REG - Physiomics PLC - Interim Results
29/09/2022 07:01
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RNS Number : 0684B Physiomics PLC 29 September 2022
29 September 2022
Physiomics plc
("Physiomics" or "the Company")
Final Results for the year ended 30 June 2022 and Date of AGM
Highlights
Financial Highlights
• Total income (revenue and grant income) increased 23% to
£900,707 (2021: £730,899)
• The operating loss increased 6.5% to £359,114 (2021:
£337,040)
• The loss after taxation increased 17.3% to £253,138 (2021:
£215,827)
• At 30 June 2022, the surplus of shareholders' funds was
£974,807 (30 June 2021: £1,165,714)
• Cash and cash equivalents at 30 June 2022 of £687,674 (30
June 2021: £1,043,450)
Operational highlights
• Recruitment of two additional technical team members
• Recruitment of the Company's first ever Head of Business
Development
• Recruitment of first patient in the Company's personalised dosing
PARTNER study being run by Portsmouth University Hospitals NHS Trust
• Award of contracts by long term client Merck KGaA
• Second project with client Numab Therapeutics
• Signing of new biotech clients Ankyra Therapeutics and
Ducentis Biotherapeutics
• Appointment of two new independent Non-Executive Directors to
the Company's board Dr Tim Corn and Mr Shalabh Kumar
• Signing of new large-pharma client, Servier
"The Company has returned to a growth trajectory in the year ended 30 June
2022, coming in slightly ahead of analyst forecasts and also beating the
Company's previous highest ever total income. Cash outflows reflected a
deliberate strategy to invest for growth through the recruitment of both
additional technical team members and the Company's first Head of Business
Development, as well as investment in various marketing activities. These
enabled us to sign a number of new clients including Ankyra Therapeutics,
Ducentis BioTherapeutics and Servier with many other potential new customers
in the pipeline.
As all companies start to establish new normal working practices post-COVID,
staff motivation remains high with flexible working arrangements allowing us
to attract highly talented and experienced staff who might otherwise not be
available to us.
In parallel with its consulting activities, the Company is coming to the end
of its personalised dosing PARTNER trial in Portsmouth and looks forward to
the final analysis of data being completed by the end of this calendar year.
Finally, the Company has secured the services of two highly experienced
independent Non-Executive Directors and I look forward to working with them
and the rest of the board to identify and action what we believe are
significant growth opportunities for the Company going forward."
Dr Jim Millen, Executive Chairman and CEO
Executive Chairman and Chief Executive Officer's Statement
Overview
The Company is pleased to report that, following a challenging financial year
2021, it has returned to a growth trajectory in the year ended 30 June 2022,
slightly ahead of analyst forecasts and beating its previous highest ever
total income. Planned investments in expanded capacity, marketing and
business development capability, led to higher cash outflows than in the
comparable previous period, however the Directors believe that these will be
reflected in higher levels of new business during 2023.
In its consulting business, the Company continues to exhibit a strong ability
to generate repeat business from clients such as Merck, Bicycle Therapeutics
and Numab Therapeutics, while also attracting first time customers such as
Servier, Ankyra Therapeutics and Ducentis BioTherapeutics.
In parallel with its consulting activities, the Company continues to explore
the opportunity of personalised oncology through its collaboration with
DoseMeRx and its observational PARTNER trial being run by Portsmouth Hospitals
University NHS Trust, which reaches the end of its recruitment period this
month and whose data will be analysed by the end of this calendar year.
Since the Company last raised funds in May 2020, the Company has increased its
marketing activities, invested in its personalised medicine initiatives (both
with DoseMeRx and through its PARTNER study in Portsmouth) and hired three new
staff members, two scientists and a Head of Business Development. In
addition, the Company has invested in resources and project activities which
are not currently cash generative but are designed to create a platform for
future growth. These include the collaborations with ValiRx and DoseMeRx and
account for the additional losses not attributable to COVID-related factors.
With the addition of two new and highly experienced Non-Executive Directors to
the Board, the Company intends to once again review strategic opportunities to
accelerate growth in both its core consulting business and personalised
oncology, as well as other areas where we believe our modelling and
quantitative analysis capabilities would give us a competitive advantage.
Financial Review
The Company's total income for the year ended 30 June 2022 of £900,707
represents a 23% increase over year ended 30 June 2021 and is 7% higher than
its previous highest ever total income of £841,649 in year ended 30 June
2020.
The loss after taxation increased 17.3% to £253,138 (2021: £215,827) with a
significant part of this due to investment in new team members and marketing
as noted above.
At 30 June 2022, the surplus of shareholders' funds was £974,807 (30 June
2021: £1,165,714) of which cash and cash equivalents were £687,674 (30 June
2021: £1,043,450), representing around two years of cash runway at the
Company's current burn rate.
COVID 19
The COVID 19 crisis led to a delay in the commencement of our NIHR funded
trial at the Portsmouth University Hospitals NHS Trust. The trial eventually
started recruiting in September 2021, having received ethics committee
approval in December 2020, and will complete recruitment in September 2022.
Data from the trial will be received by Physiomics and analysed over the
course of the remainder of calendar year 2022.
By contrast with the comparable prior period, the Company's clients have
experienced fewer delays due to COVID and most projects have generally
proceeded according to anticipated timelines.
Employees continue to work effectively from a mixture of office and home
office settings with no reduction in efficiency and the Company envisages that
it will continue with this flexible model for the foreseeable future. As
noted above, flexible working also offers significant advantages in attracting
new talent to the team.
Staff
The Company recruited two highly talented new technical team members during
the year, as well as a new Head of Business Development, to drive and service
a larger pipeline of new business. When advertising new positions, the Company
continues to receive a significant number of applications from qualified and
experienced individuals, which reflects the profile of the Company and the
positive image it continues to foster.
Staff utilisation rates are regularly reviewed as part of the Company's
workforce planning process and the Company would like to thank all its staff
for their continuing hard work and commitment during the year.
In addition, the Company appointed two new and highly experienced
Non-Executive Directors, one in April and one in September after the year end.
Outlook
The Company is pleased to have bounced back to its highest ever level of total
income for the year ended 30 June 2022 and sees opportunities for the current
financial year in both its core consulting business and in personalised
oncology. The global oncology pharmaceuticals market is anticipated to
continue to grow strongly at around 11.6% per annum through 2027 1 (#_ftn1)
with the biosimulation technology market (all therapy areas) predicted to grow
even more strongly at 13% per annum through to 2030 2 (#_ftn2) .
With a strengthened Board, the Company plans to continue to explore other
areas where its expertise in lifesciences modelling and data analysis could
create additional value for its shareholders.
Dr Jim Millen, Executive Chairman and Chief Executive Officer
Strategic Report
Principal activities
Physiomics is engaged in providing consulting services to pharmaceutical
companies in the areas of outsourced quantitative pharmacology and
computational biology, using a combination of industry standard technologies
and its own proprietary technology platform, Virtual Tumour™. In simple
terms, this means helping companies to put the right drugs together, at the
right dose, in the right types of cancer, to help achieve the best possible
outcomes for patients, at the lowest cost.
Modelling and simulation using Virtual Tumour™ and other tools
The Company's focus is almost exclusively in the provision of modelling,
simulation and data analysis services, covering the full range of oncology
R&D and with a focus on quantitative pharmacology techniques. The Company
generates fee for service revenues by providing insights to clients based on
its modelling. The Company utilises its proprietary Virtual Tumour™
predictive software, industry standard tools (such as NONMEM and MATLAB), as
well as developing bespoke models using the R programming language.
Extensions to Virtual Tumour™ have been developed over the last few years to
address specialist areas such as immuno-oncology, DNA damage repair
inhibitors, radiation therapy and other areas of specialism. Projects often
require a blend of several approaches to deliver the optimal insights to
clients. Client companies rely heavily on the knowledge and experience of our
team when evaluating data and devising new programmes. The team's exposure
to and expanding expertise in a wide range of cancer treatment modalities is
attractive to new and existing clients.
