REG - Verici Dx PLC - Half-year Report
07/09/2022 07:00
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RNS Number : 5177Y Verici Dx PLC 07 September 2022
Verici Dx plc
("Verici Dx" or the "Company")
Half-year report
Strong data in validation study for Tuteva™ paving the way for commercial
launch
Verici Dx plc (AIM: VRCI), a developer of advanced clinical diagnostics for
organ transplant, announces its unaudited interim results for the six months
ended 30 June 2022.
Operational highlights (including post-period end)
· Positive data from multi-centre, international validation study for
Tuteva™ presented at American Transplant Congress ("ATC") 2022, paving way
for soft commercial launch of Tuteva™ in the United States in 2022
· Announced a collaboration with Illumina, Inc., to expedite the
operational launch of data analysis processing and predictive artificial
intelligence component of our products, using early access to the Illumina
Connected Analytics (ICA) platform
· Received, ahead of schedule, CPT® Proprietary Laboratory Analyses
("PLA") codes for Clarava™ and Tuteva™
· Completed analytical validation for Clarava™ and Tuteva™ in
February 2022, an essential element of defining the performance
characteristics and platform capabilities of in vitro diagnostic assays and a
key milestone towards commercialisation
· Raised gross proceeds of £10.0m in March 2022 via Placing and
Subscription
· Appointed initial commercial team to support Tuteva™ launch
· Confirmed positive initial results, in September 2022, for Clarava™
from an international clinical validation study; an expanded cohort from the
ongoing trial will be used to enrich the utility data for the assay and
support a statistically robust and clinically meaningful case for its adoption
in due course
Financial highlights
· Adjusted EBITDA loss of $4.91m (2021: loss of $2.52m), excluding
share-based payments and costs of new share issue
· $15.7m cash balance as at 30 June 2022 (31 December 2021: $10.3m),
augmented by the net proceeds of $12.5m from the issue of 28,571,429 new
ordinary shares in March 2022
· Net cash outflow from operating activities in the six months to 30
June 2022 was $4.9m (excluding the share issue costs charged to the Income
Statement) (six months to 30 June 2021: $2.8m) with investing activities
consuming a further $0.7m (six months to 30 June 2021: $0.7m)
Sara Barrington, Chief Executive Officer, said: "I have been delighted with
the significant progress that we have made over this six-month period, as
Verici Dx advances towards becoming a company with commercial products.
"The business is well funded following our March 2022 fundraise to advance all
three of our products as well as potential new growth opportunities, including
new partnerships such as our collaboration with Illumina. I am looking forward
to making further progress over the rest of the year and beyond, as we move
from being a purely research and development company to one with commercial
products."
Investor briefing
Sara Barrington, Chief Executive Officer, and David Anderson, Chief Financial
Officer, will provide a live presentation relating to the interim results via
the Investor Meet Company platform today at 15:00 BST.
The presentation is open to all existing and potential shareholders. Questions
can be submitted at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet VERICI
DX PLC via:
https://www.investormeetcompany.com/verici-dx-plc/register-investor
(https://www.investormeetcompany.com/verici-dx-plc/register-investor)
Investors who already follow Verici Dx on the Investor Meet Company platform
will automatically be invited.
A copy of the Company's interim results report will shortly be made available
on the Company's website.
Enquiries:
Verici Dx www.vericidx.com (http://www.vericidx.com)
Sara Barrington, CEO Via Walbrook PR
Julian Baines, Chairman
Singer Capital Markets (Nominated Adviser & Broker) Tel: 020 7496 3000
Aubrey Powell / Kailey Aliyar / Rachel Hayes
Walbrook PR Limited Tel: 020 7933 8780 or vericidx@walbrookpr.com
(mailto:renalytix@walbrookpr.com)
Paul McManus / Sam Allen / Mob: 07980 541 893 / 07502 558 258 /
Phillip Marriage 07867 984 082
About Verici Dx plc www.vericidx.com (http://www.vericidx.com)
Verici Dx is a developer of a complementary suite of leading-edge tests
forming a kidney transplant platform for personalised patient and organ
response risk to assist clinicians in medical management for improved patient
outcomes. The underlying technology is based upon artificial intelligence
assisted transcriptomic analysis to provide RNA signatures focused upon the
immune response and other biological pathway signals critical for transplant
prognosis of risk of injury, rejection and graft failure from pre-transplant
to late stage. The Company also has a mission to accelerate the pace of
innovation by research using the fully characterised data from the underlying
technology and collaboration with medical device, biopharmaceutical and data
science partners.
