28 April 2023
Biodexa Pharmaceuticals
PLC(“Biodexa” or the “Company” or, together with
its subsidiaries, the “Group”)
Preliminary Results for
the Year Ended 31 December 2022
Biodexa Pharmaceuticals PLC (Nasdaq: BDRX), a
clinical-stage biopharmaceutical company developing a pipeline of
products aimed at primary and metastatic cancers of the brain,
announces its audited preliminary results for the year ended 31
December 2022.
For more information, please
contact:
Biodexa Pharmaceuticals
PLC
Stephen Stamp, CEO, CFO
Tel: +44 (0)29 2048 0180
www.biodexapharma.com
Edison Group (US Investor
Relations)
Alyssa Factor
Tel: +1 (860) 573 9637
Email: afactor@edisongroup.com
About Biodexa Pharmaceuticals
PLCBiodexa Pharmaceuticals PLC (listed on NASDAQ:
BDRX) is a clinical stage biopharmaceutical company developing a
pipeline of products aimed at primary and metastatic cancers of the
brain. The Company’s lead candidate, MTX110, is being studied in
aggressive rare/orphan brain cancer indications including recurrent
glioblastoma and diffuse midline glioma. MTX110 is a liquid
formulation of the histone deacetylase (HDAC) inhibitor,
panobinostat. This proprietary formulation enables delivery of
the product via convection-enhanced delivery (CED) at potentially
chemotherapeutic doses directly to the site of the tumour,
by-passing the blood-brain barrier and avoiding systemic
toxicity.Biodexa's headquarters and R&D facility is in Cardiff,
UK. For more information, please visit www.biodexapharma.com |
Forward-Looking Statements
Certain statements in this announcement may
constitute "forward-looking statements" within the meaning of
legislation in the United Kingdom and/or United States Private
Securities Litigation Reform Act. All statements contained in this
announcement that do not relate to matters of historical fact
should be considered forward-looking statements.
Reference should be made to those documents that
Biodexa shall file from time to time or announcements that may be
made by Biodexa in accordance with regulations promulgated by the
US Securities and Exchange Commission, which contains and
identifies other important factors that could cause actual results
to differ materially from those contained in any projections or
forward-looking statements. These forward-looking statements speak
only as of the date of this announcement. All subsequent written
and oral forward-looking statements by or concerning Biodexa are
expressly qualified in their entirety by the cautionary statements
above. Except as may be required under the relevant law in the
United States, Biodexa does not undertake any obligation to
publicly update or revise any forward-looking statements because of
new information, future events or otherwise arising.
INTRODUCTION
Headquartered in Cardiff, UK, and quoted on
NASDAQ in the US, Biodexa is a clinical-stage biotechnology company
with three enabling drug delivery technologies. The Company
de-listed from the AIM market as of 26 April 2023.
STRATEGY
Since the Strategic Review, and throughout 2022,
we pursued a strategy of broadening our R&D pipeline by
initiating internal programmes, collaborating with third party
pharmaceutical companies on their proprietary active pharmaceutical
ingredients, or APIs, and adding new indications to MTX110. New
internal programmes were selected and prioritised based on the
expected time to deliver proof-of-concept data for potential
partnering.
Other than adding a second R&D collaboration
with Janssen Pharmaceutica NV, for reasons not always within our
control, we were not successful in finding partners for our
internal Q-Sphera pipeline. As our cash runway ran down, and the
market for biotech financing worsened in 2022, we considered the
opportunities for refinancing the Company as a drug delivery
company were limited. Accordingly, we concluded that repositioning
the Company as a therapeutics company, focused on rare and orphan
products in a merger with Bioasis Technologies, Inc. (Bioasis) with
an attendant $10.0 million financing was the optimal solution for
the Company. Although the merger and financing did not proceed, we
were successful in raising $6.0 million, repositioning the Company
as a clinical-stage therapeutics company supported by enabling
technologies. In line with that repositioning, we undertook a
restructuring in March 2023 including a cost reduction programme
and termination of our internal Q-Sphera programmes. These
initiatives are described more fully in the Chief Executive’s
Review.
Following the repositioning of the Company, our
priorities for 2023 reflect our modified strategy as follows:
Strategic Imperatives |
Progress in 2022 |
Priorities for 2023 |
|
|
|
Advance our clinical -stage assets through to proof-of-concept
data |
We announced the recruitment of our first patient in the first
cohort of a Phase I study of MTX110 in recurrent GBM (rGBM) in two
clinical centres in the US. |
In respect of our Phase I study in rGBM, deliver interim safety and
efficacy data (in the form of Progression Free Survival data) in
respect of Cohort A patients and recruit Cohort B patients.Finalise
recruitment of our second Phase I study in DIPG and report safety
data.Accelerate recruitment of our Phase I study in
medulloblastoma. |
Develop and broaden applications for our three primary drug
delivery technologies |
Having discovered we could encapsulate and retain the functional
integrity of a monoclonal antibody, we explored additional
potential applications for our Q-Sphera technology including
antibody drug conjugates (ADCs) and BiTes. We completed our
assignment under our first R&D collaboration with Janssen,
including optimising drug loading of Janssen’s proprietary large
molecule using our Q-Sphera technology. |
Generate in vivo data to demonstrate intratumoral delivery of drugs
using our proprietary technology.Explore opportunities for MTX110
in combination therapy for brain and metastatic CNS cancer.Expand
further our patent portfolio to cover new inventions and
divisionals to strengthen existing patent families. |
Enter into R&D collaborations at the feasibility stage and/or
licenses at proof-of-concept stage with third parties. |
In January 2022 and again in March 2022, we announced two R&D
collaborations with Janssen. We have been tasked with maximizing
drug loading and optimizing in vitro duration of release for two of
Janssen’s experimental large molecules using our Q-Sphera
technology. |
Enter into R&D collaborations with third parties to formulate
their proprietary molecules using our technology platforms.Seek a
partner to develop, or co-develop, MTX110 once preliminary data
from our Phase I study in recurrent GBM become available. |
Seek opportunities to diversify our pre-clinical and clinical-stage
pipeline |
We explored additional indications for MTX110 during the year
although the decision to reposition the Company into a therapeutics
(as opposed to drug delivery) company was actioned in early 2023.We
added a new research programme coded MTD217 focused on developing
new therapeutics options for metastatic cancers including
leptomeningeal disease. |
Identify and acquire at least one development asset to in-license,
ideally in oncology and for a rare/orphan indication.Initiate
additional preclinical studies to assess the potential for MTD217
inhibitors in leptomeningeal disease. |
Provide a healthy and stimulating environment in which our staff
members can continue to thrive and innovate |
We have been compliant with ISO 9001 since 2014. During the year,
we introduced a new COSHH assessment procedure to better quantify
the safety of chemicals and third parties’ APIs being deployed in
our laboratories. |
Continue to monitor third party advice and regulation to maintain a
safe environment for our staff members.Develop individualised
learning programmes for staff members through participation in
conferences, webinars and/or training programmes. |
BUSINESS MODEL
Following our Strategic Review in March 2020, we
reverted to a traditional biotech business model. We aimed to
deploy our proprietary technologies to develop proof-of-concept
formulations and then enter into licensing agreements with third
party pharmaceutical companies.
In order to make the Company more investable and
secure additional financing, the Board decided to reposition the
Company as a therapeutics (as opposed to drug delivery) company in
early 2023. As a result, the delivery of proof-of-concept clinical
data is the primary focus of our business model going forward.
Development
Our intention is to build a balanced portfolio
of clinical-stage development assets, ideally focused on oncology
and on rare/orphan indications. Our only current clinical-stage
asset, MTX110 is in Phase I development for three rare/orphan brain
cancers.
Our R&D programmes may, like MTX110, be
based on one or more of our enabling technologies.
Our aim is to enter into R&D collaborations
with third parties to develop proof-of-concept formulations of
their proprietary compounds using our proprietary drug delivery
technologies. We will not be expanding our internal pipeline of
drug delivery based programmes.
Manufacturing
To establish proof-of-concept in pre-clinical
studies for potential licensees, we are able to manufacture non-GMP
Q-Sphera products at pilot scale at our Cardiff facility. Upon
securing a license partner who wishes to start clinical studies,
our intention would be to technology transfer GMP manufacture of
clinical trial supplies and ultimately full GMP commercial
manufacture to a third party CMO. We would expect a licensee to
assume the cost of manufacturing GMP product and commercial
scale-up pursuant to a technology transfer agreement.
