THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
BIVICTRIX THERAPEUTICS PLC
("BiVictriX" or "the Company" or "the Group")
Full year results for the twelve months ended 31 December 2022
· Good progress towards identifying a clinical candidate
· Broadening and strengthening the Company's pipeline portfolio
· Expansion of scientific capabilities and premises
Alderley Park, 30 March 2023 - BiVictriX Therapeutics plc (AIM: BVX), an emerging biotechnology company applying a novel approach to develop next-generation cancer therapies with improved tolerability and anti-cancer activity, today announces its audited full year results for the twelve months ended 31 December 2022.
The Annual Report is available to review on the Company's website and hard copies will be posted to shareholders shortly.
Corporate Highlights including post period end events
| • | Identified a development lead for the BVX001 programme which will be progressed to in vivo studies |
| • | Expanded the therapeutic pipeline with two additional programmes, BVX002 and BVX003, both entering the early stages of drug development |
| • | Developed a unique, state-of-the-art, Bi-Cygni® discovery engine that will feed the Company's growing proprietary Bi-Cygni® library, IP portfolio and expanding therapeutic pipeline |
| • | Expanded the newly established internal R&D premises at Alderley Park, UK, to incorporate a dedicated protein expression division and biomarker discovery unit |
| • | Post period, the Company announced the appointment of Dr. Michael Kauffman as Non-Executive Chairman |
| • | Post period, the Company reported positive preclinical data with the BVX001 programme, demonstrating a highly favourable safety profile compared to MylotargTM in an in vivo model assessing the risk for bone marrow toxicity and neutropenia |
Financial highlights
| • | Increased investment in R&D of £2.1 million (2021: £0.7 million) |
| • | Loss after tax of £2.5 million (2021: £2.3 million) |
| • | Closing cash balance of £3.3 million at 31 December 2022 (2021: £6.1 million) |
Tiffany Thorn, Chief Executive Officer of BiVictriX, commented: "We have made signficant progress over the past year with our lead programme, BVX001, advancing this candidate towards the clinic. In addition to identifying a development lead for BVX001, at the beginning of this year we reported a highly favourable safety profile in a preclinical study comparing two doses of BVX001 to the only currently approved ADC indicated for AML. Beyond BVX001, we've diversified our pipeline with the addition of two additional programmes, BVX002 and BVX003, to our portfolio. Further, we've established of our new wholly-owned Bi-Cygni® discovery engine, laying the groundwork for future expansion and value creation in the years ahead."
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About BiVictriX Therapeutics plc
BiVictriX is a UK-based drug discovery and development company which is focused on leveraging clinical experience to develop a new class of highly selective, next generation cancer therapeutics which exhibit superior potency, whilst significantly reducing treatment-related toxicities.
The Company utilises a first-in-class approach to generate a proprietary pipeline of Bi-Cygni® Antibody Drug Conjugate therapeutics which are designed to selectively target cancer-specific antigen pairs, or "Bi-Cygni® fingerprints", on tumour cells, which are largely absent from healthy cells.
BiVictriX has established a growing proprietary library of cancer-specific Bi-Cygni® fingerprints, which enable the Company to target a diverse array of different cancer types. The Company utilises these novel Bi-Cygni® fingerprints, together with the Company's novel Antibody Drug Conjugate therapeutic design, to develop more effective and safer therapeutics to target cancers that are expected to constitute orphan indications and areas of high unmet medical need.
Find out more about BiVictriX online at www.bivictrix.com
Chairman's Statement
For the year ended 31 December 2022
I am delighted to report on the Company's most recent and notable developments and am confident that we will continue to see significant progress with our pipeline over the coming year as we advance towards the clinic.
Since joining BiVictriX in 2021, my role has focused on supporting our CEO, Tiffany Thorn, and the Company in establishing a strong foundation from which it can develop and mature into a meaningful biotech company. It is my belief that, over the past 12 months, we have achieved this across all aspects of the business, in line with the Company's goals laid out at the time of the last statement.
We have produced promising in vitro safety and efficacy data, resulting in the identification of a development lead for the BVX001 programme and marking a significant step forward towards progressing this programme to the clinic.
We have successfully built upon our existing internal R&D capabilities, incorporating a fully functional protein expression laboratory to satisfy our tumour-selective bispecific antibody (Bi-Cygni®) requirements across both the lead programme and broader pipeline.
In addition, in pursuit of our aim to decrease the development time from discovery to lead selection, we established our own unique Bi-Cygni® discovery engine which enables the expansion of our library of proprietary cancer-selective fingerprints, using patient-derived next-generation sequencing data.
During the period, the Company expanded its development pipeline to include two new programmes, BVX002 & BVX003, which have entered discovery. These programmes target a spectrum of solid tumour and haematological cancer indications, demonstrating the broad utility of the Bi-Cygni® concept as a first-in-class approach to better cancer treatment. Selection of development leads for the two new programmes, together with further patent filings, is anticipated during the next year.
We have continued to maintain tight control of our finances and have been both robust and prudent with the use of shareholders' funds. In terms of governance and oversight during the year, we strengthened the Board with the appointment of Dr Michael Kauffman, who broadens the Board's capabilities and experience by providing his expertise in preclinical research, clinical development, and regulatory strategy. Recently, we announced that I am handing over the Chairman role to Michael. I look forward to remaining with the Company as a member of the Board and continuing as a supportive shareholder. It has been a privilege to serve BiVictriX as Chairman since 2021, through the Company's initial public offering in August 2021 and the significant progress made since.
In summary, the journey of any biotech company is often non-linear, but we have nevertheless continued to make great progress in the past year, which has proven very challenging for many small biotech companies. We have built an effective, fit-for-purpose R&D team with expanded capabilities, and broadened our know-how in the business. A development lead for the BVX001 programme was selected in December 2022, and we have expanded our discovery capabilities along with our development pipeline, which we believe over time will address substantial numbers of patients with cancers and thus represent very substantial commercial markets. The fundamentals of this business remain strong and I am confident we will make substantial progress in the coming year.
I would like to thank all my fellow Directors and our terrific team in Alderley Park, UK, led by our exceptional CEO, Tiffany Thorn, for all their efforts over the past year. And, as always, we remain grateful for the ongoing support of our shareholders, whose faith in the company makes possible everything we do.
Iain Ross
Former Non-Executive Chairman - (August 2021 - January 2023)
29 March 2023
Chief Executive Officer's Review
For the year ended 31 December 2022
It is with great pleasure that I am delivering the Company's second Annual Report as CEO of BiVictriX Therapeutics plc, following our IPO in 2021. I am delighted to share the meaningful recent progress that we have made in advancing our state-of-the-art approach to developing more effective and safer anti-cancer therapeutics. The original idea I had while serving as a Clinical Immunologist in the NHS is moving ever closer to delivering value in a patient setting and offering a potentially "game-changing" approach to cancer treatment. This would not be possible without the continued and valued support of our dedicated staff and shareholders, to whom I am extremely grateful for their enthusiasm and belief in BiVictriX.
The business
BiVictriX is a UK-based drug discovery and development company with a vision to revolutionise cancer therapy for some of the most difficult to treat cancers. The Company is focused on applying our innovative, proprietary Bi-Cygni® approach to develop a new class of highly selective, next-generation cancer therapeutics which exhibit superior potency, whilst substantially reducing treatment-related toxicities by greatly improving the specificity of these molecules for targeting the cancer. Our lead programme, BVX001, is focused on Acute Myeloid leukaemia ("AML"), one of the most aggressive forms of blood cancer which, to this day, carries an incredibly poor prognosis, leading to death in 60%-90% of adult cases depending on the patient's age.