The Company's expertise in the late discovery, preclinical and clinical phases
of pharmaceutical R&D, enables it to add value by helping companies to
efficiently derive insights from their data. This is achieved in a variety
of ways ranging from data analysis, visualisation and interpretation, to
mathematical modelling of the performance of drugs. The end result is that
our clients are in a better position to optimise the treatments they are
developing by selecting the right targets, drugs, dosages, timing and
combinations. We believe that we add particular value in early development
during the transition from pre-clinical to first-in-human studies. We believe
our experience and capabilities have been helpful in supporting clients in
identifying optimal clinical trial designs and justifying them to regulatory
authorities. In recent projects, the Company has been able to:
· Support big pharma companies in developing evidence-based dose
selection to optimise the balance of efficacy and toxicity
· Use modelling to generate hypotheses as to the mechanism of action of
client assets and predict/ explain why they may have a competitive advantage
over other marketed drugs with the same targets
· Predict the clinical efficacy of cancer regimens amongst patients
with various specific genetic settings, based on extensive preclinical
modelling and then translation of these settings to man
· Support and inform first in human dosing based on predictions of
biologically effective dose from computer models
Personalised Medicine
In addition to its core modelling and simulation business, the Company has
continued to develop its technology for use in the field of personalised
medicine. The term "personalised medicine" is used in many ways but is most
often associated with the use of genetic markers in the selection of drugs to
treat a particular group of patients. Physiomics' approach has been to use
its expertise in interpreting pre-clinical and clinical cancer data to help
predict when to treat patients and with what dose of drug. This approach
relies on advanced analytical techniques, many of which (such as machine
learning and neural networks) are in the field of artificial intelligence
(AI). To date this work has been funded by two Innovate UK Grants and one
NIHR grant and has not drawn materially on shareholder funds. The Company's
ongoing observational "PARTNER" trial being run at Portsmouth's University
Hospitals NHS Trust should complete recruitment by the end of September 2022
and data from the trial will be analysed over the course of the rest of this
calendar year, with a particular focus on:
· Validating the ability of the tool to predict levels of neutropaenia
· Exploring the tool's ability to predict the effect of drugs commonly
used to counteract the neutropaenia normally associated with chemotherapy (in
this case the use of docetaxel in prostate cancer)
In parallel with the PARTNER study, the Company continues to be in dialogue
with its US partner DoseMeRx (a subsidiary of TabulaRasa Healthcare Inc.) to
identify commercially attractive applications of Physiomics technology that
could potentially be marketing to US customers of the DoseMeRx platform.
Business Model
The Company's main commercial business is the provision of consulting services
which rely substantially on our Virtual Tumour™ pre-clinical and clinical
models that are proprietary to the Company. Physiomics works primarily on a
fee for service basis, although we are open to and continue to explore other
approaches including risk sharing and collaboration. An example of this
includes the risk-sharing deal with ValiRx plc announced in February 2021 for
which terms have been fully disclosed and which would be triggered by the
receipt by ValiRx of licensing revenues related to VAL-201.
With the involvement of its two new Non-Executive Directors, the Company will
continue to explore alternative approaches, although it is envisaged that
consulting will continue to be the main driver of revenues in the short to
medium term.
Key strengths
The consulting business is the core of the Company's commercial activity and
we believe that it is unique in a number of respects:
· We focus almost exclusively on oncology. Our team has over 140
years of combined experience in the development of cancer drugs and
computational biology, and in particular of quantitative pharmacology
(essentially analysing how much drug to use and trying to predict what effect
it will have). Over the Company's lifetime it has completed over 90 projects
covering hundreds of targets, cell lines, drugs, and cancer types;
· We use a proprietary in-house platform called Virtual Tumour™.
Although the team can take advantage of all commonly used modelling,
simulation and data analysis techniques in the cancer field, we also have
access to an internally developed platform that is uniquely useful when
considering combinations of cancer drugs (and most anti-cancer regimes
eventually involve using multiple agents simultaneously);
· We have particular expertise in the sourcing, curating and analysis
of healthcare data. Whether originating from clients or within the public
domain, our team comprises experts in data analysis, coding and machine
learning (AI) techniques that underpin the modelling activities we carry out
on behalf of our clients; and
· We provide a responsive and dedicated service. Many large companies
offer services in the cancer space though do not restrict themselves to cancer
nor to quantitative pharmacology. As a result, we believe, many of these
companies cannot offer the same level of bespoke, responsive service that
Physiomics can and does provide its clients.
Our strategy
Physiomics' strategy is to grow its consulting business (whether through fee
for service or risk-sharing arrangements) while actively investigating other
possible applications of our core modelling and simulation capabilities. Our
main strategic aims are to:
· Form close partnerships with customers, attracting repeat business
and growing alongside them (as evidenced by having now worked on multiple
projects with Bicycle Therapeutics, Numab Therapeutics, Merck and others);
· Diversify the Company's customer base by working with a variety of
commercial, and not-for-profit clients and grant funded projects (CRUK,
Innovate UK, NIHR etc);
· Broaden our geographical presence in Europe and North America by
leveraging the Company's existing contact base and increasing marketing and
business development efforts;
· Work with a mix of early pre-clinical stage projects and high value
clinical development phase of oncology; and
· Develop new, complementary areas of business such as personalised
medicine and other service offerings in drug discovery and development that
can add long term value to the business.
Obligations under s172 of the Companies Act
The Directors are mindful of their obligations under s172(1) of the Companies
Act 2006 to act in good faith to promote the success of the Company for the
benefit of its members as a whole, and in doing so have regard (amongst other
matters) to the following:
Principle Company's actions
The likely consequences of any decision in the long term. The Company has a long term vision as set out in this report.
The interests of the Company's employees. The Company values its employees and implements training, offers development
opportunities and has in place appropriate incentive programs to support their
retention.
The need to foster the Company's business relationships with suppliers, The Company spends significant effort in reaching out to new and existing
customers and others. customers and in soliciting their feedback following engagements.
The impact of the Company's operations on the community and the environment. The Company's operations have minimal impact on the community and
environment.
The desirability of the Company maintaining a reputation for high standards of The Company maintains a high standard of business ethics, complying with the
business conduct. QCA code for corporate governance.
The need to act fairly as between members of the Company. The Company treats all members equitably and attempts to ensure a timely and
accurate flow of information to all members.
Review of Business
The Company is principally engaged in providing consulting services to
pharmaceutical companies in the areas of outsourced quantitative pharmacology
and computational biology.
· Total income (revenue and grant income) increased 23% to £900,707
(2021: £730,899)
· The operating loss increased 6.5% to £359,114 (2021: £337,040)
· The loss after taxation increased 17.3% to £253,138 (2021:
£215,827)
· At 30 June 2022, the surplus of shareholders' funds was £974,807 (30
June 2021: £1,165,714)
· Cash and cash equivalents at 30 June 2022 of £687,674 (30 June 2021:
£1,043,450)
Consulting Business
Physiomics' consulting business is at the heart of its offering to clients.
The Company uses its proprietary Virtual Tumour™ software platform but also
develops bespoke mathematical models for clients and leverages models in the
public domain. It is a combination of our technology and the oncology
experience of our team that enables us to be able to deliver clients both a
targeted product offering that meets their needs whilst at the same time
delivering value for money. We believe that we are unique in offering a
combination of:
· Deep experience and knowledge of oncology;
· An exclusive focus on model-based approaches to supporting our
clients' R&D projects; and
· A level of flexibility and responsiveness that is not typically found
in larger organisations.
We have continued to develop our brand through a variety of marketing and
business development activities including:
· Expansion of our digital marketing strategy with significantly
increased social media activity focused on areas of interest to our clients;
· Retention of a full-time Head of Business Development;
· Beginning once again (post-COVID) to have a significant presence at
key conferences (e.g. we will attend, present, and have a stand at the SITC
immune-oncology conference in November 2022); and
· Development and dissemination of case studies based on actual client
projects.
