REG - Oncimmune Hldgs PLC - Interim Results
28/02/2022 07:16
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RNS Number : 9456C Oncimmune Holdings PLC 28 February 2022
This announcement contains inside information
for the purposes of the UK Market Abuse Regulation
28 February 2022
Oncimmune Holdings plc
("Oncimmune" or the "Company")
Interim Results
Increasing ImmunoINSIGHTS pipeline with penetration of top 10 global pharma
Accelerating US-driven momentum, as number of
ImmunoINSIGHTS clients more than doubles year-on-year
ImmunoINSIGHTS set to become a market leader in autoantibody profiling segment
by 2023, with forecast growth to 12% of market share
Oncimmune Holdings plc (AIM: ONC.L), the leading global immunodiagnostics group, today announces its unaudited interim results for the six months ended 30 November 2021 ("H1 FY2022").
Financial highlights
· Recognised revenue for the period was £1.43M (H1 2020: £1.83M)
was affected by the easing of COVID-19 restrictions over the 2021 summer
holiday period, as previously announced.
· Gross profit for the period was £0.96M (H1 2020: £1.41M).
· Administrative expenses were £4.05M (H1 2020: £2.88M) which
reflect the planned expansion in our ImmunoINSIGHTS Dortmund facility and
accelerated investment in our Commercial team, particularly in the US, in
light of the increasing demand for ImmunoINSIGHTS services.
· Research & development expenses were stable at £0.67M (H1
2020: £0.62M).
· Loss after tax was £4.86M (H1 2020: £2.60M).
· Gross cash balance at the period end of £2.97M (H1 2021: £3.28M)
and net debt at the period end of £5.39M (H1 2021: £7.22M), after investment
including capacity growth. The Company drew down an additional €3.0M
(c.£2.50M) of debt post period end to fund the acceleration in the expansion
of the US-based Commercial team, serviceable by cash generation from
ImmunoINSIGHTS.
Commercial and operational highlights (including post period)
ImmunoINSIGHTS
· Since launching in 2020 we have secured contracts with 5 of the top
10 global pharma companies which are expected to constitute c.70% of revenue
for the financial year ending 31 May 2022 ("FY2022"). Most of these clients
have multiple studies, with five separate programmes underway with the world's
leading oncology company.
· The number of contracted clients has more than doubled year-on-year
to 13, 3 of which are currently running multiple contracts each, and momentum
has continued to accelerate post period end. The value and number of
contracted orders and forecast pipeline expected to convert in the near-term
continues to grow. In particular, there is increasing visibility from project
extensions and additional contracts in other areas for existing clients.
· Existing customer contracts are being extended as planned and
relationships with these customers are also expanding to include work in
adjacent and separate therapeutic areas. Within this the number of customers
engaged in multiple contracts is also increasing, pointing to the quality and
impact value on therapeutic programmes we are able to deliver.
· During Q2 and Q3 FY2022 the Company substantially expanded its
Commercial team from two with an additional five individuals hired in the US.
The rate at which potential studies are moving through the pipeline and
converting into contracts has increased markedly from Q2 FY2022 onwards, and
we therefore expect near-term revenue growth to reflect this as new members of
the team increase their productivity.
· The scaling up of the Company's Dortmund facility continued as
planned during the period, with the hiring of bioinformaticians and
experienced senior scientists to project manage contracts. We have also
streamlined our operations to facilitate the rapid turnaround of
proof-of-concept studies, which are often the gateway to larger follow-on
contracts.
· New US office established at the Cambridge Innovation Center
("CIC"), Kendall Square in Boston, USA enables the ImmunoINSIGHTS Commercial
team to be central to many of the Company's clients.
EarlyCDT(®) Lung
· iDx Lung(1) programme ongoing, with 815 patients recruited to date
in Southampton and Leeds.
· Successful real-world screening evaluation pilot with the Norfolk
and Waveney Clinical Commissioning Group ("CCG") completed and final report
expected in Q4 FY2022. Adoption of the EarlyCDT Lung test within this NHS CCG
is expected in the second half of calendar 2022.
· A second pilot with an additional CCG screening over 2,000 patients
is anticipated to commence in Q4 FY2022 which is also expected to lead to an
ongoing contract.
· Sales revenues from Biodesix in the US are being underpinned by our
commercial contract which provides minimum sales volumes.
Recent progress and FY2022 outlook
· The strength of our strategic ImmunoINSIGHTS relationship with our
largest customer continued throughout the period and post period, and we are
currently undertaking five separate projects across its group companies.
Multiple contracts for existing customers is an increasing characteristic of
our contracted revenue, particularly from our clients within the top 10
leading global pharma companies.
· The number of contract signings has accelerated from Q2 FY2022 and
this momentum has continued throughout Q3 FY2022. Management now guide full
year ImmunoINSIGHTS revenues to be not less than £6.0M.
· The contracts signed in FY2022 to date together with those expected
to be signed before the end of this financial year underpins the Board's
confidence in the prospects of the business beyond the current year, on which
we aim to provide an update by the end of August 2022.
