TIDMRENE
RNS Number : 1193R
ReNeuron Group plc
04 July 2022
ReNeuron Group plc
("ReNeuron" or "the Group")
Preliminary Results for the year ended 31 March 2022
Strategic shift to fully focus on ReNeuron's Proprietary
Exosomes Platform
ReNeuron Group plc (AIM: RENE), a UK based leader in stem cell
derived exosome technologies, announces its preliminary results for
the year ended 31 March 2022.
OPERATIONAL HIGHLIGHTS
Exosomes Platform
- Following a strategic review in January, ReNeuron is now fully
focused on expanding its proprietary customisable exosomes
platform
- Seven discovery-stage collaborations proceeding with global
pharma, biotech and academic institutions, with the Group committed
to adding new long term value creating partnerships
- Exciting pre-clinical data announced showing that ReNeuron's
exosome drug delivery technology can effectively deliver
therapeutic proteins to the brain to potentially treat neurological
diseases
Corporate and Organisational Development
- In July 2021, Iain Ross was appointed as Non-Executive
Chairman and following Olav Hellebø's resignation as CEO in
February 2022, Mr Ross became Interim Executive Chairman until the
appointment of a new CEO
- In October 2021, Catherine Isted, ACMA, joined the Board,
replacing Michael Hunt as Chief Financial Officer
- Additionally, during the period, the Board was reconfigured
with former Chairman, Dr Tim Corn and Non-Executive directors Mark
Evans and Sir Chris Evans OBE stepping down. Two new independent
Non-Executive directors, Barbara Staehelin and Martin Walton, have
joined the Board
- Additionally, Dr Stefano Pluchino was appointed as Chief
Scientific Officer and Dr Randolph Corteling as Head of Research,
greatly increasing the Group's exosomes expertise
Fosun Pharma
- Fosun Pharma continues to progress development of CTX in
stroke disability in China. In January 2022 ReNeuron announced that
it had signed an additional agreement, setting out the first steps
for the technology transfer of the CTX drug product into China
- Post period end in July 2022, ReNeuron signed a Supplemental
Terms Agreement with Fosun Pharma. As a result, the Group expects
to receive approximately GBP1 million over the next 24 months with
up to a further GBP5 million over the medium to long term
Induced Pluripotent Stem Cell (iPSC) Platform
- Collaboration signed with University College London (UCL)
investigating the use of ReNeuron's iPSC platform to potentially
generate CAR-T and/or CAR-NK cells
- Positive data from a separate UCL collaboration demonstrating
that ReNeuron's iPSCs can be differentiated into Schwann cells with
potential applications such as peripheral nerve damage repair
hRPC (human retinal progenitor cells) for retinal diseases
- In January 2022, as a result of the strategic review and
following consultation with the Company's Scientific Advisory
Board, the Board took the decision to halt development of its
Retinitis Pigmentosa programme as it became clear that a further
phase II trial would be required. The view was that the size of the
additional investment required would not be in the best interests
of shareholders
- The Board's intention is to complete the Retinitis Pigmentosa
data package and out-licence the programme to a third party
FINANCIAL HIGHLIGHTS
- Revenue for the period of GBP403,000 relating to research and
collaboration activities and royalty income (2021: GBP257,000)
- Loss for the period of GBP9.7 million (2021: loss of GBP11.3 million) reflecting lower costs
- Reduced costs incurred in the period of GBP11.6 million (2021:
GBP13.2 million) primarily driven by lower R&D spend following
the strategic decision to curtail clinical development
activities
- Increased net cash used in operating activities of GBP7.4
million (2021: GBP6.1 million) with the prior year benefitting from
the receipt of two R&D tax credits relating to financial years
2019 and 2020
- Cash, cash equivalents and bank deposits at 31 March 2022 of
GBP14.5 million (31 March 2021: GBP22.2 million) providing a cash
runway until at least mid-calendar year 2023
Iain Ross, Chairman said: "During the period tough decisions
have been taken, the business model re-focussed and the Board and
Management team strengthened in line with our future goals.
Personally, I have been most impressed with the competence,
resilience and determination of the ReNeuron team and look forward
to driving the business forward, executing a realistic plan and
achieving meaningful milestones over the next 12 months."
Analyst briefing
Iain Ross, Interim Executive Chairman, Catherine Isted, Chief
Financial Officer and Dr Randolph Corteling, Head of Research will
be hosting a briefing for analysts which will take place at 75 King
William St, London, EC4N 7BE on Monday 4 July 2022 at 13.00 (GMT) /
08:00 EST. A live webcast of the presentation will also be
available for those unable to attend the meeting in-person.
For more information and to register to attend the meeting
in-person or require the link to the live webcast, please email
reneuron@walbrookpr.com or call +44 (0)20 7933 8785.
Investor Briefing
Management will be hosting a live online presentation relating
to the preliminary results via the Investor Meet Company platform
at 15.00 (GMT) on Monday 4 July. The presentation is open to all
existing and potential shareholders.
