TIDMVRCI
RNS Number : 0890O
Verici Dx PLC
29 September 2023
Verici Dx plc
("Verici Dx" or the "Company")
Half-year report
Continuing to build the foundations for commercial success.
Verici Dx plc (AIM: VRCI), a developer of advanced clinical
diagnostics for organ transplant, announces its unaudited interim
results for the six months ended 30 June 2023.
Operational highlights (including post-period end)
-- Initial revenues following the commercial launch of our first
product, Tutivia(TM), the Company's post-transplant prognostic test
for the assessment of risk of acute kidney rejection.
o Full year revenues from Tutivia(TM) are likely to be less than
expected although the Company has recently doubled the number of US
transplant centers as early adopters of the test.
-- The impact of lower Tutivia revenues is expected to be offset
by higher than expected research-related
revenues so that that cash runway expectations to mid-2024 are unchanged at this time.
-- Successful clinical validation of our second product,
Clarava(TM), the Company's pre-transplant prognostic test,
demonstrating a statistically significant result and capability to
stratify patients based on their likely immune response to a
transplanted kidney, informing a clear, actional response for
clinicians.
o Clarava (TM) is on track for initial US commercial use by the
end of 2023 under prospective real-world evidence studies.
-- Completed patient enrolment for the multi-centre clinical
validation study of the Company's third product, Protega(TM),
assessing long-term outcomes for kidney transplant patients.
-- Received preliminary gapfill median rate of $2,650 proposed
for both Clarava(TM) and Tutivia(TM) by the Centers for Medicare
& Medicaid Services ("CMS"). These rates are due to be
finalised later this year and represent a substantial uplift from
the Company's initial assumption for modelling purposes.
-- Two key patents granted in the United States underpinning Verici Dx's products.
-- Achieved CLIA Certificate of Compliance for clinical
laboratory in Nashville, TN, USA, a key requirement to obtaining
insurance reimbursement coverage under Medicare and allowing for
expanded commercial launch of Tutivia(TM) in 49 out of 50 US states
to date.
-- Submitted final responses to comments for our peer-reviewed
publication on the Tutivia clinical validation. Final publication
dependent on publishers.
-- Initiated studies in our databank to facilitate product
development and further research collaborations.
-- Obtained Medicaid approvals in 15 States and a further 12 States pending.
Outstanding clinician feedback on Tutivia (TM)
We have been delighted with the feedback on Tutivia (TM)
following its commercial launch at the start of 2023.
"In the first few months post-transplant there are many
rejection events and yet in my opinion we have not really had a
biomarker that can assist at this critical time. Tutivia(TM) is
able to give the clinician reliable test results as soon as the
first week post-transplant and so is an early biomarker test which
addresses this critical need."
Dr Nicolae Leca Professor, Medical Director, Kidney and Pancreas
Transplant - University of Washington
Financial highlights
-- Adjusted EBITDA loss of $4.8m (six months to 30 June 2022:
loss of $5.0m), excluding share-based payments.
-- $5.3m cash balance as at 30 June 2023 (31 December 2022: $9.8m).
-- Net cash outflow from operating activities in the six months
to 30 June 2023 was $4.7m (six months to 30 June 2022: $5.0m) with
investing activities consuming a further $0.1m (six months to 30
June 2022: $0.7m).
The full year revenues are expected to be lower than originally
projected from Tutivia but offset by higher than expected revenues
from research collaborations. Revenues and containment of total
costs mean that cash runway expectations to mid-2024 are unchanged
at this time.
Sara Barrington, Chief Executive Officer of Verici Dx, said:
"I am proud of the progress we have made in the first six months
of this year. The clinician response to our first product,
Tutivia(TM), following its commercial launch at the start of the
year clearly demonstrates how much they value the key benefits and
recognise the strong differentiating features. We are also excited
to have announced a second successful product, Clarava(TM),
following the recently completed clinical validation study showing
excellent results. This allows us to prepare for its initial launch
in due course. We also completed enrolment for the validation study
on our third product, Protega(TM). Whilst this product has a much
longer time frame, it completes the end-to-end testing for the
portfolio as we look ahead.
