REG - Hemogenyx Pharma Plc - Final Results
28/04/2025 07:00
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RNS Number : 3168G Hemogenyx Pharmaceuticals PLC 28 April 2025
28 April 2025
Hemogenyx Pharmaceuticals plc
("Hemogenyx Pharmaceuticals" or the "Company")
Final Results
Hemogenyx Pharmaceuticals plc (LSE: HEMO), the biopharmaceutical group
developing new therapies and treatments for blood diseases, announces its
final audited results for the year ended 31 December 2024. The Annual Report
is available to view on the Company's website at https://hemogenyx.com/
(https://hemogenyx.com/) .
Key Highlights
· The Company commenced Phase I clinical trials of its
HG-CT-1product candidate.
· Continuing development of Chimeric Bait Receptor
antiviral/biodefence platform, which gained attention at major conferences.
· Successfully raised £3.9 million (before expenses) through the
allotment and issue of new ordinary shares during the year ended 31 December
2024, and a further £1.3 million in early 2025.
Fuller details of these developments are contained in the full, unedited text
of the final results for the year ended 31 December 2024 below.
Enquiries:
Hemogenyx Pharmaceuticals plc https://hemogenyx.com (https://hemogenyx.com/)
Dr Vladislav Sandler, Chief Executive Officer & Co-Founder headquarters@hemogenyx.com (mailto:headquarters@hemogenyx.com)
Peter Redmond, Director peter.redmond@hemogenyx.com (mailto:peter.redmond@hemogenyx.com)
SP Angel Corporate Finance LLP Tel: +44 (0)20 3470 0470
Matthew Johnson, Vadim Alexandre, Adam Cowl
Peterhouse Capital Limited Tel: +44 (0)20 7469 0930
Lucy Williams, Duncan Vasey, Charles Goodfellow
Chairman's Statement
The 2024 financial year was a pivotal period of transition, validation, and
progress for Hemogenyx Pharmaceuticals plc. In an industry climate marked by
capital constraints and macroeconomic uncertainty, we advanced boldly into
clinical-stage development, made substantial progress across all our programs,
and built momentum that has carried us strongly into 2025.
Our mission-to deliver innovative therapies to patients suffering from
life-threatening hematologic conditions-remains at the heart of all we do.
This past year has demonstrated our scientific discipline, operational
resilience, and unwavering commitment to patients, partners, and shareholders.
HG-CT-1 (formerly HEMO-CAR-T)
Our lead clinical asset, HG-CT-1, is a proprietary CAR-T cell therapy designed
to treat relapsed or refractory acute myeloid leukemia (R/R AML). In June
2023, our IND submission to the U.S. Food and Drug Administration (FDA) was
placed on clinical hold due to third-party vector impurities. This was
addressed swiftly and transparently through a complete investigation and
corrective actions.
In January 2024, the FDA lifted the clinical hold, allowing us to resume
clinical development. Thereafter, we received IRB approval from MD Anderson
Cancer Center, cleared all institutional onboarding, and prepared for patient
enrolment.
In February 2025, we dosed our first patient in the Phase I trial of HG-CT-1,
marking a historic milestone for the Company. By March, we announced that the
treatment had been well tolerated, with no adverse effects observed,
successfully passing the initial safety assessment. Early signals of efficacy
were encouraging, and monitoring continues in accordance with protocol.
Also in March, the second patient was recruited, and manufacturing of HG-CT-1
was initiated. In April 2025, we filed our first FDA-mandated Annual IND
Report, documenting our progress and setting a roadmap for continued enrolment
in the year ahead.
In parallel, we expanded the clinical program through a strategic partnership
with Prevail InfoWorks and Prevail Partners. This collaboration supports
pediatric development and additional clinical sites in the U.S., further
accelerating the program's scalability and reach.
CBR Platform
Hemogenyx's Chimeric Bait Receptor (CBR) technology has continued to evolve as
both a highly promising anti-cancer and antiviral immunotherapy platform. In
2024, we made substantial strides across multiple fronts:
- We demonstrated improved efficiency in lentiviral transduction
for CBR-expressing cells.
- Developed an intranasal mRNA-based delivery route potentially
enabling mucosal immunity-a key advance for respiratory infections.
- Progressed IND-enabling studies, including scale-up and
formulation work, while identifying central nervous system related
indications.
The CBR platform also gained attention at major conferences, including the
Macrophage-directed Therapies Summit and the CBD Science & Technology
Symposium, where Hemogenyx Pharmaceuticals presented its preclinical progress.
CDX Antibody Program
We continued IND-enabling work for our CDX bispecific antibody for the
treatment of R/R AML as well as conditioning in transplant settings. In early
2024, a new clone of the antibody was developed with improved affinity and
manufacturability. This platform remains a priority for future partnering and
development opportunities.
Strategic Manufacturing Partnership
In December 2024, we announced a collaboration with Kure.ai to co-develop an
ultrafast CAR-T manufacturing platform tailored to HG-CT-1. This partnership
has the potential to dramatically reduce production times, improve
scalability, and extend our technology to broader hematologic indications,
including KMT2A-rearranged Acute Lymphoblastic Leukemia.
Financing and Investor Confidence
Despite one of the most challenging biotech funding climates in recent memory,
we successfully raised over £3.9 million (before expenses) in 2024 and
completed three further equity financings in Q1 2025 totalling £1.33 million
(before expenses). Including, in March 2025, when we welcomed a new
institutional investor contributing £709,200 to support the HG-CT-1 trial.
This continued access to capital reflects growing investor confidence in our
science and strategy.
The milestones achieved by the Company over the last year underscore the
exceptional progress we have made-advancing multiple complex programs with a
level of capital efficiency that is rarely achieved in our industry. This
track record is a testament to the strength of our team, our focus, and our
ability to deliver meaningful results with disciplined use of resources.
Corporate Developments
In January 2025, we appointed Westend Corporate LLP as our new Company
Secretary and relocated our registered office to 6 Heddon Street, London.
We also maintained transparency with regulators and stakeholders by submitting
our FDA IND annual report and keeping the market updated through regular RNS
announcements.
Looking Forward
We enter the second quarter of 2025 with optimism and focus. The successful
first-in-human administration of HG-CT-1, promising early results, and the
recruitment of the second patient firmly establish Hemogenyx as a
clinical-stage company with real-world momentum.
We are deeply grateful to our shareholders for their continued support and
belief in the Company, especially during a period of transformation. We strive
every day to create long-term value for them and for all stakeholders.
Finally, I would like to thank our extraordinary team of scientists and
advisors for their perseverance, vision, and dedication. Hemogenyx is
positioned not only to progress but to lead in transforming the treatment of
life-threatening blood diseases.
Board of Directors and Senior Management
Professor Sir Marc Feldmann - Non-Executive Director & Chairman -
appointed 9 April 2018
Professor Sir Marc Feldmann is a pre-eminent medically trained immunologist at
the University of Oxford where he was Head of the Kennedy Institute of
Rheumatology until 2014 and now Emeritus Professor, and a Visiting Professor
at Rockefeller University, New York. He trained in medicine at Melbourne
University and then earned a Ph.D. in Immunology at the Walter & Eliza
Hall Institute with Sir Gus Nossal, before working in London at the Imperial
Cancer Research Fund. Sir Marc's main research interests are immunoregulation,
understanding mechanisms of autoimmunity and the role of cytokines in disease,
and working out how to fill unmet medical needs.
His work in London led to the generation of a new hypothesis for the mechanism
of autoimmunity, linking upregulated antigen presentation and cytokine
expression. Testing this hypothesis led to the discovery, with colleague Sir
Ravinder Maini, of the pivotal role of TNFα (Tumour Necrosis Factor alpha) in
the pathogenesis of rheumatoid arthritis. This major discovery has
revolutionised therapy not only of rheumatoid arthritis but other chronic
inflammatory diseases (e.g. inflammatory bowel disease, psoriasis, and
ankylosing spondylitis), and helped change the perception of monoclonal
antibodies from niche products to mainstream therapeutics. Anti-TNF
therapeutics are the current leading drug class with 2022 sales exceeding
US$42 billion.
This has led to much scientific recognition, for example election to the Royal
Society and Academy of Medical Sciences in London, the National Academy of
Sciences USA and the Australian Academy of Science, and multiple major
International prizes including the Crafoord Prize of the Royal Swedish Academy
of Sciences, the Albert Lasker Clinical Research Award (NY), the Ernst
Schering Prize, the Paul Janssen Award for Biomedical Research, the
Canada-Gairdner Award, and more recently the Tang prize. He was also the first
recipient in biology or medicine of the EU/European Patent Office Inventor of
the Year Award in the Lifetime Achievement category. In addition, Sir Marc has
advised more than 20 of the largest pharmaceutical and biotech companies in
the world and has mentored some of the most successful scientists, many of
whom have become senior figures in the commercial pharmaceutical world. Sir
Marc was knighted in the 2010 Queen's Birthday Honours, and was honoured in
Australia with the knighthood equivalent, the Companion of the Order of
Australia.
Sir Marc has been at the forefront of promoting effective
scientific-medical-pharmaceutical interactions. He has built up a huge network
of friends and collaborators who meet regularly in Oxford and who will help
Hemogenyx Pharmaceuticals to grow.
Dr Vladislav Sandler - Chief Executive Officer - appointed 4 October 2017
Dr Vladislav Sandler is the Co-Founder and CEO of Hemogenyx Pharmaceuticals
and a research Assistant Professor at the State University of New York (SUNY)
Downstate. Dr Sandler is a widely published stem cell scientist with decades
of experience in scientific research. In particular, Dr Sandler has extensive
experience developing novel methods of direct reprogramming of somatic cells
into functional and engraftable hematopoietic stem cells, as well as
developing novel sources of pluri- and multi-potent cells.
Dr Sandler has conducted his research at many leading institutions in Russia,
Israel, Canada and the United States, including at the Children's Hospital at
Harvard Medical School, the Salk Institute for Biological Sciences, Harvard
University and Albert Einstein College of Medicine, among others. He also led
a team of scientists at Advanced Cell Technologies, Inc. and was most recently
on the faculty of Weill Cornell Medical College. While at Cornell, Dr Sandler
made the significant discovery that the cells that give rise to blood stem
cells during mammalian development continue to exist after birth, and he
developed the method of isolation of these cells from humans. As a result of
this important work, Dr Sandler was awarded the inaugural Daedalus Fund Award
for Innovation at Cornell. He went on to found Hemogenyx Pharmaceuticals in
order to further pursue this significant scientific discovery and his
dedication to the translation of science into clinical practice.
Dr Sandler has published numerous peer-reviewed papers and has received a
number of awards and fellowships for his scientific research. Dr Sandler
received his PhD from the University of British Columbia. He is a member of
the International Society for Stem Cell Research.
Alexis Sandler - Non-Executive Director - appointed 4 October 2017
Alexis M. Sandler is the co-founder of Hemogenyx Pharmaceuticals, for which
she has served as the Chief Operating Officer. Ms Sandler is an attorney
specialising in intellectual property, with over 20 years of experience
representing a range companies and institutions.
Ms Sandler is the General Counsel of The Frick Collection. A talented and
respected attorney with a wide range of experience and expertise, Ms Sandler
previously served for nearly a decade as in-house counsel for The Museum of
Modern Art. Prior to that, she worked as the director of business and legal
affairs for a major media and entertainment company, and in private practice
for several prominent law firms.
Ms Sandler received her AB from Harvard University and her JD from the UCLA
School of Law and is a member of the State Bar of New York and the State Bar
of California.
Peter Redmond - Non-Executive Director - appointed 29 July 2015
Peter Redmond is a corporate financier with over 40 years' experience in
corporate finance and venture capital. He has acted on and assisted a wide
range of companies to attain a listing over many years on the former Unlisted
Securities Market, the Main Market of the London Stock Exchange and AIM,
whether by IPO or in many cases via reverse takeovers, across a wide range of
sectors, ranging from pharmaceuticals, through technology, financial services
and natural resources. In recent years has done so as a director and investor
in the companies concerned.
He was a founder director of a number of investment companies listed on the
Standard List of the Stock Exchange, all of which went on to complete
significant reverse takeovers resulting in admission as active businesses on
AIM or back onto the Standard List. In particular, he was a founder director
of Silver Falcon plc, the Company into which Hemogenyx Pharmaceuticals
reversed, and he took a leading role in negotiating and effecting the reverse
takeover. He undertook the same role in the rescue, reconstruction and
refinancing of many AIM-quoted companies that had previously run into
difficulties and took a significant active part in fundraising for the above
companies - in particular Standard-listed GEM Resources plc, of which he
remains a director.
Directors' Strategic Report for the year ended 31 December 2023
The Directors present their Strategic Report of Hemogenyx Pharmaceuticals plc
for the year ended 31 December 2024.
Introduction
This Strategic Report comprises several sections, namely: the Group's
objectives, the Group's strategy and business model, a review of the Group's
business using key performance indicators, and the principal risks and
uncertainties facing the business.
The disclosures under s172 of the Companies Act 2006 are included in the
Governance Report on page 26.
Objectives
The Group's objective is to develop breakthrough therapies for the treatment
of blood and autoimmune diseases, rare cancers and of certain viral
infections.
Strategy and Business Model
The Group's long-term strategy is to create a suite of products to address
current problems associated with the treatment of blood disorders such as
leukemia-type cancers and autoimmune diseases, with the treatment of viral
infections and certain non-blood cancer conditions, and advanced methods of
conditioning of blood stem-cell transplants. The latter represents an
important part of the solution to treating blood-related diseases, with the
opportunity to improve outcomes through reduced blood stem cell transplant
rejection and relapse, and if successful potentially provides long-term cures
for these diseases.
The Group's business model aims to advance its therapies through clinical
proof-of-concept, taking them towards a final stage of development. This is
intended to be achieved either through the Company itself taking the product
into and through clinical trials or by the licensing of one or more of its
therapies to partners in return for potential upfront payments, research
funding support, success milestone and royalty payments.
Operational Review and Outlook
The operational review and outlook are set out in the Chairman's Statement on
page 3.
Financial Review
The Group incurred a loss for the year to 31 December 2024 of £5,625,478 (31
December 2023: £6,696,493 loss).
In the year to 31 December 2024 the loss mainly arose from operational
expenses pursuing the Group's objectives listed above as well as salaries,
consulting and professional fees, and general administration expenses. These
expenses have been met from the proceeds of equity placings that were
undertaken during the period.
Cash flow and cash position
Cash used in operations totalled £3,516,813 (31 December 2023: £6,105,570).
As at 31 December 2024, the Group had a cash balance of £159,265 (31 December
2023 - £1,247,601).
Key Performance Indicators ("KPIs")
The Directors have identified the KPIs below that they feel are the most vital
measurements for the Group to monitor given its current stage of development.
KPIs are monitored on an annual basis to ensure that they remain the most
important and relevant measure of performance and progress.
Cash management
In the year the Company undertook several fundraises in furtherance of its
research and development strategy, raising a total of £3,925,000 (before
expenses). As of 31 December 2024 the cash position was £159,265 (31 December
2023: £1,247,601).
The Group carefully plans expenditure with rolling cash flow forecasts and
tight financial control. The Group takes a collaborative cost sharing approach
with business partners and avoids long-term commitments as far as possible.
As detailed in the Future Developments and Events Subsequent to the Year End
note on page 21, in January 2025 the Company successfully raised £340,000
(before expenses) through the issue of 100,000 new ordinary shares at a price
of 340p per share. In February 2025 the Company raised £285,000 through the
issue of convertible loan notes, which converted into 95,000 ordinary shares
on 13 March 2025.
Additionally, on the 11 March 2025 the Company announced it had issued 394,000
new ordinary shares raising £709,200 (before expenses).
Intellectual property
The Group is focused on developing new drugs and cell therapy products for
blood and autoimmune diseases, HSC/BM transplantation, rare cancers and
certain viral infections. The Group, or its licensors, has applied for patents
to protect its proprietary technology and future products, which are in
varying stages of development.
The success of the Group will depend largely on the Group's ability to
implement successful drug development programmes, obtain the required
regulatory approvals (in various territories), protect and exploit its own
intellectual property and know-how and the intellectual property and know-how
licensed to it, and to generate a cash flow in accordance with the strategy of
the Group. Intellectual property is protected by the Group through taking a
pro-active approach to filing patents over its products and technologies, as
well as the diligent maintenance and protection of such patents and licences.
The Group patent portfolio currently includes:
CDX bi-specific antibodies ("CDX")
The patent application relating to CDX bi-specific antibodies was filed by
Hemogenyx Pharmaceuticals LLC in the USA on 4 April 2016 ("CDX Patent") and
awarded as Patent Number US 11,021,536 B2 on 1 June 2021. The invention
summarised in the patent application is a method of eliminating hematopoietic
stem cells/hematopoietic progenitors ("HSC"/"HP") in a patient using
bi-specific antibodies specifically binding to a protein predominantly
expressed on the surface of HSC/HP and to a protein uniquely expressed on a
surface of immune cells. The bound bi-specific antibodies redirect immune
cells to eliminate HSC/HP. The invention relates to the required conditioning
of a patient prior to a BM/HSC transplant. In this respect, the invention
serves two main purposes:
§ it provides adequate immunosuppression of the patient and clears sufficient
niche space in the bone marrow for the transplant of HSC. This allows
transplanted cells to engraft in the recipient; and
§ it could potentially help to eradicate the source of malignancy.