Bi-Cygni®: A game-changing approach to treat cancer
Bi-Cygni® is a unique, proprietary platform which combines the discovery of novel, cancer-selective twin-antigen pairs or "fingerprints" (typically two different proteins), with our expert bispecific antibody engineering insights; to create a new class of highly selective, next-generation anti-cancer therapeutics. Together with our proprietary library of these newly identified cancer-specific fingerprints, which are found to be aberrantly present on tumour cells, but largely absent from normal, healthy cells; we develop first-in-class obligate bispecific therapeutics (Bi-Cygni® therapeutics) that are exquisitely cancer-selective.
Because our first-in-class Bi-Cygni® therapeutics have high selectivity for cancer cells with reduced toxicity on normal cells, we have the potential to generate a pipeline of anti-cancer drugs across both solid and haematologic cancers with the widest therapeutic windows. Consequently, these drugs have the potential to reduce the development of treatment-limiting (and sometimes life-threatening) toxicities and enable clinicians to give patients higher, more effective doses of therapy over prolonged periods in order to improve both depth and duration of anti-tumour responses with reduced likelihood of causing harm.
Since establishing operations in 2017, the Company has maintained its vision to combine our unique innovations in therapeutic design with established, clinically validated, therapeutic modes of action. Applying advances in our understanding of precision targeting through the Bi-Cygni® platform to the established, highly potent Antibody Drug Conjugate "ADC" concept enables us to generate a broad pipeline of next generation ADC therapeutics which could deliver increased tumour cell kill while reducing effects on normal cells. Thus, my fellow directors and I believe that in the clinic, these therapeutics will have the potential to deliver very high response rates and longer-term tolerability over and above the standard ADC design, while effectively reducing early developmental risk and time-to-market. This will enable, for the first time, the broader utilisation of this therapeutic class across a wider range of difficult-to-treat solid tumour and haematologic cancers.
Key achievements in 2022
Following our IPO on to the AIM market of the London Stock Exchange in 2021, which was recognised as Investment Deal of the Year at Bionow's 20th annual awards, I am pleased to report the Company has continued to make value-creating progress in line with our strategy in what has been a significant year for the ADC space. We continue to utilise the net proceeds of our £7.5 million fundraise at the time of IPO with care and precision, ensuring absolute priority is given to the progression of our R&D programmes and to meeting the corporate goals. We have made good progress in the period in meeting these goals, which include:
| • | building a fit-for-purpose internal R&D team to ensure value-creation and know-how is retained in the business; |
| • | identifying a development lead for the BVX001 programme to accelerate progression towards the clinic; and |
| • | expansion of our early-stage pipeline and growth of our IP portfolio, with the development of a novel "Bi-Cygni® discovery engine" - utilising state-of-the-art, patient-derived, next-generation sequencing data, with the addition of two further candidates to our pipeline. |
A more detailed description of our progress and key drivers follows below.
Board of Directors
On 6 January 2023, post period end, we announced that Dr. Michael Kauffman, M.D., Ph.D. has been appointed as Non-Executive Chairman of BiVictriX. Dr. Kauffman took over the role from Iain Ross, who will continue as a Non-Executive Director at BiVictriX and stepped down from the role of Chairman due to his additional responsibilities at ReNeuron Group plc.
Dr Kauffman takes over the reins as Non-Executive Chairman at a crucial time for the Company, as we plan to progress our BVX001 development lead into the clinic. Since his appointment to the Board of Directors in January 2022, Dr Kauffman has seen the business progress the lead drug candidate from an early-stage asset towards a clinical candidate. Having been instrumental in the approval of several oncology therapeutics over twenty five years of working across preclinical research, clinical development, regulatory strategy and commercialisation, he is very well placed to draw from his experience as a highly seasoned cancer drug developer to support the business as we progress the asset towards clinical development and commercialisation.
As Non-Executive Chairman, Dr Kauffman will utilise his previous experience as Co-Founder and Chief Executive Officer of oncology company Karyopharm Therapeutics Inc., which he guided from a discovery stage biotechnology company to a commercial stage organisation, achieving global approvals of XPOVIO®. He also led the Kyprolis® development programme at Proteolix and then Onyx Pharmaceuticals, the Velcade® development programme at Millennium Pharmaceuticals, and has held a number of senior positions at Millennium Predictive Medicine and Biogen, and other companies.
I would like to personally thank Iain Ross for his commitment and support of the business, his mentorship and his valued guidance in helping to take the Company from a private entity to a publicly listed business during our IPO in August 2021. I look forward to continuing to work closely with Iain and Michael, together with our wider group of seasoned Non-Executive Directors, as we look to navigate the Company towards commercial success.
Internal R&D capabilities
In 2022, we expanded our newly established internal R&D premises to incorporate a dedicated protein expression division. This additional capability will be key in reducing timelines from discovery to the identification of development leads, across the pipeline. In addition, the new division will expand and diversify internal know-how surrounding the development of novel bispecific antibody formats, a key aspect of our approach. Ultimately, this will reduce the time-to-market and increase patent life for each asset, as well as drive further value in the platform offering of the business.
To support our expanded internal capabilities and our growing pipeline, during the period we continued to build our dedicated team of experienced scientific staff. This included the recruitment of four exceptional scientists to provide support across each of the three internal R&D divisions at BiVictriX: namely protein expression, bioconjugation and biology/biomarker discovery.
Scientific progress
We have continued to make good progress during the period through the optimisation of BVX001, our lead therapeutic development programme. In December 2022, we announced that we have successfully identified a development lead for this programme, which is a substantial step forward in identifying a final clinical candidate - a milestone which we anticipate meeting later this year.
As the first asset utilising our proprietary Bi-Cygni® approach, navigating the clinical development landscape for a completely novel drug candidate was always going to require careful preparation and planning. I am pleased to report that the Company has made great progress in identifying a suitable and timely development path, in conjunction with support and guidance from our regulatory advisors, which we believe will ensure a streamlined path to the clinic for this asset. This will effectively set the precedent and will aim to reduce time-to-market for all future pipeline assets aligned to this approach.
The development lead identified for the BVX001 programme was selected based on a highly encouraging and comprehensive in vitro data package. The data package report included positive readouts on cancer cell potency across different target-expressing cell lines, improved cancer selectivity and safety studies using human-derived healthy cells, as well as a suitable developability, stability and manufacturing profile reported. As such assays, many of which are proprietary, have been developed, established, and validated in house at BiVictriX, they will also serve the entire pipeline of the Company. In particular, we believe that these now established assays will help to drive shorter timelines from discovery activities to selection of future asset leads.
The development lead will now be further assessed in in vivo models of efficacy to assess the optimised dosing regimen, data which is anticipated later this year and will represent an exciting milestone for the business. The results will support manufacturing preparation of material for human trials and guide dosing in first-in-human studies to follow.
During the period, we have also made good progress with our proposed strategy to expand the therapeutic pipeline and identify new ways in which we could rapidly expand our proprietary Bi-Cygni® fingerprint library.
I am pleased to report that, through utilising patient-derived, next-generation sequencing data and state-of-the-art bioinformatics approaches, we have established a wholly-owned Bi-Cygni® discovery engine. The Bi-Cygni® discovery engine enables the efficient discovery of a wide range of novel, cancer-selective Bi-Cygni® fingerprints to feed our growing proprietary library, IP portfolio and expanding therapeutic pipeline. The discovery engine will serve an important, valued asset for the business and will enable BiVictriX to progress the Bi-Cygni® platform further into areas of significant unmet medical need and high commercial interest. Importantly, the Bi-Cygni® discovery engine will enable the business to expand the utility of the Bi-Cygni® concept across a wide range of solid tumour and haematological cancer indications, while also enabling the Company to enter new, well-sought-after markets, such as immuno-oncology. I believe this to be a crucial step forward for the business as we look to increase our value proposition aligned to our proprietary Bi-Cygni® concept and as we look towards securing commercial partnerships with third parties.
