TIDMOBD
RNS Number : 8724H
Oxford BioDynamics PLC
13 June 2017
13 June 2017
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
OXFORD BIODYNAMICS PLC
("OBD" or the "Company" and, together with its subsidiaries, the
"Group")
INTERIM RESULTS FOR THE SIX-MONTH PERIODED 31 MARCH 2017
Successful IPO sets foundation for future growth
Multiple development agreements signed
Oxford BioDynamics Plc (AIM: OBD), a revenue-generating
biotechnology company focused on the discovery and development of
epigenetic biomarkers based on regulatory genome architecture, for
use within the pharmaceutical and biotechnology industry, today
announces its interim results for the six-month period to 31 March
2017.
Commenting on the results, Christian Hoyer Millar, Chief
Executive Officer of Oxford BioDynamics said: "The first six months
of the financial year have been very exciting for both OBD and the
industry as a whole, as the awareness in the importance of
epigenetics for drug discovery and development continues to
grow.
In progressing towards our strategic aim of becoming the
industry standard for epigenetic biomarker discovery, we have
achieved a number of significant milestones, including the
successful completion of our IPO, establishment of our US
representation, and the initiation of several new high value
biomarker discovery programmes, which are using our proprietary
EpiSwitch(TM) technology platform.
Having established a considerable commercial foundation of
multiple new development agreements we expect growth to accelerate
in the second half of the year as we deliver on our strategic
objectives."
HIGHLIGHTS
Corporate and operational
-- Successful completion of an IPO and placing on AIM raising
gross proceeds of GBP20.0m, including gross growth capital of
GBP7.1m.
-- Pilot biomarker discovery project initiated to analyse the
effect of fitness regimes using EpiSwitch(TM).
-- Continued development of the commercial pipeline.
-- Collaboration announced to identify biological factors that
trigger disease relapses in rheumatoid arthritis.
-- Results published at The Lancet Neurology Conference on
EpiSwitch(TM) signatures on neurodegenerative and autoimmune
diseases.
-- Data presented at the 58th American Society of Hematology
(ASH) Meeting in San Diego on its EpiSwitch(TM) blood test for
prognostic detection of oncological deregulation susceptible to
treatment with tyrosine kinase inhibitors in patients with
leukaemia.
-- Dr Claudio Carini appointed as an advisor to the Company, and
as a member of the Company's Scientific Advisory Panel.
-- Martin Reeves appointed as Senior Vice President of
Commercial Development in the US.
-- Two new patents filed covering the use of the EpiSwitch(TM)
technology, adding to the Company's established six patent family
covering Alzheimer's and other neurodegenerative diseases, breast
cancer and prognostic oncological treatment tests.
-- Continued innovation in terms of EpiSwitch(TM) and its
operational procedures.
Financial
-- Revenue of GBP0.4m (HY16: GBP0.4m), in line with
expectations.
-- Operating loss of GBP1.8m (HY16: GBP1.1m) and adjusted
operating loss of GBP1.3m (HY16: GBP1.1m) before one-off IPO
costs.
-- Cash and cash equivalents of GBP11.5m as at 31 March 2017
(HY16: GBP7.5m).
-- Net assets of GBP12.6m as at 31 March 2017 (HY16:
GBP8.5m).
Post period end
-- OBD and Dr Claudio Carini joined the Foundation for the
National Institutes of Health Biomarkers Consortium Steering
Committees.
-- Exclusive Asia licence signed for EpiSwitch(TM) to supply its
proprietary products and reagents for the potential use in a
non-invasive blood test to assist in the diagnosis of breast
cancer.
-- Development agreement entered into with two of the top 10
global pharmaceutical companies collaborating to develop an anti
PD-L1 therapy.
-- Peer reviewed paper of OBD's collaborative work with the
Cancer Science Institute of Singapore published in the journal
Nature.
-- Innovate UK funded ALS biomarker programme expanded into
South East Asia.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For further details please contact:
Oxford BioDynamics Plc +44 (0)1865 518910
Christian Hoyer Millar,
CEO
Katie Long, CFO
Stifel Nicolaus Europe
Limited +44 (0)20 7710 7600
Nominated Advisor and
Broker
David Arch
Jonathan Senior
Peter Lees
Ben Maddison
Shore Capital +44 (0)20 7408 4090
Joint Broker
Bidhi Bhoma
Edward Mansfield
FTI Consulting +44 (0)20 3727 1000
Financial Public Relations
Advisor
Julia Phillips
Brett Pollard
Natalie Garland-Collins
Notes for Editors
About Oxford BioDynamics Plc
Oxford BioDynamics Plc (AIM: OBD) ("Oxford BioDynamics") is a
revenue--generating biotechnology company focused on the discovery
and development of epigenetic biomarkers for use within the
pharmaceutical and biotechnology industry.
