REG - Verici Dx PLC - Half-year Report
29/09/2023 07:00
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RNS Number : 0890O Verici Dx PLC 29 September 2023
Verici Dx plc
("Verici Dx" or the "Company")
Half-year report
Continuing to build the foundations for commercial success.
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 2023.
Operational highlights (including post-period end)
· Initial revenues following the commercial launch of our first
product, Tutivia™, the Company's post-transplant prognostic test for the
assessment of risk of acute kidney rejection.
o Full year revenues from Tutivia™ are likely to be less than expected
although the Company has recently doubled the number of US transplant centers
as early adopters of the test.
· The impact of lower Tutivia revenues is expected to be offset by
higher than expected research-related revenues so that that cash runway
expectations to mid-2024 are unchanged at this time.
· Successful clinical validation of our second product, Clarava™, the
Company's pre-transplant prognostic test, demonstrating a statistically
significant result and capability to stratify patients based on their likely
immune response to a transplanted kidney, informing a clear, actional response
for clinicians.
o Clarava™ is on track for initial US commercial use by the end of 2023
under prospective real-world evidence studies.
· Completed patient enrolment for the multi-centre clinical validation
study of the Company's third product, Protega™, assessing long-term outcomes
for kidney transplant patients.
· Received preliminary gapfill median rate of $2,650 proposed for both
Clarava™ and Tutivia™ by the Centers for Medicare & Medicaid Services
("CMS"). These rates are due to be finalised later this year and represent a
substantial uplift from the Company's initial assumption for modelling
purposes.
· Two key patents granted in the United States underpinning Verici Dx's
products.
· Achieved CLIA Certificate of Compliance for clinical laboratory in
Nashville, TN, USA, a key requirement to obtaining insurance reimbursement
coverage under Medicare and allowing for expanded commercial launch of
Tutivia™ in 49 out of 50 US states to date.
· Submitted final responses to comments for our peer-reviewed
publication on the Tutivia clinical validation. Final publication dependent on
publishers.
· Initiated studies in our databank to facilitate product development
and further research collaborations.
· Obtained Medicaid approvals in 15 States and a further 12 States
pending.
Outstanding clinician feedback on Tutivia™
We have been delighted with the feedback on Tutivia™ following its
commercial launch at the start of 2023.
"In the first few months post-transplant there are many rejection events and
yet in my opinion we have not really had a biomarker that can assist at this
critical time. Tutivia™ is able to give the clinician reliable test results
as soon as the first week post-transplant and so is an early biomarker test
which addresses this critical need."
Dr Nicolae Leca Professor, Medical Director, Kidney and Pancreas Transplant -
University of Washington
Financial highlights
· Adjusted EBITDA loss of $4.8m (six months to 30 June 2022: loss of
$5.0m), excluding share-based payments.
· $5.3m cash balance as at 30 June 2023 (31 December 2022: $9.8m).
· Net cash outflow from operating activities in the six months to 30
June 2023 was $4.7m (six months to 30 June 2022: $5.0m) with investing
activities consuming a further $0.1m (six months to 30 June 2022: $0.7m).
The full year revenues are expected to be lower than originally projected from
Tutivia but offset by higher than expected revenues from research
collaborations. Revenues and containment of total costs mean that cash runway
expectations to mid-2024 are unchanged at this time.
Sara Barrington, Chief Executive Officer of Verici Dx, said:
"I am proud of the progress we have made in the first six months of this year.
The clinician response to our first product, Tutivia™, following its
commercial launch at the start of the year clearly demonstrates how much they
value the key benefits and recognise the strong differentiating features. We
are also excited to have announced a second successful product, Clarava™,
following the recently completed clinical validation study showing excellent
results. This allows us to prepare for its initial launch in due course. We
also completed enrolment for the validation study on our third product,
Protega™. Whilst this product has a much longer time frame, it completes the
end-to-end testing for the portfolio as we look ahead.