MTX110 is currently being manufactured to GMP
standards at a CMO.
Commercialisation
Once proof-of-concept has been established, we
intend to seek to license our products to a partner who would
complete the clinical development and subsequently market and sell
them in the licensed territory. In addition to reimbursement of
development costs, the partner would be expected to make milestone
payments based on sales targets and royalty payments.
Our development pipeline includes six projects
of which one is partnered with Janssen:
CLINICAL-STAGE ASSETS
MTX110
Using our MidaSolve technology in combination
with panobinostat, an otherwise insoluble drug, MTX110 is designed
for direct-to-tumour treatment of intractable brain cancers.
Panobinostat is currently marketed under the brand Farydak® which
is used orally in combination therapy for the treatment of multiple
myeloma. We are currently researching the utility of MTX110 to
proof-of-concept stage in three indications:
Glioblastoma Multiforme (GBM):GBM is the most
common and aggressive form of brain cancer in adults, usually
occurring in the white matter of the cerebrum. Treatments include
radiation, surgical resection and chemotherapy, although in almost
all cases tumours recur. There are approximately 2-3/100,000(1)
population diagnoses of GBM per annum. Survival with standard of
care treatment ranges from approximately 13 months in unmethylated
MGMT patients to approximately 30 months in highly methylated MGMT
patients(2).
Following IND approval in December 2021, we are
in the process of recruiting patients in a Phase I study to assess
the utility of MTX110 in recurrent GBM. The Phase I study is an
open-label, dose escalation study designed to assess the
feasibility and safety of intermittent infusions of MTX110
administered by convection enhanced delivery (CED) via implanted
refillable pump and catheter. The study aims to recruit two
cohorts, each with a minimum of four patients; the first cohort
will receive MTX110 only and the second cohort will receive MTX110
in combination with lomustine.
Diffuse Intrinsic Pontine Glioma (DIPG):DIPG
tumours are located in the pons (middle) of the brain stem and are
diffusely infiltrating. Occurring mostly in children, approximately
1,000 patients(3) worldwide are diagnosed with DIPG per annum and
median survival is approximately 10 months(4). There is no
effective treatment since surgical resection is not possible. The
standard of care is radiotherapy, which transiently improves
symptoms and survival. Chemotherapy does not improve survival and
one likely reason is that many anti-cancer drugs cannot cross the
blood-brain barrier to access the tumour.
In October 2020, we reported the first-in-human
study by the University of California, San Francisco (“UCSF”) of
MTX110 in DIPG using a convection enhanced delivery (“CED”) system.
The Phase I study established a recommended dose range for Phase
II, a good safety and tolerability profile but also encouraging
survival data in the seven patients treated.
Medulloblastoma:Medulloblastomas are malignant
embryonal tumours that start in the cerebellum. They are invasive
and, unlike most brain tumours, spread through
the cerebrospinal fluid (“CSF”) and
frequently metastasize to different locations in the
brain and spinal cord. Treatments include resection, radiation and
chemotherapy. Approximately 350 patients(5) are diagnosed with
medulloblastoma per annum and 3,800 people are living with the
disease in the US. The cumulative survival rate is approximately
60%, 52%, and 47% at 5 years, 10 years, and 20 years,
respectively(6); however, recurrence is nearly always fatal with no
established standard of care.
The University of Texas is undertaking a Phase I
exploratory study in recurrent medulloblastoma patients using
direct administration of MTX110 into the fourth ventricle, enabling
it to circulate throughout the CSF.
(1) American Association of
Neurosurgeons(2) Radke et al (2019). Predictive
MGMT status in a homogeneous cohort of IDH wildtype glioblastoma
patients. Acta Neuropathologica Communications 7:89 Online:
https://doi.org/10.1186/s40478-019-0745-z(3) Louis
DN, Ellison DW, et al. The 2016 World Health Organization
Classification of Tumors of the Central Nervous System: a summary.
Acta Neuropathol 2016; 131:803–820 (4) Jansen et
al, 2015. Neuro-Oncology 17(1):160-166(5) Aboian
et al (2018). Neuro-Oncology Practice, Volume 5, Issue 4, December
2018(6) Smoll NR (March 2012). "Relative survival
of childhood and adult medulloblastomas and primitive
neuroectodermal tumors (PNETs)". Cancer. 118 (5):
1313–22
TECHNOLOGIES
Q-Sphera
Our Q-Sphera technology employs 3-D printing
techniques to encapsulate medicines in polymer-based bioresorbable
microspheres. The microspheres may be injected to form depots in
the body which release drug over predictable, sustained periods
from one week up to several months. The features and benefits of
Q-Sphera technology offer numerous potential advantages to patients
and payors compared with immediate release products and other
polymer-based technologies.
MidaSolve
Our MidaSolve technology increases the aqueous
solubility of certain classes of anti-cancer drugs using complexes
that solubilize these agents in water, thereby enabling them to be
injected in liquid form directly into tumours.
The MidaSolve complexation agents
(cyclodextrins) comprise a hydrophobic inner surface and a
hydrophilic outer surface, and as a result are capable of forming
host-guest complexes with normally water-insoluble molecules. The
hydrophobic, poorly water-soluble drug associates with the inner,
more hydrophobic surface of the MidaSolve host, while the
hydrophilic outer surface allows the complex to dissolve at
biological pH.
MidaCore
Our MidaCore technology platform is based on
ultra-small gold nanoparticle (GNP) drug conjugates, which at 2-4nm
are among the smallest particles in biomedical use. They are
composed of a core of gold salts decorated with an array of
therapeutic and/or targeting ligands. The small size and
multi-functional arrangement around the gold core underpin the
ability to improve biodistribution and target tumour and/or immune
sites.
MidaCore design and synthesis GNP technology
enables the production of nano-medications, which we believe are
five-to-tenfold smaller than any other delivery vehicle in medical
use.
CHIEF EXECUTIVE’S REVIEW
Introduction
With probably the most challenging market
backdrop since the financial crisis in 2008/09 for financing
biotech companies, 2022 was dominated by efforts to refinance the
Company before its cash runway was due to expire in the first
quarter of 2023. These efforts included our proposed acquisition of
Bioasis and financing which was voted down by a group of
shareholders followed by a successful, smaller financing and shift
in strategic focus in early 2023.
Commercial Update
We made some incremental steps with our
commercial strategy in 2022. In January we announced that Janssen
had extended our R&D collaboration to optimise the drug loading
and in vitro dissolution of a proprietary Janssen protein using our
Q-Sphera technology. In March we announced that Janssen had further
extended the collaboration to include the optimisation of drug
loading and in vitro dissolution of a second protein. We have met
our objectives with the first assignment and continue to work on
the second.
R&D Update
MTX110
Employing our MidaSolve technology, MTX110
solubilises panobinostat, a histone deacetylase (HDAC) inhibitor
currently used in the treatment of multiple myeloma. In a liquid
formulation as MTX110, panobinostat can be delivered directly to a
patient's tumour under constant pressure via a catheter system
(Convection Enhanced Delivery, or "CED"), thereby bypassing the
blood-brain barrier and allowing for high drug concentrations and
broader drug distribution in and around the tumour while
simultaneously minimising systemic toxicity and other side
effects.
During 2021, following receipt of promising
pre-clinical data from tumour models and in vitro patient-derived
cell lines, we reprioritised our development of MTX110 in favour of
GBM, potentially a very significant opportunity with annual
diagnoses of 2-3/100,000 population and global market potential of
US$3-5 billion. In December 2021 we received an IND to proceed with
an open label, dose escalation study designed to assess the
feasibility and safety of intermittent infusions of MTX110
administered by CED via implanted refillable pump and catheter. The
study aims to recruit two cohorts, each with a minimum of four
patients; the first cohort will receive MTX110 only and the second
cohort will receive MTX110 in combination with lomustine. We
announced our first patient enrolled in the trial in November 2022
and the Data Safety Monitoring Board recommended the dose be
escalated to 90µM, the expected optimal dose for patients. We are
aiming for preliminary safety and efficacy data (in the form of
Progression Free Survival data) for the first cohort in the third
quarter of 2023.
We initially began developing MTX110 for DIPG,
the ultra-rare, highly aggressive and inoperable form of childhood
brain cancer. We have an ongoing Phase I study in the US with one
more patient required for completion. We are also evaluating the
utility of MTX110 in medulloblastoma in a pilot study at the
University of Texas.
