REG - Verici Dx PLC - Half-year Report
15/07/2024 07:00
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RNS Number : 3161W Verici Dx PLC 15 July 2024
Verici Dx plc
("Verici Dx" or the "Company")
Half-year report
Continued strategic delivery with revenues
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 2024 ("H1 2024"). Comparative data is for the unaudited six
months ended 30 June 2023 ("H1 2023") unless stated otherwise.
Focus on three distinct revenue streams
The Company has transitioned from a purely research stage business to one with
three distinct revenue streams: licensing revenues, direct sales, and other
income from our Services Business. In the period, this resulted in total
revenues of $3.3m (FY23: $1.0m):
• Licensing revenues. Recognition of revenue during H1 2024 relating to the
successful achievement of transfer of the pre-transplant prognostic testing
technology (formerly known as Clarava(™)). This is in accordance with the
terms of a global licensing and commercialisation agreement with Thermo Fisher
announced on 15 November 2023 (the "Thermo Agreement").
• Direct sales. The Company is seeing increased test adoption with our first
product, Tutivia(™). This is now being used in fifteen centres in the US,
and this is growing as anticipated. Although the timing of revenue recognition
from these sales is impacted by the various reimbursement processes, the
adoption is in line with our expectations and now supported by additional
hires in our commercial team.
• Services income. This recognises the value in the data asset, collaborations,
and other applications of the Company's technology and expertise.
Collectively, the Company is managing these as our Services Business. In the
period, the successful completion of final deliverables relating to urine
samples in accordance with the Thermo Agreement generated revenues. This is in
addition to the revenues generated in 2023.
Each of these income streams is further supported going forward by our newly
expanded, in-house bioinformatics capability which supports further product
development and commercialisation, as well as identifying and underpinning
additional value in the Company's research assets.
Significant progress across our lead products
The Company has continued to make significant progress with each of its lead
products:
• Submitted the Technical Assessment ("TA") File for Tutivia(™), an important
step in the pathway for reimbursement coverage from Medicare. We are currently
in a period of review and expect to have a Medicare determination by the end
of 2024.
• Presented new performance data on Tutivia(™) in the setting of delayed graft
function ("DGF") where there is unmet clinical need and generated interest
from practitioners at the June American Transplant Congress ("ATC") meeting.
The subsequent increase in adoption reflects in part interest in using
Tutivia(™) in this context.
• Development of the Company's third product, Protega(™), is on track with
additional funding supporting the ability to generate more robust data /
better commercialisation outcomes. The first validation data is expected in H1
2025.
• Initiated a new key opinion leader (KOL) led education program to highlight
the uses and advantages of the Company's underlying technology and its
application in the lead products.
Continued and consistent strong delivery against multiple operational
milestones
The Company has established a strong track record of delivery across multiple
projects and initiatives, and we are pleased this has continued throughout the
first half of 2024:
• Finalised the CLIA application for the final US state, New York, where there
were several additional stages to complete prior to accreditation compared to
the process in other states. When granted, the Company's laboratory will be
able to test samples from patients across all US states.
• Launched an interactive patient-focused educational tool, the Patient
Journey, providing a detailed overview of all stages of the kidney transplant
journey. This aligns with the Company's goal to enhance patient care and
support by ensuring that patients and caregivers have access to the latest
information and best practices for kidney transplant care.
• Gained accreditation from the internationally recognised College of American
Pathology (CAP) for the testing laboratory in Franklin, TN, USA. Along with
the existing CLIA Certificate of Compliance for the Company's clinical
laboratory in Nashville, TN, USA, this further reinforces the Company's
on-going commitment to maintaining best in class quality systems.
• Announced an exciting collaboration with The Westmead Institute for Medical
Research based in Sydney, Australia, on a newly awarded, 4-year federal
research grant. The goal of the research is to enhance the prediction and
management of risks associated with organ transplants across a diverse group
of patients drawn from three different clinical sites.
Financial highlights
• Revenue of $3.3m (H1 2023: $-; FY 2023: $1.0m).
• EBITDA loss of $1.1m (H1 2023: loss of $4.9m; FY 2023: loss of $8.0m).
• $7.0m cash balance as at 30 June 2024 (31 December 2023: $2.6m).
• Net cash outflow from operating activities in H1 2024 was $3.2m (H1 2023:
$4.8m outflow; FY 2023: $7.2m outflow).