The foundational research was driven by a deep understanding of cell-mediated
immunity and is enabled by access to expertly curated collaborative studies in
highly informative cohorts in kidney transplant.
Chairman's statement
I am pleased to report strong progress over the six months to 30 June 2022, in
what has been a highly positive period for the Company, with significant
milestones achieved that have left us well positioned for further progress
towards commercialisation over the remainder of 2022 and beyond.
Our commercialisation pathway is now starting to be realised, and critically,
by the end of 2022, we will have moved from being a purely R&D company to
one with a commercial product, with Tuteva™ set for a soft sales launch
later this year, with a view to scaling up operations in 2023. Post-period
end, Clarava™ also demonstrated clinical significance via the recently
reported initial validation study results and Verici Dx is poised to take
advantage of the larger cohorts presented by the current wider validation
clinical trial to support further utility work and the clinical adoption of
Clarava™ in due course.
We made strong progress against our strategy during the period, particularly
related to our two lead products, Clarava™ and Tuteva™, for which we
achieved pricing codes as the first milestone for the two tests towards
commercial reimbursement, as well as having submitted both for pricing
consideration.
This progress culminated in the positive results of our clinical validation
study for Tuteva™, our post-transplant blood test focused on acute
rejection, including sub-clinical rejection, that were initially announced in
May, before the full results were presented to the clinical community at the
American Transplant Congress (ATC) in June. The results of the validation
study were highly positive, with Tuteva™ shown to have a significantly
higher PPV than currently available single kidney transplant blood tests and,
most significantly, from an inclusion of an 'all-comers' population which has
been very warmly received by the scientific community, as well as the positive
data itself. We believe this establishes a new industry standard in the
detection of acute kidney transplant rejection, and positions Tuteva™ well
for its soft commercial launch in the United States later this year.
Additionally, in March 2022, we completed a fundraise which raised gross
proceeds of £10.0 million (c.$13.0 million). We intend to use the funds,
along with the Company's existing resources, to accelerate and broaden our
platform, through advancing towards key milestones for our third product
Protega™, a liquid biopsy that aims to predict the risk of fibrosis and
long-term graft failure, continuing to push our commercialisation strategy for
Clarava™ and Tuteva™, and carrying out planned improvements to our
CLIA-certified laboratory. Some of the funds are also set to be used to
explore potential new commercial opportunities to enhance our platform, such
as adding new technology and AI capabilities.
The completion of this fundraise, amidst a difficult macroeconomic environment
which has particularly affected AIM-listed healthcare companies, is a
testament to the vast potential of our kidney transplant platform, and the
potential of our technology in wider applications. I would like to thank both
our existing and new shareholders for their support in the raise. Our current
cash position of $13.5 million provides us with a cash runway to the start of
2024.
In January 2022 we were proud to announce our collaboration with Illumina,
Inc. (NASDAQ: ILMN), a leading developer, manufacturer and marketer of life
science tools and integrated systems for large scale analysis of genetic
variation and function, whereby Verici Dx has clinically validated on Illumina
Connected Analytics (ICA), Illumina's new software platform, a strategic focus
area for Illumina.
On behalf of the Board, I would like to thank our employees, shareholders and
partners for their support, and we look forward to further updates throughout
the year, including working towards the soft commercial launch of our two lead
products, and further information on the progress of Protega™.
