REG - ReNeuron Group plc - Interim Results
02/12/2022 07:00
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RNS Number : 3534I ReNeuron Group plc 02 December 2022
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018.
ReNeuron Group plc
("ReNeuron" or "the Company")
Interim Results for the six months ended 30 September 2022
ReNeuron Group plc (AIM: RENE), a UK based leader in Stem Cell derived Exosome
Technologies, announces its unaudited interim results for the six months ended
30 September 2022 and a funding update.
Catherine Isted, Chief Executive Officer, said: "The last six months have been
a time of transition as the executive team has focused on accelerating the
development of CustomEx(TM) our exosome drug delivery platform. The data
produced to validate the platform, following Dr. Corteling's return in March
of this year, has enabled us to highlight the potential of CustomEx(TM) in
comparison to the conventional approach of our competitors. Following my
appointment as CEO in September, I have further strengthened the executive
team with the recent appointment of Simon Dew as Chief Business Officer. In
light of current unfavourable equity capital markets, it has not been possible
to complete an equity raise at the present time. However, through a review of
the cost base and planned initiatives, savings have been identified in order
to extend our cash runway to ensure the continued development of our
technology platform and maximise partnering opportunities and thereby deliver
the value that I believe our customisable and targeted delivery platform
should command."
FINANCIAL HIGHLIGHTS
· Revenue for the period of £438,000 (H1 2021: £58,000) related to
income from partner funded development activities and royalty income
· Reduced operating costs incurred in the period of £4.7 million (H1
2021: £6.1 million) primarily as a result of a reduction in clinical trial
related costs following the strategic review in January 2022, partly offset by
additional investment made in the exosome technology platform
· Loss for the period of £3.2 million (H1 2021: loss of £5.2 million)
driven by lower costs, increased revenue as noted above and foreign exchange
gains
· Net cash used in operating activities of £4.3 million (H1 2021:
£4.6 million). Cash used was higher than the loss for the period explained by
changes in working capital and capital investment made to support exosome
platform development
· Cash, cash equivalents and bank deposits at 30 September 2022 of
£10.5 million (31 March 2022: £14.5 million)
FUNDING UPDATE
The Company has been investigating an equity raise with institutional and
other investors. Having regard to the unfavourable conditions in small-cap
equity markets, the Board has concluded that it will not be possible to
complete an equity raise at the current time. As at 30 November 2022, having
recently received the R&D tax credit for FY 2022, the Company has cash of
£10.0 million, and through deferring certain expenditure on proprietary
programmes and other longer term development plans, the cash runway will be
extended until at least the start of the fourth calendar quarter of 2023.
This is not expected to compromise the Company's ability to sign commercial
exosome collaborations which upon completion should extend the runway until at
least 2024.
OPERATIONAL HIGHLIGHTS
Corporate and Organisational Development
In September 2022 the Company announced a number of organisation changes:
· Catherine Isted was appointed Chief Executive Officer with Iain Ross
resuming his role as Non-Executive Chairman
· John Hawkins was promoted to Chief Financial Officer and joined the
ReNeuron board;
· Dr. Randolph Corteling assumed the role of Chief Scientific Officer
· Suzanne Hancock was appointed Chief Operations officer
· It was announced that Simon Dew, an experienced business development
professional and exosomes expert would join ReNeuron as Chief Business Officer
Exosomes platform
· Data presented in May highlighted the breadth of the Group's
CustomEx(TM) exosome platform with four neural and three non-neural stem cell
lines each producing distinct exosome populations
· Post period end in October, the Group presented exciting data on the
significant advantages of its CustomEx(TM) platform, including a 600% increase
in delivery of siRNA compared to a conventional human embryonic kidney-derived
("HEK") exosome approach
Fosun Pharma
· In July 2022, a Supplemental Terms Agreement was signed with Fosun
Pharma for the Technology Transfer of CTX into China, highlighting continued
progress with the collaboration
· The Group expects to receive approximately £1 million over the 24
month period from signing the agreement, of which £320,000 has been received.
