TIDMOBD
RNS Number : 0308Q
Oxford BioDynamics PLC
16 June 2020
16 June 2020
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 2020
Strategic and operational progress supports further worldwide
commercialization of EpiSwitch(TM) platform
Oxford BioDynamics Plc (AIM: OBD), a biotechnology company
focused on the discovery and development of epigenetic biomarkers,
based on regulatory 3D genome architecture, using its liquid biopsy
platform EpiSwitch(TM), today announces its interim results for the
six month period to 31 March 2020.
CORPORATE AND OPERATIONAL HIGHLIGHTS
-- Board restructuring to support future growth worldwide, with
a special focus on the US, with the appointment of Dr Jon Burrows
as Global Chief Executive Officer (March 2020)
-- Presentation of significant results of the utility of OBD's
EpiSwitch(TM) in predicting response to immuno-oncology (IO)
treatments, co-authored with Pfizer, EMD Serono and Mayo Clinic,
offering significant commercial potential (November 2019)
-- Signature of master services agreement with top US pharmaceutical company (December 2019)
-- Publication in peer-reviewed Translational Medicine
(Communications) of the development of the first successful
blood-based assay for prognostic stratification and disease
subtyping in diffuse large B-cell lymphoma (DLBCL), in
collaboration with Roche and Genentech (March 2020)
-- Recruitment of first patient to the Mitsubishi Tanabe Pharma
America (MTPA)-sponsored REFINE-ALS clinical study, in which
EpiSwitch(TM) biomarkers are used to assess the rate of amyotrophic
lateral sclerosis (ALS) disease progression (October 2019)
-- Appointment of Professor Iain McInnes to the Company's
Scientific Advisory Board (October 2019)
FINANCIAL HIGHLIGHTS
-- Revenue of GBP0.2m (H1 2019: GBP0.6m)
-- Operating loss of GBP2.4m (H1 2019: GBP1.7m)
-- Cash and term deposits of GBP13.9m as at 31 March 2020 (31
March 2019: GBP16.9m, 30 September 2019: GBP15.5m)
POST-PERIOD
-- Inclusion of the Group's EpiSwitch(TM) technology in the
GETAFIX clinical study, in collaboration with University of
Glasgow, to perform prognostic and predictive profiling of COVID-19
patients (April 2020)
-- Receipt of first 500 samples under master services agreement
with top US pharmaceutical company announced in December 2019
(April 2020)
-- Appointment of the Group's Chief Scientific Officer, Dr
Alexandre Akoulitchev, to represent OBD on the Foundation for the
National Institutes of Health (FNIH) Biomarkers Consortium Steering
Committees in Oncology, Inflammation & Immunity, and
Neuroscience in Bethesda, MD, USA (April 2020)
-- Appointment of industry expert Dr Peter Pack as Independent
Non-Executive Chairman, succeeding Stephen Diggle (June 2020)
Commenting on the results, Jon Burrows, Chief Executive Officer
of Oxford BioDynamics, said:
"By reducing to practice and presenting the utility of our IO
non-response EpiSwitch(TM) classifier at SITC in November 2019
followed by the commercially validating execution of an MSA with
one of the industry's leading pharma companies in December 2019 to
use the EpiSwitch(TM) platform for biomarker development, it is
clear that OBD is beginning to put itself firmly on the map as an
innovative value adding technology company to partner with for
pharma drug development and precision medicine.
The completion and publication of our work in DLBCL with Roche
and Genentech and our participation in the REFINE-ALS clinical
trial with Mitsubishi Tanabe Pharma America are further evidence of
our early reach into the commercial space.
Finally, the turn in a commercially dedicated direction has been
completed by the appointments of a commercially seasoned Global CEO
and Chairman to lead the Company through the effects of COVID-19
and into the commercial opportunities of 2021. We look forward to
updating the market on our future progress."
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
Jon Burrows, CEO
Paul Stockdale, CFO
Shore Capital +44 (0)20 7408 4090
Nominated Adviser and Broker
Stephane Auton
Edward Mansfield
John More
FTI Consulting +44 (0)20 3727 1000
Financial Public Relations
Advisor
Natalie Garland-Collins
Notes for Editors
About Oxford BioDynamics Plc
Oxford BioDynamics Plc (AIM: OBD) ("Oxford BioDynamics") is a
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 personalization of therapeutics for
patients in the context of challenging pricing environments where
improved clinical outcomes are critical.
In April 2019, Oxford BioDynamics received the Queen's Award for
Enterprise: Innovation. The Queen's Awards for Enterprise are the
most prestigious awards for UK businesses.
The Company 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 .
A copy of this announcement is available 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 OFFICER'S REVIEW
Introduction
During the six-month period to 31 March 2020, OBD continued to
make significant commercial, organizational and scientific
progress. The period also saw the introduction of COVID-19-related
restrictions in the Group's key locations and markets: as well as
contributing to the research-driven fight against coronavirus,
OBD's strengthened leadership team is focused on planning to emerge
from current restrictions with renewed commercial focus.
New leadership with extensive industry experience and US
commercial focus
I joined the Group as Chief Executive Officer at the end of the
period, on 23 March 2020 and nearly three months of my tenure have
been spent in the COVID-19 lockdown. This extraordinary situation
has severely curtailed the Company's business development
continuity, but it has afforded me a valuable opportunity to spend
time getting to know the rest of the OBD executive team, reviewing
the Group's current position and reshaping the commercial mindset
of the team. I am pleased to report my overwhelmingly positive
experience of the OBD team that I am leading, of the Group's
EpiSwitch(TM) technology and the remarkable depth of R&D, data
and know-how possessed by the Company. In my deep dive into OBD's
niche platform technology and capabilities I see significant
commercial potential, particularly in the EpiSwitch(TM) classifiers
that have been developed to predict likely response to IO
therapies, our prognostic and disease subtyping assay for DLBCL,
which outperformed a number of industry standard tests, our rapidly
developing work on disease severity in COVID-19 and in the
bioinformatics foundation that supports the contextual
interpretation of OBD's data.