"Although the timing effects on early adoption are frustrating,
we have been able to make savings in other areas and are focused on
research collaborations to help build a solid platform for future
growth. At the same time, we are continuing to deliver on our
strategy of transforming kidney transplant patient outcomes, as we
move further into commercialisation."
Investor briefing
Sara Barrington, Chief Executive Officer, and David Anderson,
Chief Financial Officer, will provide a live presentation relating
to the interim results via the Investor Meet Company platform on
Thursday October 5 at 4.30pm BST.
This presentation is open to all existing and potential
shareholders. Questions can be submitted at any time during the
live presentation.
Investors can sign up to Investor Meet Company for free and add
to meet VERICI DX PLC via:
https://www.investormeetcompany.com/verici-dx-plc/register-investor
Investors who already follow Verici Dx on the Investor Meet
Company platform will automatically be invited.
A copy of the Company's interim results report will shortly be
made available on the Company's website.
Enquiries:
Verici Dx www.vericidx.com
Sara Barrington, CEO Via Walbrook PR
Julian Baines, Chairman
Singer Capital Markets (Nominated Tel: 020 7496 3000
Adviser & Broker)
Aubrey Powell / Sam Butcher
Walbrook PR Limited Tel: 020 7933 8780 or vericidx@walbrookpr.com
Paul McManus / Sam Allen / Mob: 07980 541 893 / 07502 558 258
Phillip Marriage /
07867 984 082
About Verici Dx plc www.vericidx.com
Verici Dx is a developer of a complementary suite of
leading-edge tests forming a kidney transplant platform for
personalised patient and organ response risk to assist clinicians
in medical management for improved patient outcomes. The underlying
technology is based upon artificial intelligence assisted
transcriptomic analysis to provide RNA signatures focused upon the
immune response and other biological pathway signals critical for
transplant prognosis of risk of injury, rejection and graft failure
from pre-transplant to late stage. The Company also has a mission
to accelerate the pace of innovation by research using the fully
characterised data from the underlying technology and collaboration
with medical device, biopharmaceutical and data science
partners.
The foundational research was driven by a deep understanding of
cell-mediated immunity and is enabled by access to expertly curated
collaborative studies in highly informative cohorts in kidney
transplant.
Chief Executive Officer's Report
Progress in the first six months of 2023 saw the Company
transition to a fully commercial-stage business following the
initial launch of Tutivia(TM). Following the successful clinical
validation of our pre-transplant test, Clarava(TM), we are also now
poised for the commercialization of our second product starting
with prospective real-world evidence studies. Turning to our third
product, Protega(TM), we completed enrolment for the validation
trial and expect to be fully completed with the 24-month end point
in Q1 2025, although the Company expects to review performance on
an interim timepoint. Together, these demonstrate the clinical
validity of the underlying technology in RNA signatures for kidney
transplant patients, providing early predictive tests to cover the
full transplant lifecycle, from pre-transplant to late-stage,
enabling clinicians to make more informed treatment decisions.
In addition, the Company achieved a number of key operational
milestones during the period, including receiving our CLIA
Certificate of Compliance now covering 49 states, including
California representing 10% of US transplants by volume, and the
strengthening of our intellectual property portfolio.
Executing on commercial pathway
Tutivia(TM) commercially launched in January 2023, following an
initial pilot launch in December 2022. We continue to work with
leading US transplant centers to support the adoption and
integration of Tutivia(TM) into their clinical pathways to
encourage consistent and recurring utilisation. This provides
valuable information for us to make Tutivia(TM) as simple as
possible for clinicians to use and interpret, which in turn will
help support the accelerated roll out of the test to other major
transplant centers across the US. The Company previously
highlighted the short-term confusion by clinical centers as they
assessed the announcements made by CMS and this led to a slow down
in bringing in centers into the early adopter program in Q2 and
early Q3. Based on our current interactions with centers this
appears to have been resolved and we are pleased to report a recent
doubling of adopting centers in the later part of Q3. Timing of the
submission of the application under the Local Coverage
Determination is predicated upon the acceptance of the clinical
validation publication for Tutivia and having recently responded to
peer reviewer questions we are hoping that this is now
imminent.
