TIDMHVO
RNS Number : 7961C
hVIVO plc
20 April 2017
For immediate release 07:00: 20 April 2017
HVIVO PLC
("hVIVO" or the "Company")
AUDITED PRELIMINARY RESULTS
FOR THE YEARED 31 DECEMBER 2016
hVIVO plc (AIM: HVO), the pioneer of human disease models, is
pleased to announce its audited preliminary results for the year
ended 31 December 2016.
Financial Highlights
-- Revenue of GBP19.9 million (2015: GBP7.7 million), includes
GBP7.3 million from third-party client engagements and GBP12.5
million from equity investments (GBP9.7 million from the three
PrEP-001 Phase IIa clinical studies and GBP2.8 million from the
FLU-v Phase IIb clinical study)
-- Gross profit of GBP4.2 million and gross profit margin of
21.3% (2015: gross profit GBP2.5 million and gross profit margin
31.8%), with margin dampened by clinical studies with equity
investments
-- Research and development (R&D) expense was GBP6.3 million
(2015: GBP10.2 million) and is lower, as expected, compared to
previous years, due to the timing of phases and weighting of costs
of our discovery research programmes, with greater R&D expense
in previous years from undertaking the sample clinical studies and
subsequent third party transcriptomic analysis
-- Administrative expenses were GBP13.8 million (2015: GBP13.7
million) with costs maintained primarily due to non-capitalisable
costs of investment in a medical management technology platform,
leveraging technology to improve efficiency, partially offset by
ongoing cost savings and other efficiency initiatives
-- Short-term deposits, cash and cash equivalents of GBP25.7
million at 31 December 2016 (2015: GBP51.2 million), extending cash
runway into H2 2018
Operational Highlights
-- Filed hVIVO's first patent application in severe flu as a
result of our our pathomics-informed drug target discovery, and in
parallel, progressed the selection of a severe flu compound against
this target, positioning hVIVO to lead the way in developing the
first treatments for this area of high unmet need
-- Advanced a potentially ground-breaking biological algorithm
for predicting who will experience asthma worsening before symptoms
emerge
-- Conducted three Phase IIa clinical studies for PrEP-001
designed to address key clinical development questions, regarding
target indications (both flu and cold), dosing regimens (daily
dosing), and optimal field study population (healthy adults)
-- Contracted our second equity investment in April 2016,
acquiring a 49.0% interest in Imutex Limited for GBP7.0 million,
which holds two clinical stage vaccine platforms in universal flu
(FLU-v) and mosquito-borne disease (AGS-v)
-- Advanced three clinical studies with FLU-v and AGS-v, with
initial data read-outs expected in 2017
Commenting on today's results, Kym Denny, Chief Executive
Officer, said:
"In 2016 we leveraged the hVIVO platform to advance our equity
investment-based clinical assets, while simultaneously converting
our growing insight in flu and asthma into new inventions. Securing
PrEP-001's clinical proof-of-concept in flu was a key achievement.
Whilst PrEP-001's asthma trial results were not what we hoped for,
our ongoing analysis of the data, in combination with hVIVO's
proprietary common cold datasets, will inform future hypothesis for
testing regarding specific asthma subtypes. In the meantime PrEP
Biopharm will progress the product's development in the healthy
adult population. Our Imutex investment brought us a universal flu
vaccine and a mosquito-borne illness vaccine, both of which we were
able to accelerate into the clinic, with initial data read outs
expected in 2017.
Further to the platform's product testing activities, the hVIVO
R&D team took the insight generated from previous years'
samples and arrived at a qualified drug target and corresponding
candidate compound list for severe flu, as well as produced our
first biological algorithm for predicting patients at risk of
asthma worsening before symptoms arise.
We look forward to advancing our inventions and clinical stage
assets in 2017, as we seek to utilise our revolutionary platform
and precision development approach to deliver respiratory precision
medicine-based therapies."
For further information please contact:
hVIVO plc +44 207 756 1300
Kym Denny (Chief Executive
Officer)
Graham Yeatman (Chief Financial
& Business Officer)
+44 203 021 3933
/
Media Enquiries +44 7854 979 420
Colin Paterson (Director of
Marketing, Communication and
Public Relations)
Numis Securities Limited +44 207 260 1000
Michael Meade / Freddie Barnfield
(Nominated Adviser)
James Black / Michael Burke
(Corporate Broking)
FTI Consulting
Simon Conway / Victoria Foster
Mitchell (UK) +44 203 727 1000
John Capodanno / Evan Smith
(US) +1 212 850 5705
Notes to Editors:
hVIVO plc ("hVIVO"), a specialty biopharma company with
discovery and clinical testing capabilities, is pioneering a
human-based analytical platform to accelerate drug discovery and
development in respiratory and infectious diseases. Leveraging
human disease models in flu, RSV and asthma exacerbation, the hVIVO
platform captures disease in motion, illuminating the entire
disease life cycle from healthy to sick and back to health. Based
in the UK, market leader hVIVO has conducted more than 45 clinical
studies, inoculated over 2000 volunteers and has three
first-in-class therapies currently in development with a growing
pre-clinical pipeline.
CHIEF EXECUTIVE OFFICER'S STATEMENT
In 2016, the insights enabled by our "disease in motion" human
disease models allowed us to achieve significant steps in our quest
for precision medicines in respiratory and infectious diseases.
After three years of collecting and qualifying influenza (flu)
disease in motion samples, we were able to demonstrate 'severe flu'
as having a different pathophysiology to 'normal flu', opening up
the ability to predict, diagnose and treat severe flu for the very
first time. Additionally, from our new asthma exacerbation disease
model, we were able to advance a potentially ground-breaking
biological algorithm that can predict, up to two days before
symptoms emerge, who will experience asthma worsening due to the
common cold. Leveraging our platform for its product testing
capabilities, we advanced PrEP-001 through three clinical studies
aimed at widening its application, selecting the optimal dosing
regimen, and investigating the best patient population in which to
advance development. Lastly, we formed a joint venture with SEEK
Group (SEEK) to develop two clinical stage vaccine assets in
universal flu and mosquito-borne diseases, which we advanced into
Phase IIb and first-in-man studies, respectively.
Severe flu - first pathomics patent application filed
Over hVIVO's 25 years of experience researching flu it has
become clear that there are significant gaps in existing treatments
and vaccines. We believe we can overcome these gaps by better
understanding the immune response to flu infection. In particular,
hVIVO noted that there were no treatments for severe flu. This
translates into a worrying economic reality: in the US alone, there
are 200,000 cases of severe flu annually, 20% of which develop
acute respiratory distress syndrome (ARDS) and cause $13.8 billion
in hospital costs. These figures can be expected to increase
exponentially in pandemic outbreaks.
