REG - ReNeuron Group plc - Preliminary Results
04/07/2022 07:00
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RNS Number : 1193R ReNeuron Group plc 04 July 2022
ReNeuron Group plc
("ReNeuron" or "the Group")
Preliminary Results for the year ended 31 March 2022
Strategic shift to fully focus on ReNeuron's Proprietary Exosomes Platform
ReNeuron Group plc (AIM: RENE), a UK based leader in stem cell derived exosome
technologies, announces its preliminary results for the year ended 31 March
2022.
OPERATIONAL HIGHLIGHTS
Exosomes Platform
- Following a strategic review in January, ReNeuron is now fully
focused on expanding its proprietary customisable exosomes platform
- Seven discovery-stage collaborations proceeding with global pharma,
biotech and academic institutions, with the Group committed to adding new long
term value creating partnerships
- Exciting pre-clinical data announced showing that ReNeuron's exosome
drug delivery technology can effectively deliver therapeutic proteins to the
brain to potentially treat neurological diseases
Corporate and Organisational Development
- In July 2021, Iain Ross was appointed as Non-Executive Chairman and
following Olav Hellebø's resignation as CEO in February 2022, Mr Ross became
Interim Executive Chairman until the appointment of a new CEO
- In October 2021, Catherine Isted, ACMA, joined the Board, replacing
Michael Hunt as Chief Financial Officer
- Additionally, during the period, the Board was reconfigured with
former Chairman, Dr Tim Corn and Non-Executive directors Mark Evans and Sir
Chris Evans OBE stepping down. Two new independent Non-Executive directors,
Barbara Staehelin and Martin Walton, have joined the Board
- Additionally, Dr Stefano Pluchino was appointed as Chief Scientific
Officer and Dr Randolph Corteling as Head of Research, greatly increasing the
Group's exosomes expertise
Fosun Pharma
- Fosun Pharma continues to progress development of CTX in stroke
disability in China. In January 2022 ReNeuron announced that it had signed an
additional agreement, setting out the first steps for the technology transfer
of the CTX drug product into China
- Post period end in July 2022, ReNeuron signed a Supplemental Terms
Agreement with Fosun Pharma. As a result, the Group expects to receive
approximately £1 million over the next 24 months with up to a further £5
million over the medium to long term
Induced Pluripotent Stem Cell (iPSC) Platform
- Collaboration signed with University College London (UCL)
investigating the use of ReNeuron's iPSC platform to potentially generate
CAR-T and/or CAR-NK cells
- Positive data from a separate UCL collaboration demonstrating that
ReNeuron's iPSCs can be differentiated into Schwann cells with potential
applications such as peripheral nerve damage repair
hRPC (human retinal progenitor cells) for retinal diseases
- In January 2022, as a result of the strategic review and following
consultation with the Company's Scientific Advisory Board, the Board took the
decision to halt development of its Retinitis Pigmentosa programme as it
became clear that a further phase II trial would be required. The view was
that the size of the additional investment required would not be in the best
interests of shareholders
- The Board's intention is to complete the Retinitis Pigmentosa data
package and out-licence the programme to a third party
FINANCIAL HIGHLIGHTS
- Revenue for the period of £403,000 relating to research and
collaboration activities and royalty income (2021: £257,000)
- Loss for the period of £9.7 million (2021: loss of £11.3 million)
reflecting lower costs
- Reduced costs incurred in the period of £11.6 million (2021: £13.2
million) primarily driven by lower R&D spend following the strategic
decision to curtail clinical development activities
- Increased net cash used in operating activities of £7.4 million
(2021: £6.1 million) with the prior year benefitting from the receipt of two
R&D tax credits relating to financial years 2019 and 2020
- Cash, cash equivalents and bank deposits at 31 March 2022 of £14.5
million (31 March 2021: £22.2 million) providing a cash runway until at least
mid-calendar year 2023
Iain Ross, Chairman said: "During the period tough decisions have been taken,
the business model re-focussed and the Board and Management team strengthened
in line with our future goals. Personally, I have been most impressed with the
competence, resilience and determination of the ReNeuron team and look forward
to driving the business forward, executing a realistic plan and achieving
meaningful milestones over the next 12 months."