· On entering the next financial year (see below regarding year-end
change), the Company expects to have materially improved revenue visibility,
arising from contracts already signed, from extensions to existing contracts,
and from existing clients with already identified studies in other therapeutic
areas.
· The considerable growth in the Commercial team, with five members
now based in the US, is expected to increase the commercial pipeline
substantially throughout FY2023. The expansion in the commercial team
headcount is also driving an increase in the pipeline and in the rate of
conversion of the pipeline to contract.
· A recent market analysis commissioned from an independent strategy
consultancy has sized the potential market for ImmunoINSIGHTS pharma services.
It is estimated that the addressable market for pharma services is $2.3bn and
growing at c.10% per annum. The autoantibody profiling segment of this market,
where we operate, is faster growing at approximately 27% per annum. We believe
that, as a pure-play service provider, ImmunoINSIGHTS will become a market
leader in this segment by 2023 having grown the Company's market share by more
than three times to c.12% over the course of the current financial year.
· Opportunities exist in segments adjacent to the current
autoantibody profiling which are accessible through organic and inorganic
development and Oncimmune's management is focused on further expanding the
total addressable market for the ImmunoINSIGHTS business. We are therefore
actively engaged in further in-house R&D to develop these additional
product offerings as well as identifying potential complementary M&A
opportunities.
· In order to bring the ImmunoINSIGHTS service business in line with
the procurement cycles of the Company's clients and also to provide closer
alignment between contract awards and revenue recognised during the same
financial year, the Board has resolved to move the Company's accounting
reference date from 31 May to 31 August. As a result of the change in its
accounting reference date, the Company intends to release unaudited interim
results for the 12 months ending 31 May 2022 by 31 August 2022 and publish its
audited accounts for the 15-month period to 31 August 2022 by 31 January 2023.
Thereafter, interim and final results will be published each year for the 6
months to the end of February and 12 months to 31 August, respectively. FY2023
refers to the 12 months to 31 August 2022.
Dr Adam M Hill, CEO of Oncimmune said: "Now that we have far greater
visibility on our revised management expectations for this year and beyond, it
is anticipated that ImmunoINSIGHTS will become a leading player in the
autoantibody profiling segment of pharma services by FY2023, supported by our
enviable list of existing blue-chip customers, which includes many of the
world's leading pharmaceutical companies.
"Over the last two quarters we have generated significant momentum in
ImmunoINSIGHTS, strengthened our client relationships and bolstered our
workforce, expanded our capacity and grown our business development
capability. Having largely built the ImmunoINSIGHTS business during the
COVID-19 pandemic, we have only very recently been able to meet face-to-face
with customers, in many cases for the first time. With closer ongoing
interaction we anticipate being able to identify further value that our
services can bring to our customers' research, discovery and development
processes.
"Our science continues to play a key role at the frontiers of academic
discovery and is increasingly recognised as a tool set able to deliver high
quality, value adding data and insight. With our new presence at CIC in
Kendall Square, Boston, in the most active life science hub globally, and the
build-out of our Commercial team in North America, ImmunoINSIGHTS will enter
our new financial year in September with a proportion of its revenue already
visible. This reflects revenue already contracted or identified through
existing customer relationships, and a growing pipeline to support improved
performance and realisation of value."
(1) NHS Lung Health Check Programmes in Wessex and Yorkshire as part of the
iDx-LUNG evaluation programme
Investor Presentation and Conference Call
The management team will also host on Investor Meet Company a live
presentation of the results at 15.00 GMT this afternoon which will be open to
all existing shareholders and potential new investors. Access to Investor Meet
Company is free and interested parties can register to attend the presentation
via the following link:
https://www.investormeetcompany.com/oncimmune-holdings-plc/register-investor
(https://www.investormeetcompany.com/oncimmune-holdings-plc/register-investor)
The Directors of the Company and the officer of the Company named below
take responsibility for this announcement.
For further information:
Oncimmune Holdings plc
Dr Adam M Hill, Chief Executive Officer
Matthew Hall, Chief Financial Officer
contact@oncimmune.co.uk (mailto:contact@oncimmune.co.uk)
Singer Capital Markets (Nominated Adviser and Joint Broker)
Aubrey Powell, Harry Gooden, George Tzimas, James Fischer
+44 (0)20 7496 3000
WG Partners (Joint Broker)
David Wilson, Nigel Barnes, Erland Sternby
+44 (0)20 3705 9321
Media enquiries:
FTI Consulting
Ben Atwell, Michael Trace, Alex Davis
Oncimmune@fticonsulting.com (mailto:Oncimmune@fticonsulting.com)
+44 (0)20 3727 1000
About Oncimmune
ImmunoINSIGHTS Service Business
Oncimmune is a leading immunodiagnostics developer, primarily focused on the
growing fields of immuno-oncology, autoimmune disease and infectious diseases.
The ImmunoINSIGHTS service business leverages Oncimmune's technology platform
and methodologies across multiple diseases, to offer life-science
organisations actionable insights for therapies across the development and
product lifecycle. Our core immune-profiling technology is underpinned by our
library of over eight thousand immunogenic proteins, one of the largest of its
kind. This helps identify trial participants and patients into clinically
relevant subgroups, enabling development of targeted and more effective
treatments.