• Equity fundraise of £6.5m ($8.2m) in total gross proceeds (£6.0m / $7.5m
net) through the issue of 72,222,222 new ordinary shares.
The financial effects of the Thermo Agreement and the equity fundraise,
together with our business modelling assumptions which remain unchanged, mean
that the Company's cash runway now extends into 2026.
Strategic update and outlook
At the time of the equity fundraise in early 2024, we set out our strategic
priorities. The team has continued to deliver strong progress against each of
these areas and is confident regarding the outlook for each of these areas.
• Licensing revenues. There will be royalties from tests sold after Thermo
Fisher launches its pre-transplant test and a further milestone payment upon
achievement of a commercial milestone by Thermo Fisher.
• Direct revenues. With our expanded sales force now in situ, we are seeing
momentum both with the number of centres adopting Tutivia(™) as well repeat
orders as the test becomes embedded in their processes. The timing of when
revenue can be recognised is affected by the LCD coverage determination.
• Other products. Protega(™) is progressing through the phases of its clinical
development and, in the event of successful validation, will have
commercialisation opportunities through either licensing or direct routes.
Longer term, there remains scope to move into adjacent disease areas,
including other transplant organs and other conditions.
• Other applications of the Company's approach, expertise and technology. The
value inherent in the Services Business has already been demonstrated through
the urine element of the Thermo Agreement. Other opportunities to create value
within the Services Business are currently at various stages of negotiation.
Sara Barrington, Chief Executive Officer of Verici Dx, said:
"This has been another busy period, with the focus of the business upon
revenue generation from our three separate income streams together with the
delivery of many significant commercial and operational milestones. I am
delighted with the progress from the team and welcome the increased pace that
the fundraise enabled."
"The steps we took at the start of the year to bolster our balance sheet
positioned us well to progress our strategic ambitions. The focus through the
remainder of 2024 remains to advance multiple growth and value creation
initiatives over the short, medium and longer term, whilst maintaining our
strong financial discipline. I am pleased with the strong start we have made
across these multiple revenue generation initiatives, and we will continue to
update the market on progress as appropriate."
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 Tuesday 16 July 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 Investors @vericidx.com
Julian Baines, Chairman
Singer Capital Markets (Nominated Adviser & Broker) Tel: 020 7496 3000
Phil Davies / Sam Butcher / Jalini Kalaravy
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 in 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
I am pleased to report that the momentum gained in 2023 continued throughout
the first half of 2024. We successfully achieved all the key milestones
expected during the period under the Thermo Agreement. Concurrently, we have
advanced multiple other projects and initiatives, demonstrating delivery
across the full breadth of our strategy.
Continued execution on our commercial pathway
Direct Revenues
While the commercial rollout of Tutivia(™) encountered some initial
short-term delays during 2023, due in part to clinical centres assessing the
broader market implications of certain CMS announcements. Recent engagement
with centres indicates increased clarity on these issues and is reflected in
the rapid expansion of adopting centres in 1H 2024. Tutivia(™) is now
offered in fifteen leading transplant centres across the United States and,
with our more recently expanded sales team, we continue to work with other
leading US transplant centres to support the adoption and integration of
Tutivia(™) into their clinical pathways to encourage consistent and
recurring utilisation.
We presented new performance data on Tutivia(™) in the setting of delayed
graft function ("DGF") and generated interest from practitioners at the June
American Transplant Congress ("ATC") meeting. DGF is a condition that can lead
to a higher risk of rejection and identifying which patients are likely to
experience rejection in this population is a currently unmet need in
transplantation. This has been reflected in part in the increase of
adoption of Tutivia™ in the period.
As previously announced, the national payment rate of $2,650 per test for our
two lead tests became effective from 1 January 2024. Having this rate
published by CMS was an important step towards securing reimbursement for
testing of patients covered by Medicare insurance.
We submitted the Technical Assessment (TA) file for Tutivia(™) in Q1 2024.
We are now actively engaged in the next stage in this process, addressing
questions raised by the initial review. Revenue recognition from Tutivia(™)
remains dependent upon securing the LCD for Medicare under this pathway and we
expect to have a determination by the end of 2024. The Company will be able to
apply for retrospective reimbursement on testing to date and during the
assessment period once the Local Coverage Determination (LCD) is granted.
