15 May 2024
ValiRx PLC
("ValiRx" or the
"Company")
Full Year Results and Notice of
AGM
London, UK - ValiRx Plc (AIM: VAL), a life
science company focusing on early-stage cancer therapeutics and
women's health, announces its audited results for the year ended 31
December 2023.
Highlights
Operational Highlights:
·
Initiation of Evaluation Agreement with StingRay Bio and
expanded evaluation agreement with Barcelona University
·
Post-period initiation of evaluation agreements with Imperial
College London and Dundee University
·
Launch of subsidiary Inaphaea BioLabs to conduct internal
laboratory based evaluation experiments and to offer external
services; with first revenue generating client contract
signed
·
Acquisition of scientific assets of Imagen Therapeutics,
including a biobank of patient derived cell models
Financial
Highlights:
·
Research and developments costs of £383,362 for
the year ended 31 December 2023 as compared to £551,233 in 2022, a
decrease of £167,871
·
Administrative expenses of £1,886,401 for the year
ended 31 December 2023 as compared to £1,502,355 in 2022, an
increase of £384,046 reflecting increased spending in the set-up of
the laboratory facility
·
Total comprehensive loss for the year ended 31
December 2023 of £2,037,701 as compared to £2,366,488 in 2022, a
decrease of £328,787 and a loss per share of 2.01p as compared to
3.06p in 2022
·
Cash balance at 31 December 2023 of £174,684 as
compared to £1,137,477 in 2022
Material uncertainty relating to going
concern
The Auditors have drawn attention to the policy
on Going Concern within note 2 to the financial statements, which
indicates that the accounts have been prepared on the going concern
basis. The Board has referred to the fact that the Group and Parent
Company are reliant on future fund raisings to continue their
activities as budgeted. Should future fund raisings be
unsuccessful, this may cast significant doubt on the Group and
parent Company's ability to continue as a going concern. The
Auditors opinion is not modified in respect of this matter. The
Auditor's report contained in the Company's Annual Report is set
out in full in note 4 further below.
Notice of
AGM
The Company's Annual General Meeting ("AGM")
will be held at 1:00 pm on 20 June 2024 at the offices of DAC
Beachcroft LLP at The Walbrook Building, 25 Walbrook, London EC4N
8AF. A copy of the Company's annual report and accounts, together
with the Notice of AGM, have been posted to all shareholders and
will shortly be available on the Company's website
www.valirx.com.
The information contained within this
announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR"). The Directors of
the Company take responsibility for this announcement.
For more information, please
contact:
ValiRx
plc
Dr Suzanne Dilly, CEO
|
Tel: +44 (0)
115 784 0026
www.valirx.com
Suzanne.Dilly@valirx.com
|
V Formation
(Public Relations)
Lucy Wharton - Senior PR Executive
Sue Carr - Director
|
+44 (0) 115
787 0206
www.vformation.biz
lucy@vformation.biz
sue@vformation.biz
|
Cairn
Financial Advisers LLP (Nominated Adviser)
Liam Murray/Jo Turner/Ludovico
Lazzaretti
|
Tel: +44 (0)
20 7213 0880
|
Shard Capital
Partners LLP (Sole Broker)
Damon Heath
|
Tel: +44 (0)
20 7186 9000
|
Notes for
Editors
About
ValiRx
ValiRx is a life science company focused on
early-stage cancer therapeutics and women's health, accelerating
the translation of innovative science into impactful medicines to
improve patient lives.
ValiRx provides the scientific, financial, and
commercial framework for enabling rapid translation of innovative
science into clinical development.
Using its extensive and proven experience in
research and drug development, the team at ValiRx selects and
incubates promising novel drug candidates and guides them through
an optimised process of development, from pre-clinical studies to
clinic and investor-ready assets.
ValiRx connects diverse disciplines across
scientific, technical, and commercial domains, with the aim of
achieving a more streamlined, less costly, drug development
process. The team works closely with carefully selected
collaborators and leverages the combined expertise required for
science to advance.
Lead candidates from ValiRx's portfolio are out
licensed or partnered with investors through ValiRx subsidiary
companies for further clinical development and
commercialisation.
ValiRx listed on the AIM Market of the London
Stock Exchange in October 2006 and trades under the ticker symbol:
VAL.
For further information, visit:
www.valirx.com
Chairman's Report for the year ended 31 December
2023
The last few years are widely acknowledged to
have been challenging for the biotech industry across the board and
specifically for publicly listed companies. Investor interest has
significantly retreated, most likely driven by a combination of
geo-political events and the dramatic rise in interest rates to
tackle high inflation.
Not surprisingly, ValiRx has not been immune to
these external factors, further exacerbated by slower than expected
progress in key projects, such as VAL201 out-licencing and, to a
lesser extent, protracted negotiations on university-derived
evaluation agreements.
The funds secured in January 2023 have enabled
ValiRx to progress our development pipeline and, importantly, to
initiate the build-and-buy strategy to establish our translational
contract research organisation (tCRO®), branded as Inaphaea
Biolabs.
Since its incorporation in January 2023,
Inaphaea has leased, equipped and validated a new laboratory in
Nottingham, recruited a highly qualified team and is beginning to
build a strong market presence in translational testing services.