Oncimmune's ImmunoINSIGHTS service business is based at the Company's
discovery research centre in Dortmund, Germany. The business platform enables
life science organisations to optimise drug development and delivery, leading
to more effectively targeted and safer treatments for patients.
The ImmunoINSIGHTS Commercial team is based in the US and Europe and Oncimmune
is seeking to replicate the Dortmund facility in the US in the medium term.
EarlyCDT Product Business
Oncimmune's immunodiagnostic technology, EarlyCDT, can detect and help
identify cancer on average four years earlier than standard clinical
diagnosis. Our lead diagnostic test, EarlyCDT Lung, targets a vast market
estimated to grow to £3.8bn by 2024. With over 200,000 tests already
performed for patients worldwide and its use being supported by peer reviewed
data in over 12,000 patients, we are poised to become an integral component of
future lung cancer detection programmes, globally.
Oncimmune's diagnostic products business is located at its laboratory facility
in Nottingham, UK.
For more information, visit www.oncimmune.com (http://www.oncimmune.com)
Chief Executive's Review
We are pleased to report the Group's unaudited half year results for the six
months ended 30 November 2021 and provide an update on the commercial and
operational progress since last period end.
Oncimmune remains a leading developer of applied immunodiagnostics for the
early detection of disease, drug discovery and development, with over 18 years
as a leader in autoantibody-enabled immunodiagnostics. Oncimmune's proprietary
platform technology includes a substantial immunogenic protein library, over
200 patents granted and pending in 47 countries, and over 150 academic papers
and presentations.
ImmunoINSIGHTS commercial update
The Group launched the ImmunoINSIGHTS service in February 2020 as Oncimmune's
contract discovery and development service-based platform and, since then, the
number of signed contracts and projects with major pharmaceutical and
biotechnology companies has progressively increased.
As at the date of this announcement, the business has secured contracts with 5
of the top 10 global pharmaceutical companies and this is expected to grow
again by the end of this financial year. We currently anticipate that by the
end of FY2022 approximately 70% of FY2022 revenues will have been earned from
these top 10 pharmaceutical companies. More than ever, this is reflected in
the increasing number of multiple contracts we have secured with our leading
pharmaceutical clients across multiple indications or therapeutic areas.
Consistent feedback from our clients highlights the high quality of our
service and, most importantly, the impactful value we have been able to
contribute to our clients' therapeutic programmes.
The Company is strategically focused on securing contracts from the top global
pharma companies. Considerable efforts are required to become an approved and
ongoing service provider to these global pharma companies. In most cases,
before being awarded an initial contract, we have been required to satisfy
technical qualification in order to be accepted as an approved supplier. This
is particularly the case for patient data management where, during the course
of a study, we are provided with pseudonymised data in order to provide
optimised clinical and statistical insight. Being an approved supplier to
major pharmaceutical companies is an asset in itself and should facilitate
faster contract wins in the future.
The strategy of focusing on large pharma companies does deliver significant
benefits. It is estimated that the market for outsourced pharma services to
support clinical trials is approximately $2.3bn growing at an estimated 10%
per annum, of which, the top 13 pharmaceutical companies will contribute
approximately $500M this year. Furthermore, large pharma companies have
multiple studies in several disease areas running concurrently, which is
enabling the Company to win more than one contract per client. As we deepen
and extend our relationships with large pharma, we are improving the quality,
as well as the quantity and value, of our commercial pipeline.
Our focus on securing contracts and growing the commercial pipeline has been
notably more successful from Q2 FY2022 onwards. Whilst new business activity
in Q1 FY2022 was unexpectedly slower than forecast caused by the easing of
COVID-19 restrictions over the summer holiday period of 2021, there has been a
marked pick-up in commercial momentum in Q2 FY2022 which has continued into Q3
FY2022 and is expected to continue into Q4 FY2022 and beyond.
A measure of our progress is the growth in the commercial pipeline, in
particular the growth in the number of individual clients within the pipeline.
We are pleased to report that the number of contracted clients has more than
doubled year-on-year and this metric continues to grow.
Since the beginning of the current financial year, we have signed 11
contracts, including:
· A Master Services Agreement ("MSA") with a leading global
pharmaceutical company with a contract to develop a multiplexed assay to
measure Immunoglobulin E (IgE) autoantibodies for planned
autoimmune clinical studies. A follow-on IgE project has been indicated by
the client for Q1 FY2023. A second and significantly larger contract was
announced on 15 February 2022 and work on this project will span the current
and next financial years.
· An autoantibody profiling collaboration with MSD, co-funded with
the EORTC Melanoma Group and study sponsor, to evaluate the autoantibody
profiles of patient samples collected in the ongoing Phase 3
EORTC1325/KEYNOTE-054 trial investigating KEYTRUDA® (pembrolizumab), MSD's
anti-PD-1 therapy, as monotherapy for surgically resected, high-risk melanoma.
We are scheduling initial results from this project to be made available to
EORTC in Q4 2022 and for the project to be completed shortly thereafter.