Q-Sphera
Development programmes in our internal Q-Sphera
pipeline are designed to address large markets but also offer
significant clinical benefits compared with current therapies and,
importantly for reimbursement, savings to the healthcare
system.
MTD211 (Q-brexpiprazole)
We have developed a long-acting formulation of
brexpiprazole. In in vivo studies, MTD211 demonstrated that a
single dose is expected to deliver therapeutic blood levels of
brexpiprazole over a period of approximately three months. Marketed
under the brand name Rexulti®, brexpiprazole is indicated for the
treatment of schizophrenia and adjunctive treatment of major
depressive disorder (MDD) and is currently only available as an
immediate release oral tablet. The market for anti-psychotic drugs
has shifted towards long-acting formulations for reasons of
improved patient compliance and lowering of payor costs associated
with patient hospitalisation events. MTD211 is available for
licensing.
MTX223 Q-Protein, partnered with JanssenWe are
continuing to collaborate with Janssen on a second large molecule
to optimize drug loading and in vitro dissolution profiles.
MidaSolveMTD217 (MTX110 plus an
oxphosphorylation inhibitor)
Our recently initiated MTD217 programme explores
simultaneous inhibition of aerobic glycolysis and
oxphosphorylation, key metabolic pathways for cancer cells. Our
programme is centred around a number of new water-soluble drug
formulations that can be easily infused or injected simultaneously,
or sequentially, directly into the cancer microenvironment,
disrupting metabolic functions in a highly localised manner and
limiting off-target toxicity. We have already demonstrated up to a
six-fold synergistic effect of administering MTX110, with an
oxphosphorylation inhibitor in vitro in three patient-derived cell
lines. On the back of those data, we have established new patent
positions to protect these combination formulations.
Our initial target is treatment of
leptomeningeal disease, a lethal complication in which metastatic
cancer cells invade the cerebrospinal fluid and central nervous
system. In collaboration with several large academic centres, we
are now accelerating preclinical studies to generate proof of
concept data that can support a future clinical trial
application.
MidaCore
We are using our GNP technology to engineer a
formulation of methotrexate for the topical treatment of psoriasis.
Pre-clinical data have shown that MTX114 normalises skin thickness
in mouse psoriatic skin models. There are estimated to be over 100
million(2) people who suffer from psoriasis worldwide. MTX114 is
available for licensing.
(1) Jansen et al, 2015.
Neuro-Oncology 17(1):160-166(2) Psoriasis.org
Strategic Repositioning in
2023
Since our £9.0 million (net) fundraise in July
2021 we had consistently forecast that our cash resources would
fund operations into the first quarter of 2023. As our cash runway
ran down, and the market for biotech financing worsened in 2022, we
found the opportunities for refinancing as a drug delivery company
were, for practical purposes, non-existent.
Bioasis
In response to the lack of appetite to refinance
a drug delivery platform company, the Board looked for
opportunities to merge or acquire other companies to create a more
investable therapeutics company. Accordingly, the Board proposed an
acquisition of Bioasis, a multi-asset company listed on the TSX-V
exchange with two platform technologies that had been validated by
partnerships and licenses with pharmaceutical companies with
potential milestone payments totalling in excess of US$200 million.
The enlarged, merged company would have been repositioned as a
therapeutics company with an internal pipeline focused on rare and
orphan products. Importantly, we had secured a $10.0 million
financing conditional upon the acquisition. One shareholder
corralled sufficient votes to ensure the requisite Special
Resolutions to approve the acquisition and financing were not
approved and, accordingly, the acquisition and financing did not
proceed.
Financing
After the General Meeting on 23 January 2023 at
which the Bioasis acquisition and financing were voted down, we had
only a short time to secure funding, failing which the Directors
would have no option other than to place the Group in
Administration. At this time, the Company engaged Quantuma Advisory
Limited, a specialist business advisory firm, to advise the Board
on its obligations to creditors, in particular. Ultimately, we were
successful in raising $6.0 million using a cashbox structure which
did not require shareholder approval but on terms materially more
dilutive than those of the conditional financing originally
proposal alongside the Bioasis acquisition. At the time, in early
February, the Board had considered it had no actionable
alternatives to Administration other than the $6.0 million
financing. The financing is expected to allow the Group to fund
operations into the fourth quarter of 2023 and progress its
clinical-stage asset MTX110, in particular.
Repositioning the Company as a Therapeutics
Company
In the course of raising additional finance for
the Company in late 2022 and early 2023, it became clear that a
therapeutics company was more investable than a drug delivery
platform company. Accordingly, the Board determined that the
Company should be repositioned as a therapeutics company supported
by three enabling technologies. Going forward, our priority will be
moving our development programmes into the clinic and generating
clinical data to demonstrate proof-of-concept. We intend to
continue our existing, and seek new, R&D collaborations for our
drug delivery technologies but we will not be expanding our
internal drug delivery platform.
De-listing from AIM
The Board decided to cancel the Company’s AIM
listing for a number of reasons including: an increasingly smaller
proportion of trading in the Ordinary Shares is conducted on AIM
compared to NASDAQ; improved liquidity through concentration of
trading in the Company’s securities on a single market; and the
cost, management time commitment and the burden of complying with
the AIM Rules and maintaining a quotation on AIM is duplicative of
that for complying with the NASDAQ rules. In addition, the Company
intends to seek opportunities to expand its pipeline through the
acquisition and/or in-licensing of additional development
programmes. Given the Company’s market capitalisation, transactions
are likely to be deemed reverse takeovers under AIM rules,
requiring suspension and relisting via a new Admission Document
which is both time-consuming and costly.
Change of Name
Our intention that repositioning as a
therapeutics company should represent a ‘fresh start’ for the
Company. To reflect this change the Company’s name was changed to
Biodexa Pharmaceuticals PLC following a General Meeting on 24 March
2023.
Restructuring in 2023
In March 2023, in order to better align our
resources with our repositioning as a therapeutics company, we
undertook a cost-reduction programme which included making
redundant seven staff members. At a one-time cost of £88,000.
Outlook
The financing environment for biotech companies
in general, and small and micro-cap companies in particular, is
extremely challenging. While we have secured financing into the
fourth quarter of 2023, the Company remains open to opportunities
to acquire assets and/or merge with other companies to both broaden
the R&D portfolio and make Biodexa more investable.
FINANCIAL REVIEW
Introduction
Biodexa Pharmaceuticals PLC (the "Company") was
incorporated as a company on 12 September 2014 and is domiciled in
England and Wales.
Financial analysis
Key performance indicators
|
2022 |
2021 |
Change |
|
|
|
|
Total gross revenue(1) |
£0.70m |
£0.58m |
21% |
R&D expenditure |
£5.11m |
£4.65m |
10% |
R&D as % of operating costs |
53% |
61% |
n/a |
Net cash (outflow)/inflow for the year |
(£7.22m) |
£2.52m |
n/m |
|
|
|
|
|
|
|
|
(1) |
Total gross revenue represents collaboration income. |
|
|
Revenue
In the year ended 31 December 2022, Biodexa
generated consolidated total gross revenue of £0.70m (2021:
£0.58m), an increase of 21% on the prior year, this arose from
customer revenue as in 2021. Customer revenue was derived entirely
from the Group’s R&D collaboration agreements with Janssen in
both years. The R&D collaboration agreement with Janssen has
been expanded to include two proteins in 2022.
Research and development expenditure
Research and development costs increased by
£0.46m, or 10% to £5.11m (2021: £4.65m) in the year, primarily due
to £0.6m increased staff costs as the Group invested in in-house
capabilities and a £0.4m increase in clinical costs on MTX110.
These increases are offset by reductions of £0.2m in pre-clinical
costs and £0.2m in patent-related costs as the Group rationalised
its portfolio.
Administrative costs
Administrative costs in the year increased by
£1.60m, or 54% to £4.54m (2021: £2.95m). The increase is
predominately due to £1.36m fees relating to the proposed
acquisition of Bioasis and a provision of £0.4m against a payment
made and future loan commitments to Bioasis under the Promissory
Note agreed as part of the proposed transaction. There were also
compensating immaterial changes in the cost of insurance and staff
costs in the year.
Impairment of intangible assets
There was no impairment charge against
intangible assets in 2022 and 2021.
Staff costs
During the year, the average number of staff
increased to 27 (2021: 20), reflecting the investment in the
in-house research and development team. Total staff cost increased
51% to £2.52m (2021: £1.67m).