Analyst briefing
Iain Ross, Interim Executive Chairman, Catherine Isted, Chief Financial
Officer and Dr Randolph Corteling, Head of Research will be hosting a briefing
for analysts which will take place at 75 King William St, London, EC4N 7BE on
Monday 4 July 2022 at 13.00 (GMT) / 08:00 EST. A live webcast of the
presentation will also be available for those unable to attend the meeting
in-person.
For more information and to register to attend the meeting in-person or
require the link to the live webcast, please email reneuron@walbrookpr.com
(mailto:reneuron@walbrookpr.com) or call +44 (0)20 7933 8785.
Investor Briefing
Management will be hosting a live online presentation relating to the
preliminary results via the Investor Meet Company platform at 15.00 (GMT) on
Monday 4 July. The presentation is open to all existing and potential
shareholders.
Investors can sign up to Investor Meet Company for free and register for the
presentation here:
https://www.investormeetcompany.com/reneuron-group-plc/register-investor
(https://www.investormeetcompany.com/reneuron-group-plc/register-investor)
Enquiries:
ReNeuron www.reneuron.com/investors (http://www.reneuron.com/investors)
Iain Ross, Chairman Via Walbrook PR
Catherine Isted, 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)
Paul McManus / Alice Woodings +44 (0)7980 541 893 / +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 year ended 31 March 2022
CHAIRMAN'S STATEMENT
Following the strategic review in January 2022, the Board took some tough
decisions from a business and organisational perspective. As a result,
during the course of the year the Group has made a number of changes to not
only re-organise the business to fully focus on exosomes, but also to put in
place the right team both at the Board and Executive level in order to build a
sustainable growing business and ultimately to deliver shareholder value.
I was appointed Chairman in July 2021, and having worked with the team for six
months, in January 2022 the Board under my leadership took the tough decision
to halt the Retinitis Pigmentosa (RP) programme and fundamentally re-organise
the business and its priorities. Upon reviewing the RP data we believed that
we could not justify substantial further investment into the RP programme and
that the programme's future was better served in the hands of a partner. This
decision has allowed us to increase the speed at which we can invest in and
progress our proprietary exosomes platform. We believe this platform is
differentiated from others in the field and allows our exosomes to be
customised and optimised for specific payloads and targets. We believe our
position as a leader in this growing field of science offers the best
opportunity of returns for our shareholders.
In addition to having leading edge science and IP in the field I believe we
now have the right combination of skill sets in our executive team having made
three key hires during the year to build and grow our exosomes platform
business. Catherine Isted joined as CFO having spent her career to date in
healthcare, most recently at Oxford Biomedica building their viral
vector-based platform business. Catherine has already made a significant
contribution since joining the business. Additionally in the year, Dr Stefano
Pluchino joined ReNeuron as Chief Scientific Officer and Dr Randolph Corteling
re-joined ReNeuron as Head of Research. Between them they bring over 30 years
of experience in exosomes and their extensive knowledge in the field is
invaluable as the Group looks to maximise the potential in this fast growing
area of science.
In addition, we have evolved the Board to align with the needs of the business
and whilst it has reduced in size, it has increased in independence.
Accordingly, I want to thank Olav Hellebø, Sir Chris Evans, Dr.Tim Corn and
Mark Evans for their significant contribution over a number of years. We
have welcomed the appointments of two new Independent Non-Executive Directors,
Barbara Staehelin and Martin Walton. I intend that ReNeuron will continue to
operate to the highest levels of governance and as diversity and inclusion are
a core part of our culture, I am pleased to note that we currently have 40%
female board member representation.
With the excellent team we now have in place, the focus over the year ahead
will be to deliver on our promises, to build on the partnerships we already
have in place and look to expand the best of these into new long term value
creating partnerships. We will continue to expand our technology platform and
work with delivery of therapeutic proteins to the brain, producing further
data around the customisable nature of our proprietary platform and our
optimised exosomes product candidates. The management team will also continue
to assess all opportunities to monetise value from ReNeuron's assets, be that
its stem cell legacy assets, induced pluripotent stem cell (iPSC) platform or
proprietary stem cell lines, to build sustainable value for shareholders. The
Board anticipates further strengthening of the team including the appointment
of a CEO in the year ahead and I personally look forward to the coming year
and to helping the team to build and release value commensurate with the
quality of our scientific leadership.