Critically, the funding secured earlier in the year also placed
ValiRx in a strong position to respond rapidly to the offer for
sale of the liquidated assets of Imagen Therapeutics. This was a
highly competitive process and a quick response was
imperative.
The acquired assets comprise a wide range of
relevant analytical equipment and a biobank of patient -derived
cancer cells (PDCs) accumulated by Imagen over a number of years.
Ownership of the PDC biobank has given Inaphaea a clear competitive
advantage and will become a corner stone of the tCRO® concept. Work
is now underway to identify which cancers are of greatest market
interest to be able to prioritise full characterisation of the
appropriate cells for use in the provision of services and product
sales. In addition, all ValiRx in-house development projects have
been transferred into Inaphaea and benefitting from access to the
PDCs. This has also resulted in considerable cost savings relative
to the use of external contractors.
After extensive business development activities
for VAL401, we were pleased to have entered into a letter of intent
with Ambrose Healthcare for development of this unique compound.
With a focus on rare diseases and patients managed in hospitals, we
believe the team at Ambrose have the right skills and experience to
progress VAL401 into clinical studies when the necessary funding
has been secured.
In summary, despite significant challenges
facing the biotech sector in 2023, we were pleased to have secured
sufficient investment to progress the dual track strategy of
developing a risk-balanced pre-clinical pipeline and building a
tCRO®, Inaphaea Biolabs, to generate 3rd party income.
With the recently announced Board changes, we
look forward to continuing commercial progress in 2024 and
establishing Inaphaea as a leader in the use of PDCs to enhance the
translation of novel pre-clinical assets into clinical
development.
Kevin
Cox
Chairman
13 May 2024
Chief
Executive's Report for the year ended 31 December
2023
In this, my final Chief Executive's Report, I
would like to take the opportunity to reflect on progress by the
Group not just over the past year, but to include the context of
the previous four years.
With the launch of Inaphaea BioLabs in Q1 of
2023, we progressed the ambitions of the ValiRx group to move away
from a wholly virtual biotech company and towards a balanced,
early-stage discovery and preclinical biotechnology group. Although
the virtual model was preferred for the Group as a "single asset"
group, as the expansion and risk diversification of the preclinical
pipeline continues, the value of controlling our own laboratory
facility increases proportionally. These early-stage assets need
standardised experimental procedures conducting for initial
assessment and for advancing the biological understanding of the
drug candidate molecules. Access to both the expertise within
Inaphaea and the facilities enables a time and cost-efficient
turnaround.
The addition of the scientific assets from
Imagen Therapeutics provided an opportunity to launch our
translational Contract Research Organisation (tCRO®) with a truly
valuable biobank of patient derived tumour cell models (PDCs) -
covering samples from over 500 tissue collections, grown into cell
models.
Work continues on the development,
characterisation and optimisation of these samples, but within
months of on-boarding the biobank, Inaphaea had secured the first
service contract from an external client to screen a focussed
library of drug candidates against a PDC sample to seek anti-cancer
activity. Considerable interest has also been shown in the
use of samples from our biobank by other researchers, and we have
developed commercial frameworks to offer these samples under a
range of different use categories, including for preclinical
research, for commercial incorporation into medical devices and for
provision in further specialist third party CRO assays.
The PDCs provide the capability to produce
experimental procedures in the Inaphaea facility that more closely
model the human disease state compared to fully immortalised cell
lines. We minimise the use of non-human growth factors and optimise
selective growth conditions to ensure we retain both the cancerous
cells and, where appropriate, a proportion of the supportive
surrounding cells in the samples. These techniques enable us to
provide a differentiated and more translational service.
The tCRO® concept is built on the premise of
providing a coherent network of translational science, bridging a
number of technologies to create a more complete picture of the
biological activity of a drug candidate. As part of our process to
further build the tCRO® service offering, we have commenced
assembling a range of related services via collaborative services
agreements with third party service providers. These providers have
been selected specifically with their relationship to the Inaphaea
services in mind, and are trusted partners with whom we would
collaborate (and in many cases have done so) on our own projects,
and hence we recommend them to our clients.
The benefits of the collaborative services
approach are many - from the client perspective, the ability to
access all the services seamlessly under a single service agreement
creates efficiency and, for Inaphaea, we can have confidence that
the upstream or downstream processes have been conducted in a
manner and with partners that we are confident in working with.
Additional synergism is seen through combined marketing, business
development, and of course, our exposure to their established
client bases.
So, although we are building the Inaphaea
customer base from a clean page, we have the advantage of our
collaborators networks to build on.
The pipeline of client prospects within
Inaphaea is looking strong, with a steady build of prospects
throughout the second half of 2023. Although the nature of our
industry is of long-term research budget planning with associated
long lead times, our current pipeline of prospects is progressing
well. As the catalogue of characterised PDCs is developed we expect
this to grow further with product license as well as service
opportunities.
The in-house research evaluation pipeline was
boosted by two programmes within 2023, with the Barcelona agreement
being expanded to encompass an additional project, as well as an
evaluation project initiated in Q4 on an asset from StingRay Bio.
The latter demonstrates our intent to work with innovators in all
capacities; we are not restricted to the university sector to
source innovative projects for development. We look forward to
progressing both of these projects to meet the timelines for a
decision on in-licensing within 2024.