On 4 April 2017, an international PCT (Patent Cooperation Treaty) application
was filed by Hemogenyx Pharmaceuticals which includes additional claims that
extend the CDX Patent set out in the provisional patent application. These
claims protect specific sequences of several high-quality clones discovered
and validated by the Group. The claim extension transforms the original
"method" provisional patent application into a "composition of matter" PCT
application. A patent was granted in China in July 2022 covering both
transplant conditioning and AML treatment applications. An additional
composition of matter patent application titled Bispecific Anti-FLT3/CD3
Antibodies and Methods of Use (covering novel sequences of the antibodies
discovered and validated by the Company in collaboration with Eli Lilly &
Company) was filed following completion of the Lilly collaboration agreement
and was published by the World Intellectual Property Organization on 23
February 2023 as publication number WO/2023/023489.
Furthermore, on the 2 February 2024 the United States Patent and Trademark
Office granted a patent to the Company entitled Method of Eliminating
Hematopoietic Stem Cells/Hematopoietic Progenitors (HSC/HP) in s Patient Using
Bi-specific Antibodies. The original patent application is issued as U.S.
Patent No. 11,945,866 on 2 April 2024.
Monoclonal antibodies
In July 2019 the Group filed a composition of matter patent application
entitled Monoclonal Antibodies to Human FLT3/FLK2 Receptor Protein in relation
to newly-discovered monoclonal antibodies against a target protein expressed
on the surface of hematopoietic stem cells/hematopoietic progenitors and a
number of leukemias, such as acute myeloid leukemia ("AML"). The patent was
granted on 31 August 2021 as Patent Number US 11,104,738. This patent covers
composition of matter (sequences) of monoclonal antibodies to the human
FLT3/FLK2 receptor protein that is found on the surface of acute myeloid
leukaemia cells, hematopoietic (blood-forming) stem cells and progenitors
("HSC/HP"), and dendritic cells. It also covers a method of application of the
Group's bi-specific CDX antibodies for conditioning patients for bone marrow
transplantation.
HG-CT-1
A PCT patent application titled Anti-FLT3 Antibodies, CARs, CAR T Cells and
Methods of Use was published by the World Intellectual Property Organization
on 23 February 2023 under number WO/2023/023491, detailing the Company's
Chimeric Antigen Receptor sequences including anti-FLT3 antibodies.
Hu-PHEC cell therapy
The patent relating to Hu-PHEC was filed by Cornell University in several
jurisdictions on 13 November 2014. The patent was approved and issued in the
United States of America on 25 February 2020 and published by the European
Patent Office on 13 May 2020. The invention summarises a method of isolation
and identification of post-natal hemogenic endothelial cells, as well as the
provision of substantially purified populations of post-natal hemogenic
endothelial cells, compositions of post-natal endothelial cells and methods to
utilise post-natal hemogenic endothelial cells to regenerate the hematopoietic
system in a patient.
Advanced Hematopoietic Chimeras
The provisional patent application relating to the Group's proprietary
humanised mouse model, the Advanced Hematopoietic Chimera ("AHC"), is an
application filed by Dr Sandler and Dr Rita Simone in the USA on 20 February
2018. The invention summarised in the patent application is mice whose
hematopoietic system is at least 40% humanised and methods for preparing the
same. The patent was assigned to the Group's subsidiary Immugenyx LLC on 24
May 2018. In June 2019 the Group announced that Immugenyx LLC has further
refined its work to develop the Advanced peripheral blood Hematopoietic
Chimera ("ApbHC") as a research and development tool. The major advantage of
the ApbHC compared to other humanised mouse models known to the Group is the
absence of Graft versus Host Disease, a disease that complicates and often
renders impossible the efficient use of peripheral blood mononuclear cells in
transplanted mice. The ApbHC can potentially be used for testing
multi-specific antibodies, including its own bi-specific CDX antibody, as well
as for the development and testing of new cell therapies involving immune cell
programming such as CAR-T. ApbHC can also potentially be used for the
modelling of autoimmune diseases, such as Systemic Lupus Erythematosus (aka
Lupus), with a goal of developing fundamentally new treatments for those
diseases.
Chimeric Bait Receptor ("CBR")
In March 2022, the Company filed a seminal provisional patent application
protecting its rights to the intellectual property covering its CBR platform
technology, a new paradigm for treating viral infections from which constructs
targeting viral pathogens and potentially malignancies may be derived and for
certain cancer and neurological conditions On 7 September 2023 the Company
filed patent application number WO2023168292 Chimeric Bait Receptors and Uses
Thereof with the World Intellectual Property Organization. At the time of
reporting, it remains to be reviewed and approved by national patent
authorities.
Product development
The Group develops therapies for the treatment of AML, for the treatment of a
range of viral conditions and certain rare cancers and conditions as well as
for the improvement of bone marrow and blood stem cell transplant procedures.
HG-CT-1 is a therapy for the treatment of AML in which a patient's own
T-cells, a type of immune cell, are modified to recognise and kill the
patient's cancer cells. The procedure involves: isolating T-cells from the
patient; modifying the isolated T-cells in a laboratory using a CAR gene
construct (which allows the cells to recognise the patient's cancer);
amplifying (growing to large numbers) the newly modified cells; and
re-introducing the cells back into the patient.
CBR is a broad and versatile range of potential treatments based on the
methodology of programming immune cells using a novel type of modifiable
synthetic receptor to destroy viral pathogens. This approach can also
potentially be used to programme immune cells to destroy malignant cells
causing certain types of cancer and potentially also some neurological
conditions.
CDX aims to treat AML as well as to replace the need for existing methods of
preparation of patients for transplantation, such as chemotherapy and
radiation treatments, and at the same time address the problem of finding
matching stem cell donors whilst reducing the risk of blood stem cell
rejection after transplantation.
The Group's lead product, HG-CT-1, is at the stage of conducting clinical
trials. Its other key products, CDX antibodies, the CBR platform, and CBR, are
currently in preclinical development. In addition, the Group's advanced
hematopoietic chimeric ("AHC") mice have been the subject of collaborations
with other pharmaceutical companies to evaluate AHCs' effectiveness as
platforms for disease modelling and drug discovery and are being used by the
Company currently for its own product development.
The Directors monitor product development through pre-clinical results. The
CDX and CAR-T products have been successfully evaluated in the Group's
proprietary humanised mouse model, achieving proof of concept. Furthermore, we
have achieved notable demonstrations of both CDX's and HG-CT-1's activity
versus AML cells in vitro and in vivo. If successful, the Company may be able
to use the CDX and/or CAR-T products to eliminate relapsed or refractory acute
myeloid leukaemia ("R/R AML") in patients who qualify for bone marrow
transplantation. HG-CT-1 has already entered clinical trials. The Company is
also investigating the possibility of using its CDX antibodies in combination
with other treatments for AML to increase their effectiveness.
A CBR construct designed to target SARS-CoV-2 has been tested in vitro, and in
vivo tests against live replicating viruses are ongoing, as is work on CBR for
use against certain cancers such as Non-Hodgkin Lymphoma ("NHL") certain solid
tumours and neurological conditions.
Diversity
Hemogenyx Pharmaceuticals is committed to workplace diversity which includes
but is not limited to gender, age, ethnicity and cultural background.
Hemogenyx Pharmaceuticals' Diversity Policy defines initiatives which assist
the Company in maintaining and improving the diversity of its workforce. The
table below highlights the proportion of men and women engaged by the Group:
Men Women
Organisation as a whole 7 9
Executive management team 2 -
Board 3 1
The board is comprised of individuals from white British and other white
ethnic backgrounds.
Board of Advisors
The Group engages the services of a Board of Advisors who are highly
experienced in both the clinical development of treatments and regulatory
processes to commercialisation. In addition to Professor Sir Marc Feldmann,
who runs the Board of Advisors in addition to his role as Chairman, the
advisors are:
Dr H. Michael Shepard, Ph.D.
SCIENTIFIC ADVISOR
§ Led the discovery and development of many successful cancer treatments
including Herceptin/trastuzumab - annual sales exceed $6.5 billion worldwide
§ Received Harvard Medical School's prestigious Warren Alpert Prize in
recognition of contributions to the field of cancer treatment research
§ Founded NewBiotics, Inc., acquired by Kiadis Pharma
§ Founded BioLogix, acquired by Symphogen
Dr Koen van Besien M.D.
CLINICAL ADVISOR/MEDICAL DIRECTOR
§ Hematology Chief and Director of the Wesley Center for Immunotherapy at
University Hospitals Seidman Cancer Center
§ Professor of Medicine at NYP-Weill Cornell College of Medicine
§ Developed novel methods of transplantation for those patients who lack
matching donors
§ >200 publications in peer reviewed journals
§ Editor in Chief of the journal Leukemia and Lymphoma
Corporate Responsibility
We have defined the scope of our Group's responsible business practices as
falling within the following key focus areas:
§ Health and Safety - ensuring the safety and well-being of our staff
§ Environment - managing our environmental impact areas of waste, energy and
water
§ Employees - supporting our people to develop and flourish within the
business
§ Community - positive interaction with the communities in which we operate
§ Ethical Standards - operating to the highest ethical standards
We remain committed to ensuring these activities become embedded in how we
operate and contribute towards the success of our business. This includes not
only identifying and managing business risk but exploring opportunities to add
value to the business.
Greenhouse Gas Emissions
Given the nature of its activities, there is limited scope for the Group to
have a major impact on environmental matters. Nevertheless, the Directors are
mindful of their responsibilities in this regard and strive to seek
opportunities where improvements may be made.
Climate-related Financial Disclosures
The Financial Stability Board's Task Force on Climate-related Financial
Disclosures (TCFD) recommendations serve as a global foundation for effective
reporting on the operational and financial implications of the
interrelationship between climate change and business, and set out recommended
disclosures structured under four core elements:
· Governance - The organisation's governance around climate-related
risks and opportunities
· Strategy - The actual and potential impacts of climate-related
risks and opportunities for an organisation's businesses, strategy, and
financial planning
· Risk Management - The processes used by the organisation to
identify, assess, and manage climate-related risks; and
· Metrics and Targets - The metrics and targets used to assess and
manage relevant climate-related risks and opportunities.
These are supported by recommended disclosures that build on the framework
with information intended to help investors and others understand how
reporting companies assess climate-related risks and opportunities.
The table below shows our current progress against the TCFD recommendations.
TCFD Pillar Recommended DisclosureDisclosure Hemogenyx Pharmaceuticals Summary
Governance · Board's oversight of climate-related risks and opportunities As a development stage biopharmaceutical business, the Group's operations are
at a relatively small scale and so therefore is its environmental impact.
· Management's role in assessing and managing climate-related risks Nevertheless, the Board recognises its responsibility to protect the
and opportunities environment (particularly as the business scales up).
The Board has oversight of climate-related matters (which include risks and
opportunities). The board is supported by the Audit Committee, which is
responsible for keeping under review the adequacy and effectiveness of the
Group's internal control and risk management systems, which consider
climate-related risks.
Strategy · Climate-related risks and opportunities identification Hemogenyx Pharmaceuticals is committed to a net zero and healthier planet, and
this is part of the Group's strategic long-term priorities.
· Climate-related risks and opportunities impacts
The Board is committed to conserving natural resources and striving for
· Resilience of the organisation's strategy environmental sustainability, by ensuring that its facilities (and the
facilities of academic and contracted collaborators) are operated to optimise
energy usage; minimising waste production; and protecting nature and people.
As Hemogenyx Pharmaceuticals enters the next stage of its development,
clinical trials, ESG will be at the heart of the Board and management's vision
and strategy to enable climate-related risks and opportunities to be
identified and suitably mitigated/actioned.
The information collected will allow the Board to challenge the Group's
strategy to ensure it is as resilient as possible.
In the short-term, clinical trials are not expected to have any impact on the
Company's environmental impact as research will remain small and within the
same facilities it currently operates from. However, this will be continually
monitored.
Risk Management · Identifying and assessing climate-related risks Given the small scale of its current operations, Hemogenyx Pharmaceuticals has
the ability to embed climate-related risk management systems into its overall
· Managing climate-related risks internal control systems from an early stage of its journey, thus almost
eliminating the occurrence of transition risk.
· Integration into overall risk management
As operations scale up in the coming years, the identification, assessment and
effective management of climate-related risks and opportunities will be
actively discussed during Board and management meetings.
Metrics and Targets · Climate-related metrics As the Group's operations scale up, it will continue to monitor its energy
use. The Group will seek to collect, structure, and effectively disclose
· Scope 1, Scope 2, and Scope 3 emissions. related performance data for the material climate-related risks and
opportunities identified where relevant.
· Climate-related targets
The Board will also look to adopt SASB recommended disclosures in the next 2-3
years.
The Group already minimises business travel, and therefore energy use and
emissions, through the use of Internet-based communications tools. It has a
policy of preferring devices with low energy consumption where a choice is
available, and switching them off when not in use.
Principal Risks and Uncertainties
The Group operates in an uncertain environment and is subject to a number of
risk factors. The Directors have carried out a robust assessment of the
principal risks facing the Group, including those that threaten its business
model, future performance, solvency or liquidity. They consider the following
risk factors are of particular relevance to the Group's activities and to any
investment in the Group. It should be noted that the list is not exhaustive
and that other risk factors not presently known or currently deemed immaterial
may apply.
The risk factors are summarised below:
Risks relating to the Group's business strategy
The Group's business is relatively undeveloped
The operations of Hemogenyx Pharmaceuticals are at a relatively early stage
and, to date, no commercial sales of its products have been made. The ability
of the Group to achieve commercialisation is dependent on a number of factors,
many of which are outside of the Group's control. Examples of factors outside
of the Group's control are capital market conditions, FDA approval and
competition.
Business strategy of the Group
The development of clinical products for new medical treatments is inherently
uncertain, with high failure rates in clinical studies for both early and
late-stage development products and such clinical studies can be expensive,
time-consuming and complicated and there is no certainty as to the outcome of
such studies. Even once clinical studies have been successfully carried out,
later phase trials may not successfully replicate or improve on such outcomes.
Staffing and key personnel
The Group is reliant on a number of the key personnel, in particular Dr
Vladislav Sandler who is the founder of Hemogenyx Pharmaceuticals (refer to
Corporate Governance Report for further detail). Whilst the Group has
endeavoured to ensure that it has contractual arrangements which include
non-compete restrictions in place with such persons to lessen the risk of them
ceasing to be involved with the Group, in the event that the Group was to lose
the services of such individuals, its results could be adversely affected.
Costs of commercialisation
The ability of the Group to bring its products to first commercial sale will
be dependent in part on the overall costs of manufacturing and the costs
involved could be significant and there is no guarantee that the sale prices
achievable for its products will be viable and sustainable.
Clinical studies and timelines risk
Hemogenyx Pharmaceuticals is currently progressing its product candidates
through preclinical development and the first stages of clinical trials.
Although encouraging results have been achieved so far, there can be no
certainty that these results can be reproduced in clinical trials and as
existing clinical trial progresses. The monies raised in Placings and
Subscriptions support those preclinical and clinical development activities.
The development of clinical products for new medical treatments is inherently
uncertain, with high failure rates in clinical studies for both early- and
late-stage development products. Furthermore, such clinical studies (Phase 1,
Phase 2a/2b, Phase 3) are typically expensive, complex, can take considerable
time to complete and have uncertain outcomes.
Furthermore, as a result of adverse, undesirable, unintended or inconclusive
results from any testing or clinical trials, the future progress, planning and
potential treatment outcome of the products and clinical programmes may be
affected and may potentially prevent or limit the commercial use of one, many
or all of the Company's products. In addition, later phase clinical trials may
fail to show the desired safety and efficacy obtained in earlier studies, and
a successful completion of one stage of clinical development of an
investigational clinical product does not ensure that subsequent stages of
clinical development will be successful.
Failure can occur at any stage of clinical development and, as a result,
enforced delays to the clinical development plan could delay or prevent
commercialisation of the Company's product candidates. Various factors
associated with the potential failure or delay in completing a clinical
programme include, but are not limited to:
§ Delays in securing clinical investigators or clinical study sites;
§ Delays in securing any regulatory authority, hospital ethics committee, or
institutional review board approval or approvals necessary to commence a
clinical study;
§ Delays or failure to recruit a sufficient number of clinical study
participants in accordance with the clinical study protocol;
§ Difficulty or inability to monitor subjects adequately during or after
treatment;
§ Inability to replicate in Phase 3 controlled studies any safety and
efficacy data obtained from controlled Phase 2a/2b clinical studies;
§ Difficulty or inability to secure clinical investigator compliance to
follow the approved clinical study protocol; and
§ Unexpected adverse events or any other safety or related issues.
Research and development risk
The Group operates in the biotechnology and bio-pharmaceutical development
sectors and carries out complex scientific research. If the research or
preclinical testing or clinical trials of any of Hemogenyx Pharmaceuticals'
product candidates fail, meaning that these candidates will not be licensed or
marketed, this would result in a complete absence of revenue from these failed
candidates. Positive results from preclinical and early clinical studies do
not guarantee positive results from clinical trials required to permit
application for regulatory approval. Furthermore, the Group may discontinue
the development of candidates if results are not positive or unlikely to
further its progress towards a meaningful outcome or collaboration.