We also announced the successful validation results from our
multi-centre clinical validation study for Clarava(TM) . The study,
which included a broad and diverse group of patients preparing to
receive a kidney transplant across 13 centers, demonstrated a
statistically significant result, identifying patients that are at
increased risk for a kidney rejection event in the critical first
60 to 90 days post-transplant after receiving a kidney from a
deceased donor (c.65,000 patients eligible per year). Study data
analysis of the clinical performance of Clarava(TM) determined that
patients of high risk based on their test result were approximately
six times more likely to have a rejection than those of low risk.
This demonstrated Clarava(TM) to be capable of informing a clear,
actionable response from clinicians The Company remains on track to
commence the initial US launch of Clarava(TM) before the end of
2023 through prospective real-world evidence studies.
Enrolment into the longer duration Protega(TM) validation study
was finalised in the first quarter of 2023. Protega(TM) is the
third product to emerge from our platform of personalised,
predictive RNA signature tests, completing our offering for
end-to-end kidney transplant testing, from pre-transplant to
long-term damage. We expect that the final validation point will be
completed after follow-up at the 24-month point for the last
patient tested, which is expected to be in Q1 2025. The Company
expects to be able to review interim data before this point.
Operational milestones
During the period we successfully progressed our laboratory
registration status to CLIA Certificate of Compliance by the
Centers for Medicare & Medicaid ("CMS"), allowing our
commercial clinical operations to process samples from 45 US
states, following an inspection by CMS of our clinical laboratory
in Franklin, Tennessee. In July, we received authorisation from a
further four states, including California, meaning Verici Dx is now
fully accredited in 49 states, and is currently working on reaching
accreditation in New York state, solidifying our commercial
positioning.
This also represents a major milestone towards US Medicare
reimbursement, for which we are preparing our submission, a key
milestone to driving adoption with Medicare covering 63.9 million
US patients. We have also now received a preliminary Medicare price
recommendation of $2,650 for both Clarava(TM) and Tutivia which
represents an increase to the price used in previous forecasts. The
price will be finalised later this year following a period of
public consultation. This is a key milestone in our commercial
strategy and advances us closer to achieving coverage under
Medicare.
Additionally, r egistration for Medicaid has been approved in 15
states, as well as with BlueCross Blue Shield of Tennessee, the
largest health benefit plan company in the state, with a further 12
states pending. Together, Medicaid and Medicare patients account
for 65% of all transplant recipients across the US(1) .
The Company was also granted two key patents in the United
States that support and protect the Company's core technologies in
RNA signature biomarker tests used for assessment of the prognostic
risk pre-transplant (Clarava(TM)) and post-transplant (Tutivia(TM))
of acute kidney transplant rejection. The protection of the
Company's intellectual property is fundamental to our strategy of
amassing full transcriptomic data from the biological systems and
interactions associated with transplant rejection and, over the
longer term, informing transplant analysis in other organs and in
the broader field of immune-mediated diseases.
Management and staff
During the period, we hired one additional member of staff to
assist with the research asset, whilst two employees exited. As of
30 June 2023, the Company had 14 employees. As previously noted,
the commercial team is sufficient for the early adopter program but
will need to be increased at the appropriate time to drive more
widespread adoption.
Financials
Cash balance as of 30 June 2023 was $5.3m (30 June 2022: $15.7m;
31 December 2022: $9.8m), the prior period augmented by the net
proceeds from the issue of 28,571,429 new ordinary shares in March
2022 of $12.5m. Net cash outflow in the six months to 30 June 2023
from operating activities was $4.7m (six months to 30 June 2022:
$5.0m) with investing activities consuming a further $0.1m (six
months to 30 June 2022: $0.7m) and unrealised foreign exchange gain
of $0.3m (six months to 30 June 2022: loss of $1.5m).