Post period two additional programmes from
Dundee University and Imperial College London have been secured
into evaluation agreements, with Dundee agreeing to an over-arching
agreement to encompass future projects. On reflection of our
current pipeline of new projects, consisting of Cytolytix plus four
active evaluation agreements we have made significant steps towards
bringing a balanced pipeline to the Group.
The assets currently in the new pipeline
include a mixture of peptides and small molecules; cover a range of
cancer types, and have a range of characteristics of validated,
novel or unknown target activities. Although all early stage
developments, this risk diversification across multiple programmes
enables a genuine scientific assessment of all, and a greater
chance of success with subsequent returns of value to shareholders.
With preclinical attrition rates in oncology programmes thought to
be as high as 90%, further growth of the pipeline is required to
truly balance the risk and avoid the risks of any single project
being inappropriately prioritised or of being continued beyond the
natural point of attrition.
The announcement of the Option Agreement for
VAL401 with Ambrose Healthcare was a key milestone in 2023, with
the maximum Option term concluding within 2024. Ambrose's
commitment to progress VAL401 through remaining clinical
development and commercialisation is an exciting development and I
am looking forward to progressing this partnership.
VAL201 remains under the Letter of Intent with
TheoremRx and we noted towards the conclusion of 2023 their
progression towards a merger with Nasdaq company EUDA, which marked
a significant step forward in publicly revealing their progression
towards financing.
Outlook
2024 will see another year of significant
evolution, with the changes to the Board composition providing an
opportunity to harness new expertise and skills into the Group,
enabling further honing of the strategy to promote growth and
development across all strands of the portfolio.
While 2023 witnessed the launch of the Inaphaea
BioLabs facility, with the Group shifting from being a wholly
virtual biotech group to have in-house capability to conduct our
experiments in-house; we view 2024 as the stepping stone to
consolidate that growth. Anticipating conversion of the pipeline of
commercial opportunity into further sales within Inaphaea in 2024
thus demonstrating the value of Inaphaea for both internal project
progression and revenue generation.
The evaluation project pipeline will also
continue to expand, with two further evaluation agreements executed
post period, and research on these is already underway in our
facility. Further negotiations are ongoing for additional projects,
with a target of 1-2 further within 2024, with some of those
negotiation expected to carry into 2025.
Financial
overview
Our financial results show the total
comprehensive loss for the year ended 31 December 2023 of
£2,037,701 (2022: £2,366,488) and a loss per share of 2.01p (2022:
Loss - 3.06p).
Research and developments costs were £383,362
for the year ended 31 December 2023 as compared to £551,233 in
2022, a reduction of £167,871. In addition, total wage costs of
£462,862 (2022: £254,050) were expended on research and development
during the year.
Administrative expenses were £1,886,401 (2022:
£1,502,355) for the year ended 31 December 2023 an increase of
£384,046.
Cash at the bank at 31 December 2023 was
£174,684 compared to £1,137,477 in 2022.
I would like to thank the staff and Board
members for all their contributions and shareholders for their
continued support. With further evolution and progression of the
Company strategy under the new management team; the Company offers
potential for change and prospects for Company growth into the
future.
Dr S J
Dilly
Chief Executive Officer
13 May 2024
Consolidated
Statement of Profit or Loss and Other Comprehensive Income for the
year ended 31 December 2023
|
2023
|
2022
|
|
£
|
£
|
CONTINUING OPERATIONS
|
|
|
TURNOVER
|
9,600
|
|
Cost of sales
|
(1,440)
|
|
GROSS PROFIT
|
8,160
|
|
Research and developments
|
(383,362)
|
(551,233)
|
Administrative expenses
|
(1,886,401)
|
(1,502,355)
|
Share-based payment charge
|
(36,936)
|
(539,791)
|
|
|
|
OPERATING LOSS
|
(2,298,539)
|
(2,593,379)
|
Finance costs
|
(4,419)
|
(5,456)
|
LOSS
BEFORE INCOME TAX
|
(2,302,958)
|
(2,598,835)
|
Income tax credit
|
175,173
|
192,671
|
LOSS
AFTER INCOME TAX
|
(2,127,785)
|
(2,406,164)
|
Non-controlling interest
|
90,084
|
39,676
|
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
|
(2,037,701)
|
(2,366,488)
|
|
|
|
LOSS
PER SHARE - BASIC AND DILUTED
|
(2.01p)
|
(3.06p)
|
Consolidated
Statement of Financial Position for the year ended
31 December 2023
|
|
|
|
|
|
2023
|
2022
|
|
|
£
|
£
|
|
ASSETS
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