Intellectual property (IP) infringement
The Group may be subject to future litigation concerning its own IP and the IP
of others. Adverse judgements in relation to its IP would likely have negative
outcomes for its results of operations.
Intellectual property (IP) control
The Group is partially reliant on an exclusive, world-wide licence of a patent
from Cornell University for its Hu-PHEC line of business. The exclusivity and
exploitable territory for this licence depend on the Group meeting various
developmental milestones.
Environmental and other regulatory requirements
The event of a breach with any environmental or regulatory requirements may
give rise to reputational, financial or other sanctions against the Group, and
therefore the Board considers these risks seriously and designs, maintains and
reviews its policies and processes so as to mitigate or avoid these risks.
Whilst the Board has a good record of compliance, there is no assurance that
the Group's activities will always be compliant.
Financing
The Group's ability to develop its products through to commercial sales will
depend upon the Group's ability to obtain financing primarily through a
further raising of new equity capital. Although the Group has been successful
in raising new equity capital, there can be no guarantee that it will be able
to do so in the future. The Group may not be successful in procuring the
requisite funds on terms which are acceptable to it (or at all) and, if such
funding is unavailable, would raise questions over its ability to further
develop its products through to commercialisation. Further, Shareholders'
holdings of Ordinary Shares may be materially diluted if debt financing is not
available.
Market conditions
Market conditions, including general economic conditions and their effect on
exchange rates, interest rates and inflations rates, may impact the ultimate
value of the Group regardless of its operating performance. The Group also
faces competition from other organisations, some of which may have greater
resources or be more established in a particular territory. The Board
considers and reviews all market conditions to try and mitigate any risks that
may arise from these.
Political and country risk
The departure of the UK from the EU is now complete and its impact on the
business, whose current operations are principally in the US, has been
negligible. Any further changes in international trade, tariff and
import/export regulations may impose unexpected duty costs or other non-tariff
barriers on the Group. The Company is monitoring matters and will seek advice,
where necessary, as to how to mitigate the risks arising. The Company has not
experienced and does not anticipate that there will be any impact, including
on its personnel or supply chain, as a result of the on-going war in Ukraine
or the situation in the Middle East save for a general increase in inflation
such as of the cost of energy.
Approved by the Board on 25 April 2025
Dr Vladislav Sandler
CEO
Directors' Report for the year ended 31 December 2024
The Directors present their report with the audited financial statements of
the Group for the year ended 31 December 2024.
The Company's Ordinary Shares were admitted to listing on the London Stock
Exchange under the name Silver Falcon plc, on the Official List pursuant to
Chapters 14 of the Listing Rules, which sets out the requirements for Standard
Listings, on 9 November 2015.
On 4 October 2017 the Company's shareholders voted in favour of acquiring the
biotechnology company Hemogenyx Pharmaceuticals Limited, with shares being
readmitted to trading on 5 October 2017 under the name Hemogenyx
Pharmaceuticals plc.
Principal Activity
The Group's principal activity is the discovery, development and
commercialisation of a suite of products to address current problems
associated with the treatment of blood disorders such as cancers and
autoimmune diseases, and with viral infections. Hemogenyx Pharmaceuticals'
distinct and complementary products include immunotherapy product candidates
for the treatment of AML and other blood malignancies and potentially patient
conditioning for bone marrow transplantation (the CDX bi-specific antibody and
CAR-T therapy). Each of these products holds the potential to revolutionise
the way diseases of the blood are treated, offering solutions that mitigate
the dangers and limitations associated with the current standard of care.
Additionally, the Group has two platform technologies: its Advanced peripheral
blood Hematopoietic Chimeras, a form of humanised mouse used to model diseases
including autoimmune conditions and to test multi-specific antibody
treatments; and Chimeric Bait Receptors or CBR, a novel way to create
constructs potentially capable of programming immune cells to attract and
destroy a wide range of viruses and malignant (cancer-causing) cells.
The Group has two companies that are located outside of the UK. The principal
laboratory of the Group is located in Manhattan, New York, USA.
Results and Dividends
The Consolidated Statement of Comprehensive Income set out on page 46 shows a
loss for the year amounting to £5,625,478 (2023: £6,696,493). The Directors
do not propose a dividend in respect of the year ended 31 December 2024 (31
December 2023: nil).
Directors and Directors' Interests
The Directors who held office during the year and up to the date of this
report were as follows:
Date Appointed Date Resigned
Professor Sir Marc Feldmann 9 April 2018 -
Dr Vladislav Sandler 4 October 2017 -
Alexis Sandler 4 October 2017 -
Peter Redmond 29 July 2015 -
The Directors of the Company who held office at 31 December 2024 had the
following beneficial interests in the Ordinary shares of the Company at 31
December 2024 according to the register of directors' interests:
Director At 31 December 2024 At 31 December 2023
Professor Sir Marc Feldmann - -
Peter Redmond* 13,991 13,991
Dr Vladislav Sandler 103,861 103,861
Alexis Sandler 187,726 187,726
* Peter Redmond holds the majority of these shares through Catalyst Corporate
Consultants Ltd of which he is the sole shareholder.
At the date of this report, there have been no further changes to the
Directors' beneficial interest in the Ordinary shares of the Company as
disclosed in the table above.
According to the Register of Directors' Interests, no rights to subscribe for
shares in or debentures of Group companies were granted to any of the
Directors or their immediate families, or exercised by them, during the
financial year, save for the annual grant of 10,000 ownership units in
Immugenyx LLC due to Dr Vladislav Sandler under the terms of his appointment
as CEO and Chief Scientific Officer of that company. Grants of options are as
indicated below (see Note 18 for detail on option plans):
Options
Date of grant Number of options at start of year Options granted or acquired during year Options lapsed during year Number of options at end of year
Professor Sir Marc Feldmann
9 Apr 2018 33,775 - (15,002) 18,753
33,775 - (15,002) 18.753
Dr Vladislav Sandler
20 August 2020 69,600 142,750 - 212,350
69,600 142,750 - 212,350
Peter Redmond
13 July 2020 5,500 - - 5,500
5,500 - - 5,500
Qualifying Third Party Indemnity Provision
At the date of this report, the Company has a third-party indemnity policy in
place for all Directors.
Substantial Shareholders
As at 31 December 2024, the total number of issued Ordinary Shares with voting
rights in the Company was 3,504,539 The Company has been notified of the
following interests of 3 per cent or more in its issued share capital as at
the date of approval of this report:
Party Name Number of Ordinary Shares % of Share Capital
Alexis Sandler 187,726 5.35
Share Capital
Details of the issued share capital, together with details of the movement in
issued share capital during the year, are shown in Note 16 to the financial
statements.
Share capital comprises 3,504,540 Ordinary shares (0.25%) and 1,401,815,988
Deferred shares (99.75%).
Financial Instruments
Details of the use of the Company's financial risk management objectives and
policies as well as exposure to financial risk are contained in the Accounting
Policies and Note 22 of the financial statements.
Future Developments and Events Subsequent to the Year End
Details of the Group's future developments and events subsequent to the year
end are set out in the Chairman's Statement and Directors' Strategic Report on
pages 3 and 10 respectively.
Corporate Governance
The Corporate Governance report is disclosed on page 26.
Going Concern
The Company's business activities, together with facts likely to affect its
future operations and financial and liquidity positions are set out in the
Chairman's Statement and Directors' Strategic Report on pages 3 and 10
respectively. In addition, Note 22 to the financial statements discloses the
Company's capital risk management policy and Note 2 details further
considerations made by the Directors in respect of going concern.
The Directors, having made due and careful enquiry, are of the opinion that
the Company has or will have access to sufficient funding in order to execute
its operations over the next 12 months, however a material uncertainty exists.
The Directors have made an informed judgment, at the time of approving the
financial statements, that there is a reasonable expectation that the Company
has adequate resources to continue in operational existence for the
foreseeable future, however this relies upon the Company raising additional
capital. As a result, the Directors have adopted the going concern basis of
accounting in the preparation of the annual financial statements.
Political Donations
The Group made no political donations during the year (2023: £nil).
Charitable Donations
There were no charitable donations made by the Group in thecurrent or prior
year.
Greenhouse gas emissions
The Company used less than 40,000kWh of energy in the United Kingdom during
2024 and therefore does not report on energy consumption and emissions under
the Companies (Directors' Report) and Limited Liability Partnerships (Energy
and Carbon Report) Regulations 2018.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the Group
and Company financial statements in accordance with UK-adopted international
accounting standards.
Under Company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss of the Group for
that year.
In preparing these financial statements, the Directors are required to:
· Select suitable accounting policies and then apply them
consistently;
· Make judgments and accounting estimates that are reasonable and
prudent;
· State whether applicable UK-adopted international accounting
standards have been followed,
subject to any material departures disclosed and explained in the financial
statements; and
· Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company will continue
in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group and parent company's transactions and
disclose with reasonable accuracy at any time
the financial position of the Group and parent company and enable them to
ensure that the financial statements and the Directors' remuneration report
comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the Group and parent company and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities. They
are also responsible to make a statement that they consider that the annual
report and accounts, taken as a whole, is fair, balanced, and understandable
and provides the information necessary for the shareholders to assess the
Group and parent company's position and performance, business model and
strategy.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of the financial statements may differ from legislation in other
jurisdictions.
Directors' Responsibility Statement Pursuant to Disclosure and Transparency
Rules
Each of the Directors, whose names and functions are listed on page 1,
confirms that, to the best of their knowledge and belief:
· the group and company financial statements have been prepared in
accordance with UK-adopted international accounting standards, and give a true
and fair view of the assets, liabilities, financial position and loss of the
Group; and
· the Annual Report and financial statements, including the
Business review, includes a fair review of the development and performance of
the business and the position of the Group and parent company, together with a
description of the principal risks and uncertainties that they face.
Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant audit information of
which the Company's auditors are unaware, and each Director has taken all the
steps that he ought to have taken as a Director in order to make himself aware
of any relevant audit information and to establish that the Company's auditors
are aware of that information.
Approved by the Board on 25 April 2025
Dr Vladislav Sandler
CEO
Governance Report
Introduction
The Company recognises the importance of, and is committed to, high standards
of Corporate Governance. The Company has voluntarily applied the main and
supporting principles set out in the UK Code of Corporate Governance published
by the Financial Reporting Council in 2018 ("the Code"). The Code has been
followed to the extent practicable for a company of its size and nature. The
Code can be found at
https://www.frc.org.uk/library/standards-codes-policy/corporate-governance/uk-corporate-governance-code
(https://www.frc.org.uk/library/standards-codes-policy/corporate-governance/uk-corporate-governance-code/)
. The ways in which the Company has applied the Code are explained below:
§ The Code requires that a smaller company should have at least two
Independent Non-Executive Directors. As at 31 December 2024 the Board
consisted of an Executive Director and three Non-Executive Directors. The
Non-Executive Directors are interested in either ordinary shares in the
Company, options over ordinary shares in the Company, or both, and cannot
therefore be considered fully independent under the Code. The remuneration of
the Non-Executive Directors includes options and this is contrary to best
practice, and thus the Company is not in full compliance. However, the
Directors consider the present structure and arrangements to be adequate given
the size and stage of development of the Company, and all are considered to be
independent in character and judgement.
§ Directors appointed by the Board are subject to election by shareholders at
the Annual General Meeting of the Company following their appointment and
thereafter are subject to re-election in accordance with the Company's
articles of association. The terms and conditions of appointment of
Non-Executive Directors will be made available upon written request.
The Board has voluntarily adopted a code for Directors' dealings based on the
Model Code contained in the Listing Rules of the UK Listing Authority that was
previously in force. The Board will be responsible for taking all proper and
reasonable steps to ensure compliance with the code by the Directors.
Compliance with the code is being undertaken on a voluntary basis and the FCA
will not have the authority to (and will not) monitor the Company's voluntary
compliance with it, nor to impose sanctions in respect of any failure by the
Company to so comply. In addition, the Company will take all proper and
reasonable steps to ensure compliance by the Founders with the Code for
dealings in the Ordinary Shares.
The Company is small with a modest resource base. The Company has a clear
mandate to optimise the allocation of limited resources to support its
development plans. As such, the Company strives to maintain a balance between
conservation of limited resources and maintaining robust corporate governance
practices. As the Company evolves, the Board is committed to enhancing the
Company's corporate governance policies and practices deemed appropriate for
the size and maturity of the organisation.
Set out below are the Company's corporate governance practices for the year
ended 31 December 2024.
Committees
The Company has established audit, remuneration and nomination committees.
Audit Committee
The Audit Committee has responsibility for, among other things, the monitoring
of the integrity of the financial statements of the Company and its Group and
the involvement of the Group's auditors in that process. It focuses in
particular on compliance with accounting policies and ensuring that an
effective system of external audit and financial control is maintained,
including considering the scope of the annual audit and the extent of the
non-audit work undertaken by external auditors and advising on the appointment
of external auditors. The ultimate responsibility for reviewing and approving
the annual report and accounts and the half-yearly reports remains with the
Board. The Audit Committee will meet at least three times a year at the
appropriate times in the financial reporting and audit cycle.
The members of the Audit Committee are Peter Redmond, who acts as chairman of
the committee, and Professor Sir Marc Feldmann.
The Group's external auditor is PKF Littlejohn LLP who has served as external
auditor for ten years. The role of external auditor last went to tender in
2015 and a tender process will be undertaken in 2025 in respect of the year
ended 31 December 2025. The Audit Committee closely monitors the level of
audit and non-audit services that it provides to the Company and Group.
During the year to 31 December 2024 the Audit Committee considered the
following key issues in relation to the Financial Statements:
Issue Action
· Accounting policies The Committee reviewed and discussed the significant accounting policies with
management and the external auditor and reached the conclusion that each
policy was appropriate to the Group.
· Carrying value of investment in Hemogenyx Pharmaceuticals LLC The Committee reviewed the impairment assessment report prepared by management
and agreed that given the reasonable expectation that the Group will achieve
its milestone targets over the next 18 months no impairment to the value of
the investment in Hemogenyx Pharmaceuticals LLC was required as at 31 December
2024.
· Carrying value of licensed intangible assets The Committee reviewed the impairment assessment report prepared by management
and agreed that given the licenses are still active and the licensing parties
have not expressed a want to revoke the Company's rights no impairment to the
value of licensed intangible assets, being rights to certain intellectual
property of Cornell University and Eli Lilly and Company, was required as at
31 December 2024.
· Going concern review The Committee considered the ability of the Group to operate as a Going
Concern considering cash flow forecasts for the next 12 months and milestone
achievements. It was determined by the Committee that it was reasonable to
expect that the Group has or will have access to sufficient funding in order
to achieve its 12-month milestone targets and that it was appropriate for the
Financial Statements to be prepared on a going concern basis.
· Review of audit and non-audit services and fees The external auditor is not engaged by the Group to carry out any non-audit
work in respect of which it might, in the future, be required to express an
audit opinion.
The Committee reviewed the fees charged for the provision of audit and
non-audit services and determined that they were in line with fees charged to
companies of similar size and stage of development.
The Committee considered and was satisfied the external auditor's assessment
of its own independence.
Remuneration Committee
The remuneration committee reviews the performance of the Executive Directors
and makes recommendations to the Board on matters relating to their
remuneration and terms of employment. The committee also makes recommendations
to the Board on proposals for the granting of share awards and other equity
incentives pursuant to any share award scheme or equity incentive scheme in
operation from time to time. The Remuneration Committee will meet at least
twice a year.
The members of the Remuneration Committee are Peter Redmond, who acts as
chairman of the committee, and Alexis Sandler.
Nomination Committee
The Nomination Committee is responsible for considering and making
recommendations to the Board in respect of appointments to the Board, the
Board committees and the chairmanship of the Board committees. It is also
responsible for keeping the structure, size and composition of the Board under
regular review, and for making recommendations to the Board with regard to any
changes necessary, taking into account the skills and expertise that will be
needed on the Board in the future. The Nomination Committee meets at least
once a year.
The members of the Nomination Committee are Peter Redmond, who acts as
chairman of the committee, Professor Sir Marc Feldmann, and Alexis Sandler.
Leadership
The Company is headed by an effective Board which is collectively responsible
for the long-term success of the Company.
The role of the Board: the Board sets the Company's strategy, ensuring that
the necessary resources are in place to achieve the agreed strategic
priorities, and reviews management and financial performance. It is
accountable to shareholders for the creation and delivery of strong,
sustainable financial performance and long-term shareholder value. To achieve
this, the Board directs and monitors the Company's affairs within a framework
of controls which enable risk to be assessed and managed effectively. The
Board also has responsibility for setting the Company's core values and
standards of business conduct and for ensuring that these, together with the
Company's obligations to its stakeholders, are widely understood throughout
the Company. The Board has a formal schedule of matters reserved which is
provided later in this report.
Board Meetings: the core activities of the Board are carried out in scheduled
meetings of the Board. These meetings are timed to link to key events in the
Company's corporate calendar and regular reviews of the business are
conducted. Additional meetings and conference calls are arranged to consider
matters which require decisions outside the scheduled meetings. During the
year, the Board met formally on 12 occasions.
Outside the scheduled meetings of the Board, the Directors maintain frequent
contact with each other to discuss any issues of concern they may have
relating to the Company or their areas of responsibility, and to keep them
fully briefed on the Company's operations.