"Although the timing effects on early adoption are frustrating, we have been
able to make savings in other areas and are focused on research collaborations
to help build a solid platform for future growth. At the same time, we are
continuing to deliver on our strategy of transforming kidney transplant
patient outcomes, as we move further into commercialisation."
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 on Thursday October 5 at 4.30pm BST.
This 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 / Sam Butcher
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.
Chief Executive Officer's Report
Progress in the first six months of 2023 saw the Company transition to a fully
commercial-stage business following the initial launch of Tutivia™.
Following the successful clinical validation of our pre-transplant test,
Clarava™, we are also now poised for the commercialization of our second
product starting with prospective real-world evidence studies. Turning to our
third product, Protega™, we completed enrolment for the validation trial and
expect to be fully completed with the 24-month end point in Q1 2025, although
the Company expects to review performance on an interim timepoint. Together,
these demonstrate the clinical validity of the underlying technology in RNA
signatures for kidney transplant patients, providing early predictive tests to
cover the full transplant lifecycle, from pre-transplant to late-stage,
enabling clinicians to make more informed treatment decisions.
In addition, the Company achieved a number of key operational milestones
during the period, including receiving our CLIA Certificate of Compliance now
covering 49 states, including California representing 10% of US transplants by
volume, and the strengthening of our intellectual property portfolio.
Executing on commercial pathway
Tutivia™ commercially launched in January 2023, following an initial pilot
launch in December 2022. We continue to work with leading US transplant
centers to support the adoption and integration of Tutivia™ into their
clinical pathways to encourage consistent and recurring utilisation. This
provides valuable information for us to make Tutivia™ as simple as possible
for clinicians to use and interpret, which in turn will help support the
accelerated roll out of the test to other major transplant centers across the
US. The Company previously highlighted the short-term confusion by clinical
centers as they assessed the announcements made by CMS and this led to a slow
down in bringing in centers into the early adopter program in Q2 and early
Q3. Based on our current interactions with centers this appears to have been
resolved and we are pleased to report a recent doubling of adopting centers in
the later part of Q3. Timing of the submission of the application under the
Local Coverage Determination is predicated upon the acceptance of the clinical
validation publication for Tutivia and having recently responded to peer
reviewer questions we are hoping that this is now imminent.
We also announced the successful validation results from our multi-centre
clinical validation study for Clarava™. The study, which included a broad
and diverse group of patients preparing to receive a kidney transplant across
13 centers, demonstrated a statistically significant result, identifying
patients that are at increased risk for a kidney rejection event in the
critical first 60 to 90 days post-transplant after receiving a kidney from a
deceased donor (c.65,000 patients eligible per year). Study data analysis of
the clinical performance of Clarava™ determined that patients of high risk
based on their test result were approximately six times more likely to have a
rejection than those of low risk. This demonstrated Clarava™ to be capable
of informing a clear, actionable response from clinicians The Company remains
on track to commence the initial US launch of Clarava™ before the end of
2023 through prospective real-world evidence studies.
Enrolment into the longer duration Protega™ validation study was finalised
in the first quarter of 2023. Protega™ is the third product to emerge from
our platform of personalised, predictive RNA signature tests, completing our
offering for end-to-end kidney transplant testing, from pre-transplant to
long-term damage. We expect that the final validation point will be completed
after follow-up at the 24-month point for the last patient tested, which is
expected to be in Q1 2025. The Company expects to be able to review interim
data before this point.
Operational milestones
During the period we successfully progressed our laboratory registration
status to CLIA Certificate of Compliance by the Centers for Medicare &
Medicaid ("CMS"), allowing our commercial clinical operations to process
samples from 45 US states, following an inspection by CMS of our clinical
laboratory in Franklin, Tennessee. In July, we received authorisation from a
further four states, including California, meaning Verici Dx is now fully
accredited in 49 states, and is currently working on reaching accreditation in
New York state, solidifying our commercial positioning.
This also represents a major milestone towards US Medicare reimbursement, for
which we are preparing our submission, a key milestone to driving adoption
with Medicare covering 63.9 million US patients. We have also now received a
preliminary Medicare price recommendation of $2,650 for both Clarava™ and
Tutivia which represents an increase to the price used in previous
forecasts. The price will be finalised later this year following a period of
public consultation. This is a key milestone in our commercial strategy and
advances us closer to achieving coverage under Medicare.