As such, hVIVO turned the power of our platform on severe flu in
order to illuminate the correct drug targets to produce a positive
therapeutic effect. Through our pathomics process, we arrived at a
qualified pathway component for our severe flu drug target in under
18 months and filed our first patent application around this
discovery in early July 2016. The invention in this initial patent
application aims to protect our pathomics-informed drug target
(HVO-001), with additional patent applications to follow that
address novel and inventive use of the associated pathway and
disease activity biomarkers.
Based on both in vitro and human ex vivo disease relevant
assays, we are currently in the compound selection stage for our
severe flu drug candidate. We believe our pathomics insights and
our efforts over the past three years to distinguish those pathways
involved in severe flu positions hVIVO to lead the charge in
defining and treating this area of high unmet medical need.
Data mining - translating insights to products
Once we had identified a biological distinction between severe
and normal flu, we turned to data mining of our time-course,
disease in motion samples to reveal patterns and meaningful
correlations between clinical, cellular and molecular data. Our
goal is subsequently to identify molecular signatures and
biological algorithms that can serve as predictor tools and patient
stratification guides. For flu, we have identified a candidate
invention to distinguish who is contagious well in advance of
showing symptoms (patent application filed in February 2017) and we
are currently working to identify a molecular signature for
predicting who will develop severe flu. Qualification of these
discoveries is ongoing in 2017, and we continue to mine our
existing discovery data sets with the goal of deriving additional
commercially viable inventions.
In addition to flu, 2016 saw hVIVO progress data mining of
samples from our newest human model in asthma exacerbation. We
identified a time-course signature in our disease in motion data
that pointed to an ability to predict who would suffer asthma
worsening when infected with the common cold. By the end of 2016,
we had completed a third party analysis of that discovery, which we
strengthened via correlation analysis and grouping, in addition to
predictive modelling. The result was a refined algorithm that can
potentially predict up to two days in advance of any symptoms, who
will experience a worsening of their asthma (patent application
filed in April 2017). We see this invention being further refined
as we zero in on asthma subtypes. The discovery holds promise for
both precision drug development as well as precision diagnostics.
As a development tool, the asthma worsening predictor can help
select patients for enrolment into clinical trials; as a diagnostic
or digital health tool, it could help patients at risk proactively
and appropriately seek or avoid therapeutic interventions, thereby
preventing serious exacerbations and morbidity for patients and
substantially reducing healthcare costs.
Advancing PrEP-001 - a novel pan-viral prophylactic
Less than 18 months after our investment in PrEP Biopharm
Limited (PrEP Biopharm) and its lead product PrEP-001, hVIVO has
completed three Phase IIa studies for PrEP-001: a proof-of-concept
(POC) in flu, a dose ranging (durability) study, both using healthy
volunteers, and a study exploring an additional patient population
(asthmatics). These studies were designed to answer early in
development crucial questions regarding breadth of viral coverage,
dosing regimens and optimal field study patient populations. They
provide the ability to sufficiently explore study variables before
committing to Phase III - a step that is imperative in diseases
such as asthma, where taking a "one-size-fits-all" approach is not
viable for bringing more targeted and effective new medicines to
market, highlighting how little is known regarding asthma's subtype
populations.
PrEP-001 is a nasally administered, broad-spectrum agent that
leverages the innate immune system to prevent upper respiratory
tract viral infections. The PrEP-001 Phase IIa flu POC study, which
achieved positive results and was announced in June 2016, was a key
highlight of the first half of 2016. Severity and duration of flu
symptoms were reduced two-fold in healthy volunteers. Following the
previous successful results in the common cold POC study in 2014,
this study demonstrated PrEP-001's potential as a pan-viral
prophylactic for flu and cold infections that cause more than 500
million infections per annum.
The PrEP-001 Phase IIa durability and asthma exploratory studies
were designed to provide valuable insights for PrEP-001 on dosing
regimens and future study patient populations, respectively, and
build on the profile of the drug following the positive flu and
cold POC challenge studies in healthy volunteers. Both of these
trials were initiated in 2016 and reported post-period in February
2017. Both studies demonstrated that PrEP-001 was safe and well
tolerated, with the adverse event profile being similar in active
and placebo arms and consistent with previous studies with the
drug.
The durability study was conducted in healthy subjects
challenged with human rhinovirus 16 (HRV-16) to explore the impact
of two potential dosing schedules for PrEP-001 beyond the once
daily dosing already established in prior studies. Together, with
the previous study in common cold, the results showed that weekly
and twice weekly dosing were not sufficient to sustain a meaningful
prophylactic effect and once daily dosing may be the more effective
dosing regimen.
The next Phase IIa trial investigated the effect of PrEP-001 in
a different patient population, namely people with asthma. The
trial involved a non-stratified approach in patients with mild to
moderate controlled asthma, challenging them with HRV-16. The
primary endpoint was patient assessed TSS, expressed as an average
(Area Under the Curve (AUC)). The trial failed to meet its primary
endpoint, with lower than expected symptoms reported in both the
placebo and treatment groups, hinting that a broad, controlled
asthma patient population responds differently to cold infections
than a more homogeneous healthy population.
We subsequently took a deeper look into the data to see if we
could detect any trends that would help pinpoint the key
differences in the clinical characteristics and biology of the
patient population and therefore identify key features of
responders and non-responders. We identified that there was a
significantly higher number of patients post common cold infection
with no symptoms in the active group compared to placebo. This
suggests that there was potentially a strong responder subtype. In
addition, when exploring individual symptoms (as opposed to an
average), we found in a modified intent-to-treat (ITT) analysis
that the TSS peak was significantly lower in the active compared to
the placebo.
Work is now ongoing to fully characterise the responder subgroup
discussed above at the clinical, cellular and molecular level.
Whilst PrEP-001's asthma trial results were not what we hoped for,
hVIVO is in a privileged position of being in possession of full
time-course data for healthy, mild uncontrolled, and controlled
mild to moderate asthma patients challenged with the common cold
virus and we will be leveraging this dataset to tease out the
granular differences (i.e. phenotypes and endotypes) between asthma
patients and how they respond to viral infection. In the meantime,
PrEP Biopharm will advance the development of PrEP-001 in the
healthy adult population, with Phase IIb planned for H1 2018.
Expanding our pipeline - Imutex Limited
In April 2016, hVIVO completed its second equity investment,
forming a joint venture in a new company, Imutex Limited (Imutex),
with fellow investor PepTcell Limited, also known as the SEEK Group
(SEEK). The partnership was formed to develop two clinical stage
vaccine platforms in universal flu (FLU-v) and mosquito-borne
diseases (AGS-v).
Such vaccines are key public health priorities identified by the
Centers for Disease Control and Prevention (CDC), the US National
Institute of Health (NIH), and other international health
authorities. Since the announcement, hVIVO and SEEK have been
collaborating to accelerate development of both vaccines. Both
products have the potential to qualify for US Food and Drug
Administration (FDA) Fast Track designation, depending on the
outcome of the trials being conducted in 2016/2017.
Outlook
In 2016, we made significant strides in leveraging our platform
to test new products and harvest our biological insights. We
advanced the development of our three clinical stage assets.