Matters reserved specifically for the Board: the Board has a formal schedule
of matters reserved that can only be decided by the Board. The key matters
reserved are the consideration and approval of:
· The Company's overall strategy;
· Financial statements and dividend policy;
· Management structure including succession planning, appointments
and remuneration; material acquisitions and disposal, material contracts,
major capital expenditure projects and budgets;
· Capital structure, debt and equity financing and other matters;
· Risk management and internal controls;
· The Company's corporate governance and compliance arrangements;
and
· Corporate policies
Summary of the Board's work in the year: during the year, the Board considered
all relevant matters within its remit, but focused in particular on the
development and risk diversification of the Company.
Attendance at Board meetings
Number held and entitled to attend Number attended
Dr Vladislav Sandler 10 10
Professor Sir Marc Feldmann 10 2
Alexis Sandler 10 8
Peter Redmond 10 8
The Board is pleased with the high level of attendance and participation of
Directors at Board and committee meetings.
The Chairman sets the Board Agenda and ensures adequate time for discussion.
Non-Executive Directors: the Non-Executive Directors bring a broad range of
business and commercial experience to the Company and have a particular
responsibility to challenge independently and constructively the performance
of the Executive management (where appointed) and to monitor the performance
of the management team in the delivery of the agreed objectives and targets.
All directors with the exception of the CEO and Professor Sir Marc Feldmann
were appointed for an initial term of 12 months. These terms were extended by
mutual agreement after satisfactory performance and re-election by
shareholders.
Other governance matters: all of the Directors are aware that independent
professional advice is available to each Director in order to properly
discharge their duties as a Director. In addition, each Director and Board
committee has access to the advice of the Company Secretary.
The Company Secretary: the Company Secretary during the year was Ben Harber.
Westend Corporate LLP were appointed on 1 January 2025. They are responsible
for the Board complying with UK procedures.
Effectiveness
For the period under review the Board comprised a Chief Executive Officer, a
Non-Executive Chairman, and two independent Non-Executive Directors.
Biographical details of the Board members are set out on page 8 of this
report.
The Directors are of the view that the Board and its committees consist of
Directors with an appropriate balance of skills, experience, independence and
diverse backgrounds to enable them to discharge their duties and
responsibilities effectively.
Independence: the Non-Executive Directors bring a broad range of business and
commercial experience to the Company. The Board considers each of the
Non-Executive Directors to be independent in character and judgement.
Appointments: the Board is responsible for reviewing and the structure, size
and composition of the Board and making recommendations to the board with
regards to any required changes.
Commitments: all Directors have disclosed any significant commitments to the
Board and confirmed that they have sufficient time to discharge their duties.
Induction: all new Directors received an induction as soon as practical on
joining the Board.
Conflict of interest: a Director has a duty to avoid a situation in which he
or she has, or can have, a direct or indirect interest that conflicts, or
possibly may conflict with the interests of the Company. The Board had
satisfied itself that there is no compromise to the independence of those
Directors who have appointments on the Boards of, or relationships with,
companies outside the Company. The Board requires Directors to declare all
appointments and other situations which could result in a possible conflict of
interest.
Board performance and evaluation: Hemogenyx Pharmaceuticals plc has a policy
of appraising Board performance annually. Having reviewed various approaches
to Board appraisal, it has concluded that for a company of its current scale,
an internal process in which all Board members submit answers to a
questionnaire that considers the functionality of the Board and its committees
is most appropriate at this stage.
Accountability
The Board is committed to providing shareholders with a clear assessment of
the Company's position and prospects. This is achieved through this report and
as required in other periodic financial and trading statements.
Going concern: the Company's business activities, together with factors likely
to affect its future operations, financial position, and liquidity position
are set out in the Chairman's Statement and the principal risks and
uncertainties sections of the Directors' Strategic Report. In addition, the
Notes to the Financial Statements disclose the Company's financial risk
management practices with respect to its capital structure, liquidity risk,
interest rate risk, credit risk, and other related matters.
The Directors, having made due and careful enquiry, are of the opinion that
the Company has or will have adequate working capital to execute its
operations and has the ability to access additional financing over the next 12
months. The Directors, therefore, have made an informed judgement, at the time
of approving financial statements, that there is a reasonable expectation that
the Company has adequate resources to continue in operational existence for
the foreseeable future. As a result, the Directors have continued to adopt the
going concern basis of accounting in preparing the annual financial
statements.
Internal controls: the Board of Directors reviews the effectiveness of the
Company's system of internal controls in line with the requirement of the
Code. The internal control system is designed to manage the risk of failure to
achieve its business objectives. This covers internal financial and
operational controls, compliances and risk management. The Company has
necessary procedures in place for the year under review and up to the date of
approval of the Annual Report and financial statements. The Directors
acknowledge their responsibility for the Company's system of internal controls
and for reviewing its effectiveness. The Board confirms the need for an
ongoing process for identification, evaluation and management of significant
risks faced by the Company. The Directors carry out a risk assessment before
signing up to any commitments.
Workforce policies and practices
The Board is responsible for ensuring that workforce policies and practices
are consistent with the Group's values and support its long-term sustainable
success, and that staff are able to raise any matters of concern. The
Non-executive Director designated to engage with the workforce on these
matters is Alexis Sandler. Ms Sandler, and in turn the Board, review the
Group's policies and procedures, including anti-harassment and discrimination
policies, sexual harassment reporting procedures, and procedures for reporting
grievances or other concerns, and oversee the proportionate and independent
investigation of any matters arising from them. These policies are provided to
workers prior to the start of their work with the Group, and hard copies are
posted prominently in the Group's operating premises together with other
legally required notices.
Relations with stakeholders
The Company is committed to a continuous dialogue with shareholders as it
believes that this is essential to ensure a greater understanding of and
confidence amongst its shareholders in the medium- and longer-term strategy of
the Group and in the Board's ability to oversee its implementation. It is the
responsibility of the Board as a whole to ensure that a satisfactory
dialogue takes place.
Section 172 of the Companies Act 2006 requires Directors to take into
consideration the interests of stakeholders in their decision making. The
Board is committed to understanding and engaging with all key stakeholder
groups of the Company in order to maximise value and promote long-term Company
success in line with our strategic objectives. The Board recognises its duties
under Section 172 and continuously has regard to how the Company's activities
and decisions will impact employees, those with which it has a business
relationship, the community and environment and its reputation for high
standards of business conduct. In weighing all of the relevant factors, the
Board, acting in good faith and fairly between members, makes decisions and
takes actions that it considers will best lead to the long-term success of the
Company.
During the year, the Board assessed its current activities between the Board
and its stakeholders, which demonstrated that the Board actively engages with
its stakeholders and takes their various objectives into consideration when
making decisions. Specifically, actions the Board has taken to engage with its
stakeholders in 2024 include:
· Attended the 2024 AGM and GM, and prepared to answer any
questions raised by shareholders;
· Arranged meetings with certain stakeholders to provide them with
updates on the Company's research and development activities and other general
corporate updates;
· Made presentations at conferences and published recordings and
slide decks on the Company's research and development;
· Evaluated the relationships with the Company's various
collaborators through management and identified ways to strengthen
relationships and arrangements with key collaborations; and
· Monitored company culture and engaged with employees on efforts
to continuously improve company culture and morale.
The Board believes that appropriate steps and considerations have been taken
during the year so that each Director has an understanding of the various key
stakeholders of the Company. The Board recognises its responsibility to
contemplate all such stakeholder needs and concerns as part of its
discussions, decision-making, and in the course of taking actions, and will
continue to make stakeholder engagement a top priority in the coming years.
The Board's primary shareholder contact is through Peter Redmond, the
Non-Executive Director responsible for shareholder relations. The Chairman,
the CEO and other Directors, as appropriate, make themselves available for
contact with major shareholders and other stakeholders in order to understand
their issues and concerns.
The Company plans to use the AGM as an opportunity to communicate with its
shareholders. Notice of the AGM will be issued shortly and at least 21 days
before the date of the meeting. To ensure compliance with the Governance Code,
the Board proposes separate resolutions for each issue, and proxy forms allow
shareholders who are unable to attend the AGM to vote for or against or to
withhold their vote on each resolution. The results of all proxy voting will
be published on the Group's web site after the AGM. Shareholders who attend
the AGM will have the opportunity to ask questions.
The Group's web site at https://hemogenyx.com is the primary source of
information on the Group. The web site includes an overview of the activities
of the Group and all recent Group announcements.
Viability statement
In accordance with the UK Corporate Governance Code published in July 2018,
the Directors have assessed the prospects of the Group and concluded that it
is appropriate to adopt the going concern basis of accounting based on the
amount of cash on hand at the end of the year and at the time of publication
of this report. The assessment of going concern is disclosed in Note 2.
The Board's assessment of the Group's current position and principal risks are
disclosed in the Directors' Strategic Report on page 8 of this report.
Dr Vladislav Sandler
CEO
Directors' Remuneration Report
The Company has an established remuneration committee. The Committee reviews
the scale and structure of the Directors' fees, taking into account the
interests of shareholders and the performance of the Company and directors.
The items included in this report are unaudited unless otherwise stated.
Statement of Hemogenyx Pharmaceutical plc's Policy on Directors' Remuneration
by the Chairman of the Remuneration Committee
As Chairman of the Remuneration Committee I am pleased to introduce our
Directors' Remuneration Report. One of the Remuneration Committee's aims is to
provide clear, transparent remuneration reporting for our shareholders which
adheres to the best practice corporate governance principles that are required
for listed organisations.
The Directors' Remuneration Policy, which is set out on page 32 of this
report, will be submitted to shareholders for approval at our Annual General
Meeting.
A key focus of the Directors' Remuneration Policy is to align the interests of
the Directors to the long-term interests of the shareholders and aims to
support a high-performance culture with appropriate reward for superior
performance, without creating incentives that will encourage excessive risk
taking or unsustainable company performance. This is underpinned through the
implementation and operation of incentive plans.
Key Activities of the Remuneration Committee
The key activities of the Remuneration Committee are:
§ to determine and agree with the Board the framework or broad policy for the
remuneration of the Company's chairman, chief executive, the executive
directors, the company secretary and such other members of the executive
management as it is designated to consider;
§ in determining such policy, take into account all factors which it deems
necessary including relevant legal and regulatory requirements, the provisions
and recommendations of the UK Corporate Governance Code (the "Code") and
associated guidance. The objective of such policy shall be to ensure that
members of the executive management of the Company are provided with
appropriate incentives to encourage enhanced performance and are, in a fair
and responsible manner, rewarded for their individual contributions to the
success of the Company;
§ recommend and monitor the level and structure of remuneration for senior
management;
§ when setting remuneration policy for directors, review and have regard to
the remuneration trends across the Company, and review the on-going
appropriateness and relevance of the remuneration policy;
§ obtain reliable, up-to-date information about remuneration in other
companies. To help it fulfil its obligations the Committee shall have full
authority to appoint remuneration consultants and to commission or purchase
any reports, surveys or information which it deems necessary, within any
budgetary restraints imposed by the Board;
§ be exclusively responsible for establishing the selection criteria,
selecting, appointing and setting the terms of reference for any remuneration
consultants who advise the Committee;
§ approve the design of, and determine targets for, any performance related
pay schemes operated by the Company and approve the total annual payments made
under such schemes;
§ review the design of all share incentive plans for approval by the Board
and shareholders. For any such plans, determine each year whether awards will
be made, and if so, the overall amount of such awards, the individual awards
to executive directors, company secretary and other designated senior
executives and the performance targets to be used;
§ ensure that contractual terms on termination, and any payments made, are
fair to the individual, and the Company, that failure is not rewarded and that
the duty to mitigate loss is fully recognised; and
§ oversee any major changes in employee benefits structures throughout the
Company.
Members
The Remuneration Committee comprises the following independent Non-Executive
Directors:
Name Date of appointment
Position
Peter Redmond Chairman 5 October 2017
Alexis Sandler Member 5 October 2017
Remuneration Components
The Company remunerates directors in line with best market practice in the
industry in which it operates. The components of Director remuneration that
are considered by the Board for the remuneration of directors in future years
are likely to consist of:
· Base salaries
· Pension and other benefits
· Annual bonus
· Share incentive arrangements
The Executive Director has entered into a service agreement with the Company
and the Non-Executive Directors have entered into letters of appointment with
the Company.
All such contracts impose certain restrictions as regards the use of
confidential information and intellectual property and the Executive
Director's service contract imposes restrictive covenants which apply
following the termination of the agreement.
The Executive Director Dr Vladislav Sandler is entitled to pay at a rate of
£1,500 per day for time spent in the UK on the Company's business. In
addition, Dr Sandler has a separate contract with Hemogenyx Pharmaceuticals
LLC effective 1 September 2017 appointing him as CEO and Chief Scientific
Officer of that company for an initial three-year term with automatic
continuation and setting out his duties in relation to his day-to-day to work
in connection with Hemogenyx Pharmaceuticals' product candidates. Pursuant to
this contract, Dr Sandler was entitled to receive $324,000 in March 2023 which
rose to $389,000 in March 2024 and four weeks' holiday a year. Dr Sandler is
also subject to certain non-compete and non-interference covenants in the
event of its termination (subject to certain limited exceptions). Dr Sandler
also has a separate contract with Immugenyx LLC effective from 1 January 2019
appointing him as CEO and Chief Scientific Officer of that company for an
initial three-year term with automatic continuation and setting out his duties
in relation to his day-to-day work in connection with Immugenyx's development
of its AHC. Pursuant to this contract, Dr Sandler receives $64,889 (2023:
$64,889) and 10,000 ownership units in Immugenyx LLC per annum. This contract
has the same noncompete and non-interference covenants in the event of its
termination as his contract with Hemogenyx Pharmaceuticals LLC.
Other Matters
The Company does not currently have any annual or long-term incentive schemes
or any other scheme interests in place for any of the Directors.
The Company has established a workplace pension scheme but it does not
presently have any employees qualifying under the auto-enrolment pension rules
who have not opted out of the scheme. It makes matching contributions to a
401(k) pension plan for employees in the US of up to 4%. The Company has not
paid out any excess retirement benefits to any Directors or past Directors.
The Company has not paid any compensation to past Directors.
Recruitment Policy
Base salary levels will take into account market data for the relevant role,
internal relativities, their individual experience and their current base
salary. Where an individual is recruited at below market norms, they may be
re-aligned over time (e.g. two to three years), subject to performance in the
role. Benefits will generally be in accordance with the approved policy.
For external and internal appointments, the Board may agree that the Company
will meet certain relocation and/or incidental expenses as appropriate.
Payment for Loss of Office
The Committee will honour Executive Directors' contractual entitlements.
Service contracts do not contain liquidated damages clauses. If a contract is
to be terminated, the Committee will determine such mitigation as it considers
fair and reasonable in each case. There is no agreement between the Company
and its Executive Directors or employees, providing for compensation for loss
of office or employment that occurs because of a takeover bid.
The Committee reserves the right to make additional payments where such
payments are made in good faith in discharge of an existing legal obligation
(or by way of damages for breach of such an obligation); or by way of
settlement or compromise of any claim arising in connection with the
termination of an Executive Director's office or employment.
Service Agreements and Letters of Appointment
The Executive Director's service agreement had an initial term of two years
and may subsequently be terminated by the Company or the Executive Director by
giving 6 months' notice.
Date of service agreement Notice period by Company (months) Notice period by Director (months)
Name
Dr Vladislav Sandler 4 October 2017 6 6
The Non-Executive Directors of the Company do not have service contracts but
are appointed by letters of appointment. Each Non-Executive Director's term of
office runs for an initial period of one year unless terminated earlier upon
written notice or upon their resignations.
The terms of the Non-Executive Directors' appointments are subject to their
re-election by the Company's shareholders at any Annual General Meeting at
which the Non-Executive Directors stand for re-election.
The details of each Non-Executive Director's current term are set out below:
Notice period by Company (months) Notice period by Director (months)
Current term (years)
Date of service agreement Date of resignation
Name
Alexis Sandler 4 October 2017 2 3 3 -
Peter Redmond 4 October 2017 2 3 3 -
Professor Sir Marc Feldmann 11 October 2024 1 3 3 -
Executive Directors' Remuneration (audited)
The table below sets out the remuneration received by each Executive Director
for the years ended 31 December 2024 and 2023. Dr Vladislav Sandler was the
highest paid Director:
Basic salary Pension Total
2023 2023 2023
Executive Directors £'000 £'000 £'000
Dr Vladislav Sandler 389 8 397
Total 389 8 397
Basic salary Pension Total
2024 2024 2024
Executive Directors £'000 £'000 £'000
Dr Vladislav Sandler 439 6 445
Total 439 6 445
Non-Executive Directors' Remuneration (audited)
The table below sets out the remuneration received by each Non-Executive
Director during the years ended 31 December 2024 and 2023:
Basic salary Total
2023 2023
£'000 £'000
Alexis Sandler 60 60
Peter Redmond 50 50
Professor Sir Marc Feldmann 15 15
Total 125 125
Basic salary Total
2024 2024
£'000 £'000
Alexis Sandler 60 60
Peter Redmond 58 58
Professor Sir Marc Feldmann 49 49
Total 167 167
Relative importance of spend on pay
The table below illustrates the year-on-year change in total remuneration
compared to distributions to shareholders and loss before tax for the
financial years ended 31 December 2024 and 2023:
Distributions to shareholders Total employee pay (including stock based compensation) Operational cash outflow
£ £ £
Year ended 31 December 2023 - 2,151,045 6,105,570
Year ended 31 December 2024 - 2,259,424 3,516,891
Percentage change N/A 5.0% -42.4%
Total employee pay includes wages and salaries, social security costs,
healthcare cost, 401K scheme cost and share-based payments for employees in
continuing operations. Further details on Employee remuneration are provided
in Note 6.