The Company's award-winning, proprietary technology platform,
EpiSwitch(TM), aims to accelerate the drug discovery and
development process, improve the success rate of therapeutic
product development and take advantage of the increasing importance
of personalised medicine.
In particular, EpiSwitch(TM) can reduce time to market, failure
rates and the costs at every stage of drug discovery. Additionally,
the technology provides significant insights into disease
mechanisms for drug discovery and product re--positioning
programmes, and enables the personalisation of therapeutics for
patients in the context of challenging pricing environments where
improved clinical outcomes are critical.
Oxford BioDynamics is headquartered in the UK, and listed on the
London Stock Exchange's AIM under the ticker "OBD". For more
information please visit www.oxfordbiodynamics.com.
The person responsible for the release of this announcement on
behalf of the Company is Katie Long.
A copy of this announcement has been posted on the company's
website at www.oxfordbiodynamics.com.
This announcement includes "forward-looking statements" which
include all statements other than statements of historical facts,
including, without limitation, those regarding the Group's
financial position, business strategy, plans and objectives of
management for future operations, and any statements preceded by,
followed by or that include forward-looking terminology such as the
words "targets", "believes", "estimates", "expects", "aims",
"intends", "will", "can", "may", "anticipates", "would", "should",
"could" or similar expressions or the negative thereof. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the Group's
control that could cause the actual results, performance or
achievements of the Group to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are
based on numerous assumptions regarding the Group's present and
future business strategies and the environment in which the Group
will operate in the future. These forward-looking statements speak
only as at the date of this announcement. The Group expressly
disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statements contained in this
announcement to reflect any change in the Group's expectations with
regard thereto or any change in events, conditions or circumstances
on which any such statements are based. As a result of these
factors, readers are cautioned not to rely on any forward-looking
statement.
CHIEF EXECUTIVE OFFFICER'S REVIEW
Introduction
The six-month period to 31 March 2017 has been pivotal for OBD.
During this time, the Company has continued to make considerable
progress in terms of its stated strategic aim of becoming the
industry standard for epigenetic biomarker discovery and, as
previously announced, achieved another significant milestone in the
Company's history, having successfully completed its IPO on AIM in
December 2016.
As a result of the IPO, the Company successfully raised GBP7.1m
of gross proceeds, from both existing investors and a number of
well-known and highly regarded UK-based institutions. This growth
capital is enabling the Company to invest to accelerate its growth
strategy through three main areas:
-- Seeking to increase the number of proprietary biomarker
projects it undertakes;
-- Seeking to establish US representation to increase its
commercial reach within the US
-- Continuing to develop its extensive IP portfolio.
The progress the Company has made during the reporting period
against these strategic aims is detailed below.
Business progress
In the six months to 31 March 2017, the Company expanded the
breadth and depth of its biomarker discovery pilot agreements and,
in January 2017, entered into a pilot project with EpiFit PTE. LTD
("EpiFit"), a new Singapore-based company, to identify epigenetic
biomarkers to evaluate predispositions, variations and responses in
healthy volunteers undergoing fitness programmes conducted by
EpiFit. The collaboration will leverage the Company's expertise in
epigenetic stratifications by using its proprietary EpiSwitch(TM)
platform to help identify and monitor those healthy fitness
volunteers and trainees who may benefit from EpiFit strength or
endurance programmes. This agreement with EpiFit further
demonstrates the broad application potential of the EpiSwitch(TM)
technology platform. Upon completion of the initial project, OBD
has agreed to grant EpiFit the option of a multi-year global
licence to use certain EpiSwitch(TM) biomarker panels in the supply
of screening services to certain third parties.
In March 2017, OBD announced its participation in a
collaboration to identify the biological factors that trigger
disease relapses, known as 'flares', in rheumatoid arthritis ("RA")
entitled "The BIO-FLARE study (Biological factors that limit
sustained remission in rheumatoid arthritis)". OBD is one of six
consortium partners to examine and address why immune-mediated
inflammatory diseases remit and relapse, with a particular focus on
RA, and OBD's role within the consortium is to use EpiSwitch(TM) to
identify epigenetic biomarkers in an RA patient population
associated with impending relapse in RA. Any resultant IP generated
by OBD will be retained by the Company, with the aim of developing
a prognostic test which has the potential accurately to predict
patients who are likely to have RA flares. In addition, the work
which OBD will undertake as part of the BIO-FLARE study has the
potential to lead the Company to the development of an
epigenetic-based prognostic test for RA flares, an important unmet
medical need. The consortium has been awarded GBP2.8m from the
Medical Research Council.