Goodwill
|
1,602,522
|
1,602,522
|
|
Intangible assets
|
718,814
|
903,900
|
|
Property, plant and
equipment
|
242,625
|
-
|
|
Right-of-use assets
|
|
5,561
|
|
|
2,563,961
|
2,511,983
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
Inventory
|
69,002
|
-
|
|
Trade and other
receivables
|
147,618
|
133,815
|
|
Tax receivable
|
175,173
|
192,671
|
|
Cash and cash equivalents
|
174,684
|
1,137,477
|
|
|
566,477
|
1,463,963
|
|
|
|
|
|
TOTAL ASSETS
|
3,130,438
|
3,975,946
|
|
|
|
|
|
EQUITY
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
Called up share capital
|
9,707,266
|
9,695,120
|
|
Share premium
|
27,870,548
|
26,772,630
|
|
Merger reserve
|
637,500
|
637,500
|
|
Reverse acquisition
reserve
|
602,413
|
602,413
|
|
Share option reserve
|
1,082,163
|
986,816
|
|
Retained earnings
|
(36,681,340)
|
(34,643,639)
|
|
|
3,218,550
|
4,050,840
|
|
Non-controlling interests
|
(314,623)
|
(224,539)
|
|
TOTAL EQUITY
|
2,903,927
|
3,826,301
|
|
|
|
|
|
LIABILITIES
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
|
Borrowings
|
11,857
|
22,070
|
|
Lease liabilities
|
|
-
|
|
|
11,857
|
22,070
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
Trade and other payables
|
204,441
|
111,933
|
|
Borrowings
|
10,213
|
9,962
|
|
Lease liabilities
|
-
|
5,680
|
|
|
214,654
|
127,575
|
|
|
|
|
|
TOTAL LIABILITIES
|
226,511
|
149,645
|
|
|
|
|
|
TOTAL EQUITY AND LIABILITIES
|
3,130,438
|
3,975,946
|
|
|
|
|
|
| |
Consolidated
Statement of Changes in Equity for the year ended
31 December 2023
|
Share capital
|
Share premium
|
Merger reserve
|
Reverse acquisition reserve
|
Share-based payment reserve
|
Non-controlling interest
|
Retained earnings
|
Total
|
|
£
|
£
|
£
|
£
|
£
|
£
|
£
|
£
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2022
|
9,669,995
|
24,490,618
|
637,500
|
602,413
|
491,219
|
(184,867)
|
(32,292,507)
|
3,414,371
|
|
|
|
|
|
|
|
|
|
Changes in equity
|
|
|
|
|
|
|
|
|
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
(39,676)
|
(2,366,488)
|
(2,406,164)
|
Issue of shares
|
25,125
|
2,462,250
|
-
|
-
|
-
|
-
|
-
|
2,487,375
|
Cost of shares issued
|
-
|
(209,076)
|
-
|
-
|
-
|
-
|
-
|
(209,076)
|
Lapse of share options and
warrants
|
-
|
28,838
|
-
|
-
|
(44,194)
|
-
|
15,356
|
-
|
Movement in year
|
|
|
|
|
539,791
|
4
|
-
|
539,795
|
Balance at 31 December 2022
|
9,695,120
|
26,772,630
|
637,500
|
602,413
|
986,816
|
(224,539)
|
(34,643,639)
|
3,826,301
|
Changes in equity
|
|
|
|
|
|
|
|
|
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
(90,084)
|
(2,037,701)
|
(2,127,785)
|
Issue of shares
|
12,146
|
1,323,854
|
-
|
-
|
-
|
-
|
-
|
1,336,000
|
Cost of shares issued
|
-
|
(167,525)
|
-
|
-
|
-
|
-
|
-
|
(167,525)
|
Movement in year
|
-
|
(58,411)
|
-
|
-
|
95,347
|
-
|
-
|
36,936
|
Balance at 31 December 2023
|
9,707,266
|
27,870,548
|
637,500
|
602,413
|
1,082,163
|
(314,623)
|
(36,681,340)
|
2,903,927
|
Consolidated
Statement of Cash Flows for the year ended
31 December 2023
|
|
2023
|
2022
|
|
|
Notes
|
£
|
£
|
|
Cash
flows from operations
|
|
|
|
|
Cash outflow from
operations
|
1
|
(1,961,697)
|
(1,841,443)
|
|
Interest paid
|
|
(3,325)
|
(4,215)
|
|
Tax credit received
|
|
192,671
|
133,413
|
|
Net
cash outflow from operating activities
|
|
(1,772,351)
|
(1,712,245)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
Purchase of intangible fixed
assets
|
|
(15,000)
|
-
|
|
Purchase of property, plant and
equipment
|
|
(291,181)
|
-
|
|
Net
cash inflow from financing activities
|
|
(306,181)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
Bank loan repayment
|
|
(9,962)
|
(13,249)
|
|
Repayment of lease
liabilities
|
|
(6,774)
|
(9,000)
|
|
Share issue
|
|
1,300,000
|
2,487,375
|
|
Costs of shares issued
|
|
(167,525)
|
(209,076)
|
|
Net
cash inflow from financing activities
|
|
1,115,739
|
2,256,050
|
|
|
|
|
|
|
Increase/(decrease) in cash and cash
equivalents
|
|
(962,793)
|
543,805
|
|
|
|
|
|
|
Cash
and cash equivalents at beginning of year
|
2
|
1,137,477
|
593,672
|
|
|
|
|
|
|
Cash
and cash equivalents at end of year
|
2
|
174,684
|
1,137,477
|
|
Notes to the
Consolidated Statement of Cash Flows for the year ended
31 December 2023
1.
|
RECONCILIATION OF OPERATING LOSS TO CASH GENERATED FROM
OPERATIONS
|
|
|
2023
|
|
2022
|
|
|
£
|
|
£
|
|
|
|
|
|
Operating loss
|
|
(2,298,539)
|
|
(2,593,379)
|
Amortisation and impairment of
intangible assets
|
|
200,086
|
|
204,216
|
Depreciation of right-of-use
assets
|
|
5,561
|
|
7,717
|
Depreciation of property, plant and
equipment
|
|
48,556
|
|
|
Increase in inventory
|
|
(69,002)
|
|
|
Increase in trade and other
receivables
|
|
(13,803)
|
|
(60,886)
|
Increase/(decrease) in trade and
other payables
|
|
128,508
|
|
61,098
|
Share-based payments
charge
|
|
36,936
|
|
539,791
|
Net
cash outflow from operations
|
|
(1,961,697)
|
|
(1,841,443)
|
2.
CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statement of Cash
Flows in respect of cash and cash equivalents are in respect of
these Statement of Financial Position amounts:
|
|
31 December
2023
|
|
1 January
2023
|
|
|
£
|
|
£
|
Cash and cash equivalents
|
|
174,684
|
|
1,137,477
|
|
|
|
|
|
|
|
31
December 2022
|
|
1 January
2022
|
|
|
£
|
|
£
|
Cash and cash equivalents
|
|
1,137,477
|
|
593,672
|
Notes to the
Consolidated Financial Statements for the year ended 31 December
2023
1.
STATUTORY INFORMATION
ValiRx Plc is a company incorporated in the
United Kingdom, which is listed on the AIM market of the London
Stock Exchange Plc. The address of its registered office is
Stonebridge House, Chelmsford Road, Hatfield Heath, CM22
7BD.
The registered number of the Company is
03916791.
The principal activity of the Group is the
development of oncology therapeutics and companion
diagnostics.
The presentation currency of the financial
statements is the Pound Sterling (£).
The above information has been extracted from
the annual report and accounts for the year ended 31 December 2023
and, accordingly, references and page numbers may not be complete.
Shareholders should read the report and accounts in full which will
shortly be available from the Company's website.
2.
ACCOUNTING POLICIES
Basis of
preparation
The Group's financial statements have been
prepared in accordance with International Accounting
Standards in conformity with the requirements of the Companies Act
2006 as they apply to the financial statements of the Group
for the year ended 31 December 2023. The principal accounting
policies adopted by the Group and by the Company are set out
in note 2. The Group financial statements have been prepared under
the historical cost convention or fair value where
appropriate.
Going
concern
As part of their going concern review the
Directors have followed the guidelines published by the Financial
Reporting Council entitled "Guidance on the Going Concern Basis of
Accounting and Reporting on Solvency Risks- Guidance for directors
of companies that do not apply the UK Corporate Governance
Code".
The Group and Parent Company are subject to a
number of risks similar to those of other development stage
pharmaceutical companies. These risks include, amongst others,
generation of revenues in due course from the development portfolio
and risks associated with research, development, testing and
obtaining related regulatory approvals of its pipeline products.
Ultimately, the attainment of profitable operations is dependent on
future uncertain events which include obtaining adequate financing
to fulfil the Group's commercial and development activities and
generating a level of revenue adequate to support the Group's cost
structure.
The current economic environment is
challenging, and the Group has reported an operating loss for the
year. These losses are expected to continue in the current
accounting year to 31 December 2024.
The Directors have prepared detailed financial
forecasts and cashflows looking beyond 12 months from the date of
the approval of these financial statements. In developing these
forecasts, the Directors have made assumptions based upon their
view of the current and future economic conditions that are
expected to prevail over the forecast period. The Directors
estimate that the cash of £174,684 held by the Group as at 31
December 2023 together with cash receivable in January 2024 (see
below) will be sufficient to support the current level of
activities for at least the next 12 months. The Directors are
continuing to explore sources of finance available to the Group and
based upon initial discussions with a number of existing and
potential investors they have a reasonable expectation that they
will be able to secure sufficient cash inflows for the Group to
continue its activities beyond the 12 months from the date of
approval of these financial statements.
The Company carries out regular fund-raising
exercises in order that it can provide the necessary working
capital for the Group. Further funds may be required to finance the
Group's work programme. The Board expects to continue to raise
additional funding as and when required to cover the Group's
development, primarily from the issue of further shares.
In January 2024, the Company raised
approximately £1.8m, before expenses, through the issue of new
ordinary shares.
In the event that additional financing is not
secured when it is required, the Group would need to
consider:
·
reducing and/or deferring discretionary spending on one or
more research and development programmes; and/or
·
restructuring operations to change its overhead
structure.
Basis of
consolidation
The Group financial statements consolidate the
financial statements of the Company and all its subsidiaries ("the
Group"). Subsidiaries include all entities over which the Group has
the power to govern financial and operating policies. The existence
and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether
the Group controls another entity. Subsidiaries are consolidated
from the date on which control commences until the date that
control ceases. Intra-group balances and any unrealised gains and
losses on income or expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial
statements.
On 3 October 2006, ValiRx Bioinnovation Limited
('Bioinnovation') acquired 60.28% of the issued share capital of
ValiPharma Limited ('ValiPharma') in exchange for shares in
Bioinnovation. Concurrently, the Company, ("ValiRx"), acquired the
entire issued share capital of Bioinnovation in a share for share
transaction. As a result of these transactions, the former
shareholders of ValiPharma became the majority shareholders in
ValiRx. Accordingly, the substance of the transaction was that
ValiPharma acquired ValiRx in a reverse acquisition. Under IFRS 3
"Business Combinations", the acquisition of ValiPharma has been
accounted for as a reverse
acquisition.