· A contract in the area of Systemic Lupus Erythematosus ("SLE") for
an existing global pharmaceutical company, the second contract we have been
awarded for this client. We have scheduled a follow-on to this initial project
to commence in Q4 FY2022.
· A contract with a large pharma partner headquartered in Germany, to
characterise the Immunoglobulin G (IgG) autoantibody profiles of patients in
clinical trials for SLE. A significantly larger follow-on contract is
scheduled for Q4 FY2022.
· Two further contracts were signed with our largest client, which
brings the total number of contracts signed to date to five. Both of these
projects have follow-on studies expected to be signed as further contracts
before the end of the current financial year.
In addition to contracts signed and commenced in the period, a number of
contracts which were signed in the prior year were progressed through the
Dortmund facility. The growth capital from the March 2021 equity fundraise has
in part been deployed on equipment and personnel to complete the scaling up of
the Dortmund facility to handle approximately 40,000 samples per annum and the
expansion of the Commercial team. At the Dortmund facility, we have also
streamlined our operations to facilitate the rapid turnaround of pilot studies
which are often the gateway to larger follow-on contracts.
During the period, the Commercial team has also been substantially increased,
with an additional five heads employed in the US, to complement the existing
two heads based in Europe. Complementing this, we have established an office
on the Cambridge Innovation Center in Boston, USA, enabling the Commercial
team to be proximate to many of our North American pharma clients. In
addition, the Company's marketing function has been significantly enhanced
with the appointment of a Senior Director of Global Marketing, based in North
America. This appointment will be key to building brand awareness across the
globe, including through the use of digital projects and marketing automation
initiatives.
A recent market analysis by a leading independent strategy consultancy has
sized the potential market for pharma services. It is estimated that the
addressable market for outsourced pharma services is $2.3bn and growing at
c.10% per annum. The autoantibody profiling segment of this market, where we
operate, is growing rapidly and expected to increase at a compound rate of
c.27% per annum over the next 5 years. We believe that, as a pure-play service
provider, ImmunoINSIGHTS will become a market leader in this segment by 2023
having more than tripled the Company's market share over the course of the
current financial year. This opportunity for ImmunoINSIGHTS has been achieved
through organic growth only since the business was acquired by Oncimmune in
March 2019. The Board continues to evaluate available M&A opportunities
which could substantially increase the Group's revenue by widening the current
service offering and potentially provide a facility in the US to expand
laboratory capacity.
EarlyCDT(®) Lung commercial update
As previously indicated in our annual results to 31 May 2021, announced on 2
November 2021, there has been considerable disruption to healthcare systems
globally as countries continue to focus on the COVID-19 pandemic. This
disruption affected the sale of EarlyCDT Lung across the globe and has made it
difficult for the Group to forecast revenues for EarlyCDT Lung. This downside
has been somewhat offset by distributor agreements, particularly with
Biodesix, Inc., which require minimum volume commitments.
In the UK, the iDX Lung programme (NHS Lung Health Check Programmes in Wessex
and Yorkshire as part of the iDx-LUNG evaluation programme) continues to
provide the Group with regular product sales and to date over 815 patients
have been recruited in Southampton and Leeds.
Within the NHS, we successfully concluded the real-world screening evaluation
pilot with the Norfolk and Waveney Clinical Commissioning Group ("CCG") and
the final report is expected in Q4 FY2022. We anticipate the adoption of the
EarlyCDT Lung test within this NHS CCG with regular and ongoing product sales
to commence from June 2022. Furthermore, a second pilot with another NHS CCG
for the screening of over 2,000 patients is expected to commence in Q4 FY2022
and which is also anticipated to lead to ongoing product sales.
Reflecting the above, total Group revenue for FY2022 is expected to be
considerably more weighted to ImmunoINSIGHTS this year, as commercial growth
for EarlyCDT Lung is anticipated to be more in evidence in the next financial
year.
In May 2021, we returned to the Group the intellectual property and
distribution rights for the EarlyCDT technology in the People's Republic of
China and Hong Kong, allowing us to pursue the optimum route to market in this
important territory. We expect to update the market before the end of the
current financial year on the ongoing discussions in this area.
Outlook
The ImmunoINSIGHTS business, acquired for an all-share consideration in March
2019 of £3.5M, is an exciting business which is delivering significant high
margin revenue growth. It is expected that by the end of this financial year,
ImmunoINSIGHTS will have contracted with the majority of the top 10 global
pharmaceutical companies and be delivering high quality projects which provide
our clients with deep insights into their clinical assets and programmes.
The Company's commercial strategy is focused on securing contracts,
particularly from large pharma, and growing the commercial pipeline, which has
been particularly successful from Q2 FY2022 onwards. Whilst new business
activity in Q1 FY2022 was unexpectedly slow, commercial activity picked up
markedly in Q2 FY2022 and this momentum has continued into Q3 and Q4 FY2022.
We have already signed five new contracts in Q3 FY2022 and are expecting to
sign additional contracts in Q4 FY2022. A significant proportion of contracts
signed during the latter part of FY2022 will deliver revenue into FY2023, as a
result we expect to commence FY2023 with more than 30% of management's FY2023
revenue expectations already contracted.