The Company has been successful in attracting repeat business this year from
clients such as Numab Therapeutics, as well as long-standing client Merck
KGaA.
The Company's clients in this financial year have been located in the USA, UK,
EU and Switzerland. In terms of the mix of work, we continue to work across
the full spectrum of R&D from discovery to development, though we continue
to focus increasingly on translational projects involving assets entering
clinical development for the first time. This is particularly exciting, as
it raises our profile and can involve exposure to regulatory authorities.
The Company continues to work in the immuno-oncology space with several of its
clients, and it is anticipated that the industry focus on this treatment
approach is likely to continue for some time.
Personalised Medicine
The personalised medicine and digital health space continues to generate
significant interest from both investors and healthcare systems. Many
start-ups in this area focus on the use of genetic markers or the
pattern-recognition capabilities of artificial intelligence applications.
However, we believe that there is a significant opportunity in the analysis of
existing clinical data to identify better ways to treat patient using existing
drugs and procedures.
The Company has developed a tool for personalised dosing, funded mainly by two
Innovate UK and one NIHR grant as noted above.
Strategic and financial performance indicators
The Company is focused on the creation of long-term value for its
shareholders.
The Directors consider that the key performance indicators are those that
communicate the financial performance and strength of the Company as a whole,
these being revenue, profitability, and shareholders' funds. Total revenues
during the last five financial years (from year ended June 2018 to year ended
June 2022) exceed the total revenues of the 15 years prior to that. In
particular, total income for the past 3 financial years (year ended June 2020
to year ended June 2022) has averaged £824k annually, compared with £522k
for the 3 years before that (year ended June 2017 to year ended June 2019).
Similarly, loss after tax for the past 3 financial years (year ended June 2020
to year ended June 2022) has averaged £178k, compared with an average of
£229k for the 3 years before that (year ended June 2017 to year ended June
2019). Year-end net assets at 30 June 2022 of £975k have fallen from their
year-end peak at June 2020 of £1,314,981 but remain higher than all year ends
prior to that.
Principal Risks
The Company faces a number of risks and maintains a risk register that
identifies specific risks, their potential impact, their likelihood and
mitigating actions. This register is updated as required and on an annual
basis as a minimum. Selected key risks are addressed below.
Risk Description Mitigation
Loss of major customer The business has a high dependence on a single large customer (Merck KGaA). The Company continues to broaden its customer base and create a balance
This leads to the risk that the customer could significantly reduce or cancel between a small number of large customers and a larger number of small
its contracts with the Company. customers. The Company continues to foster a close relationship with its
main big pharma client Merck KGaA and is currently in the fifth year of a
master services agreement signed with that client in 2017.
Competition Physiomics operates in a competitive environment which could lead to pricing Our focus on oncology and the way in which we employ Virtual Tumour™
pressure. Whilst the business uses its own proprietary technology a requires a combination of technology and specialised skills, which we believe
competitor could attempt to replicate its Virtual Tumour™ technology. is hard to replicate.
We continually develop our model to improve the scope and applicability of the
technology, adding further value to our clients and differentiating our
service from our competitors.
In addition, in the last three years we have developed a personalised medicine
offering that we are currently seeking to commercialise and which would help
reduce dependency on our consulting business.
We are in parallel seeking other ways in which to broaden the base of
activities of the Company.
Personnel & skills The success and future growth of the Company is in part dependent on the The Company seeks to recruit, develop, and manage talent on a continuous basis
continued performance and delivery of certain Directors, managers, key staff and have built a network of contracted specialists who can provide additional
and contractors. The Company operates in a highly specialised field where resource when required.
there is strong competition for required skills and talent.
In order to attract the best talent, the Company offers competitive packages
Key personnel leaving the Company could lead to a short-term reduced capacity to its staff which includes a share option scheme, private medical insurance
to service client projects. and flexible working. A collegiate working environment and opportunities for
personal and professional development also help to maintain staff
satisfaction.
Over the course of this financial year, the Company took on two new technical
team members and a Head of Business Development. In all cases a high number
of qualified applications were received.
Financial The financial risks faced by the Company include the ability to cover working The board addresses financial uncertainties by monitoring actual performance
capital needs, raise sufficient funds to support the Company through to against internal projections and responding to significant variances. The
profitability and failure to secure further contracts. Company also employs tight cost controls across the business and has from time
to time raised funds from investors.
The process of winning major contracts is typically protracted and the Company
operates in a competitive environment. This means the Company often faces The Company seeks to ensure cash availability for working capital purposes and
significant uncertainties in its cash flow. to reduce credit risk arising from cash and short-term deposits with banks and
other financial institutions by holding deposits with an institution with a
medium grade credit rating or better.
Although cash outflows this year (£356k) were significantly higher than the
comparable previous period (£4k), this was in large part to planned
investments in staff which are expected to translate to increased revenues
during the current financial year. The Company had £688k in cash and
equivalents at the year end and projections indicate that cash by December
2023 will not fall significantly below this level.
Regulation Changes The Company's customers are predominately pharmaceutical companies who require The Company regularly reviews regulations changes through proactive
outsourced quantitative pharmacology and computational biology services. discussions with key industry officials, professional advisors and regulatory
There is a risk that the business model is impacted by future changes in bodies where appropriate.
regulations in the medical and pharmaceutical industry.
Major agencies such as the FDA are actively promoting the use of modelling and
simulation and issue advisory papers which set out their thinking.
Systems & infrastructure The Company is dependent on its IT technical infrastructure and systems for Continuity of access to data and integrity of data is maintained through the
the management of its core operations and research and development implementation of a system of data storage, offsite backup and monitoring of
programmes. key coding and modelling data. The Company maintains CyberEssentials
accreditation of its systems hardware and processes in order to increase
resilience vs cyber related attacks and risks.
COVID 19 The COVID 19 pandemic had far-reaching consequences for many companies The COVID pandemic appears to be receding, and its impact on business this
although the threat appears to be receding year has been minimal other than in delaying the completion of the Company's
PARTNER study in Portsmouth (as detailed elsewhere in this report). Some
individual employees have contracted COVID during the year but none seriously
and there has been no material impact on project timelines as a result of
illness on our side.
Prevailing economic conditions Publicly listed biotech companies share prices have come under some pressure We have not noted any material negative impact on our projects resulting from
during calendar 2022 and our clients' ability to raise capital may be impacted our clients scaling back their development plans over the course of this
by this and adverse sentiment related to energy prices and the war in Ukraine financial year ended 30 June 2022 however we continue to monitor carefully.
By order of the board
Dr Jim Millen
Executive Chairman and Chief Executive Officer
Directors' Report
The Directors submit their report and the audited financial statements of
Physiomics Plc for the year ended 30 June 2022.
Results
There was a loss for the year after taxation amounting to £253,138 (2021 loss
after tax: £215,827). In view of accumulated losses, and given the stage of
the Company's development, the Directors are unable to recommend the payment
of a dividend.
Directors
The Directors who served during the year were:
Dr P B Harper (until 22 February 2022)
Dr J S Millen
Dr C D Chassagnole
Dr T H Corn (from 1 April 2022)
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
financial statements in accordance with International Financial Reporting
Standards (IFRS) as adopted by the UK. 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 Company and the financial
performance and cash flows of the Company for that year.
The financial statements are required by law, and IFRS as adopted by the EU,
to give a true and fair view of the state of affairs of the Company.
In preparing the Company financial statements, the Directors are required to:
a. select suitable accounting policies and then apply them consistently;
b. make judgements and estimates that are reasonable and prudent;
c. state whether in preparation of the financial statements the Company has
complied with IFRS as adopted by the EU, subject to any material departures
disclosed and explained in the financial statements; and
d. prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
Act 2006.
They are also responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The Directors are also responsible for the maintenance and integrity of the
Physiomics Plc website. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may differ from
legislation in other jurisdictions.