Additionally, registration for Medicaid has been approved in 15 states, as
well as with BlueCross Blue Shield of Tennessee, the largest health benefit
plan company in the state, with a further 12 states pending. Together,
Medicaid and Medicare patients account for 65% of all transplant recipients
across the US(1).
The Company was also granted two key patents in the United States that support
and protect the Company's core technologies in RNA signature biomarker tests
used for assessment of the prognostic risk pre-transplant (Clarava™) and
post-transplant (Tutivia™) of acute kidney transplant rejection. The
protection of the Company's intellectual property is fundamental to our
strategy of amassing full transcriptomic data from the biological systems and
interactions associated with transplant rejection and, over the longer term,
informing transplant analysis in other organs and in the broader field of
immune-mediated diseases.
Management and staff
During the period, we hired one additional member of staff to assist with the
research asset, whilst two employees exited. As of 30 June 2023, the Company
had 14 employees. As previously noted, the commercial team is sufficient for
the early adopter program but will need to be increased at the appropriate
time to drive more widespread adoption.
Financials
Cash balance as of 30 June 2023 was $5.3m (30 June 2022: $15.7m; 31 December
2022: $9.8m), the prior period 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 2023 from operating activities was $4.7m (six months
to 30 June 2022: $5.0m) with investing activities consuming a further $0.1m
(six months to 30 June 2022: $0.7m) and unrealised foreign exchange gain of
$0.3m (six months to 30 June 2022: loss of $1.5m).
Our largest item of expenditure is employment costs, being $1.8m (six months
to 30 June 2022: $1.3m), reflecting the additions to the team on the
commercial and data asset side. We began the year with 15 members of staff
and end the period with 14 members of staff. In the six months to 30 June
2022 our average team size was 10. As we have passed the peak of our clinical
trial costs our second highest spend on research and development has reduced,
with the cost in the period of $1.6m (six months to 30 June 2022 - $2.3m).
Updated Trading Position
Our expectation for a cash runway extending to mid-2024 was predicated on our
revenue assumptions regarding the number of test results delivered and the
subsequent reimbursement of those tests. In addition, the number of test
results delivered was based on our assumptions about the number of US
transplant centers ordering the test.
Modest revenue of $19k for the first half reflected the early use of
Tutivia™ in a small number of centers in the early adoption program. As of
the date of this report, we are expanding our centers in the program and are
already seeing an increase in number of tests ordered both from new centers
and from recurring ordering from established clinicians. We are pleased to see
this increase in orders coming through, however, it is still lower than our
original assumptions. This reflects a number of factors:
- In order to focus on a high-quality customer experience whilst
carefully managing costs, we made the commercial decision to operate with a
very small sales team of two persons to cover business development and
clinical communications. A larger team will be needed to support further
growth beyond the early adopting centers. Going forward, we can consider a
distribution partner or a direct sales force of around 10 to 12 individuals to
facilitate more ambitious targets over time. This size of direct sales team
would remain modest relative to industry averages.
- Whilst we believe the impact of some of the recent CMS
clarifications(2) is favourable for Verici Dx over the medium-term, the need
to understand the impacts to testing protocols across the market has, on
occasion, constrained our ability to initiate or progress conversations.
Towards the end of Q3 this short-term impact appears to have lessened
- We have also encountered some logistical issues in sample
collection affecting early adoption, which we have now resolved.
Nationally, 65% of transplant patients are covered by Medicare and Medicaid.
For the Company to be able to be fully reimbursed by Medicare we need the
award of a Local Coverage Determination ("LCD"). Part of the process of
obtaining this LCD is the submission of a Technical Assessment which, among
other matters, includes a peer reviewed publication of our clinical validation
study for Tutivia™. The publication process has taken longer than originally
anticipated, due to extraneous factors, thus delaying our ability to submit
the Technical Assessment and apply for the award of the LCD. This directly
impacts on the time taken for tests to be reimbursed. Our original
expectation was reimbursement would occur in Q4 of 2023. This is now
expected in Q1 of 2024 but it is important to note that there is a route for
retrospective reimbursement to be applied on tests ordered in the year before
approval of the LCD is obtained.