Iain Ross
Chairman
OPERATIONAL REVIEW
Overview
This year has been a year of change not only strategically, with ReNeuron
pivoting to be fully focused on maximising the potential of its leading
exosomes technology platform, but also in relation to personnel with a number
of changes at both the Board and the Executive level. The Group also looked to
continue to progress its iPSC platform and additionally generate value from
its legacy assets and was pleased to announce progress with Fosun Pharma in
their development of CTX for stroke disability in greater China as well as two
iPSC collaborations with UCL. ReNeuron ended the period with cash of £14.5
million, providing a current cash runway to at least mid-calendar year 2023,
although the Group looks to extend this further through continued expansion of
its exosomes platform with partners and further monetisation of its legacy
product. With a strong team and leading science in the exosomes field, the
Group looks forward to the year ahead maximising and building on the
foundations set in place in the prior year.
Exosome Platform
The Group's lead technology is its stem cell derived exosome platform, where
ReNeuron is one of the leading players globally in this fast growing area of
drug delivery technology. The platform builds on the years of stem cell
experience and without this would not be in the strong position it is today.
ReNeuron has the third largest patent estate globally in the field of
exosomes, highlighting its strength and depth in the field.
Exosomes produced by the Group are manufactured through a fully qualified,
xeno-free, scalable process and can be loaded with a variety of payloads, such
as nucleic acids (including siRNA, mRNA and miRNA), proteins (such as Cas9,
antibodies and peptides), as well as small molecules. The Group's CTX (cortex)
stem cell derived exosomes have also been shown to exhibit a natural ability
to cross the blood brain barrier.
ReNeuron has a differentiated approach with the Group's seven proprietary
conditionally immortalised stem cell lines. This includes, as recently
announced, four proprietary neural cell lines as well as three additional
proprietary cell lines in other areas outside of the brain. With exosomes
having functional properties based on the parent cell line, this allows
ReNeuron to produce exosomes that can be customised and optimised for a
specific payload or target.
Additionally, the Group's iPSC platform provides an opportunity to generate
additional tissue specific conditionally immortalised stem cell lines thus
producing further bespoke exosomes beyond those produced from its existing
seven stem cell lines.
The Group looks to monetise this delivery platform through working with
partners as well as on its own proprietary product development. The Group has
seven discovery stage collaborations with global pharma, biotech and academic
institutions using ReNeuron's exosomes as a delivery vehicle for their
therapeutic agents. The Group looks to continue to progress these
collaborations as well as add new additional programmes either with existing
or new partners.
In October, the Group announced positive data from its collaboration with the
University of Salamanca that provided clear pre-clinical proof-of-concept that
ReNeuron's novel exosome drug delivery technology can effectively deliver
therapeutic proteins to the specific region of the brain affected by several
neurological diseases such as stroke, Parkinson's disease and Huntington's
disease. These in vivo results involving BDNF (brain derived neurotrophic
factor) are key in showing that ReNeuron's exosome delivery technology offers
a striking higher stability, more targeted delivery, and an increase in
potency, therefore potentially solving the delivery issues that can be
experienced with therapeutic proteins.
Major pharmaceutical companies have identified therapeutic proteins that are
effective in treating a variety of neurological diseases. However, there are
major issues associated with the delivery of these protein therapeutics, which
include the poor stability in living organisms, as proteins rapidly break down
and do not last long in the body; as well as issues surrounding poor tissue
distribution due to an inability to target specific tissues. These issues
cannot be overcome by simply administering more protein, as this can have
unwanted side-effects, however ReNeuron believes that its proprietary exosomes
have the potential to address both these issues due to their natural
tissue-targeting ability and superior stability characteristics (as evidenced
from ReNeuron's pre-clinical studies).
ReNeuron is currently further evaluating BDNF in functional studies, with
initial readouts expected during the course of the year.