Substantial shareholdings
The Company has been informed, based on a beneficial ownership search carried
out by its registrar, that as at 15 August 2022, the following individual
shareholders had over 3% interests in the issued ordinary shares of the
Company.
Shares (m) Holding %
Mr Zahid Ali 4,649,642 4.77%
Mr Ben Ryden 3,872,833 3.98%
On 15 August 2022, Dr Jim Millen held 1,384,393 ordinary shares and Dr
Christophe Chassagnole held 602,723 ordinary shares. The holding percentages
were 1.42% and 0.62% respectively.
Directors' remuneration
Details of Directors' remuneration in the year ended 30 June 2022 is set out
below:
Emoluments Bonus Benefits Pension Contributions Total 2022 Total 2021
£ £ £ £ £ £
Dr P B Harper 34,595 - - - 34,595 37,185
Dr J S Millen 125,970 - 1,864 10,608 138,442 146,079
Dr C D Chassagnole 69,572 - 1,530 9,579 80,681 83,198
Dr T H Corn 5,000 - - - 5,000 -
Total 235,137 - 3,394 20,187 258,718 266,462
Environmental and Social Governance
The Company has a relatively small environmental footprint and implements
various policies to ensure it is kept to a minimum, including:
· Use of modular office space with services shared with other occupiers
· Adoption of flexible "hot-desking", especially in light of new more
flexible home/ office working models post-COVID
· Recycling of office waste where possible
· Discontinuation of the use of small plastic bottles of water for
staff and visitors
The activities of the Company are targeted at supporting companies developing
drugs and therapies to fight cancer and in addition, the computer-based
modelling we undertake serves to reduce the volume of animal testing needed in
developing such therapies.
Finally, in terms of diversity and inclusion, of eight employees, four are
women and three are non-UK nationals.
Post balance sheet events
There were no material post-balance sheet events.
Statement as to disclosure of information to auditors
The Directors in office on 28 September 2022 have confirmed that, as far as
they are aware, there is no relevant audit information of which the auditors
are unaware. Each of the Directors have confirmed that they have taken all
the steps that they ought to have taken as Directors in order to make
themselves aware of any relevant audit information and to establish that it
has been communicated to the auditors.
Going concern, responsibilities and disclosure
After making appropriate enquiries, the Directors have a reasonable
expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future. For this reason, they continue to
adopt the going concern basis in preparing the financial statements.
Internal controls and risk management
The board is responsible for the Company's system of internal control and risk
management and for reviewing its effectiveness. The Directors have a
reasonable expectation that the Company will safeguard the Company's assets.
The risk management process and internal control systems are designed to
manage rather than eliminate the risk of failing to achieve business
objectives and can only provide reasonable, but not absolute, assurance
against material misstatement or loss. The key features of the Company's
system of internal control are as follows:
· a clearly defined organisational structure and set of objectives;
· the executive Directors play a significant role in the day to day
operation of the business; and
· detailed monthly management accounts are produced for the board to
review and take appropriate action.
Annual General Meeting
The Company values the views of its shareholders and recognises their interest
in the Company's strategy, performance and the ability of the board. The AGM
provides an opportunity for two-way communication and all shareholders are
encouraged to attend and participate. Separate resolutions will be put to
shareholders at the AGM, giving them the opportunity to discuss matters of
interest. The Company counts all proxy votes and will indicate the level of
proxies lodged on each resolution, after each has been dealt with on a show of
hands.
The Company intends to hold a physical AGM this year. In the event that any
changes to the 2022 AGM become unavoidable, however, we will announce them on
the Company's website at www.physiomics.co.uk (http://www.physiomics.co.uk)
. The website also provides links to the annual report and accounts, interim
results and other relevant announcements immediately after they have been made
available via RNS.
The Annual General Meeting of the Company will be held at the offices of
Physiomics Plc, The Magdalen Centre, Oxford Science Park, Oxford OX4 4GA at
10.00 a.m. on 22 November 2022.
By order of the board
Dr Jim Millen
Executive Chairman and Chief Executive Officer
Independent Auditors' Report to the Members of Physiomics Plc
Opinion
We have audited the financial statements of Physiomics Plc for the year ended
30 June 2022 which comprise the income statement, the statement of
comprehensive income, the statement of financial position, the cash flow
statement, the statement of changes in equity and the related notes. The
financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union.
In our opinion:
· the financial statements give a true and fair view of the state of
the Company's affairs as at 30 June 2022 and of its loss for the year then
ended;
· the financial statements have been properly prepared in accordance
with IFRSs as adopted by the European Union; 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 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 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.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to
which the ISAs (UK) require us to report to you where:
· the directors' use of the going concern basis of accounting in the
preparation of the financial statements is not appropriate; or
· the directors have not disclosed in the financial statements any
identified material uncertainties that may cast significant doubt about the
Company's ability to continue to adopt the going concern basis of accounting
for a period of at least twelve months from the date when the financial
statements are authorised for issue.
Our assessment of risks of material misstatement
The assessed risks of material misstatement described below are those that had
the greatest effect on our audit strategy, the allocation of resources in the
audit and directing the efforts of the engagement team.
Risk How the Scope of our audit responded to the risk
Management override of controls
Journals can be posted that significantly alter the Financial Statements. We examined journals posted around the year end, specifically focusing on
areas which are more easily manipulated such as accruals, prepayments,
investment valuation and the bank reconciliation.
Going Concern and COVID-19
There is a risk that the Company is not a going concern and have been impacted We reviewed the Directors' assessment of the risks and impacts of COVID-19 on
from COVID-19 materially. the business. We compared this assessment to our own understanding of the
risks, and the nature of the Company's operations and customer base. We then
conducted a review of going concern in respect of COVID-19, which included
reviewing forecasts and current trading performance, and carrying out stress
testing. The work undertaken considered a period of at least 12 months from
the date of approving these financial statements.
The disclosures in the financial statements adequately reflect the Directors'
conclusions around the uncertainties and impact of COVID-19 and, that the
going concern assumption remains appropriate.
Fraud in Revenue Recognition
There is a risk that revenue is materially understated due to fraud. Income was tested on a sample basis from contracts. No evidence of fraud or
other understatement was identified.
Accounting Estimates
Potential risk of inappropriate accounting estimates giving rise to All areas were examined to identify any potential accounting estimates. These
misstatement in the accounts. estimates were then reviewed and tested for adequacy.
Overstatement of Administrative Expenses
There is a risk that the Company's administrative expenses are overstated. A proof in total calculation and substantive testing were both undertaken and
no evidence of overstatement was identified.
Grant Income
There is a risk that grant income may be materially misstated. Grant income was reviewed and a sample basis from contracts. No evidence of
misstatement was identified.
Our audit procedures relating to these matters were designed 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.
Our application of materiality
We define materiality as the magnitude of misstatement in the Financial
Statements that of materiality makes it probable that the economic decisions
of a reasonably knowledgeable person would be changed or influenced. We use
materiality both in planning and in the scope of our audit work and in
evaluating the results of our work.
We determined materiality for the Company to be £18,781. We agreed with the
Audit Committee that we would report to them all audit differences in excess
of 5% of materiality, as well as differences below that which would, in our
view, warrant reporting on a qualitative basis. We also report to the Audit
Committee on disclosure matters that we identified when assessing the overall
presentation of the Financial Statements.
An overview of the scope of our audit
An audit involves obtaining evidence about the amounts and disclosures in the
Financial Statements sufficient to give reasonable assurance that the
Financial Statements are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether the accounting
policies are appropriate to the Company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness of
significant accounting estimates made by the Directors; and the overall
presentation of the Financial Statements. In addition we read all the
financial and non-financial information in the Annual Report to identify
material inconsistencies with the audited Financial Statements and to identify
any information that is apparently materially incorrect based on, or
materially inconsistent with, the knowledge acquired by us in the course of
performing the audit. If we become aware of any apparent material misstatement
or inconsistencies we consider the implications for our report.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report other than the
financial statements and our auditor's report thereon. Our opinion on the
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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. 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, 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 Company and its
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, or returns adequate
for our audit have not been received from branches not visited by us; or
· the financial statements 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.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement set out
on page 17, the directors are responsible for the preparation of the 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 financial statements, the directors are responsible for
assessing the 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 Company or
to cease operations, or have no realistic alternative but to do so.