As we plan for the gradual ending of lockdown in the US and UK,
I am very positive about the Group's prospects. I intend to bring a
refreshed mindset and unrelentingly commercial focus to all of our
activities. To that end, we are planning for a number of
appointments to critical positions, predominantly in the US (in
human resources, customer service, product development, marketing
and bioinformatics) as soon as we are able.
Post-period end on 3 June 2020, the Board elected industry
expert Dr Peter Pack to the position of Independent Non-Executive
Chairman. Peter joined the OBD Board in April 2019 and in his first
year as a Non-Executive Director has provided excellent support and
challenge to the Executive Directors, as well as developing a deep
understanding of OBD's technology and business. Peter's extensive
industry experience, much of it gained in the fields of diagnostics
and biomarkers, make him particularly well-suited to helping guide
the OBD Board through the next stages of the Group's journey.
Peter and I are already working well together, and I look
forward to him leading the Board as we move toward fuller
realization of the commercial potential of the EpiSwitch(TM)
technology platform. The Board also thanks Stephen Diggle for his
commitment and leadership in the role of Interim Chairman since
April 2019. Steve has returned to his role as Non-Executive
Director.
Earlier, in October 2019, the Company was pleased to appoint
Professor Iain McInnes CBE to its Scientific Advisory Board. Iain
is currently the Director of the Institute of Infection, Immunity,
and Inflammation, Muirhead Professor of Medicine and Professor of
Rheumatology at the University of Glasgow. OBD has collaborated
with Professor McInnes and his teams on several successful research
projects since 2014, and immediately following my appointment we
jumped right into the Group's recently announced participation in
the GETAFIX COVID-19-related clinical study, with the University of
Glasgow which is outlined below.
Response to COVID-19 pandemic
Shortly after the period end, in April 2020, the Company
announced the selection of its EpiSwitch(TM) platform for
prognostic and predictive profiling of COVID-19 patients in the
GETAFIX clinical study, in collaboration with the University of
Glasgow. As well as seeking a biomarker profile to predict likely
response to the anti-viral treatment Favipiravir, OBD plans to
develop a predictive disease severity classifier, to help identify
patients who may be at increased risk of serious illness or death
as a result of overreaction of their immune systems in so-called
"cytokine storms". These occur when the response of the body goes
into overdrive triggering excessive release of key regulators of
inflammation - cytokines, leading to tissue damage by the patient's
own immune system. Cytokine storms are well-known complications in
a number of diseases such as flu, SARS, or sepsis and similar
reactions are observed in patients with multiple sclerosis,
pancreatitis, or as a common side effect of IO treatments such as
CAR-Ts and TCRs. We believe such a classifier could therefore have
broad clinical utility and significant commercial potential.
In addition to its involvement in the research-driven fight
against COVID-19, the Group set out its operational response to the
current pandemic in our business update on 21 May 2020. We restate
here that the COVID-19 pandemic has already had an impact, which is
expected to continue, on the timing of certain existing projects,
directly as a result of delays in receipt of blood samples,
especially from cohorts of patients who are considered particularly
vulnerable to serious illness from a COVID-19 infection. In
addition, travel restrictions worldwide have impacted business
development activity. The likely severity and duration of the
pandemic and its impact on OBD's customers' activities remains
uncertain.
Notwithstanding these issues, the Group is in a strong position
to navigate the current crisis, with cash and fixed-term deposits
at 31 March 2020 of GBP13.9m, sufficient to fund planned activity
for several years. To date, none of the Company's UK employees has
been put on furlough. Activity has continued on several projects
including the receipt, in April 2020, of the first 500 patient
samples to be analysed under the master services agreement
announced on 20 December 2019 (referred to below). The Company
continues to do everything possible to keep its employees safe. Our
most recent risk assessments have allowed us cautiously to increase
the number of laboratory personnel permitted to work at our
facilities, while still following strict social distancing
rules.
Commercial and scientific progress
In October 2019 the first patient was enrolled in the Mitsubishi
Tanabe Pharma America-sponsored REFINE-ALS clinical study, in which
the Group's EpiSwitch(TM) technology platform is to be used to
assess the rate of ALS disease progression using highly novel
epigenetic biomarkers. Recruitment to this study has been affected
by the COVID-19 pandemic and we have not yet received patient
samples for laboratory analysis.
In November 2019, the Company's EpiSwitch(TM) technology
featured in two poster presentations at The Society for
Immunotherapy of Cancer's 34th Annual Meeting. The presentations,
co-authored with collaborating scientists from EMD Serono, Pfizer,
Oxford BioDynamics and the Mayo Clinic, showed that biomarkers
identified by EpiSwitch(TM) using blood samples from patients
treated with immune checkpoint inhibitors enabled robust exclusion
of non-responders across cancer indications and therapeutic
combinations, provided asset-specific classifiers with high
positive predictive value, and had the potential to enable IO drug
development programmes to advance with smaller patient cohorts. As
we noted at the time, the ability to stratify patients based on
their genomic architecture to reduce the risk, cost and
time-to-market for therapeutic development programmes would be a
game changer in IO.