Investors can sign up to Investor Meet Company for free and
register for the presentation here:
https://www.investormeetcompany.com/reneuron-group-plc/register-investor
Enquiries:
ReNeuron www.reneuron.com/investors
Iain Ross, Chairman Via Walbrook PR
Catherine Isted, Chief Financial Officer
Liberum Capital Limited (NOMAD and
Joint Broker)
Phil Walker (Investment Banking)
Richard Lindley (Investment Banking)
Ben Cryer (Investment Banking) +44 (0)20 3110 2000
Allenby Capital Limited (Joint Broker) +44 (0)20 3328 5656
James Reeve/George Payne (Corporate
Finance)
Stefano Aquilino (Sales & Corporate
Broking)
Walbrook PR (Media & Investor Relations) +44 (0)20 7933 8780 or reneuron@walbrookpr.com
Paul McManus / Alice Woodings +44 (0)7980 541 893 / +44 (0)7407 804
654
About ReNeuron
ReNeuron is a UK based leader in proprietary stem cell derived
exosome technologies, harnessing its unique stem cell technologies
to develop 'off the shelf' treatments for diseases with significant
unmet needs.
ReNeuron's stem cell derived proprietary exosome technology
platform offers a delivery mechanism for a variety of payloads such
as siRNA, mRNA, proteins, small molecules and genes. The Group has
a growing number of partner collaborations with Global Pharma,
Biotech and academic partners in this fast-expanding area of
scientific and commercial interest. ReNeuron also has the ability,
through its conditionally immortalised induced pluripotent stem
cell (iPSC) platform, to make allogeneic tissue cells of choice and
has the potential to produce exosomes with tissue specific
targeting ability.
The Group has out-licenced its CTX Programme for stroke
disability and hRPC programme in retinitis pigmentosa to Fosun in
China and is looking to out-license both of these programmes in
other territories.
ReNeuron's shares are traded on the London AIM market under the
symbol RENE.L. For further information visit www.reneuron.com
This announcement contains forward-looking statements with
respect to the financial condition, results of operations and
business achievements/performance of ReNeuron and certain of the
plans and objectives of management of ReNeuron with respect
thereto. These statements may generally, but not always, be
identified by the use of words such as "should", "expects",
"estimates", "believes" or similar expressions. This announcement
also contains forward-looking statements attributed to certain
third parties relating to their estimates regarding the growth of
markets and demand for products. By their nature, forward-looking
also statements involve risk and uncertainty because they reflect
ReNeuron's current expectations and assumptions as to future events
and circumstances that may not prove accurate. A number of factors
could cause ReNeuron's actual financial condition, results of
operations and business achievements/performance to differ
materially from the estimates made or implied in such
forward-looking statements and, accordingly, reliance should not be
placed on such statements.
Interim Results for the year ended 31 March 2022
CHAIRMAN'S STATEMENT
Following the strategic review in January 2022, the Board took
some tough decisions from a business and organisational
perspective. As a result, during the course of the year the Group
has made a number of changes to not only re-organise the business
to fully focus on exosomes, but also to put in place the right team
both at the Board and Executive level in order to build a
sustainable growing business and ultimately to deliver shareholder
value.
I was appointed Chairman in July 2021, and having worked with
the team for six months, in January 2022 the Board under my
leadership took the tough decision to halt the Retinitis Pigmentosa
(RP) programme and fundamentally re-organise the business and its
priorities. Upon reviewing the RP data we believed that we could
not justify substantial further investment into the RP programme
and that the programme's future was better served in the hands of a
partner. This decision has allowed us to increase the speed at
which we can invest in and progress our proprietary exosomes
platform. We believe this platform is differentiated from others in
the field and allows our exosomes to be customised and optimised
for specific payloads and targets. We believe our position as a
leader in this growing field of science offers the best opportunity
of returns for our shareholders.
In addition to having leading edge science and IP in the field I
believe we now have the right combination of skill sets in our
executive team having made three key hires during the year to build
and grow our exosomes platform business. Catherine Isted joined as
CFO having spent her career to date in healthcare, most recently at
Oxford Biomedica building their viral vector-based platform
business. Catherine has already made a significant contribution
since joining the business. Additionally in the year, Dr Stefano
Pluchino joined ReNeuron as Chief Scientific Officer and Dr
Randolph Corteling re-joined ReNeuron as Head of Research. Between
them they bring over 30 years of experience in exosomes and their
extensive knowledge in the field is invaluable as the Group looks
to maximise the potential in this fast growing area of science.
In addition, we have evolved the Board to align with the needs
of the business and whilst it has reduced in size, it has increased
in independence. Accordingly, I want to thank Olav Hellebø, Sir
Chris Evans, Dr.Tim Corn and Mark Evans for their significant
contribution over a number of years. We have welcomed the
appointments of two new Independent Non-Executive Directors,
Barbara Staehelin and Martin Walton. I intend that ReNeuron will
continue to operate to the highest levels of governance and as
diversity and inclusion are a core part of our culture, I am
pleased to note that we currently have 40% female board member
representation.