In addition there is potential under the Technology Transfer agreement for the
Group to receive up to £5 million over the medium to long term, with further
potential milestone payments of up to £74 million linked to the main
agreement signed in 2019
Enquiries:
ReNeuron www.reneuron.com/investors (http://www.reneuron.com/investors)
Catherine Isted, Chief Executive Officer Via Walbrook PR
John Hawkins, Chief Financial Officer
Liberum Capital Limited (NOMAD and Joint Broker) +44 (0)20 3110 2000
Phil Walker (Investment Banking)
Richard Lindley (Investment Banking)
Ben Cryer (Investment Banking)
Allenby Capital Limited (Joint Broker) +44 (0)20 3328 5656
James Reeve/George Payne (Corporate Finance)
Stefano Aquilino (Sales & Corporate Broking)
Walbrook PR (Media & Investor Relations) +44 (0)20 7933 8780 or reneuron@walbrookpr.com
(mailto:reneuron@walbrookpr.com)
Alice Woodings +44 (0)7407 804 654
About ReNeuron
ReNeuron is a UK based leader in proprietary stem cell derived exosome
technologies, harnessing its unique stem cell technologies to develop 'off the
shelf' treatments for diseases with significant unmet needs.
ReNeuron's stem cell derived proprietary exosome technology platform offers a
delivery mechanism for a variety of payloads such as siRNA, mRNA, proteins,
small molecules and genes. The Group has a growing number of partner
collaborations with Global Pharma, Biotech and academic partners in this
fast-expanding area of scientific and commercial interest. ReNeuron also has
the ability, through its conditionally immortalised induced pluripotent stem
cell (iPSC) platform, to make allogeneic tissue cells of choice and has the
potential to produce exosomes with tissue specific targeting ability.
The Group has out-licenced its CTX Programme for stroke disability and hRPC
programme in retinitis pigmentosa to Fosun in China and is looking to
out-license both of these programmes in other territories.
ReNeuron's shares are traded on the London AIM market under the symbol RENE.L.
For further information visit www.reneuron.com (http://www.reneuron.com)
This announcement contains forward-looking statements with respect to the
financial condition, results of operations and business
achievements/performance of ReNeuron and certain of the plans and objectives
of management of ReNeuron with respect thereto. These statements may
generally, but not always, be identified by the use of words such as "should",
"expects", "estimates", "believes" or similar expressions. This announcement
also contains forward-looking statements attributed to certain third parties
relating to their estimates regarding the growth of markets and demand for
products. By their nature, forward-looking also statements involve risk and
uncertainty because they reflect ReNeuron's current expectations and
assumptions as to future events and circumstances that may not prove
accurate. A number of factors could cause ReNeuron's actual financial
condition, results of operations and business achievements/performance to
differ materially from the estimates made or implied in such forward-looking
statements and, accordingly, reliance should not be placed on such statements.
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022
CHAIRMAN'S STATEMENT
Following the departure of our CEO in February 2022, I started this financial
year as Executive Chairman and had the opportunity to spend a lot of time with
the team at our site in Pencoed in Wales. I have been impressed by the quality
of the management team, the science and the data produced by our scientists on
our exosome delivery platform CustomEx(TM). In August, at my recommendation,
we announced that the board had taken the decision to appoint Catherine Isted,
our then CFO, as the new CEO having shown herself, against external
competition, to be an excellent candidate for the role and that I would revert
to being non-executive Chairman after a period supporting the transition.
During September, under Catherine's leadership, we announced that John
Hawkins, our Financial Controller, would step up to the role of CFO and join
the board. Along with other executive changes and the recruitment of Simon Dew
as Chief Business Officer this now completes what I believe to be a very
strong executive team with the skill sets needed to continue and accelerate
the turnaround following the change of strategic direction we as a board made
under my direction at the start of the year.
In summary the first six months of the financial year have been a time of
change with the transition to becoming a company with a fully focused Exosomes
drug delivery platform - CustomEx(TM). The Company has produced significant
data highlighting the advantages of the CustomEx(TM) platform over the
competition's conventional HEK based exosome delivery approach.
Progress has also been made with Fosun Pharma as we continue to maximise the
value of the legacy stem cell assets. Whilst continuing to support Fosun in
Greater China, we are also committed to continuing to add value from the
legacy assets and realising the potential of the iPSC platform, not only in
its role in future proofing the CustomEx(TM) platform and its ability to
generate new exosome lines, but also in its own right. We will continue to
assess all opportunities to create value through organic growth but also, as
appropriate, explore technology licensing and acquisition opportunities to
accelerate and enhance the overall value proposition of our Company.
The Group ended the period with cash, cash equivalents and bank deposits of
£10.5 million and with our cash runway being extended until at least the
start of the fourth calendar quarter 2023 and the right team now in place, the
Company will look to build on these foundations and sign new longer-term
commercial partnerships to further extend the cash runway and therefore
deliver value commensurate with what our CustomEx(TM) platform can offer in
the field of targeted drug delivery.