In December 2019, the Group entered into a master service
agreement for the development of predictive EpiSwitch(TM)
biomarkers with a top US pharmaceutical company. This agreement
built on OBD's proven ability to develop predictive biomarkers for
response in IO, granting the customer access to OBD's unique
EpiSwitch(TM) technology for use in the development of predictive
biomarkers. The first 500 patient samples to be analysed under the
agreement were received shortly after the period end in April 2020
and laboratory work has been progressing as planned.
In January 2020, further evidence of the applicability of
EpiSwitch(TM)-derived biomarkers across species was presented at
American Association for Cancer Research (AACR) Conference on
Advances in Liquid Biopsies, in Miami, Florida. In work conducted
in collaboration with the University of Minnesota Department of
Veterinary Clinical Sciences, Animal Cancer Care and Research
Program, College of Veterinary Medicine and Masonic Cancer Center,
OBD utilised its proprietary datasets of markers specific for
regulatory 3D genome architecture associated with lymphoma in
humans, as determined by EpiSwitch(TM). The Company's scientists
were able to translate the markers from humans into dogs, to
generate a new biomarker signature using whole blood from a cohort
of dogs with lymphoma and validate it on a second cohort. The
results of this study indicate that EpiSwitch(TM) biomarkers can be
successfully translated across species for related pathologies and
conditions and highlight the potential application of non-invasive
EpiSwitch(TM) biomarkers in new therapeutic developments, including
in the veterinary industry.
In March 2020, the results of OBD's work in collaboration with
Roche and Genentech to develop a blood-based EpiSwitch(TM)
signature for non-invasive prognostic stratification of Diffuse
large B-cell lymphoma (DLBCL) patients were published in the
peer-reviewed journal Translational Medicine (Communications).
DLBCL is the second most common type of blood cancer after
Hodgkin's Lymphoma. Within this disease there are two distinct
subtypes associated with cell of origin: germinal centre
B-cell-like (GCB) and activated B-cell-like (ABC). Conventional
methods for identifying disease subtypes use complex and
time-consuming gene expression-based platforms that require an
invasive biopsy to obtain a diagnosis and often fail to assign the
correct subtype. The two subtypes follow different disease courses
and respond differently to therapeutic intervention, with the ABC
subtype having a far worse survival prognosis; it is therefore
important to determine a patient's subtype as early as possible.
Importantly, a significant group of patients do not manifest clear
ABC or GCB transcriptional profiles and are classified as Type III
(Unclassified), despite showing underlying differences in
prognostic outcomes. OBD's EpiSwitch(TM) platform was used in a
full programme of biomarker development, beginning with screening
and biomarker evaluation in 60 patients with a known subtype,
followed by validation of that EpiSwitch(TM) prognostic classifier
on an independent cohort of 58 Type III patients, comparing the
prognostic call made with EpiSwitch(TM) with the clinical outcome
of patient survival. The results of the study were striking,
showing that the EpiSwitch(TM) DLBCL biomarker signature was
accurate in classifying confirmed ABC and GCB subtypes in patient
samples of known status, providing an identical call in all 60
samples. Furthermore, the EpiSwitch(TM) biomarker signature was
able to classify all 58 Type III samples into subtypes, correctly
predicting clinical outcome with a high level of statistical
significance and outperforming a number of current industry
standard gene expression-based assays. The prognostic calls on
patients prior to their treatment made using the EpiSwitch(TM)
classifier had significant correlation with actual survival rates,
demonstrating the potentially transformative utility of an
EpiSwitch(TM) assay in the clinical management of DLBCL.
Shortly after the period end, in April 2020, the Group's Chief
Scientific Officer, Dr Alexandre (Sasha) Akoulitchev, was appointed
to represent OBD on three Steering Committees of the FNIH
Biomarkers Consortium, in Oncology, Inflammation & Immunity,
and Neuroscience, in Bethesda, MD, USA. The Biomarkers Consortium
is a public-private biomedical research partnership managed by the
FNIH that endeavours to discover, develop, and seek regulatory
approval for biomarkers, to support new drug development,
preventive medicine, and medical diagnostics. The members of the
Steering Committees represent a variety of sectors, including
academia, government, industry and not-for-profit/advocacy
organisations and are responsible for identifying and moving
forward promising biomarker projects for implementation by the
Consortium. Sasha's appointment to the Steering Committees
represents both a major recognition of his expertise in the field
and an opportunity to share the application of OBD's EpiSwitch(TM)
platform in a highly respected scientific forum.
IP portfolio development
OBD's IP portfolio now includes fourteen patent families, with
the latest application having been filed after the period end in
early June 2020. During the period, the Group continued its
strategy of seeking to obtain claims which provide the best
possible protection for its EpiSwitch(TM) platform and the
biomarkers that are derived from it; two patents were granted, a
further one entered the national phase and supplementary
information was submitted to patent offices in connection with one
other. The Group also benefits from significant technological and
scientific know-how within its team and valuable proprietary
experimental data.
Looking forward
The period to 31 March 2020 saw the Group continue to make
commercial and scientific progress on several fronts whilst
initiating a transition to newly appointed, commercially focused
executive leadership. The period saw the beginning of
COVID-19-related restrictions, with the Group in a strong position
not only to survive the period without external financial
assistance, but also to apply its EpiSwitch(TM) technology to
research into the effects of the virus.
In the remainder of the year, we expect to emerge from the
immediate effects of the pandemic with renewed organizational
focus, building on the Group's progress to date for significant
growth in 2021 and beyond. We look forward to providing
shareholders with news of further positive developments in due
course.