The whole field of exosomes to deliver therapeutic payloads is expanding
rapidly and the Group is well-positioned with its proprietary customisable
exosomes platform to maximise the potential in this growing area of science.
Fosun Pharma - CTX in Stroke disability
Fosun Pharma continues to develop CTX in stroke disability in China following
the out-licensing agreement signed with ReNeuron in April 2019. In January
2022, ReNeuron announced that it had signed an additional agreement, setting
out the first steps for the technology transfer of the CTX drug product for
the stroke disability programme. The agreement allowed for £320,000 to be
invoiced on signing with further payments expected, based on services and CTX
cell bank vials to be supplied by ReNeuron in the future, although these were
contingent on signing a supplemental payment terms agreement which was under
discussion at the time.
Post period end in July 2022, ReNeuron announced that it has negotiated and
signed the Supplemental Terms Agreement with Fosun. As a result, the Group
expects to receive approximately £1 million over the next 24 months
(including the £320,000 upfront payment already 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.
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 is being 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 Group continues to look to progress this programme in other geographies
through regional partnerships.
Induced Pluripotent Stem Cell (iPSC) Platform
In addition to the benefits this platform can bring to expanding the range of
stem cell types (and thus exosomes) that can be produced using the Group's
exosomes platform, ReNeuron continues to progress development of the CTX
cell-based Induced Pluripotent Stem Cell (iPSC) technology platform deploying
this technology to develop new, immortalised allogeneic cell lines of varying
types as potential therapeutic agents in diseases of unmet medical need.
In October the Group announced that it had entered into a collaboration
agreement with UCL to conduct research into the generation of immune cells
from iPSCs for anti-cancer cell therapies. ReNeuron will be providing UCL
with iPSCs from its CTX immortalised neural progenitor cell line which UCL
will use to assess the ability to differentiate into functional T cells and
Natural Killer ('NK') cells. If successful, the CXT-iPSC cell lines will be
used to generate chimeric antigen ('CAR') T cells and/or CAR-NK cells.
Additionally, in November a separate collaboration with UCL demonstrated that
iPSCs can be differentiated into Schwann cells with potential applications in
areas such as peripheral nerve damage repair.
hRPC (human retinal progenitor cells) for retinal disease
The Group's Retinitis Pigmentosa (RP) study used a cryopreserved hRPC
formulation delivered via a subretinal injection. Following an initial study
which treated 10 patients with a 1 million cell administration which showed at
12 months a mean 9.9 letter improvement versus baseline in ETDRS letter score,
an extension segment of the study proposing to dose up to nine patients with a
higher level 2 million cell dose was started in September 2020.
During 2021, the extension trial progressed slower than planned and for a
period of four months from June to October 2021 dosing was temporarily
suspended to investigate a presumed bacterial intraocular infection in the
treated eye of a patient. While the origin of the presumed infection was not
clear, investigations showed no evidence of a causal link to the drug product,
and the study was reopened in October 2021.
In January 2022, as a result of the strategic review and following
consultation with the Group's Scientific Advisory Board (SAB), the Board took
the decision to halt development of its Retinitis Pigmentosa programme. Having
treated seven of the nine patents in the extension arm, the experience in
treating the patients at the 2 million cell dose had shown that the surgical
procedure required to deliver this higher dose (which involves a greater
volume and therefore greater surgical complexity) had led to more surgical
complications compared to that seen with the 1 million cell dose. While there
have been no serious adverse events (SAEs) attributed to the drug itself, it
was decided that a 2 million cell dose was not a viable dosing regimen.
Additionally, analysis of the 24-month data at the 1 million cell dose, while
inconclusive, did appear to show that efficacy wanes after 12 months with only
four out of nine patients still showing a positive response versus baseline at
month 24.
Following the SAB meeting, the Group reviewed its commercial strategy and the
financial resources needed to progress the RP programme. Even though certain
patients did appear to benefit from the treatment (in particular in the first
12 months), further patients would need to be treated at the 1m dose to try to
identify which sub-populations are most likely to lead to a higher and longer
lasting response. To fully understand this the Group believes an additional
phase 2 trial would be needed and it was decided that the size of the
additional investment required from ReNeuron into this programme would not be
in the best interests of shareholders and therefore it would be better to
complete a data package on the programme and look to out-license the programme
to a third party.