I look forward to the coming year continuing to work with the ReNeuron team
and all our stakeholders to build the value this Company truly merits.
Iain Ross
Chairman
CHIEF EXECUTIVE'S REPORT
Corporate and Organisational Development
There have been significant changes during the period at the Executive level
in addition to the changes at Directorate as described in the Chairman's
statement.
In September it was announced that Simon Dew would be joining the Executive
Team as Chief Business Officer. Mr. Dew is a senior healthcare executive with
extensive experience in Business Development and Corporate Strategy. His
career spans working at SmithKline Beecham, IQVIA, Astellas Pharma, Gyroscope,
and more recently exosomes company Evox Therapeutics, where he was responsible
for leading two transformational partnership deals with global pharmaceutical
companies. He commenced his new role at ReNeuron in early November.
Additionally, in September Dr. Randolph Corteling assumed the role of Chief
Scientific Officer with Prof. Stefano Pluchino moving to the role of Chair of
the Scientific Advisory Board (continuing to combine working with ReNeuron
with his academic work in Exosomes and Regenerative Neuroimmunology at the
University of Cambridge) and Suzanne Hancock, formerly Head of Operations,
moved to the position of Chief Operations Officer.
CustomEx(TM) Exosome Platform
In the last six months there has been significant data presented on ReNeuron's
CustomEx(TM) platform, highlighting not only the breadth of the platform but
also improvements in uptake and payload delivery when compared to the standard
HEK based exosome approach.
In May, Dr. Corteling was invited as a guest speaker to the International
Society of Cell and Gene Therapy conference. This presentation was the first
time that the Company had highlighted the breadth of the Group's exosome
platform, showing that it had four district neural cell lines (in the cortex,
hippocampus, striatum and mesencephalon) in addition to three non-neural cell
lines (in the retina, liver and pancreas), with, very importantly, each cell
line producing a distinct exosomes type allowing for improved target
selection. In addition, ReNeuron highlighted its induced pluripotent stem cell
(iPSC) platform, derived from ReNeuron's CTX cell line, which could be used to
produce other stem cell lines which in turn could be used to produce other
distinct exosomes depending on the target required.
In October, further exciting data were presented at an international exosomes
conference in Boston showing the significant advantages of the Group's stem
cell derived platform CustomEx(TM) compared to a conventional HEK exosome
approach. Key highlights from the presentation included:
· When comparing the uptake of a panel of exosomes into three different
target cell types (Epithelial cells, Endothelial cells and Neural cells),
ReNeuron identified one or more CustomEx(TM) exosome types that outperformed
the conventional approach of using HEK-derived exosomes at least 10-fold in
each of the three different cell types. This was most pronounced with
endothelial cells where one of ReNeuron's CustomEx(TM) exosome types showed an
18-fold improvement in uptake over HEK-derived exosomes.
· When ReNeuron's exosomes were loaded with an siRNA payload, this
improvement in uptake was reflected in the siRNA delivery to the target cell,
with the best performing CustomEx(TM) exosome type showing a 600% improvement
in siRNA delivery to the target cell when compared to delivery from
HEK-derived exosomes.
The siRNA data was of particular interest to ReNeuron's siRNA collaborators,
and the Group plans to further bolster its siRNA data package over the coming
period, highlighting the advantages of using CustomEx(TM).
During the period, ReNeuron continued to progress its existing partner
programmes focusing on the CNS, although following the recent data
announcements, interest has now started to grow outside of the CNS.
Additionally, the Group has received interest from potential partners
following presentation of these platform data. The management team is working
to progress both existing and potential new partnerships towards meaningful
collaborations over the course of the next 12 months. The Group believes that
the addition of Simon Dew will help accelerate interest from the industry
which will ultimately lead to an acceleration of partnering announcements.
Induced Pluripotent Stem Cell (iPSC) Platform
While the iPSC platform is highly important to expanding the breadth of the
CustomEx(TM) platform due to its ability to create new stem cell lines and
therefore associated exosomes from those lines, there is also a growing
interest in the iPSC platform in its own right due to iPSC's ability to
differentiate into any other form of cell. ReNeuron's iPSCs were developed
from the Group's conditionally immortalised CTX stem cell line and they retain
the immortalisation characteristics of the original CTX line. This results in
any new stem cell line derived from these iPSCs having the benefit of being
highly stable which is of increased interest to third parties.