Licensing Revenues
In June, the Company successfully completed the transfer and all
transfer-related activities for the pre-transplant prognostic testing
technology in accordance with the terms of the Thermo Agreement. This
achievement now enables Thermo Fisher to use the technology to develop a
Laboratory Developed Test ("LDT") using its own labs. We will continue to
provide support as required to Thermo Fisher as they move towards a full
commercial launch. As a reminder, under the terms of the agreement, the
Company will receive future milestone payments one being a commercial
milestone to be met by Thermo Fisher, and royalties on the tests sold going
forward.
Other products
With the exclusive license over the deceased donor version of Clarava(™)
granted to Thermo Fisher, we remain interested in the potential to develop a
living donor version of Clarava(™). To this end, the Company is exploring
multiple approaches to expanding its testing cohort to maximize cost and time
efficiencies.
Turning to our third product, Protega(™), we have now completed the 12-month
visits as part of the clinical validation study assessing long-term outcomes
for kidney transplant patients. We remain on track and initial data from this
part of the study is expected to be available in H1 2025. As stated at the
time of our recent fundraising, the cohort has been expanded to increase the
robustness of results and improve commercialisation over the longer term. The
study will therefore continue to follow-up at the 24-month stage to provide
additional data and further potential validation on longer-term outcomes.
Services Business
Collectively, these activities demonstrate the clinical validity of the
underlying technology, research assets and expertise in RNA signatures. The
Company remains alert to the potential opportunities in its technology,
expertise and approach in other disease areas.
Consistent delivery of operational milestones
In addition to the above progress across our lead products, the Company
achieved a number of key operational milestones during the period.
Foremost amongst these was the successful transfer of all data relating to a
portion of the Company's urine samples to Thermo Fisher. This completed a key
element of the Thermo Agreement and demonstrates the additional value in the
Company's Services Business through its data and sample assets for research.
As previously announced, during 2023 we solidified our commercial position by
progressing our laboratory registration status to CLIA Certificate of
Compliance by the Centers for Medicare & Medicaid ("CMS"), meaning that
the Company is currently fully accredited in all except one state. We have now
submitted for review the application for the final US state, New York, which
involves several additional stages prior to accreditation compared to the
process in the other states.
In May 2024, we were delighted to launch a new interactive patient-focused
educational tool, the Patient Journey, which provides a detailed overview of
all stages of the kidney transplant journey. This aligns with the Company's
goal to enhance patient care and support by ensuring that patients and
caregivers have access to the latest information and best practices for kidney
transplant care.
We continue to add to our existing portfolio of quality assurance awards and
recognition as we gained accreditation from the internationally recognised
College of American Pathology (CAP) for the testing laboratory in Franklin,
TN, following the completion of an on-site audit. No deficiencies, findings,
or recommendations were identified, and this accomplishment affirms our
commitment to operating at the highest standards that healthcare providers,
patients, and regulatory bodies expect. With our testing laboratory already
CLIA certified, we voluntarily sought this further accreditation as part of
our on-going commitment to maintaining best-in-class quality systems.
Collaborations remain an integral part of our strategy. This can be evidenced
through the growing international recognition and reach in our newest
collaboration with The Westmead Institute for Medical Research based in
Sydney, Australia, on a newly awarded, 4-year federal research grant. This
will expand our international reach. We are currently engaged in a number of
other opportunities for collaborations going forward.
Management and staff
During the period, we hired five additional members of staff in our
bioinformatics and commercial teams in line with our growth plans articulated
at the time of the fundraising in February 2024, such that as of 30 June 2024
we have a team of 19 in total.
Financials
We ended the period with a cash balance as of 30 June 2024 of $7.0m (31
December 2023: $2.6m). This balance reflects the net raise of $7.5m from the
February 2024 share issue of 72,222,222 shares, and the further $1.3m received
during the period under our agreement with Thermo Fisher. To date, we have
received a total $2.8m of the $5.0m payments expected in the first 12 months
of the agreement and are on track for the remainder.
In the period we recognised revenue of $3.3m. Our ability to recognise
revenues from Tutivia(™) sales in the current year is dependent upon the
successful award of the Local Coverage Determination from Medicare, expected
later this year.