ReNeuron is currently working towards completing the data package and will
then be able to further focus on identifying potential partners for the
programme.
Corporate and Organisational Development
During the year, ReNeuron has reconfigured its Board of Directors under the
leadership of Iain Ross who joined in July 2021. In October 2021 Catherine
Isted, ACMA, joined the Board, replacing Michael Hunt as Chief Financial
Officer and in February 2022 Olav Hellebø stood down as CEO and Executive
Director of the Group with Iain Ross supported by the Executive team assuming
responsibility for the running of the Group.
Additionally, Sir Chris Evans, Dr. Tim Corn and Mark Evans retired from the
board and ReNeuron welcomed the appointments of two new Independent
Non-Executive Directors Barbara Staehelin and Martin Walton. Following these
changes, the ReNeuron Board now comprises five directors: Iain Ross (Interim
Executive Chairman); Catherine Isted (CFO and Executive Director) and three
independent Non-Executive Directors - Dr Michael Owen, Barbara Staehelin and
Martin Walton.
During the year, the executive team was strengthened and focused towards
exosomes. The Group was pleased to firstly welcome Dr Stefano Pluchino as
Chief Scientific Officer in May 2021 and in March 2022 Dr Randolph Corteling
re-joined ReNeuron heading up the Research team. Between them Dr Pluchino and
Dr Corteling have over 30 years' experience in Exosomes and their extensive
knowledge in the field is invaluable as the Group looks to maximise the
potential in this fast growing field of science. Rick Beckman, the Group's CMO
and lead for the RP programme stepped down in the period.
Outlook
The Group looks to capitalise on the potential it sees in the Exosomes field
by progressing its current collaborations and by adding new long term value
creating partnerships. The Group will also continue to progress its
proprietary programmes, especially in the area of therapeutic protein delivery
to the brain following the positive data produced in October and is currently
further evaluating BDNF in functional studies with initial readouts expected
during the course of the year.
Platform development is also key, with the team working on additional
manufacturing improvements and to produce data to highlight the strengths of
our customisable platform producing optimised exosomes product candidates.
Additionally, the Group will look to add new additional technologies and
capabilities through partnering or licensing to further strengthen and
differentiate the exosomes platform highlighting its global leadership in the
field.
While ReNeuron continues to work closely with Fosun following on from the
recent signing of the technology transfer agreement, the Group looks to
further monetise its legacy stem cell products outside of Greater China.
Additionally, it will look to expand the number of collaborations with its
iPSCs.
Personally, having joined ReNeuron from a leading cell and gene therapy
platform delivery company, I can see the great potential that exosomes could
offer as a delivery mechanism for the next generation of targeted
therapeutics. The two key internal ingredients of a successful company come
from its science and its people. In the field of exosomes I believe we are
leading the way with our customisable and targeted approach and we have the
team here to realise that value. None of this would be possible without the
support of our shareholders and I look forward over the coming year to
updating the market on our progress as we continue to build and grow on the
foundations and developments achieved in the last 12 months.
Catherine Isted
Chief Financial Officer
FINANCIAL REVIEW
During the financial year costs continued to be closely controlled with spend
primarily directed towards progressing the Group's hRPC therapeutic candidate
and proprietary exosome platform. Following the strategic decision made in
January 2022, spend has been redirected to the exosome platform enabling the
Group to better capitalise on the potential in the exosomes field. The total
comprehensive loss for the period reduced to £9.7 million (2021: £11.3
million).
At 31 March 2022, the Group had cash, cash equivalents and bank deposits of
£14.5 million providing a cash runway to at least mid-calendar year 2023.
Further detail on the Directors' assessment is provided in note 3 to the
condensed financial statements.