There has been demonstrable progress of our two lead products and with a third
product in the pipeline, underpinned by the strong platform and opportunities
for revenues from the research asset through research collaborations, and
despite currently operating with a very small sales team, the Company has
established a solid commercial platform for growth, with a rising revenue
stream.
The combination of slower initial traction with US transplant centers and the
delayed reimbursement profile would ordinarily have shortened our expected
cash runway to mid-2024, but this reduction is expected to be offset by
research revenues and runway guidance is therefore unchanged.
Outlook
Looking ahead, we are focussed on accelerating the commercial rollout of
Tutivia™ and will look to enrol more leading transplant centers in the US to
begin using the test. Concurrently, we remain on track to commence the initial
US commercial launch of Clarava™ before the end of the year, which will
support the utility assessments to demonstrate the real-world clinical value
of the test.
We expect to secure both Medicare and private payor pricing and coverage for
Tutivia™ this year, which will be a key catalyst to enabling more widespread
adoption as well as revenue generation and cash collection. Following our
receipt of the CLIA Certificate of Compliance covering 49 states, we will also
look to receive full accreditation in New York, which has its own compliance
requirements. Given Clarava™ is a first-in-class pre-transplant test,
adoption can be expected to be promoted by the results of prospective
real-world evidence on utility for hospital centers.
As previously indicated, there are further research and product development
opportunities from the clinical trial samples and data. For example, we will
be exploring further samples drawn from living donor transplant recipients to
assess Clarava's™ potential utility in that patient population, in addition
to assessing the anticipated combination of using the test in conjunction with
Tutivia™, as well as assessing the role of urine-based testing.
Following the publication on Tutivia™ validation results, we are expecting
to submit publications for Clarava™ validation, analytical validation and
health economics models to aid our commercialisation efforts. We also expect
to engage in real-world evidence studies to further support adoption of our
products both later this year and into next year.
On behalf of the Company, I would like to thank our shareholders for their
ongoing support and look forward to providing further updates in due course.
Sara Barrington
Chief Executive Officer
28 September 2023
(1. Scientific Registry of Transplant Recipients: OPTN/SRTR 2021 Annual Data
Report: Kidney)
(2.) (Article - Billing and Coding: MolDX: Molecular Testing for Solid Organ
Allograft Rejection (A58061) (cms.gov)
(https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleid=58061&ver=17&=)
)
( )
Consolidated condensed statement of profit or loss and other comprehensive
income
for the six months ended 30 June 2023
Six months to Six months to Year to
30 June 30 June 31 December
Note 2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Revenue 5 19 - -
Cost of sales (3) - -
_________ _________ _________
16 - -
Administrative expenses 6 (4,825) (5,004) (10,497)
Depreciation and amortisation 6 (472) (275) (640)
Share-based payments 6 (99) (195) (318)
_________ _________ _________
Loss from operations (5,380) (5,474) (11,455)
Finance income 122 7 53
Finance expense (15) - (5)
_________ _________ _________
Loss before tax (5,273) (5,467) (11,407)
Tax expense - - -
_________ _________ _________
Loss from continuing operations (5,273) (5,467) (11,407)
Other comprehensive income:
Exchange gains / (losses) arising on translation of foreign operations 353 (1,729) (2,016)
_________ _________ _________
Loss and total comprehensive income attributable to the owners of the Company (4,920) (7,196) (13,423)
_________ _________ _________
Earnings per share attributable to the
ordinary equity holders of the parent
Loss per share
Basic and diluted (US$ cents) 7 ($0.031) ($0.034) ($0.069)
_________ _________ _________
The results reflected above relate to continuing operations.