Dr Jon Burrows
Chief Executive Officer
FINANCIAL REVIEW
Overview
The six-month period ended 31 March 2020 included modest project
revenue alongside slightly increased operating costs. The Group
ended the period in a strong financial position, with sufficient
resources to continue to operate through and beyond restrictions
arising from the COVID-19 pandemic.
Financial performance
Revenue for the six-month period to 31 March 2020 was GBP0.2m
(H1 2019: GBP0.6m), entirely derived from research projects (H1
2019 also included some licence fee income). Revenue on research
projects is recognised as the Group meets its performance
obligations under the relevant contracts, and the timing of this
work is in turn largely dependent on the receipt of blood samples
from customers.
Operating expenses before share option charges were GBP2.45m,
(H1 2019: GBP2.11m), reflecting a 27% increase, compared to H1
2019, in direct (non-staff) research and development costs and more
modest increases in staff costs and general and administration
costs. Research and development costs are principally laboratory
consumables and reagents, with cost broadly reflecting the level of
activity on both internal and revenue-generating research
projects.
Staff costs of GBP1.24m (H1 2019: GBP1.06m) increased because of
expansion of the staff team, including as a result of a number of
senior appointments since March 2019, as well as salary increases
for existing staff.
Increases in general and administration costs (GBP0.69m, H1
2019: GBP0.66m), in addition to general inflationary rises,
included costs incurred following the Group's establishment of its
US subsidiary and for recruitment of senior staff. These increases
are offset by a reduction in the level of rent charges included
under general and administration costs following the adoption of
IFRS 16 'Leases' with effect from 1 October 2019. The adoption of
IFRS 16 was also the principal cause of the increase in
depreciation to GBP0.24m (H1 2019: GBP0.19m).
The Group's operating loss for the period was GBP2.4m (H1 2019:
GBP1.7m), reflecting the lower revenue and increased costs noted
above.
Finance income for the period of GBP80k related to interest
receivable and realised and unrealised exchange gains (H1 2019:
GBP98k of interest receivable) and reflected both lower balances
and lower deposit interest rates. Finance costs of GBP10k are lease
interest charges calculated under IFRS 16 'Leases' (H1 2019: GBP14k
related to realised and unrealised exchange losses). In both
periods, exchange movements were driven almost entirely by the
effect on US dollar-denominated cash and debtor balances of
movements in the sterling-to-US dollar exchange rate.
The taxation credit for the six months to 31 March 2020 of
GBP0.26m represents tax relief on applicable research and
development expenditure incurred by the Company during the period
and was broadly similar to the prior period (H1 2019: GBP0.32m).
The Group has so far 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 GBP2.03m (H1 2019: GBP1.28m).
Loss per share for the six months ended 31 March 2020 was 2.2 pence
(H1 2019: 1.4 pence).
Financial position
Additions to intangible and tangible fixed assets during the
period were primarily related to patents and computer equipment.
Right-of-use assets of GBP0.54m (31 March 2019 and 30 September
2019: GBPnil) are recognised for the first time in the current
period on the adoption of IFRS 16 'Leases' and relate to the
Group's leased laboratory and office space.
Inventory balances have remained broadly level at GBP0.25m (31
March 2019: GBP0.24m, 30 September 2019: GBP0.24m). Prior to March
2019, the Group had engaged in planned stockpiling of certain
laboratory supplies in advanced of the then-anticipated departure
of the UK from the EU. Subsequently new lines of consumables have
been added to inventory and there was some limited re-ordering in
advance of the implementation of the COVID-19-related lockdown.
Trade and other debtors were GBP1.10m (31 March 2019: GBP0.73m,
30 September 2019: GBP1.18m). The increase in this balance
relative to 31 March 2019 is primarily due to amounts receivable
from customers, all of which were received on time shortly after
the period end. Compared to 30 September 2019, customer receivables
were slightly increased, offset by a reduction in the debtor
associated with the Company's R&D Tax Credit claim in respect
of the year ended 30 September 2019, which was received during the
six months ended 31 March 2020.
Cash and cash equivalents and fixed-term deposits at 31 March
2020 were GBP13.9m (31 March 2019: GBP16.9m, 30 September 2019:
GBP15.5m).
Trade and other payables at 31 March 2020 were GBP1.29m (31
March 2019: GBP0.69m, 30 September 2019: GBP1.11); reflecting
increases in trade creditors and contract liabilities (amounts
received from customers in advance of the recognition of revenue
for the projects concerned).
Non-current liabilities have increased significantly with the
recognition of a lease liability on the adoption of IFRS 16
'Leases' from 1 October 2019.
Cash flow
Net cash used in operating activities was increased at GBP1.39m
(H1 2019: GBP0.80m), reflecting the increased operating loss,
offset by an increase of GBP0.12m in receipts of R&D Tax
Credits. Net cash generated by investing activities was GBP2.88m,
including GBP2.97m of cash inflows on the maturity of various
fixed-term deposits (H1 2019: net cash used of GBP9.75m, including
the placement of GBP9m of funds into fixed-term deposits). Net cash
used in financing activities reflects lease payments. In the prior
period the cash generated from financing activities arose from the
settlement of share option exercises during the period, of which
there were none in the six months to 31 March 2020.
The overall reduction in cash and term deposits for the
six-month period ended 31 March 2020 was GBP1.6m, representing a
slightly increased burn rate compared to the prior year (H1 2019:
GBP1.3m).