During the period, the Company also presented data at a number
of industry conferences: results were published on EpiSwitch(TM)
signatures on neurodegenerative and autoimmune diseases at the
Lancet Neurology Conference; data was presented at the 58th
American Society of Hematology (ASH) Meeting in San Diego on its
EpiSwitch(TM) blood test for prognostic detection of oncological
deregulation susceptible to treatment with tyrosine kinase
inhibitors in patients with leukaemia; and OBD promoted its
EpiSwitch(TM) technology at the 12th Annual Biomarker Congress in
Manchester.
The Company also successfully achieved the Investors in People
Standard accreditation. Since 1991, Investors in People has set the
standard for better people management. The Standard defines what it
takes to lead, support and manage people well for sustainable
results. Based on 25 years of leading practice, the Investors in
People Standard is underpinned by a rigorous assessment methodology
and a framework which reflects the very latest workplace trends,
essential skills and effective structures required to outperform in
any industry.
US representation
The Company made two key appointments during the period to
increase its commercial reach, particularly within the US.
In March 2017, Martin Reeves was appointed as Senior Vice
President of Commercial Development, based in the US. Martin has
over 20 years' experience in business development and strategic
planning within the sector and is a great asset to the Company as
it seeks to leverage IP licensing opportunities with
EpiSwitch(TM).
In February 2017, Dr Claudio Carini was appointed as an advisor
to the Company. Dr Carini has over 20 years' experience in
immunology, drug development, personalised medicine and biomarkers
and, as part of his role, he sits on the Company's Scientific
Advisory Panel. Dr Carini's previous experience in the US is of
great value to the Company as it continues to build and expand
relationships with some of the leading pharma and biotechnology
companies globally.
Post-period, the Company and Dr Carini were invited to join the
Foundation for the National Institutes of Health Biomarkers
Consortium ("FNIH") as a member of the Cancer, Inflammation &
Immunity, and Neuroscience Steering Committees. The Steering
Committees are responsible for identifying and moving forward
promising pre-competitive biomarkers projects for implementation by
The Biomarkers Consortium, as well as overseeing each individual
project under its purview. The members of each Steering Committee
represent a variety of sectors, including academia, government,
industry and not-for-profit/advocacy organisations. FNIH aims to
accelerate the development of biomarker-based technologies,
medicines and therapies for the prevention, early detection,
diagnosis and treatment of disease, a goal which is shared by the
Company.
IP portfolio development
During the period, the Company also made very good progress with
its IP portfolio, having filed two new patents on the use of the
EpiSwitch(TM) technology in companion diagnostics, biological
systems and specific clinical indications, including glioblastoma,
prognostic test for tyrosine kinase inhibitors therapy, Alzheimer's
disease and determining therapeutic agents in neurodegenerative
diseases for use in treatment.
Summary and outlook
The last six months, including the recent IPO, have undoubtedly
been a pivotal period in the Company's development. The Company is
committed to delivering its growth strategy by increasing the
number of proprietary biomarker programmes it undertakes,
capitalising on its newly-established US representation and
continuing to enhance the Company's IP portfolio. Following
admission to AIM and the growth capital raised as part of the IPO
process, the Company is now well positioned to execute these
strategic aims, and in doing so, continue to strive to become the
industry standard for epigenetic biomarker discovery.
Christian Hoyer Millar
Chief Executive Officer
FINANCIAL REVIEW
Overview
During the six months ended 31 March 2017, the Company continued
to focus on developing its pipeline of contracts with leading
global pharmaceutical and biotechnology companies, investing in
proprietary R&D projects, and strengthening its intellectual
property portfolio.
The Company during this time also prepared for an IPO of its
shares on AIM that was successfully completed on 6 December 2016.
The Company issued 4.5 million new shares at a placing price of
158p, raising gross proceeds of GBP20.0m, including gross growth
capital of GBP7.1m. The Directors believe the flotation on AIM has
increased the Company's overall profile, broadened and strengthened
OBD's shareholder base, and will attract, retain and incentivise
high calibre employees.
Financial performance
Revenue for the six month period to 31 March 2017 was GBP0.4m,
consistent with the GBP0.4m delivered in the same period last
year.
Operating expenses before share option charges and IPO costs
were GBP1.6m in the period ended 31 March 2017 (HY16: GBP1.3m). Of
the GBP0.3m increase in operating costs, GBP0.2m related to an
increase in staff costs and GBP0.1m related to an increase in
general and other administrative costs.