Post period end, we reported positive preclinical safety data with BVX001 when compared to MylotargTM - the only currently approved ADC indicated for AML. In January 2023, we reported that in an in vivo model evaluating the risk for bone marrow toxicity and neutropenia - a potentially life-threatening toxicity linked to currently approved therapies in AML - BVX001 showed no adverse effect to these healthy cells. The model was run head-to-head with MylotargTM with BVX001 demonstrating a highly favourable safety profile when compared to this commercial comparator. These results build upon the previously documented excellent in vivo efficacy data and ex vivo safety data reported for this programme
Commercial strategy
It is my belief, and that of the Board, that the Bi-Cygni® platform can be applied to build a diverse pipeline of first-in-class therapeutics to treat a wide range of solid tumour and haematological cancer indications, offering a competitive therapeutic advantage to the existing milieu of drugs currently in development and addressing key unmet needs in the market. BiVictriX's ambition is to validate the Bi-Cygni® approach within a panel of difficult-to-treat cancer indications, beginning with BVX001 in AML, to demonstrate the wide applicability of the concept, propelling the Group forward as a global leader in the field.
To realise maximum value, we are committed to ensuring the focused, expedient development of our therapeutic pipeline towards reaching key value inflection points, subsequently validating the wide utility of our proprietary Bi-Cygni® approach to treat multiple cancer types. Alongside this, we aim to further strengthen and grow our broad patent portfolio through the newly established Bi-Cygni discovery engine, safeguarding both current and future cancer-specific fingerprints for the Group, or our chosen partners. In addition, a number of our now established in-house assays represent trade secrets and provide further barriers to entry for potential competitors.
We are strongly focused on utilising our capital efficiently to secure value-enhancing milestones across our therapeutic products and wider platform, which will enable us to target commercial partnerships, including licensing agreements.
BVX001, as our lead asset, will be important in providing validation to the market for the wider Bi-Cygni platform. I believe there are three key milestones within the development pathway for our lead, namely nominating a clinical candidate, achieving IND approval and establishing early clinical proof of concept through an initial Phase I/II clinical trial. The first value-enhancement for BVX001 is on track to be achieved during 2023. The Board believes that nomination of a clinical candidate will have the potential to attract third party interest, including from pharma and mid-sized biotech companies operating within the sector, who may be interested in partnerships and/or licensing opportunities, providing long-term revenue streams to BiVictriX.
As we near completion of this major corporate milestone, we will continue to increase visibility of the Company at major sector conferences, building upon our well-received presentations and active involvement at the Immuno-Oncology Summit Europe and PEGS Europe during the period, together with our upcoming presentation at PEGS Boston in 2023. We were delighted to be included, nominated, and recognised for a variety of awards in 2022, notably EY's Entrepreneur of the Year and the European Mediscience Awards, in the 'Emerging Star' category. To enable the Company to actively seek out and explore potential opportunities in the near term, we will also bring onboard additional resource.
While we have had some early interest in our platform, our aim is to strike a balance between demonstrating commercial value of both our platform and our specific programmes, with an appropriate deal structure for the Company and our stakeholders. We, as a Company and Board, believe that our position to negotiate an appropriate deal structure for the lead asset will be strengthened by the continued development of the wider pipeline alongside the further development of BVX001. Therefore, in order to expedite the development of the lead asset and to ensure the Company is in a strong position to find the most appropriate partnership structure, we will also seek early-stage partnerships within specified territories which may provide additional financial support to move the asset forward within the shortest timeframe.
Immediate goals
Through our expanding pipeline, broad patent portfolio and internal know-how, the Company is well positioned to target multiple early-stage, preclinical partnership opportunities on the wider pipeline.
To succeed at achieving these goals we are focused on delivering upon the following key milestones:
· Nomination of a clinical candidate for the BVX001 programme based on in vivo efficacy data, anticipated during 2023;
· Identification of development leads for BVX002 and BVX003 within the next 12 months;
· Consolidation of the intellectual property landscape surrounding further potential cancer-specific Bi-Cygni® fingerprints, supported by the newly established discovery engine;
· Bringing onboard dedicated business development resource to actively seek out appropriate partnership opportunities for the BVX001 and/or other programmes; and
· Securing key discovery-stage collaborations with industry and academia to expand the Bi-Cygni® platform across other therapeutic platforms/other therapeutic indications.
Financials
Management controls operate across the business to ensure that our financial resources are prioritised towards the further development of the Company's therapeutic programmes and platform to reach the key value points outlined above.
This focus was reflected in the R&D expenditure which increased to £2.1 million (2021: £0.7 million) in the year and a loss after tax of £2.5 million (2021: £2.3 million).
We added to our internal laboratory capabilities by investing a further £241k (2021: £64k) in laboratory equipment.
The Group ended the year with a cash balance of £3.3 million (2021: £6.1 million)
Summary and outlook
I am very encouraged by the progress we have made during the period, including the progression of our lead therapeutic programme and the further strengthening of our IP portfolio; together with the positive strides we have made in future-proofing the business through the establishment of the Bi-Cygni® discovery engine, expansion of the pipeline and broadening of our internal capabilities and know-how. As we draw closer to reaching key value inflection points during 2023, our focus will be on increasing the visibility of the Company and showcasing our clear value proposition to potential third-party collaborators.
I remain fully committed to our business goals, our continued delivery against objectives and to prioritising the use of proceeds to create further significant value in the Company and to provide multiple potential opportunities for financial return to our valued shareholders.
Finally, and on a personal note, I would like to thank our exceptional scientific team for their enthusiasm, commitment and hard work over the past twelve months, for which our progress to date would not have been possible, the Board for their guidance throughout the period and of course, our shareholders for their much valued continued support and investment in our business.
Tiffany Thorn
Chief Executive Officer
29 March 2023
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
| |
Notes | Year Ended 31 Dec 2022 | Year Ended 31 Dec 2021
|
| £'000 | £'000 | ||
| Operating expenses | |
| |
| Research and Development | 3 | (2,110) | (711) |
| General and Administration | 3 | (738) | (567) |
| Share based compensation | 14 | (127) | (224) |
| Total operating expenses before non-recurring costs | | (2,975) | (1,502) |
| Non-recurring costs | 3 | - | (389) |
| Operating loss | | (2,975) | (1,891) |
| Finance income/(cost) | | 4 | (641) |
| Loss on ordinary activities before taxation | | (2,971) | (2,532) |
| Taxation | 6 | 474 | 192 |
| Loss and total comprehensive expenses attributable to equity holders of the parent for the year | | (2,497) | (2,340) |
| Loss per share attributable to equity holders of the parent (pence) | 7 |
| |
| | |
| |
| Basic loss per share (pence) | | (3.78) | (6.02) |
| Diluted loss per share (pence) | | (3.78) | (6.02) |
Consolidated and Company Statements of Financial Position
as at 31 December 2022
| | | Group | Company |
| ||
| |
Notes | As at 31 Dec 2022 £'000 | As at 31 Dec 2021 £'000 | As at 31 Dec 2022 £'000 | As at 31 Dec 2021 £'000 | |
| Assets | |
| |
| | |
| Non-current assets | |
| |
| | |
| Property, plant and equipment | 8 | 571 | 339 | - | - | |
| Investment in subsidiary undertakings | 9 | - | - | 214 | 214 | |
| Amounts receivable from subsidiaries | - | - | 5,173 | 2,906 | ||
| Total non-current assets | | 571 | 339 | 5,387 | 3,120 | |
| Current assets | | | |
| | |
| Trade and other receivables | 10 | 224 | 287 | 74 | 11 | |
| Current tax receivable | | 454 | 192 | - | - | |
| Cash and cash equivalents | 11 | 3,287 | 6,063 | 3,002 | 5,500 | |
| Total current assets | | 3,965 | 6,542 | 3,076 | 5,511 | |
| Total assets | | 4,536 | 6,881 | 8,463 | 8,631 | |
| Liabilities and equity | | | |
| | |
| Current liabilities | | | |
| | |
| Trade and other payables | 12 | 284 | 308 | 43 | 2 | |
| Lease liabilities | 15 | 107 | 71 | - | - | |
| Total current liabilities | | 391 | 379 | 43 | 2 | |
| Non-current Liabilities | | 188 | 175 | - | - | |
| Total Liabilities | | 579 | 554 | 43 | 2 | |
| Equity | | | |
| | |
| Ordinary shares | 13 | 661 | 661 | 661 | 661 | |
| Share premium | 13 | 12,052 | 12,052 | 8,002 | 8,002 | |
| Share based compensation | 13 | 351 | 224 | 351 | 224 | |
| Warrant reserve | 13 | 73 | 73 | 73 | 73 | |
| Merger reserve | 13 | (2,834) | (2,834) | - | - | |
| Retained losses | 13 | (6,346) | (3,849) | (667) | (331) | |
| Total equity attributable to equity holders of the parent | | 3,957 | 6,327 | 8,420 | 8,629 | |
| Total liabilities and equity | | 4,536 | 6,881 | 8,463 | 8,631 | |
No Statement of Comprehensive Income is presented in these financial statements for the parent company as provided by Section 408 of the Companies Act 2006. The loss for the financial year dealt with in the financial statements of the parent company was £345k (2021: £331k).