Summary
The Group's results for the six-month period to 31 March 2020
reflect genuine commercial progress, albeit tempered by the effect
of delays to certain projects that were outside the Group's
control. The OBD Board has also concentrated significant efforts on
strengthening its commercial leadership, culminating in the
appointment of Jon Burrows as CEO and, post-period end, Peter Pack
as Non-Executive Chairman. The Group has continued research and
development activity, growing its UK team and investing in its
intellectual property portfolio. Whilst the COVID-19 crisis and its
associated impact on the Company's operations remains open-ended
and uncertain, the Board looks forward to emerging from the current
restrictions more ready to benefit from the adoption of its unique
and valuable technology platform, EpiSwitch(TM), by a growing
customer base. The Board is satisfied that the Group's significant
cash and term deposits mean it remains well funded both to
withstand the likely effects of the pandemic and to fund its
near-term plans.
Paul Stockdale
Chief Financial Officer
Consolidated income statement
Six-month period Year ended
ended 31 March 30 September
2020 2019 2019
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
Continuing operations
Revenue 3,4 188 574 907
Research & development costs (excluding
staff costs) (279) (203) (468)
Staff costs (1,242) (1,055) (2,117)
General & other admin costs (691) (664) (1,423)
Share option charges 12 (94) (141) (274)
Depreciation and amortization 6-8 (241) (191) (387)
Other operating income 1 1 39
--------- ------------ --------------
Operating loss (2,358) (1,679) (3,723)
Finance income 80 98 337
Finance costs (10) (14) -
--------- ------------ --------------
Loss before tax (2,288) (1,595) (3,386)
Income tax 262 315 586
--------- ------------ --------------
Loss for the period from continuing
operations (2,026) (1,280) (2,800)
========= ============ ==============
Loss attributable to:
Owners of the Company (2,026) (1,280) (2,800)
Non-controlling interest - - -
--------- ------------ --------------
(2,026) (1,280) (2,800)
========= ============ ==============
Earnings per share
From continuing operations
Basic and diluted (pence per share) 5 (2.2) (1.4) (3.0)
========= ============ ==============
Consolidated statement of comprehensive income
Six-month period Year ended
ended 31 March 30 September
2020 2019 2019
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Loss for the period (2,026) (1,280) (2,800)
Exchange differences on translation of
foreign operations
that may be reclassified to the income
statement (42) 5 26
------------ ------------ --------------
Total comprehensive income for the
period (2,068) (1,275) (2,774)
============ ============ ==============
Total comprehensive income attributable
to:
Owners of the Company (2,065) (1,275) (2,774)
Non-controlling interest (3) - -
------------ ------------ --------------
(2,068) (1,275) (2,774)
============ ============ ==============
Consolidated statement of financial position
31 March 31 March 30 September
2020 2019 2019
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Assets Note
Non-current assets
Intangible fixed assets 6 634 446 555
Property, plant and equipment 7 784 948 891
Right-of-use assets 8 537 - -
Deferred tax asset - - -
Investments accounted for using the
equity method 422 422 422
--------- ------------ -------------
Total non-current assets 2,377 1,816 1,868
--------- ------------ -------------
Current assets
Inventories 247 237 243
Trade and other receivables 1,101 726 1,183
Fixed term deposits 7,331 9,000 10,300
Cash and cash equivalents 6,544 7,946 5,198
--------- ------------ -------------
Total current assets 15,223 17,909 16,924
--------- ------------ -------------
Total assets 17,600 19,725 18,792
========= ============ =============
Equity and liabilities
Capital and reserves
Share capital 11 926 926 926
Share premium 16,740 16,740 16,740
Translation reserve 164 182 203
Share option reserve 2,859 2,655 2,788
Retained earnings (5,027) (1,562) (3,082)
--------- ------------ -------------
Equity attributable to owners of
the Company 15,662 18,941 17,575
Non-controlling interest 16 19 19
--------- ------------ -------------
Total equity 15,678 18,960 17,594
========= ============ =============
Current liabilities
Trade and other payables 1,289 688 1,081
Current tax liabilities 8 - 25
--------- ------------ -------------
Total current liabilities 1,297 688 1,106
--------- ------------ -------------
Non-current liabilities
Lease liabilities 10 514 - -
Provisions 102 77 92
Deferred tax 9 - -
--------- ------------ -------------
Total non-current liabilities 625 77 92
--------- ------------ -------------
Total liabilities 1,922 765 1,198
--------- ------------ -------------
Total equity and liabilities 17,600 19,725 18,792
========= ============ =============
Consolidated statement of changes in equity
Share Share Translation Share Retained Attributable Non-controlling Total
capital premium reserve option earnings to share- interest
reserve holders
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October
2018 925 16,696 177 2,704 (472) 20,030 19 20,049
---------------- --------- --------- ------------ --------- ---------- ------------- ---------------- --------
Loss for the
period - - - (1,280) (1,280) - (1,280)
Other
comprehensive
income for the
period - - 5 - - 5 - 5
---------------- --------- --------- ------------ --------- ---------- ------------- ---------------- --------
Total
comprehensive
income for the
period - - 5 - (1,280) (1,275) - (1,275)
---------------- --------- --------- ------------ --------- ---------- ------------- ---------------- --------
Transactions with owners recorded in equity
Exercise of
share
options 1 44 - (30) 30 45 - 45
Share option
credit - - - 141 - 141 - 141
Lapse of vested
share options - - - (160) 160 - - -
---------------- --------- --------- ------------ --------- ---------- ------------- ---------------- --------