Our 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 legal and regulatory frameworks
that are applicable to the Company and determined the most significant are
those that relate to the reporting framework (IFRS, the Companies Act 2006))
and the relevant tax compliance regulations in which the Company operates.
· We understood how the Company is complying with those frameworks by
making enquiries on the management and those responsible for legal and
compliance procedures. We corroborated our enquiries through our review of
board minutes and any correspondence received from regulatory bodies.
· We assessed the susceptibility of the Company's financial statements
to material misstatement, including how fraud might occur by enquiring with
management during the planning, fieldwork and completion phase of our audit.
We considered the controls that the Company has established to address risks
identified, or that otherwise prevent, deter and detect fraud and how
management monitors those controls. Where the risk was considered to be
higher, we performed audit procedures to address each identified fraud risk
including revenue recognition. These procedures included testing manual
journals and were designed to provide reasonable assurance that the financial
statements were free from fraud or error.
· Based on this understanding we designed our audit procedures to
identify non-compliance with such laws and regulations. Our procedures
involved journal entry testing, with a focus on manual journals and journals
indicating large or unusual transactions based on our understanding of the
business; enquiries of the management and focus testing.
An auditor conducting an audit in accordance with ISAs (UK) is responsible for
obtaining reasonable assurance that the financial statements taken as a whole
are free from material misstatement, whether caused by fraud or error and in
our audit procedures described above. Owing to the inherent limitations of an
audit, there is an unavoidable risk that some material misstatements of the
financial statements may not be detected, even though the audit is properly
planned and performed in accordance with the ISAs (UK).
As part of an audit in accordance with ISAs (UK), we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
· Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
· Obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
internal control.
· Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by the
director.
· Conclude on the appropriateness of the director's use of the going
concern basis of accounting and, based on the audit evidence obtained, whether
a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we
identify during our audit.
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.
Benjamin Bidnell (Senior Statutory Auditor)
For and on behalf of Shipleys LLP,
Chartered Accountants and Statutory Auditor
10 Orange Street
Haymarket
London
WC2H 7DQ
Income Statement for the year ended 30 June 2022
Year Year
ended ended
30 June 30 June
2022 2021
Notes £ £
Revenue 3 830,266 702,314
Other operating income 3 70,441 28,585
Total income 900,707 730,899
Net operating expenses (1,259,821) (1,067,939)
Operating loss 4 (359,114) (337,040)
Finance income 7 142 110
Loss before taxation (358,972) (336,930)
Income tax income 9 105,834 121,103
Loss for the year attributable to equity shareholders 25 (253,138) (215,827)
Earnings per share (shown in pence) 10
Basic and diluted (0.26)p (0.22)p
Statement of Comprehensive Income
Year ended 30 June Year ended 30 June
2022 2021
£ £
Loss for the year (253,138) (215,827)
Other comprehensive income - -
Total comprehensive income/ (expense) for the year (253,138) (215,827)
Attributable to:
Equity holders (253,138) (215,827)
Statement of Financial Position as at 30 June 2022
Non-current assets 2022 2021
Notes £ £
Intangible assets 12 3,005 3,435
Property, plant and equipment 13 14,365 15,700
Other receivables 14 395 -
17,765 19,135
Current assets
Trade and other receivables 14 409,977 260,699
Cash and cash equivalents 687,674 1,043,450
1,097,651 1,304,149
Total assets 1,115,416 1,323,284
Current liabilities
Trade and other payables 18 126,347 114,042
Deferred revenue 19 14,262 43,528
140,609 157,570
Total liabilities
Net current assets 957,042 1,146,579
Net assets 974,807 1,165,714
Equity
Called up share capital 22 1,283,096 1,282,736
Share premium account 23 5,936,478 5,933,993
Other reserves 24 281,660 222,274
Retained earnings 25 (6,526,427) (6,273,289)
Total equity 974,807 1,165,714
The financial statements were approved by the board of directors and
authorised for issue on 29 September 2022.
Statement of Changes in Equity for the year ended 30 June 2022
Share capital Share Other Reserves Profit and loss reserves Total
premium
account
Notes £ £ £ £ £
Balance at 1 July 2020 1,275,752 5,896,737 199,954 (6,057,462) 1,314,981
Year ended 30 June 2021:
Loss and total comprehensive income for the year - - - (215,827) (215,827)
Issue of share capital 23 6,984 37,256 - - 44,240
Transfer to other reserves - - 22,320 - 22,320
Balance at 30 June 2021 1,282,736 5,933,993 222,274 (6,273,289) 1,165,714
Year ended 30 June 2022:
Loss and total comprehensive income for the year
- - - (253,138) (253,138)
Issue of share capital 23 360 2,485 - - 2,845
Transfer to other reserves - - 59,386 - 59,386
Balance at 30 June 2022 1,283,096 5,936,478 281,660 (6,526,427) 974,807
Cash Flow Statement for the year ended 30 June 2022
2022 2021
Notes £ £ £ £
Cash flows from operating activities
Cash absorbed by operations 32 (468,767) (116,122)
Tax refunded 119,374 83,515
Net cash outflow from operating activities
(349,393) (32,607)
Investing activities
Purchase of tangible fixed assets (9,370) (16,153)
Interest received 142 110
Net cash used in investing activities (9,228) (16,043)
Financing activities
Proceeds from issue of shares 2,845 44,240
Net cash generated from financing activities
2,845 44,240
Net decrease in cash and cash equivalents
(355,776) (4,410)
Cash and cash equivalents at beginning of year
1,043,450 1,047,860
Cash and cash equivalents at end of year 687,674 1,043,450
Notes to the Financial Statements
1 Accounting policies
Company information
Physiomics Plc is a company limited by shares incorporated in England and
Wales. The registered office is The Magdalen Centre, Oxford Science Park,
Robert Robinson Avenue, Oxford, OX4 4GA. The Company's ordinary shares of
0.4p each are admitted to trading on the AIM market of the London Stock
Exchange plc.
1.1 Accounting convention
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom
and with those parts of the Companies Act 2006 applicable to companies
reporting under IFRS, except as otherwise stated.
The financial statements have been prepared on the historical cost basis.
The principal accounting policies adopted are set out below.
1.2 Going concern
The accounts have been prepared on the going concern basis. The Company
primarily operates in the relatively defensive pharmaceutical industry.
The Company had £687,674 of cash and cash equivalents as at 30 June 2022
(2021: £1,043,450).
The board operates an investment policy under which the primary objective is
to invest in low-risk cash or cash equivalent investments to safeguard the
principal.
The Company's projections, taking into account anticipated revenue streams,
show that the Company has sufficient funds to operate for the next twelve
months. In coming to this conclusion, the Company notes that current cash and
currently contracted projects are projected to cover budgeted expenses for the
majority of this period. In addition to currently contracted projects the
Company anticipates a number of new clients as well as repeat business from
some existing clients.
After reviewing the Company's projections, the Directors believe that the
Company is adequately placed to manage its business and financing risks for
the next twelve months. Accordingly, they continue to adopt the going concern
basis in preparing the annual report and accounts.
1.3 Revenue recognition
The revenue shown in the income statement relates to amounts received or
receivable from the provision of services associated with outsourced systems
and computational biology services to pharmaceutical companies.
Revenue from the provision of the principal activities is recognised by
reference to the stage of completion of the transaction at the balance sheet
date where the amount of revenue can be measured reliably and sufficient work
has been completed with certainty to ensure that the economic benefit will
flow to the Company.