The organic growth opportunity for ImmunoINSIGHTS over the next three years
is estimated to be substantial. Additional opportunities exist to address
adjacent segments of the pharma services market beyond autoantibody profiling
which might be reached through organic and inorganic development, further
expanding the total addressable market for ImmunoINSIGHTS.
The investment we have made into enlarging Dortmund's laboratory capacity has
facilitated an expansion in the volume of samples able to be analysed. This
has been complemented by the expansion in the Commercial team, which has grown
from two heads at the beginning of the financial year to seven heads
currently, five of whom are based in North America. It is anticipated that we
will have maximised the current laboratory capacity through organic growth
within three years.
In summary, we are successfully delivering against our strategic objectives
and have created a business which has a broad commercial offering and is now
demonstrating significant revenue growth, with improved growth prospects.
Against this backdrop of gathering commercial momentum since the second
quarter, the Board is confident of delivering increasing value to all
stakeholders.
Adam Hill Meinhard Schmidt
Chief Executive Officer Chairman
28 February 2022
Chief Financial Officer's review
The Company's recognised revenue for the six months to 30 November 2021 was
£1.43M (H1 2020: £1.83M) reflecting a slower start to the financial year
with contract signings within the ImmunoINSIGHTS business over the summer
being lower than expected. Notwithstanding this, the number of contract
signings were higher than the same period last year. Notably there has been a
significant uplift in contract signings towards the end of Q2 FY2022 and into
Q3 FY2022 and this momentum is expected to continue into Q4 FY2022.
Gross profit for the period was £0.96M (H1 2020: £1.41M).
Administrative expenses through our expansion were £4.05M (H1 2020: £2.88M)
which reflect the expansion in our ImmunoINSIGHTS Dortmund facility and
Commercial team in the US.
Research & Development costs totalled £0.67M were substantially the same
as the same period last year (H1 FY2021: £0.62M). These costs are not
expected to materially increase as future R&D expenditure is expected to
be funded through commercial contracts.
Loss after tax was £4.86M (H1 2020: £2.60M) as the Company invested in the
ImmunoINSIGHTS business with additional equipment purchases and headcount to
further increase capacity and remove possible operational bottlenecks.
Gross cash balance at the period end of £2.97M (H1 2021: £3.28M) and net
debt at the period end, comprising gross cash less lease liabilities and
borrowings, of £5.39M (H1 2021: £7.22M).
In December 2021, the Company drew down the remaining €3.0M of the €6.0M
debt facility which was announced in October 2020. The funds are being used to
support the acceleration in the build out of the US-based Commercial team and
are serviceable by cash generation from ImmunoINSIGHTS. In accordance with the
terms of the facility, additional warrants were issued to IPF over 383,994
ordinary shares at an exercise price of 156.6 pence.
Matthew Hall
Chief Financial Officer
28 February 2022
Oncimmune Holdings plc
Consolidated income statement for the six months ended 30 November 2021
Unaudited Unaudited Audited
6 months to
6 months to
12 months to
30 November 2021
30 November 2020
31 May 2021
Notes £'000 £'000 £'000
Continuing operations
Revenue 1,430 1,827 3,722
Cost of sales (473) (416) (865)
Gross profit 957 1,411 2,857
Other income 144 72 311
Administrative expenses (4,052) (2,876) (5,652)
Research and development expenses (666) (615) (1,615)
Share-based payments charge (900) (334) (1,046)
(5,474) (3,753) (8,002)
Operating loss (4,517) (2,342) (5,145)
Finance income 97 2 403
Finance (455) (449) (954)
expense
Loss before taxation (4,875) (2,789) (5,696)
Taxation 12 192 1,068
Loss after tax from continuing operations (4,863) (2,597) (4,628)
Other comprehensive income
Exchange translation differences (46) 4 (91)
Loss after tax and total comprehensive income attributable to equity holders (4,909) (2,593) (4,719)
Loss per share:
Basic and diluted (pence) 3 (7.04p) (4.09p) (7.17p)
Oncimmune Holdings plc
Consolidated statement of financial position as at 30 November 2021
Unaudited Unaudited Audited
30 November 2021
30 November 2020
31 May
2021
Notes £'000 £'000 £'000
Assets
Non-current assets
Goodwill 1,578 1,578 1,578
Intangible assets 3,676 1,001 4,116
Property, plant and equipment 818 400 664
Right-of-use assets 776 868 930
Deferred tax asset 921 - 937
Total non-current assets 7,769 3,847 8,225
Current assets
Inventories 377 291 143
Trade and other receivables 6,365 1,969 7,079
Contract assets 706 199 200
Cash and cash equivalents 2,965 3,284 8,631
Total current assets 10,413 5,743 16,053
Total assets 18,182 9,590 24,278
Equity and liabilities attributable to equity holders of the parent company