At 31 March
2019 926 16,740 182 2,655 (1,562) 18,941 19 18,960
---------------- --------- --------- ------------ --------- ---------- ------------- ---------------- --------
At 1 April 2019 926 16,740 182 2,655 (1,562) 18,941 19 18,960
Loss for the
period - - - - (1,520) (1,520) - (1,520)
Other
comprehensive
income for the
period - - 21 - - 21 - 21
---------------- --------- --------- ------------ --------- ---------- ------------- ---------------- --------
Total
comprehensive
income for the
period - - 21 - (1,520) (1,499) - (1,499)
Transactions with owners recorded in equity
Share option
credit - - - 133 - 133 - 133
At 30 September
2019 926 16,740 203 2,788 (3,082) 17,575 19 17,594
---------------- --------- --------- ------------ --------- ---------- ------------- ---------------- --------
At 1 October
2019 926 16,740 203 2,788 (3,082) 17,575 19 17,594
Adjustment
arising
on adoption of
IFRS 16 - - - - 58 58 - 58
---------------- --------- --------- ------------ --------- ---------- ------------- ---------------- --------
At 1 October
2019
(adjusted) 926 16,740 203 2,788 (3,024) 17,633 19 17,652
Loss for the
period - - - - (2,026) (2,026) - (2,026)
Other
comprehensive
income for the
period - - (39) - - (39) (3) (42)
---------------- --------- --------- ------------ --------- ---------- ------------- ---------------- --------
Total
comprehensive
income for the
period - - (39) - (2,026) (2,065) (3) (2,068)
--------- --------- ------------ --------- ---------- ------------- ---------------- --------
Transactions with owners recorded in equity
Share option
credit - - - 94 - 94 - 94
Lapse of vested
share options - - - (23) 23 - - -
---------------- --------- --------- ------------ --------- ---------- ------------- ---------------- --------
At 31 March
2020 926 16,740 164 2,859 (5,027) 15,662 16 15,678
================ ========= ========= ============ ========= ========== ============= ================ ========
Consolidated statement of cash flows
Six-month period Year ended
ended 31 March 30 September
2020 2019 2019
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
Loss before tax for the financial
period (2,288) (1,595) (3,386)
Adjustments to reconcile loss for
the period to net cash flows:
Net interest (65) (98) (196)
(Profit) on disposal of property, - - -
plant and equipment
Amortization of intangible fixed
assets 6 17 9 25
Depreciation of property, plant
and equipment 7,8 224 182 362
Movement in provisions 10 7 22
Share based payments charge 12 94 141 274
Working capital adjustments:
(Increase) / decrease in trade and
other receivables (269) 154 (14)
Decrease in other financial instruments - - -
Increase in inventories (4) (91) (97)
Increase /(decrease) in trade and
other payables 292 (13) 381
-------- ------------ --------------
Operating cash flows before interest
and tax paid (1,989) (1,304) (2,629)
R&D tax credits received 598 479 480
-------- ------------ --------------
Cash used in operations (1,391) (825) (2,149)
Net foreign exchange movements 6 21 (122)
-------- ------------ --------------
Net cash used in operating activities (1,385) (804) (2,271)
-------- ------------ --------------
Investing activities
Interest received 71 61 165
Purchases of property, plant and
equipment (72) (280) (400)
Purchases of intangible fixed assets (96) (107) (232)
Proceeds from disposal of tangible - - -
assets
Investment in associate - (422) (422)
Decrease / (increase) in fixed-term
deposits 2,969 (9,000) (10,300)
-------- ------------ --------------
Net cash generated by / (used in)
investing activities 2,872 (9,748) (11,189)
-------- ------------ --------------
Financing activities
Lease payments (98) - -
Issue of equity shares - 235 236
Share issue costs - - -
Net cash (used in) / generated by
financing activities (98) 235 236
-------- ------------ --------------
Net increase / (decrease) in cash
and cash equivalents 1,389 (10,317) (13,224)
Foreign exchange movement on cash and cash
equivalents (43) (15) 144
Cash and cash equivalents at beginning
of year 5,198 18,278 18,278
-------- ------------ --------------
Cash and cash equivalents at end
of period 6,544 7,946 5,198
======== ============ ==============
Notes
1. General information
The interim financial information was authorised for issue by
the Board of Directors on 15 June 2020. The information for the
period ended 31 March 2020 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 2019, which
were prepared in accordance with EU Adopted International Financial
Reporting Standards and have been delivered to the Registrar of
Companies. The Report of the Auditor on the financial statements
was unqualified, did not contain an emphasis of matter paragraph
and did not contain any statement under section 498 of the
Companies Act 2006. This interim information does not comply with
IAS 34 Interim Financial Reporting, as is 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).
Reporting currency
The consolidated financial statements are presented in pounds
sterling (GBP), which is also the Company's functional
currency.
Accounting policies
The interim financial statements have been prepared in
accordance with the accounting policies set out in the Annual
Report and Accounts for the year ended 30 September 2019, with the
exception of IFRS 16 'Leases', which was adopted during the
period.
New accounting standard adopted as at 1 October 2019 - IFRS 16
'Leases'
IFRS 16 'Leases' replaces IAS 17 'Leases' along with three
Interpretations (IFRIC 4 'Determining whether an Arrangement
contains a Lease', SIC 15 'Operating Leases-Incentives' and SIC 27
'Evaluating the Substance of Transactions Involving the Legal Form
of a Lease'). The new Standard has been applied using the modified
retrospective approach, with the cumulative effect of adopting IFRS
16 being recognised in equity as an adjustment to the opening
balance of retained earnings for the current period. Prior periods
have not been restated.