1.4 Intangible assets other than goodwill
Intangible assets acquired separately from third parties are recognised as
assets and measured at cost.
Following initial recognition, intangible assets are measured at cost or fair
value at the date of acquisition less any amortisation and any impairment
losses. Amortisation costs are included within the net operating expenses
disclosed in the income statement.
Intangible assets are amortised over their useful lives as follows:
Useful life Method
Trademarks 10 years Straight line
Useful lives are also examined on an annual basis and adjustments, where
applicable are made on a prospective basis. The Company does not have any
intangible assets with indefinite lives.
1.5 Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured
at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets
less their residual values over their useful lives on the following bases:
Fixtures and
fittings
3 years straight line
IT
Equipment
3 years straight line
The gain or loss arising on the disposal of an asset is determined as the
difference between the sale proceeds and the carrying value of the asset and
is recognised in the profit and loss account.
1.6 Research and development expenditure
Expenditure on research activity is recognised as an expense in the period in
which it is incurred.
1.7 Impairment of tangible and intangible assets
Property, plant and equipment and intangible assets are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. For purposes of assessing impairment, assets
that do not individually generate cash flows are assessed as part of the cash
generating unit to which they belong. Cash generating units are the lowest
levels for which there are cash flows that are largely independent of the cash
flows from other assets or groups of assets.
1.8 Fair value measurement
IFRS 13 establishes a single source of guidance for all fair value
measurements. IFRS 13 does not change when an entity is required to use fair
value, but rather provides guidance on how to measure fair value under IFRS
when fair value is required or permitted. The resulting calculations under
IFRS 13 affected the principles that the Company uses to assess the fair
value, but the assessment of fair value under IFRS 13 has not materially
changed the fair values recognised or disclosed. IFRS 13 mainly impacts the
disclosures of the Company. It requires specific disclosures about fair value
measurements and disclosures of fair values, some of which replace existing
disclosure requirements in other standards.
1.9 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with
banks, other short-term liquid investments with original maturities of three
months or less.
1.10 Financial assets
Financial assets are recognised in the Company's statement of financial
position when the Company becomes party to the contractual provisions of the
instrument.
Financial assets are classified into specified categories. The
classification depends on the nature and purpose of the financial assets and
is determined at the time of recognition.
Financial assets are initially measured at fair value plus transaction costs,
other than those classified as fair value through the income statement,
which are measured at fair value.
Trade and other receivables
Trade receivables are recognised and carried at the lower of their original
invoiced value and recoverable amount. Balances are written off when the
probability of recovery is considered to be remote.
Impairment of financial assets
Financial assets, other than those at fair value through the income statement,
are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a
result of one or more events that occurred after the initial
recognition of the financial asset, the estimated future cash flows of the
investment have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership to another entity.
1.11 Financial liabilities
Financial liabilities are classified as either financial liabilities at fair
value through the income statement or other financial liabilities.
Financial liabilities are classified according to the substance of the
contractual arrangements entered into.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Company's
obligations are discharged, cancelled, or they expire.
1.12 Equity instruments
Equity instruments issued by the Company are recorded at the proceeds
received, net of direct issue costs. An equity instrument is any contract that
evidences a residual interest in the assets of the Company after deducting all
of its liabilities.
1.13 Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Company's liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the
initial recognition of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the income statement, except when it
relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt with in equity. Deferred tax assets and liabilities
are offset when the Company has a legally enforceable right to offset current
tax assets and liabilities and the deferred tax assets and liabilities relate
to taxes levied by the same tax authority.
1.14 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an
expense.
The cost of any unused holiday entitlement is recognised in the period in
which the employee's services are received.
Termination benefits are recognised immediately as an expense when the Company
is demonstrably committed to terminate the employment of an employee or to
provide termination benefits.
1.15 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an
expense as they fall due.
1.16 Share-based payments
The Company issues equity settled share based payments to certain employees.
Equity settled share based payments are measured at fair value at the date of
grant. The fair value determined at the grant date is expensed on a
straight-line basis over the vesting period. Fair value is measured by use of
a Black-Scholes model.
1.17 Leases
At inception, the Company assesses whether a contract is, or contains, a lease
within the scope of 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. Where a tangible asset is
acquired through a lease, the Company recognises a right-of-use asset and a
lease liability at the lease commencement date. Right-of-use assets are
included within tangible fixed assets, apart from those that meet the
definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date plus any initial direct costs and an estimate
of the cost of obligations to dismantle, remove, refurbish or restore the
underlying asset and the site on which it is located, less any lease
incentives received.
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the earlier of the end of the useful life
of the right-of-use asset or the end of the lease term. The estimated useful
lives of right-of-use assets are determined on the same basis as those of
other tangible fixed assets. The right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the
lease liability.
The lease liability is initially measured at the present value of the lease
payments that are unpaid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily
determined, the Company's incremental borrowing rate. Lease payments included
in the measurement of the lease liability comprise fixed payments, variable
lease payments that depend on an index or a rate, amounts expected to be
payable under a residual value guarantee, and the cost of any options that the
Company is reasonably certain to exercise, such as the exercise price under a
purchase option, lease payments in an optional renewal period, or penalties
for early termination of a lease.
The Company has elected not to recognise right-of-use assets and lease
liabilities for short-term leases of machinery that have a lease term of 12
months or less, or for leases of low-value assets including IT equipment. The
payments associated with these leases are recognised in profit or loss on a
straight-line basis over the lease term.
1.18 Government grants
Government grants are recognised when there is reasonable assurance that the
grant conditions will be met and the grants will be received.
Government grants of a revenue nature are credited to the profit and loss
account in the same period as the related expenditure.
1.19 Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the
rates of exchange prevailing at the dates of the transactions. At each
reporting end date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing on the reporting
end date. Gains and losses arising on translation are included in the income
statement for the period.
1.20 Segment reporting
A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that
are subject to risks and return that are different from those of segments
operating in other economic environments.
2 Critical accounting estimates and judgements
Revenue for projects started and completed during the financial year is
recognised in full during the year. Revenue from a project which commences in
one financial year and is completed in a subsequent financial year is
recognised over the life of the project based on the expected period to
completion as anticipated at each balance sheet date less what has already
been recognised during a previous financial period or periods.
There were no other material accounting estimates or areas of judgements
required.
3 Revenue & segmental reporting
An analysis of the Company's revenue is as follows:
2022 2021
£ £
Revenue 830,266 702,314
Other operating income
Grant income 70,441 28,585
The principal activities are the provision of outsourced systems and
computational biology services to pharmaceutical companies.
This activity comprises a single segment of operation of a sole UK base and
entirely UK based assets. Revenue was derived in the UK, European Union
Switzerland and USA (2021: UK, European Union Switzerland and USA) from its
principal activity.
4 Operating loss
2022 2021
£ £
Operating loss for the period is stated after charging/(crediting):
Net foreign exchange losses/(gains) 548 160
Government grants (70,441) (28,585)
Fees paid to the Company's auditor, refer to below 10,500 10,500
Depreciation of property, plant and equipment 10,705 11,989
Amortisation of intangible assets 430 429
Share-based payments 59,386 22,320
5 Auditors remuneration
2022 2021
Fees payable to the Company's auditor and associates: £ £
For audit services
Audit of the Company's financial statements 10,500 10,500
6 Employees
The average monthly number of persons (including directors) employed by the
Company during the year was:
2022 2021
Number Number
8 7
Their aggregate remuneration comprised:
2022 2021
£ £
Wages and salaries 484,570 435,071
Social security costs 52,026 48,134
Other pension and insurance benefit costs 44,528 36,997
581,124 520,202
Details of the remuneration of Directors are included in the Directors Report
on page 18.
7 Finance income
2022 2021
£ £
Interest income
Bank deposits
142 110
8 Finance costs
Interest rate risk
The Company finances its operations by cash and short-term deposits. The
Company's policy on interest rate management is agreed at board level and is
reviewed on an ongoing basis. Other creditors, accruals and deferred revenue
values do not bear interest.