Other operating income for the six month period to 31 March 2017
was GBP0.1m (HY16: GBP0.1m) comprised grant income from Innovate UK
to support the Group's ALS biomarker research and development
programme.
Operating loss for the Group was GBP1.8m in the period (HY16:
GBP1.1m) and adjusted operating loss was GBP1.3m (HY16: GBP1.1m)
before one-off IPO enabling costs.
Financial income of GBP0.1m (HY16: GBP0.1m) relates to interest
received and foreign exchange gains during the half year to 31
March 2017.
The taxation credit of GBP0.1m in the six months to 31 March
2017 (HY16: GBP0.2m) represents tax relief on research and
development expenditure during the period. The Group has not
recognised any deferred tax assets in respect of trading losses
arising in the current or prior financial periods.
Net loss for the half year was GBP1.7m (HY16: GBP0.8m) and
adjusted net loss for the same period was GBP1.2m (HY16: GBP0.8m)
after one-off IPO costs. Loss per share was 2.0 pence (HY16: 1.0
pence) and adjusted loss per share was 1.3 pence (HY16: 1.0 pence)
excluding one-off IPO costs of GBP0.5m.
Financial position
Cash and cash equivalents totalled GBP11.5m at the end of March
2017, compared to GBP7.5m at the end of March 2016. This includes
net cash proceeds of GBP5.4m from the IPO and placing on 6 December
2016.
Total assets on the balance sheet were GBP13.4m as at 31 March
2017, compared to GBP9.1m as at 31 March 2016.
Total liabilities were GBP0.8m at the end of March 2017 (HY16:
GBP0.6m).
Cash flow
Net cash used in operating activities was -GBP1.1m for the half
year ended 31 March 2017 (HY16: -GBP1.0m). Net cash used in
investing activities was -GBP0.1m (HY16: -GBP0.1m) and net cash
generated by financing activities was GBP5.4m (HY16: GBP0),
following the placing in December 2016.
Overall net cash inflow for the six month period ended 31 March
2017 was GBP4.2m (HY16: net cash outflow of GBP1.1m) including
exchange movements on non-GBP denominated cash and cash equivalents
of GBP0 (HY16: GBP0.2m).
Katie Long
Chief Financial Officer
Consolidated income statement
Six month Year ended
period 30 September
ended 31 March
2017 2016 2016
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
Continuing operations
Revenue 5, 6 384 389 1,091
Research & development costs
(excluding staff costs) (160) (254) (516)
Staff costs (813) (595) (1,146)
General & other admin costs (498) (387) (903)
Initial public offering
costs (529) - (447)
Depreciation 8 (113) (63) (166)
Share option charges 10 (230) (248) (402)
Other operating income 118 73 161
-------- ------------ --------------
Operating loss (1,841) (1,085) (2,328)
Finance income 65 117 254
Finance costs (1) -
-------- ------------ --------------
Loss before tax (1,776) (969) (2,074)
Income tax 95 183 344
-------- ------------ --------------
Loss for the year from continuing
operations (1,681) (786) (1,730)
======== ============ ==============
Loss attributable to:
Owners of the Company (1,681) (786) (1,730)
Non-controlling interest - - -
-------- ------------ --------------
(1,681) (786) (1,730)
======== ============ ==============
Earnings per share
From continuing operations
Basic and diluted (pence
per share) 7 (2.0) (1.0) (2.1)
======== ============ ==============
Consolidated statement of comprehensive income
Six month Year ended
period 30 September
ended 31 March
2017 2016 2016
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
Loss for the period/year 7 (1,681) (786) (1,730)
Exchange differences on translation
of foreign operations
that may be reclassified to the
income statement 16 40 29
--------- ------------ --------------
Total comprehensive income
for the period/year (1,665) (746) (1,701)
========= ============ ==============
Total comprehensive income
attributable to:
Owners of the Company (1,665) (748) (1,706)
Non-controlling interest - 2 5
--------- ------------ --------------
(1,665) (746) (1,701)
========= ============ ==============
Consolidated statement of financial position
31 March 31 March 30 September
2017 2016 2016
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Assets Note
Non-current assets
Property, plant and equipment 8 657 571 671
Deferred tax asset - - -
Total non-current assets 657 571 671
Current assets
Inventories 130 95 105
Trade and other receivables 1,058 948 965
Cash and cash equivalents 11,520 7,518 7,279
Total current assets 12,708 8,561 8,349
Total assets 13,365 9,132 9,020
Equity and liabilities
Capital and reserves
Share capital 9 861 2 816
Share premium 6,251 15,709 -
Translation reserves 206 204 190
Other reserve 3,003 2,619 2,773
Retained earnings 2,264 (10,006) 3,945
Equity attributable to owners
of the Company 12,585 8,528 7,724
Non-controlling interest 19 16 19
Total equity 12,604 8,544 7,743
Current liabilities
Trade and other payables 710 588 1,233