Share capital 4 691 636 691
Share premium 40,512 31,483 40,497
Merger reserve 31,882 31,882 31,882
Other reserves 4,994 3,382 4,094
Own shares (1,926) (1,926) (1,926)
Foreign exchange translation reserve 42 183 88
Retained earnings (74,962) (68,068) (70,099)
Total equity 1,233 (2,428) 5,227
Liabilities
Non-current liabilities
Borrowings 5 4,417 8,157 6,239
Other liabilities 6 2,000 - 2,000
Lease liability 479 692 671
Deferred tax liability 362 125 374
Total non-current liabilities 7,258 8,974 9,284
Current liabilities
Trade and other payables 1,048 846 1,979
Contract liabilities 5,124 57 5,175
Other tax liabilities 60 56 55
Other liabilities 6 - 428 -
Lease liability 373 227 310
Borrowings 5 3,086 1,430 2,248
Total current liabilities 9,691 3,044 9,767
Total liabilities 16,949 12,018 19,051
Total equity and liabilities 18,182 9,590 24,278
Oncimmune Holdings plc
Consolidated statement of changes in equity for the six months ended 30
November 2021
Share Share Other reserves Merger reserve Foreign exchange translation reserve Retained earnings Total equity
capital premium
Own
shares
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Six months ended 30 November 2021 - unaudited
Balance at 1 June 2021 691 40,497 4,094 31,882 88 (1,926) (70,099) 5,227
Loss for the period - - - - - - (4,863) (4,863)
Other comprehensive income - - - - (46) - - (46)
Total comprehensive expense for the period - - - - (46) - (4,863) (4,909)
Transactions with owners
Share-based payment charge - - 900 - - - - 900
Options exercised - 15 - - - - - 15
Balance at 691 40,512 4,994 31,882 42 (1,926) (74,962) 1,233
30 November 2021
Oncimmune Holdings plc
Consolidated statement of changes in equity for the six months ended 30
November 2021 (continued)
Share Share Other reserves Merger reserve Foreign exchange translation reserve Retained earnings Total equity
capital premium
Own
shares
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Year ended 31 May 2021 - audited
Balance at 1 June 2020 635 31,459 3,048 31,882 179 (1,926) (65,471) (194)
Loss for the period - - - - - - (4,628) (4,628)
Other comprehensive income - - - - (91) - - (91)
Total comprehensive expense for the period - - - - (91) - (4,628) (4,719)
Transactions with owners
Shares issued in year 50 8,331 - - - - - 8,381
Options exercised 2 106 - - - - - 108
Shares issued in relation to prior year acquisition 4 601 - - - - - 605
Share-based option charge - - 1,046 - - - - 1,046
Balance at 691 40,497 4,094 31,882 88 (1,926) (70,099) 5,227
31 May 2021
Oncimmune Holdings plc
Consolidated statement of changes in equity for the six months ended 30
November 2021 (continued)
Share Share Other reserves Merger reserve Foreign exchange translation reserve Retained earnings Total equity
capital premium
Own
shares
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Six months ended 30 November 2020 - unaudited
Balance at 1 June 2020 31,459 3,048 31,882 179 (65,471) (194)
635 (1,926)
Loss for the period - - - - - - (2,597) (2,597)
Other comprehensive income - - - - 4 - - 4
Total comprehensive expense for the period - - - - 4 - (2,597) (2,593)
Transactions with owners
Share-based payment charge - - 334 - - - - 334
Share options exercised 1 24 - - - - - 25
Balance at 636 31,483 3,382 31,882 183 (1,926) (68,068) (2,428)
30 November 2020
Oncimmune Holdings plc
Consolidated statement of cash flows for the six months ended 30 November 2021
Unaudited Unaudited Audited
6 months to
6 months to
12 months to
30 November 2021
30 November 2020
31 May
2021
£'000 £'000 £'000
Cash flow from operating activities
Loss before tax (4,875) (2,789) (5,696)
Adjustments for:
Depreciation and amortisation 707 327 740
Interest income (97) (2) (403)
Interest expense 455 449 954
Share-based payment expense 900 334 1,046
Fair value movement on contingent consideration - - 176
Foreign exchange movements - 20 -
(2,910) (1,661) (3,183)
Changes in working capital:
(Increase)/decrease in inventories (220) (117) 31
Decrease/(increase) in trade and other receivables 203 (367) (5,837)
(Decrease)/increase in trade and other payables (449) (714) 4,841
Cash used in operating activities (3,376) (2,859) (4,148)
Interest paid (426) (392) (885)
Interest received 97 2 3
Income tax received - - 503
Net cash used in operating activities (3,705) (3,249) (4,527)
Cash flow from investing activities
Purchase of property, plant and equipment (278) (94) (446)
Purchase of intangible assets (593) - (625)
Proceeds from sale of assets - 196 215
Net cash (used in)/generated from investing activities (871) 102 (856)
Cash flow from financing activities
Proceeds of share issue 15 25 8,489
Proceeds of new long term borrowings - 2,641 2,728
Repayment of borrowings (946) (384) (1,135)
Principal lease repayments (136) (86) (303)
Net cash (used in)/generated from financing activities (1,067) 2,196 9,779
Movement in cash attributable to foreign exchange (23) (5) (5)