In May 2008 the Company acquired the remaining
39.72% of the issued share capital of ValiPharma, which is now
wholly owned by the Group. This acquisition was accounted for using
the acquisition method of accounting.
In November 2013 ValiSeek Limited was formed to
enable the company to enter into a joint venture agreement. The
company has a 55.5% holding in the issued share capital of
ValiSeek.
In October 2023 the Company acquired 60%
of the issued share capital of Cytolytix Limited.
3.
LOSS PER SHARE
The loss and number of shares used in the
calculation of loss per ordinary share are set out
below:
|
|
2023
|
|
2022
|
|
|
£
|
|
£
|
|
|
|
|
|
Loss for the financial
period
|
|
(2,127,785)
|
|
(2,406,164)
|
Non-controlling interest
|
|
90,084
|
|
39,676
|
|
|
|
|
|
Loss
attributable to owners of Parent Company
|
|
(2,037,701)
|
|
(2,366,488)
|
|
|
|
|
|
Basic:
|
|
|
|
|
Weighted average number of
shares
|
|
101,570,021
|
|
77,301,896
|
Loss per share
|
|
(2.01p)
|
|
(3.06p)
|
The loss and the weighted average number of
shares used for calculating the diluted loss per share are
identical to those for the basic loss per share. The outstanding
share options and share warrants would have the effect of reducing
the loss per share and would therefore not be dilutive under IAS 33
'Earnings per Share'.
4.
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF VALIRX
PLC
Opinion
We have audited the financial statements of
ValiRx Plc (the 'Parent Company') and its subsidiaries (the
'Group') for the year ended 31 December 2023 which comprise the
Group Statement of Comprehensive Income, the Group and Company
Statements of Financial Position, the Group Statement of Cash
Flows, the Group and Company Statements of Changes in Equity and
the related notes, including a summary of significant accounting
policies. The financial reporting framework that has been applied
in their preparation is applicable law and UK adopted International
Accounting Standards, in conformity with the requirements of the
Companies Act 2006.
In our
opinion:
- the financial
statements give a true and fair view of the state of the Group's
and of the Parent Company's affairs as at 31 December
2023 and of the Group's loss for the year then ended;
- the Group's
financial statements have been prepared in accordance with UK
adopted International Accounting Standards in conformity with the
requirements of the Companies Act 2006;
- the Parent
Company financial statements have been properly prepared in
accordance with UK adopted International Accounting Standards
in conformity with the requirements of the Companies Act 2006;
and
- the financial
statements have been prepared in accordance with the requirements
of the Companies Act 2006.
Basis for
opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further
described in the Auditors' responsibilities for the audit of the
financial statements section of our report. We are
independent of the Group and Parent Company in accordance with the
ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Emphasis of
Matter
We draw attention to the value of goodwill in
the Consolidated Statement of Financial Position and the value of
investments in the Company Statement of Financial Position. The
value of investments represents the historic cost of acquisition of
investments less provisions for impairment. The value of goodwill
arises on consolidation and represents the excess between the value
of the underlying subsidiary on acquisition and the cost of
investment, less provisions for impairment.
Management's assessment of impairment includes
a review of the net present value of future potential cashflows of
the underlying assets. The basis of these valuations include a
number of variables within the calculations that are subjective and
based on professional judgments of expectations and estimates. This
also includes the expected potential around the success of the
future development and commercialisation of the Group's products,
VAL 201 and VAL 401.
While we have assessed management's judgements
and application of estimates in their calculations and consider
these to be reasonable, as set out in the key audit risks below,
there are several factors that could result in a material change in
the valuation of the underlying investments which could result in
an impairment of the investments and associated
goodwill.
Our opinion is not modified in respect of this
matter.
Conclusions
relating to going concern
Material uncertainty relating to going
concern
We draw your attention to the policy on Going
Concern within note 2 to the financial statements, which indicates
that the accounts have been prepared on the going concern basis.
The Board has referred to the fact that the Group and Parent
Company are reliant on future fund raisings to continue their
activities as budgeted. Should future fund raisings be
unsuccessful, this may cast significant doubt on the Group and
parent Company's ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
Key audit
matters
Key audit matters are those matters that, in
our professional judgment, were of most significance in our audit
of the financial statements of the current period and include the
most significant assessed risks of material misstatement (whether
or not due to fraud) we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
The key audit matters identified
were:
Impairment of
goodwill and intangibles
Area of focus
The Group has goodwill of £1.60 million and
intangible assets of £0.72 million.
IAS 36 requires at least annual impairment
assessments in relation to goodwill, indefinite-lived intangible
assets and intangible assets that are not yet ready for use, with
more regular assessments should an impairment trigger be
identified.
The determination of recoverable amount, being
the higher of value-in-use and fair value less costs of disposal,
requires judgement on the part of management in identifying and
then estimating the recoverable amount for the relevant
CGUs.
Recoverable amounts are based on management's
view of future cash flow forecasts and external market conditions
such as future pricing and the most appropriate discount
rate.