Separately and concurrently, we pivoted from building our
collection of disease in motion samples to mining and converting
the biological insights they reveal into precision medicine-based
therapies and tools.
To date, our equity investment assets, namely PrEP-001 and
FLU-v, have benefited from our platform, primarily as a rapid,
sophisticated testing tool. As we now move forward with converting
our insight into precision development tools and diagnostics, we
will add much deeper value to these products and to future products
we collaborate on and test in our platform. To that end, in 2017 we
will be focusing on mining our time-course samples across common
cold challenged data sets to search for an asthmatic subgroup of
PrEP-001 responders, as well as a phenotype associated with
susceptibility to viral infection. In the meantime, PrEP Biopharm
will press ahead with a PrEP-001 Phase IIb study in healthy
adults.
We also expect the development of the assets from our most
recent investment in Imutex to continue at its rapid pace, with
data from the two FLU-v Phase IIb studies, and the AGS-v Phase I
study, expected later this year. With flu remaining a key priority
for many public health authorities, we will look to advance to lead
candidate selection and capitalise on the opportunity to fast track
development of a potential severe flu drug treatment, as well as
further progressing Imutex's FLU-v.
We plan to continue to progress the application of our asthma
worsening predictor tool as we deepen our understanding of asthma
subtypes, and qualify our severe flu predictor tool. Along with the
flu contagiousness patent application filed in February 2017, we
expect the development of additional tools for flu and asthma to
continue in 2017.
In the second half of 2016, our testing facilities were
leveraged to their highest capacity of the year, with the
completion of PrEP-001 durability and asthma exploratory studies,
the start of the FLU-v study, and the restarting of a client study
that was delayed from H1 2016. We successfully managed the workload
of the PrEP-001 and FLU-v studies to accommodate the client study,
such that the PrEP-001 and client studies completed their
quarantines in Q4 2016, with the expanded FLU-v study achieving its
last quarantine cohort in March 2017. Demand continues to rebuild
for flu, with strong funding opportunities coming particularly from
US government agencies. Our flexible operating model allows us
dynamically to balance competing demands for our capacity and
workload, to meet our own and our clients' development
expectations. Our commercial operating model is now such that we
seek to balance and flex our platform's capacity and workload
between engagements with our equity investments, our strategically
important clients and our own discovery work (together with the
associated funding streams from client revenue and government
grants), such that we achieve the optimum mixture of work type to
advance our products and progress adoption of our models depending
on priority and best value. We also continue to make significant
strides in achieving a more agile, flexible and efficient operating
model, together with implementing other cost
savings initiatives and leveraging technology in our process,
which seek to extend our cash runway and prioritise our investment
spend to achieving near term value inflection points and
commercialisation opportunities.
As we move into 2017, we stand at the forefront of the
development of precision medicine for respiratory and infectious
diseases, and model platform, converting biological insights from
our disease in motion samples into proprietary inventions that
will, over time, help to revolutionise how we treat respiratory and
infectious diseases such as asthma and flu. I look forward to
updating you further as we achieve key milestones and I would like
to thank our staff, patients, customers, partners and investors for
their invaluable support in making all of our 2016 achievements
possible.
Kym Denny
Chief Executive Officer
19 April 2017
Sources:
-- CDC.gov, Influenza Activity - United States, 2013-2014 Season
and Composition of the 2014-15 Influenza Vaccine, Accessed
10/15
-- Woods et al (2015), Am J Physiol Lung Cell Mol Physiol 38(9): L912-L921
-- Howard WA et al (2011), influenzajournal.com,
-- Wisen, J., et al (2012), Annals of Intensive Care, 2:41
-- Molinari (2007), Vaccine 25(27) :5086-5096
-- Fendrick et. al. (2003), Arch Intern Med. 163(4):487-494
FINANCIAL REVIEW
During 2016, hVIVO completed three PrEP-001 Phase IIa clinical
studies, contracted its equity investment in Imutex Limited (April
2016) and made significant progress in conducting the FLU-v Phase
IIb clinical study for PepTcell Limited. A third party client study
postponed from H1 2016 was restarted and completed in H2 2016,
which added to improved utilisation and gross profit margin in the
second half of the year. hVIVO continued to invest in its research
and development programme to leverage its collection of disease in
motion samples to provide biological insights and further develop
its clinical assets.
Financial KPIs 2016 2015
----------------------------- ----------- -----------
Short--term deposits, cash GBP25.7m GBP51.2m
and cash equivalents
----------------------------- ----------- -----------
Revenue GBP19.9m GBP7.7m
----------------------------- ----------- -----------
Gross profit GBP4.2m GBP2.5m
----------------------------- ----------- -----------
Gross profit margin 21.3% 31.8%
----------------------------- ----------- -----------
Research and development GBP(6.3)m GBP(10.2)m
expense
----------------------------- ----------- -----------
Administrative expense GBP(13.8)m GBP(13.7)m
----------------------------- ----------- -----------
Share of loss of associates GBP(7.4)m GBP(0.1)m
and joint ventures
----------------------------- ----------- -----------
Loss for the year GBP(17.9)m GBP(17.9)m
----------------------------- ----------- -----------
Revenue
Revenue for the year ended 31 December 2016 was GBP19.9 million
(2015: GBP7.7 million). Revenue includes GBP7.3 million from third
party client engagements and GBP12.5 million from equity
investments (GBP9.7 million from the three PrEP-001 Phase IIa
clinical studies and GBP2.8 million from the PepTcell Limited FLU-v
Phase IIb clinical study). The PepTcell Limited FLU-v study is
included in revenue following the reversal in accounting treatment
of the Imutex Limited transaction, announced on 13 April 2017.
During 2016, the Group delivered final study data for the PrEP
Biopharm Limited flu and asthma licence arrangements, leading to
recognition of revenue and related costs against the delivery of
these two licences on a "completed" basis. Revenue from the
PrEP-001 durability study, FLU-v study and other third party client
studies was recognised on a percentage of completion basis.
Research and development ("R&D") expense
R&D expense was GBP6.3 million (2015: GBP10.2 million) and
is lower, as expected, compared to previous years, due to the
timing of phases and weightings of cost of our various discovery
research programmes, with greater R&D expense in previous years
from undertaking the sample clinical studies and subsequent third
party transcriptomic analysis.
Share of loss of associates and joint ventures
Share of loss of associates and joint ventures was GBP7.4
million (2015: GBP0.1 million), which reflects the share of results
of hVIVO's investments in PrEP Biopharm Limited (GBP7.4 million
loss) and Imutex Limited (GBPnil).
Administrative expense
Administrative expenses were GBP13.8 million (2015: GBP13.7
million). The increase is primarily due to non-capitalisable costs
of investment in a medical management technology platform of GBP0.4
million, as well as increased spend on legal and professional fees,
partially offset by savings achieved through the continuation of
cost saving initiatives during the period. Administrative expense
in 2016 included GBP1.1 million of leasehold provisions (2015:
GBP1.0 million).