The financial statements were approved by the Board of Directors and authorised for issue on 29 March 2023 and were signed on its behalf by:
Michael Kauffman Tiffany Thorn
Chairman Chief Executive Officer
29 March 2023
BiVictriX Therapeutics plc
Registered number: 13470690
Consolidated Statement of Changes in Equity
for the year ended 31 December 2022
| | Ordinary shares
| Share Premium
| Merger reserve
| Share based compensation | Warrant reserve | Fair Value Reserve
| Retained deficit
| Total
|
| | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Balance at 31 December 2020 | 1 | 1,428 | - | 10 | - | 147 | (1,519) | 67 |
| Total comprehensive expense for the period | - | - | - | - | - | - | (2,340) | (2,340) |
| Transactions with owners | | | | | | | | |
| Acquisition of BiVictriX Limited | 212 | 2,622 | (2,834) | - | - | - | - | - |
| Share issue - convertible loan notes | 73 | 1,387 | - | - | - | (147) | - | 1,313 |
| Share issue - cash | 375 | 7,125 | - | - | - | - | - | 7,500 |
| Expense of share issue | - | (437) | - | - | - | - | - | (437) |
| Share based compensation - share options | - | - | - | 224 | - | - | - | 224 |
| Issue of warrants | - | (73) | - | - | 73 | - | - | - |
| Share based compensation -lapsed options | - | - | - | (10) | - | - | 10 | - |
| Total transactions with owners | 660 | 10,624 | (2,834) | 214 | 73 | (147) | 10 | 8,600 |
| Balance at 31 December 2021 | 661 | 12,052 | (2,834) | 224 | 73 | - | (3,849) | 6,327 |
| Total comprehensive expense for the period | | | | | | | (2,497) | (2,497) |
| Transactions with owners | | | | | | | | |
| Share based compensation - share options | | | | 127 | | | | 127 |
| Total transactions with owners | - | - | - | 127 | - | - | - | 127 |
| Balance at 31 December 2022 | 661 | 12,052 | (2,834) | 351 | 73 | - | (6,346) | 3,957 |
Company Statement of Changes in Equity
for the year ended 31 December 2022
|
| Attributable to equity holders of the parent | |||||||
| | Ordinary shares | Share premium
| Share based compensation
| Warrant reserve | Fair Value Reserve
| Retained deficit
| Total
| |
| | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance at 31 December 2020 | - | - | - | - | - | - | - | |
| Total comprehensive expense for the period | - | - | - | - | - | (331) | (331) | |
|
| Transactions with owners |
| ||||||
| Share issue - acquisition of BiVictriX Limited | 213 | - | - | - | - | - | 213 | |
| Share issue - convertible loan notes | 73 | 1,387 | - | - | - | - | 1,460 | |
| Share issue - cash | 375 | 7,125 | - | - | - | - | 7,500 | |
| Expense of share issue | - | (437) | - | - | - | - | (437) | |
| Share based compensation - share options | - | - | 224 | - | - | - | 224 | |
| Share based compensation - warrant reserve | - | (73) | - | 73 | - | - | - | |
| Total transactions with owners | 661 | 8,002 | 224 | 73 | - | - | 8,960 | |
| Balance at 31 December 2021 | 661 | 8,002 | 224 | 73 | | (331) | 8,629 | |
| Total comprehensive expense for the period | | | | | | (336) | (336) | |
|
| Transactions with owners |
| ||||||
| Share based compensation - share options | | | 127 | | | | 127 | |
| Total transactions with owners |
|
| 127 |
|
|
| 127 | |
| Balance at 31 December 2022 | 661 | 8,002 | 351 | 73 |
| (667) | 8,420 | |
Consolidated and Company Statements of Cash Flows
for the year ended 31 December 2022
| | Group | Company | ||
| Year ended 31 Dec 2022 £'000 | Year ended 31 Dec 2021 £'000 | Year ended 31 Dec 2022 £'000 | Year ended 31 Dec 2021 £'000 | |
| Cash flows from operating activities |
| |
| |
| Loss before taxation | (2,971) | (2,532) | (336) | (331) |
| Depreciation and amortisation | 151 | 46 | - | - |
| Share based compensation | 127 | 224 | 127 | 224 |
| Finance costs | (4) | 641 | - | - |
| | (2,697) | (1,621) | (209) | (107) |
| Changes in working capital |
| |
| |
| (Increase)/decrease in trade and other receivables | 63 | (227) | (63) | (11) |
| Increase/(decrease) in trade and other payables | 25 | (21) | 41 | 1 |
| Cash used in operations | 88 | (248) | (22) | (10) |
| Taxation received | 212 | 84 | - | - |
| Net cash used in operating activities | (2,397) | (1,785) | (231) | (117) |
| Cash flows (used in)/generated from investing activities |
| |
| |
| Acquisition of tangible fixed assets | (389) | (46) | - | - |
| Disposal of tangible fixed assets | 10 | - | - | - |
| Loans to subsidiary | - | - | (2,267) | (1,446) |
| Net cash (used in)/generated from investing activities | (379) | (46) | (2,267) | (1,446) |
| Cash flows from financing activities |
| |
| |
| Proceeds from issue of shares | - | 7,500 | - | 7,500 |
| Issue costs | - | (437) | - | (437) |
| Repayment of lease liabilities | - | (31) | - | - |
| Net cash generated from financing activities | - | 7,032 | - | 7,063 |
| Movements in cash and cash equivalents in the period | (2,776) | 5,201 | (2,498) | 5,500 |
| Cash and cash equivalents at start of period | 6,063 | 862 | 5,500 | - |
| Cash and cash equivalents at end of period | 3,287 | 6,063 | 3,002 | 5,500 |
Notes to the Financial Statements
1. General Information
BiVictriX Therapeutics plc ('the Company') is a public limited company incorporated in England and Wales and was admitted to trading on the AIM market of the London Stock Exchange under the symbol "BVX" on 11 August 2021. The address of its registered office is Mereside, Alderley Park, Alderley Edge, Macclesfield, England, SK10 4TG and the registered company number is 13470690. The principal activity of the Company is research and experimental development of pharmaceutical products.
2. Significant Accounting Policies and Basis of Preparation
Basis of preparation
The consolidated financial statements have been prepared in accordance with United Kingdom International Financial Reporting Standards ('IFRS') as adopted by the UK, IFRIC interpretations and the Companies Act 2006 applicable to companies operating under IFRS. The Company's financial statements have been prepared in accordance with Financial Reporting Standard 102 (United Kingdom Generally Accepted Accounting Practice).
The financial statements are presented in Sterling (£) and rounded to the nearest £000. This is the predominant functional currency of the Group and is the currency of the primary economic environment in which it operates. Foreign transactions are accounted in accordance with the policies set out below.