With the excellent team we now have in place, the focus over the
year ahead will be to deliver on our promises, to build on the
partnerships we already have in place and look to expand the best
of these into new long term value creating partnerships. We will
continue to expand our technology platform and work with delivery
of therapeutic proteins to the brain, producing further data around
the customisable nature of our proprietary platform and our
optimised exosomes product candidates. The management team will
also continue to assess all opportunities to monetise value from
ReNeuron's assets, be that its stem cell legacy assets, induced
pluripotent stem cell (iPSC) platform or proprietary stem cell
lines, to build sustainable value for shareholders. The Board
anticipates further strengthening of the team including the
appointment of a CEO in the year ahead and I personally look
forward to the coming year and to helping the team to build and
release value commensurate with the quality of our scientific
leadership.
Iain Ross
Chairman
OPERATIONAL REVIEW
Overview
This year has been a year of change not only strategically, with
ReNeuron pivoting to be fully focused on maximising the potential
of its leading exosomes technology platform, but also in relation
to personnel with a number of changes at both the Board and the
Executive level. The Group also looked to continue to progress its
iPSC platform and additionally generate value from its legacy
assets and was pleased to announce progress with Fosun Pharma in
their development of CTX for stroke disability in greater China as
well as two iPSC collaborations with UCL. ReNeuron ended the period
with cash of GBP14.5 million, providing a current cash runway to at
least mid-calendar year 2023, although the Group looks to extend
this further through continued expansion of its exosomes platform
with partners and further monetisation of its legacy product. With
a strong team and leading science in the exosomes field, the Group
looks forward to the year ahead maximising and building on the
foundations set in place in the prior year.
Exosome Platform
The Group's lead technology is its stem cell derived exosome
platform, where ReNeuron is one of the leading players globally in
this fast growing area of drug delivery technology. The platform
builds on the years of stem cell experience and without this would
not be in the strong position it is today. ReNeuron has the third
largest patent estate globally in the field of exosomes,
highlighting its strength and depth in the field.
Exosomes produced by the Group are manufactured through a fully
qualified, xeno-free, scalable process and can be loaded with a
variety of payloads, such as nucleic acids (including siRNA, mRNA
and miRNA), proteins (such as Cas9, antibodies and peptides), as
well as small molecules. The Group's CTX (cortex) stem cell derived
exosomes have also been shown to exhibit a natural ability to cross
the blood brain barrier.
ReNeuron has a differentiated approach with the Group's seven
proprietary conditionally immortalised stem cell lines. This
includes, as recently announced, four proprietary neural cell lines
as well as three additional proprietary cell lines in other areas
outside of the brain. With exosomes having functional properties
based on the parent cell line, this allows ReNeuron to produce
exosomes that can be customised and optimised for a specific
payload or target.
Additionally, the Group's iPSC platform provides an opportunity
to generate additional tissue specific conditionally immortalised
stem cell lines thus producing further bespoke exosomes beyond
those produced from its existing seven stem cell lines.
The Group looks to monetise this delivery platform through
working with partners as well as on its own proprietary product
development. The Group has seven discovery stage collaborations
with global pharma, biotech and academic institutions using
ReNeuron's exosomes as a delivery vehicle for their therapeutic
agents. The Group looks to continue to progress these
collaborations as well as add new additional programmes either with
existing or new partners.
In October, the Group announced positive data from its
collaboration with the University of Salamanca that provided clear
pre-clinical proof-of-concept that ReNeuron's novel exosome drug
delivery technology can effectively deliver therapeutic proteins to
the specific region of the brain affected by several neurological
diseases such as stroke, Parkinson's disease and Huntington's
disease. These in vivo results involving BDNF (brain derived
neurotrophic factor) are key in showing that ReNeuron's exosome
delivery technology offers a striking higher stability, more
targeted delivery, and an increase in potency, therefore
potentially solving the delivery issues that can be experienced
with therapeutic proteins.
Major pharmaceutical companies have identified therapeutic
proteins that are effective in treating a variety of neurological
diseases. However, there are major issues associated with the
delivery of these protein therapeutics, which include the poor
stability in living organisms, as proteins rapidly break down and
do not last long in the body; as well as issues surrounding poor
tissue distribution due to an inability to target specific tissues.
These issues cannot be overcome by simply administering more
protein, as this can have unwanted side-effects, however ReNeuron
believes that its proprietary exosomes have the potential to
address both these issues due to their natural tissue-targeting
ability and superior stability characteristics (as evidenced from
ReNeuron's pre-clinical studies).
ReNeuron is currently further evaluating BDNF in functional
studies, with initial readouts expected during the course of the
year.
The whole field of exosomes to deliver therapeutic payloads is
expanding rapidly and the Group is well-positioned with its
proprietary customisable exosomes platform to maximise the
potential in this growing area of science.