The Group has recognised a lease liability at the date of
initial application for leases previously classified as an
operating lease applying IAS 17, measured at the present value of
the remaining lease payments at the date of initial application,
discounted using a weighted average incremental borrowing rate of
3%.
The Group has recognised a right-of-use asset at the date of
initial application for leases previously classified as an
operating lease applying IAS 17, measured at its carrying amount as
if IFRS 16 had been applied since the commencement date of the
lease, but discounted using a weighted average incremental
borrowing rate of 3%.
On transition, for leases previously accounted for as operating
leases with a remaining lease term of less than 12 months and for
leases of low-value assets, the Group has applied the optional
exemptions to not recognise right-of-use assets but to account for
the lease expense on a straight line basis over the remaining lease
term.
Instead of performing an impairment review on the right-of-use
assets at the date of initial application, the Group has relied on
its historic assessment as to whether leases were onerous
immediately before the date of initial application of IFRS 16.
Impact of applying IFRS 16
The impact of applying IFRS 16 on the Group statement of
financial position and equity on 1 October 2019 is as follows:
GBP000
Assets
Right-of-use assets (carrying value) 593
Liabilities
Lease liabilities 703
Lease incentives recognised under
IAS 17 (168)
------
Net impact on equity 58
======
Reconciliation of total operating lease commitments at 30
September 2019 to lease liabilities recognised at 1 October
2019
GBP000
Total operating lease commitments
disclosed at 30 September 2019: 779
Recognition exemptions:
* Low value assets (8)
* Leases with a remaining term of 12 months or less (11)
----
(19)
------
Operating lease liabilities before
discounting 760
Discounted using incremental borrowing
rate (57)
------
Operating lease liabilities 703
Finance lease obligations as at 30 -
September 2019
------
Total lease liabilities recognised
under IFRS 16 at 1 October 2019 703
======
Accounting judgements and estimates
There have been no significant changes to critical accounting
judgements or accounting estimates of amounts reported in prior
financial periods.
3. Revenue
All revenue is derived from the Group's principal activity,
biomarker research and development. An analysis of the Group's
revenue by geography and pattern of revenue recognition is as
follows:
Six-month period Year ended
ended 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
Continuing operations
USA 109 55 126
Rest of World 79 519 781
-------- -------- -------------
Consolidated revenue 188 574 907
======== ======== =============
Six-month period Year ended
ended 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
Continuing operations
Revenue recognised at a point in time - 519 519
Revenue recognised over time 188 55 388
-------- -------- -------------
188 574 907
======== ======== =============
4. Business segments
Products and services from which reportable segments derive
their revenues
Information reported to the Group's Chief Executive Officer (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 (other than investments accounted
for using the equity method), analysed by geographical location
were as follows:
31 March 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
Non-current assets
UK 1,849 1,269 1,326
Malaysia 106 125 120
USA - - -
-------- -------- ------------
Total non-current assets 1,955 1,394 1,446
======== ======== ============
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 period Year ended
ended 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
Revenue from individual customers each representing
more than 10% of revenue for the period: 159 519 900
========= ======== ==============
5. 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
2020 2019 2019
GBP000 GBP000 GBP000
Earnings for the purposes of basic earnings
per share being net loss attributable to owners
of the Company (2,026) (1,280) (2,800)
---------- ---------- -------------
Earnings for the purposes of diluted
earnings per share (2,026) (1,280) (2,800)
========== ========== =============
No. No. No.
Number of shares
Weighted average number of ordinary shares
for the purposes of basic and diluted earnings
per share* 92,559,771 92,556,854 92,558,317
========== ========== =============
Pence Pence Pence
Earnings per share
Basic and diluted earnings per share (2.2) (1.4) (3.0)
========== ========== =============
*Potential ordinary shares are not treated as dilutive as the
Group is loss making.
6. Intangible fixed assets
Group Patents Website Software Total
development development
costs costs
GBP000 GBP000 GBP000 GBP000
Cost
At 1 October 2019 487 62 32 581
Additions 89 - 7 96
Disposals - - - -
-------- ------------- ------------- -------
At 31 March 2020 576 62 39 677
-------- ------------- ------------- -------
Amortization
At 1 October 2019 3 12 11 26
Charge for the period 1 6 10 17
-------- ------------- ------------- -------
At 31 March 2020 4 18 21 43
-------- ------------- ------------- -------
Carrying amount
At 31 March 2020 572 44 18 634
======== ============= ============= =======
At 30 September 2019 484 50 21 555
======== ============= ============= =======
7. Property, plant and equipment
Group Leasehold Office Fixtures Laboratory Total
improvements equipment and fittings equipment
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 1 October 2019 576 77 59 1,558 2,270
Additions 1 54 3 9 67
Disposals - - - - -
Exchange differences - - (1) (6) (7)
-------------- ----------- -------------- ----------- -------
At 31 March 2020 577 131 61 1,561 2,330
-------------- ----------- -------------- ----------- -------
Accumulated depreciation
At 1 October 2019 166 48 29 1,136 1,379
Charge for the period 36 12 4 116 168
Eliminated on disposals - - - - -
Exchange differences - - - (1) (1)
-------------- ----------- -------------- ----------- -------
At 31 March 2020 202 60 33 1,251 1,546
-------------- ----------- -------------- ----------- -------
Carrying amount
At 31 March 2020 375 71 28 310 784
============== =========== ============== =========== =======
At 30 September 2019 410 29 30 422 891
============== =========== ============== =========== =======
8. Right-of-Use Assets
Group Buildings Total
GBP000 GBP000
Cost
At 1 October 2019 734 734
Additions - -
Disposals - -
---------- -------
At 31 March 2020 734 734
---------- -------
Accumulated depreciation
At 1 October 2019 141 141
Charge for the period 56 56
Eliminated on disposals - -
---------- -------
At 31 March 2020 197 197
---------- -------
Carrying amount
At 31 March 2020 537 537
========== =======
At 30 September 2019 - -
========== =======
9. Interest in associate undertaking
The Group has a 28.84% holding in Holos Life Sciences
(Singapore) Pte Ltd ("Holos"), a Singapore-based company which is
not listed on any public exchange. The Group's interest in Holos is
accounted for using the equity method.