Management engaged an expert to assist them in
performing an annual impairment assessment which included the
assumptions and estimates around the success of the future
development and commercialisation of its products VAL 201 and VAL
401. Changes in these assumptions might give rise to a change in
the carrying value of intangibles and goodwill.
How our audit
addressed the area of focus
We obtained the report prepared by the expert
and gained an understanding of the key assumptions and judgements
underlying the assessment. We assessed the appropriateness of the
methodology applied and tested the mathematical accuracy of the
models.
We obtained an understanding of the stage of
product development and management's expected timelines for product
commercialisation, including updates on the achievement of expected
milestones.
We determined the judgement made by the
Directors that no impairment was required, and that the disclosures
made in the financial statements to be reasonable.
Going
concern
area of
focus
Refer to note 2 of the financial statements for
the Directors' disclosures of related accounting policies,
judgements and estimates. The Directors have concluded that they
have a reasonable expectation that the Group will have sufficient
cash resources and cash inflows to continue its activities for not
less than twelve months from the date of approval of these
financial statements and have therefore prepared these financial
statements on a going concern basis.
The Group had cash and cash equivalents of
£174,684 as at 31 December 2023.
Management produces a cash flow forecast based
on the board plans.
The key judgements within the cash flow
forecast that we particularly focused on were:
- The continued
availability of funding.
- The likely recovery
of other receivables.
- Cash flows expected
from research and development tax credits.- Flexibility of
development programme.
How our audit
addressed the area of focus
We assessed the reasonableness and support for
the judgments underpinning management's forecast, as well as the
sensitivity of projections to these judgements.
We reviewed management's financing plans and
considered the reasonableness of the assumptions within
management's proposed cost reduction actions, should future fund
raisings be lower than anticipated.
Our conclusion on management's use of the going
concern basis of accounting is included in the going concern
section of the report above.
We reviewed management's financing plans and
considered the reasonableness of the assumptions within
management's proposed cost reduction actions, should future fund
raisings be lower than anticipated.
Our conclusion on management's use of the going
concern basis of accounting is included in the going concern
section of the report above.
Our
application of materiality
When establishing our overall audit strategy,
we set certain thresholds which help us to determine the nature,
timing and extent of our audit procedures and to evaluate the
effects of misstatements, both individually and on the financial
statements as a whole.
We consider materiality to be the magnitude by
which misstatements, including omissions, could influence the
economic decisions of reasonable users that are taken on the basis
of the financial statements.
In order to reduce the probability that any
misstatement exceeds materiality to an appropriately low level, we
use a lower materiality level, performance materiality, to
determine the extent of testing needed. Importantly, misstatements
below these levels will not necessarily be evaluated as immaterial
as we also take account of the nature of identified misstatements,
and the particular circumstances of their occurrence, when
evaluating their effect of the financial statements as a
whole.
Based on our professional judgment, we
determined materiality for the financial statements as a whole and
performance materiality as follows:
Group and Parent Company materiality were set
at £168,200 and £125,000 respectively, based on 8% of loss before
tax and amortisation. In our professional judgement, this benchmark
is considered appropriate as it reflects the ongoing operational
requirements of the business to develop and build the
business.
Group and Parent Company performance
materiality were set at £126,200 and £93,700 respectively, based on
75% of materiality. In setting the level of performance
materiality, we consider a number of factors including the control
environment, our testing strategy, the total value of known and
likely misstatement (based on past experience and other factors)
and management's attitude towards proposed adjustments.
Component
materiality
For the purposes of our Group audit opinion, we
set materiality for each significant component of the Group based
on a percentage of Group materiality, dependent on the size and our
assessment of the risk of material misstatement of that
component.
Reporting
thresholds
We agreed with the Audit Committee that we
would report to them all unadjusted audit differences in excess of
£5,000, as well as differences below this threshold that, in our
view, warranted reporting on qualitative grounds.
An overview of
the scope of our audit
The audit was scoped to ensure that the audit
team obtained sufficient and appropriate audit evidence in relation
to significant operations of the Group during the year ended 31
December 2023. In particular, we looked at areas involving
significant accounting estimates and judgement by the Directors. We
also addressed the risk of management override of internal
controls, including an evaluation of whether there was evidence of
bias by the Directors that represented a risk of material
misstatement due to fraud.
As part of our planning, we assessed the risk
of material misstatement including those that required significant
auditor consideration at the component and group level. Procedures
were designed and performed to address the risk identified and for
the most significant assessed risks of material misstatement, the
procedures performed are outlined above in the key audit matters
section of this report.
Other
information
The Directors are responsible for the other
information. The other information comprises the information in the
Annual Report but does not include the financial statements and our
Report of the Auditors thereon.
Our opinion on the financial statements does
not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
Our opinion on the financial statements does
not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the financial statements, or our
knowledge obtained in the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial
statements or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this
regard.
Opinions on
other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in
the course of the audit:
- the information given in the Group Strategic
Report and the Report of the Directors for the financial year
for which the financial statements are prepared is consistent
with the financial statements; and
- the Group Strategic Report and the Report of
the Directors have been prepared in accordance with
applicable legal requirements.
Matters on
which we are required to report by exception
In the light of the knowledge and understanding
of the Group and the Parent Company and its environment obtained in
the course of the audit, we have not identified material
misstatements in the Group Strategic Report or the Report of the
Directors.