FINANCIAL HIGHLIGHTS Year ended 31 March Year ended 31 March
(£'000) 2022 2021
Revenue 403 257
Total comprehensive loss 9,689 11,347
Operating expenses 11,631 13,249
Net cash used in operating activities 7,411 6,052
Cash, cash equivalents & bank deposits 14,548 22,203
Revenue and Other Operating Income
In the year to 31 March 2022, revenues, which relate to research and
collaboration activities and royalty income, were £403,000 (2021: £257,000).
No grant income was received in the year. In 2021, £78,000 was received under
the Government's Coronavirus Job Retention Scheme and is shown as other
operating income.
Operating expenses
Total operating expenses reduced in the year to £11.6 million (2021: £13.2
million).
This reduction in costs follows a review in the previous financial year of
programme priorities and resource requirements, with costs directed to the
hRPC therapeutic candidate and proprietary exosome platform. As a result of
the strategic decision made in January, noted above, costs relating to the
hRPC therapeutic candidate have now reduced with the spend being reallocated
to the exosome platform.
Research and development costs in the year reduced to £8.1 million (2021:
£9.5 million), primarily reflecting the refocussing of activities as
described above, together with consequent cost reductions.
General and administrative expenses also reduced in the period to £3.6
million (2021: £3.7 million), despite the year including termination payments
to former directors. If termination payments are excluded in both financial
years, then general and administrative expenses show savings of 15% compared
to the prior year.
Finance income/expense
Finance income represents 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 £195,000 in the period (2021: £20,000), primarily
reflecting foreign exchange gains. In the year, finance expense solely
comprises lease interest of £25,000 (2021: £516,000, which included
£484,000 foreign exchange losses).
Taxation
Taxation for the period at £1.4 million primarily comprises an R&D tax
credit (2021: £2.1 million, which included £0.2 million relating to
financial year 2020). The amount of the R&D tax credit for this year has
reduced as a result of the lower research and development spend.
Cash flow
Net cash used in operating activities in the period increased to £7.4 million
(2021: £6.1 million). However, there is an underlying reduction in net cash
used as a result of the reduction in costs with the prior year benefitting
from the receipt of two R&D tax credits totalling £6.1 million for both
financial years 2019 and 2020.
The Group had cash, cash equivalents and bank deposits totalling £14.5
million as of 31 March 2022 (31 March 2021: £22.2 million), providing a cash
runway until at least mid-calendar year 2023.
Statement of financial position
Non-current assets - Property, plant and equipment have increased as we invest
in equipment to further develop our manufacturing processes and analytical
capabilities.
Current assets - Corporation tax receivable of £1.4 million comprises the
amount due from R&D tax credits for the full year ended 31 March 2022
(2021: £1.8 million). This debtor is lower than 2021 due to the reduction in
research and development expenditure.
Current liabilities - Trade and other payables at £6.9 million have increased
since the start of the financial year (2021: £5.7 million). These movements
primarily reflect changes in the level of accruals (mainly across the legacy
clinical trials) and deferred income.
Catherine Isted
Chief Financial Officer
Financial Statements
Condensed Consolidated Statement of Comprehensive Income
for the year ended 31 March 2022
Unaudited Audited
2022 2021
Note £'000 £'000
Revenue 403 257
Other income - 78
Research and development costs 4,5 (8,068) (9,503)
General and administrative costs 5 (3,563) (3,746)
Operating loss (11,228) (12,914)
Finance income 195 20
Finance expense (25) (516)
Loss before income tax (11,058) (13,410)
Taxation 6 1,369 2,063
Loss and total comprehensive loss for the year (9,689) (11,347)
Loss and total comprehensive loss attributable to equity owners of the Company (9,689) (11,347)
Basic and diluted loss per ordinary share 7 (17.0p) (29.0p)
Condensed Consolidated Statement of Financial Position
as at 31 March 2022
Unaudited Audited
2022 2021
Note £'000 £'000
Assets
Non-current assets
Property, plant and equipment 288 213
Right-of-use asset 373 473
Intangible assets 186 186
847 872
Current assets
Trade and other receivables 536 444
Income tax receivable 1,392 1,832
Investments - bank deposit 5,000 7,500
Cash and cash equivalents 9,548 14,703