Work continues with two groups at University College London ("UCL"), firstly
investigating the potential use of CTX derived iPSC lines to generate CAR-T /
CAR-NK cells and secondly with a separate group at UCL investigating the
ability to differentiate into Schwann cells for potential use in peripheral
nerve damage repair. The Group plans to generate further data in the iPSC
field over the coming six months and additionally expand its numbers of
collaborators in the area.
Legacy assets
Fosun Pharma continues to develop CTX in stroke disability in China following
the out-licensing agreement signed with ReNeuron in April 2019. In July 2022,
ReNeuron announced that it had negotiated and signed a supplemental terms
agreement with Fosun. As a result, the Group expects to receive approximately
£1 million over the 24 month period from signing the agreement (including the
£320,000 upfront payment received in January 2022) in relation to the initial
supply of CTX cell bank vials and services provided to undertake the
technology transfer, with up to a further £5 million receivable by the Group
over the medium to longer term for the continued provision of CTX cell bank
vials to enable manufacture by Fosun Pharma and with further potential
milestone payments of up to £74m linked to the main agreement signed in 2019.
Fosun Pharma is expanding its cell therapy portfolio to stem cell platforms
and ReNeuron CTX is one of the starting programmes. A dedicated Fosun Pharma
team has been established for the technology transfer into China and the
construction of a 20,000 square foot GMP facility to manufacture CTX is
underway. The signing of this Supplemental Terms Agreement underscores Fosun
Pharma's continued commitment to the CTX stroke disability programme.
The collaboration with Fosun Pharma continues on track and the Group continues
to progress out-licensing opportunities for the CTX programme in other
geographies.
Following the cessation of the hRPC programme earlier in the year, work has
been ongoing to complete the data package that can be made available to
potential interested parties. This data package is expected to be completed in
Q4 2022. There has been some early interest in this programme and the Group
will accelerate efforts to progress this once the data package is available.
Outlook
With the executive team now in place, the key focus over the coming period for
myself and the rest for the team will be data generation and collaboration
deals to further extend the cash runway.
We are targeting to announce several larger scale exosome collaborations from
existing / new partners and to develop further collaboration agreements with
our iPSC platform. We also plan to accelerate the number of partnering
opportunities in the 'hopper' through a greater focus on marketing of the
advantages of the CustomEx(TM) platform. This, I believe, will lead to further
success for the Company over the longer term.
Presenting further data highlighting the customisability and targeted approach
of the CustomEx(TM) platform and superiority over HEK based approaches will be
a key priority for the team over the period as will a renewed focus on looking
to further monetise the legacy assets outside of the agreement with Fosun
Pharma.
I look forward to leading the new exosome focused team, as ReNeuron extends
its presence and exosome collaborations, maximising the opportunities ahead,
as we deliver returns to shareholders from the fast-growing field of exosome
mediated drug delivery.
Catherine Isted
Chief Executive Officer
FINANCIAL REVIEW
During the first half of the financial year, costs continued to be closely
controlled with spend primarily directed towards progressing the Group's
proprietary exosome platform. The Group is investing in the exosome platform
in order to capitalise on the potential it sees in the exosomes field by
adding value through its existing and future new commercial collaborations.
The total comprehensive loss for the period reduced to £3.2 million (H1 2021:
£5.2 million).
At 30 September 2022, the Group had cash, cash equivalents and bank deposits
of £10.5 million.
FINANCIAL HIGHLIGHTS Six months ended 30 September 2022 Six months ended 30 September 2021 Year ended 31 March2022
(£'000)
Revenue 438 58 403
Total comprehensive loss 3,176 5,234 9,689
Operating expenses 4,712 6,128 11,631
Net cash used in operating activities
4,323 4,599 7,411
Cash, cash equivalents & bank deposits
10,464 17,418 14,548
Revenue and Other Operating Income
In the six months to 30 September 2022, revenues, which related to partner
funded development activities were £393,000 (H1 2021: £Nil). Income related
to royalty income, was £45,000 (H1 2021: £58,000).
Operating expenses
Total operating expenses reduced in the period to £4.7 million (H1 2021:
£6.1 million).
This reduction in costs followed a review of programme priorities and resource
requirements, with the Group having made the decision to primarily focus its
resources on its proprietary exosome platform.