Interest rate profile
The Company had no bank borrowings at the 30 June 2022 and 30 June 2021.
9 Income tax expense
Continuing operations
2022 2021
£ £
Current tax
Research and development tax credit: current year (105,834) (119,374)
Research and development tax credit: prior year - (1,729)
(105,834) (121,103)
The charge for the year can be reconciled to the loss per the income statement
as follows:
2022 2021
£ £
Loss before taxation (358,972) (336,930)
Expected tax charge based on a corporation tax rate of 19.00% (68,205) (64,017)
Expenses not deductible in determining taxable profit 10,964 (8,943)
Unutilised tax losses carried forward 786 9,636
Adjustment in respect of prior years' research and development - (1,729)
Research and development expenditure tax credit (105,834) (119,374)
Deferred / (accelerated) capital allowances (315) (832)
Research and development enhancement (68,125) (83,404)
Loss surrendered for tax credits 124,895 147,560
Tax charge for the year (105,834) (121,103)
At 30 June 2022 tax losses of £3,892,521, (2021: £3,888,387) remained
available to carry forward against future taxable trading profits. These
amounts are in addition to any amounts surrendered for Research and
Developments tax credits. There is an unrecognised deferred tax asset of
£737,640, (2021: £736,649).
Future changes to the rate of corporation tax
In the 2021 budget it was announced that the main rate of corporation tax will
increase from 19% to 25% from 1(st) April 2023.
10 Earnings per share
2022 2021
£ £
Number of shares
Weighted average number of ordinary shares for basic earnings per share 97,372,997 97,127,381
Earnings - Continuing operations
Loss for the period from continued operations (253,138) (215,827)
Earnings for basic and diluted earnings per share being net profit (253,138) (215,827)
attributable to equity shareholders of the Company for continued operations
Earnings per share for continuing operations
Basic and diluted earnings per share (shown in pence) (0.26) (0.22)
Basic and diluted earnings per share
Loss from continuing operations (shown in pence) (0.26) (0.22)
The loss attributable to equity holders (holders of ordinary shares) of the
Company for the purpose of calculating the fully diluted loss per share is
identical to that used for calculating the loss per share. The exercise of
share options would have the effect of reducing the loss per share and is
therefore anti- dilutive under the terms of IAS 33 'Earnings per Share'.
11 Financial instruments recognised in the statement of financial
position
2022 2021
Held for trading: £ £
Current financial assets 83,903
Trade and other receivables 31,356
Cash and cash equivalents 687,674 1,043,450
771,577 1,074,806
Current financial liabilities Trade and other payables
108,014 98,916
Deferred revenue 14,262 43,528
122,276 142,444
The Company's financial instruments comprise cash and short-term deposits. The
Company has various other financial instruments, such as trade debtors and
creditors that arise directly from its operations.
The main risks arising from the Company's financial instruments are interest
rate risk, liquidity risk and foreign currency risk. The policies for managing
these are periodically reviewed and agreed by the board.
It is and has been throughout the year under review, the Company's policy that
no trading in financial instruments shall be undertaken.
12 Intangible assets
Trademarks Total
£ £
Cost
At 1 July 2020 4,298 4,298
At 30 June 2021 4,298 4,298
At 30 June 2022 4,298 4,298
Amortisation and impairment
At 1 July 2020 434 434
Charge for the year 429 429
At 30 June 2021 863 863
Charge for the year 430 430
At 30 June 2022 1,293 1,293
Carrying amount
At 30 June 2022 3,005 3,005
At 30 June 2021 3,435 3,435
13 Tangible fixed assets
Fixtures and fittings IT equipment Total
Cost £ £ £
At 1 July 2020 3,028 58,640 61,668
Additions - 16,153 16,153
At 30 June 2021 3,028 74,793 77,821
Additions - 9,370 9,370
Disposals (179) (3,182) (3,361)
At 30 June 2022 2,849 80,981 83,830
Accumulated depreciation and impairment
At 1 July 2020 2,300 47,832 50,132
Charge for the year 411 11,578 11,989
At 30 June 2021 2,711 59,410 62,121
Charge for the year 316 10,389 10,705
Eliminated on disposal (179) (3,182) (3,361)
At 30 June 2022 2,848 66,617 69,465
Carrying amount
At 30 June 2022 1 14,364 14,365
At 30 June 2021 317 15,383 15,700
At 30 June 2020 728 10,808 11,536
14 Trade and other receivables
Due within one year
2022 2021
£ £
Trade debtors 80,125 27,578
Other receivables 3,778 3,778
Corporation tax recoverable 105,834 119,374
VAT recoverable 32,988 9,098
Prepayments and accrued income 187,252 100,871
409,977 260,699
Due after one year
2022 2021
£ £
Prepayments and accrued income 395 -
395 -
15 Fair value of trade receivables
There are no material differences between the fair value of financial assets
and the amount at which they are stated in the financial statements.
16 Fair value of financial liabilities
There are no material differences between the fair value of financial
liabilities and the amount at which they are stated in the financial
statements.
17 Liquidity risk
The Company seeks to manage financial risk by ensuring that sufficient
liquidity is available to meet foreseeable needs and to invest cash assets
safely and profitably.
18 Trade and other payables
Due within one year
2022 2021
£ £
Trade creditors 26,847 18,842
Accruals 78,197 77,547
Social security and other taxation 18,333 15,126
Other creditors 2,970 2,527
126,347 114,042
19 Deferred revenue
2022 2021
£ £
Arising from invoices in advance 14,262 43,528
Analysis of deferred revenue
Deferred revenues are classified based on the amounts that are expected to be
settled within the next 12 months and after more than 12 months from the
reporting date, as
follows:
2022 2021
£ £
Current liabilities 14,262 43,528
20 Retirement benefit schemes
Defined contribution schemes
The Company operates a defined contribution pension scheme for all qualifying
employees. The assets of the scheme are held separately from those of the
Company in an independently administered fund.
The total costs charged to income in respect of defined contribution plans is
£36,012 (2021: £30,471).
As at the statement of financial position date the Company had unpaid pension
contributions totalling £2,970 (2021: £2,527).
21 Share-based payment transactions
The Company operates two share option schemes: (1) under the Enterprise
Management Initiative Scheme ("EMI") and (2) an unapproved share option
scheme. Both are equity settled. Options are granted with a fixed exercise
price equal to the market price of the shares under option at the date of
grant. Some options are subject to performance criteria relating to either
share price performance or the achievement of certain corporate milestones.
The contractual life of the options is 10 years from the date of issue.