Capital expenditure
The total cash expenditure on property plant and
equipment in 2022 was £0.06m (2021: £0.32m), largely in respect of
investment in laboratory equipment and IT equipment as headcount
increased.
Cash flow
Net cash outflow from operating activities in
2022 was £7.05m (2021: outflow £6.01m) driven by a net loss of
£7.66m (2021: loss £5.46m) and after positive movements in working
capital of £0.521m (2021: negative £0.62m), taxes received of
£0.68m (2021: £1.16m), and other net negative adjustments for
non-cash items totalling £0.59m (2021: negative £1.09m).
Investing activities outflow in 2022 of £0.22m
(2021: outflow of £0.28m) included purchases of property, plant and
equipment of £0.06m (2021: £0.32m) and a loan to Bioasis relating
to the proposed acquisition announced in December 2022 of £0.2m
offset by proceeds from the disposal of assets of £0.02m (2021:
£0.04m) and interest income from bank deposits of £0.03m (2021:
£nil).
Financing activities inflow in 2022 of £0.05m
(2021: inflow of £8.81m) was driven by receipts from share issues,
including exercise of warrants, of £0.24m (2021: £9.04m). The other
principal outflows related to the repayment of Spanish government
loans of £nil (2021: £0.10m), interest paid of £0.02m (2021:
£0.02m) and payments on lease liabilities of £0.18m (2021:
£0.11m).
As a result of the foregoing, net cash outflow
for the year was £7.22m (2021: inflow of £2.52m).
Share consolidation and ADS
Ratio
At a General Meeting on 24 March 2023,
shareholders approved a consolidation of the Company’s Ordinary
Shares on a one for 20 basis. As a result the par value of the
Ordinary Shares was changed from £0.001 per share to £0.02 per
share. At the same time, the ratio of the Company’s Ordinary Shares
to ADSs was changed from each ADS representing 25 Ordinary Shares
to each ADS representing five Ordinary Shares.
Going Concern
The Group and Company has experienced net losses
and significant cash outflows from cash used in operating
activities over the past years as it develops its portfolio. For
the year ended 31 December 2022, the Group incurred a consolidated
loss from operating activities of £7.66m and negative cash flows
from operations of £7.05m. As of 31 December 2022, the Group had an
accumulated deficit of £135.3 m.
The Group’s future viability is dependent on its
ability to raise cash from financing activities to finance its
development plans until commercialisation, generate cash from
operating activities and to successfully obtain regulatory approval
to allow marketing of its development products. The Group’s
failure to raise capital as and when needed could have a negative
impact on its financial condition and ability to pursue its
business strategies.
The Group's consolidated financial statements
have been presented on a going concern basis, which contemplates
the realization of assets and the satisfaction of liabilities in
the normal course of business.
As at 31 December 2022, the Group had cash and
cash equivalents of £2.84m. On 9 February 2023 the Company
completed a Private Placement in which it raised US$5.2 million
(approximately £4.3 million), after deducting the placement agent’s
fees and other estimated expenses. The Directors forecast that the
Group currently has enough cash to fund its planned operations into
the fourth quarter of 2023. If the Company does not secure
additional funding before the fourth quarter of 2023, it will no
longer be a going concern and would most probably be placed in
Administration.
The Directors have prepared cash flow forecasts
and considered the cash flow requirement for the Group for the next
three years including the period 12 months from the date of
approval of the consolidated financial statements. These
forecasts show that further financing will be required before the
fourth quarter of 2023 assuming, inter alia, that certain
development programs and other operating activities continue as
currently planned.
In the Directors’ opinion, the environment for
financing of small and micro-cap biotech companies is as
challenging as it has been since the financial crisis of 2008-10.
While this may present acquisition and/or merger opportunities with
other companies with limited or no access to financing, any
attendant financings by Biodexa are likely to be dilutive. The
Directors continue to evaluate financing options, including those
connected to acquisitions and/or mergers, potentially available to
the Group. The alternatives being considered are all at an early
stage and are contingent upon the agreement of counterparties and
accordingly, there can be no assurance that any of the alternative
courses of action to finance the Company will be successful. This
requirement for additional financing in the short term represents a
material uncertainty that may cast significant doubt upon the Group
and Parent Company’s ability to continue as a going concern. Should
it become evident in the future that there are no realistic
financing options available to the Company which are actionable
before its cash resources run out then the Company will no longer
be a going concern. In such circumstances, we would no longer be
able to prepare financial statements under paragraph 25 of IAS 1.
Instead, the financial statements would be prepared on a
liquidation basis and assets would stated at net realizable value
and all liabilities would be accelerated to current liabilities
The Directors believe there are adequate options
and time and available to secure additional financing for the
Company and after considering the uncertainties, the Directors
consider it is appropriate to continue to adopt the going concern
basis in preparing these financial statements.
Macroeconomic environment
The United Kingdom completed its exit from the
European Union (“EU”) on 31 January 2020 and the transition period
concluded on 31 December 2020. A new trade agreement with the EU,
the EU-UK Trade and Cooperation Agreement, was negotiated and
became effective on 1 January 2021. The impact of the new trade
agreement on the general and economic conditions in the United
Kingdom remains uncertain. There may, for example be additional
costs in materials and equipment sourced from the EU and we have
experienced some delays in delivery timelines due to additional
administration.
The invasion by Russian Federation military in
Ukraine in early 2022 had a destabilising impact on the global
economy, including energy prices. Although there has been no
immediate impact on the Group, it is not possible to assess the
medium and long-term impact of the conflict on the Group and the
global economy generally.
Environmental matters, community, human
rights issues and
employees
As at 31 December 2022 the Group had 26
employees, of whom 18 were routinely based at its offices in
Cardiff, accordingly the Company believes it has a relatively
modest environmental impact. All materials imported into the
Company’s laboratories are assessed for safety purposes and
appropriate handling and storage safeguards imposed as necessary.
Any small quantities of hazardous materials are removed by licensed
waste management contractors. A number of policies and procedures
governing expectations of ethical standards and the treatment of
employees and other stakeholders are set out in the Company’s
Employee Handbook. The Company has also established an anti-slavery
policy pursuant to the Modern Slavery Act 2015.
The Company strives to be an equal opportunity
employer, irrespective of race or gender. At 31 December 2022, the
number of male/female employees was 50%/50%, the number of
male/female senior managers was 86%/14% and the number of
male/female Directors was 100%/0%.
Annual greenhouse gas emissions
We measure our environmental performance by
reporting our carbon footprint in terms of tonne CO2 equivalent. We
report separately on our indirect emissions from consumption of
electricity (Scope 2) and emissions consisting of employee travel
in cars on Group business estimated on the basis of miles travelled
(Scope 3). The Group have elected to monitor and report its energy
efficiency using tonnes of CO2 per employee as an intensity
ratio.
Methodology
In calculating the reported energy usage and
equivalent greenhouse gas emissions the Group have referred to the
HM Government Environment Reporting Guidelines and the GHG
Reporting Protocol. A location-based allocation methodology was
used to calculate electricity usage.
Tonnes CO2e |
2022 |
2021 |
Scope 2 |
15 |
21 |
Scope 3 |
3 |
4 |
Total |
18 |
25 |
Intensity ratio (tonnes of CO2
per employee) |
0.7 |
1.2 |
|
|
|
The Group’s electricity costs for 2022 were
approximately £23,000 (2021: £16,000). The Group has no immediate
plans to improve energy efficiency.
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE
INCOME
For the year ended 31 December
|
Note |
2022£’000 |
2021£’000 |
2020£’000 |
Revenue |
|
699 |
578 |
180 |
Grant revenue |
|
– |
– |
163 |
Total revenue |
|
699 |
578 |
343 |
Other income |
|
22 |
24 |
12 |
Research and development costs |
|
(5,111) |
(4,654) |
(6,068) |
Administrative costs |
|
(4,542) |
(2,946) |
(4,958) |
Impairment of intangible assets |
|
– |
– |
(12,369) |
Loss from operations |
|
(8,932) |
(6,998) |
(23,040) |
Finance income |
2 |
497 |
936 |
1 |
Finance expense |
2 |
(53) |
(44) |
(431) |
Loss before tax |
|
(8,488) |
(6,106) |
(23,470) |
Taxation |
3 |
832 |
646 |
1,281 |
Loss for the year attributable to the owners of
the Parent |
|
(7,656) |
(5,460) |
(22,189) |
Other comprehensive income: |
|
|
|
|
Items that will or may be reclassified subsequently to profit or
loss: |
|
|
|
|
Exchange gains arising on translation of foreign operations |
|
– |
– |
508 |
Total other comprehensive income net of tax |
|
– |
– |
508 |
Total comprehensive loss attributable to the owners of
the Parent |
|
(7,656) |
(5,460) |
(21,681) |
Loss per share |
|
|
|
|
Continuing operations |
|
|
|
|
Basic and diluted loss per ordinary share - pence |
4 |
(155) p |
(136) p |
(1,036) p |
The notes form an integral part of these
consolidated financial statements.