Consolidated statement of financial position
as at 30 June 2023
30 June 30 June 31 December
Note 2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Assets
Current assets
Trade and other receivables 8 426 516 520
Cash and cash equivalents 5,249 15,717 9,805
_________ _________ _________
5,675 16,233 10,325
_________ _________ _________
Non-current assets
Property, plant and equipment 1,641 1,310 2,010
Intangible assets 2,037 1,944 1,970
_________ _________ _________
3,678 3,254 3,980
_________ _________ _________
Total assets 9,353 19,487 14,305
_________ _________ _________
Liabilities
Current liabilities
Trade and other payables 9 (2,044) (1,874) (2,096)
Lease liabilities 10 (159) - (156)
Non-current liabilities
Lease liabilities 10 (462) - (544)
_________ _________ _________
NET ASSETS 6,688 17,613 11,509
_________ _________ _________
Issued capital and reserves attributable to
owners of the parent
Share capital 219 219 219
Share premium reserve 32,946 32,946 32,946
Share-based payments reserve 3,952 3,730 3,853
Foreign exchange reserve (684) (750) (1,037)
Retained earnings (29,745) (18,532) (24,472)
_________ _________ _________
TOTAL EQUITY 6,688 17,613 11,509
_________ _________ _________
Consolidated statement of cash flows
for the six months ended 30 June 2023
Six months to Six months to Year to
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Cash flows from operating activities
Loss for the period (5,273) (5,467) (11,407)
Adjustments for:
Depreciation and amortisation 472 275 640
Finance income (122) (7) (53)
Finance expense 15 - 5
Share-based payment expense 99 195 318
_________ _________ _________
(4,809) (5,004) (10,497)
(Increase) / decrease in trade and other receivables 96 (140) 136
Increase / (decrease) in trade and other payables (53) 116 293
Income taxes paid - - -
_________ _________ _________
Net cash outflow from operating activities (4,766) (5,028) (10,068)
_________ _________ _________
Cash flows from investing activities
Purchases of property, plant and equipment (23) (561) (1,040)
Purchase of intangibles (83) (161) (268)
_________ _________ _________
Net cash used in investing activities (106) (722) (1,308)
Cash flows from financing activities
Issue of ordinary shares - 13,070 13,070
Expenses of share issue - (441) (441)
Interest received 122 7 53
Interest paid (15) - (5)
Repayment of lease liabilities (79) - (3)
_________ _________ _________
Net cash from financing activities 28 12,636 12,674
Net increase / (decrease) in cash and cash equivalents (4,844) 6,886 1,298
Cash and cash equivalents at beginning of period 9,805 10,340 10,340
Exchange movement on cash and cash equivalents 288 (1,509) (1,833)
_________ _________ _________
Cash and cash equivalents at end of period 5,249 15,717 9,805
_________ _________ _________
Consolidated statement of changes in equity
for the six months ended 30 June 2023
Share Share Share-based Foreign Retained Total Total
capital premium payment exchange earnings attributable equity
reserve reserve to equity
holders of
parent
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
1 January 2022 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 payments charge - - 195 - - 195 195
_________ _________ _________ _________ _________ _________ _________
At 30 June 2022 - unaudited 219 32,946 3,730 (750) (18,532) 17,613 17,613
_________ _________ _________ _________ _________ _________ _________
At 1 July 2022 219 32,946 3,730 (750) (18,532) 17,613 17,613
Comprehensive income
Loss for the period - - - - (5,940) (5,940) (5,940)
Other comprehensive income - - - (287) - (287) (287)
Contributions by and distributions to owners
Share-based payment - - 123 - - 123 123
_________ _________ _________ _________ _________ _________ _________
At 31 December 2022 - audited 219 32,946 3,853 (1,037) (24,472) 11,509 11,509
_________ _________ _________ _________ _________ _________ _________
Consolidated statement of changes in equity
for the six months ended 30 June 2023
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 2023 219 32,946 3,853 (1,037) (24,472) 11,509 11,509
Comprehensive income for the period
Loss for the period - - - - (5,273) (5,273) (5,273)
Other comprehensive income - - - 353 - 353 353
Contributions by and distributions to owners
Share-based payment - - 99 - - 99 99
_________ _________ _________ _________ _________ _________ _________
At 30 June 2023 - unaudited 219 32,946 3,952 (684) (29,745) 6,688 6,688
_________ _________ _________ _________ _________ _________ _________
Notes forming part of the consolidated financial statements
for the six months ended 30 June 2023
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 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 2022. No new IFRS standards, amendments or interpretations became
effective in the six months to 30 June 2023.