Fosun Pharma - CTX in Stroke disability
Fosun Pharma continues to develop CTX in stroke disability in
China following the out-licensing agreement signed with ReNeuron in
April 2019. In January 2022, ReNeuron announced that it had signed
an additional agreement, setting out the first steps for the
technology transfer of the CTX drug product for the stroke
disability programme. The agreement allowed for GBP320,000 to be
invoiced on signing with further payments expected, based on
services and CTX cell bank vials to be supplied by ReNeuron in the
future, although these were contingent on signing a supplemental
payment terms agreement which was under discussion at the time.
Post period end in July 2022, ReNeuron announced that it has
negotiated and signed the Supplemental Terms Agreement with Fosun.
As a result, the Group expects to receive approximately GBP1
million over the next 24 months (including the GBP320,000 upfront
payment already received in January 2022) in relation to the
initial supply of CTX cell bank vials and services provided to
undertake the technology transfer, with up to a further GBP5
million receivable by the Group over the medium to longer term for
the continued provision of CTX cell bank vials to enable
manufacture by Fosun Pharma.
Fosun Pharma is expanding its cell therapy portfolio to stem
cell platforms and ReNeuron CTX is one of the starting programmes.
A dedicated Fosun Pharma team is being established for the
technology transfer into China and the construction of a 20,000
square foot GMP facility to manufacture CTX is underway. The
signing of this Supplemental Terms Agreement underscores Fosun
Pharma's continued commitment to the CTX stroke disability
programme.
The Group continues to look to progress this programme in other
geographies through regional partnerships.
Induced Pluripotent Stem Cell (iPSC) Platform
In addition to the benefits this platform can bring to expanding
the range of stem cell types (and thus exosomes) that can be
produced using the Group's exosomes platform, ReNeuron continues to
progress development of the CTX cell-based Induced Pluripotent Stem
Cell (iPSC) technology platform deploying this technology to
develop new, immortalised allogeneic cell lines of varying types as
potential therapeutic agents in diseases of unmet medical need.
In October the Group announced that it had entered into a
collaboration agreement with UCL to conduct research into the
generation of immune cells from iPSCs for anti-cancer cell
therapies. ReNeuron will be providing UCL with iPSCs from its CTX
immortalised neural progenitor cell line which UCL will use to
assess the ability to differentiate into functional T cells and
Natural Killer ('NK') cells. If successful, the CXT-iPSC cell lines
will be used to generate chimeric antigen ('CAR') T cells and/or
CAR-NK cells. Additionally, in November a separate collaboration
with UCL demonstrated that iPSCs can be differentiated into Schwann
cells with potential applications in areas such as peripheral nerve
damage repair.
hRPC (human retinal progenitor cells) for retinal disease
The Group's Retinitis Pigmentosa (RP) study used a cryopreserved
hRPC formulation delivered via a subretinal injection. Following an
initial study which treated 10 patients with a 1 million cell
administration which showed at 12 months a mean 9.9 letter
improvement versus baseline in ETDRS letter score, an extension
segment of the study proposing to dose up to nine patients with a
higher level 2 million cell dose was started in September 2020.
During 2021, the extension trial progressed slower than planned
and for a period of four months from June to October 2021 dosing
was temporarily suspended to investigate a presumed bacterial
intraocular infection in the treated eye of a patient. While the
origin of the presumed infection was not clear, investigations
showed no evidence of a causal link to the drug product, and the
study was reopened in October 2021.
In January 2022, as a result of the strategic review and
following consultation with the Group's Scientific Advisory Board
(SAB), the Board took the decision to halt development of its
Retinitis Pigmentosa programme. Having treated seven of the nine
patents in the extension arm, the experience in treating the
patients at the 2 million cell dose had shown that the surgical
procedure required to deliver this higher dose (which involves a
greater volume and therefore greater surgical complexity) had led
to more surgical complications compared to that seen with the 1
million cell dose. While there have been no serious adverse events
(SAEs) attributed to the drug itself, it was decided that a 2
million cell dose was not a viable dosing regimen. Additionally,
analysis of the 24-month data at the 1 million cell dose, while
inconclusive, did appear to show that efficacy wanes after 12
months with only four out of nine patients still showing a positive
response versus baseline at month 24.
Following the SAB meeting, the Group reviewed its commercial
strategy and the financial resources needed to progress the RP
programme. Even though certain patients did appear to benefit from
the treatment (in particular in the first 12 months), further
patients would need to be treated at the 1m dose to try to identify
which sub-populations are most likely to lead to a higher and
longer lasting response. To fully understand this the Group
believes an additional phase 2 trial would be needed and it was
decided that the size of the additional investment required from
ReNeuron into this programme would not be in the best interests of
shareholders and therefore it would be better to complete a data
package on the programme and look to out-license the programme to a
third party.