Julian Baines
Non-Executive Chairman
7 September 2022
Chief Executive Officer's Report
Overview
At our preliminary results earlier this year, we set out that by the end of
2022 Verici Dx will have transitioned from a fully R&D-focused company, to
one with commercial products. I have been delighted with the execution of our
strategy as we remain on track to achieve this goal, with the soft commercial
launch of Tuteva™ set for later this year and Clarava™ expanding its
validation cohort to support the commercial pathway of utility studies and
publications for its launch.
The highlight of this period was the publication of the data from our
international, multi-centre validation study for Tuteva™. In the study,
Tuteva™ demonstrated a significantly higher Positive Predictive Value
("PPV") than currently available kidney transplant single blood tests, which
was our key performance metric, in order for the test to provide clinicians
with an appropriate, reliable call to action to improve patient outcomes
post-transplant. The response to these results, as well as the robust design
of the validation study from the scientific community, was highly positive,
and reflects our excitement in having developed a powerful, highly specific
predictive tool that can enable clinicians to detect acute cellular rejection
accurately post-transplant.
Over H1 2022, we also achieved several other notable milestones, including
progressing our lead products towards commercial reimbursement, signing a
collaboration agreement with Illumina, Inc. (NASDAQ: ILMN), our March
fundraising which extended our cash runway, and a strengthening of our
commercial team with senior appointments.
Pipeline
Our platform of innovative kidney transplant tests use advanced
next-generation sequencing to define a personalised risk profile for each
patient. We believe we have unique products that support accurate, data-driven
clinical decisions, such as the most appropriate immunosuppressive therapy for
that patient. This has not only near-term scope to reduce the unnecessary and
serious consequences from over- or under-dosing for immunosuppression in
conjunction with kidney transplant, but also to improve the longevity of
transplanted kidneys and, by reducing the risk and rate of transplant failure,
much broader potential to deliver huge health economic benefits by improving
transplant outcomes.
Our three products are:
· Clarava™, a pre-transplant prognosis test for the risk of early
acute rejection;
· Tuteva™, a post-transplant test focused upon acute cellular
rejection, including sub-clinical rejection; and
· Protega™, a liquid biopsy that aims to predict the risk of
fibrosis and long-term graft failure.
In early 2022, we received CPT® Proprietary Laboratory Analyses ("PLA")
codes, from the American Medical Association, and successfully completed
analytical validation for Clarava™ and Tuteva™. The PLA codes marked the
first step for the two tests on the path for commercial reimbursement, which
is comprised of three components: code, price and coverage. CPT® codes offer
health care professionals a uniform language for coding medical services and
procedures and allow clinical laboratories to more specifically identify their
tests when billing Medicare and commercial insurers. Analytical validation is
an essential element of defining the performance characteristics and platform
capabilities of in vitro diagnostic assays, including reproducibility,
accuracy, limits of detection, and risk of interferences for any clinician
wanting comprehensive data about the reliability of testing.
In June, we presented highly positive data from our international,
multi-centre, all-comers validation study for Tuteva™ at the 2022 American
Transplant Congress ("ATC") and are due to present at ASN's Kidney Week on
November 3-6, 2022.
Currently available single blood tests that look for signs of transplant
damage typically have a high Negative Predictive Value ("NPV"), but a low
Positive Predictive Value. These values mean that if the blood test returns a
negative result, clinicians can be confident that there is no current
rejection occurring but uncertain as to a positive result is from a rejection
or an infection, or physical trauma. Consequently, these tests are functioning
primarily as a 'rule out' tool, rather than a 'rule in' one. This has proved
difficult for clinicians, who need to know with some degree of confidence
whether or not their patient requires further intervention in the form of
immunosuppression. This is especially true in the case of kidney transplant,
where approximately half of cases have a rejection event. Clinicians need a
'rule in' test so they can take appropriate action with confidence.