Our largest item of expenditure is employment costs, being $1.8m
(six months to 30 June 2022: $1.3m), reflecting the additions to
the team on the commercial and data asset side. We began the year
with 15 members of staff and end the period with 14 members of
staff. In the six months to 30 June 2022 our average team size was
10. As we have passed the peak of our clinical trial costs our
second highest spend on research and development has reduced, with
the cost in the period of $1.6m (six months to 30 June 2022 -
$2.3m).
Updated Trading Position
Our expectation for a cash runway extending to mid-2024 was
predicated on our revenue assumptions regarding the number of test
results delivered and the subsequent reimbursement of those tests.
In addition, the number of test results delivered was based on our
assumptions about the number of US transplant centers ordering the
test.
Modest revenue of $19k for the first half reflected the early
use of Tutivia(TM) in a small number of centers in the early
adoption program . As of the date of this report, we are expanding
our centers in the program and are already seeing an increase in
number of tests ordered both from new centers and from recurring
ordering from established clinicians. We are pleased to see this
increase in orders coming through, however, it is still lower than
our original assumptions. This reflects a number of factors:
- In order to focus on a high-quality customer experience whilst
carefully managing costs, we made the commercial decision to
operate with a very small sales team of two persons to cover
business development and clinical communications. A larger team
will be needed to support further growth beyond the early adopting
centers. Going forward, we can consider a distribution partner or a
direct sales force of around 10 to 12 individuals to facilitate
more ambitious targets over time. This size of direct sales team
would remain modest relative to industry averages.
- Whilst we believe the impact of some of the recent CMS
clarifications(2) is favourable for Verici Dx over the medium-term,
the need to understand the impacts to testing protocols across the
market has, on occasion, constrained our ability to initiate or
progress conversations. Towards the end of Q3 this short-term
impact appears to have lessened
- We have also encountered some logistical issues in sample
collection affecting early adoption, which we have now
resolved.
Nationally, 65% of transplant patients are covered by Medicare
and Medicaid. For the Company to be able to be fully reimbursed by
Medicare we need the award of a Local Coverage Determination
("LCD"). Part of the process of obtaining this LCD is the
submission of a Technical Assessment which, among other matters,
includes a peer reviewed publication of our clinical validation
study for Tutivia (TM) . The publication process has taken longer
than originally anticipated, due to extraneous factors, thus
delaying our ability to submit the Technical Assessment and apply
for the award of the LCD. This directly impacts on the time taken
for tests to be reimbursed. Our original expectation was
reimbursement would occur in Q4 of 2023. This is now expected in Q1
of 2024 but it is important to note that there is a route for
retrospective reimbursement to be applied on tests ordered in the
year before approval of the LCD is obtained.
There has been demonstrable progress of our two lead products
and with a third product in the pipeline, underpinned by the strong
platform and opportunities for revenues from the research asset
through research collaborations, and despite currently operating
with a very small sales team, the Company has established a solid
commercial platform for growth, with a rising revenue stream.
The combination of slower initial traction with US transplant
centers and the delayed reimbursement profile would ordinarily have
shortened our expected cash runway to mid-2024, but this reduction
is expected to be offset by research revenues and runway guidance
is therefore unchanged.
Outlook
Looking ahead, we are focussed on accelerating the commercial
rollout of Tutivia(TM) and will look to enrol more leading
transplant centers in the US to begin using the test. Concurrently,
we remain on track to commence the initial US commercial launch of
Clarava(TM) before the end of the year, which will support the
utility assessments to demonstrate the real-world clinical value of
the test.