ReNeuron is currently working towards completing the data
package and will then be able to further focus on identifying
potential partners for the programme.
Corporate and Organisational Development
During the year, ReNeuron has reconfigured its Board of
Directors under the leadership of Iain Ross who joined in July
2021. In October 2021 Catherine Isted, ACMA, joined the Board,
replacing Michael Hunt as Chief Financial Officer and in February
2022 Olav Hellebø stood down as CEO and Executive Director of the
Group with Iain Ross supported by the Executive team assuming
responsibility for the running of the Group.
Additionally, Sir Chris Evans, Dr. Tim Corn and Mark Evans
retired from the board and ReNeuron welcomed the appointments of
two new Independent Non-Executive Directors Barbara Staehelin and
Martin Walton. Following these changes, the ReNeuron Board now
comprises five directors: Iain Ross (Interim Executive Chairman);
Catherine Isted (CFO and Executive Director) and three independent
Non-Executive Directors - Dr Michael Owen, Barbara Staehelin and
Martin Walton.
During the year, the executive team was strengthened and focused
towards exosomes. The Group was pleased to firstly welcome Dr
Stefano Pluchino as Chief Scientific Officer in May 2021 and in
March 2022 Dr Randolph Corteling re-joined ReNeuron heading up the
Research team. Between them Dr Pluchino and Dr Corteling have over
30 years' experience in Exosomes and their extensive knowledge in
the field is invaluable as the Group looks to maximise the
potential in this fast growing field of science. Rick Beckman, the
Group's CMO and lead for the RP programme stepped down in the
period.
Outlook
The Group looks to capitalise on the potential it sees in the
Exosomes field by progressing its current collaborations and by
adding new long term value creating partnerships. The Group will
also continue to progress its proprietary programmes, especially in
the area of therapeutic protein delivery to the brain following the
positive data produced in October and is currently further
evaluating BDNF in functional studies with initial readouts
expected during the course of the year.
Platform development is also key, with the team working on
additional manufacturing improvements and to produce data to
highlight the strengths of our customisable platform producing
optimised exosomes product candidates. Additionally, the Group will
look to add new additional technologies and capabilities through
partnering or licensing to further strengthen and differentiate the
exosomes platform highlighting its global leadership in the
field.
While ReNeuron continues to work closely with Fosun following on
from the recent signing of the technology transfer agreement, the
Group looks to further monetise its legacy stem cell products
outside of Greater China. Additionally, it will look to expand the
number of collaborations with its iPSCs.
Personally, having joined ReNeuron from a leading cell and gene
therapy platform delivery company, I can see the great potential
that exosomes could offer as a delivery mechanism for the next
generation of targeted therapeutics. The two key internal
ingredients of a successful company come from its science and its
people. In the field of exosomes I believe we are leading the way
with our customisable and targeted approach and we have the team
here to realise that value. None of this would be possible without
the support of our shareholders and I look forward over the coming
year to updating the market on our progress as we continue to build
and grow on the foundations and developments achieved in the last
12 months.
Catherine Isted
Chief Financial Officer
FINANCIAL REVIEW
During the financial year costs continued to be closely
controlled with spend primarily directed towards progressing the
Group's hRPC therapeutic candidate and proprietary exosome
platform. Following the strategic decision made in January 2022,
spend has been redirected to the exosome platform enabling the
Group to better capitalise on the potential in the exosomes field.
The total comprehensive loss for the period reduced to GBP9.7
million (2021: GBP11.3 million).
At 31 March 2022, the Group had cash, cash equivalents and bank
deposits of GBP14.5 million providing a cash runway to at least
mid-calendar year 2023. Further detail on the Directors' assessment
is provided in note 3 to the condensed financial statements.
FINANCIAL HIGHLIGHTS Year ended Year ended
(GBP'000) 31 March 31 March
2022 2021
Revenue 403 257
----------- -----------
Total comprehensive loss 9,689 11,347
----------- -----------
Operating expenses 11,631 13,249
----------- -----------
Net cash used in operating
activities 7,411 6,052
----------- -----------
Cash, cash equivalents &
bank deposits 14,548 22,203
----------- -----------
Revenue and Other Operating Income
In the year to 31 March 2022, revenues, which relate to research
and collaboration activities and royalty income, were GBP403,000
(2021: GBP257,000). No grant income was received in the year. In
2021, GBP78,000 was received under the Government's Coronavirus Job
Retention Scheme and is shown as other operating income.
Operating expenses
Total operating expenses reduced in the year to GBP11.6 million
(2021: GBP13.2 million).
This reduction in costs follows a review in the previous
financial year of programme priorities and resource requirements,
with costs directed to the hRPC therapeutic candidate and
proprietary exosome platform. As a result of the strategic decision
made in January, noted above, costs relating to the hRPC
therapeutic candidate have now reduced with the spend being
reallocated to the exosome platform.