Operational cash outflow has been shown in the table above as cash flow
monitoring and forecasting is an important consideration for the Remuneration
Committee and Board of Directors when determining cash-based remuneration for
directors and employees.
Historical share price performance comparison
The chart below compares the share price performance (based on a notional
investment of £100) of Hemogenyx Pharmaceuticals plc against the FTSE
SmallCap and FTSE Techmark Mediscience for the period November 2015 to
December 2024 calculated on a month end spot basis. The FTSE SmallCap has been
chosen to provide a wider market comparator constituting companies of an
appropriate size and the FTSE Techmark Mediscience chosen due to sector
relevance:
Hemogenyx Pharmaceuticals plc was listed in November 2015 (under the name
Silver Falcon plc) and therefore no historical share price data exists prior
to this period. There was also no data between December 2015 and October 2017
pending completion of a transaction. It is for these reasons that the
historical investment performance is not reflective of the current Group.
Consideration of shareholder views
The Board considers shareholder feedback received and guidance from
shareholder bodies. This feedback, plus any additional feedback received from
time to time, is considered as part of the Company's annual policy on
remuneration.
Approved on behalf of the Board of Directors.
Peter Redmond
Director & Remuneration Committee Chairman
25 April 2025
Independent Auditor's Report to the Members of Hemogenyx Pharmaceuticals Plc
Opinion
We have audited the financial statements of Hemogenyx Pharmaceuticals Plc (the
'parent company') and its subsidiaries (the 'group') for the year ended 31
December 2024 which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated and Company Statements of Financial Position, the
Consolidated and Company Statements of Changes in Equity, the Consolidated and
Parent Company Statements of Cash Flows and notes to the financial statements,
including significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and UK-adopted
international accounting standards and as regards the parent company financial
statements, as applied in accordance with the provisions of the Companies Act
2006.
In our opinion:
· the financial statements give a true and fair view of the state
of the group's and of the parent company's affairs as at 31 December 2024 and
of the group's loss for the year then ended;
· the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
· the parent company financial statements have been properly
prepared in accordance with UK-adopted international accounting standards and
as applied in accordance with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which indicates that
the group will need to obtain additional funding in order to complete its
Phase 1 clinical development of CAR-T product, together with working capital
requirements. As stated in note 2, these events or conditions, along with the
other matters as set forth in note 2, indicate that a material uncertainty
exists that may cast significant doubt on the group's and company's ability to
continue as a going concern. Our opinion is not modified in respect of this
matter.
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group's and company's ability to continue to adopt the going
concern basis of accounting included reviewing key assumptions and inputs used
by management in their cash flow forecasts, checking mathematical accuracy, as
well as discussing with management how they intend to fund the clinical
trials. Furthermore, we have assessed the probability of obtaining additional
sources of funds when required, along with an assessment of committed
expenditure and those which are able to be deferred or tapered.
In relation to the group's and company's reporting on how it has applied the
UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to:
· the directors' statement in the financial statements about
whether the directors considered it appropriate to adopt the going concern
basis of accounting; and
· the directors' identification in the financial statements of the
material uncertainty related to the entity's ability to continue as a going
concern over a period of at least twelve months from the date of approval of
the financial statements.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
For the purposes of determining whether the financial statements are free from
material misstatement, we define materiality as the magnitude or nature of
misstatement that makes it probable that the economic decisions of a
reasonably knowledgeable person, relying on the financial statements, would be
changed, or influenced. We also determine a level of performance materiality
which we use to assess the extent of testing needed to reduce to an
appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality for the financial statements as a
whole.
Materiality for the group financial statements as a whole was set at £115,000
(2023: £132,000). This was calculated based on 2% of total expenses, which is
unchanged from the prior year. Using our professional judgement, we have
determined this to be the principal benchmark within the financial statements
as it will be most relevant to stakeholders in assessing the financial
performance of the group during its years of development as the group is not
currently revenue generating.
Materiality for the parent company financial statements as a whole was set at
£22,000 (2023: £29,000) based on 2% of total expenses, which is unchanged
from the prior year. We have determined this level of materiality for the
parent company to gain sufficient coverage of expenses.
Performance materiality for the group financial statements was set at £80,000
(2023: £92,400) and the parent company was set at £15,000 (2023: £20,300),
being 70% of materiality for the financial statements as a whole. A benchmark
of 70% for performance materiality, which is unchanged from the prior year,
was applied to provide sufficient coverage of significant and residual risks.
We agreed to report to those charged with governance all corrected and
uncorrected misstatements we identified through our audit with a value in
excess of £5,000 (2023: £6,600) for the group financial statements and
£1,000 (2023: £1,450) for the parent company financial statements. We also
agreed to report any other audit misstatements below that threshold that we
believe warranted reporting on qualitative grounds.
Our approach to the audit
The scope of our audit was influenced by our application of materiality. The
quantitative and qualitative thresholds for materiality determine the scope of
our audit and the nature, timing, and extent of our audit procedures.
The group includes the listed parent company and its US-based subsidiaries. We
assessed the structure of the group, its accounting processes and controls,
and the industry in which it operates in order to determine the scope of our
audit work and ensure that we obtained sufficient and appropriate audit
evidence on which to base our group audit opinion. Those entities of the group
which were considered to be material components, being the parent company and
the subsidiary Hemogenyx Pharmaceuticals LLC, were subject to full scope audit
procedures by us. We did not rely on the work of any component auditors.
Procedures were performed to address the assessed risks of material
misstatement at component level.
As part of our planning, we assessed the risk of material misstatement
including those that required significant auditor consideration at the
component and group level. Procedures were then performed to address the risk
identified and for the most significant assessed risks of material
misstatement. The procedures performed are outlined below in the key audit
matters section of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter
described in the Material uncertainty related to going concern section we
have determined the matter described below to be the key audit matters to be
communicated in our report.
Key Audit Matter How our scope addressed this matter
Carrying value of investments in, and loans to, subsidiary undertakings
(Parent company only - Note 2, Note 13 and Note 14)
Investments held by the parent company in subsidiaries, as at 31 December As part of our audit, we have performed the following procedures:
2024, totalled £8,000,000 in the Company Statement of Financial Position.
Loans to those subsidiaries, as at 31 December 2024, are reported as · Reviewed and challenged the directors' assessment of the carrying
£21,862,118. value of investments and loans to subsidiary undertakings, and their
conclusions thereon;
These are significant balances due to the parent company. If the subsidiary
undertakings are unable to generate sufficient future profits in the · Reviewed and assessed the subsidiary undertakings' financial
foreseeable future, there is a risk that both the investment and loans held in performance and development progress to corroborate the directors' evaluation
those entities are overstated. of recoverability;
Given the aforementioned, the carrying value of investments in and loans to · Reviewed and assessed the current state of development, and
subsidiary undertakings was deemed to be a key audit matter. scientific and commercial progress of the products under development;
· Agreed ownership documents of all the subsidiaries in the group;
and
· Reviewed the market capitalisation of the group to provide
further assurance of the carrying value of the investments and loans to
subsidiary undertakings subsequent to the year end.
Through the performance of the above testing, we conclude that management's
assessment of the carrying value of investments in, and loans to, subsidiary
undertakings is reasonable. Recoverability is dependent on successful project
development through the clinical trial phase and securing regulatory approval.
Other information
The other information comprises the information included in the Annual Report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group and parent company financial
statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent company financial statements and the part of the
directors' remuneration report to be audited are not in agreement with the
accounting records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Corporate governance statement
We have reviewed the directors' statement in relation to going concern,
longer-term viability and that part of the Corporate Governance Statement
relating to the group's and parent company's compliance with the provisions of
the UK Corporate Governance Code specified for our review by the Listing
Rules.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the Corporate Governance Statement is materially
consistent with the financial statements or our knowledge obtained during the
audit:
· Directors' statement with regards the appropriateness of adopting
the going concern basis of accounting and any material uncertainties
identified set out on page 21;
· Directors' explanation as to their assessment of the group's
prospects, the period this assessment covers and why the period is appropriate
set out on page 30;
· Directors' statement on whether they have a reasonable
expectation that the group will be able to continue in operation and meet its
liabilities set out on page 54;
· Directors' statement that they consider the annual report and the
financial statements, taken as a whole, to be fair, balanced and
understandable set out on page 22;
· Board's confirmation that it has carried out a robust assessment
of the emerging and principal risks set out on page 15;
· The section of the annual report that describes the review of
effectiveness of risk management and internal control systems set out on page
27; and
· The section describing the work of the audit committee set out on
page 24.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors
are responsible for assessing the group's and the parent company's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the group and parent company and
the sector in which they operate to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management,
and application of our cumulative audit knowledge and experience of the
sector.
· We determined the principal laws and regulations relevant to the
group and parent company in this regard to be those arising from the Companies
Act 2006, Listing Rules, the Disclosure Guidance and Transparency Rules, the
UK Corporate Governance Code and compliance with US Food and Drug
Administration requirements.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
and parent company with those laws and regulations. These procedures included,
but were not limited to:
o Making inquiries of management;
o Reviewing legal and professional fees;
o Reviewing board and audit committee minutes; and
o Reviewing regulated news service publications.
· We also identified the potential risks of material misstatement
of the financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, that a potential for management bias exists in relation to the
carrying value of investments in, and loans to, subsidiary undertakings -
parent company. See key audit matters section above.
· As in all our audits, we addressed the risk of fraud arising from
management override of controls by performing audit procedures which included,
but were not limited to: the testing of journals; reviewing accounting
estimates for evidence of bias; and evaluating the business rationale of any
significant transactions that are unusual or outside the normal course of
business.
· Compliance with laws and regulations at the subsidiary level was
ensured through inquiry of management and review of correspondence for any
instances of non-compliance.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Other matters which we are required to address
We were first appointed by the audit committee to audit the financial
statements for the period ended 31 December 2015 and subsequent financial
periods. Our total uninterrupted period of engagement is 10 years, covering
the periods ended 31 December 2015 to 31 December 2024.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the group or the parent company and we remain independent of the
group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
David Thompson (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
Consolidated Statement of Comprehensive Income
Group - Continuing Operations Note Year Ended 31 December 2024 Year Ended 31 December 2023
£ £
Revenue - -
Administrative and Research and Development Expenses 5 (4,737,802) (5,820,165)
Depreciation Expense 10,11 (639,285) (645,681)
Operating Loss (5,377,087) (6,465,846)
Finance Income 23,164 85,344
Finance Costs (271,555) (315,991)
Loss before Taxation (5,625,478) (6,696,493)
Income tax 8 - -
Loss for the year (5,625,478) (6,696,493)
Loss attributable to:
- Owners of Hemogenyx Pharmaceuticals plc (5,619,181) (6,690,678)
- Non-controlling interests (6,297) (5,815)
(5,625,478) (6,696,493)
Items that may be reclassified subsequently to profit or loss:
Translation of foreign operations (358,396) 903,067
Other comprehensive income for the year (358,396) 903,067
Total comprehensive loss for the year (5,983,937) (5,793,426)
Attributable to:
Owners of Hemogenyx Pharmaceuticals plc (5,977,640) (5,787,611)
Non-controlling interests (6,297) (5,815)
Total comprehensive loss for the year (5,983,937) (5,793,426)
Basic and diluted earnings loss per share attributable to the equity owners of 9
the Company
(1.811) (2.370)
Consolidated Statement of Financial Position
Group Note
31 December 2024 31 December 2023 (Restated)
Assets £ £
Non-current assets
Property, plant and equipment 10 759,408 966,423
Right of use asset 11 1,967,813 2,346,015
Security deposit 167,888 153,668
Intangible asset 12 477,403 470,173
Total non-current assets 3,372,512 3,936,279
Current assets
Trade and other receivables 15 679,783 922,013
Cash and cash equivalents 159,265 1,247,601
Total current assets 839,048 2,169,614
Total assets 4,211,560 6,105,893
Equity and Liabilities
Equity attributable to shareholders
Paid-in Capital
Called up share capital 16 35,045 11,755,660
Share premium 17 21,388,546 19,938,556
Deferred share capital 16 13,983,115 -
Other reserves 18 1,508,572 1,164,637
Reverse asset acquisition reserve (6,157,894) (6,157,894)
Foreign currency translation reserve (435,955) (77,496)
Retained Earnings (29,423,915) (23,804,734)
Equity attributable to owners of the Company 897,514 2,818,729
Non-controlling interests (44,020) (37,723)
Total equity 853,494 2,781,006
Liabilities
Non-current liabilities
Lease liabilities 11 2,199,413 2,583,364
Total non-current liabilities 2,199,413 2,583,364
Current liabilities
Trade and other payables 20 734,980 379,001
Lease liabilities 11 423,673 362,522
Total current liabilities 1,158,653 741,523
Total liabilities 3,358,066 3,324,887
Total equity and liabilities 4,211,560 6,105,893
Company Statement of Financial Position
Company Note
31 December 2023 31 December 2023
£ £
Assets
Non-current assets
Loan to subsidiaries 13 21,862,118
18,097,857
Investment in subsidiary 14 8,000,000
8,000,000
Total non-current assets 29,862,118 26,097,857
Current assets
Trade and other receivables 15 19,463
14,820
Cash and cash equivalents 52,262
219,236
Total current assets 71,725
234,056
Total assets 29,933,843 26,331,913
Equity and Liabilities
Equity attributable to shareholders
Paid-in Capital
Called up share capital 16 35,045
11,755,660
Share premium 17 21,388,546 19,938,556
Deferred share capital 16 13,983,115 -
Other reserves 18 1,507,468 1,163,533
Retained Earnings (7,359,622) (6,721,085)
Total Equity 29,554,552 26,136,664
Liabilities
Current liabilities
Trade and other payables 20 379,291
195,249
Total current liabilities 379,291
195,249
Total liabilities 379,291 195,249
Total equity and liabilities 29,933,843 26,331,913
Hemogenyx Pharmaceuticals plc has used the exemption granted under s408 of the
Companies Act 2006 that allows for the non-disclosure of the Income Statement
of the parent company. The after-tax loss attributable to Hemogenyx
Pharmaceuticals plc for the year ended 31 December 2024 was £638,537 (2023:
loss of £1,620,638).