Taxation
The Group makes claims each year for research and development
tax credits and, since it is loss-making, elects to surrender these
tax credits for a cash rebate. The amount credited to the
consolidated statement of comprehensive income with respect to
amounts received and receivable for the surrender of research and
development expenditure was GBP4.8 million for the year ended 31
December 2016 (2015: GBP3.7 million).
Consolidated statement of financial position
As of 31 December 2016 total assets less liabilities amounted to
GBP46.1 million (2015: GBP63.6 million) including short--term
deposits of GBPnil (2015: GBP37.0 million) and cash and cash
equivalents of GBP25.7 million (2015: GBP14.2 million).
The principal movements in the consolidated statement of
financial position during the year are summarised below:
-- acquisition of equity in Imutex Limited of GBP7.1 million,
inclusive of GBP0.1 million of transaction costs;
-- recognition of losses (GBP7.4 million) and other
comprehensive income (GBP0.2 million) relating to the Group's
investment in PrEP Biopharm Limited;
-- delivery of the licence of previously completed flu and
asthma study data to PrEP Biopharm, resulting in a reduction of
current intangible asset of GBP2.9 million;
-- decrease in short-term deposits of GBP37.0 million;
-- increase in cash and cash equivalents of GBP11.5 million; and
-- decrease in current trade and other payables of GBP10.4
million, which includes the payment in January 2016 of GBP5.0
million deferred consideration in respect of the equity investment
in PrEP Biopharm Limited on 1 November 2015.
Cash flow
The principal cash flows in the year were as follows:
Inflows
-- finance income of GBP0.3 million (2015: GBP0.4 million).
Outflows
-- cash outflow from operating activities of GBP17.8 million (2015: GBP9.8 million);
-- equity investment in Imutex Limited of GBP7.1 million,
inclusive of GBP0.1 million of transaction costs; and
-- purchase of intangible assets (data management software
platform) of GBP0.7m (2015: GBPnil).
Key performance indicators
The Directors consider the principal financial performance
indicators of the Group to be:
-- short--term deposits, cash and cash equivalents;
-- revenue;
-- gross profit;
-- gross profit margin;
-- research and development expense;
-- administrative expense;
-- share of loss of associates and joint ventures; and
-- net profit or loss.
The Directors consider the principal non--financial performance
indicators of the Group to be:
-- performance of hVIVO's equity investments;
-- collaboration opportunities with global pharmaceutical companies;
-- development of intellectual property from our discovery
research and product validation capabilities and, in particular,
disease research (pathomics), data mining and analysis, sample
collection and product testing processes;
-- the expansion of the hVIVO platform and its increasing
acceptance by global pharmaceutical companies and government
bodies, including regulatory agencies;
-- development of new human disease models; and
-- research and development in other disease areas including asthma.
These elements are discussed within the Chief Executive
Officer's statement.
Graham Yeatman
Chief Financial & Business Officer
19 April 2017
hVIVO plc
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2016
2016 2015
Note GBP'000 GBP'000
------------------------------------- ----- --------- ---------
Revenue 19,850 7,717
------------------------------------- ----- --------- ---------
Cost of sales (15,629) (5,266)
------------------------------------- ----- --------- ---------
Gross profit 4,221 2,451
Other income 276 1,187
------------------------------------- ----- --------- ---------
Research and development expense (6,282) (10,199)
------------------------------------- ----- --------- ---------
Provision against virus inventory 9 - (1,617)
------------------------------------- ----- --------- ---------
Administrative expense (13,767) (13,671)
------------------------------------- ----- --------- ---------
Share of loss of associates and
joint ventures 8 (7,371) (146)
------------------------------------- ----- --------- ---------
Loss from operations (22,923) (21,995)
Finance income 310 387
------------------------------------- ----- --------- ---------
Finance costs (18) (17)
------------------------------------- ----- --------- ---------
Loss before taxation (22,631) (21,625)
Taxation 3 4,750 3,716
------------------------------------- ----- --------- ---------
Loss for the year (17,881) (17,909)
------------------------------------- ----- --------- ---------
Other comprehensive income, net
of tax
Items that may be reclassified
subsequently to profit or loss:
------------------------------------- ----- --------- ---------
Share of other comprehensive income
of associates and joint ventures 207 (5)
------------------------------------- ----- --------- ---------
Exchange differences arising on
translating foreign operations (65) 1
------------------------------------- ----- --------- ---------
Total comprehensive loss for the
year attributable to owners of
the parent (17,739) (17,913)
------------------------------------- ----- --------- ---------
Loss per share - basic (pence) 4 (22.9p) (26.0p)
Loss per share - diluted (pence) 4 (22.9p) (26.0p)
------------------------------------- ----- --------- ---------
All activities relate to continuing operations.
The accompanying notes are an integral part of the consolidated
statement of comprehensive income.
hVIVO plc
Consolidated Statement of Financial Position
As at 31 December 2016
2016 2015
------------------------------------- ----- --------- ---------
Note GBP'000 GBP'000
------------------------------------- ----- --------- ---------
Assets
Non--current assets
------------------------------------- ----- --------- ---------
Goodwill 5 1,722 1,722
------------------------------------- ----- --------- ---------
Intangible assets 6 3,375 3,030
------------------------------------- ----- --------- ---------
Property, plant and equipment 7 1,552 2,679
------------------------------------- ----- --------- ---------
Investment in associates and joint
ventures 8 14,150 14,254
------------------------------------- ----- --------- ---------
20,799 21,685
------------------------------------- ----- --------- ---------
Current assets
------------------------------------- ----- --------- ---------
Inventories 9 1,986 2,141
------------------------------------- ----- --------- ---------
Current intangible asset 10 - 2,935
------------------------------------- ----- --------- ---------
Trade and other receivables 11 3,704 2,642
------------------------------------- ----- --------- ---------
Research and development tax credit
receivable 4,558 4,101
------------------------------------- ----- --------- ---------
Short--term deposits 12 - 37,031
Cash and cash equivalents 13 25,679 14,205
------------------------------------- ----- --------- ---------
35,927 63,055
------------------------------------- ----- --------- ---------
Total assets 56,726 84,740
------------------------------------- ----- --------- ---------
Equity and liabilities
------------------------------------- ----- --------- ---------
Equity
------------------------------------- ----- --------- ---------
Share capital 3,905 3,903
------------------------------------- ----- --------- ---------
Share premium account 93,217 93,145
------------------------------------- ----- --------- ---------
Share--based payment reserve 238 144
------------------------------------- ----- --------- ---------
Merger reserve 4,199 4,199
------------------------------------- ----- --------- ---------
Other reserve 211 211
------------------------------------- ----- --------- ---------
Retained deficit (55,718) (37,979)
------------------------------------- ----- --------- ---------
Total equity 46,052 63,623
------------------------------------- ----- --------- ---------
Non--current liabilities
------------------------------------- ----- --------- ---------
Other payables 15 400 475
------------------------------------- ----- --------- ---------
Provisions 16 3,131 3,140
------------------------------------- ----- --------- ---------
3,531 3,615
------------------------------------- ----- --------- ---------
Current liabilities
Trade and other payables 14 7,143 17,502
------------------------------------- ----- --------- ---------
7,143 17,502
------------------------------------- ----- --------- ---------
Total liabilities 10,674 21,117
------------------------------------- ----- --------- ---------
Total liabilities and equity 56,726 84,740
------------------------------------- ----- --------- ---------
The accompanying notes are an integral part of the consolidated
statement of financial position.