We expect to secure both Medicare and private payor pricing and
coverage for Tutivia(TM) this year, which will be a key catalyst to
enabling more widespread adoption as well as revenue generation and
cash collection. Following our receipt of the CLIA Certificate of
Compliance covering 49 states, we will also look to receive full
accreditation in New York, which has its own compliance
requirements. Given Clarava(TM) is a first-in-class pre-transplant
test, adoption can be expected to be promoted by the results of
prospective real-world evidence on utility for hospital
centers.
As previously indicated, there are further research and product
development opportunities from the clinical trial samples and data.
For example, we will be exploring further samples drawn from living
donor transplant recipients to assess Clarava's(TM) potential
utility in that patient population, in addition to assessing the
anticipated combination of using the test in conjunction with
Tutivia (TM) , as well as assessing the role of urine-based
testing.
Following the publication on Tutivia (TM) validation results, we
are expecting to submit publications for Clarava (TM) validation,
analytical validation and health economics models to aid our
commercialisation efforts. We also expect to engage in real-world
evidence studies to further support adoption of our products both
later this year and into next year.
On behalf of the Company, I would like to thank our shareholders
for their ongoing support and look forward to providing further
updates in due course.
Sara Barrington
Chief Executive Officer
28 September 2023
(1. Scientific Registry of Transplant Recipients: OPTN/SRTR 2021
Annual Data Report: Kidney)
(2.) Article - Billing and Coding: MolDX: Molecular Testing for
Solid Organ Allograft Rejection (A58061) (cms.gov)
Consolidated condensed statement of profit or loss and other
comprehensive income
for the six months ended 30 June 2023
Six months Six months Year to
to to
30 June 30 June 31 December
Note 2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Revenue 5 19 - -
Cost of sales (3) - -
_________ _________ _________
16 - -
Administrative expenses 6 (4,825) (5,004) (10,497)
Depreciation and amortisation 6 (472) (275) (640)
Share-based payments 6 (99) (195) (318)
_________ _________ _________
Loss from operations (5,380) (5,474) (11,455)
Finance income 122 7 53
Finance expense (15) - (5)
_________ _________ _________
Loss before tax (5,273) (5,467) (11,407)
Tax expense - - -
_________ _________ _________
Loss from continuing operations (5,273) (5,467) (11,407)
Other comprehensive income:
Exchange gains / (losses) arising
on translation of foreign operations 353 (1,729) (2,016)
_________ _________ _________
Loss and total comprehensive
income attributable to the owners
of the Company (4,920) (7,196) (13,423)
_________ _________ _________
Earnings per share attributable
to the
ordinary equity holders of
the parent
Loss per share
Basic and diluted (US$ cents) 7 ($0.031) ($0.034) ($0.069)
_________ _________ _________
The results reflected above relate to continuing operations.
Consolidated statement of financial position
as at 30 June 2023
30 June 30 June 31 December
Note 2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Assets
Current assets
Trade and other receivables 8 426 516 520
Cash and cash equivalents 5,249 15,717 9,805
_________ _________ _________
5,675 16,233 10,325
_________ _________ _________
Non-current assets
Property, plant and equipment 1,641 1,310 2,010
Intangible assets 2,037 1,944 1,970
_________ _________ _________
3,678 3,254 3,980
_________ _________ _________
Total assets 9,353 19,487 14,305
_________ _________ _________
Liabilities
Current liabilities
Trade and other payables 9 (2,044) (1,874) (2,096)
Lease liabilities 10 (159) - (156)
Non-current liabilities
Lease liabilities 10 (462) - (544)
_________ _________ _________
NET ASSETS 6,688 17,613 11,509
_________ _________ _________
Issued capital and reserves
attributable to
owners of the parent
Share capital 219 219 219
Share premium reserve 32,946 32,946 32,946
Share-based payments reserve 3,952 3,730 3,853
Foreign exchange reserve (684) (750) (1,037)
Retained earnings (29,745) (18,532) (24,472)
_________ _________ _________
TOTAL EQUITY 6,688 17,613 11,509