Research and development costs in the year reduced to GBP8.1
million (2021: GBP9.5 million), primarily reflecting the
refocussing of activities as described above, together with
consequent cost reductions.
General and administrative expenses also reduced in the period
to GBP3.6 million (2021: GBP3.7 million), despite the year
including termination payments to former directors. If termination
payments are excluded in both financial years, then general and
administrative expenses show savings of 15% compared to the prior
year.
Finance income/expense
Finance income represents income received from the Group's cash
and investments and gains from foreign exchange, with losses from
foreign exchange shown in finance expense.
Finance income was GBP195,000 in the period (2021: GBP20,000),
primarily reflecting foreign exchange gains. In the year, finance
expense solely comprises lease interest of GBP25,000 (2021:
GBP516,000, which included GBP484,000 foreign exchange losses).
Taxation
Taxation for the period at GBP1.4 million primarily comprises an
R&D tax credit (2021: GBP2.1 million, which included GBP0.2
million relating to financial year 2020). The amount of the R&D
tax credit for this year has reduced as a result of the lower
research and development spend.
Cash flow
Net cash used in operating activities in the period increased to
GBP7.4 million (2021: GBP6.1 million). However, there is an
underlying reduction in net cash used as a result of the reduction
in costs with the prior year benefitting from the receipt of two
R&D tax credits totalling GBP6.1 million for both financial
years 2019 and 2020.
The Group had cash, cash equivalents and bank deposits totalling
GBP14.5 million as of 31 March 2022 (31 March 2021: GBP22.2
million), providing a cash runway until at least mid-calendar year
2023.
Statement of financial position
Non-current assets - Property, plant and equipment have
increased as we invest in equipment to further develop our
manufacturing processes and analytical capabilities.
Current assets - Corporation tax receivable of GBP1.4 million
comprises the amount due from R&D tax credits for the full year
ended 31 March 2022 (2021: GBP1.8 million). This debtor is lower
than 2021 due to the reduction in research and development
expenditure.
Current liabilities - Trade and other payables at GBP6.9 million
have increased since the start of the financial year (2021: GBP5.7
million). These movements primarily reflect changes in the level of
accruals (mainly across the legacy clinical trials) and deferred
income.
Catherine Isted
Chief Financial Officer
Financial Statements
Condensed Consolidated Statement of Comprehensive Income
for the year ended 31 March 2022
Unaudited Audited
2022 2021
Note GBP'000 GBP'000
------------------------------------------------ ----- ---------- ---------
Revenue 403 257
Other income - 78
Research and development costs 4,5 (8,068) (9,503)
General and administrative costs 5 (3,563) (3,746)
------------------------------------------------ ----- ---------
Operating loss (11,228) (12,914)
Finance income 195 20
Finance expense (25) (516)
------------------------------------------------ ----- ---------
Loss before income tax (11,058) (13,410)
Taxation 6 1,369 2,063
------------------------------------------------ ----- ---------
Loss and total comprehensive loss for
the year (9,689) (11,347)
------------------------------------------------ ----- ---------- ---------
Loss and total comprehensive loss attributable
to equity owners of the Company (9,689) (11,347)
------------------------------------------------ ----- ---------- ---------
Basic and diluted loss per ordinary share 7 (17.0p) (29.0p)
------------------------------------------------ ----- ---------- ---------
Condensed Consolidated Statement of Financial Position
as at 31 March 2022
Unaudited Audited
2022 2021
Note GBP'000 GBP'000
-------------------------------------- ----- ---------- ----------
Assets
Non-current assets
Property, plant and equipment 288 213
Right-of-use asset 373 473
Intangible assets 186 186
847 872
-------------------------------------- ----- ---------- ----------
Current assets
Trade and other receivables 536 444
Income tax receivable 1,392 1,832
Investments - bank deposit 5,000 7,500
Cash and cash equivalents 9,548 14,703
-------------------------------------- ----- ---------- ----------
16,476 24,479
-------------------------------------- ----- ---------- ----------
Total assets 17,323 25,351
-------------------------------------- ----- ---------- ----------
Equity
Equity attributable to owners of the
Company
Share capital 571 569
Share premium account 113,925 113,904
Capital redemption reserve 40,294 40,294
Merger reserve 2,223 2,223
Accumulated losses (147,125) (138,085)
-------------------------------------- ----- ---------- ----------
Total equity 9,888 18,905
-------------------------------------- ----- ---------- ----------
Liabilities
Current liabilities
Trade and other payables 6,873 5,727
Lease liabilities 146 157
7,019 5,884
-------------------------------------- ----- ---------- ----------
Non-current liabilities
Lease liabilities 416 562
-------------------------------------- ----- ---------- ----------
416 562
-------------------------------------- ----- ---------- ----------
Total liabilities 8 7,435 6,446
-------------------------------------- ----- ---------- ----------
Total equity and liabilities 17,323 25,351
-------------------------------------- ----- ---------- ----------
Condensed Consolidated Statement of Changes in Equity
for the year ended 31 March 2022
Share Capital
Share premium redemption Merger Accumulated Total
capital account reserve reserve losses equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- -------- ----------- -------- ------------ ---------