hVIVO plc
Consolidated Statement of Changes in Equity
For the year ended 31 December 2016
Share
Share --based
Share premium payment Merger Other Retained Total
capital account reserve reserve reserve deficit equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
As at 31 December 2014 3,383 72,498 249 4,199 921 (20,066) 61,184
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
Share-based payment - - 78 - - - 78
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
Proceeds from shares issued:
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
Acquisition of subsidiary - settlement of
deferred consideration 11 699 - - (710) - -
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
Exercise of warrants and share options 52 360 (183) - - - 229
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
Issue of new shares 1 67 - - - - 68
Placing net of related expenses 456 19,521 - - - - 19,977
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
Total transactions with owners in their
capacity as owners 520 20,647 (105) - (710) - 20,352
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
Loss for the year - - - - - (17,909) (17,909)
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
Exchange differences on translation of
foreign assets - - - - - (4) (4)
As at 31 December 2015 3,903 93,145 144 4,199 211 (37,979) 63,623
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
Share-based payment - - 94 - - - 94
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
Proceeds from shares issued:
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
Issue of new shares 2 72 - - - - 74
Total transactions with owners in their
capacity as owners 2 72 94 - - - 168
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
Loss for the year - - - - - (17,881) (17,881)
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
Share of other comprehensive income of
associates and joint ventures - - - - - 207 207
Exchange differences on translation of
foreign assets - - - - - (65) (65)
As at 31 December 2016 3,905 93,217 238 4,199 211 (55,718) 46,052
--------------------------------------------- -------- -------- --------- -------- -------- --------- ---------
The accompanying notes are an integral part of the consolidated
statement of changes in equity.
hVIVO plc
Consolidated Statement of Cash Flows
For the year ended 31 December 2016
2016 2015
Note GBP'000 GBP'000
--------------------------------------- ----- --------- ---------
Net cash used in operating activities 17 (17,831) (9,846)
--------------------------------------- ----- --------- ---------
Cash flows from investing activities
--------------------------------------- ----- --------- ---------
Acquisition of intangible assets (660) (15)
--------------------------------------- ----- --------- ---------
Acquisition of property, plant
and equipment (162) (869)
--------------------------------------- ----- --------- ---------
Decrease/(increase) in balances
on short--term deposit 37,031 (9,024)
--------------------------------------- ----- --------- ---------
Investment in associates and joint
ventures (7,138) (9,405)
--------------------------------------- ----- --------- ---------
Interest received 310 398
--------------------------------------- ----- --------- ---------
Net cash generated from/(used
in) investing activities 29,381 (18,915)
Cash flows from financing activities
--------------------------------------- ----- --------- ---------
Net proceeds from issue of shares - 20,205
--------------------------------------- ----- --------- ---------
Other payables repaid (75) (75)
--------------------------------------- ----- --------- ---------
Net cash (used in)/generated from
financing activities (75) 20,130
--------------------------------------- ----- --------- ---------
Net increase/(decrease) in cash
and cash equivalents 11,474 (8,631)
Exchange gain on cash and cash
equivalents - 10
--------------------------------------- ----- --------- ---------
Cash and cash equivalents at the
start of year 14,205 22,826
--------------------------------------- ----- --------- ---------
Cash and cash equivalents at the
end of year 25,679 14,205
--------------------------------------- ----- --------- ---------
The accompanying notes are an integral part of the consolidated
statement of cash flows.
hVIVO plc
Notes to the Consolidated Financial Statements
1. Basis of the announcement
The audited preliminary results for the year ended 31 December
2016 were approved by the Board of Directors on 19 April 2017. The
preliminary results do not constitute full accounts within the
meaning of section 434 of the Companies Act 2006 but are derived
from accounts for the year ended 31 December 2016 and year ended 31
December 2015.
The preliminary announcement is prepared on the same basis as
set out in the statutory accounts for the year ended 31 December
2016. Those accounts upon which the auditors issued an unqualified
opinion, also had no statement under section 498(2) or (3) of the
Companies Act 2006.
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards, as adopted by the European Union (EU) (IFRS), this
announcement does not in itself contain sufficient information to
comply with IFRS.
The Company is a limited liability company incorporated and
domiciled in England & Wales and whose shares are quoted on
AIM, a market operated by The London Stock Exchange. The
consolidated financial information of hVIVO plc is presented in
pounds Sterling (GBP). The individual financial statements of hVIVO
plc is presented in pounds Sterling (GBP) which is the Company's
functional currency. For the purpose of the consolidated financial
statements, the results and financial position of each Group
company are expressed in pounds Sterling.
The statutory accounts for the financial year ended 31 December
2016 will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
Going concern
In determining the basis for preparing the Consolidated
Financial Statements, the Directors are required to consider
whether the Company can continue in operational existence for the
foreseeable future, being a period of not less than twelve months
from the date of the approval of the Consolidated Financial
Statements. As at 31 December 2016 the Group had short--term
deposits, cash and cash equivalents of GBP25.7 million (2015:
GBP51.2 million) and net current assets of GBP28.8 million (2015:
GBP45.6 million).
Management prepares detailed working capital forecasts which are
reviewed by the Board on a regular basis. The forecasts include
assumptions regarding the status of client engagements and sales
pipeline, future revenues and costs together with various scenarios
which reflect growth plans, opportunities, risks and mitigating
actions. The forecasts also include assumptions regarding the
timing and quantum of investment in the Company's research and
development programme. Whilst there are inherent uncertainties
regarding the cash flows associated with the development of the
hVIVO platform, together with the timing of signature and delivery
of client engagements and future collaboration transactions, the
Directors are satisfied that there is sufficient discretion and
control as to the timing and quantum of cash outflows to ensure
that the Company and Group are able to meet their liabilities as
they fall due for the foreseeable future.
As part of its going concern review the Board has followed the
guidelines published by the Financial Reporting Council entitled
"Going Concern and Liquidity Risk Guidance for UK Companies 2009".
Having made relevant and appropriate enquiries, including
consideration of the Company's and Group's current cash resources
and the working capital forecasts, the Directors have a reasonable
expectation that the Company and Group will have adequate cash
resources to continue to meet the requirements of the business for
at least the next twelve months. Accordingly, the Board continues
to adopt the going concern basis in preparing the Consolidated
Financial Statements.