CONSOLIDATED
STATEMENTS OF FINANCIAL
POSITION
At 31
December
Company number 09216368 |
Note |
2022£’000 |
2021£’000 |
2020£’000 |
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Property, plant and equipment |
|
831 |
1,152 |
542 |
Intangible assets |
|
6 |
– |
– |
|
|
837 |
1,152 |
542 |
Current assets |
|
|
|
|
Trade and other receivables |
5 |
1,006 |
1,034 |
572 |
Taxation |
|
846 |
670 |
1,157 |
Cash and cash equivalents |
|
2,836 |
10,057 |
7,546 |
|
|
4,688 |
11,761 |
9,275 |
Total assets |
|
5,525 |
12,913 |
9,817 |
Liabilities |
|
|
|
|
Non-current liabilities |
|
|
|
|
Borrowings |
|
463 |
620 |
60 |
Provisions |
|
– |
– |
50 |
|
|
463 |
620 |
110 |
Current liabilities |
|
|
|
|
Trade and other payables |
|
1,447 |
1,092 |
1,230 |
Borrowings |
|
161 |
146 |
200 |
Provisions |
6 |
207 |
50 |
– |
Derivative financial liability |
7 |
85 |
553 |
1,559 |
|
|
1,900 |
1,841 |
2,989 |
Total liabilities |
|
2,363 |
2,461 |
3,099 |
CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION(CONTINUED)At
31 December |
|
Note |
2022£’000 |
2021£’000 |
2020£’000 |
Issued capital and reserves attributable to owners of
the Parent |
|
|
|
|
Share capital |
8 |
1,108 |
1,098 |
1,063 |
Share premium |
|
83,667 |
83,434 |
74,364 |
Merger reserve |
|
53,003 |
53,003 |
53,003 |
Warrant reserve |
|
720 |
720 |
720 |
Accumulated deficit |
|
(135,336) |
(127,803) |
(122,432) |
Total equity |
|
3,162 |
10,452 |
6,718 |
Total equity and liabilities |
|
5,525 |
12,913 |
9,817 |
CONSOLIDATED
STATEMENTS OF CASH
FLOWS
For the year ended 31 December
|
Note |
2022£’000 |
2021£’000 |
2020£’000 |
Cash flows from operating activities |
|
|
|
|
Loss for the year |
|
(7,656) |
(5,460) |
(22,189) |
Adjustments for: |
|
|
|
|
Depreciation of property, plant and equipment |
|
174 |
213 |
1,089 |
Depreciation of right-of-use asset |
|
166 |
190 |
118 |
Amortisation of intangible fixed assets |
|
3 |
– |
10 |
Loss/(Profit) on disposal of fixed assets |
|
14 |
(39) |
(226) |
Impairment of intangible assets |
|
– |
– |
12,369 |
Impairment of loan |
|
207 |
– |
– |
Finance income |
2 |
(497) |
(936) |
(1) |
Finance expense |
2 |
53 |
44 |
431 |
Share-based payment debit/(credit) |
|
123 |
89 |
(404) |
Taxation |
3 |
(832) |
(646) |
(1,281) |
Foreign exchange (gains)/losses |
|
(1) |
(3) |
387 |
Cash flows from operating activities before changes in
working capital |
|
(8,246) |
(6,548) |
(9,697) |
Decrease/(increase) in trade and other receivables |
|
7 |
(487) |
493 |
Increase/(decrease) in trade and other payables |
|
356 |
(130) |
(2,004) |
Increase/(decrease) in provisions |
6 |
157 |
– |
(47) |
Cash used in operations |
|
(7,726) |
(7,165) |
(11,255) |
Taxes received |
|
678 |
1,157 |
1,954 |
Net cash used in operating activities |
|
(7,048) |
(6,008) |
(9,301) |
CONSOLIDATED
STATEMENTS OF CASH
FLOWS(CONTINUED)
For the year ended 31 December
|
Note |
2022£’000 |
2021£’000 |
2020£’000 |
Investing activities |
|
|
|
|
Purchases of property, plant and equipment |
|
(62) |
(320) |
(209) |
Proceeds from disposal of fixed assets |
|
20 |
42 |
143 |
Long-term deposit for guarantee for Government loan |
|
– |
– |
2,639 |
Loan granted |
|
(207) |
– |
– |
Interest received |
|
29 |
– |
1 |
Net cash (used in)/generated from investing
activities |
|
(220) |
(278) |
2,574 |
Financing activities |
|
|
|
|
Interest paid |
|
(18) |
(15) |
(34) |
Receipts from sub-lessee on onerous lease |
|
– |
– |
45 |
Amounts paid on lease liabilities |
|
(178) |
(112) |
(258) |
Repayment of Government grants on closure of Spanish operation |
|
– |
– |
(229) |
(Repayment)/proceeds from Government loan |
|
– |
(103) |
(6,182) |
Share issues including warrants, net of costs |
8 |
243 |
9,035 |
9,742 |
Net cash generated from financing activities |
|
47 |
8,805 |
3,084 |
Net increase/(decrease) in cash and cash
equivalents |
|
(7,221) |
2,519 |
(3,643) |
Cash and cash equivalents at beginning of
year |
|
10,057 |
7,546 |
10,928 |
Exchange (losses)/gains on cash and cash equivalents |
|
– |
(8) |
261 |
Cash and cash equivalents at end of year |
|
2,836 |
10,057 |
7,546 |
CONSOLIDATED
STATEMENTS OF CHANGES IN
EQUITY
For the year ended 31
December
|
Sharecapital£’000 |
Sharepremium£’000 |
Merger reserve£’000 |
Warrant reserve £’000 |
Foreignexchangereserve£’000 |
Accumulateddeficit£’000 |
Totalequity£’000 |
At 1 January 2022 |
1,098 |
83,434 |
53,003 |
720 |
– |
(127,803) |
10,452 |
Loss for the year |
– |
– |
– |
– |
– |
(7,656) |
(7,656) |
Total comprehensive loss |
– |
– |
– |
– |
– |
(7,656) |
(7,656) |
Transactions with owners |
|
|
|
|
|
|
|
Exercise of warrants on 22 March 2022 |
– |
– |
– |
– |
– |
– |
– |
Shares issued on 19 December 2022 |
10 |
311 |
– |
– |
– |
– |
321 |
Costs associated with share issue on 19 December 2022 |
– |
(78) |
– |
– |
– |
– |
(78) |
Share-based payment charge |
– |
– |
– |
– |
– |
123 |
123 |
Total contribution by and distributions to
owners |
10 |
233 |
– |
– |
– |
123 |
366 |
At 31 December 2022 |
1,108 |
83,667 |
53,003 |
720 |
– |
(135,336) |
3,162 |
CONSOLIDATED
STATEMENTS OF CHANGES IN
EQUITY(CONTINUED)
|
Sharecapital£’000 |
Sharepremium£’000 |
Merger reserve£’000 |
Warrant reserve £’000 |
Foreignexchangereserve£’000 |
Accumulateddeficit£’000 |
Totalequity£’000 |
At 1 January
2021 |
1,063 |
74,364 |
53,003 |
720 |
– |
(122,432) |
6,718 |
Loss for the year |
– |
– |
– |
– |
– |
(5,460) |
(5,460) |
Total comprehensive loss |
– |
– |
– |
– |
– |
(5,460) |
(5,460) |
Transactions with owners |
|
|
|
|
|
|
|
Shares issued on 19 February 2021 |
– |
161 |
– |
– |
– |
– |
161 |
Costs associated with share issue on 19 February 2021 |
– |
(10) |
– |
– |
– |
– |
(10) |
Shares issued on 6 July 2021 |
35 |
9,965 |
– |
– |
– |
– |
10,000 |
Costs associated with share issue on 6 July 2021 |
– |
(1,046) |
– |
– |
– |
– |
(1,046) |
Share-based payment charge |
– |
– |
– |
– |
– |
89 |
89 |
Total contribution by and distributions to
owners |
35 |
9,070 |
– |
– |
– |
89 |
9,194 |
At 31 December
2021 |
1,098 |
83,434 |
53,003 |
720 |
– |
(127,803) |
10,452 |
CONSOLIDATED
STATEMENTS OF CHANGES IN
EQUITY(CONTINUED)
|
Sharecapital£’000 |
Sharepremium£’000 |
Merger reserve£’000 |
Warrant reserve £’000 |
Foreignexchangereserve£’000 |
Accumulateddeficit£’000 |
Totalequity£’000 |
At 1 January 2020 |
1,023 |
65,879 |
53,003 |
– |
(508) |
(99,839) |
19,558 |
Loss for the year |
– |
– |
– |
– |
– |
(22,189) |
(22,189) |
Foreign exchange translation |
– |
– |
– |
– |
508 |
– |
508 |
Total comprehensive loss |
– |
– |
– |
– |
508 |
(22,189) |
(21,681) |
Transactions with owners |
|
|
|
|
|
|
|
Shares issued with warrants on 18 May 2020 |
16 |
2,527 |
– |
720 |
– |
– |
3,263 |
Costs associated with shares issued with warrants on 18 May
2020 |
|
(544) |
– |
– |
– |
– |
(544) |
Shares issued on 27 July 2020 |
21 |
5,729 |
– |
– |
– |
– |
5,750 |
Costs associated with share issue on 27 July 2020 |
|
(489) |
– |
– |
– |
– |
(489) |
Shares issued on 19 August 2020 |
3 |
1,278 |
– |
– |
– |
– |
1,281 |
Costs associated with share issue on 19 August 2020 |
|
(16) |
– |
– |
– |
– |
(16) |
Share-based payment credit |
– |
– |
– |
– |
– |
(404) |
(404) |
Total contribution by and distributions to
owners |
40 |
8,485 |
– |
720 |
– |
(404) |
8,841 |
At 31 December 2020 |
1,063 |
74,364 |
53,003 |
720 |
– |
(122,432) |
6,718 |
NOTES FORMING PART OF THE FINANCIAL
STATEMENTS
For the year ended 31 December
2022
- Basis of
preparation
The consolidated financial statements have been
prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006, and
they are prepared in accordance with international financial
reporting standards. The consolidated financial statements have
been prepared on a historical cost basis except that the following
assets and liabilities are stated at their fair value: certain
financial assets and financial liabilities measured at fair value,
and liabilities for cash-settled share-based payments.
The financial information contained in this
final announcement does not constitute statutory financial
statements as defined in Section 435 of the Companies Act 2006. The
financial information has been extracted from the financial
statements for the year ended 31 December 2021 which have been
approved by the Board of Directors, and the comparative figures for
the year ended 31 December 2021 and 31 December 2020 are based on
the financial statements for that year.
The financial statements for 2021 and 2020 have
been delivered to the Registrar of Companies and the 2022 financial
statements will be delivered after the Annual General Meeting.
The auditor’s report for the Company’s 2022
Annual Report and Accounts was unqualified but did draw attention
to the material uncertainty relating to going concern. The
auditor’s report did not contain statements under s498(2) or (3) of
the Companies Act 2006.
Whilst the financial information included in
this results announcement has been prepared in accordance with
International Financial Reporting Standards (IFRSs) this
announcement does not itself contain sufficient information to
comply with IFRSs. The information in this results announcement was
approved by the board on 28 April 2023.
Going concern
The Group and Company has experienced net losses
and significant cash outflows from cash used in operating
activities over the past years as it develops its portfolio. For
the year ended 31 December 2022, the Group incurred a consolidated
loss from operations of £7.7m and negative cash flows from
operating activities of £7.0m. As of 31 December 2022, the Group
had an accumulated deficit of £135.3m.
The Group’s future viability is dependent on its
ability to raise cash from financing activities to finance its
development plans until commercialisation, generate cash from
operating activities and to successfully obtain regulatory approval
to allow marketing of its development products. The Group’s failure
to raise capital as and when needed could have a negative impact on
its financial condition and ability to pursue its business
strategies.
The Group's consolidated financial statements have
been presented on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business.
As at 31 December 2022, the Group had cash and cash
equivalents of £2.8m. On 9 February 2023 the Company completed a
Private Placement in which it raised US$5.2 million (approximately
£4.3 million), after deducting the placement agent’s fees and other
estimated expenses. The Directors forecast that the Group currently
has enough cash to fund its planned operations into the fourth
quarter of 2023. If the Company does not secure additional funding
before the fourth quarter of 2023, it will no longer be a going
concern and would most probably be placed in Administration.
The Directors have prepared cash flow forecasts and
considered the cash flow requirement for the Group for the next
three years including the period 12 months from the date of
approval of the consolidated financial statements. These forecasts
show that further financing will be required during the fourth
quarter of 2023 assuming, inter alia, that certain development
programs and other operating activities continue as currently
planned.
In the Directors’ opinion, the environment for
financing of small and micro-cap biotech companies is as
challenging as it has been since the financial crisis of 2008-10.
While this may present acquisition and/or merger opportunities with
other companies with limited or no access to financing, any
attendant financings by Biodexa are likely to be dilutive. The
Directors continue to evaluate financing options, including those
connected to acquisitions and/or mergers, potentially available to
the Group, including fundraising and the partnering of assets and
technologies of the Company. The alternatives being considered are
all at an early stage and are contingent upon the agreement of
counterparties and accordingly, there can be no assurance that any
of the alternative courses of action to finance the Company will be
successful. This requirement for additional financing in the short
term represents a material uncertainty that may cast significant
doubt upon the Group and Parent Company’s ability to continue as a
going concern. Should it become evident in the future that there
are no realistic financing options available to the Company which
are actionable before its cash resources run out then the Company
will no longer be a going concern. In such circumstances, we would
no longer be able to prepare financial statements under paragraph
25 of IAS 1. Instead, the financial statements would be prepared on
a liquidation basis and assets would stated at net realizable value
and all liabilities would be accelerated to current
liabilities.
The Directors believe there are adequate options
and time and available to secure additional financing for the
Company and after considering the uncertainties, the Directors
consider it is appropriate to continue to adopt the going concern
basis in preparing these financial statements.
2 Finance
income and expense
|
2022£’000 |
2021£’000 |
2020£’000 |
Finance income |
|
|
|
Interest received on bank deposits |
29 |
– |
1 |
Gain on equity-settled derivative financial liability |
468 |
936 |
– |
Total finance income |
497 |
936 |
1 |
|
2022£’000 |
2021£’000 |
2020£’000 |
Finance expense |
|
|
|
Interest expense on lease liabilities |
43 |
36 |
20 |
Other loans |
10 |
8 |
14 |
Loss on equity-settled derivative financial liability |
– |
– |
397 |
Total finance expense |
53 |
44 |
431 |
The gain/(loss) on the equity-settled derivative
financial liability in 2022, 2021 and 2020 arose as a result of the
movement in share price.
3
Taxation
|
2022£’000 |
2021£’000 |
2020£’000 |
Current tax credit |
|
|
|
Current tax credited to the income statement |
825 |
646 |
1,144 |
Taxation payable in respect of foreign subsidiary |
– |
– |
(21) |
Adjustment in respect of prior year |
7 |
– |
158 |
|
832 |
646 |
1,281 |
Deferred tax credit |
|
|
|
Reversal of temporary differences |
– |
– |
– |
Total tax credit |
832 |
646 |
1,281 |
The reasons for the difference between the
actual tax charge for the year and the standard rate of corporation
tax in the United Kingdom applied to losses for the year are as
follows:
|
2022£’000 |
2021£’000 |
2020£’000 |
Loss before tax |
(8,488) |
(6,106) |
(23,470) |
Expected tax credit based on the standard rate of United Kingdom
corporation tax at the domestic rate of 19% (2021: 19%; 2020:
19%) |
(1,613) |
(1,160) |
(4,459) |
Expenses not deductible for tax purposes |
392 |
75 |
596 |
Income not taxable |
(4) |
(2) |
(75) |
Adjustment in respect of prior period |
(7) |
– |
(158) |
Surrender of tax losses for R&D tax refund |
(357) |
(280) |
(491) |
Deferred tax not recognised |
757 |
721 |
3,306 |
Total tax credited to the income statement |
(832) |
(646) |
(1,281) |
The taxation credit arises on the enhanced
research and development tax credits accrued for the respective
periods.