Inappropriate dosing of immunosuppressant medication (in either direction) can
have harmful consequences for the patient and create additional or unnecessary
healthcare costs. There has therefore been a growing demand for a kidney
transplant test that is more capable of identifying those patients that are
experiencing acute cellular rejection post-transplant and can empower
clinicians to initiate further treatment for their patients, which we believe
Tuteva™ will now be able to meet. This is why the significantly higher PPV
result seen with Tuteva™, compared to other available tests, is such an
important performance metric.
Importantly, our validation study was a blinded 'all-comers' patient
population across 14 international transplant centres. This means that we were
able to test the power of Tuteva™ within a clinically realistic context that
included all types of rejection. Our FDA-standard study design, alongside the
positive results, was well received by the scientific community at ATC,
providing validation of our strategic decision earlier in the year to prolong
the final close of the study in order to ensure inclusion from all of our
European sites. We believe that the highly positive results reflect the wide
clinical applicability of the test for comprehensive commercial adoption in a
real-world setting, and position Tuteva™ for a soft commercial launch in the
US later this year.
Clarava™ was also able to identify and validate successfully a blood-based
RNA signature (profile) that effectively identified patients most likely to
experience a future kidney rejection event. These early validation results
announced in September confirm and expand the previous feasibility study,
through the incorporation of advanced next sequencing technology combined with
sophisticated bioinformatics, to identify patient-level immune cell-type and
biological pathways associated with kidney rejection. Clarava™ represents a
completely novel approach to characterising a pre-transplant patient's immune
profile which has broad implications for treatment planning and monitoring. To
generate a broad clinical acceptance within the diverse transplant community,
we are extending enrolment for a wider cohort for publication over the next
six months using our existing clinical trial network. It is anticipated that
the expansion of our validation cohort will serve to enrich the utility of the
assay and ultimately improve outcomes. This has no material cost impact, as
the study is ongoing for our other products.
Partnerships and agreements
In January 2022 we entered into a collaboration with Illumina, granting us
early access to Illumina Connected Analytics (ICA), Illumina's new software
platform, which provides us with the ability to process large datasets in a
streamlined manner. This supports our leading-edge technology approach and
provides a foundation for future data science discovery, expansion and
collaboration opportunities.
Collaborating with such a high-quality partner as Illumina is an indicator of
the strength of our platform, and access to the ICA platform has materially
enhanced our data processing capabilities, as well as boosted our ability to
develop highly predictive products in the future. This partnership supports
our wider goal of improving patient outcomes within organ transplantation,
where there remains an urgent clinical need.
Management and staff
During the period, we hired our initial commercial team focused upon the
commercial soft launch of Tuteva™ in the US later this year, ahead of a
wider launch in 2023.
As of 30 June 2022, the Company had 13 staff members.
Financials
Cash balance as of 30 June 2022 was $15.7m (31 December 2021: $10.3m),
augmented by the net proceeds from the issue of 28,571,429 new ordinary shares
in March 2022 of $12.5m. Net cash outflow in the six months to 30 June 2022
from operating activities was $4.9m (excluding the share issue costs charged
to the Income Statement) (six months to 30 June 2021: $2.8m) with investing
activities consuming a further $0.7m (six months to 30 June 2021: $0.7m) and
unrealised foreign exchange loss of $1.5m (six months to 30 June 2021: gain of
$0.2m).
The most significant expenditure continued to relate to the work done on our
clinical validation study of $2.3m (year to 31 December 2021: $2.8m) followed
by our total employee cost in the period of $1.3m, including share-based
payment charge of $0.1m (year to 31 December 2021: $2.4m, including
share-based payment charge of $0.4m). For the period to 30 June 2022 the
average number of employees was 11, and as of the date of this report we
employ 14 people.
Outlook
Over the remainder of the rest of the year, we are focused on the soft
commercial launch of Tuteva™, with a view to scaling up to a wider launch in
2023. Our transition to having a commercially launched product, a little over
two years after our IPO, is a reflection of the huge amount of work that has
been put in by our entire team.