Basis of consolidation
The financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved when the Company has the power over the investee; is exposed, or has rights, to variable return from its involvement with the investee; and, has the ability to use its power to affect its returns. The Company reassesses whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the period are included in the Consolidated Statement of Comprehensive Income from the date the Company gains control until the date when the Company ceases to control the subsidiary.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the Group's accounting policies.
All intra-Group assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.
Going concern
In considering the Group's financial commitments and forecasts, the Board has followed the guidelines published by the Financial Reporting Council entitled ''Guidance on Risk Management and Internal Control and Related Financial and Business Reporting''.
In the normal course of business, the Directors regularly review rolling cash flow forecasts. The review of financial forecasts and cash flows looking at least 12 months from the approval of these financial statement includes levers and controls which could be applied, if necessary.
The Board has considered the impact of rising inflation and foreign exchange risk. In addition, consideration has been given to the conflict in Ukraine and the impact that may have on worldwide supplies. These risks are closely monitored as part of controlled, defined expenditure to meet business objectives.
Operational cashflows include planned research and development activities to advance the Group's lead and pipeline programmes. The timing and quantum of this expenditure is under the control and direction of management with oversight provided by the Board.
After considering cash flow forecasts and associated risks, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Company continues to adopt the going concern basis in preparing these financial statements.
At 31 December 2022, the Group had cash and cash equivalents, including short-term investments and cash on deposit, of £3.3 million.
Standards, interpretations and amendments to published standards not yet effective
The Directors have considered those standards and interpretations, which have not been applied in these financial statements but which are relevant to the group's operations, that are in issue but not yet effective and do not consider that they will have a material effect on the future results of the Group
Currencies
Functional and presentational currency
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or at an average rate for a period if the rates do not fluctuate significantly. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. The presentational currency is also the functional currency.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.
Office equipment - 25% straight line
Plant and equipment - 16% straight line
Furniture, fixtures and fittings - 25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Consolidated Statement of Comprehensive Income.
At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities, representing obligations to make lease payments and right-of-use assets representing the right to use the underlying assets.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the leases (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less and lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the remainder of the lease term.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. The Group's lease liabilities are included in interest-bearing loans and borrowings.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight-line bases over the lease term.
Extension and termination options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss.
Research and development
Expenditure on pure and applied research are charged to the profit and loss account in the year in which they are incurred. Development costs are charged to profit and loss account unless it can be demonstrated that the costs represent an intangible asset which meets all of the criteria for capitalisation set out in para 57 of IAS38.
Income tax
The tax expense or credit represents the sum of the tax currently payable or recoverable and the movement in deferred tax assets and liabilities.
(a) Current income tax
Current tax, including R&D tax credits which have the characteristics of income tax, is based on taxable income for the period and any adjustment to tax from previous periods. Taxable income differs from net income in the Consolidated Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other periods or that are never taxable or deductible. The calculation uses the latest tax rates for the period that have been enacted or substantively enacted by the dates of the Consolidated Statement of Financial Position.
(b) Deferred tax
Deferred tax is calculated at the latest tax rates that have been substantially enacted by the reporting date that are expected to apply when settled. It is charged or credited in the Consolidated Statement of Comprehensive Income, except when it relates to items credited or charged directly to equity, in which case it is also dealt with in equity.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable income, and is accounted for using the liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable income will be available against which the asset can be utilised. Such assets are reduced to the extent that it is no longer probable that the asset can be utilised.
Deferred tax assets and liabilities are offset when there is a legal right to offset current tax assets and liabilities, and when the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Deferred tax assets are not recognised due to uncertainty concerning crystallisation.
Payroll expense and related contributions
Wages, salaries, payroll tax, paid annual leave and sick leave, bonuses, and non-monetary benefits are accrued in the period in which the associated services are rendered.
Pension costs
The Group makes contributions to the private pension schemes of Directors and employees. Contributions are recognised in the periods to which they relate.
Share-based compensation
The Group issues share based payments to certain employees and Directors and warrants have been issued to certain suppliers. Equity- settled share-based payments are measured at fair value at the date of grant and expensed on a straight-line basis over the vesting period, along with a corresponding increase in equity.
At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market based vesting conditions. The impact of any revision is recognised in the Consolidated Statement of Comprehensive Income, with a corresponding adjustment to equity reserves.
The fair value of share options and warrants are determined using a Black-Scholes model, taking into consideration the best estimate of the expected life of the option or warrant and the estimated number of shares that will eventually vest.
Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of operating segments.
The Directors consider that there are no identifiable business segments that are subject to risks and returns different to the core business. The information reported to the Directors, for the purposes of resource allocation and assessment of performance is based wholly on the overall activities of the Group. The Group has therefore determined that it has only one reportable segment under IFRS 8.
The results and assets for this segment can be determined by reference to the Consolidated Statement of Comprehensive Income and Consolidated Statement of Financial Position.
Investment in subsidiaries
Investment in subsidiaries are shown in the Company balance sheet at cost and are reviewed annually for impairment.
Financial instruments
Financial assets and financial liabilities are recognised in the Group's Consolidated Statement of Financial Position when the Group becomes party to the contractual provisions of the instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire or when the contractual rights to those assets are transferred. Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or expired.
Trade and other receivables
Trade and other receivables that do not contain a significant financing component are initially recognised at fair value and subsequently held at amortised cost less provision for impairment. Provisions for impairment are based on an expected credit loss model as required by IFRS 9.
Cash, cash equivalents and short-term investments
Cash and cash equivalents consist of cash on hand, demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
Trade and other payables
Trade and other payables are not interest-bearing and are stated at nominal value.
Classification as debt or equity
Debt and equity instruments issued by the Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all its liabilities. Equity instruments issued by the Group are recognised as the proceeds received, net of direct issue costs.
Capital risk management
The Group has been funded by equity. The components of shareholders' equity are:
(a) The share capital and share premium account arising on the issue of shares.
(b) Merger reserve, which was created as a result of the acquisition by the Company of the entire issued share capital of BiVictriX Limited on 9 August 2021.
(c) The share based compensation reserve results from the Group's grant of equity-settled share options to selected employees and Directors.
(d) The retained deficit reflecting comprehensive loss to date.
The Group's objective when managing capital is to maintain adequate financial flexibility to preserve its ability to meet financial obligations, both current and long term. The capital structure of the Group is managed and adjusted to reflect changes in economic conditions. The Group funds its expenditures on commitments from existing cash and cash equivalent balances, primarily received from issuances of shareholders' equity. There are no externally imposed capital requirements. Financing decisions are made based on forecasts of the expected timing and level of capital and operating expenditure required to meet the Group's commitments and development plans.
Fair value estimation
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values because of the short term nature of such assets and the effect of discounting liabilities is negligible.
Significant management judgement in applying accounting policies and estimation uncertainty
When preparing the financial statements, the Directors make estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.
Estimation uncertainty
Receivables from the subsidiary, being amounts due from BiVictriX Limited advanced to support the Group's research expenditure, will be recoverable from future commercial revenues or capital receipts in the subsidiary, which are not certain to arise.
Taxation
In recognising income tax assets and liabilities, management makes estimates of the likely outcome of decisions by tax authorities on transactions and events whose treatment for tax purposes is uncertain. In particular, amounts claimed for R&D tax credits may not be receivable. Where the final outcome of such matters is different, or expected to be different, from previous assessments made by management, a change to the carrying value of income tax assets and liabilities will be recorded in the period in which such a determination is made. The carrying values of current tax are disclosed separately in the statement of financial position
Share based payment charge
A Black-Scholes model was used to calculate the appropriate charge for share based payments. The model involves using a number of estimates and judgements to establish the appropriate inputs including an appropriate interest rate and dividend rate, exercise restrictions and behavioural considerations. A significant element of judgement is therefore involved in the calculation of the charge. The total charge in the year to 31 December 2022 was £127k (year to 31 December 2021: £224k).