Research and development (R&D) expenditure reduced to £2.9 million (H1
2021: £4.3million), primarily reflecting the refocussing of activities as
described above, together with consequent cost reductions related to clinical
development activities.
General and administrative expenses declined in the period to £1.7million (H1
2021: £1.8 million).
Finance income/expense
Finance income represented income received from the Group's cash and
investments and gains from foreign exchange, with losses from foreign exchange
shown in finance expense.
Finance income was £466,000 in the period (H1 2021: £124,000). The current
period included foreign exchange gains of £429,000 (H1 2021: £112,000). In
the current period, finance expense solely comprised lease interest of
£10,000 (2021: £18,000).
The Group holds cash and investments in foreign currencies in order to hedge
against operational spend in those currencies. The weakening of sterling
during the period resulted in a relative increase in valuation of the Group's
foreign currency deposits.
Taxation
The taxation credit for the period of £0.6 million primarily comprised an
R&D tax credit (H1 2021: £0.7 million). The amount of the R&D tax
credit reduced in line with the reduction in research and development spend.
Cash flow
Net cash used in operating activities in the period reduced to £4.3 million
(H1 2020: £4.6 million). This reduction in cash used reflected the reduction
in costs offset by an adverse working capital movement (H1 2022 saw a £0.5
million reduction in working capital, whereas H1 2021 had a £0.9 million
increase).
The Group had cash, cash equivalents and bank deposits totalling £10.5
million as of 30 September 2022 (31 March 2022: £14.5 million).
Statement of financial position
Non-current assets increased as the Company invested in property, plant and
equipment to aid further development of the exosome analytics and
manufacturing process.
Current assets include a Corporation tax receivable of £2.0 million
comprising the amount due from R&D tax credits for the full year ended 31
March 2022 plus the credit due for the current period (30 September 2021:
£2.6 million). This debtor was lower than 2021 due to the reduction in
research and development expenditure.
Current liabilities primarily comprise trade and other payables at £6.2
million which were £0.4 million lower than the same period last year (30
September 2021: £6.6 million) and £0.7 million lower than at the last year
end (31 March 2022: £6.9 million).
Non-current liabilities represented the lease liability relating to the
Company's premises. The lease liability reduced by £0.1 million during the
period.
John Hawkins
Chief Financial Officer
INTERIM FINANCIAL STATEMENTS
Unaudited Consolidated Statement of Comprehensive Income
for the six months ended 30 September 2022
Six months ended Six months ended Year ended
30 September 30 September 31 March
2022 2021 2022
Note £'000 £'000 £'000
Revenue 4 438 58 403
Research and development costs (2,986) (4,340) (8,068)
General and administrative costs (1,726) (1,788) (3,563)
Operating loss (4,274) (6,070) (11,228)
Finance income 6 466 124 195
Finance expense 7 (10) (18) (25)
Loss before income taxes (3,818) (5,964) (11,058)
Taxation 8 642 730 1,369
Loss and total comprehensive loss for the period (3,176) (5,234) (9,689)
Loss and total comprehensive loss attributable to equity owners of the company (3,176) (5,234) (9,689)
Basic and diluted loss per ordinary share 9 (5.6p) (9.2p) (17.0p)
Unaudited Consolidated Statement of Financial Position
as at 30 September 2022
30 September 30 September 31 March
2022 2021 2022
Note £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 354 325 288
Right-of-use asset 10 331 423 373
Intangible assets 186 186 186
871 934 847
Current assets
Trade and other receivables 456 517 536
Corporation tax receivable 2,036 2,565 1,392
Investments - bank deposits 1,000 6,000 5,000
Cash and cash equivalents 9,464 11,418 9,548
12,956 20,500 16,476
Total assets 13.827 21,434 17,323
Equity
Equity attributable to owners of the company
Share capital 11 571 569 571
Share premium account 11 113,925 113,925 113,925
Capital redemption reserve 40,294 40,294 40,294
Merger reserve 2,223 2,223 2,223
Accumulated losses (149,931) (142,858) (147,125)
Total equity 7,082 14,153 9,888
Liabilities
Current Liabilities
Trade and other payables 6,249 6,646 6,873
Lease liabilities 151 145 146
6,400 6,791 7,019
Non-current liabilities
Lease liabilities 345 490 416
345 490 416
Total liabilities 6,745 7,281 7,435
Total equity and liabilities 13,827 21,434 17,323
Unaudited Consolidated Statement of Changes in Equity