16,476 24,479
Total assets 17,323 25,351
Equity
Equity attributable to owners of the Company
Share capital 571 569
Share premium account 113,925 113,904
Capital redemption reserve 40,294 40,294
Merger reserve 2,223 2,223
Accumulated losses (147,125) (138,085)
Total equity 9,888 18,905
Liabilities
Current liabilities
Trade and other payables 6,873 5,727
Lease liabilities 146 157
7,019 5,884
Non-current liabilities
Lease liabilities 416 562
416 562
Total liabilities 8 7,435 6,446
Total equity and liabilities 17,323 25,351
Condensed Consolidated Statement of Changes in Equity
for the year ended 31 March 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 2020 318 97,890 40,294 2,223 (127,502) 13,223
Issue of ordinary shares 251 17,251 - - - 17,502
Costs of share issue - (1,237) - - - (1,237)
Credit on share-based payment - - - - 764 764
Loss and total comprehensive loss for the year - - - - (11,347) (11,347)
As at 31 March 2021 (audited) 569 113,904 40,294 2,223 (138,085) 18,905
Issue of ordinary shares 2 21 - - - 23
Credit on share-based payment - - - - 649 649
Loss and total comprehensive loss for the year - - - - (9,689) (9,689)
As at 31 March 2022 (unaudited) 571 113,925 40,294 2,223 (147,125) 9,888
Condensed Consolidated Statement of Cash Flows
for the year ended 31 March 2022
Unaudited Audited
2022 2021
Note £'000 £'000
Cash flows from operating activities
Cash used in operations 9 (9,196) (12,075)
Overseas taxes paid (52) (5)
Income tax credit received 1,862 6,061
Interest paid (25) (33)
Net cash used in operating activities (7,411) (6,052)
Cash flows from investing activities
Capital expenditure - Fixed Assets (302) (25)
Interest received 26 27
Net cash (used in)/generated from investing activities (276) 2
Cash flows from financing activities
Proceeds from the issue of ordinary shares 23 17,502
Costs of share issue - (1,237)
Bank deposit matured/(invested) 2,500 (7,500)
Lease payments (157) (154)
Net cash generated from financing activities 2,366 8,611
Net (decrease)/increase in cash and cash equivalents (5,321) 2,561
Effect of FX movements on cash balances 166 (483)
Cash and cash equivalents at the start of year 14,703 12,625
Cash and cash equivalents at the end of the year 9,548 14,703
Notes to the Financial Statements
for the year ended 31 March 2022
1. General information
ReNeuron Group plc ("the Company") and its subsidiaries (together "the Group")
are engaged in the research and development of therapies using stem cells. The
Company is a public limited company incorporated and domiciled in England with
registered number 05474163. Its shares are admitted to trading on the AIM
market of the London Stock Exchange.
2. Basis of preparation
The unaudited financial information included in this preliminary results
announcement for the year ended 31 March 2022 and audited financial
information for the year ended 31 March 2021 does not comprise statutory
accounts within the meaning of section 434 of the Companies Act 2006. The
information has been extracted from the draft statutory financial statements
for the year ended 31 March 2022 which will be delivered to the Registrar of
Companies in due course and the report of the auditors for these statutory
financial statements is expected to include an emphasis of matter in respect
of a material uncertainty in relation to going concern, as further outlined in
note 3. Statutory financial statements for the year ended 31 March 2021 were
approved by the Board of directors on 6 August 2021 and have been delivered to
the Registrar of Companies. The report of the auditors on these financial
statements was unqualified.
The financial statements 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.
Whilst the financial information included in this preliminary announcement has
been prepared in accordance with IFRS, this announcement does not contain
sufficient information to comply with IFRS. The accounting policies used in
the preparation of these unaudited financial statements are consistent with
those used in the preparation of the audited financial statements for the year
ended 31 March 2021.
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 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. Following a strategic decision, it was
announced in January 2022 that the internal development of the Group's hRPC
programme would be halted, with existing resources refocused on the Group's
exosome technology platform extending the companies cash runway. It is
considered that this strategy provides the best opportunity to create
increasing and sustainable shareholder value.