Consolidated Statement of Changes in Equity
Group
Called up Share Capital Share Premium Foreign currency translation reserve Retained earnings Total Equity
Deferred Other reserves Reverse acquisition reserve Non-
Share Controlling interests
capital
£ £ £ £ £ £ £ £
As at 1 January 2023 16,808,647 (6,157,894)
9,797,493 - 921,801 (980,563) (17,114,056) (31,908) 3,243,520
Loss in year - - (6,690,678) (6,696,493)
- - - - (5,815)
Other Comprehensive Income - - -
- - - 903,067 - 903,067
Total comprehensive income for the year - - -
903,067
- - - 903,067 -
Issue of shares 1,958,167 - 3,296,458 - - - - - 5,254,625
Cost of capital - - (166,549) - - - - - (166,549)
Issue of options - - - 242,836 - - - - 242,836
As at 31 December 2023 11,755,660 19,938,556 (23,804,734) 2,781,006
- 1,164,637 (6,157,894) (77,496) (37,723)
Loss in year - - (5,619,181) (5,625,478)
- - - - (6,297)
Other Comprehensive Income - - -
- - - (358,459) - (358,459)
Total comprehensive income for the year - - - (358,459)
- - - (358,459) -
Issue of shares 2,262,500 - 1,662,500 - - - - - 3,925,000
Cost of capital - - (212,510) - - - - - (212,510)
Capital
reorganization (13,983,115) - - - - - - -
13,983,115
Issue of options - - 343,935 - - - - 343,935
-
As at 31 December 2024 35,045 21,388,546 (29,423,915) 853,494
13,983,115 1,508,572 (6,157,894) (435,955) (44,020)
Company Statement of Changes in Equity
Company
Called up Share Capital Share Premium Other reserves Retained earnings Total Equity
Deferred
share capital
£ £ £ £ £
As at 31 December 2022 9,797,493 16,808,647 (5,100,447) 22,426,390
- 920,697
Loss in year - - (1,620,638) (1,620,638)
- -
Other Comprehensive Income - - - -
- -
Total comprehensive income for the year - - (1,620,638) (1,620,638)
- -
Issue of shares 1,958,167 3,296,458 - - 5,254,625
-
Cost of capital - (166,549) - - (166,549)
-
Issue of options - - - 242,836 - 242,836
As at 31 December 2023 11,755,660 19,938,556 (6,721,085) 26,136,664
1,163,533
-
Loss in year - - (638,537) (638,537)
- -
Other Comprehensive Income - - - -
- -
Total comprehensive income for the year - - (638,537) (638,537)
-
-
Issue of shares 2,262,500 1,662,500 - - 3,925,000
Cost of capital - - (212,510) - - (212,510)
Capital (13,983,115) - - - -
reorganization 13,983,115
Issue of options - - 343,935 - 343,935
As at 31 December 2024 35,045 21,388,546 (7,359,622) 29,554,552
1,507,468
13,983,115
Consolidated Statement of Cash Flows
Group Note Year Ended Year Ended
31 December 2024
31 December 2023
£ £
Cash flows generated from operating activities
Loss before income tax (5,625,478) (6,696,493)
Depreciation and amortisation 10, 11 639,285 645,681
Other non-cash items - 81
Interest income (23,164) (85,344)
Interest expense 271,555 315,991
Share based payments 18 343,935 242,836
Changes in right of use asset and lease liability, net 277,284 306,759
Foreign exchange loss (626,240) (1,485)
Increase in trade and other payables 346,521 28,579
(Increase)/Decrease in trade and other receivables (2,637) 4,469
Decrease/(Increase) in prepaid and deposits 258,880 (866,644)
Net cash outflow used in operating activities (4,140,059) (6,105,570)
Cash flows generated from financing activities
Proceeds from issuance equity securities, net of issue costs 3,712,490 5,088,076
Payment of lease liabilities (635,037) (638,765)
Net cash flow generated from financing activities 3,077,453 4,449,311
Cash flows used in investing activities
Interest income 23,164 85,344
Payment of security deposit for lease (11,611) -
Purchase of property & equipment (13,285) (117,285)
Net cash flow used in investing activities (1,732) (31,941)
Net decrease in cash and cash equivalents (1,064,338) (1,688,200)
Effect of exchange rates on cash (23,998) 403,043
Cash and cash equivalents at the beginning of the year 1,247,601 2,532,758
Cash and cash equivalents at the end of the year 159,265 1,247,601
Company Statement of Cash Flows
Company Note Year Ended Year Ended
31 December 2024
31 December 2023
£ £
Cash flows generated from operating activities
Loss before income tax (638,537) (1,620,638)
Foreign exchange gain (347,134) 910,832
Share based payments 18 343,935 242,836
Increase/(decrease) in trade and other receivables (4,643) 5,585
Increase in trade and other payables 184,042 60,592
Net cash outflow used in operating activities (462,337) (400,793)
Cash flows generated from financing activities
Proceeds from issuance of equity securities, net of issue costs 3,712,490 5,088,076
Net cash flow generated from financing activities 3,712,490 5,088,076
Cash flows (used in) investing activities
Loan (to) from related parties (3,417,325) (4,556,312)
Net cash flow used in investing activities (3,417,325) (4,556,312)
Net (decrease)/increase in cash and cash equivalents (167,172) 130,971
Effect of exchange rates on cash 198 (644)
Cash and cash equivalents at the beginning of the year 219,236 88,909
Cash and cash equivalents at the end of the year 52,262 219,236
Notes to the Financial Statements
1. General information
The Group's business is clinical-stage biotechnology focused on the discovery,
development and commercialisation of innovative treatments relating to the
treatment of blood cancers, certain solid cancers, autoimmune diseases, and
viral infections. The products under development are designed to address a
range of problems that occur with current standard of care treatments.
The Company's registered office is located at 6 Heddon Street, London, W1B
4BT, and the Company's shares are listed on the main market of the London
Stock Exchange.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with UK-adopted
international accounting standards and with requirements of the Companies Act
2006. The financial statements have been prepared under the historical cost
convention.
Basis of consolidation
The consolidated financial statements comprise the financial statements of
Hemogenyx Pharmaceuticals plc and its subsidiaries as at 31 December 2024. The
financial statements of the subsidiaries are prepared for the same reporting
period as the parent company, using consistent accounting policies.
All intra-group balances, transactions, income and expenses and profits and
losses resulting from intra-group transactions that are recognised in assets,
are eliminated in full.
Subsidiaries are fully consolidated from the date of acquisition, being the
date on which the Group obtains control, and continue to be consolidated until
the date that such control ceases. Hemogenyx Pharmaceuticals plc owns the
majority of the shareholdings and has operational control over all its
subsidiaries. Please refer to Note 14 for information on the consolidation of
Hemogenyx Pharmaceuticals LLC.
Hemogenyx Pharmaceuticals plc has used the exemption granted under s408 of the
Companies Act 2006 that allows for the non-disclosure of the Income Statement
of the parent company. The after-tax loss attributable to Hemogenyx
Pharmaceuticals plc for the year ended 31 December 2024 was £638,537 (2023:
loss of £1,620,638).
Research and development expenditure
(i) Research and development
Expenditure on research activities, undertaken with the prospect of gaining
new scientific or technical knowledge and understanding, is expensed in profit
or loss as incurred. Development activities involve a plan or design for the
production of new or substantially improved products and processes.
Development expenditures are capitalised only if development costs can be
measured reliably, the product or process is technically and commercially
feasible, future economic benefits are probable, and the Company intends to,
and has sufficient resources to, complete development and to use or sell the
asset. No development costs have been capitalised to date.
(ii) Clinical trial expenses
Clinical trial-related expenses are a component of the Company's research and
development costs. These expenses include fees paid to contract research
organisations, clinical sites, and other organisations who conduct development
activities on the Company's behalf. The amount of clinical trial expenses
recognised in the period related to clinical agreements is based on estimates
of the work performed using an accrual basis of accounting. These estimates
incorporate factors such as patient enrolment, services provided, contractual
terms, and prior experience with similar contracts.
Intangibles
Research and development
Research expenditure is written off as incurred. Development costs are
capitalised only if the expenditure can be measured reliably, the product or
process is technically and commercially feasible, future economic benefits are
probable, the Group intends to and has sufficient resources to complete
development and to use or sell the asset, and it is able to measure reliably
the expenditure attributable to the intangible asset during its development.
The Group's view is that capitalised assets have a finite useful life and to
that extent they should be amortised over their respective unexpired periods
with provision made for impairment when required. Assets capitalised are not
amortised until the associated product is available for use or sale.
Amortisation is calculated using the straight-line method to allocate the
costs of development over the estimated useful economic lives. Estimated
useful economic life is assessed by reference to the remaining patent life and
may be adjusted after taking into consideration product and market
characteristics such as fundamental building blocks and product life cycle
specific to the category of expenditure.
Intellectual property (IP)
IP assets (comprising patents, know-how, copyright and licences) acquired by
the Group as a result of a business combination are initially recognised at
fair value or as a purchase at cost and are capitalised.
Internally generated IP costs are written off as incurred except where IAS 38
criteria, as described in research and development above, would require such
costs to be capitalised.
The Group's view is that capitalised IP assets have a finite useful life and
to that extent they should be amortised over their respective unexpired
periods with provision made for impairment when required. Capitalised IP
assets are not amortised until the Group is generating an economic return from
the underlying asset and as such no amortisation has been incurred to date as
the products to which they relate are not ready to be sold on the open market.
When the trials are completed and the products attain the necessary
accreditation and clearance from the regulators, the Group will assess the
estimated useful economic like and the IP will be amortised using the
straight-line method over their estimated useful economic lives.
Fixed assets
All property and equipment are stated at historical cost less accumulated
depreciation or impairment value. Cost includes the original purchase price
and expenditure that is directly attributable to the acquisition of the items
to bring the asset to its working condition. Depreciation is provided at rates
calculated to write off the cost less estimated residual value of each asset
over its expected useful economic life. Right of Use assets are depreciated
over their expected useful economic life on the same basis as owned assets, or
where shorter, the lease term. Assets are reviewed for impairment when events
or changes in circumstances indicate that the carrying amount may not be
recoverable.
The following rates are used:
Computer equipment 33% Straight-line
Leasehold improvements 12.5% Straight-line
Property & equipment 20% - 50% Straight-line
Impairment of non-financial assets
The Group is required to review, at least annually, whether there are
indications (events or changes in circumstances) that non-financial assets
have suffered impairment and that the carrying amount may exceed the
recoverable amount. If there are indications of impairment, then an impairment
review is undertaken. An impairment charge is recognised within operating
costs for the amount by which the carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of the asset's fair value less
costs to sell and the value-in-use. In the event that an intangible asset will
no longer be used, for example, when a patent is abandoned, the balance of
unamortised expenditure is written off.
Impairment reviews require the estimation of the recoverable amount based on
value-in-use calculations. Non-financial assets relate typically to
investments in related parties and in-process development and patents and
require broader assumptions than for developed technology. Key assumptions
taken into consideration relate to technological, market and financial risks
and include the chance of product launch taking into account the stage of
development of the asset, the scale of milestone and royalty payments, overall
market opportunities, market size and competitor activity, revenue
projections, estimated useful lives of assets (such as patents), contractual
relationships and discount rates to determine present values of cash flows.
Investments
Equity investments in subsidiaries are held at cost, less any provision for
impairment.
Going concern
The preparation of financial statements requires an assessment on the validity
of the going concern assumption.
The Company successfully raised £3.93 million (before expenses) through the
allotment and issue of new ordinary shares during the year ended 31 December
2024, and a further £340 thousand in early 2025. These proceeds were raised
in order to facilitate the progression of the Company's HG-CT-1 product
candidate into clinical trials and to enable the Company to continue
development of product candidates for the treatment of viral infections and
cancers based on its CBR platform.
Funding will be required by the Company to complete Phase I clinical
development.
The Company cannot be certain that such additional funding will be available
on acceptable terms, or at all. To the extent that the Company raises
additional funds by issuing equity securities, the Company's stockholders may
experience dilution. Any debt financing, if available, may involve restrictive
covenants. If the Company is unable to raise additional capital when required
or on acceptable terms, it may have to (i) significantly delay, scale back or
discontinue the development and/or commercialisation of one or more product
candidates; (ii) seek collaborators for product candidates at an earlier stage
than otherwise would be desirable and on terms that are less favourable than
might otherwise be available; or (iii) relinquish or otherwise dispose of
rights to technologies, product candidates or products that it would otherwise
seek to develop or commercialise on unfavourable terms.
The Directors are of the opinion that the Company has adequate working capital
to execute its operations for the present time and is confident in its ability
to access additional financing over the next 12 months, however a material
uncertainty exists. The Directors, therefore, have made an informed judgement,
at the time of approving these financial statements, that there is a
reasonable expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future, however this relies upon the
Company raising additional capital. The Directors have continued to adopt the
going concern basis of accounting in preparing the annual financial
statements.
Trade and other receivables and payables
Trade and other receivables are amounts due from customers for services
performed in the ordinary course of business. If collection is expected in one
year or less (or in the normal operating cycle of the business if longer),
they are classified as current assets. If not, they are presented as
non-current assets.
Trade and other receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method,
less provision for impairment.
Other payables measured at amortised cost are obligations to pay for goods or
services that have been acquired in the ordinary course of business from
suppliers. The payables are classified as current payables if payment is due
within one year or less (or in the normal operating cycle of the business if
longer). If not, they are presented as non-current payables.
The payables are recognised initially at fair value and subsequently measured
at amortised cost using the effective interest method.
Foreign currencies
Functional and presentation currency
The Company's presentation currency is the British Pound Sterling ("£"). The
functional currency for the Company, being the currency of the primary
economic environment in which the Company operates, is the British Pound
Sterling. The individual financial statements of each of the Company's wholly
owned subsidiaries are prepared in the currency of the primary economic
environment in which it operates (its functional currency).
The financial statements of Hemogenyx Pharmaceuticals LLC, Immugenyx LLC and
Hemogenyx-Cell SPRL have been translated into Pound Sterling in accordance
with IAS 21 The Effects of Changes in Foreign Exchange Rates. This standard
requires that assets and liabilities be translated using the exchange rate at
period end, and income, expenses and cash flow items are translated using the
rate that approximates the exchange rates at the dates of the transactions
(i.e. the average rate for the period). The foreign exchange differences on
translation of Hemogenyx Pharmaceuticals LLC, Immugenyx LLC and Hemogenyx-Cell
SPRL are recognised in other comprehensive income (loss).
Foreign currency transactions
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing on the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at period-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in profit and
loss.
Share capital
Ordinary Shares are classified as equity. Equity instruments issued by the
Hemogenyx Pharmaceuticals Group are recorded at the proceeds received, net of
direct issue costs.
Cash
Cash consists of cash bank deposit balances.
Share-based payments
The Group has applied the requirements of IFRS 2 Share-based Paymentfor all
grants of equity instruments.
The Group issues equity-settled share-based payments to the directors, senior
management and employees ("Employee Share Options"), to corporate finance
advisers for assistance in raising private equity, and to its Scientific
Advisory Board members ("Non-employee Share Options"). In 2021, the Group
adopted the "Hemogenyx Pharmaceuticals plc 2021 Equity Incentive Plan with
Non-Employee Sub-Plan" (the "EIP") for the grant of options, restricted
shares, and restricted share units to employees, directors and consultants of
the Company and its subsidiaries over ordinary shares in the capital of the
Company, which was approved by the Company's shareholders at the 2022 AGM.
Equity-settled share-based payments are measured at fair value at the date of
grant for Employee Share Options and the date of service for Non-employee
Share Options. The fair value determined at the grant date or service date, as
applicable, of the equity-settled share-based payments is expensed, with a
corresponding credit to equity, on a straight-line basis over the vesting
period, based on the Group's estimate of shares that will eventually vest. At
each subsequent reporting date, the Group calculates the estimated cumulative
charge for each award having regard to any change in the number of options
that are expected to vest and the expired portion of the vesting period. The
change in this cumulative charge since the last reporting date is expensed
with a corresponding credit being made to equity. Once an option vests, no
further adjustment is made to the aggregate amount expensed.
The fair value is calculated using the Black Scholes method for both Employee
and Non-employee Share Options as management views the Black Scholes method as
providing the most reliable measure of valuation. The expected life used in
the model has been adjusted, based on management's best estimate, for the
effects of non-transferability exercise restrictions and behavioural
considerations. The market price used in the model is the issue price of
Company shares at the last placement of shares immediately preceding the
calculation date. The fair values calculated are inherently subjective and
uncertain due to the assumptions made and the limitation of the calculations
used.
Taxation
Current tax
Current taxation is based on the results for the year as adjusted for items
that are non-assessable or disallowed. It is calculated using rates that have
been enacted, or substantially enacted, by the balance sheet date. Current
income tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the relevant taxation authorities.
Deferred tax
Deferred income tax is recognised on all temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the
financial statements, with the following exceptions:
§ where the temporary difference arises from the initial recognition of
goodwill or of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither accounting
nor taxable profit or loss;
§ in respect of taxable temporary differences associated with investment in
subsidiaries, associates and joint ventures, where the timing of the reversal
of the temporary differences can be controlled, and it is probable that the
temporary differences will not reverse in the foreseeable future; and
§ deferred income tax assets are recognised only to the extent that it is
probable that taxable profit will be available against which the deductible
temporary differences, carried forward tax credits or tax losses can be
utilised.
Deferred income tax assets and liabilities are measured on an undiscounted
basis at the tax rates that are expected to apply when the related asset is
realised or liability is settled, based on tax rates and laws enacted or
substantively enacted at the statement of financial position date.
The carrying amount of deferred income tax assets is reviewed at each
statement of financial position date. Deferred income tax assets and
liabilities are offset, only if a legally enforcement right exists to set off
current tax assets against current tax liabilities, the deferred income taxes
related to the same taxation authority and that authority permits the Company
to make a single net payment.
Income tax is charged or credited directly to equity if it relates to items
that are credited or charged to equity. Otherwise, income tax is recognised in
the statement of comprehensive income.
Financial Assets and Liabilities
Financial assets and liabilities are recognised in the Company's statement of
financial position when the Company becomes a party to the contractual
provisions of the instrument. The Company currently does not use derivative
financial instruments to manage or hedge financial exposures or liabilities.
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
included in current assets, except for maturities greater than 12 months after
the end of the reporting period. These are classified as non-current assets.
The Company's loans and receivables comprise Trade and Other Receivables and
Cash and Cash Equivalents in the Statement of Financial Position.
Impairment of Financial Assets
The Company and Group assess at each reporting date whether a financial asset
is impaired and will recognise the impairment loss immediately through the
consolidated statement of comprehensive loss.
Interest Bearing Loans and Borrowings
Borrowings are initially recognised at the fair value of consideration
received less directly attributable transaction costs. After initial
recognition, borrowings are subsequently measured at amortised cost using the
effective interest rate method. Where borrowings are provided by shareholders
at an interest rate discounted to market rates, the difference on initial fair
value is taken to equity as a capital contribution.
Where the Group has entered into a hybrid instrument whereby there is a debt
instrument and an embedded derivative financial liability, the fair value of
the debt instrument less the fair value of the derivative financial liability
is equal to loan recognised on initial measurement.
IFRS 16, Leases
IFRS 16 requires lessees to recognise a lease liability reflecting future
lease payments and a 'right-of-use asset' for virtually all lease contracts.
IFRS 16 includes an optional exemption for certain short-term leases and
leases of low-value assets; however, this exemption can only be applied by
lessees. For lessors, the accounting remains substantially unchanged. IFRS 16
provides updated guidance on the definition of a lease (as well as the
guidance on the combination and separation of contracts); under IFRS 16, a
contract is, or contains, a lease if the contract conveys the right to control
the use of an identified asset for a period of time in exchange for
consideration.
The right-of-use asset and lease liability are both based on the present value
of lease payments due over the term of the lease, with the asset being
depreciated in accordance with IAS 16 Property, Plant and Equipment and the
liability increased for the accretion of interest and reduced by lease
payments.