3. Operating Loss
An analysis of the Group's operating loss has been arrived at after charging:
|
| Year ended 31 Dec 2022 | Year ended 31 Dec 2021 |
|
| £'000 | £'000 |
| Research and development: |
| |
| Other research and development | 1,237 | 306 |
| Staff costs - Note 5 | 722 | 349 |
| Depreciation of property, plant and equipment | 151 | 46 |
| Operating lease cost - land and buildings | - | 10 |
| General and Administrative: |
| |
| Staff costs - Note 5 | 314 | 329 |
| Administration expenses | 424 | 238 |
| Share based compensation | 127 | 224 |
| Non-recurring costs | - | 389 |
| Total operating expenses | 2,975 | 1,891 |
The Group has one reportable segment, namely the development of pharmaceutical products all within the United Kingdom.
Non-recurring costs represent the costs of the Company's admission to AIM in the period ended 31 December 2021 which were recognised as an expense.
4. Auditor's Remuneration
The analysis of the auditor's remuneration is as follows:
| | Year ended 31 Dec 2022 | Year ended 31 Dec 2021 |
| | £'000 | £'000 |
| Fees payable to the Group's auditors for the audit of: |
| |
| the consolidated and Company annual accounts | 38 | 33 |
| the subsidiary's annual accounts |
| - |
| Total audit fees | 38 | 33 |
| Audit related services | 4 | 4 |
| Total audit related fees | 42 | 37 |
| Other services | - | - |
| Total non-audit fees | 4 | 4 |
5. Employees and Directors
The average monthly number of persons (including Executive Directors) employed by the Group was:
| | Group | Company | ||
| | Year ended 31 Dec 2022 Number | Year ended 31 Dec 2021 Number | Year ended 31 Dec 2022 Number | Year ended 31 Dec 2021 Number |
| Directors | 6 | 5 | 6 | 5 |
| Scientists and administration staff | 10 | 5 | - | - |
| Average total persons employed | 16 | 10 | 6 | 5 |
At 31 December 2022 the Group had 17 employees (31 December 2021: 7).
Staff costs in respect of these employees were:
| | Group |
| |
| | Year ended 31 Dec 2022 £'000 | Year ended 31 Dec 2021 £'000 | |
| Salaries and other short-term employee benefits | 899 | 395 | |
| Employer's National Insurance | 102 | 44 | |
| Pension contributions | 35 | 16 | |
| Options vesting under share option schemes | 127 | 224 | |
| Total remuneration including vesting of share options | 1,163 | 679 | |
The Group makes contributions to a pension scheme on behalf of the Director and employees.
The total remuneration of the highest paid Director excluding share based payments was £212,950 (31 December 2021: £181,290).
The Directors have the authority and responsibility for planning, directing and controlling, directly or indirectly, the activities of the Group and they therefore comprise key management personnel as defined by IAS 24.
Aggregate emoluments of the Directors of BiVictrix Therapeutics Plc:
| | Group | |
| | Year ended 31 Dec 2022 | Year ended 31 Dec 2021 |
| | £'000 | £'000 |
| Aggregate emoluments of Directors: | | |
| Salaries and other short-term employee benefits | 375 | 205 |
| Employer's National Insurance | 38 | 28 |
| Pension contributions | 8 | 7 |
| Options vesting under share option schemes | 106 | 224 |
| Total remuneration including vesting of share options | 527 | 464 |
6. Taxation
| | Year ended 31 Dec 2022 £'000 | Year ended 31 Dec 2021 £'000 |
| Current tax | | |
| Current period - UK corporation tax | - | - |
| R&D tax credit | 454 | 192 |
| Adjustments in respect of prior periods | 20 | - |
| Net tax credit | 474 | 192 |
The tax credit for each period can be reconciled to the loss per Consolidated Statement of Comprehensive Income as follows:
| | Year ended 31 Dec 2022 £'000 | Year ended 31 Dec 2021 £'000 |
| Loss on ordinary activities before taxation | (2,971) | (2,532) |
| Loss before tax at the effective rate of corporation tax in the United Kingdom of 19% (2021 19%) | (566) | (481) |
| Effects of: | | |
| Fixed asset differences | (15) | - |
| Expenses not deductible for tax purposes | 59 | - |
| Additional deduction for R&D expenditure | (336) | - |
| Surrender of tax losses for R&D tax credit refund | 596 | - |
| Movement in deferred tax not recognised | 262 | 481 |
| R&D tax credit | 474 | 192 |
| Tax credit for the year | 474 | 192 |
The Group has a deferred tax liability being accelerated capital allowances, for which the tax, measured at a standard rate of 19% in all periods is 31 December 2022 £262 (2021: £18,000). This has not been recognised as it is covered by accumulated tax losses in all periods.
The Group has a deferred tax asset for share-based payments, for which the tax, measured at a standard rate of 19% in all periods is 31 December 2022 £66,000 (2021: £45,000). No deferred tax assets have been recognised due to the uncertainty of the availability of future profits.
At 31 December 2022 the Group had UK carried forward tax losses of approximately £3,668,000 (2021: £3,703,000) for which no deferred tax asset has been recognised.
7. Loss per Share
Basic loss per share is calculated by dividing the loss for the period attributable to equity holders by the weighted average number of ordinary shares outstanding during the year.
For diluted loss per share, the loss for the year attributable to equity holders and the weighted average number of ordinary shares outstanding during the year is adjusted to assume conversion of all dilutive potential ordinary shares.
As at 31 December 2022, the Group had 8,734,184 (2021: 8,614,184) share options, warrants and subscriptions outstanding which are potentially dilutive.
The calculation of the Group's basic and diluted loss per share is based on the following data:
| | Year ended 31 Dec 2022 £'000 | Year ended 31 Dec 2021 £'000 |
| Loss for the year attributable to equity holders for basic loss and adjusted for the effects of dilution | (2,497) | (2,340) |
| | Year ended 31 Dec 2022 | Year ended 31 Dec 2021 |
| Weighted average number of ordinary shares for basic loss per share | 66,115,171 | 38,865,782 |
| Effects of dilution: | - | -
|
| Share options |
| |
| Weighted average number of ordinary shares adjusted for the effects of dilution | 66,115,171 | 38,865,782 |
| | Year ended 31 Dec 2022 £'000 | Year ended 31 Dec 2021 £'000 |
| Loss per share - basic and diluted | (3.78) | (6.02) |
The loss and the weighted average number of ordinary shares for the years ended 31 December 2022 and 2021 used for calculating the diluted loss per share are identical to those for the basic loss per share. This is because the outstanding share options would have the effect of reducing the loss per ordinary share and would therefore not be dilutive under the terms of International Accounting Standard ('IAS') No 33.
8. Property, Plant and Equipment
| | Office equipment, fixtures and fittings
| Building improvements | Plant and machinery | Motor Vehicles
| Right of Use Asset
| Total
|
| | £'000s | £'000s | £'000s | £'000s | £'000s | £'000s |
| Cost | | | | | | |
| At 31 December 2021 | 12 | 3 | 97 | - | 275 | 387 |
| Additions | 5 | 2 | 229 | 4 | 148 | 388 |
| Disposals | - | - | (7) | - | - | (7) |
| At 31 December 2022 | 17 | 5 | 319 | 4 | 423 | 768 |
| | | | | | | |
| Accumulated Depreciation | | | | | | |
| At 31 December 2021 | 2 | 1 | 16 | - | 29 | 48 |
| Provided during the year | 4 | 1 | 43 | - | 102 | 150 |
| Disposals | - | - | (1) | - | - | (1) |
| At 31 December 2022 | 6 | 2 | 58 | - | 131 | 197 |
| | | | | | | |
| Net Book Value | | | | | | |
| At 31 December 2021 | 10 | 2 | 81 | - | 246 | 339 |
| At 31 December 2022 | 11 | 3 | 261 | 4 | 292 | 571 |
Depreciation is charged to operating expenses.