A summary of the options at the start and end of period for directors and all
other employees is presented in the following table:
Holder Outstanding at start of period Granted during period Forfeited during period Exercised during period Outstanding at end of period Exercisable at end of period Exercise price (p) Date of grant Date of expiry
Dr. C. Chassagnole 32,331 - 32,331 - - - 34.00 09-Nov-11 09-Nov-21
Dr. C. Chassagnole 129,381 - - - 129,381 129,381 13.20 11-Feb-13 11-Feb-23
Dr. C. Chassagnole 322,615 - - - 322,615 322,615 6.17 24-Mar-15 24-Mar-25
Dr. C. Chassagnole 659,641 - - - 659,641 659,641 2.50 28-Feb-17 28-Feb-27
Dr. C. Chassagnole 350,000 - - - 350,000 350,000 5.35 26-Mar-18 26-Mar-28
Dr. C. Chassagnole 267,000 - - - 267,000 267,000 3.16 26-Mar-19 26-Mar-29
Dr. C. Chassagnole 694,287 - - - 694,287 694,287 7.55 02-Mar-21 01-Mar-31
Dr. J. Millen 520,000 - - - 520,000 520,000 5.35 26-Mar-18 26-Mar-28
Dr. J. Millen 400,000 - - - 400,000 400,000 3.16 26-Mar-19 26-Mar-29
Dr. J. Millen 985,454 - - - 985,454 985,454 7.55 02-Mar-21 01-Mar-31
Dr. P. Harper 12,932 - 12,932 - - - 34.00 09-Nov-11 09-Nov-21
Dr. P. Harper 51,752 - - - 51,752 51,752 13.20 11-Feb-13 11-Feb-23
Dr. P. Harper 129,046 - - - 129,046 129,046 6.17 24-Mar-15 24-Mar-25
Dr. P. Harper 258,092 - - - 258,092 258,092 3.50 21-Dec-15 21-Dec-25
Dr. P. Harper 140,000 - - - 140,000 140,000 5.35 26-Mar-18 27-Mar-28
Dr. P. Harper 448,760 - - - 448,760 448,760 7.55 02-Mar-21 01-Mar-31
Other staff 91,107 - 91,107 - - - 34.00 09-Nov-11 09-Nov-21
Other staff 77,628 - - - 77,628 77,628 13.20 11-Feb-13 11-Feb-23
Other staff 188,605 - - - 188,605 188,605 6.17 24-Mar-15 24-Mar-25
Other staff 54,596 - - - 54,596 54,596 3.50 21-Dec-15 21-Dec-25
Other staff 201,891 - - - 201,891 201,891 2.50 28-Feb-17 28-Feb-27
Other staff 490,000 - - - 490,000 490,000 5.35 26-Mar-18 26-Mar-28
Other staff 443,000 - - 90,000 353,000 353,000 3.16 26-Mar-19 26-Mar-29
Other staff 1,371,499 - - - 1,371,499 1,371,499 7.55 02-Mar-21 01-Mar-31
Other staff - 850,000 - - 850,000 - 4.38 29-Apr-22 29-Apr-32
Total 8,319,617 850,000 136,370 90,000 8,943,247 8,093,247
The weighted average share price at the date of the grant for share options
granted in the year was £0.0438 (2021: £0.0755).
The options outstanding at 30 June 2022 had an exercise price ranging from
£0.025 to £0.132, and a remaining contractual life ranging between 7 months
and 10 years.
During 2022, 850,000 options were granted on 29 April 2022 (2021:
3,500,000). The weighted average fair value of the options on the
measurement date was £0.0438. Options vest according to time and performance
based criteria.
The options were granted with an exercise price of £0.0438.
Fair value was measured using Black-Scholes share option pricing model.
Inputs were as follows:
2022 2021
Expected volatility 56.70% 67.64%
Expected life 2.47 years 2.47 years
Risk free rate 1.614% 0.093%
The expected volatility is based on the sixty day average historical
volatility of the Company over 3 years.
The expected life of options is now based on the share option exercise history
with the Company. The risk free rate of return is derived from UK treasury
yields at 2 and 3 years.
Total expenses of £59,386 related to equity settled share based payment
transactions were recognised in the year. (2021: £22,320).
22 Share capital
2022 2021
£ £
Ordinary share capital, issued and fully paid
97,424,778 Ordinary of 0.4p each (2021: 97,334,778) 389,699 389,339
2,481,657,918 Deferred of 0.036p each 893,397 893,397
1,283,096 1,282,736
The ordinary shares carry no rights to fixed income. The deferred shares
have no voting rights and have no rights to receive dividends or other income.
Reconciliation of movements during the year: Ordinary Number Deferred Number
At 1 July 2021 97,334,778 2,481,657,918
Issue of fully paid shares 90,000 -
At 30 June 2022 97,424,778 2,481,657,918
Current year changes to Ordinary share
capital
On 27 January 2022 the Company issued 90,000 ordinary shares of 0.4p at a
price of 3.16p per ordinary share following the exercise of employee share
options, the proceeds of which were used for working capital purposes.
23 Share premium account
£
At 1 July 2020 5,896,737
Issue of new shares 37,256
At 30 June 2021 5,933,994
Issue of new shares 2,484
At 30 June 2022 5,936,478
The share premium account consists of proceeds from the issue of shares in
excess of their par value (which is included in the share capital account).
24 Other reserves: share-based compensation reserve
£
At 30 June 2020 199,954
Additions 22,320
At 30 June 2021 222,274
Additions 59,386
At 30 June 2022 281,660
The share-based compensation reserve represents the credit arising on the
charge for share options calculated in accordance with IFRS 2.
25 Retained earnings
£
At 1 July 2020 (6,057,462)
Loss for the period (215,827)
At 30 June 2021 (6,273,289)
Loss for the period (253,138)
At 30 June 2022 (6,526,427)
Retained earnings includes an amount of £237,889 (2021: £237,889) in
relation to the Equity Swap Agreement in 2014 which under the Companies Act is
not distributable.
26 Operating lease commitments
Lessee
Amounts recognised in the income statement as an expense during the period in
respect of operating lease arrangements are as
follows:
2022 2021
£ £
Minimum lease payments under operating leases 64,012 61,351
At the reporting end date, the Company had outstanding commitments for future
minimum lease payments under non-cancellable operating leases, which fall due
as follows:
2022 2021
£ £
Within one year 6,588 6,128
6,588 6,128
27 Capital commitments
At 30 June 2022 and 30 June 2021 the Company had no capital commitments.
28 Capital risk management
The capital structure of the Company consists of cash and cash equivalents and
equity attributable to equity holders of the Company, comprising issued
capital, reserves and retained earnings as disclosed in notes 22 to 25.
The board's policy is to maintain an appropriate capital base so as to
maintain investor and creditor confidence and to sustain future development of
the business. The Company's objectives when managing capital are to
safeguard the Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for stakeholders and to maintain
an optimal capital structure to reduce the cost of capital. The Company has
a record of managing the timing and extent of discretionary expenditure in the
business.
In order to maintain or adjust the capital structure the Company may issue new
shares.
29 Events after the reporting date
No material post balance sheet events occurred after the end of the period.
30 Related party transactions
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the
Company, is set out on page 18.
31 Controlling party
The Company does not currently have an ultimate controlling party and did not
have one in this reporting year or the preceding reporting year.
32 Cash absorbed by operations
2022 2021
£ £
Loss for the year after tax (253,138) (215,827)
Adjustments for:
Taxation credited (105,834) (121,103)
Investment income (142) (110)
Amortisation and impairment of intangible assets 430 429
Depreciation and impairment of tangible fixed assets 10,705 11,989
Equity settled share-based payment expense 59,386 22,320
Movements in working capital:
Increase in contract assets (395) -
(Increase)/decrease in debtors (162,818) 160,127
Increase/(decrease) in creditors 12,305 (9,777)
(Decrease)/increase in deferred revenue outstanding (29,266) 35,830
Cash absorbed by operations (468,767) (116,122)
Enquiries:
Physiomics plc
Dr Jim Millen, CEO
+44 (0)1865 784 980
Hybridan LLP (Broker)
Claire Louise Noyce
+44 (0) 203 764 2341
Strand Hanson Ltd (NOMAD)
James Dance & James Bellman
+44 (0)20 7409 3494
Notes to Editor
About Physiomics
Physiomics plc (AIM: PYC) is an oncology consultancy using mathematical models
to support the development of cancer treatment regimens and personalised
medicine solutions. The Company's Virtual Tumour™ technology uses computer
modelling to predict the effects of cancer drugs and treatments to improve the
success rate of drug discovery and development projects while reducing time
and cost. The predictive capability of Physiomics' technologies have been
confirmed by over 80 projects, involving over 40 targets and 70 drugs, and has
worked with clients such as Merck KGaA, Astellas, Merck & Co and Bicycle
Therapeutics.
1 (#_ftnref1)
https://www.fortunebusinessinsights.com/oncology-drugs-market-103431
(https://www.fortunebusinessinsights.com/oncology-drugs-market-103431)
2 (#_ftnref2)
https://growthplusreports.com/report/biosimulation-technology-market/7766
(https://growthplusreports.com/report/biosimulation-technology-market/7766)
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