Segmental reporting
The Group's operations are located in New York, USA with the head office
located in the United Kingdom. The main assets of the Group, cash and cash
equivalents, are held primarily in the United Kingdom and the United States,
while the fixed assets and right of use assets are held in the United States.
The Board ensures that adequate amounts are transferred internally to allow
all companies to carry out their operations on a timely basis.
The Group currently has one reportable segment - a biotechnology company
focused on the discovery, development and commercialisation of innovative
treatments relating to blood and immune system disorders and viral infections.
New Accounting Standards and Interpretations issued and applied in the Financial Statements
(a) New and amended standards mandatory for the first time for the financial
periods beginning on or after 1 January 2024
The International Accounting Standards Board (IASB) issued various amendments
and revisions to International Financial Reporting Standards and IFRIC
interpretations. The amendments and revisions were applicable for the year
ended 31 December 2024 but did not result in any material changes to the
financial statements of the Group or Company.
b) New standards, amendments and interpretations in issue but not yet
effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet effective and have
not been early adopted are as follows:
Standard Impact on initial application Effective date
IAS 21 (Amendments) The Effects of Changes in Foreign Exchange Rate 1 January 2025
IFRS 18 Presentation and Disclosure in Financial Statements TBC
IFRS 7 and 9 (Amendments)* Financial Instruments: Disclosures - Classification and Measurement TBC
(* )Subject to endorsement
The Group is evaluating the impact of the new and amended standards
above, which are not expected to have a material impact on future Group
financial statements.
3. Significant accounting judgements, estimates and assumptions
The preparation of the financial statements in conformity with International
Financial Reporting Standards requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the
process of applying the Company's accounting policies.
Estimates and judgements are continually evaluated, and are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. The
estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next
financial year are discussed below.
The principal areas in which judgement is applied are as follows:
Valuation of stock options
Management uses the Black Scholes model to value the share options. The model
requires use of assumptions regarding volatility, risk free interest rate and
a calculation of the value of the option at the time of the grant. Please see
Note 18 for details.
Intangible assets impairment
When there is an indicator of a significant and permanent reduction in the
value of intangible assets, an impairment review is carried out. The
impairment analysis is principally based on estimated discounted future cash
flows. The determination of the assumptions is subjective and requires the
exercise of considerable judgement about the outcome of research and
development activity, probability of technical and regulatory success, amount
and timing of projected future cash flow or changes in market conditions. Any
changes in key assumptions could materially affect whether an impairment
exists. See Note 12 for further details.
Valuation of investment in and long-term loans to subsidiaries
Management has assessed the recovery profile of the Parent Company loans
granted to subsidiaries and noted the research and development timetable would
mean that repayment of the amounts loaned would not commence in the short to
medium term and accordingly the loans were considered to be long-term.
Management has assessed the recoverability of the loans to subsidiaries and
its investment in subsidiaries using the same metrics and assumptions. The
determination of the assumptions is subjective and requires the exercise of
considerable judgement about the outcome of research and development activity,
probability of technical and regulatory success, amount and timing of
projected future cash flow or changes in market conditions. Any changes in key
assumptions could materially affect whether an impairment exists. Several
factors such as the progression of the Phase I trial of HG-CT-1 gives
management comfort that no impairment indicators exist over both balances.
4. Segment Information
The Group has one reportable segment, the discovery, development, and
commercialisation of innovative treatments relating to blood and immune system
disorders and viral infections, and administrative functions in the United
Kingdom, and therefore the segmental information is the same as that presented
in the primary statements.
The following tables present expenditure and certain asset information
regarding the Group's geographical segments for the year ended 31 December
2024 and 2023:
Year Ended Year Ended
31 December 2024
31 December 2023
£ £
Segment assets
United Kingdom
- Non-current - -
- Current 71,725 234,056
United States
- Non-current 3,372,512 3,936,279
- Current 693,790 1,915,093
Belgium (Discontinued operation)
- Non-current - -
- Current 19,532 20,465
Total
- Non-current 3,372,512 3,936,279
- Current 785,047 2,169,614
Capital expenditure
United Kingdom - -
United States 13,285 117,285
Belgium (Discontinued operation) - -
13,285 117,285
Capital expenditure consists of the purchase of property, plant and equipment.
The Group also had a subsidiary in Liège, Belgium that was dissolved on 30
March 2022.
The loss arising from this discontinued operation was £2,671 (2023: £2,890).
5. Expenses by nature
Group Group
Year Ended 31 December 2024 Year Ended 31 December 2023
£ £
Laboratory expenses 236,722 90,632
Consumable equipment and supplies 1,301,692 1,692,203
Contractors & consultants 286,556 336,804
Travel 39,303 30,863
Staff Costs 2,259,424 2,151,045
Insurance 118,065 123,344
Other 137,829 135,746
Legal and professional fees 707,818 352,230
Foreign exchange loss / (gain) (349,607) 907,298
Total Administrative Expenses 4,737,802 5,820,165
6. Employees
Group Group Company Company
Year Ended 31 December 2024 Year Ended 31 December 2023 Year Ended 31 December 2024 Year Ended 31 December 2023
£ £ £ £
Wages and salaries 1,749,625 1,736,928 146,250 115,000
Social security 115,778 124,005 4,484 8,660
Share based payments 343,935 242,836 343,935 242,836
Pension contributions 50,086 47,276 - -
2,259,424 2,151,045 494,669 366,496
Average number of people (including Executive Directors) employed:
Group Group Company Company
Year Ended 31 December 2024 Year Ended 31 December 2023 Year Ended 31 December 2024 Year Ended 31 December 2023
Research & development 14 12 - -
Administration 2 5 3 3
16 17 3 3
7. Auditor's remuneration
Group Group
Year Ended 31 December 2024 Year Ended 31 December 2023
£ £
Fees payable to the Company auditor:
Audit of the financial statements of the Group and Company 55,000 52,500
55,000 52,500
8. Income tax
Group Group
Year Ended 31 December 2024 Year Ended 31 December 2022
£ £
Current Tax: - -
Tax on loss on ordinary activities - -
Loss on ordinary activities before tax (5,625,478) (6,696,493)
Analysis of charge in the year:
Loss on ordinary activities multiplied by weighted average tax rate for the (1,450,248) (1,726,356)
group of 25.78% (2023: 25.78%)
Disallowed items 91,216 172,329
US R&D credit and timing differences 243,230 231,595
Tax losses carried forward 1,115,802 1,322,432
Current tax credit - -
Weighted average tax rate is calculated by reference to the tax rates
effective in each of the jurisdictions. The tax rates effective at 31 December
2024 are 25% and 28% in the UK and the USA respectively.
The Group has accumulated tax losses arising in the UK of approximately
£4,512,000 (31 December 2023: £3,529,000) that should be available, under
current legislation, to be carried forward against future profits. No deferred
tax asset has been recognised against these losses.
The Group has tax losses carried forward in the US of approximately
$21,122,000 (31 December 2023: $18,031,000) available under current rules
until 2037. Of the total Federal net operating losses, the amounts incurred
after 2017 of approximately $9,000,000 will carry forward indefinitely. No
deferred tax asset has been recognised against these losses. Sections 382 and
383 of the US Internal Revenue Code, and similar state regulations, contain
provisions that may limit the tax loss carried forward available to be used to
offset income in any given year upon the occurrence of certain events,
including changes in the ownership interests of significant stockholders. In
the event of a cumulative change in ownership in excess of 50% over a
three-year period, the amount of the NOL carry forwards that the Company may
utilise in any one year may be limited.
9. Earnings per share
The calculation of the basic and fully diluted earnings per share is
calculated by dividing the loss for the year from continuing operations
attributable to equity owners of the Group of £5,977,640 (2023: £5,787,611)
by the weighted average number of ordinary shares in issue during the year of
3,301,431 (2023: 2,822,841).
Dilutive loss per Ordinary Share equals basic loss per Ordinary Share as, due
to the losses incurred in 2024 and 2023, there is no dilutive effect from the
subsisting share options. See Note 18 for details of stock options and
warrants outstanding.
10. Property and equipment
Group Property, plant & equipment Computer equipment Leasehold Total
Improvements
£ £ £ £
Cost
31 December 2021 430,171 19,728 644,155 1,094,054
Additions 417,897 11,161 1,553 430,611
Foreign exchange movement 26,011 2,065 76,463 104,539
Disposals (1,666) - - (1,666)
31 December 2022 872,413 32,954 722,171 1,627,538
Additions 103,948 13,337 - 117,285
Foreign exchange movement (41,424) (1,810) (34,518) (77,753)
Disposals - - - -
31 December 2023 934,937 44,480 687,653 1,667,070
Additions 13,285 - - 13,285
Foreign exchange movement 14,657 684 10574 25,915
Disposals - - - -
31 December 2024 962,879 45,164 698,227 1,706,270
Accumulated depreciation and impairment losses
31 December 2021 297,309 8,858 - 306,167
Depreciation 116,493 8,129 75,226 199,848
Foreign exchange movement 54,693 677 42,900 98,270
31 December 2022 468,495 17,664 118,127 604,285
Depreciation 126,281 10,577 88,543 225,401
Foreign exchange movement (78,160) (1,796) (49,083) (129,039)
31 December 2023 516,616 26,444 157,587 700,647
Depreciation 136,088 9,015 85,475 230,578
Foreign exchange movement 10,356 595 4,227 15,637
31 December 2024 663,519 36,054 247,289 946,862
Carrying amounts
31 December 2021 132,862 10,870 644,155 787,887
31 December 2022 403,918 15,290 604,044 1,023,252
31 December 2023 418,321 18,036 530,066 966,423
31 December 2024 299,360 9,110 450,938 759,408
11. Leases
The Group follows IFRS 16 with respect to its leases, whereby the Group
recognises right-of-use assets and lease liabilities for all leases on its
balance sheet. One of the US subsidiaries has an agreement for the lease of
laboratory facilities to which IFRS 16 has been applied.
The key impacts on the Statement of Comprehensive Income and the Statement of
Financial Position are as follows:
Group & Company
Right of use asset Lease Income statement
liability
£
£
£
Carrying value at 31 December 2021 9,242 (10,152)
Additions 3,249,244 (3,249,244) -
Depreciation (366,302) - (366,302)
Interest - (274,802) (274,802)
Lease payments - 106,321 -
Foreign exchange movements 77 5,042 (4,965)
Carrying value at 31 December 2022 2,892,261 (3,422,835)
Additions - - -
Depreciation (420,280) - (420,280)
Interest - (315,991) (315,991)
Lease payments - 638,765 -
Foreign exchange movements (125,966) 154,175 28,210
Carrying value at 31 December 2023 2,346,015 (2,945,886) ()
Additions - - -
Depreciation (408,707) - (408,707)
Interest - (271,555) (271,555)
Lease payments - 635,037 -
Foreign exchange movements 30,505 (40,682) (10,177)
Carrying value at 31 December 2024 1,967,813 (2,623,086)
12. Intangible assets
On 15 January 2015, the Company entered into an Exclusive License Agreement
with Cornell University to grant to the Company patent rights to patent
PCT/US14/65469 entitled Post-Natal Hematopoietic Endothelial Cells and Their
Isolation and Use and rights to any product or method deriving therefrom. The
Company paid Cornell University USD $347,500 for such licence rights.
In October 2021, the Company entered into a licence with Eli Lilly &
Company to use a patented product derived from jointly-developed intellectual
property in the CDX antibody for a term ending on the latest of (a) the
twelfth (12th) anniversary of the date of First Commercial Sale of a
particular Licensed Product in a particular country; (b) the first day on
which there is not at least one Licensed Patent having a Valid Claim Covering
the manufacture, use, or sale of such Licensed Product in such country; or (c)
the expiration of the last-to-expire Data Exclusivity Period for such Licensed
Product in such country. The Company paid £181,743 or $250,000 as an up-front
payment and will make milestone payments of up to $1 million through to Phase
II clinical trials. Lilly is also eligible to receive substantial additional
milestone payments based on the achievement of prespecified milestones, as
well as tiered single-digit royalties on sales and a percentage of any cash
payments received in respect of any sublicence of the licensed intellectual
property. Through December 31, 2024, the Company has not incurred any
development or sales-based payment obligations to the licensor.
Cost Intellectual Property
£
31 December 2022 441,493
Additions -
Exchange movements 28,680
31 December 2023 470,173
Additions -
Exchange movements 7,230
31 December 2024 477,403
The carrying value of intangible assets is reviewed for indications of
impairment whenever events or changes in circumstances indicate that the
carrying value may exceed the recoverable amount. The products to which they
relate are not ready to be sold on the open market. When the trials are
completed and the products attain the necessary accreditation and clearance
from the regulators, the Group will assess the estimated useful economic life
and the IP will be amortised using the straight-line method over their
estimated useful economic lives. The directors are of the view that no
impairment is required as the test results to date have been very positive and
these products are now being moved on towards the clinical trial phase.
Accordingly, the directors continue to believe that the products will
eventually attain the necessary accreditation and clearance from the
regulators and so no impairment has been considered necessary.
Amortisation will be charged to operating costs in the Statement of
Comprehensive Income when the Group achieves product sales.
13. Loan to subsidiary
Company Company
Year Ended 31 December 2024 Year Ended 31 December 2023
£ £
Hemogenyx Pharmaceuticals LLC 21,861,622 18,097,368
Immugenyx LLC 496 592
21,862,118 18,097,960
Hemogenyx Pharmaceuticals plc has made cumulative loans to Hemogenyx
Pharmaceuticals LLC of US$21,514,889 (£21,861,622) as at 31 December 2024 (31
December 2023: US$22,998,308 (£18,097,368)) and Immugenyx LLC of US$752
(£601) as at 31 December 2024 (31 December 2023: US$752 (£592)). The loans
are interest free and will be repaid when Hemogenyx LLC's operational cash
flow allows. Management has undertaken an impairment assessment of the loan as
at 31 December 2024 and has determined that that there was no impairment
required due to continued progress of the product candidates. The interest
rate and impairment assessment are reviewed on an annual basis.
14. Investment in subsidiary
Name Address of the registered office Nature of business Proportion of ordinary shares held directly by parent (%) Proportion of ordinary shares held ultimately by parent (%)
Hemogenyx UK Limited 6 Heddon Street, London, W1B 4BT Holding Company 100 -
Hemogenyx Pharmaceuticals LLC 9 East Lookerman Street, Suite 3A, Dover, Kent, Delaware, USA, 19901 Biomedical sciences - 100
Immugenyx LLC c/o Corporation Service Company, 251 Little Falls Drive, Wilmington, Delaware, Biomedical sciences - 88.9
USA, 19808
The remaining shares in Immugenyx LLC are held by Dr Vladislav Sandler and by
a prior employee, Carina Sirochinsky, as part of their compensation under
their respective roles as CEO and Director of Operations. Ms Sirochinsky's
role as Director of Operations ended on the termination of her employment on 1
July 2021. Dr Sandler and Ms Sirochinsky receive(d) 10,000 and 1,000 shares
respectively for each year of employment from January 2019. At 31 December
2024, Hemogenyx Pharmaceuticals LLC, Dr Sandler, and Ms Sirochinsky each own
510,000, 50,000, and 2,500 shares in Immugenyx LLC, respectively.
15. Trade and other receivables
Group Group Company Company
Year Ended 31 December 2024 Year Ended 31 December 2023 Year Ended 31 December 2024 Year Ended 31 December 2023
£ £ £ £
VAT receivable 4,089 4,064 4,089 4,064
Trade and other receivables 3,768 1,074 2,519 -
Prepayments 671,926 916,875 12,855 10,757
Total trade and other receivables 679,783 922,013 19,463 14,820
There are no material differences between the fair value of trade and other
receivables and their carrying value at the year-end. No receivables were past
due or impaired at the year end.
16. Called up share capital
Capital Reorganisation
The Company carried out a subdivision and reclassification of the Existing
Ordinary Shares by 1:2 so that each Existing Ordinary Share was subdivided and
reclassified into 1 new ordinary share of £0.000025 each (the New Ordinary
Shares) and 1 deferred share of £0.009975 each (the Deferred Shares) (the
Subdivision), followed by a consolidation of the New Ordinary Shares by
400:1 so that every 400 New Ordinary Shares will be consolidated into 1 New
Ordinary Share of £0.01 each (the Consolidation, together with the
Subdivision, the Capital Reorganisation).
The Deferred Shares will have no right to vote or participate in the capital
of the Company (save as set out under the 'New Articles') and the Company will
not issue any certificates or credit CREST accounts in respect of them. The
Deferred Shares will not be admitted to trading on any exchange. The rights of
the New Ordinary Shares and the Deferred Shares will be set out in the New
Articles proposed to be adopted by the Company. The purpose of the Capital
Reorganisation is to reduce the nominal value of the Existing Ordinary Shares
and to reduce the number of shares in issue.
Group & Company Number of ordinary shares £
As at 31 December 2022 979,749,321 9,797,493
Issue of shares - placement 2 Feb 2023 162,250,000 1,622,500
Issue of shares - placement 27 Sept 2023 11,066,667 110,667
Issue of shares - placement 4 Dec 2023 22,500,000 225,000
As at 31 December 2023 1,175,565,988 11,755,660
Issue of shares - placement 7 Mar 2024 72,750,000 727,500
Issue of shares - placement 11 Mar 2024 86,000,000 860,000
Issue of shares - placement 12 Mar 2024 7,500,000 75,000
Issue of shares - placement 1 Nov 2024 60,000,000 600,000
Capital reorganisation (1,398,311,448) (13,983,115)
As at 31 December 2024 3,504,540 35,045
During 2022, the Company did not issue any ordinary shares.