2. Segmental information
The Group's Chief Operating Decision Maker, the Chief Executive
Officer, is responsible for resource allocation and the assessment
of performance. In the performance of this role, the Chief
Executive Officer reviews the Group's activities, in the aggregate.
The Group has therefore determined that it has only one reportable
segment under IFRS 8 Operating Segments, which is "medical and
scientific research services".
The Group carries out its main activities from the United
Kingdom. The Group conducts sales activity in the US and in Europe
which is carried out through hVIVO Inc and hVIVO Services Limited
respectively. All revenue is derived from activities undertaken in
the UK.
During the year ended 31 December 2016 the Group had four
customers who each generated revenue greater than 10% of total
revenue (2015: two customers). These customers generated 49%, 24%,
14% and 11% of revenue (2015: 59% and 28% of revenue).
3. Taxation
Year Year
ended ended
----------------------------------------- ------------ ------------
31 December 31 December
----------------------------------------- ------------ ------------
2016 2015
GBP'000 GBP'000
----------------------------------------- ------------ ------------
Current tax:
----------------------------------------- ------------ ------------
Current year research and development
tax credit (4,293) (3,749)
----------------------------------------- ------------ ------------
Adjustments in respect of previous
periods (473) 31
----------------------------------------- ------------ ------------
Foreign current tax 16 2
----------------------------------------- ------------ ------------
Deferred tax:
----------------------------------------- ------------ ------------
Origination and reversal of temporary - -
timing differences
----------------------------------------- ------------ ------------
(4,750) (3,716)
----------------------------------------- ------------ ------------
Corporation tax is calculated at 20% (2015:
20.25%) of the estimated taxable loss for
the year.
The charge for the year can be reconciled
to the loss in the consolidated statement
of comprehensive income as follows:
------------------------------------------------------- ------------
Loss before taxation (22,631) (21,625)
----------------------------------------- ------------ ------------
Tax at the UK corporation tax rate
of 20% (2015: 20.25%) (4,526) (4,379)
----------------------------------------- ------------ ------------
Expenses not deductible in determining
taxable profit 18 129
----------------------------------------- ------------ ------------
Income not taxable for tax purposes - (595)
----------------------------------------- ------------ ------------
Fixed asset temporary differences not
recognised 7 8
----------------------------------------- ------------ ------------
Current year research and development
tax credit (1,681) (1,542)
----------------------------------------- ------------ ------------
Movement in unrecognised deferred tax
asset 1,524 2,137
----------------------------------------- ------------ ------------
Other temporary timing differences
not recognised 381 495
----------------------------------------- ------------ ------------
Adjustments in respect of prior periods (473) 31
----------------------------------------- ------------ ------------
Tax for the year (4,750) (3,716)
----------------------------------------- ------------ ------------
Factors affecting current and future taxation
The rate of UK corporation tax during the year was 20%. It will
fall to 19% from 1 April 2017, and 17% from 2020.
As at 31 December 2016, the Group had tax losses available for
carry forward of approximately GBP22.6 million (2015: GBP22.8
million). The Group has not recognised deferred tax assets of
GBP3.9 million (2015: GBP4.1 million) relating to carried forward
losses. These deferred tax assets have not been recognised as the
Group's management considers that there is insufficient future
taxable income, taxable temporary differences and feasible
tax--planning strategies in the short term to utilise all of the
cumulative losses and therefore it is probable that the deferred
tax assets will not be realised in full. If future income differs
from current projections, this could significantly impact the tax
charge or benefit in future periods.
4. Earnings per share ("EPS")
Basic earnings per share is calculated by dividing profit or
loss for the year by the weighted average number of ordinary shares
in issue during the year. Diluted EPS is computed based on the
weighted average number of ordinary shares plus the effect of
dilutive potential ordinary shares outstanding during the period
based on the number of shares that could have been acquired at fair
value (determined as the average annual market share price of the
Company's shares) based on the monetary value of the subscription
rights attached to outstanding share options and warrants.
The calculation of the basic and diluted EPS as included in the
consolidated statement of comprehensive income is based on the
following data:
Year Year
ended ended
--------------------------------------- ------------ ------------
31 December 31 December
--------------------------------------- ------------ ------------
2016 2015
GBP'000 GBP'000
--------------------------------------- ------------ ------------
Earnings
--------------------------------------- ------------ ------------
Loss for the year (17,881) (17,909)
--------------------------------------- ------------ ------------
Number of shares
Weighted average number of ordinary
shares for the purposes of basic EPS 78,076,407 68,943,581
--------------------------------------- ------------ ------------
Effect of dilutive potential ordinary
shares:
- share options - -
--------------------------------------- ------------ ------------
Weighted average number of ordinary
shares for the purposes of diluted
EPS 78,076,407 68,943,581
--------------------------------------- ------------ ------------
5. Goodwill
31 December 31 December
----------------------------------------- ------------ ------------
2016 2015
GBP'000 GBP'000
----------------------------------------- ------------ ------------
At 1 January 1,722 1,722
Recognised on acquisition of subsidiary - -
----------------------------------------- ------------ ------------
At 31 December 1,722 1,722
----------------------------------------- ------------ ------------
The Group tests annually for impairment, or more frequently if
there are indications that goodwill might be impaired.
Consistent with our segmental reporting, the business has one
cash generating unit to which all goodwill arising on acquisitions
has been allocated. The recoverable amount of the cash generating
unit is determined by reference to fair value of the cash
generating unit less estimated costs of disposal. As at 31 December
2016, the recoverable amount of the cash generating unit was
considered to be significantly in excess of its book value.
6. Intangible assets
Acquired Capitalised
--------------------------- ------------- ------------ --------
Intellectual Software
property Development Total
GBP'000 GBP'000 GBP'000
--------------------------- ------------- ------------ --------
Cost:
--------------------------- ------------- ------------ --------
At 31 December 2014 2,118 1,228 3,346
---------------------------- ------------- ------------ --------
Additions at cost - 15 15
Disposals - - -
--------------------------- ------------- ------------ --------
At 31 December 2015 2,118 1,243 3,361
---------------------------- ------------- ------------ --------
Additions at cost - 660 660
Disposals - - -
--------------------------- ------------- ------------ --------
At 31 December 2016 2,118 1,903 4,021
---------------------------- ------------- ------------ --------
Accumulated depreciation:
--------------------------- ------------- ------------ --------
At 31 December 2014 - 13 13
---------------------------- ------------- ------------ --------
Charge for the year 283 35 318
Disposals - - -
--------------------------- ------------- ------------ --------
At 31 December 2015 283 48 331
---------------------------- ------------- ------------ --------
Charge for the year 282 33 315
Disposals - - -
--------------------------- ------------- ------------ --------
At 31 December 2016 565 81 646
---------------------------- ------------- ------------ --------
Carrying amount:
At 31 December 2014 2,118 1,215 3,333
---------------------------- ------------- ------------ --------
At 31 December 2015 1,835 1,195 3,030
---------------------------- ------------- ------------ --------
At 31 December 2016 1,553 1,822 3,375
---------------------------- ------------- ------------ --------
The useful lives of assets for amortisation range from five to
ten years.