Based on the above, the Directors expect that the Group's current financial
resources will be sufficient to support the business until at least mid-2023
and the Directors continue to seek opportunities to secure further revenues /
funding sufficient for the future needs of the business beyond mid-2023.
The Directors therefore consider it appropriate to continue to adopt the going
concern basis in the preparation of these financial statements. However, there
is no guarantee that 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 and Company's
ability to continue as a going concern. These financial statements do not
include the adjustments that would result if the Group were unable to continue
as a going concern.
4. Research and development costs
All research and development costs incurred in the year have been charged
directly to the Group Statement of Comprehensive Income.
5. Operating expenses
Unaudited Audited
2022 2021
£'000 £'000
Loss before income tax is stated after charging:
Research and development costs:
Employee benefits 2,530 3,258
Depreciation of property, plant and equipment 199 216
Depreciation of right-of-use asset - 19
Other expenses 5,339 6,010
Total research and development costs 8,068 9,503
General and administrative costs:
Employee benefits 2,308 2,190
Legal and professional fees 176 653
Depreciation of property, plant and equipment 25 46
Depreciation of right-of-use asset 100 99
Loss on disposal of fixed assets 3 2
Other expenses 951 75
Total general and administrative costs 3,563 3,746
Total research and development costs and general and administrative costs 11,631 13,249
6. Taxation
No corporation tax liability arises on the results for the year due to the
loss incurred.
As a loss-making small and medium-sized enterprise, the Group is entitled to
research and development tax credits at 14.5% (2020: 14.5%) on 230% (2020:
230%) of qualifying expenditure for the year to 31 March 2021.
Unaudited Audited
2022 2021
£'000 £'000
UK research and development tax credit at 14.5% (2021: 14.5%) 1,421 2,068
Overseas taxation (52) (5)
1,369 2,063
The tax credit compares with the loss for the year as follows:
Unaudited Audited
2022 2021
£'000 £'000
Loss before income tax 11,058 13,410
Loss before income tax multiplied by the main rate of corporation tax of 19% 2,101 2,548
(2021: 19%)
Effects of:
- difference between depreciation and capital allowances 42 (33)
- expenses not deductible for tax purposes (108) (132)
- losses not recognised (644) (550)
- adjustments in respect of prior year 30 236
Overseas taxes paid (52) (5)
Tax credit 1,369 2,063
No deferred tax asset has been recognised by the Group as there are currently
no foreseeable trading profits.
7. Basic and diluted loss per ordinary share
The basic and diluted loss per share is calculated by dividing the loss for
the financial year of £9,689,000 (2021: 11,347,000) by 56,975,677 shares
(2021: 39,128,925 shares), being the weighted average number of 1p Ordinary
shares in issue during the year.
Potential Ordinary shares are not treated as dilutive as the entity is loss
making.
8. Ageing profile of financial liabilities
Unaudited Audited
2022 2021
£'000 £'000
Trade and other payables due within twelve months 6,873 5,727
Current lease liabilities - due within one year 146 157
Non-current lease liabilities - due after more than one year 416 562
7,435 6,446
9. Cash used in operations
Unaudited Audited
Year ended Year
ended
31-Mar 31-Mar
2022 2021
£'000 £'000
Loss before income tax (11,058) (13,410)
Adjustments for:
Finance income (195) (20)
Finance expense 25 516
Depreciation of property, plant and equipment 224 262
Depreciation of right-of-use-asset 100 118
Loss on disposal of fixed assets 3 2
Share-based payment charges 649 764
Changes in working capital:
Receivables (90) 245
Payables 1,146 (552)
Cash used in operations (9,196) (12,075)
10. Reconciliation of net cash flow to movement in net debt
Unaudited Audited
2022 2021
£'000 £'000
(Decrease)/increase in cash and cash equivalents (5,321) 2,561
Effect of foreign exchange differences 166 (484)
Lease repayments 182 187
Lease interest (25) (32)
Net funds at start of period 13,984 11,752
Net funds at end of period 8,986 13,984
11. Analysis of net funds
Unaudited Audited
2022 2021
£'000 £'000
Cash and cash equivalents 9,548 14,703
Lease liabilities (562) (719)
Net funds 8,986 13,984
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