An adjustment has been recognised in 2022 in
respect of the prior period of £7k (2021: £nil; 2020: £158k), this
is as a result of a more detailed review of cost classification
prior to the submission of tax returns to HMRC.
4 Loss
per share
|
2022£’000 |
2021£’000 |
2020£’000 |
Numerator |
|
|
|
Loss used in basic EPS and diluted EPS: |
|
|
|
Continuing operations |
(7,656) |
(5,460) |
(22,189) |
Denominator |
|
|
|
Weighted average number of ordinary shares used in basic EPS: |
4,941,793 |
4,027,345 |
2,142,000 |
Basic and diluted loss per share: |
|
|
|
Continuing operations – pence |
(155) p |
(136) p |
(1,036) p |
At a General Meeting on 24 March 2023,
shareholders approved a consolidation of the Company’s Ordinary
Shares on a one for 20 basis. As a result, the par value of the
Ordinary Shares was changed from £0.001 per share to £0.02 per
share. The denominator has been calculated to reflect the share
consolidation.
The Group has made a loss in the current and
previous years presented, and therefore the options and warrants
are anti-dilutive. As a result, diluted earnings per share is
presented on the same basis for all periods shown.
5 Trade
and other receivables
|
2022£’000 |
2021£’000 |
2020£’000 |
Trade receivables |
329 |
33 |
95 |
Prepayments |
376 |
607 |
258 |
Other receivables |
301 |
394 |
219 |
Total trade and other receivables |
1,006 |
1,034 |
572 |
Less: non-current portion |
– |
– |
– |
Current portion |
1,006 |
1,034 |
572 |
The Group has applied the practical expedient
permitted by IFRS 15 to not disclose the transaction price
allocated to performance obligations unsatisfied (or partially
unsatisfied) as of the end of the reporting period as contracts
typically have an original expected duration of a year or less.
Book values approximate to fair value at 31
December 2022, 2021 and 2020.
Expected credit loss
Given the short-term nature of the Group’s trade
receivables and accrued income, which are mainly due from large
national or multinational companies, the Group's assessment of
expected credit losses includes provisions for specific clients and
receivables where the contractual cash flow is deemed at risk.
Considerations include the current economic environment along with
historical and forward-looking information. No assumptions or
estimating techniques are applied in considering these. Additional
provisions are made based on the assessment of recoverability of
aged receivables over one year where sufficient evidence of
recoverability is not evident.
Trade and other receivables contain one impaired
asset in 2022, as detailed below. In 2021 and 2020 Trade and other
receivables did not contain an impaired asset. The Group does hold
security in 2022 as detailed above against one asset, in 2021 and
2020 it did not hold any collateral as security. The maximum
exposure to credit risk at the consolidated statement of financial
position date is the fair value of each class of receivable.
The Company recognises a default on a financial
asset when the counter party announces they have limited resources
to satisfy the debt.
Bioasis Loans
On 13 December 2022 the Company entered into an
Arrangement Agreement with Bioasis Technologies Inc. (“Bioasis”)
under which the Company would acquire the entire issued share
capital of Bioasis; the agreement entered into was subject to
shareholder approval. In addition to this, on 19 December 2022 the
Company entered into a Promissory Note and Security Agreement with
Bioasis to assist in the short term with Bioasis’ working capital
requirements. Under the agreement the Company agreed to advance
Bioasis up to US$750,000 in three tranches payable on 19 December
2022, 2 January 2023 and 6 February 2023. The loan is repayable on
the earliest of the following:
a) The occurrence of
an event of default.
b) The closing date
(as defined in the Arrangement Agreement for the proposed
acquisition of Bioasis).
c) 30 June 2023.
The promissory note is subject to interest at a
rate equal to 2% per month or, from and after the Bioasis maturity
date, at a default rate of 15% per annum. Under the Security
Agreement the Company was made a secured creditor.
The Company advanced US$250,000 to Bioasis in
the year to 31 December 2022. A further advance of US$250,000 was
made to Bioasis on 3 January 2023. Management considers recovery of
the debt to be uncertain and have therefore recognised an
impairment provision of £207,000 in the year against the advance
made to Bioasis in December 2022.
On 3 February 2023 Bioasis announced they were
‘urgently exploring and evaluating all financing and strategic
alternatives that may be available to address its liquidity
requirements’ which triggered an event of default. As a result of
this the 3rd payment under the agreement was not made in the post
year end period. On 5 March 2023 Bioasis were served with notice of
an event of default.
6 Provisions
|
2022£’000 |
2021£’000 |
2020£’000 |
Opening provision at 1 January |
50 |
50 |
97 |
Utilisation of provision |
(43) |
– |
(97) |
Provision recognised in the year |
200 |
– |
50 |
At 31 December |
207 |
50 |
50 |
Less: non-current portion |
– |
– |
(50) |
Current portion |
207 |
50 |
– |
The provision as at 31 December 2021 and 2020
represents management’s best estimate of the ‘making good’ clause
on the Cardiff office which was vacated during the fourth quarter
of 2021. This liability was settled during 2022.
Bioasis Loans
On 19 December 2022 the Company entered into a
Promissory Note and Security Agreement with Bioasis to assist in
the short term with Bioasis’ working capital requirements. Under
the agreement the Company agreed to advance Bioasis up to
US$750,000 in 3 tranches payable on 19 December 2022, 3 January
2023 and 6 February 2023. The terms of the agreement are set out in
note 5.
The Company advanced US$250,000 to Bioasis in
the year to 31 December 2022. A further advance of US$250,000 was
made to Bioasis on 3 January 2023.
Management considers recovery of the debt to be
uncertain and have therefore recognised an impairment provision of
£207,000 in the year against advance made to Bioasis in December
2022, see note 14. A further provision has been of £207,000 against
the future credit losses resulting from the Promissory Note.
On 3 February 2023 Bioasis announced they were
‘urgently exploring and evaluating all financing and strategic
alternatives that may be available to address its liquidity
requirements’ which triggered an event of default. As a result of
this the 3rd payment under the agreement was not made in the post
year end period. On 5 March 2023 Bioasis were served with a notice
of an event of default.
7 Derivative
financial liability – current
|
2022£’000 |
2021£’000 |
2020£’000 |
Equity-settled derivative financial liability |
|
|
|
At 1 January |
553 |
1,559 |
664 |
Warrants issued |
– |
– |
997 |
Transfer to share premium on exercise of warrants |
– |
(70) |
(499) |
(Gain)/loss recognised in finance (income)/expense within the
consolidated statement of comprehensive income |
(468) |
(936) |
397 |
At 31 December |
85 |
553 |
1,559 |
Equity-settled derivative financial liability is
a liability that is not to be settled for cash.
May 2020 warrants
In May 2020 the Company issued 9,545,456
warrants in the ordinary share capital of the Company as part of a
registered direct offering in the US. The number of ordinary shares
to be issued when exercised is fixed, however the exercise price is
denominated in US Dollars being different to the functional
currency of the Company. Therefore, the warrants are classified as
equity-settled derivative financial liabilities recognised at fair
value through the profit and loss account (“FVTPL”). The financial
liability is valued using the Monte Carlo model. Financial
liabilities at FVTPL are stated at fair value, with any gains or
losses arising on re-measurement recognised in profit or loss. The
net gain or loss recognised in profit or loss incorporates any
interest paid on the financial liability and is included in the
‘finance income’ or ‘finance expense’ lines item in the income
statement. Fair value is determined in the manner described in note
20. A key input in the valuation of the instrument is the Company
share price.
October 2019 warrants
In October 2019 the Company issued 3,150,000
warrants in the ordinary share capital of the Company as part of a
registered direct offering in the US. The number of ordinary shares
to be issued when exercised is fixed, however the exercise price is
denominated in US Dollars. The warrants are classified
equity-settled derivative financial liabilities and accounted for
in the same way as those issued in May 2020. The financial
liability is valued using the Monte Carlo model.