for the six months ended 30 September 2022
Share Capital
Share premium redemption Merger Accumulated Total
capital account reserve reserve losses Equity
£'000 £'000 £'000 £'000 £'000 £'000
As at 1 April 2021 569 113,904 40,294 2,223 (138,085) 18,905
Exercise of employee share options - 21 - - - 21
Credit on share-based payment - - - - 461 461
Loss and total comprehensive loss for the period - - - - (5,234) (5,234)
As at 30 September 2021 569 113,925 40,294 2,223 (142,858) 14,153
Exercise of employee share options 2 - - - - 2
Credit on share-based payment - - - - 188 188
Loss and total comprehensive loss for the period - - - - (4,455) (4,455)
As at 31 March 2022 571 113,925 40,294 2,223 (147,125) 9,888
Credit on share-based payment - - - - 370 370
Loss and total comprehensive loss for the period - - - - (3,176) (3,176)
As at 30 September 2022 571 113,925 40,294 2,223 (149,931) 7,082
Unaudited Consolidated Statement of Cash Flows
for the six months ended 30 September 2022
Six months ended Six months ended Year ended
30 September 30 September 31 March
2022 2021 2022
Note £'000 £'000 £'000
Cash flows from operating activities
Cash used in operations 12 (4,310) (4,578) (9,196)
Overseas taxes paid (3) (3) (52)
Income tax credit received - - 1,862
Interest paid (10) (18) (25)
Net cash used in operating activities (4,323) (4,599) (7,411)
Cash flows from investing activities
Capital expenditure (156) (238) (302)
Interest received 32 3 26
Net cash (used in)/generated by investing activities (124) (235) (276)
Cash flows from financing activities
Proceeds from the issue of ordinary shares - 21 23
Bank deposits matured/(placed) 4,000 1,500 2,500
Lease payments (73) (84) (157)
Lease finance 7 - -
Net cash generated by/(used in) financing activities 3,934 1,437 2,366
Net (decrease)/increase in cash and cash equivalents 13 (513) (3,397) (5,321)
Effect of foreign exchange rates 429 112 166
Cash and cash equivalents at the start of period 9,548 14,703 14,703
Cash and cash equivalents at the end of period 14 9,464 11,418 9,548
Notes to the Interim Financial Statements
for the six months ended 30 September 2022
1. General information and basis of preparation
ReNeuron Group plc is an AIM listed company incorporated and domiciled in the
United Kingdom under the Companies Act 2006. The Company's registered office
and its principal place of business is Pencoed Business Park, Pencoed,
Bridgend CF35 5HY. Its shares are listed on the Alternative Investment Market
("AIM") of the London Stock Exchange.
These Interim Financial Statements were prepared by the Directors and approved
for issue on xx xxx 2022. They have not been audited.
These Interim Financial Statements do not comprise statutory accounts within
the meaning of section 434 of the Companies Act 2006. Statutory accounts for
the year ended 31 March 2022 were approved by the Board of Directors on 11
August 2022 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified and did not contain statements
under 498 (2) or (3) of the Companies Act 2006. The auditor's report did
however contain an emphasis of matter regarding a material uncertainty related
to going concern.
As permitted, these Interim Financial Statements have been prepared in
accordance with UK AIM rules and with International Accounting Standard 34
"Interim financial reporting". They should be read in conjunction with the
Annual Financial Statements for the year ended 31 March 2022, which have been
prepared in accordance with International Accounting Standards in conformity
with the Companies Act 2006 (IFRS) and the applicable legal requirements of
the Companies Act 2006.
2. Accounting policies
The accounting policies applied are consistent with those of the Annual
Financial Statements for the year ended 31 March 2022, as described in those
Annual Financial Statements. Where new standards or amendments to existing
standards have become effective during the year, there has been no material
impact on the net assets or results of the Group.
3. Going concern
The Group is expected to incur further costs as it continues to develop its
technologies through the research and pre-clinical development pathway. The
operations of the Group are currently being financed from funds that have been
raised from share placings, commercial partnerships and grants.
The Group actively seeks further business development and commercial
opportunities in order to support its ongoing development programmes. The
Board places considerable emphasis on communication with shareholders,
potential investors and other commercial organisations in order to maximise
the chances of success in exploiting these opportunities.