Our largest item of expenditure remains employment costs, being $1.9m (H1
2023: $1.8m). We began the year with 14 members of staff and ended the
period with 19, having added to our bioinformatics and commercial teams in the
period. 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 $1.0m (H1 2023: $1.6m).
Despite the challenging global financing environment, we significantly
strengthened our financial position through both the Thermo Agreement
announced in November 2023, and the early 2024 equity fundraise which raised a
total of £6.5m ($8.2m) in gross proceeds (£6.0 m/ $7.5m net) through the
issue of 72,222,222 new ordinary shares. We are grateful to existing
shareholders for their continued support and delighted to welcome those new to
the register. Based on our balance sheet at 30 June 2024, together with our
continuing assumptions relating to the timing and/or quantum of the additional
milestone payments under the Thermo Agreement, the ongoing rollout of
Tutivia(™) as well as other licensing revenues and research collaborations,
our cash runway extends into 2026
Business Model Overview
The Company is focused upon three distinct revenue streams: licensing
opportunities, direct sales, and promotion of a services business line which
recognises the tangible assets of samples and data as well as the expertise of
the team in this complex area of product development and is applicable in
multiple disease areas.
Licensing is a capital-efficient approach to clinical adoption for the
multiple products within the portfolio and the Company has already
demonstrated its ability to complete significant milestones on time with a
major collaborator. The Company will continue to assess future opportunities
on a deal-by-deal basis to maximize shareholder return.
The direct sales approach is appropriate for our lead product, Tutivia(™),
where the Company has chosen to seek coverage under the Local Coverage
Determination issued by MolDx for Medicare, as this pathway offers a fuller
and more accelerated reimbursement than other pathways. Nationally, 65% of
transplant patients are covered by Medicare and Medicaid. Part of the
process of obtaining this LCD is the submission of a Technical Assessment
("TA") file which was completed in Q1 2024. A coverage determination for
Medicare reimbursement is now expected by the end of 2024, but it is important
to note that there is a route for retrospective reimbursement to be applied on
tests ordered during the LCD approval process.
Underlying our mainstream product development in kidney transplant, the
Company has developed an expertise in RNA sequencing and RNA signature
development within a regulatory environment that is now monitored by the
FDA. This, coupled with the physical samples collected in multiple
biological materials and the wide applicability of the data generated both for
diagnostic and therapeutic collaborations, has now coalesced into an
additional Services Business line.
Outlook
Through the ongoing agreement with Thermo Fisher and with the focus from our
recently enlarged sales team on both direct sales of Tutivia(™) and the
Services Business, we are positive regarding the outlook for further
attainment of our objectives and value creation across all our business lines.
In addition, the Company has a longer-term product development in the pipeline
plus additional optionality from the potential to expand into other related
areas.
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
15 July 2024
Consolidated condensed statement of profit or loss and other comprehensive
income
for the six months ended 30 June 2024
Six months to Six months to Year to
30 June 30 June 31 December
Note 2024 2023 2023
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Revenue 5 3,339 19 1,013
Cost of sales - (3) -
_________ _________ _________
3,339 16 1,013
Administrative expenses 6 (4,368) (4,825) (8,598)
Depreciation and amortisation 6 (388) (472) (829)
Share-based payments 6 (36) (99) (453)
_________ _________ _________
Loss from operations (1,453) (5,380) (8,867)
Finance income 118 122 162
Finance expense (13) (15) (29)
_________ _________ _________
Loss before tax (1,348) (5,273) (8,734)
Tax expense - - -
_________ _________ _________
Loss from continuing operations (1,348) (5,273) (8,734)
Other comprehensive income:
Exchange gains / (losses) arising on translation of foreign operations 102 353 330
_________ _________ _________
Loss and total comprehensive income attributable to the owners of the Company (1,246) (4,920) (8,406)
_________ _________ _________
Earnings per share attributable to the
ordinary equity holders of the parent
Loss per share
Basic and diluted (US$ cents) 7 ($0.6) (3.1) (5.1)
_________ _________ _________
The results reflected above relate to continuing operations.