7. Property, plant and equipment
Plant
Leasehold and Computer
--------------------------- ------------- ---------- ---------- --------
improvements machinery equipment Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ------------- ---------- ---------- --------
Cost:
--------------------------- ------------- ---------- ---------- --------
At 31 December 2014 2,419 2,990 1,045 6,454
--------------------------- ------------- ---------- ---------- --------
Additions 72 655 142 869
Disposals - (2) - (2)
--------------------------- ------------- ---------- ---------- --------
At 31 December 2015 2,491 3,643 1,187 7,321
--------------------------- ------------- ---------- ---------- --------
Additions 21 75 66 162
Disposals - - - -
--------------------------- ------------- ---------- ---------- --------
At 31 December 2016 2,512 3,718 1,253 7,483
--------------------------- ------------- ---------- ---------- --------
Accumulated depreciation:
--------------------------- ------------- ---------- ---------- --------
At 31 December 2014 1,347 1,361 593 3,301
--------------------------- ------------- ---------- ---------- --------
Charge for the year 320 729 293 1,342
Disposals - (1) - (1)
--------------------------- ------------- ---------- ---------- --------
At 31 December 2015 1,667 2,089 886 4,642
--------------------------- ------------- ---------- ---------- --------
Charge for the year 334 750 204 1,288
Disposals - - - -
--------------------------- ------------- ---------- ---------- --------
At 31 December 2016 2,001 2,839 1,090 5,930
--------------------------- ------------- ---------- ---------- --------
Carrying amount:
At 31 December 2014 1,072 1,629 452 3,153
--------------------------- ------------- ---------- ---------- --------
At 31 December 2015 824 1,554 301 2,679
--------------------------- ------------- ---------- ---------- --------
At 31 December 2016 511 879 163 1,553
--------------------------- ------------- ---------- ---------- --------
8. Investment in associates and joint ventures
PrEP Biopharm Limited
On 1 November 2015 the Company acquired 62.62% of the share
capital of PrEP Biopharm Limited for cash consideration of GBP14.0
million, of which GBP5.0 million was deferred consideration at 31
December 2015 and paid in January 2016. Acquisition costs of GBP0.4
million have been capitalised as part of the cost of the
investment. PrEP Biopharm Limited is a UK-based development stage
biopharmaceutical company which is developing infectious disease
products. At the same time as the investment, PrEP Biopharm Limited
entered into contractual arrangements with hVIVO Services Limited
to the value of GBP10.0 million.
The following table summarises the movements in the Company's
investment in PrEP Biopharm Limited during the year:
2016 2015
GBP'000 GBP'000
---------------------------------------------- -------- --------
As at 1 January 14,254 -
---------------------------------------------- -------- --------
Additions - 14,405
---------------------------------------------- -------- --------
Share of loss after tax recognised in
the consolidated statement of comprehensive
income (7,371) (146)
Share of other comprehensive income/(loss)
of associates and joint ventures 129 (5)
---------------------------------------------- -------- --------
As at 31 December 7,012 14,254
---------------------------------------------- -------- --------
Summarised consolidated financial information in respect of PrEP
Biopharm Limited and its 100% owned US-based subsidiary, PrEP
Biopharm Inc, is set out below and has been prepared in accordance
with IFRS:
31 December 31 December
----------------------------------------- ------------ ------------
2016 2015
GBP'000 GBP'000
----------------------------------------- ------------ ------------
Current assets 3,962 15,298
----------------------------------------- ------------ ------------
Non--current assets 5,090 5,076
Current liabilities (369) (123)
----------------------------------------- ------------ ------------
Net assets 8,683 20,251
----------------------------------------- ------------ ------------
Interest in the associate 5,437 12,681
Goodwill 1,573 1,573
----------------------------------------- ------------ ------------
Carrying amount of the Group's interest
in the associate 7,010 14,254
----------------------------------------- ------------ ------------
PrEP Biopharm Limited and its US subsidiary generated no revenue
during the period as the activity was that of product
development.
Its loss of GBP11.6 million (2015: GBP0.3 million) for the year
ended 31 December 2016 consisted of GBP11.6 million of research and
development expenditure (2015: GBP0.2 million) and GBP1.1 million
of administrative expenditure (2015: GBP0.1 million), partially
offset by income in respect of a research and development tax
credit refund claim and foreign exchange gains.
Imutex Limited
On 21 April 2016, the Company acquired 49.0% of the share
capital of Imutex Limited for GBP7.0 million consideration under
the terms of a Joint Venture Agreement with PepTcell Limited.
Acquisition costs of GBP0.2 million have been capitalised as part
of the investment. Imutex Limited is a UK-based company developing
vaccines against influenza and mosquito borne diseases. At the same
time as the investment, PepTcell Limited entered into a contractual
arrangement with hVIVO Services Limited for a FLU-v clinical study
to the value of GBP5.5 million.
The following table summarises the movements in the Company's
investment in Imutex Limited during the year:
2016
GBP'000
------------------------------------------------- --------
As at 1 January -
------------------------------------------------- --------
Additions 7,138
------------------------------------------------- --------
Share of loss after tax recognised in the -
consolidated statement of comprehensive income
As at 31 December 7,138
------------------------------------------------- --------
Summarised consolidated financial information in respect of
Imutex Limited is set out below and has been prepared in accordance
with IFRS:
31 December
2016
GBP'000
----------------------------------------- ------------
Current assets 383
----------------------------------------- ------------
Non--current assets 14,247
Current liabilities (383)
----------------------------------------- ------------
Net assets 14,247
----------------------------------------- ------------
Interest in the joint venture 6,981
Goodwill 158
----------------------------------------- ------------
Carrying amount of the Group's interest
in the joint venture 7,139
----------------------------------------- ------------
Imutex Limited generated no revenues during the period as the
activity was that of product development.
It recorded a loss of GBPnil for the period ended 31 December
2016.
9. Inventories
31 December 31 December
------------------------------------- ------------ ------------
2016 2015
GBP'000 GBP'000
------------------------------------- ------------ ------------
Laboratory and clinical consumables 35 33
------------------------------------- ------------ ------------
Virus - finished goods 1,952 2,108
1,986 2,141
------------------------------------- ------------ ------------
Inventories expensed in the consolidated statement of
comprehensive income are shown within cost of sales or research and
development expense. All inventories are carried at the lower of
cost or net realisable value in the consolidated statement of
financial position.
During 2015 a provision of GBP1,614,000 was recognised against
the carrying value of "Virus - finished goods". During 2013 to 2014
hVIVO developed two separate strains of H3N2 flu virus for use in
both client, equity investment and internal studies. Two strains
were developed in order to mitigate the scientific and
manufacturing risk of one strain failing development and to ensure
that at least one strain was successful in the timeframe. As it is
likely that only one of these strains will be used in client
studies going forward, the second strain has been fully provided
against.