We are developing a health economics model to aid our commercialisation
efforts, which we expect to submit for publication by the end of the year. We
are also expected to engage in clinical utility and real-world evidence
studies to support adoption of our two lead products both later this year and
into next year.
Following our fundraising in March 2022, we have the capital required to not
only progress our platform through the commercialisation of both Clarava™
and Tuteva™, but also progress Protega™ and explore exciting growth
opportunities. Having already obtained CPT codes, we will seek to determine
pricing for both of our lead products, and coverage determinations for
Clarava™. Pricing pathways will be announced later this year with a
crosswalk determination being effective by the end of 2022 and a gapfill
process would take the pricing into 2023 with the MolDx proposed pricing
expected by the end of Q2. Tuteva™ is expected to be eligible for and
covered by an existing local coverage determination issued by Palmetto under
the MolDX system.
On behalf of the Company, I would like to thank the shareholders for their
ongoing support in this transitional year and look forward to the commercial
progress and further milestones for the rest of the year.
Sara Barrington
Chief Executive Officer
7 September 2022
Consolidated condensed statement of profit or loss and other comprehensive
income
for the six months ended 30 June 2022
Six months to Six months to Year to
30 June 30 June 31 December
Note 2022 2021 2021
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Administrative expenses 5 (4,914) (2,525) (7,151)
Depreciation and amortisation 5 (275) (183) (438)
Share-based payments 5 (195) (128) (740)
Exceptional expense - costs of share issue 5 (90) - -
_________ _________ _________
Loss from operations (5,474) (2,836) (8,329)
Finance income / (expense) 7 (3) -
_________ _________ _________
Loss before tax (5,467) (2,839) (8,329)
Tax expense - - -
_________ _________ _________
Loss from continuing operations (5,467) (2,839) (8,329)
Other comprehensive income:
Exchange (losses) / gains arising on translation of foreign operations (1,729) 281 (50)
_________ _________ _________
Loss and total comprehensive income attributable to the owners of the Company (7,196) (2,558) (8,379)
_________ _________ _________
Earnings per share attributable to the
ordinary equity holders of the parent
Loss per share
Basic and diluted (US$ cents) 6 ($0.034) ($0.02) ($0.059)
_________ _________ _________
The results reflected above relate to continuing operations
Consolidated statement of financial position
as at 30 June 2022
30 June 30 June 31 December
Note 2022 2021 2021
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Assets
Current assets
Trade and other receivables 7 516 426 656
Cash and cash equivalents 15,717 14,549 10,340
_________ _________ _________
16,233 14,975 10,996
_________ _________ _________
Non-current assets
Property, plant and equipment 1,310 912 786
Intangible assets 1,944 1,884 2,007
_________ _________ _________
3,254 2,796 2,793
_________ _________ _________
Total assets 19,487 17,771 13,789
_________ _________ _________
Liabilities
Current liabilities
Trade and other payables 8 (1,874) (577) (1,804)
_________ _________ _________
NET ASSETS 17,613 17,194 11,985
_________ _________ _________
Issued capital and reserves attributable to
owners of the parent
Share capital 219 182 182
Share premium reserve 32,946 20,354 20,354
Share-based payments reserve 3,730 2,923 3,535
Foreign exchange reserve (750) 1,310 979
Retained earnings (18,532) (7,575) (13,065)
_________ _________ _________
TOTAL EQUITY 17,613 17,194 11,985
_________ _________ _________
Consolidated statement of cash flows
for the six months ended 30 June 2022
Six months to Six months to Year to
30 June 30 June 31 December
2022 2021 2021
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Cash flows from operating activities
Loss for the period (5,467) (2,839) (8,329)
Adjustments for:
Depreciation of property, plant and equipment 203 122 295