Current tax liabilities - - -
Total current liabilities 710 588 1,233
Non-current liabilities
Provisions 51 - 44
Deferred tax - - -
Total non-current liabilities 51 588 44
Total liabilities 761 588 1,277
Total equity and liabilities 13,365 9,132 9,020
Consolidated statement of changes in equity
Share Share Translation Other Retained Attributable Non-controlling Total
capital premium reserve reserve earnings to share- interest
holders
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October
2016 816 - 190 2,773 3,945 7,724 19 7,743
-------- -------- ------------ -------- --------- ------------- ---------------- --------
Loss for
the year - - - - (1,681) (1,681) - (1,681)
Other
comprehensive
income
for the
period - - 16 - - 16 - 16
-------- -------- ------------ -------- --------- ------------- ---------------- --------
Total
comprehensive
income
for the
period - - 16 - (1,681) (1,665) - (1,665)
-------- -------- ------------ -------- --------- ------------- ---------------- --------
Transactions with owners
of the Company:
New issue
of shares 45 6,251 - - - 6,296 - 6,296
Share option
credit - - - 230 - 230 - 230
-------- -------- ------------ -------- --------- ------------- ---------------- --------
At 31 March
2017 861 6,251 206 3,003 2,264 12,585 19 12,604
======== ======== ============ ======== ========= ============= ================ ========
Consolidated statement of cash flows
Six month Year ended
period 30 September
ended 31 March
2017 2016 2016
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
Loss for the financial year (1,681) (786) (1,730)
Adjustments to reconcile
profit before tax to net
cash flows:
R&D tax credit (95) (183) (344)
Net interest (43) (27) (71)
Depreciation of property,
plant and equipment 8 113 63 166
IPO costs 529 - 447
Movement in provisions 7 - 44
Share based payments charge 10 230 248 402
Working capital adjustments:
Decrease/(increase) in trade
and other receivables (16) (28) (214)
Decrease/(increase) in inventories (24) (32) (43)
Increase/(decrease) in trade
and other payables (56) (108) 69
-------- ------------ --------------
Operating cash flows before
interest and tax paid (1,036) (853) (1,274)
R&D tax credits received - - 347
-------- ------------ --------------
Cash used in operations (1,036) (853) (927)
Net foreign exchange movements (18) (132) (421)
-------- ------------ --------------
Net cash from/(used in)
operating activities (1,054) (985) (1,348)
-------- ------------ --------------
Investing activities
Interest received 61 29 53
Purchases of property, plant
and equipment (204) (117) (208)
Proceeds from disposal of - - -
tangible assets
-------- ------------ --------------
Net cash from/(used in)
investing activities (143) (88) (155)
-------- ------------ --------------
Financing activities
Interest paid - (1) -
Issue of equity shares 7,107 - -
Share issue costs (1,417) -
IPO costs (290) - (81)
Net cash generated by financing
activities 5,400 (1) (81)
-------- ------------ --------------
Net increase/(decrease)
in cash and cash equivalents 4,203 (1,074) (1,584)
Foreign exchange movement on cash
and cash equivalents 38 157 428
Cash and cash equivalents
at beginning of year 7,279 8,435 8,435
-------- ------------ --------------
Net cash from/(used in)
investing activities 11,520 7,518 7,279
======== ============ ==============
Notes
1. General information
The interim financial information was authorised by the board of
directors for issue on XX June 2017. The information for the period
ended 31 March 2017 has not been audited and does not constitute
statutory accounts as defined in section 434 of the Companies Act
2006, and should therefore be read in conjunction with the audited
financial statements of the Company and its subsidiaries as at and
for the year ended 30 September 2016, which have been prepared in
accordance with EU Adopted International Financial Reporting
Standards. The interim information does not comply with IAS 34
Interim financial reporting, as permissible under the rules of
AIM.
2. Basis of accounting
Basis of preparation
These interim consolidated financial statements have been
prepared under the historical cost convention and in accordance
with the recognition and measurement principles of European Union
Adopted International Financial Reporting Standards (IFRSs).
The accounting policies adopted in the preparation of the
half-year consolidated financial statements are consistent with
those followed in the preparation of the Group's annual financial
statements for the year ended 30 September 2016.
There have been no significant changes to estimates of amounts
reported in prior financial years.
Reporting currency
The consolidated financial statements are presented in pounds
sterling (GBP), which is also the Company's functional
currency.