No additional provision was recognised during 2016.
10. Current intangible asset
31 December 31 December
---------------------------- ------------ ------------
2016 2015
GBP'000 GBP'000
---------------------------- ------------ ------------
At 1 January 2,935 -
Additions at cost 3,475 2,935
Recognised during the year (6,410) -
---------------------------- ------------ ------------
At 31 December - 2,935
---------------------------- ------------ ------------
During 2015 hVIVO commenced the PrEP-001 flu and asthma clinical
studies with a view to the study data generating future economic
benefit through potential licensing arrangements. Accordingly, the
costs of performing these studies were capitalised. On 1 November
2015, PrEP Biopharm Limited contracted to licence the study data
for the flu and asthma studies. The study data was completed and
provided to PrEP Biopharm Limited during 2016, at which point these
costs were transferred to cost of sales.
11. Trade and other receivables
31 December 31 December
------------------- ------------ ------------
2016 2015
GBP'000 GBP'000
------------------- ------------ ------------
Trade receivables 1,001 551
------------------- ------------ ------------
VAT recoverable 260 -
------------------- ------------ ------------
Other receivables 399 405
------------------- ------------ ------------
Prepayments 1,343 1,274
Accrued income 701 412
------------------- ------------ ------------
3,704 2,642
------------------- ------------ ------------
12. Short--term deposits
31 December 31 December
---------------------- ------------- ------------
2016 2015
GBP'000 GBP'000
---------------------- ------------- ------------
Short--term deposits - 37,031
---------------------- ------------- ------------
Balances held on short--term deposits have maturity dates
between three and twelve months at the time of investment.
13. Cash and cash equivalents
31 December 31 December
-------------------------- ------------ ------------
2016 2015
GBP'000 GBP'000
-------------------------- ------------ ------------
Cash at bank and in hand 25,679 14,205
-------------------------- ------------ ------------
14. Trade and other payables
31 December 31 December
--------------------------------- ------------ ------------
2016 2015
GBP'000 GBP'000
--------------------------------- ------------ ------------
Trade payables 2,204 2,265
Other taxes and social security 327 382
VAT payable - 984
Other payables 178 5,134
Accruals 1,370 1,303
Deferred income 3,064 7,434
--------------------------------- ------------ ------------
7,143 17,502
--------------------------------- ------------ ------------
15. Other payables
31 December 31 December
---------------------------------- ------------ --------------
2016 2015
GBP'000 GBP'000
---------------------------------- ------------ --------------
Amounts to be settled beyond one
year 400 475
---------------------------------- ------------ --------------
On 11 March 2013, the Group signed an Agreement for Lease with
Queen Mary BioEnterprises Limited to develop the third floor of the
QMB Innovation Centre with a five--year term and an option to
extend for another five years. As part of the agreement, QMB
advanced the Group a repayable interest--free lease incentive of
GBP750,000 to develop the third floor, with GBP75,000 per annum
repayable over a ten--year period. The lease incentive is
recognised as a liability. In the event that the Group does not
exercise its option to extend the lease agreement for another five
years, the remaining unpaid principal of the advance (GBP375,000)
must be repaid at the end of the five--year contractual lease
term.
16. Provisions
Onerous
---------------------------------- ---------- -------------- --------
lease Dilapidations
---------------------------------- ---------- -------------- --------
provision provision Total
GBP'000 GBP'000 GBP'000
---------------------------------- ---------- -------------- --------
At 1 January 2016 3,000 140 3,140
---------------------------------- ---------- -------------- --------
Additional provision in the year 1,037 - 1,037
---------------------------------- ---------- -------------- --------
Used during the year (1,046) - (1,046)
---------------------------------- ---------- -------------- --------
At 31 December 2016 2,991 140 3,131
---------------------------------- ---------- -------------- --------
Onerous lease provision of GBP3.0 million (31 December 2015:
GBP3.0 million) represents management's best estimate of the costs
to be incurred for the exit of premises leased by the Group after
considering the likely outcomes. There is reasonable uncertainty
around the likelihood and timing of the exit of the lease as
negotiations will involve third parties. The provision is expected
to be used between 2017 and 2019. Total expected costs to be
incurred are GBP3.0 million.
Buildings dilapidations of GBP140,000 (31 December 2015:
GBP140,000) represent the present value of costs to be incurred for
the restoration of premises occupied by the Group. The provision is
expected to be used during 2018. Total expected costs to be
incurred are GBP140,000.
17. Note to the consolidated statement of cash flows
Year Year
ended ended
------------------------------------------------------------ ------------ ------------
31 December 31 December
------------------------------------------------------------ ------------ ------------
2016 2015
GBP'000 GBP'000
------------------------------------------------------------ ------------ ------------
Cash flow from operating activities
------------------------------------------------------------ ------------ ------------
Loss before income tax (22,631) (21,625)
------------------------------------------------------------ ------------ ------------
Adjustments for:
------------------------------------------------------------ ------------ ------------
Share of loss of associates and joint ventures 7,371 146
------------------------------------------------------------ ------------ ------------
Depreciation of property, plant and equipment 1,288 1,342
------------------------------------------------------------ ------------ ------------
Amortisation of intangible assets 315 318
------------------------------------------------------------ ------------ ------------
Payment of Non--Executive Director fees by issue of shares 74 68
------------------------------------------------------------ ------------ ------------
Share--based payment expense 94 78
------------------------------------------------------------ ------------ ------------
Finance costs 18 17
------------------------------------------------------------ ------------ ------------
Finance income (310) (387)
------------------------------------------------------------ ------------ ------------
Loss/(gain) on foreign exchange - (8)
------------------------------------------------------------ ------------ ------------
RDEC credit included in other income (267) (352)
------------------------------------------------------------ ------------ ------------
(Decrease)/increase in provisions (9) 10
------------------------------------------------------------ ------------ ------------
Changes in working capital:
------------------------------------------------------------ ------------ ------------
Decrease in inventories 155 1,590
------------------------------------------------------------ ------------ ------------
Decrease/(increase) in current intangible asset 2,935 (2,935)
------------------------------------------------------------ ------------ ------------
(Increase)/decrease in trade and other receivables (1,062) 249
(Decrease)/increase in trade and other payables (10,359) 7,885
------------------------------------------------------------ ------------ ------------
Cash used in operations (22,388) (13,604)
------------------------------------------------------------ ------------ ------------
Finance costs (18) (17)
Income tax refund 4,575 3,775
------------------------------------------------------------ ------------ ------------
Net cash used in operating activities (17,831) (9,846)
------------------------------------------------------------ ------------ ------------
As at 31 December 2016, a GBP267,000 (31 December 2015:
GBP352,000) asset has been recognised in respect of a Research and
Development Expenditure Credit. This amount is presented within the
research and development tax credit receivable section in the
consolidated statement of financial position. The remaining tax
credit is presented below loss from operations in the consolidated
statement of comprehensive income.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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