Amortisation of intangible fixed assets 72 61 143
Finance (income) / expense (7) 3 -
Share-based payment expense 195 128 740
_________ _________ _________
(5,004) (2,525) (7,151)
(Increase) / decrease in trade and other receivables (140) (103) (331)
Increase / (decrease) in trade and other payables 116 (160) 1,146
Income taxes paid - - -
_________ _________ _________
Net cash outflow from operating activities (5,028) (2,788) (6,336)
_________ _________ _________
Cash flows from investing activities
Purchases of property, plant and equipment (561) (508) (618)
Purchase of intangibles (161) (154) (348)
_________ _________ _________
Net cash used in investing activities (722) (662) (966)
Cash flows from financing activities
Issue of ordinary shares 13,070 - -
Expenses of share issue (441) - -
Loan repayments - - (74)
Interest received / (paid) 7 (3) -
_________ _________ _________
Net cash from financing activities 12,636 (3) (74)
Net increase / (decrease) in cash and cash equivalents 6,886 (3,453) (7,376)
Cash and cash equivalents at beginning of period 10,340 17,751 17,751
Exchange movement on cash and cash equivalents (1,509) 251 (35)
_________ _________ _________
Cash and cash equivalents at end of period 15,717 14,549 10,340
_________ _________ _________
Consolidated statement of changes in equity
for the six months ended 30 June 2022
Share Share Share-based Foreign Retained Total Total
capital premium payment exchange earnings attributable equity
reserve reserve to equity
holders of
parent
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
1 January 2021 182 20,354 2,795 1,029 (4,736) 19,624 19,624
Comprehensive income for the period
Loss for the period - - - - (2,839) (2,839) (2,839)
Other comprehensive income - - - 281 - 281 281
Contributions by and distributions to owners
Share based payments charge - - 128 - - 128 128
_________ _________ _________ _________ _________ _________ _________
At 30 June 2021 182 20,354 2,923 1,310 (7,575) 17,194 17,194
_________ _________ _________ _________ _________ _________ _________
At 30 June 2021 182 20,354 2,923 1,310 (7,575) 17,194 17,194
Comprehensive income
Loss for the period - - - - (5,490) (5,490) (5,490)
Other comprehensive income - - - (331) - (331) (331)
Contributions by and distributions to owners
Share-based payment - - 612 - - 612 612
_________ _________ _________ _________ _________ _________ _________
At 31 December 2021 182 20,354 3,535 979 (13,065) 11,985 11,985
_________ _________ _________ _________ _________ _________ _________
Consolidated statement of changes in equity
for the six months ended 30 June 2022
Share Share Share-based Foreign Retained Total Total
capital premium payment exchange earnings attributable equity
reserve reserve to equity
holders of
parent
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
31 December 2021 182 20,354 3,535 979 (13,065) 11,985 11,985
Comprehensive income for the period
Loss for the period - - - - (5,467) (5,467) (5,467)
Other comprehensive income - - - (1,729) - (1,729) (1,729)
Contributions by and distributions to owners
Issue of share capital 37 13,033 - - - 13,070 13,070
Costs of share issue - (441) - - - (441) (441)
Share-based payment - - 195 - - 195 195
_________ _________ _________ _________ _________ _________ _________
At 30 June 2022 219 32,946 3,730 (750) (18,532) 17,613 17,613
_________ _________ _________ _________ _________ _________ _________
Notes forming part of the consolidated financial statements
for the six months ended 30 June 2022
1 General information
The principal activity of Verici Dx plc (the "Company") is the development of
prognostic and diagnostic tests for kidney transplant patients.
The Company is a public limited company incorporated in England and Wales and
domiciled in the UK. The address of the registered office is Avon House, 19
Stanwell Road, Penarth, Cardiff CF64 2EZ and the company number is 12567827.
The Company was incorporated as Verici Dx Limited on 22 April 2020 as a
private company and on 9 September 2020 the Company was re-registered as a
public company and changed its name to Verici Dx plc.