Consolidated statement of financial position
as at 30 June 2024
30 June 30 June 31 December
Note 2024 2023 2023
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Assets
Current assets
Trade and other receivables 8 1,934 426 1,344
Cash and cash equivalents 7,015 5,249 2,645
_________ _________ _________
8,949 5,675 3,989
_________ _________ _________
Non-current assets
Property, plant and equipment 1,073 1,641 1,363
Intangible assets 2,084 2,037 2,091
_________ _________ _________
3,157 3,678 3,454
_________ _________ _________
Total assets 12,106 9,353 7,443
_________ _________ _________
Liabilities
Current liabilities
Trade and other payables 9 (1,787) (2,044) (3,345)
Lease liabilities 10 (184) (159) (163)
Non-current liabilities
Lease liabilities 10 (274) (462) (377)
_________ _________ _________
NET ASSETS 9,861 6,688 3,558
_________ _________ _________
Issued capital and reserves attributable to
owners of the parent
Share capital 310 219 219
Share premium reserve 40,368 32,946 32,946
Share-based payments reserve 4,342 3,952 4,306
Foreign exchange reserve (605) (684) (707)
Retained earnings (34,554) (29,745) (33,206)
_________ _________ _________
TOTAL EQUITY 9,861 6,688 3,558
_________ _________ _________
Consolidated statement of cash flows
for the six months ended 30 June 2024
Six months to Six months to Year to
30 June 30 June 31 December
2024 2023 2023
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Cash flows from operating activities
Loss for the period (1,348) (5,273) (8,734)
Adjustments for:
Depreciation and amortisation 388 472 829
Finance income (118) (122) (162)
Finance expense 13 15 29
Share-based payment expense 36 99 453
_________ _________ _________
(1,029) (4,809) (7,585)
(Increase) / decrease in trade and other receivables (590) 96 (824)
Increase / (decrease) in trade and other payables (1,558) (53) 1,249
Income taxes paid - - -
_________ _________ _________
Net cash outflow from operating activities (3,177) (4,766) (7,160)
_________ _________ _________
Cash flows from investing activities
Purchases of property, plant and equipment (14) (23) (23)
Purchase of intangibles (81) (83) (208)
_________ _________ _________
Net cash used in investing activities (95) (106) (231)
Cash flows from financing activities
Issue of ordinary shares 8,196 - -
Expenses of share issue (683) - -
Interest received 118 122 162
Interest paid (13) (15) (29)
Repayment of lease liabilities (82) (79) (160)
_________ _________ _________
Net cash from / (used in) financing activities 7,536 28 (27)
Net increase / (decrease) in cash and cash equivalents 4,264 (4,844) (7,418)
Cash and cash equivalents at beginning of period 2,645 9,805 9,805
Exchange movement on cash and cash equivalents 106 288 258
_________ _________ _________
Cash and cash equivalents at end of period 7,015 5,249 2,645
_________ _________ _________
Consolidated statement of changes in equity
for the six months ended 30 June 2023
Share Share Share-based Foreign Retained Total Total
capital premium payment exchange earnings attributable equity
reserve reserve to equity
holders of
parent
US$'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 payments charge - - 99 - - 99 99
_________ _________ _________ _________ _________ _________ _________
At 30 June 2023 - unaudited 219 32,946 3,952 (684) (29,745) 6,688 6,688
_________ _________ _________ _________ _________ _________ _________
At 1 July 2023 219 32,946 3,952 (684) (29,745) 6,688 6,688
Comprehensive income
Loss for the period - - - - (3,461) (3,461) (3,461)
Other comprehensive income - - - (23) - (23) (23)
Contributions by and distributions to owners
Share-based payment - - 354 - - 354 354
_________ _________ _________ _________ _________ _________ _________
At 31 December 2023 - audited 219 32,946 4,306 (707) (33,206) 3,558 3,558
_________ _________ _________ _________ _________ _________ _________
Consolidated statement of changes in equity
for the six months ended 30 June 2024
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 2024 219 32,946 4,306 (707) (33,206) 3,558 3,558
Comprehensive income for the period
Loss for the period - - - - (1,348) (1,348) (1,348)
Other comprehensive income - - - 102 - 102 102
Contributions by and distributions to owners
Issue of share capital 91 8,105 - - - 8,196 8,196
Costs of share issue - (683) - - - (683) (683)
Share-based payment - - 36 - - 36 36
_________ _________ _________ _________ _________ _________ _________
At 30 June 2024 - unaudited 310 40,368 4,342 (605) (34,554) 9,861 9,861
_________ _________ _________ _________ _________ _________ _________
Notes forming part of the consolidated financial statements
for the six months ended 30 June 2024
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 2023. No new IFRS standards, amendments or interpretations became
effective in the six months to 30 June 2024.