Net change in cash and cash equivalents (5,666) (956) 4,391
Cash and cash equivalents at beginning of period 8,631 4,240 4,240
Cash and cash equivalents at end of period 2,965 3,284 8,631
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. General information
The principal activity of Oncimmune Holdings plc (the "Company") and its
subsidiaries (together, the "Group") is that of autoantibodies profiling to
the pharmaceutical and biotechnology industry, specifically in the areas of
immune-oncology, autoimmune disease and infectious diseases, and the research,
development and commercialisation of autoantibody tests that can detect cancer
up to four years earlier than other methods and can be applied to a very wide
range of solid tumour types. The Company is incorporated and domiciled in the
United Kingdom. The address of its registered office is MediCity D6 Building,
1 Thane Road Nottingham, UK, NG90 6BH. The registered number is 09818395.
As permitted, this Interim Report has been prepared in accordance with the AIM
rules and not in accordance with IAS 34 "Interim Financial Reporting".
This Consolidated Interim Report and the financial information for the six
months ended 30 November 2021 does not constitute full statutory accounts
within the meaning of section 434 of the Companies Act 2006 and are unaudited.
This unaudited Interim Report was approved by the Board of Directors on 25
February 2022.
The consolidated financial statements are prepared under the historical cost
convention.
The Group's financial statements for the period ended 31 May 2021 have been
filed with the Registrar of Companies. The Group's auditor's report on these
financial statements was unqualified and did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
Electronic communications
The Company is not proposing to distribute hard copies of this Interim Report
for the six months ended 30 November 2021 unless specifically requested by
individual shareholders.
The Board believes that by utilising electronic communication it delivers
savings to the Company in terms of administration, printing and postage, and
environmental benefits through reduced consumption of paper and inks, as well
as speeding up the provision of information to shareholders.
News updates, Regulatory News and Financial statements can be viewed and
downloaded from the Company's website, www.oncimmune.com. Copies can also be
requested from; The Company Secretary, Oncimmune Holdings plc, MediCity D6
Building, 1 Thane Road, Nottingham, NG90 6BH or by email:
oncimmune@fticonsulting.com
2. Accounting policies
Basis of preparation
The financial information has been prepared in accordance with international
accounting standards.
The accounting policies applied by the Group in this interim report are the
same as those applied by the Group in the consolidated financial statements
for the year ended 31 May 2021.
Going concern
In assessing the appropriateness of applying the going concern basis in the
preparation of the interim condensed consolidated financial statements the
Directors have considered the Group's liquidity and forecast cash flows under
a range of potential scenarios taking into account reasonably possible
outcomes over a period up to and including March 2023.
In respect of the Group's funding position, the Company entered into a €8.5M
credit facility with IPF Management SA in September 2019 which was further
extended by €6.0M in October 2020, of which €3.0M was drawn down at that
time. The remaining €3.0M was draw down in December 2021. Each drawn down
tranche under the credit facility is repayable over a four-year term,
interest-only for the first 12 months, with principal repayments commencing
thereafter. The facility includes a financial covenant obligation which
requires the Group (on a quarterly basis for the term of the facility) to be
able to demonstrate that it holds a minimum amount of cash equal to the next
nine months of operating cashflow, including the amounts required to service
the credit facility. The total loan has been used to support the Group's
operational activities, in particular the growth of the ImmunoINSIGHTS service
business. In order to monitor compliance with this financial covenant, the
Board prepares monthly financial accounts including a calculation of covenant
compliance for the following 12 months.
This consolidated interim report has been prepared on a going concern basis
and under the historical cost convention. In preparing the interim report the
Directors have prepared forecasts and budgets for the period to March 2023.
These forecasts and budgets model a range of scenarios, including taking into
consideration the impact of Covid-19.
The base case scenario assumes cash from contracts and customers for the
forecast period being a mix of contracted amounts, contracts currently under
negotiation, repeat business from already contracted work, together with
contracts from as yet unidentified opportunities. The base case scenario shows
the Group is able to meet its financial obligations as and when they fall due
for the forecast period.
The Directors have also considered downside scenarios that reflect the current
unprecedented uncertainty in the UK and global economy and which the Directors
consider to be severe but plausible. The first downside scenario took the base
case scenario and removed a total of 50% of forecast EarlyCDT Lung product
revenues, excluding the US with a corresponding reduction in cost of sales,
and certain discretionary research and development and overhead costs. The
second downside scenario took the base case scenario and removed 50% of
forecast EarlyCDT Lung product revenues, excluding the UK and US, as well as
20% reduction in ImmunoINSIGHTS revenues and with a corresponding reduction in
cost of sales, and certain discretionary research and development and overhead
costs. The results of these scenarios show that the Group has sufficient
resources to meet its obligations for the forecast period and will not be in
breach of its covenant under the IPF Management SA facility.