_________ _________ _________
Consolidated statement of cash flows
for the six months ended 30 June 2023
Six months Six months Year to
to to
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Cash flows from operating activities
Loss for the period (5,273) (5,467) (11,407)
Adjustments for:
Depreciation and amortisation 472 275 640
Finance income (122) (7) (53)
Finance expense 15 - 5
Share-based payment expense 99 195 318
_________ _________ _________
(4,809) (5,004) (10,497)
(Increase) / decrease in trade
and other receivables 96 (140) 136
Increase / (decrease) in trade
and other payables (53) 116 293
Income taxes paid - - -
_________ _________ _________
Net cash outflow from operating
activities (4,766) (5,028) (10,068)
_________ _________ _________
Cash flows from investing activities
Purchases of property, plant and
equipment (23) (561) (1,040)
Purchase of intangibles (83) (161) (268)
_________ _________ _________
Net cash used in investing activities (106) (722) (1,308)
Cash flows from financing activities
Issue of ordinary shares - 13,070 13,070
Expenses of share issue - (441) (441)
Interest received 122 7 53
Interest paid (15) - (5)
Repayment of lease liabilities (79) - (3)
_________ _________ _________
Net cash from financing activities 28 12,636 12,674
Net increase / (decrease) in cash
and cash equivalents (4,844) 6,886 1,298
Cash and cash equivalents at beginning
of period 9,805 10,340 10,340
Exchange movement on cash and cash
equivalents 288 (1,509) (1,833)
_________ _________ _________
Cash and cash equivalents at end
of period 5,249 15,717 9,805
_________ _________ _________
Consolidated statement of changes in equity
for the six months ended 30 June 2023
Total
attributable
to equity
Share-based Foreign holders
Share Share payment exchange Retained of Total
capital premium reserve reserve earnings parent equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
1 January 2022 182 20,354 3,535 979 (13,065) 11,985 11,985
Comprehensive income
for the period
Loss for the period - - - - (5,467) (5,467) (5,467)
Other comprehensive income - - - (1,729) - (1,729) (1,729)
Contributions by and
distributions to owners
Issue of share capital 37 13,033 - - - 13,070 13,070
Costs of share issue - (441) - - - (441) (441)
Share based payments
charge - - 195 - - 195 195
_________ _________ _________ _________ _________ _________ _________
At 30 June 2022 - unaudited 219 32,946 3,730 (750) (18,532) 17,613 17,613
_________ _________ _________ _________ _________ _________ _________
At 1 July 2022 219 32,946 3,730 (750) (18,532) 17,613 17,613
Comprehensive income
Loss for the period - - - - (5,940) (5,940) (5,940)
Other comprehensive income - - - (287) - (287) (287)
Contributions by and
distributions to owners
Share-based payment - - 123 - - 123 123
_________ _________ _________ _________ _________ _________ _________
At 31 December 2022
- audited 219 32,946 3,853 (1,037) (24,472) 11,509 11,509
_________ _________ _________ _________ _________ _________ _________
Consolidated statement of changes in equity
for the six months ended 30 June 2023
Total
attributable
to equity
Share-based Foreign holders
Share Share payment exchange Retained of Total
capital premium reserve reserve earnings parent equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
1 January 2023 219 32,946 3,853 (1,037) (24,472) 11,509 11,509
Comprehensive income
for the period
Loss for the period - - - - (5,273) (5,273) (5,273)
Other comprehensive income - - - 353 - 353 353
Contributions by and
distributions to owners
Share-based payment - - 99 - - 99 99
_________ _________ _________ _________ _________ _________ _________
At 30 June 2023 - unaudited 219 32,946 3,952 (684) (29,745) 6,688 6,688
_________ _________ _________ _________ _________ _________ _________
Notes forming part of the consolidated financial statements
for the six months ended 30 June 2023
General information
1
The principal activity of Verici Dx plc (the "Company") is the
development of prognostic and diagnostic tests for kidney
transplant patients.
The Company is a public limited company incorporated in England
and Wales and domiciled in the UK. The address of the registered
office is Avon House, 19 Stanwell Road, Penarth, Cardiff CF64 2EZ
and the company number is 12567827.