As at 1 April 2020 318 97,890 40,294 2,223 (127,502) 13,223
Issue of ordinary
shares 251 17,251 - - - 17,502
Costs of share issue - (1,237) - - - (1,237)
Credit on share-based
payment - - - - 764 764
Loss and total comprehensive
loss for the year - - - - (11,347) (11,347)
As at 31 March 2021
(audited) 569 113,904 40,294 2,223 (138,085) 18,905
Issue of ordinary
shares 2 21 - - - 23
Credit on share-based
payment - - - - 649 649
Loss and total comprehensive
loss for the year - - - - (9,689) (9,689)
As at 31 March 2022
(unaudited) 571 113,925 40,294 2,223 (147,125) 9,888
------------------------------ -------- -------- ----------- -------- ------------ ---------
Condensed Consolidated Statement of Cash Flows
for the year ended 31 March 2022
Unaudited Audited
2022 2021
Note GBP'000 GBP'000
Cash flows from operating activities
Cash used in operations 9 (9,196) (12,075)
Overseas taxes paid (52) (5)
Income tax credit received 1,862 6,061
Interest paid (25) (33)
Net cash used in operating activities (7,411) (6,052)
Cash flows from investing activities
Capital expenditure - Fixed Assets (302) (25)
Interest received 26 27
Net cash (used in)/generated from investing
activities (276) 2
Cash flows from financing activities
Proceeds from the issue of ordinary
shares 23 17,502
Costs of share issue - (1,237)
Bank deposit matured/(invested) 2,500 (7,500)
Lease payments (157) (154)
Net cash generated from financing activities 2,366 8,611
---------------------------------------------- ----- ---------- ---------
Net (decrease)/increase in cash and
cash equivalents (5,321) 2,561
Effect of FX movements on cash balances 166 (483)
Cash and cash equivalents at the start
of year 14,703 12,625
Cash and cash equivalents at the end
of the year 9,548 14,703
---------------------------------------------- ----- ---------- ---------
Notes to the Financial Statements
for the year ended 31 March 2022
1. General information
ReNeuron Group plc ("the Company") and its subsidiaries
(together "the Group") are engaged in the research and development
of therapies using stem cells. The Company is a public limited
company incorporated and domiciled in England with registered
number 05474163. Its shares are admitted to trading on the AIM
market of the London Stock Exchange.
2. Basis of preparation
The unaudited financial information included in this preliminary
results announcement for the year ended 31 March 2022 and audited
financial information for the year ended 31 March 2021 does not
comprise statutory accounts within the meaning of section 434 of
the Companies Act 2006. The information has been extracted from the
draft statutory financial statements for the year ended 31 March
2022 which will be delivered to the Registrar of Companies in due
course and the report of the auditors for these statutory financial
statements is expected to include an emphasis of matter in respect
of a material uncertainty in relation to going concern, as further
outlined in note 3. Statutory financial statements for the year
ended 31 March 2021 were approved by the Board of directors on 6
August 2021 and have been delivered to the Registrar of Companies.
The report of the auditors on these financial statements was
unqualified.
The financial statements have been prepared in accordance with
International Accounting Standards in conformity with the Companies
Act 2006 (IFRS), and the applicable legal requirements of the
Companies Act 2006.
Whilst the financial information included in this preliminary
announcement has been prepared in accordance with IFRS, this
announcement does not contain sufficient information to comply with
IFRS. The accounting policies used in the preparation of these
unaudited financial statements are consistent with those used in
the preparation of the audited financial statements for the year
ended 31 March 2021.
3. Going concern
The Group is expected to incur further costs as it continues to
develop its technologies through the research and pre-clinical
development pathway. The operations of the Group are currently
being financed from funds that have been raised from share
placings, commercial partnerships and grants.
The Group actively seeks further business development and
commercial opportunities to support its ongoing development
programmes. The Board places considerable emphasis on communication
with shareholders, potential investors and other commercial
organisations in order to maximise the chances of success in
exploiting these opportunities. Following a strategic decision, it
was announced in January 2022 that the internal development of the
Group's hRPC programme would be halted, with existing resources
refocused on the Group's exosome technology platform extending the
companies cash runway. It is considered that this strategy provides
the best opportunity to create increasing and sustainable
shareholder value.
Based on the above, the Directors expect that the Group's
current financial resources will be sufficient to support the
business until at least mid-2023 and the Directors continue to seek
opportunities to secure further revenues / funding sufficient for
the future needs of the business beyond mid-2023.
The Directors therefore consider it appropriate to continue to
adopt the going concern basis in the preparation of these financial
statements. However, there is no guarantee that attempts to secure
adequate additional revenues / funding on a timely basis will be
successful and therefore this represents a material uncertainty,
which may cast significant doubt about the Group's and Company's
ability to continue as a going concern. These financial statements
do not include the adjustments that would result if the Group were
unable to continue as a going concern.