Going concern
After making enquiries, the directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing these interim consolidated financial statements.
3. Significant accounting policies
The Group has consistently applied the following accounting
policies to all periods presented in this interim financial
information.
Basis of consolidation
The interim consolidated financial statements consolidate those
of the parent company and all of its subsidiaries at 31 March
2017.
All transactions and balances between Group companies are
eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Amounts reported in the
financial statements of subsidiaries have been adjusted where
necessary to ensure consistency with the accounting policies
adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries
acquired or disposed of during the year are recognised from the
effective date of acquisition, or up to the effective date of
disposal, as applicable.
Revenue recognition
Revenue comprises the fair value of the consideration received
or receivable for the provision of services in the ordinary course
of the Group's activities. Revenue is shown net of sales taxes,
discounts and after eliminating intra-group sales.
The Group recognises project revenue when all the following
conditions are satisfied:
-- relevant specific milestones in the underlying contract with
the customer have been achieved;
-- the amount of revenue can be measured reliably; and
-- it is probable that the economic benefits associated with the
transaction will flow to the entity.
Revenue recognised in the income statement but not yet invoiced
is held on the balance sheet within 'Trade and other receivables'.
Revenue invoiced but not yet recognised in the income statement is
held on the balance sheet within 'Deferred revenue'.
Revenue is classified as follows:
a) Provision of services
Revenue from the provision of services is recognised as soon as
the conditions noted above are met.
b) Upfront signing fees
Revenue generated from entering licence agreements is recognised
as soon as the conditions noted above are met.
c) Interest income
Interest income is recognised when it is probable that the
economic benefits will flow to the Group and the amount of revenue
can be measured reliably. Interest income is accrued on a time
basis, by reference to the principal outstanding and at the
effective interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount on
initial recognition.
d) Government grants
Government grants are included within Other Operating Income and
are recognised so as to match the expenditure to which they are
intended to contribute. Government grants comprise amounts from
Innovate UK to support the Group's biomarker research and
development activities whereby 60% of eligible costs incurred can
be claimed for. There are no unfilled conditions or contingencies
relating to grant income recognised in the income statement.
Foreign currencies
The individual financial statements of each subsidiary are
presented in the currency of the primary economic environment in
which it operates (its functional currency). Sterling is the
predominant functional currency of the Group and presentation
currency for the Consolidated Financial Information.
In preparing the financial statements of the individual
companies, transactions in currencies other than the entity's
functional currency (foreign currencies) are recognised at the
rates of exchange prevailing on the dates of the transactions. At
each balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing at that date. Non-monetary items carried at fair value
that are denominated in foreign currencies are translated at the
rates prevailing at the date when the fair value was determined.
Non-monetary items that are measured in terms of historical cost in
a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the
period in which they arise except for:
-- exchange differences on transactions entered into to hedge
certain foreign currency risks (see below under financial
instruments/hedge accounting); and
-- exchange differences on monetary items receivable from or
payable to a foreign operation for which settlement is neither
planned nor likely to occur (therefore forming part of the net
investment in the foreign operation), which are recognised
initially in other comprehensive income and reclassified from
equity to profit or loss on disposal or partial disposal of the net
investment.
For the purpose of presenting Consolidated Financial
Information, the assets and liabilities of the Group's foreign
operations are translated at exchange rates prevailing on the
balance sheet date. Income and expense items are translated at the
average exchange rates for the period, unless exchange rates
fluctuate significantly during that period, in which case the
exchange rates at the date of transactions are used. Exchange
differences arising, if any, are recognised in other comprehensive
income and accumulated in equity (attributed to non-controlling
interests as appropriate).
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
a) Current tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Group's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet
date.
Full provision is made for research and development tax credits
calculated at the tax rates effective for the current year. It is
included as an income tax credit under trade receivables.
b) Deferred tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the Consolidated Financial Information and the corresponding tax
bases used in the computation of taxable profit, and is accounted
for using the balance sheet liability method. Deferred tax
liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference
arises from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered in the foreseeable
future.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised based on tax laws and rates that have been enacted at the
balance sheet date. Deferred tax is charged or credited in the
income statement, except when it relates to items charged or
credited in other comprehensive income, in which case the deferred
tax is also dealt with in other comprehensive income. Deferred tax
assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same
taxation authority and the Group intends to settle its current tax
assets and liabilities on a net basis.
Tangible and intangible assets
a) Property, plant and equipment
The Group has held no land and buildings for the period covered
by the Consolidated Financial Information.
Other items of property, plant and equipment are stated at cost
less accumulated depreciation and any recognised impairment
loss.