In addition to the above, the Directors have performed a more severe downside
test. The most severe of these tests reduced EarlyCDT Lung product revenues
outside the UK by 50% and reduced ImmunoINSIGHTS revenues by 50% with an
appropriate reduction in costs of sales and certain discretionary research and
development and overhead costs. Should these reduced revenues be reflected in
trading through to March 2023, the Group will not comply with the financial
covenant attached to its external borrowings for the duration of the going
concern review period. Should the financial covenant not be met the Group's
borrowings could be recalled by its lender. Such a scenario gives rise to a
material uncertainty which may cast significant doubt about the Group's
ability to continue as a going concern. The interim condensed consolidated
financial statements do not include the adjustments that would result if the
Group was unable to continue as a going concern. However, as detailed in the
Chief Executive's review, there has been an uplift in business activity from
Q2 FY2022 onwards within the ImmunoINSIGHTS business with the awarding of
contracts signed as well as a number of other contracts in the later stages of
the contracting process, and which are expected to be signed before the end of
the current financial year. Furthermore, in the event that there is a delay or
a reduction in forecast revenues or cash receipts, the Group has identified
costs within the business which could be reduced within a relatively short
time period in order to ensure the Group's ongoing compliance with the
covenant.
After considering the above and after making appropriate enquiries, the
Directors have formed a judgement at the time of approving the interim report
that there is a reasonable expectation that the Group will continue to trade
in line with the base case scenario, and as such, the Directors consider the
adoption of the going concern basis in preparing the Consolidated interim
report is appropriate.
Taxation
Taxes on income in the interim periods are accrued using the rate of tax that
would be applicable to expected total annual earnings.
In so far as the Group companies are entitled to UK tax credits on qualifying
research and development expenditure, such amounts have been accrued to 31 May
2021 based on the weighted probability of possible outcomes.
3. Loss per share
Basic
Basic loss per share is calculated by dividing the loss after tax attributable
to the equity holders of the parent company for the period of £4,863,000 (May
2021: £4,628,000) (November 2020: £2,597,000) by the weighted average number
of ordinary shares in issue during the period of 69,123,109 (May 2021:
64,571,180) (November 2020: 63,565,762).
Diluted
Due to losses in the period there is no calculation of a diluted earnings loss
per share.
4. Share capital
November 2021 May 2021
Shares £ Shares £
Authorised:
Ordinary shares of £0.01 each 69,134,848 691,348 69,121,949 691,219
Allotted, called up and fully paid:
Ordinary shares of £0.01 each 69,134,848 691,348 69,121,949 691,219
In June 2021, share options over 164,626 £0.01 ordinary shares of the
Company, exercisable at £2.10, were awarded to employees under the Company's
2016 Share Option Plan. These options are subject to the rules of the
Company's 2016 Share Option Plan including vesting in five equal annual parts.
As at 30 November 2021 the Group has 9,120,730 share options outstanding.
In December 2021, share options over 135,109 £0.01 ordinary shares of the
Company, exercisable at £1.68, were awarded to an employee under the
Company's 2016 Share Option Plan. These options are subject to the rules of
the Company's 2016 Share Option Plan including vesting in five equal annual
parts.
5. Borrowings
The Group uses other loans to finance the ongoing operations of the Group. The
following balances remain outstanding:
November 2021 November 2020 May 2021
£'000 £'000 £'000
Current
Loans 3,086 1,430 2,248
Non-current
Loans 4,417 8,157 6,239
The loan is a four-year term with Tranche 1 and Tranche 2 repayable on 29
September 2023 and Tranche 3 repayable on 31 October 2024 all tranches being
interest-only for the first 12 months, with principal repayments commencing
thereafter. The facility includes a financial covenant obligation which
requires the Group (on a quarterly basis for the term of the facility) to be
able to demonstrate that it holds a minimum amount of cash equal to the next
nine months of operating cash flow, including the amounts required to service
the credit facility. In order to monitor compliance with this financial
covenant, the Board prepares monthly financial accounts including a
calculation of covenant compliance for the following 12 months. All covenants
were complied with in period. The facility includes a floating charge over the
assets of Oncimmune Holdings plc and Oncimmune Ltd.
The fair value of the loan is not materially different to the carrying value,
as the interest payable is close to the current market rate.
6. Other liabilities
November 2021 November 2020 May 2021
£'000 £'000 £'000
Current
Contingent consideration - 181 -
Other contingent consideration - 247 -
- 428 -
Non-current
Other contingent liabilities 2,000 - 2,000
2,000 - 2,000
Other contingent consideration payable as at 31 May 2021 and 30 November 2021
relates to amounts due under the contract with Genostics Company Limited for
the IP rights to the EarlyCDT Lung product in People's Republic of China and
Hong Kong.
The contingent consideration payable as at 30 November 2020 was due to the
former shareholders of Oncimmune Germany GmbH (formerly Protagen AG) and was
settled in March 2021 via the issue of Ordinary shares.
The other contingent consideration payable as at 30 November 2020 was in
respect of amounts due to two former directors and was settled via the issue
of Ordinary shares.
7. Events after the reporting period
In December 2021 €3.0M was drawn down under the credit facility with IPF
Management SA. This debt is repayable on 19 December 2025, is interest-only
for the first 12 months, with principal repayments commencing thereafter. This
debt is subject to the same financial covenant obligations described in Note 5
in this Interim Report.
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