| | Office equipment, fixtures and fittings | Building improvements
| Plant and machinery
| Right of Use Asset
| Total
|
|
| | £'000s | £'000s | £'000s | £'000s | £'000s | |
| Cost | | | | | |
|
| At 31 December 2019 | 2 | - | - | - | 2 |
|
| Additions | 1 | 2 | 61 | - | 64 |
|
| Disposals | | | | | |
|
| At 31 December 2020 | 3 | 2 | 61 |
| 66 |
|
| Additions | 9 | 1 | 36 | 275 | 321 |
|
| Disposals | | | | | |
|
| At 31 December 2021 | 12 | 3 | 97 | 275 | 387 |
|
| | | | | | |
|
| Accumulated Depreciation | | | | | |
|
| At 31 December 2019 | 1 | - | - | - | 1 |
|
| Provided during the year | - | - | 1 | - | 1 |
|
| At 31 December 2020 | 1 | - | 1 | - | 2 |
|
| Provided during the year | 1 | 1 | 15 | 29 | 46 |
|
| At 31 December 2021 | 2 | 1 | 16 | 29 | 48 |
|
| | | | | | |
|
| Net Book Value | | | | | |
|
| At 31 December 2020 | 1 | 2 | 60 | - | 63 |
|
| At 31 December 2021 | 10 | 2 | 81 | 246 | 339 |
|
9. Investment in Subsidiary Undertakings
The consolidated financial statements of the Group at 31 December 2022 include:
| Name of subsidiary | Class of share | Place of incorporation | Principle activities | Proportion of ownership interest | Proportion of voting rights held |
| BiVictriX Limited | Ordinary | United Kingdom | Research and development | 100% | 100% |
| | Group | Company | ||
| | 2022 £'000 | 2021 £'000 | 2022 £'000 | 2021 £'000 |
| Cost at 1 January | - | - | 214 | - |
| Acquisitions during the year | - | - | - | 214 |
| Cost at 31 December | - | - | 214 | 214 |
| Carrying Value as at 31 December | - | - | 214 | 214 |
| | Group | Company | ||
| Break down of carrying value of investment: | 2022 £'000 | 2021 £'000 | 2022 £'000 | 2021 £'000 |
| BiVictriX Limited | - | - | 214 | 214 |
Investments are tested for impairment at the balance sheet date. The recoverable amount of the investment in BiVictriX Limited at 31 December 2022 was assessed on the basis of value in use. As this exceeded carrying value no impairment loss was recognised.
The key assumptions used for the value in use calculation in 2022 were as follows:
| | % |
| Discount rate | 13.8 |
The Directors have made significant estimates on the future revenues based around a typical partnering with a large FMCG or Pharma partner. Assumptions have been made based upon on the size of the potential market, a patent will be achieved from which royalties will flow and the expected royalty % across the lifetime of the patent.
The Directors have performed a sensitivity analysis to assess the impact of downside risk of the key assumptions underpinning the projected results of the Group. The projection used is sensitive to the projected royalty assumptions that have been applied.
10. Trade and Other Receivables
| | Group | Company | ||
| | As at 31 Dec 2022 £'000 | As at 31 Dec 2021 £'000 | As at 31 Dec 2022 £'000 | As at 31 Dec 2021 £'000 |
| Amounts receivable within one year | | | | |
| Other taxation and social security | 111 | 68 | 32 | 6 |
| Prepayments | 113 | 219 | 42 | 5 |
| Trade and other receivables | 224 | 287 | 74 | 11 |
The Directors believe that the carrying value of trade and other receivables represents their fair value. In determining the recoverability of trade receivables, the Group considers any change in the credit quality of the receivable from the date credit was granted up to the reporting date. In addition, an expected credit losses model is used which broadens the information that an entity is required to consider when determining its expectations of impairment. Under this model, expectations from future events are taken into account which could result in the earlier recognition of impairments. Details on the Group's credit risk management policies are shown in Note 16. The Group does not hold any collateral as security for its trade and other receivables.
Amounts due to the Company from subsidiary undertakings are not considered to be receivable within one year - see note 17
11. Cash, Cash Equivalents and Short-Term Investments
| | Group | Company | ||
| | Year ended 31 Dec 2022 £'000 | Year ended 31 Dec 2021 £'000 | Year ended 31 Dec 2022 £'000 | Year ended 31 Dec 2021 £'000 |
| Cash at bank and in hand | 3,287 | 6,063 | 3,002 | 5,500 |
12. Trade and Other Payables
| | Group | Company | |||
| | Year ended 31 Dec 2022 £'000 | Year ended 31 Dec 2021 £'000 | Year ended 31 Dec 2022 £'000 | Year ended 31 Dec 2021 £'000 |
|
| Amounts falling due within one year | | | | |
|
| Trade payables | 112 | 69 | - | 2 |
|
| Other taxation and social security | 40 | 65 | - | - |
|
| Accrued expenses | 132 | 174 | 43 | - |
|
| Trade and other payables | 284 | 308 | 43 | 2 |
|
Trade and other payables principally consist of amounts outstanding for trade purchases and ongoing costs. They are non-interest bearing and are normally settled on 30 to 45 day terms. The Directors consider that the carrying value of trade and other payables approximates to their fair value. All trade and other payables are denominated in Sterling. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe and no interest has been charged by any suppliers as a result of late payment of invoices during the period.
The fair value of trade and other payables approximates to their current book values.
13. Issued Capital and Reserves
Ordinary shares
| | Company | |||
|
Ordinary shares of 1p each: | Number | Share Capital
| Share Premium
| Total
|
| | | £'000 | £'000 | £'000 |
| At 31 December 2021 | 66,115,171 | 661 | 12,052 | 12,713 |
| | | | | |
| | | | | |
| At 31 December 2022 | 66,115,171 | 661 | 12,052 | 12,713 |
Other reserves
The share premium reserve represents the difference between the net proceeds of equity issues and the nominal share capital of the shares issued.
The merger reserve at 31 December 2022 arose from the acquisition of BiVictriX Limited on 9 August 2021, which is accounted for using the merger method of accounting.
The share-based compensation reserve reflects the cumulative expense for outstanding share based instruments.
Reserves classified as retained deficit represent accumulated losses. None of the reserves are distributable.
14. Share-based Payments
Certain Directors and employees of the Group are granted options to subscribe for shares in the Group in accordance with the rules of the Company's share option schemes. The number of shares subject to options, the periods in which they were granted and the period in which they may be exercised are given below.
The Group operates one share option scheme, in addition share options have been granted under standalone unapproved share option agreements. Options are currently granted for £nil consideration and are exercisable at a price determined on the date of the grant.
At 31 December 2022 the Company had 8,744,184 (2021: 8,614,184) unissued ordinary shares of 1p under the Company's share option schemes, details of which are as follows:
Movements on share options during the year were as follows:
| Exercise price | At | Granted | Lapsed/ Cancelled | At | Date from which exercisable | Expiry |
| 0.250 | | 30,000 | - | 30,000 | 3 May 2025 | 2 May 2032 |
| 0.205 | | 40,000 | - | 40,000 | 14 Sep 2025 | 13 Sep 2032 |
| 0.170 | | 30,000 | - | 30,000 | 22 Dec 2025 | 21 Dec 2032 |
| 0.170 | | 20,000 | - | 20,000 | 22 Dec 2025 | 21 Dec 2032 |
As at 31 December 2022, the share option scheme movements was as follows:
| | As at 31 Dec 2022 | As at 31 Dec 2021 | ||
|
| Number | Weighted average exercise price Pence | Number | Weighted average exercise price Pence |
| Outstanding at start of the year | 8,614,184 | 20.16 | - | - |
| Granted | 120,000 | 20.17 | 8,614,184 | 20.16 |
| Lapsed/cancelled |
|
| - | - |
| Outstanding at end of year | 8,734,184 | 20.16 | 8,614,184 | 20.16 |
| Exercisable at end of year | 4,900,677 | 19.54 | 3,656,170 | 19.17 |
The fair values of share options granted during the period were calculated using the Black Scholes option pricing model. The inputs into the model for awards granted were as follows:
| Options issued | 30,000 | 40,000 | 30,000 | 20,000 |
| Grant date | 3 May 2022 | 14 Sep 2022 | 22 Dec 2022 | 22 Dec 2022 |
| Expiry date | 2 May 2032 | 13 Sep 2032 | 21 Dec 2032 | 21 Dec 2032 |
| Vesting period | Over 3 years from grant | Over 3 years from grant | Over 3 years from grant | Over 3 years from grant |
| Share price (pence) | 25.0p | 20.5p | 17.0p | 17.0p |
| Exercise price (pence) | 25.0p | 20.5p | 17.0p | 17.0p |
| Expected volatility | 52.5% | 52.5% | 52.5% | 52.5% |
| Risk free rate | 0.75% | 1.75% | 3.5% | 3.5% |
The expected volatility of 52.5% has been estimated based on comparable companies listed on AIM.