2 Summary of significant accounting policies
The principal accounting policies adopted in the preparation of the historical
financial information of the Company, which have been applied consistently to
the period presented, are set out below:
Basis of preparation
The accounting policies adopted in the preparation of the interim consolidated
financial information are consistent with those of the preparation of the
Group's annual consolidated financial statements for the year ended 31
December 2021. No new IFRS standards, amendments or interpretations became
effective in the six months to 30 June 2022.
Statement of compliance
This interim consolidated financial information for the six months ended 30
June 2022 has been prepared in accordance with IAS 34, 'Interim financial
reporting' and the AIM Rules of UK companies. This interim consolidated
financial information is not the Group's statutory financial statements and
should be read in conjunction with the annual financial statements for the
year ended 31 December 2021, which have been prepared in accordance with UK
adopted International Accounting Standards (UK IFRS) and have been delivered
to the Registrar of Companies. The auditors have reported on those accounts;
their report was unqualified, did not include references to any matters to
which the auditors drew attention by way of emphasis of matter without
qualifying their report and did not contain statements under section 498(2) or
(3) of the Companies Act 2006.
The interim consolidated financial information for the six months ended 30
June 2022 is unaudited. In the opinion of the Directors, the interim
consolidated financial information presents fairly the financial position, and
results from operations and cash flows for the period. Comparative numbers for
the six months ended 30 June 2021 are unaudited.
Measurement convention
The financial information has been prepared under the historical cost
convention. Historical cost is generally based on the fair value of the
consideration given in exchange for assets.
The preparation of the financial information in compliance with IFRS requires
the use of certain critical accounting estimates and management judgements in
applying the accounting policies. The significant estimates and judgements
that have been made and their effect is disclosed in note 3.
Basis of consolidation
Where the company has control over an investee, it is classified as a
subsidiary. The company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The consolidated financial statements present the results of the company and
its subsidiaries ("the Group") as if they formed a single entity. Intercompany
transactions and balances between group companies are therefore eliminated in
full.
The consolidated financial statements incorporate the results of business
combinations using the acquisition method. In the statement of financial
position, the acquiree's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the acquisition
date. The results of acquired operations are included in the consolidated
statement of profit or loss and other comprehensive income from the date on
which control is obtained. They are deconsolidated from the date on which
control ceases.
Going concern
The Group is in the development phase of its business and has not generated
any revenues. At 30 June 2022 the Group has available cash resources of $15.7m
following its fund raise in March 2022.
The Board has considered the impact of the ongoing COVID-19 pandemic. There
has been minimal impact on the Company to date. Given the impact of COVID-19
in the economy generally, the Board has performed a number of stress tests to
assess the ability of the Company to continue as a going concern.
The Directors have prepared cash flow forecasts for the Group for a review
period of 12 months from the date of approval of this historical financial
information. These forecasts reflect an assessment of current and future
market conditions and their impact on the Company's future cash flow
performance.
The forecasts have been sensitised for additional costs which may be incurred
in the review period. In the sensitised scenario, the forecasts indicate the
Company would still have sufficient cash to continue as a going concern.
Having considered the points above, the Directors remain confident in the
long-term future prospects for the Group, and their ability to continue as a
going concern for the foreseeable future. They therefore adopt the going
concern basis in preparing the historical financial information of the Group.
Taxation
Income tax expense represents the sum of the tax currently payable and
deferred tax.
3 Judgements and key sources of estimation uncertainty
The preparation of the Company's historical financial information under UK
IFRS requires the Directors to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities. Estimates and judgements are continually evaluated and
are based on historical experience and other factors including expectations of
future events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates.
The Directors consider that the following estimates and judgements are likely
to have the most significant effect on the amounts recognised in the financial
information.
Carrying value of intangible assets, property, plant and equipment
In determining whether there are indicators of impairment of the Company's
intangible assets, the Directors take into consideration various factors
including the economic viability and expected future financial performance of
the asset and when it relates to the intangible assets arising on a business
combination, the expected future performance of the business acquired.