The Company was incorporated as Verici Dx Limited on 22 April
2020 as a private company and on 9 September 2020 the Company was
re-registered as a public company and changed its name to Verici Dx
plc.
Summary of significant accounting policies
2
The principal accounting policies adopted in the preparation of
the financial information of the Company, which have been applied
consistently to the period presented, are set out below:
Basis of preparation
The accounting policies adopted in the preparation of the
interim consolidated financial information are consistent with
those of the preparation of the Group's annual consolidated
financial statements for the year ended 31 December 2022. No new
IFRS standards, amendments or interpretations became effective in
the six months to 30 June 2023.
Statement of compliance
This interim consolidated financial information for the six
months ended 30 June 2023 has been prepared in accordance with IAS
34, 'Interim financial reporting' and the AIM Rules for Companies.
This interim consolidated financial information is not the Group's
statutory financial statements and should be read in conjunction
with the annual financial statements for the year ended 31 December
2022, which have been prepared in accordance with UK adopted
International Accounting Standards (UK IFRS) and have been
delivered to the Registrar of Companies. The auditors have reported
on those accounts; their report was unqualified and did not contain
statements under section 498(2) or (3) of the Companies Act
2006.
The interim consolidated financial information for the six
months ended 30 June 2023 is unaudited. In the opinion of the
Directors, the interim consolidated financial information presents
fairly the financial position, and results from operations and cash
flows for the period. Comparative numbers for the six months ended
30 June 2022 are unaudited.
Measurement convention
The financial information has been prepared under the historical
cost convention. Historical cost is generally based on the fair
value of the consideration given in exchange for assets.
The preparation of the financial information in compliance with
IFRS requires the use of certain critical accounting estimates and
management judgements in applying the accounting policies. The
significant estimates and judgements that have been made and their
effect is disclosed in note 3.
Basis of consolidation
The consolidated financial statements present the results of the
company and its subsidiaries ("the Group") as if they formed a
single entity. Intercompany transactions and balances between group
companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of
business combinations using the acquisition method. In the
statement of financial position, the acquiree's identifiable
assets, liabilities and contingent liabilities are initially
recognised at their fair values at the acquisition date. The
results of acquired operations are included in the consolidated
statement of profit or loss and other comprehensive income from the
date on which control is obtained. They are deconsolidated from the
date on which control ceases.
Taxation
Income tax expense represents the sum of the tax currently
payable and deferred tax.
Judgements and key sources of estimation uncertainty
3
The preparation of the Company's historical financial
information under IFRS requires the Directors to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and
liabilities. Estimates and judgements are continually evaluated and
are based on historical experience and other factors including
expectations of future events that are believed to be reasonable
under the circumstances. Actual results may differ from these
estimates.
The Directors consider that the following estimates and
judgements are likely to have the most significant effect on the
amounts recognised in the financial information.
Carrying value of intangible assets, property, plant and
equipment
In determining whether there are indicators of impairment of the
Company's intangible assets, the Directors take into consideration
various factors including the economic viability and expected
future financial performance of the asset and when it relates to
the intangible assets arising on a business combination, the
expected future performance of the business acquired.
Going concern
The preparation of cash flow forecasts for the Group requires
estimates to be made of the quantum and timing of cash receipts
from future commercial revenues and the timing of future
expenditure, all of which are subject to uncertainty.
4 Segment information
The Group has one division being the development of prognostic
and diagnostic tests for kidney transplant patients. The directors
consider that all activities relate to this segment. All the
non-current assets of the Group are located in, or primarily relate
to, the USA.