On 5 October 2018, the Company exercised a pre-existing option
to acquire, for a nominal amount, a 30% shareholding in Holos.
Subsequently, on 30 November 2018 the Company also participated in
an interim fundraising by Holos, investing US$540,000 in that
entity. Summarised financial information for Holos and a
reconciliation with the carrying amount of the Group's investment
are set out below:
Summarised statement of financial position of Holos Life
Sciences (Singapore) Pte Ltd
31 March 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
Current assets 298 645 260
Non-current assets 1 - 1
Current liabilities (34) (13) (1,025)
Non-current liabilities (1,006) (942) -
-------- -------- ------------
Equity (741) (310) (764)
-------- -------- ------------
Group's share in equity - 28.84% (31
March 2019 and 30 September 2019: -
28.84%) - -
Goodwill 422 422 422
-------- -------- ------------
Carrying amount of the investment 422 422 422
======== ======== ============
Summarised income statement for Holos Life Sciences (Singapore)
Pte Ltd
Six-month 5 October 5 October
period ended 2018 to 31 2018 to 30
31 March March 2019 September
2020 2019
GBP000 GBP000 GBP000
Revenue - - -
Cost of sales - - -
R&D expenditure (39) (674) (795)
Admin expenses (183) (237) (519)
Finance costs (9) (16) (25)
------------- ----------- -----------
Loss before tax (231) (927) (1,339)
Tax - - -
------------- ----------- -----------
Loss and total comprehensive income
for the period (231) (927) (1,339)
============= =========== ===========
Group's share of loss for the period
- 28.84% (not recognised)
(31 March 2019 and 30 September 2019:
not recognised) (67) (267) (386)
============= =========== ===========
Goodwill is subject to review for impairment on at least an
annual basis, as set out in the accounting policies in the annual
report and accounts for the year ended 30 September 2019.
Holos had no contingent liabilities as at 31 March 2020 (31
March 2019 and 30 September 2019: Nil). The Group is not liable for
any of Holos' liabilities.
10. Leasing
31 March 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
Lease liabilities (current) 91 - -
Lease liabilities (non-current) 514 - -
605 - -
-------- -------- ------------
The Group has leases for its laboratory and office
facilities.
Future minimum lease payments as at 31 March 2020 were as
follows:
Within One to After
1 year five years five years Total
GBP000 GBP000 GBP000 GBP000
Lease payments 108 544 - 652
Finance charges (17) (30) - (47)
------
Net present value 91 514 605
------ ---------- ---------- ------
The group has elected not to recognise a lease liability for
short term leases (leases with an expected term of 12 months or
less) or for leases of low value assets. Payments made under such
leases are expensed on a straight-line basis.
11. Share capital of the Company
31 March 2020 31 March 2019 30 September 2019
Number GBP Number GBP Number GBP
Authorised shares
Ordinary shares of
GBP0.01 each 92,559,771 925,597 92,559,771 925,597 92,559,771 925,597
========== ======= ========== ======= ========== =======
The Company has a number of shares reserved for issue under an
equity-settled share option scheme: further details are disclosed
in Note 12.
12. Share-based payments
Equity-settled share option scheme
In November 2016, the Company established an Enterprise
Management Incentive ("EMI") share option scheme, under which
options have been granted to certain employees, and a non-employee
option scheme with similar terms, except that options granted under
it do not have EMI status. EMI and non-EMI share options were also
previously granted under a share option scheme established in
October 2008 ("the 2008 Scheme"). The Company does not intend to
grant any further options under the 2008 Scheme. All of the schemes
are equity-settled share-based payment arrangements, whereby the
individuals are granted share options of the Company's equity
instruments, namely ordinary shares of 1 pence each.
The schemes include 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 grant date. 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 options outstanding as at 31 March 2020 had exercise prices
in the range of GBP0.34 to GBP2.10.
Options outstanding Six-month period Year ended
ended 31 March 30 September
2020 2019 2019
Unaudited Unaudited Audited
Number Number Number
Outstanding at start of period 6,640,921 6,840,812 6,840,812
Granted during the period 1,065,598 70,000 320,000
Forfeited during the period (70,000) (466,258) (466,258)
Exercised during the period - (53,633) (53,633)
---------- ---------- --------------
Outstanding at end of period 7,636,519 6,390,921 6,640,921
========== ========== ==============
Weighted average remaining contractual life
(in years) of options outstanding at the
period end 4.68 4.66 4.37
========== ========== ==============
Options exercisable Weighted Latest
Number of average exercise
Options exercise price
price GBP
GBP
At 31 March 2020 6,121,248 0.57 1.00
============ ========== ==============
At 31 March 2019 5,917,580 0.53 1.70
============ ========== ==============
At 30 September 2019 6,040,906 0.50 1.58
============ ========== ==============
Share option expense Six-month period Year ended
ended 31 March 30 September
2020 2019 2019
GBP000 GBP000 GBP000
Expense arising from share-based
payment transactions 94 141 274
============ ========== ==============
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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