Depreciation is recognised so as to write off the cost or
valuation of assets less residual value over their useful lives,
using the straight-line method, on the following bases:
Laboratory equipment 3 years
and tooling
Office equipment 3 years
Fixtures and fittings 5 years
Leasehold improvements Life of lease
The gain or loss arising on the disposal of an asset is
determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in income on the
transfer of the risks and rewards of ownership.
b) Research and development expenditure
Expenditure on research activities is recognised as an expense
in the period in which it is incurred.
An internally-generated intangible asset is recognised only if
all of the following conditions are met:
-- an asset is created that can be identified (such as product
designs and new processes);
-- it is probable that the asset created will generate future economic benefits; and
-- the costs of developing this asset can be measured reliably.
The Group has no internally-generated intangible assets that
meet the above criteria and any development costs are recognised as
an expense in the period in which it is incurred.
c) Patents
Patent costs, both those incurred at initial registration and
those subsequently incurred on renewal, are expensed to the income
statement.
Share-based payments
The cost of equity settled transactions is measured by reference
to the fair value at the date at which they are granted and is
recognised as an expense over the vesting period which ends on the
date on which the relevant holder become fully entitled to the
award. Fair value is determined by using the Black-Scholes pricing
model. In measuring fair value, no account is taken of any vesting
conditions other than conditions linked to the price of shares of
the Company.
At each period end date before vesting, the cumulative expense
is calculated; representing the extent to which the vesting period
has expired and management's best estimate of the achievement or
otherwise of non-market conditions and of the number of equity
instruments that will ultimately vest. The movement in cumulative
expenses since the previous period end date is recognised in the
income statement with a corresponding entry in the statement of
financial position.
4. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies, which are
described in note 3, the directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
Critical judgements in applying the Group's accounting
policies
The following are the critical judgements that the directors
have made in the process of applying the Group's accounting
policies and that have the most significant effect on the amounts
recognised in the Consolidated Financial Information.
Revenue recognition
In making its judgement, management considered the detailed
criteria for the recognition of revenue set out in IAS 18.
Management is satisfied that the milestones specified under the
terms of the customer contract have been achieved and that, the
proportion of revenue attributable to each milestone is suitable.
Accordingly, the recognition of revenue upon delivery of services
is appropriate.
Share option scheme
The Group has established a share option scheme known as the
Enterprise Management Incentive ('the Scheme'). The fair value of
the options issued under the scheme is derived by the Company using
a Black-Scholes model and the resultant values are allocated to the
income statement over the three year vesting period. In arriving at
the fair value using this model, management have used judgement in
arriving at the estimated share price volatility which is a key
input to the valuation model.
Further details regarding the Scheme are set out in note 10.
Key sources of estimation uncertainty
Management is required to disclose information relating to any
key assumptions concerning the future, and other key sources of
estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial
year.
Operating lease commitments
The Group has entered into commercial property leases as a
lessee of property, plant and equipment. The classification of such
leases as operating or finance lease requires the Group to
determine, based on an evaluation of the terms and conditions of
the arrangements, whether it retains or acquires the significant
risks and rewards of ownership of these assets and accordingly
whether the lease requires an asset and liability to be recognised
in the statement of financial position.
5. Revenue
An analysis of the Group's revenue is as follows:
Six month period Year ended
ended 31 March 30 September
2017 2016 2016
GBP000 GBP000 GBP000
Continuing operations
USA 130 93 795
Rest of World 254 296 296
-------- -------- -------------
Consolidated revenue 384 389 1091
======== ======== =============
All revenue is derived from the Group's principal activity,
biomarker research and development.
6. Business segments
Products and services from which reportable segments derive
their revenues
Information reported to the Group's Chief Executive (who has
been determined to be the Group's Chief Operating Decision Maker)
for the purposes of resource allocation and assessment of segment
performance is focused on the sole service which Oxford BioDynamics
sells. The Group's sole reportable segment under IFRS 8 is
therefore that of biomarker research and development.