During 2023, the Company issued 195,816,667 ordinary shares.
During 2024, the Company issued 226,250,000 ordinary shares.
Group & Company Number of deferred shares £
As at 31 December 2022 - -
No shares issued during 2022 - -
As at 31 December 2023 - -
Capital reorganisation 1,401,815,988 13,983,115
As at 31 December 2024 1,401,815,988 13,983,115
17. Share premium
Group &
Company
£
As at 31 December 2022 16,808,647
Issue of shares - placement 2 Feb 2023 2,433,750
Issue of shares - placement 27 Sep2023 553,333
Issue of shares - placement 4 Dec 2023 309,375
Cost of capital (166,549)
As at 31 December 2023 19,938,556
Issue of shares - placement 7 Mar 2024 727,500
Issue of shares - placement 11 Mar 2024 860,000
Issue of shares - placement 12 Mar 2024 75,000
Issue of shares - placement 1 Nov 2024 -
Cost of capital (212,510)
As at 31 December 2024 21,388,546
18. Other reserves
Year Ended 31 December 2024 Year Ended 31 December 2023
Group:
£ £
As at start of year 1,164,637 921,801
Charge for the year - employees 343,935 242,836
As at end of year 1,508,572 1,164,637
Year Ended 31 December 2024 Year Ended 31 December 2023
Company:
£ £
As at start of year 1,163,533 920,697
Charge for the year - employees 343,935 242,836
As at end of year 1,507,468 1,163,533
The expense recognised for employee and non-employee services during the year
is shown in the following table:
Year Ended 31 December 2024 Year Ended 31 December 2023
Group and Company:
£ £
Expense arising from equity-settled share-based payment transactions 242,836
343,935
Total expense arising from share-based payment transactions 343,935 242,836
Employee Plan
Under the Employee Plan ("EMP") share options are granted to directors and
employees at the complete discretion of the Company. The fair value of the
options is determined by the Company at the date of the grant. Options granted
vest in tranches on each of the following events/dates:
(i) Admission to the LSE ("Admission");
(ii) On the date falling six (6) months after Admission;
(iii) On the date falling twelve (12) months after Admission; and
(iv) On the date falling twenty-four (24) months after Admission
On the provision that the option holder remains an employee of the Group.
Options granted to most other option holders from 4 January 2018 onwards vest
in equal tranches of 12.5% every three months from the date of grant, until
fully vested.
The fair value of the options is determined using the Black Scholes method as
stated in Note 2. The contractual life of each option granted is between two
and five years. There are no cash settlement alternatives.
Options are settled when the Company receives a notice of exercise and cash
proceeds from the option holder equal to the aggregate exercise price of the
options being exercised.
As part of the EMP, certain share options have been granted to a Director of
the Company which contain vesting conditions that are contingent on the
authorisation of the FDA to commence clinical trials.
Non-Employee Plan
Under the Non-Employee Plan ("NEMP") share options are granted to
non-employees at the complete discretion of the Company. The exercise price of
the options is determined by the Company at the date of the grant. The options
vest at the date of the grant.
The fair value of the options is determined using the Black Scholes method as
stated in Note 2 and not the value of services provided as this is deemed the
most appropriate method of valuation. In all cases non-employee option holders
received cash remuneration in consideration for services rendered in
accordance with agreed letters of engagement. The contractual life of each
option granted ranges from two to five years. There are no cash settlement
alternatives. Volatility was determined by calculating the volatility for
three similar listed companies and applying the average of the four
volatilities calculated.
Options are settled when the Company receives a notice of exercise and cash
proceeds from the option holder equal to the aggregate exercise price of the
options being exercised.
2021 Equity Incentive Plan with Non-Employee Sub-Plan
Under the 2021 Equity Incentive Plan with Non-Employee Sub-Plan" (the "EIP")
share options, restricted shares, and restricted share units may be granted to
employees, directors and consultants of the Company and its subsidiaries at
the discretion of the Company in an aggregate amount up to 188 shares. This
was increased to 563 shares in April 2023. The fair value of awards made under
this plan is determined in the same way as for the EMP and NEMP described
above.
A schedule of options granted since inception for all plans is below:
Number options
Employees, including directors* 260,817
Members of the Scientific Advisory Board 31,205
Total 292,022
* Details of options held by individual directors are disclosed in the
Directors' Report.
In October 2022, the expiration date of options to acquire 12,016 ordinary
shares (which were scheduled to expire in October 2022) was extended by two
years by the Board of Directors of the Company. The Company recognised this
transaction as a modification of a share-based instrument for financial
reporting purposes. The change in the fair value of the stock option before
and after the modification amounted to approximately $5,400, which was
recorded as part of expense related to share-based payment transactions. The
fair value was determined using the Black Scholes model using the assumptions
noted below.
Group & Company: 2024 2024 2023 2023
Number Weighted Average Exercise Price, pence Number Weighted Average Exercise Price, pence
Outstanding at the beginning of the year 219,747 13.6 88,249 18.4
Granted during the year - - 142,750 10.8
Lapsed during the year (18,753) 14.0 (11,252) 14.0
Extended during the year - - - -
Outstanding at end of year 200,995 14.1 219,747 13.6
Exercisable at end of year 200,995 14.1 219,747 13.6
The weighted average remaining contractual life for the share options
outstanding as at 31 December 2024 is 2.58 years (2023: 4.73 years). The
weighted average fair value of options granted during the year was nil (2023:
10.8 pence).
The following table lists the inputs to the models used for the two plans for
the years ended 31 December 2024 and 31 December 2023:
April
2023
(EMP)
Expected volatility % 92
Risk-free interest rate % 3.75
Expected life of options (years) 3
WAEP - pence 10.8
Expected dividend yield -
Model used Black Scholes
19. Capital and reserves
The nature and purpose of equity and reserves are as follows:
Share capital comprises the nominal value of the ordinary issued share capital
of the Company.
Share premium represents consideration less nominal value of issued shares and
costs directly attributable to the issue of new shares.
Deferred share capital represents shares which do not carry voting rights,
dividends, distributions or redemption.
Other reserves represents the value of options in connection with share-based
payments, warrants connected with share placements issued by the Company, and
the value of the deemed embedded derivative connected with the Convertible
Note liability.
Reverse asset acquisition reserve is the reserve created in accordance with
the acquisition of Hemogenyx Pharmaceuticals LLC on 5 October 2017.
Foreign currency translation reserve is used to recognise the exchange
differences arising on translation of the assets and liabilities of foreign
branches and subsidiaries with functional currencies other than Pounds
Sterling, as well as the revaluation of intercompany loans.
Retained earnings represent the cumulative retained losses of the Company at
the reporting date.
20. Trade and other payables
Group Group Company Company
Current Year Ended 31 December 2024 Year Ended 31 December 2023 Year Ended 31 December 2024 Year Ended 31 December 2023
£ £ £ £
Trade and other payables 683,284 301,707 327,595 117,956
Accruals and deferred income 51,696 77,294 51,696 77,293
Total 734,980 379,001 379,291 195,249
21. Related party disclosures
There were no related party disclosures other than Directors' remuneration as
disclosed in the Remuneration Report section of the Directors' Report. There
are no key management personnel other than the Directors and the Company
Secretary.
22. Financial instruments
The Group's financial instruments consist of cash, amounts receivable,
accounts payable and accrued liabilities.
Fair value of financial assets and liabilities
Fair values have been determined for measurement and/or disclosure purposes
based on the following methods. When applicable, further information about the
assumptions made in determining fair values is disclosed in the notes specific
to that asset or liability.
The carrying amount for cash, accounts receivable, and accounts payable and
accrued liabilities on the statement of financial position approximate their
fair value because of the limited term of these instruments. The fair value of
deferred payment approximates its fair value. The investment is carried at
cost as it is not traded on an active market.
Financial risk management objectives and policies
The Company has exposure to the following risks from its use of financial
instruments:
· Credit risk
· Liquidity and funding risk
· Market risk
The following table sets out the amortised costs categories of financial
instruments held by the Company as at the year ended 31 December 2024 and year
ended 31 December 2023:
Group Group Company Company
Year Ended 31 December 2024 Year Ended 31 December 2023 Year Ended 31 December 2024 Year Ended 31 December 2023
£ £ £ £
Assets
Trade and other receivables, except prepayments 7,856 5,138 - -
Cash and cash equivalents 159,265 1,247,601 52,262 219,236
167,121 1,252,739 52,262 219,236
Liabilities
Trade and other payables (683,284) (301,707) (327,595) (119,249)
Lease liabilities (2,623,086) (2,945,886) - -
(3,306,370) (3,247,593) (327,595) (119,249)
a) Credit risk
The Group had receivables of £0 owing from customers (31 December 2023: £0).
All bank deposits are held with Financial Institutions with a minimum credit
rating of B.
b) Liquidity and funding risk
The Group regularly reviews its major funding positions to ensure that it has
adequate financial resources in meeting its financial obligations. The Group
takes liquidity risk into consideration when deciding its sources of funds.
The principle liquidity risk facing the business is the risk of going concern
which has been discussed in Note 2.
c) Market risk
Interest rate risk
Interest rate risk is the risk that the value of financial instruments will
fluctuate due to changes in market interest rates. The Group's income and
operating cash flows are substantially independent of changes in market
interest rates as the Group has no significant interest-bearing assets. The
borrowings issued at fixed rates expose the Group to fair value interest rate
risk. The Company's management monitors the interest rate fluctuations on a
continuous basis and acts accordingly.
The Company has floating rate financial assets in the form of deposit accounts
with major banking institutions; however, it is not currently subjected to any
other interest rate risk.
Based on cash balances as above as at the statement of financial position
date, a rise in interest rates of 1% would not have a material impact on the
profit and loss of the Company and such is not disclosed.
In relation to sensitivity analysis, there was no material difference to
disclosures made on financial assets and liabilities.
At the reporting date the interest rate profile of interest-bearing financial
instruments was:
Group Group Company Company
Year Ended 31 December 2024 Year Ended 31 December 2023 Year Ended 31 December 2023 Year Ended 31 December 2023
£ £ £ £
Financial Assets
Cash and cash equivalents 159,265 1,247,601 52,262 219,236
Foreign currency risk
The Group operates internationally and has monetary assets and liabilities in
currencies other than the functional currency of the operating company
involved.
The Group seeks to manage its exposure to this risk by ensuring that where
possible, the majority of expenditure and cash of individual subsidiaries
within the Group are denominated in the same currency as the functional
currency of that subsidiary.
The Group has not entered into any derivative instruments to manage foreign
exchange fluctuations.
The following table shows a currency of net monetary assets and liabilities by
functional currency of the underlying companies for the years ended 31
December 2024 and 31 December 2023:
31 December 2024
Functional Currency
Currency of net monetary assets/(liabilities) Pound Sterling US Dollars Euro Total
£
£ £ £
Pounds Sterling 39,303 - - 39,303
US Dollars 12,959 87,471 - 100,430
Euros - - 19,532 19,532
Total 52,262 87,471 19,532 159,265
31 December 2023
Functional Currency
Currency of net monetary assets/(liabilities) Pound Sterling US Dollars Euro Total
£
£ £ £
Pounds Sterling 206,397 - - 206,397
US Dollars 12,839 1,007,900 - 1,020,739
Euros - - 20,465 20,465
Total 219,236 1,007,900 20,465 1,247,601
Capital risk management
The Group defines capital as the total equity of the Company. The Group's
objectives when managing capital are to safeguard the Group's ability to
continue as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital structure
to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt.
Fair value of financial assets and liabilities
There are no material differences between the fair value of the Group's
financial assets and liabilities and their carrying values in the financial
statements.
23. Commitments
Licences
Milestone and royalty payments that may become due under licence agreements
are dependent on, among other factors, clinical trials, regulatory approvals
and ultimately the successful development of new drugs, the outcomes and
timings of which are uncertain.
For the licence from Cornell University to the patent of the Hu-PHEC
technology, the Group's minimum future payments contingent upon meeting
certain development, regulatory and commercialisation milestones total
£855,301 ($1,035,000) plus £413,189 ($500,000) on receipt of marketing
approval from each additional market excluding the United States of America
and the European Union. Upon commencement of commercial production, the Group
will pay a royalty between 2 to 5% on all net sales. Through 31 December 2024,
none of the requirements to make such payments have been met. In addition, the
Group pays an annual licence maintenance fee of up to £61,978 ($75,000) until
commercial sales are achieved.
For the licence to Eli Lilly and Company's ("Lilly") contributions to the
intellectual property in the CDX bispecific antibody, future payments will be
contingent upon meeting certain similar development, regulatory and
commercialisation milestones and so do not meet the definition of commitments
pending further developments. This licence is subject to an up-front payment
to Lilly of $250,000 and milestone payments of up to $1 million through to
Phase II clinical trials. Lilly is also eligible to receive substantial
additional milestone payments based on the achievement of prespecified
milestones, as well as tiered single-digit royalties on sales. In addition,
the Company will pay Lilly a percentage of any cash payments received in
respect of any sublicence of the licensed intellectual property.
Leases
In August 2021, Hemogenyx LLC entered into a lease for a 9,357 square foot
purpose-built laboratory for eight years beginning on 1 April 2022. The lease
contains escalating monthly payments ranging from approximately $64,300 to
$76,500 per month over the lease term. The Group paid a security deposit of
£156,114 ($188,005) during the year ended 31 December 2021 for such facility
lease.
Service agreements
In December 2021, Hemogenyx Pharmaceuticals LLC entered into a service
agreement to establish Research Cell Banks (RCBs) for production of the
Company's proprietary recombinant protein(s) encoded by cDNAs. From 31
December 2021 through 31 December 2022, Hemogenyx Pharmaceuticals LLC has paid
£199.956 (CHF 214,063) under this agreement. Under the terms of the
agreement, Hemogenyx Pharmaceuticals LLC may pay up to CHF 590,000 at its
discretion in aggregate, inclusive of the amounts already paid.
In December 2021, Hemogenyx Pharmaceuticals LLC entered into service
agreements with another party to produce components of the Company's CAR-T
product candidate. Under the terms of the agreement, Hemogenyx Pharmaceuticals
LLC must pay an aggregate of £1,970,911 ($2,109,957) in milestone payments
during the term of production. From 31 December 2021 through 31 December 2024,
Hemogenyx Pharmaceuticals LLC has paid £2,244,287 ($2,868,121) under these
agreements.
In September 2023, Hemogenyx Pharmaceuticals entered into a Master Services
and Contract Agreement for a third party to provide clinical services and
technologies for the forthcoming Phase I clinical trials for an initial term
of 38 months, paying an aggregate of £1,979,753 ($2,530,057). This includes
an upfront payment of £772,097 ($986,713) and monthly instalments over 38
months of £32,639 ($41,712) commencing in April 2024. From April 2024 through
31 December 2024, Hemogenyx Pharmaceuticals LLC has paid £261,115 ($333,696)
under the agreement.
Share options
As detailed further in Note 18, certain share options contain contingent
vesting conditions.
24. Ultimate controlling party
The Directors have determined that there is no controlling party as no
individual shareholder holds a controlling interest in the Company.
25. Prior period error: lease liability classification (IFRS 16)
During the year ended 31 December 2024, the Group identified a classification
error in the presentation of lease liabilities under IFRS 16 Leases in the
prior year's consolidated financial statements. While the total lease
liability was correctly recognised, an amount of £89,438 that should have
been presented as a current liability as at 31 December 2023 was incorrectly
classified as non-current.
As a result, the comparative amounts in the consolidated statement of
financial position have been restated to reflect the correct classification.
The impact of this restatement as at 31 December 2023 is as follows: current
lease liabilities increased by £89,438 from £273,084 to £362,522, and
non-current lease liabilities decreased by £89,438 from £2,672,802 to
£2,583,364. There was no impact on total lease liabilities, net assets, or
the consolidated statement of profit or loss and other comprehensive income,
including basic and diluted earnings per share, for the year ended 31 December
2023.
There was also no impact on the statement of financial position as at 1
January 2023, as the error arose during the year ended 31 December 2023.
Accordingly, no restatement was required at the beginning of the earliest
comparative period.
26. Subsequent events
In January 2025 the Company raised £340,000 through the issue of 100,000 new
ordinary shares at a price of 340p per share. One institutional investor was
also granted 50,000 warrants exercisable at a price of 500p each for a period
of 12 months from 1 March 2025.
In February 2025 the Company raised £285,000 through the issue of convertible
loan notes ("CLNs") and the loan note holders also received a one-for-one
warrant, exercisable at a price of £4.00 per share for each share held upon
the CLN conversion date. The CLNs converted into 95,000 ordinary shares on 13
March 2025.
In February 2025, the Company terminated its Exclusive License Agreement with
Cornell University.
In March 2025 the Company raised £709,200 through the issue of 394,000 new
ordinary shares at a price of 180p per share. The investor was also granted a
one-for-two warrant, exercisable at a price of £3.50 per share for each share
subscribed
27. Copies of the annual report
Copies of the annual report will be available on the Company's web site at
https://hemogenyx.com and from the Company's registered office 6 Heddon
Street, London, W1B 4BT.
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