Warrant re-price
On 13 December 2022 the Company entered into a
Securities Purchase Agreement with Armistice Capital Master Fund
Ltd (‘Armistice’) to re-price previously issued ADR warrants issued
to Armistice to $1 per ADR. The impact of the re-pricing is shown
in the table below: The warrant exercise price per ADR for the
remaining warrants remains unchanged as follows: October 2019
warrants at $31.25 per ADR; May 2020 warrants at $10.25 and 10.3125
per ADR.
|
ADR Warrants |
Equivalent Ordinary Shares (25 ordinary shares per
ADR) |
|
Number* |
Original price per
ADS* |
New price per
ADR |
Number |
October 2019 ADR warrants |
120,000 |
$31.25 |
$1.00 |
3,000,000 |
May 2020 ADR warrants |
130,200 |
$10.25 |
$1.00 |
3,255,000 |
Number and original price of warrants have been
adjusted to reflect the share consolidation and ratio change of
ADR’s to ordinary shares that occurred on 2 March 2020 and the
ratio change of ADR’s to ordinary shares on 26 September 2022.
DARA warrants and share options
The Group also assumed fully vested warrants and
share options on the acquisition of DARA Biosciences, Inc. (which
took place in 2015). The number of ordinary shares to be issued
when exercised is fixed, however the exercise prices are
denominated in US Dollars. The warrants are classified
equity-settled derivative financial liabilities and accounted for
in the same way as those detailed above. The financial liability is
valued using the Black-Scholes option pricing model. The exercise
price of the warrants and options is $61.03 and $95.17
respectively. During 2022 all remaining warrants expired.
7 Derivative
financial liability – current
(continued)
The following table details the outstanding
warrants over ordinary shares as at 31 December and also the
movement in the year:
|
At 1 January 2020 |
Granted |
Exercised |
At 31 December 2020 |
Lapsed |
Exercised |
At 31 December 2021 |
Lapsed |
At 31 December 2022 |
May 2020 grant |
– |
9,545,456 |
(2,500,000) |
7,045,456 |
– |
(306,815) |
6,738,641 |
– |
6,738,641 |
October 19 grant |
3,150,000 |
– |
– |
3,150,000 |
– |
– |
3,150,000 |
– |
3,150,000 |
DARA Warrants |
4,624 |
– |
– |
4,624 |
(544) |
– |
4,080 |
(4,080) |
– |
DARA Options |
2,835 |
– |
– |
2,835 |
– |
– |
2,835 |
(13) |
2,822 |
8 Share
capital
Authorised, allotted and fully paid –
classified as equity |
2022Number |
2022£ |
2021Number |
2021£ |
2020Number |
2020£ |
At 31 December |
|
|
|
|
|
|
Ordinary shares of £0.001 each |
108,342,738 |
108,343 |
98,468,387 |
98,468 |
63,073,852 |
63,074 |
Deferred shares of £1 each |
1,000,001 |
1,000,001 |
1,000,001 |
1,000,001 |
1,000,001 |
1,000,001 |
Total |
|
1,108,344 |
|
1,098,469 |
|
1,063,075 |
At a General Meeting on 24 March 2023,
shareholders approved a consolidation of the Company’s Ordinary
Shares on a one for 20 basis. As a result, the par value of the
Ordinary Shares was changed from £0.001 per share to £0.02 per
share. At the same time, the ratio of the Company’s Ordinary Shares
to ADSs was changed from each ADS representing 25 Ordinary Shares
to each ADS representing five Ordinary Shares. Numbers of shares
and share options/ warrants and related exercise/issue prices are
shown prior to the impact of the 24 March 2023 share consolidation,
with the exception of loss per share and note 8 Loss per share,
where the weighted average share denominator has been adjusted for
the share consolidation.]
In accordance with the Articles of Association
for the Company adopted on 13 November 2014, the share capital of
the Company consists of an unlimited number of ordinary shares of
nominal value £0.001 each. Ordinary and deferred shares were
recorded as equity.
Rights attaching to the shares following the
incorporation of Biodexa Pharmaceuticals PLC
Shares classified as equityThe holders of
ordinary shares in the capital of the Company have the following
rights:
(a) to receive notice of, to attend and to vote
at all general meetings of the Company, in which case shareholders
shall have one vote for each share of which he is the holder;
and,
(b) to receive such dividend as is declared by
the Board on each share held.
The holders of deferred shares in the capital of
the Company:
(a) shall not be entitled to receive notice of
or to attend or speak at any general meeting of the Company or to
vote on any resolution to be proposed at any general meeting of the
Company; and
(b) shall not be entitled to receive any
dividend or other distribution of out of the profits of the
Company.
In the event of a distribution of assets, the
deferred shareholders shall receive the nominal amount paid up on
such share after the holder of each ordinary share shall have
received (in cash or specie) the amount paid up or credited as paid
up on such ordinary share together with an additional payment of
£100 per share. The Company has the authority to purchase the
deferred shares and may require the holder of the deferred shares
to sell them for a price not exceeding 1p for all the deferred
shares.
9 Contingent
liability
The Company entered into an Arrangement
Agreement with Bioasis on 13 December 2022 as amended on 18
December 2022. Under the agreement the Company agreed to acquire
the entire issued share capital of Bioasis for consideration of, in
aggregate, approximately C$7.4 million (c£4.4 million). The
agreement was subject to shareholder approval. Under the agreement
the Company agreed to reimburse Bioasis US$225,000 expenses
relating to the transaction should the Company’s shareholders not
approve the transaction. As at 31 December the Company had a
contingent liability of $225,000 in relation to this potential
liability.
On 23 January 2023 at the General Meeting to
approve the Arrangement Agreement none of the special resolutions
were passed and, accordingly, the acquisition of Bioasis did not
proceed. On 23 January Bioasis terminated the Arrangement Agreement
and requested reimbursement of US$225,000 expenses relating to the
transaction, to date these expenses have not been paid.
The Group had no contingent liabilities at 31
December 2021 and 31 December 2020.
10 Post balance sheet
events
On 3 January 2023 the Company provided a further
advance to Bioasis under the Promissory Note and Security Agreement
it entered into on 19 December 2022 of US$250,000. A provision was
made in the accounts to 31 December 2022 for non-recovery of this
advance. On 3 February 2023 Bioasis announced they were ‘urgently
exploring and evaluating all financing and strategic alternatives
that may be available to address its liquidity requirements’ which
triggered an event of default. As a result of this the 3rd payment
under the agreement was not made in the post year end period.
On 5 January 2023 the Company issued a Circular
containing details of the Company’s proposed acquisition of
Bioasis, an equity raise of US$9.6 million and a change of name,
which were subject to shareholders approval at a General Meeting
held on 23 January 2023. On 23 January 2023 at the General Meeting
none of the special resolutions were passed and, accordingly,
neither the acquisition of Bioasis nor the equity raise proceeded
and the Company’s name was not changed. On 23 January Bioasis
terminated the Arrangement Agreement and requested reimbursement of
US$225,000 expenses relating to the transaction, to date these
expenses have not been paid. On 23 January 2023 the Company
appointed Quantuma Advisory Limited, a specialist business advisory
firm, to undertake contingency planning and provide advice to the
Board of Directors on appropriate actions.
On 9 February 2023 the Company announced it had
entered into definitive binding agreements with institutional US
investors to raise aggregate gross proceeds of US$6.0 million
through the issue of 10,344,822 Units (comprising either (i) one
American Depositary Share (“ADS”), one A Warrant and 1.5 B
Warrants, or (ii) one Pre-Funded Warrant, one A Warrant and 1.5 B
Warrants) at an initial price of US$0.58 per Unit. The private
placement was subject to a price adjustment mechanism which could
result in the issue price being adjusted below the initial issue
price, with a floor of US$0.10 per Unit, subject to shareholder
approval, consequently increasing the number of ADSs and/or
Pre-Funded Warrants to be issued under the Private Placement.
On 8 March 2023 the Company announced that it sent
a circular to shareholders convening a General Meeting to effect a
share consolidation on a one for 20 basis, give the Directors
authority to allot shares, disapply pre-emption rights, adopt new
Articles, , the cancel the admission of the Company’s Ordinary
Shares to trading on AIM market and change the name of the Company
to Biodexa Pharmaceuticals PLC. The Company also notified
shareholders that the Ordinary Share to ADS ratio was being changed
from 25 Ordinary Shares per ADS to five Ordinary Shares per ADS. At
the General Meeting on 24 March 2023, all resolutions were duly
passed.
On 26 April 2023 the Company delisted from the AIM
market.
Biodexa Pharmaceuticals (NASDAQ:BDRX)
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Biodexa Pharmaceuticals (NASDAQ:BDRX)
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