4. Research and development costs
All research and development costs incurred in the year have
been charged directly to the Group Statement of Comprehensive
Income.
5. Operating expenses
Unaudited Audited
2022 2021
GBP'000 GBP'000
---------------------------------------------- --------- --------
Loss before income tax is stated after
charging:
---------------------------------------------- --------- --------
Research and development costs:
Employee benefits 2,530 3,258
Depreciation of property, plant and equipment 199 216
Depreciation of right-of-use asset - 19
Other expenses 5,339 6,010
---------------------------------------------- --------- --------
Total research and development costs 8,068 9,503
---------------------------------------------- --------- --------
General and administrative costs:
Employee benefits 2,308 2,190
Legal and professional fees 176 653
Depreciation of property, plant and equipment 25 46
Depreciation of right-of-use asset 100 99
Loss on disposal of fixed assets 3 2
Other expenses 951 75
---------------------------------------------- --------- --------
Total general and administrative costs 3,563 3,746
---------------------------------------------- --------- --------
Total research and development costs and
general and administrative costs 11,631 13,249
---------------------------------------------- --------- --------
6. Taxation
No corporation tax liability arises on the results for the year
due to the loss incurred.
As a loss-making small and medium-sized enterprise, the Group is
entitled to research and development tax credits at 14.5% (2020:
14.5%) on 230% (2020: 230%) of qualifying expenditure for the year
to 31 March 2021.
Unaudited Audited
2022 2021
GBP'000 GBP'000
--------------------------------------- --------- --------
UK research and development tax credit
at 14.5% (2021: 14.5%) 1,421 2,068
Overseas taxation (52) (5)
--------------------------------------- --------- --------
1,369 2,063
--------------------------------------- --------- --------
The tax credit compares with the loss for the year as
follows:
Unaudited Audited
2022 2021
GBP'000 GBP'000
---------------------------------------------- --------- --------
Loss before income tax 11,058 13,410
---------------------------------------------- --------- --------
Loss before income tax multiplied by the
main rate of corporation tax of 19% (2021:
19%) 2,101 2,548
---------------------------------------------- --------- --------
Effects of:
- difference between depreciation and capital
allowances 42 (33)
- expenses not deductible for tax purposes (108) (132)
- losses not recognised (644) (550)
- adjustments in respect of prior year 30 236
Overseas taxes paid (52) (5)
---------------------------------------------- --------- --------
Tax credit 1,369 2,063
---------------------------------------------- --------- --------
No deferred tax asset has been recognised by the Group as there
are currently no foreseeable trading profits.
7. Basic and diluted loss per ordinary share
The basic and diluted loss per share is calculated by dividing
the loss for the financial year of GBP9,689,000 (2021: 11,347,000)
by 56,975,677 shares (2021: 39,128,925 shares), being the weighted
average number of 1p Ordinary shares in issue during the year.
Potential Ordinary shares are not treated as dilutive as the
entity is loss making.
8. Ageing profile of financial liabilities
Unaudited Audited
2022 2021
GBP'000 GBP'000
------------------------------------------- --------- --------
Trade and other payables due within twelve
months 6,873 5,727
Current lease liabilities - due within
one year 146 157
Non-current lease liabilities - due after
more than one year 416 562
------------------------------------------- --------- --------
7,435 6,446
------------------------------------------- --------- --------
9. Cash used in operations
Unaudited Audited
Year Year
ended ended
31-Mar 31-Mar
2022 2021
GBP'000 GBP'000
Loss before income tax (11,058) (13,410)
Adjustments for:
Finance income (195) (20)
Finance expense 25 516
Depreciation of property, plant and
equipment 224 262
Depreciation of right-of-use-asset 100 118
Loss on disposal of fixed assets 3 2
Share-based payment charges 649 764
Changes in working capital:
Receivables (90) 245
Payables 1,146 (552)
Cash used in operations (9,196) (12,075)
--------------------------------------- ---------- ---------
10. Reconciliation of net cash flow to movement in net debt
Unaudited Audited
2022 2021
GBP'000 GBP'000
------------------------------------------------- --------- --------
(Decrease)/increase in cash and cash equivalents (5,321) 2,561
Effect of foreign exchange differences 166 (484)
Lease repayments 182 187
Lease interest (25) (32)
Net funds at start of period 13,984 11,752
------------------------------------------------- --------- --------
Net funds at end of period 8,986 13,984
------------------------------------------------- --------- --------
11. Analysis of net funds
Unaudited Audited
2022 2021
GBP'000 GBP'000
-------------------------- --------- --------
Cash and cash equivalents 9,548 14,703
Lease liabilities (562) (719)
-------------------------- --------- --------
Net funds 8,986 13,984
-------------------------- --------- --------
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END
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July 04, 2022 02:00 ET (06:00 GMT)
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