As noted previously, it has not been possible to complete an equity raise at
this current time. The Board will continue to explore alternative funding
mechanisms and note that in the absence of any further financing, the Group's
current financial resources will be sufficient to support operations until at
least the start of the fourth calendar quarter 2023.The Board therefore
considers it appropriate to continue to adopt the going concern basis in the
preparation of these interim financial statements. However, there is no
guarantee that future attempts to secure adequate additional revenues/funding
on a timely basis will be successful and, therefore, this represents a
material uncertainty, which may cast significant doubt about the Group's
ability to continue as a going concern. These interim financial statements do
not include the adjustments that would result if the Group were unable to
continue as a going concern.
4. Revenue
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2022 2021 2022
£'000 £'000 £'000
Royalty income 45 58 119
Income associated with development activities 393 - 284
438 58 403
Royalty income is derived from the licensed sale of the Group's products to
customers in the USA.
Income associated with development activities relates to fees received under
research agreements and is generated in the United Kingdom, the USA, the
People's Republic of China and South East Asia.
5. Segment information
The Group has identified the Chief Executive Officer as the Chief Operating
Decision Maker (CODM). The CODM manages the business as one segment, the
development of stem cell derived exosome technologies. Since this is the only
reporting segment, no further information is included. The information used
internally by the CODM is the same as that disclosed in the Interim Financial
Statements. Revenue is analysed in note 4 above.
6. Finance income
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2022 2021 2022
£'000 £'000 £'000
Interest received 37 12 29
Foreign exchange gains 429 112 166
466 124 195
7. Finance expense
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2022 2021 2022
£'000 £'000 £'000
Lease interest 10 18 25
10 18 25
8. Taxation
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2022 2021 2022
£'000 £'000 £'000
R & D tax credit 644 733 1,392
Overseas taxation (2) (3) (53)
Adjustments in respect of prior years - - 30
642 730 1,369
9. Basic and diluted loss per share
The basic and diluted loss per share is calculated by dividing the loss for
the financial period of £3,176,000 (September 2021: £5,234,000, March 2022:
£9,689,000) by 57,090,147 shares (September 2021: 56,907,676 and March 2022:
56,975,677 shares), being the weighted average number of ordinary 1p shares in
issue during the period. Potential ordinary shares are not treated as dilutive
as the entity is loss-making.
10. Right-of-use-asset
30 September 30 September 31 March
2022 2021 2022
£'000 £'000 £'000
At beginning of the period 373 473 473
Additions 7 - -
Depreciation charge (49) (50) (100)
At end of the period 331 423 373
The net book value of the underlying assets is as follows:
30 September 30 September 31 March
2022 2021 2022
(124)461 £'000 £'000 £'000
Land and buildings 325 421 373
Computer and office equipment 6 2 -
At end of the period 331 423 373
11. Share capital and share premium
Number of shares Share capital Share premium Total
£'000 £'000 £'000
As at 30 September 2021 56,936,402 569 113,925 114,494
Issue of new shares - share options exercised 127,221 2 - 2
As at 31 March 2022 57,063,623 571 113,925 114,496
Issue of new shares - share options exercised 82,270 - - -
As at 30 September 2022 57,145,893 571 113,925 114,496
12. Cash used in operations
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2022 2021 2022
£'000 £'000 £'000
Loss before income tax (3,818) (5,964) (11,058)
Adjustment for:
Finance income (466) (124) (195)
Finance expense 10 18 25
Depreciation of property, plant and equipment 83 126 224
Depreciation of right-of-use asset 49 50 100
Loss on disposal of fixed assets - - 3
Share-based payment charges 370 461 649
Changes in working capital:
Receivables 87 (64) (90)
Payables (625) 919 1,146
Cash used in operations (4,310) (4,578) (9,196)
13. Reconciliation of net cash flow to movement in net debt
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2022 2021 2022
£'000 £'000 £'000
Decrease in cash and cash equivalents (513) (3,397) (5,321)
Effect of foreign exchange rates 429 112 166
Cash inflow from increase in lease liabilities (7) - -
Lease repayments 83 102 182
Lease interest (10) (18) (25)
Net funds at start of period 8,986 13,984 13,984
Net funds at end of period 8,968 10,783 8,986
14. Analysis of net funds
Six months Six months
Ended Ended Year ended
30 September 30 September 31 March
2022 2021 2022
£'000 £'000 £'000
Cash and cash equivalents 9,464 11,418 9,548
Lease liabilities (496) (635) (562)
Net funds 8,968 10,783 8,986
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