Revenue
Revenue is recognised in accordance with the requirements of IFRS 15 'Revenue
from Contracts with Customers'. The Company recognises revenue to depict the
transfer of promised goods and services to customers in an amount that
reflects the consideration to which the Group expects to be entitled in
exchange for those goods and services.
Testing revenues
Diagnostic test revenues are recognised in the amount expected to be received
in exchange for diagnostic tests when the diagnostic tests are delivered. The
Company conducts diagnostic tests and delivers the completed test results to
the prescribing physician or patient, as applicable.
The fees for diagnostic tests are billed either to a third party such as
Medicare, medical facilities, commercial insurance payers, or to the
patient.
The Company estimates the transaction price, which is the amount of
consideration it expects to be entitled to receive in exchange for providing
services based on its historical collection experience, and the probability of
being paid at the time of delivering the test result.
Other revenues
Where a right of use license is entered into revenue is recognised when the
license is granted, unless there are conditions attached. Where conditions are
attached the revenue will only be recognised when all the performance
obligations have been satisfied.
Where a sales-based license is entered into which is conditional on future
performance criteria, revenue is recognised once the performance obligation to
which some or all of the sales-based criteria has been allocated has been
satisfied.
Statement of compliance
This interim consolidated financial information for the six months ended 30
June 2024 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 2023, 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 2024 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 2023 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.
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 30 June Six months to 30 June Year to 31 December
2024 2023 2023
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Product services 2 19 -
License revenue 3,337 - 1,013
_________ _________ _________
3,339 19 1,013
_________ _________ _________
6 Expenses by nature
Six months to 30 June Six months to 30 June Year to 31 December
2024 2023 2023
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Employee benefit expenses 1,944 1,863 3,813
Depreciation of property, plant and equipment 303 394 673
Amortisation of intangible assets 85 78 156
Research and development costs 1,002 1,641 2,429
Licenses and milestones 250 50 50
Professional costs 406 490 948
Share-based payment expense for non-employees 3 41 248
Foreign exchange losses / (gains) 28 296 272
Other costs 771 543 1,291
_________ _________ _________
4,792 5,396 9,880
_________ _________ _________
7 Earnings per share
Six months to Six months to Year to
30 June 30 June 31 December
2024 2023 2023
US$ US$ US$
Unaudited Unaudited Audited
Numerator
Loss for the period used in basic EPS (1,348,528) (5,272,803) (8,734,093)
Denominator
Weighted average number of ordinary shares used in basic EPS 222,590,577 170,319,245 170,319,245
Resulting loss per share - US$ cents (0.6) (3.1) (5.1)
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
2024 2023 2023
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Accounts receivable 1,500 19 1,013
Prepayments 386 288 244
Other debtors 48 119 87
_________ _________ _________
1,934 426 1,344
_________ _________ _________
9 Trade and other payables
30 June 30 June 31 December
2024 2023 2023
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Trade payables 661 1,034 475
Other creditors 7 - 48
Deferred income - - 1,500
Accruals 1,119 1,010 1,322
_________ _________ _________
Total trade and other payables 1,787 2,044 3,345
_________ _________ _________
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 2023 461 239 700
Interest expense 7 8 15
Repayments (47) (47) (94)
________ ________ ________
At 30 June 2023 - unaudited 421 200 621
________ ________ ________
Repayments (49) (46) (95)
Interest expense 7 7 14
________ ________ ________
At 31 December 2023 - audited 379 161 540
________ ________ ________
At 1 January 2024 379 161 540
Interest expense 7 6 13
Repayments (48) (47) (95)
________ ________ ________
At 30 June 2024 - unaudited 338 120 458
________ ________ ________
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 is a 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 2023 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
Granted during the period 100,000
_________ _________
Outstanding at 31 December 2023 - audited 23.86 6,428,066
Granted during the period 1,690,000
Cancelled during the period (100,000)
_________ _________
Outstanding at 30 June 2023 - unaudited 13.90 8,018,066
_________ _________
The Group recognised total expenses of $36,000 (six months to 30 June 2023 -
$99,000) as administrative expenses relating to equity-settled share-based
payment transactions during the period to 30 June 2024.
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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