4 Segment information
The Group has one division being the development of prognostic and diagnostic
tests for kidney transplant patients. The directors consider that all
activities relate to this segment. All the non-current assets of the Group
are located in, or primarily relate to, the USA.
5 Expenses by nature
Six months to Six months to Year to
30 June 30 June 31 December
2022 2021 2021
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Employee benefit expenses 1,289 848 2,392
Depreciation of property, plant and equipment 203 122 295
Amortisation of intangible assets 72 61 143
Research and development costs 2,290 1,044 2,810
Licenses and milestones 550 - 250
Professional costs 515 455 921
Share-based payment expense for non-employees 77 44 309
Foreign exchange losses / (gains) (510) 3 (182)
Costs of share issue 90 - -
Other costs 898 259 1,391
6 Earnings per share
Six months to Six months to Year to
30 June 30 June 31 December
2022 2021 2021
US$ US$ US$
Unaudited Unaudited Audited
Numerator
Loss for the period used in basic EPS (5,466,168) (2,839,233) (8,329,829)
Denominator
Weighted average number of ordinary shares used in basic EPS 158,890,673 141,747,816 141,747,816
Resulting loss per share (US$0.034) (US$0.02) (US$0.059)
The Company has one category of dilutive potential ordinary share, being share
options. The potential shares were not dilutive in the period as the Group
made a loss per share in line with IAS 33.
7 Trade and other receivables
30 June 30 June 31 December
2022 2021 2021
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Prepayments 324 207 406
Other debtors 192 219 250
_________ _________ _________
516 426 656
_________ _________ _________
8 Trade and other payables
30 June 30 June 31 December
2022 2021 2021
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Trade payables 385 253 160
Other creditors 186 - -
Accruals 1,303 324 1,644
_________ _________ _________
Total trade and other payables 1,874 577 1,804
_________ _________ _________
The carrying value of trade and other payables classified as financial
liabilities measured at amortised cost approximates fair value.
9 Share-based payment
On 28 October 2020, the Board adopted the Share Option Plan to incentivise
certain of the Group's employees and Directors. The Share Option Plan provides
for the grant of both EMI Options and non-tax favoured options. Options
granted under the Share Option Plan are subject to exercise conditions as
summarised below.
The Share Option Plan has a non-employee sub-plan for the grant of Options to
the Company's advisors, consultants, non-executive directors, and entities
providing, through an individual, such advisory, consultancy, or office holder
services. In addition there isa US sub-plan for the grant of Options to
eligible participants in the Share Option Plan and the Non-Employee Sub-Plan
who are US residents and US taxpayers.
With the exception of options over 10,631,086 shares, which vested immediately
on grant, the options vest equally over twelve quarters from the grant date.
If options remain unexercised after the date one day before the tenth
anniversary of grant such options expire. The Options are subject to exercise
conditions such that they shall, subject to certain exceptions, vest in equal
quarterly instalments over the three years immediately following the date of
grant, which vesting shall accelerate in full in the event of a change of
control of the Company.
Weighted
average
exercise
price (p) Number
Outstanding at 22 April 2020 - -
Granted during the period 32.0 14,574,782
Exercised during the period 32.0 (10,631,086)
_________ _________
Outstanding at 31 December 2020 and 30 June 2021 32.0 3,943,696
Granted during the period 62.61 990,000
_________ _________
Exercisable at 31 December 2021 26.03 4,933,696
Granted during the period 37.97 454,370
Cancelled during the period 69.50 (120,000)
_________ _________
Outstanding at 30 June 2022 26.04 5,268,066
_________ _________
The Group recognised total expenses of $195,000 as exceptional expenses
separate to administrative expenses relating to equity-settled share-based
payment transactions during the period to 30 June 2022, $740,000 in the year
to 31 December 2021 and $128,070 in the six months to 30 June 2021.
10 Events after the reporting date
There have been no events subsequent to the period end that require disclosure
in these financial statements.
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