15. Lease liabilities
Amounts recognised in the statement of financial position
Right-of-use assets
Details of the Right-of-use assets held at 31 December 2022 can be found in note 8.
Lease liabilities
| | As at 31 December 2022 | As at 31 December 2021 |
| | £'000 | £'000 |
| Current | 107 | 71 |
| Non-current | 188 | 175 |
| | 295 | 246 |
| Future minimum lease payments are as follows: |
| |
| Not later than one year | 107 | 71 |
| Later than one year and not later than 5 years | 188 | 175 |
| Total gross payments | 295 | 246 |
| Impact of finance expenses | - | - |
| Carrying amount of liability | 295 | 246 |
Lease liabilities have been recognised on the incremental borrowing rate for Land and Buildings and Office Equipment.
Amounts recognised in the statement of comprehensive income
| | As at 31 December 2022 | As at 31 December 2021 |
| | £'000 | £'000 |
| Depreciation charge | (103) | (29) |
| Interest of lease liabilities | (12) | (2) |
| Rental payments with lease term less than 12 months | | - |
| | (115) | (31) |
Amounts recognised in the statement of cash flows
| | As at 31 December 2022 | As at 31 December 2021 |
| | £'000 | £'000 |
| Principal elements of lease payments | (75) | (1) |
| Interest of lease liabilities | - | - |
| Rental payments with lease term less than 12 months | - | (1) |
| | (75) | (2) |
16. Financial Risk Management
The main risks arising from the Group's financial instruments are cash flow and liquidity and credit risk. The Group's financial instruments comprise cash and various items such as trade payables, which arise directly from its operations.
Cash flow and liquidity risk
Management monitors the level of cash on a regular basis to ensure that the Group has sufficient funds to meet its commitments where due. The table below analyses the Group and Company's financial assets and liabilities by category:
| | Group | Company | |||||||
| | Year ended 31 Dec 2022 Financial assets at amortised cost £'000 | Year ended £'000 | Year ended 31 Dec 2022 Financial assets at amortised cost £'000 | Year ended £'000 | |||||
| Assets as per statement of financial position | | | | | |||||
| Other receivables | 111 | 68 | 5,205 | 2,911 | |||||
| Cash and cash equivalents | 3,287 | 6,063 | 3,002 | 5,500 | |||||
| | 3,398 | 6,131 | 8,207 | 8,411 | |||||
|
| | | | | |||||
| | Group | Company | |||||||
| | Year ended 31 Dec 2022 Financial assets at amortised cost £'000 | Year ended 31 Dec 2021 Financial assets at amortised Cost £'000 | Year ended 31 Dec 2022 Financial assets at amortised cost £'000 | Year ended 31 Dec 2021 Financial assets at amortised £'000 | |||||
| Trade payables | 112 | 69 | - | 1 | |||||
| Other creditors and accruals | 172 | 239 | 43 | - | |||||
| | 284 | 308 | 43 | 1 | |||||
|
| |||||||||
All liabilities are due within 30 days except for lease liabilities which are dealt with in note 15.
Credit risk
The Group gives careful consideration to which organisations it uses for banking in order to minimise credit risk. The Group holds cash with two large banks in the UK. The amounts of cash held at the reporting date can be seen in the financial assets table above. All of the cash and equivalents were denominated in UK Sterling. The Group's policy is to minimisethe risks associated with cash and cash equivalents by placing these deposits with institutions with a recognised high credit rating.
The carrying amount of financial assets recorded in the Consolidated Statement of Financial Position, net of any allowances for losses, represents the Group's maximum exposure to credit risk without taking account of the value of any collateral obtained.
No allowance has been made for impairment losses. In the Directors' opinion, there has been no impairment of financial assets during the period.
An allowance for impairment is made where there is an identified credit loss which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. The Directors consider the above measures to be sufficient to control the credit risk exposure. No collateral is held by the Group as security in relation to its financial assets.
Foreign currency risk
The Group's exposure to the risk of changes in foreign exchange rates relates solely to the Group's use of suppliers operating overseas, primarily denominated in Euros and US Dollars. The Group's use of foreign suppliers is minimal and as such exposure to foreign currency changes is not material.
The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the year end were £16,000 (2021: 1,000).
At present the Group does not make use of financial instruments to minimise any foreign exchange gains or losses so any fluctuations in foreign exchange movements may have a material adverse impact on the results from operating activities.
Fair value of financial assets and liabilities
There is no material difference between the fair value and the carrying values of the financial instruments because of the short maturity period of these financial instruments and their intrinsic size and risk.
Capital risk management
The Group considers capital to be shareholders' equity as shown in the consolidated statement of financial position, as the Group is primarily funded by equity finance. The Group is not yet in a position to pay a dividend.
The objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and for other stakeholders. In order to maintain or adjust the capital structure the Group may return capital to shareholders and issue new shares.
17. Related Party Transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
Key management compensation is disclosed in Note 5 of the consolidated financial statements. Directors' emoluments are disclosed in the Remuneration Committee Report.
18. Transactions with shareholders
The following transactions with shareholders and companies controlled by directors or former directors of Bivictrix were recorded, excluding VAT, during the year:
| | | Year to 31 December 2022 | Year to 31 December 2021 |
| | | £'000 | £'000 |
| Acceleris (David Youngman/Norman Molyneux) Non-Executive Director fees, funding support fees and expenses | - | 129 | |
| Gladstone Consultancy Partnership (Iain Ross) Consultancy fees | | - | 39 |
Company
The Company is responsible for financing and setting Group strategy. The Company's subsidiary carried out the Group's research and development strategy including the management of the Group's intellectual property. The Company provides funding to its subsidiary in the form of a loan. This loan is classified as non-current to reflect the likely repayment schedule of the loan. Interest is accrued at a rate of 4.5% per annum which is considered to be a market rate. Balance outstanding, including accrued interest, at the 31 December 2022 was £5,173,000 (31 December 2021: 2,906,000)
19. Contingent Liabilities
The Group has no contingent liabilities at 31 December 2022 (2021: nil).
20. Convertible loan notes
In 2020 BiVictriX Limited entered into a Convertible Loan Agreement ('CLA') with the Future Fund, Development Bank of Wales and Alderley Park Ventures. The CLA had 36 months term with interest payable of 8% p.a Loan note holders had the right to receive repayment in full and a 100% redemption premium or convert to equity at 20% to the prevailing share price or the previous round price, whichever was the lower..
On 10 August 2021, the loan note holders elected to convert the CLA and accrued interest. All loan notes were converted to ordinary shares at a price of 11.7 pence per share. The discount against the Admission price of 20.0 pence per share has been recognised in the statement of comprehensive income.
21. Events after the Reporting Date
In January 2023, Dr. Michael Kauffman was appointed as Non-Executive Chairman.
In January 2023, positive preclinical data was reported with the BVX001 programme, demonstrating a highly favourable safety profile compared to MylotargTM in an in vivo model assessing the risk for bone marrow toxicity and neutropenia.
22. Ultimate Controlling Party
There is no ultimate controlling party of the Group.
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