The Group's non-current assets, analysed by geographical
location were as follows:
Six month period Year ended
ended 31 March 30 September
2017 2016 2016
GBP000 GBP000 GBP000
Non-current assets
UK 563 475 576
Malaysia 94 96 95
-------- -------- -------------
Total non-current assets 657 571 671
======== ======== =============
Information about major customers
The Group's revenues for the periods covered by this report are
derived from a small number of customers, many of which represent
more than 10% of the revenue for the period. These are summarised
below:
Six month Year ended
period 30 September
ended 31 March
2017 2016 2016
GBP000 GBP000 GBP000
Revenue from individual customers
each representing more than 10%
of revenue for the period: 321 335 1,019
======== ======== ==============
7. Earnings per share
From continuing operations
The calculation of the basic and diluted earnings per share is
based on the following data:
Six month period Year ended
ended 31 March 30 September
2017 2016 2016
unaudited unaudited audited
GBP000 GBP000 GBP000
Earnings for the purposes of basic
earnings per share being net loss
attributable to owners of the Company (1,681) (786) (1,730)
---------- ---------- -------------
Earnings for the purposes
of diluted earnings per share (1,681) (786) (1,730)
========== ========== =============
No No No
Number of shares
Weighted average number of ordinary
shares for the purposes of basic
and diluted earnings per share* 86,098,228 81,600,000 81,600,000
========== ========== =============
Pence Pence Pence
Earnings per share
Weighted average number of ordinary
shares for the purposes of basic
and diluted earnings per share* (2.0) (1.0) (2.1)
========== ========== =============
*Potential ordinary shares are not treated as dilutive as the
entity is loss making.
8. Property, plant and equipment
Group Leasehold Office Fixtures Laboratory Total
improvements equipment and fittings equipment
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 1 October
2015 270 31 29 1,022 1,352
Additions - 4 8 90 102
Disposals - - - - -
Exchange differences (1) - - (3) (4)
-------------- ----------- -------------- ----------- -------
At 30 September
2016 269 35 37 1,109 1,450
-------------- ----------- -------------- ----------- -------
Accumulated depreciation
At 1 October
2015 41 14 17 609 681
Charge for the
year 14 6 1 92 113
Eliminated on - - - - -
disposals
Exchange differences - - - (1) (1)
-------------- ----------- -------------- ----------- -------
At 30 September
2016 55 20 18 700 793
-------------- ----------- -------------- ----------- -------
Carrying amount
At 31 March 2017 214 15 19 409 657
============== =========== ============== =========== =======
At 30 September
2016 229 17 12 413 671
============== =========== ============== =========== =======
9. Share capital of the Company
Six month period Year ended
ended 31 March 30 September
2017 2017 2016 2016 2016 2016
Number GBP Number GBP Number GBP
Authorised shares
Ordinary shares
of GBP0.01 each 86,098,228 860,982 81,600,000 816,000 81,600,000 816,000
========== ======= ========== ======= ========== =======
The Company's shares were admitted to trading on the AIM market
of the London Stock Exchange on 6 December 2016. The Company issued
4.5m new shares at a placing price of 158p, raising gross proceeds
of GBP7.1m (before expenses).
The Company has a number of shares reserved for issue under an
equity-settled share option scheme: further details of this are
disclosed in note 10.
10. Share based payments
Equity-settled share option scheme
The Group has an established Enterprise Management Incentive
('the Scheme') that has been granted to certain employees. The
Scheme is an equity-settled share based payment arrangement whereby
the employees are granted share options of the parent company's
equity instruments.
The scheme includes non market-based vesting conditions only,
whereby the share options may be exercised from the date of vesting
until the 10(th) anniversary of the date of the grant. In most
cases options vest under the following pattern: one-third of
options granted vest on the first anniversary of the grant date;
one-third on the second anniversary and one-third on the third
anniversary. The only exception to this pattern is 84,000 options
which were granted in the year ended 30 September 2016 which vested
immediately upon grant.
Options outstanding Six month Year ended
period 30 September
ended 31 March
2017 2016 2016
unaudited unaudited audited
Number Number Number
Outstanding at start of
period 7,636,716 2,620,472 2,620,472
Capital reorganisation - - 5,240,944
------------ ---------- --------------
7,636,716 2,620,472 7,861,416
Granted during the period 465,000 169,500 720,300
Forfeited during the period (280,000) (294,000) (945,000)
Exercised during the period - - -
------------ ---------- --------------
Outstanding at end of period 7,821,716 2,495,972 7,636,716
============ ========== ==============
Weighted average remaining contractual
life (in years) of options outstanding
at the period end 3.60 4.70 3.60
============ ========== ==============
Options exercisable Number Weighted Latest
of options average exercise
exercise price
price GBP
GBP
At 31 March 2017 6,758,916 0.43 1.58
==============
At 31 March 2016 2,266,972 1.27 1.25
============ ========== ==============
At 30 September 2016 6,556,916 0.41 1.25
============ ========== ==============
Share option expense Six month Year ended
period 30 September
ended 31 March
2017 2016 2016
GBP000 GBP000 GBP000
Expense arising from share-based
payment transactions 230 248 402
============ ========== ==============
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFUFWEFWSELM
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