Revenue
5
Six months Six months Year to
to to
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Product services 19 - -
Expenses by nature
6
Six months Six months Year to
to to
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Employee benefit expenses 1,863 1,289 2,889
Depreciation of property, plant
and equipment 394 203 497
Amortisation of intangible assets 78 72 143
Research and development costs 1,641 2,290 4,832
Licenses and milestones 50 550 550
Professional costs 490 515 1,325
Share-based payment expense for
non-employees 41 77 129
Foreign exchange losses / (gains) 296 (510) 36
Costs of share issue - 90 90
Other costs 543 898 964
Earnings per share
7
Six months Six months Year to
to to
30 June 30 June 31 December
2023 2022 2022
US$ US$ US$
Unaudited Unaudited Audited
Numerator
Loss for the period used in basic
EPS (5,272,803) (5,466,168) (11,407,527)
Denominator
Weighted average number of ordinary
shares used in basic EPS 170,319,245 158,890,673 164,667,754
Resulting loss per share (US$0.031) (US$0.034) (US$0.069)
The Company has one category of dilutive potential ordinary
share, being share options. The potential shares were not dilutive
in the period as the Group made a loss per share in line with IAS
33.
Trade and other receivables
8
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Accounts receivable 19 - -
Prepayments 288 324 343
Other debtors 119 192 177
_________ _________ _________
426 516 520
_________ _________ _________
Trade and other payables
9
30 June 30 June 31 December
2023 2022 2021
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Trade payables 1,034 385 960
Other creditors - 186 -
Accruals 1,010 1,303 1,136
_________ _________ _________
Total trade and other payables 2,044 1,874 2,096
_________ _________ _________
The carrying value of trade and other payables classified as
financial liabilities measured at amortised cost approximates fair
value.
Lease liabilities
10
Land and Plant and
Group buildings machinery Total
US$'000 US$'000 US$'000
At 1 January 2022 and 30 June 2022 - - -
Additions 465 238 703
Interest expense 4 1 5
Repayments (8) - (8)
________ ________ ________
At 31 December 2022 - audited 461 239 700
________ ________ ________
Repayments (47) (47) (94)
Interest expense 7 8 15
________ ________ ________
At 30 June 2023 - unaudited 421 200 621
________ ________ ________
The Company acquired an asset under capital lease financing
arrangements.
The Company operates from one office which is rented under a
lease agreement ending on 1 November 2027 under which rent is
payable monthly.
Share-based payment
11
On 28 October 2020, the Board adopted the Share Option Plan to
incentivise certain of the Group's employees and Directors. The
Share Option Plan provides for the grant of both EMI Options and
non-tax favoured options. Options granted under the Share Option
Plan are subject to exercise conditions as summarised below.
The Share Option Plan has a non-employee sub-plan for the grant
of Options to the Company's advisors, consultants, non-executive
directors, and entities providing, through an individual, such
advisory, consultancy, or office holder services. In addition,
there isa US sub-plan for the grant of Options to eligible
participants in the Share Option Plan and the Non-Employee Sub-Plan
who are US residents and US taxpayers.
With the exception of options over 10,631,086 shares, which
vested immediately on grant, the options vest equally over twelve
quarters from the grant date. If options remain unexercised after
the date one day before the tenth anniversary of grant such options
expire. The Options are subject to exercise conditions such that
they shall, subject to certain exceptions, vest in equal quarterly
instalments over the three years immediately following the date of
grant, which vesting shall accelerate in full in the event of a
change of control of the Company.
Weighted
average
exercise
price Number
(p)
Outstanding at 1 January 2022 4,933,696
Granted during the period 454,370
Cancelled during the period (120,000)
_________ _________
Outstanding at 30 June 2022 26.04 5,268,066
Granted during the period 1,110,000
_________ _________
Outstanding at 31 December 2022 - audited 23.86 6,378,066
Granted during the period 250,000
Cancelled during the period (300,000)
_________ _________
Outstanding at 30 June 2023 - unaudited 25.56 6,328,066
_________ _________
The Group recognised total expenses of $99,000 (six months to 30
June 2022: $195,000) as administrative expenses relating to
equity-settled share-based payment transactions during the period
to 30 June 2023.
12 Events after the reporting date
There have been no events subsequent to the period end that
require disclosure in these financial statements.
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