Statement of compliance
This interim consolidated financial information for the six months ended 30
June 2023 has been prepared in accordance with IAS 34, 'Interim financial
reporting' and the AIM Rules for 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 2022, 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 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 2023 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 2022 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
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.
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 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.
Going concern
The preparation of cash flow forecasts for the Group requires estimates to be
made of the quantum and timing of cash receipts from future commercial
revenues and the timing of future expenditure, all of which are subject to
uncertainty.
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 Revenue
Six months to Six months to Year to
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Product services 19 - -
6 Expenses by nature
Six months to Six months to Year to
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Employee benefit expenses 1,863 1,289 2,889
Depreciation of property, plant and equipment 394 203 497
Amortisation of intangible assets 78 72 143
Research and development costs 1,641 2,290 4,832
Licenses and milestones 50 550 550
Professional costs 490 515 1,325
Share-based payment expense for non-employees 41 77 129
Foreign exchange losses / (gains) 296 (510) 36
Costs of share issue - 90 90
Other costs 543 898 964
7 Earnings per share
Six months to Six months to Year to
30 June 30 June 31 December
2023 2022 2022
US$ US$ US$
Unaudited Unaudited Audited
Numerator
Loss for the period used in basic EPS (5,272,803) (5,466,168) (11,407,527)
Denominator
Weighted average number of ordinary shares used in basic EPS 170,319,245 158,890,673 164,667,754
Resulting loss per share (US$0.031) (US$0.034) (US$0.069)
The Company has one category of dilutive potential ordinary share, being share
options. The potential shares were not dilutive in the period as the Group
made a loss per share in line with IAS 33.
8 Trade and other receivables
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Accounts receivable 19 - -
Prepayments 288 324 343
Other debtors 119 192 177
_________ _________ _________
426 516 520
_________ _________ _________
9 Trade and other payables
30 June 30 June 31 December
2023 2022 2021
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Trade payables 1,034 385 960
Other creditors - 186 -
Accruals 1,010 1,303 1,136
_________ _________ _________
Total trade and other payables 2,044 1,874 2,096
_________ _________ _________
The carrying value of trade and other payables classified as financial
liabilities measured at amortised cost approximates fair value.
10 Lease liabilities
Land and Plant and
Group buildings machinery Total
US$'000 US$'000 US$'000
At 1 January 2022 and 30 June 2022 - - -
Additions 465 238 703
Interest expense 4 1 5
Repayments (8) - (8)
________ ________ ________
At 31 December 2022 - audited 461 239 700
________ ________ ________
Repayments (47) (47) (94)
Interest expense 7 8 15
________ ________ ________
At 30 June 2023 - unaudited 421 200 621
________ ________ ________
The Company acquired an asset under capital lease financing arrangements.
The Company operates from one office which is rented under a lease agreement
ending on 1 November 2027 under which rent is payable monthly.
11 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 1 January 2022 4,933,696
Granted during the period 454,370
Cancelled during the period (120,000)
_________ _________
Outstanding at 30 June 2022 26.04 5,268,066
Granted during the period 1,110,000
_________ _________
Outstanding at 31 December 2022 - audited 23.86 6,378,066
Granted during the period 250,000
Cancelled during the period (300,000)
_________ _________
Outstanding at 30 June 2023 - unaudited 25.56 6,328,066
_________ _________
The Group recognised total expenses of $99,000 (six months to 30 June 2022:
$195,000) as administrative expenses relating to equity-settled share-based
payment transactions during the period to 30 June 2023.
12 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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