We have nothing to report in respect of the
following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
- adequate
accounting records have not been kept by the Parent Company, or
returns adequate for our audit have not been received from
branches not visited by us; or
- the Parent
Company financial statements are not in agreement with the
accounting records and returns; or
- certain
disclosures of Directors' remuneration specified by law are not
made; or
- we have not
received all the information and explanations we require for our
audit.
Responsibilities of
Directors
As explained more fully in the Statement of
Directors' Responsibilities set out on page 42, the Directors are
responsible for the preparation of the financial statements and for
being satisfied that they give a true and fair view, and for such
internal control as the Directors determine necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the
Directors are responsible for assessing the Group's and the Parent
Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to
liquidate the Group or the Parent Company or to cease operations,
or have no realistic alternative but to do so.
Auditors'
responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable
assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and
to issue a Report of the Auditors that includes our opinion.
Reasonable assurance is a high level of assurance but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of
these financial statements.
Irregularities, including fraud, are instances
of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect
material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
We are not responsible for preventing
irregularities. The primary responsibility for the prevention and
detection of fraud rest with both those charged with governance of
the entity and management.
Our approach to identifying and assessing the
risks of material misstatement in respect of irregularities,
including fraud and non-compliance with laws and regulations
included, but was not limited to, the following:
- the engagement
partner ensured that the engagement team collectively had the
appropriate competence, capabilities and skills to
identify or recognise non-compliance with applicable laws and
regulations;
- we identified
the laws and regulations applicable to the company through
discussions with the Directors and other management,
and from our commercial knowledge and experience of the medical
research and development sector;
- we focused on
specific laws and regulations which we considered may have a direct
material effect on the financial statements or the
operations of the company, including the Companies Act 2006,
taxation legislation and data protection, anti-bribery,
employment and health and safety legislation;
- we assessed the
extent of compliance with the laws and regulations identified above
through making enquiries of management and inspecting
legal correspondence; and
- identified laws
and regulations were communicated within the audit team regularly
and the team remained alert to instances of
non-compliance throughout the audit.
We assessed the susceptibility of the Company's
financial statements to material misstatement, including obtaining
an understanding of how fraud might occur, by:
- making
enquiries of management as to where they considered there was
susceptibility to fraud, their knowledge of actual,
suspected and alleged fraud; and
- considering the
internal controls in place to mitigate risks of fraud and
non-compliance with laws and regulations.
To address the risk of fraud through management
bias and override of controls, we:
- performed
analytical procedures to identify any unusual or unexpected
relationships;
- tested journal
entries to identify unusual transactions;
- assessed
whether judgements and assumptions made in determining the
accounting estimates were indicative of potential bias;
and
- investigated
the rationale behind significant or unusual
transactions.
In response to the risk of irregularities and
non-compliance with laws and regulations, we designed procedures
which included, but were not limited to:
- agreeing
financial statement disclosures to underlying supporting
documentation;
- reading the
minutes of meetings of those charged with governance;
- enquiring of
management as to actual and potential litigation and claims;
and
- reviewing
correspondence with HMRC, relevant regulators including the Health
and Safety Executive, and the company's legal
advisors.
Due to the inherent limitations of an audit,
there is a risk that we will not detect all irregularities,
including those leading to a material misstatement in the financial
statements or non-compliance with regulation. This risk increases
the more that compliance with a law or regulation is removed from
the events and transactions reflected in the financial statements,
as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities
occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or
misrepresentation.
A further description of our responsibilities
for the audit of the financial statements is located on the
Financial Reporting Council's website at
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our Report of the Auditors.
Use of our
report
This report is made solely to the Company's
members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we
might state to the Company's members those matters we are required
to state to them in a Report of the Auditors and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company and the
Company's members as a body, for our audit work, for this report,
or for the opinions we have formed.
Caution
regarding forward looking statements
Certain statements in this announcement, are,
or may be deemed to be, forward looking statements. Forward looking
statements are identified by their use of terms and phrases such as
''believe'', ''could'', "should" ''envisage'', ''estimate'',
''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will''
or the negative of those, variations or comparable expressions,
including references to assumptions. These forward-looking
statements are not based on historical facts but rather on the
Directors' current expectations and assumptions regarding the
Company's future growth, results of operations, performance, future
capital and other expenditures (including the amount, nature and
sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect
the Directors' current beliefs and assumptions and are based on
information currently available to the Directors. While management
believes that these forward-looking statements are reasonable as
and when made, there can be no assurance that future developments
affecting the Company will be those that it anticipates.
Factors that could cause actual results to
differ materially from those in the forward-looking statements
include risks relating to unanticipated costs, liabilities or
delays; failure or delays in research and development programs; the
safety and efficacy of the Company's product candidates and the
likelihood of clinical data to be positive and of such product
candidates to be approved by the applicable regulatory authorities;
unanticipated changes relating to competitive factors in the
Company's industry; risks relating to the Company's capitalisation,
resources and ownership structure, the availability of sufficient
resources for company operations and to conduct or continue planned
clinical development programs; the outcome of any legal
proceedings; risks related to the ability to correctly estimate
operating expenses; risks related to the ability to project future
cash utilisation and reserves needed for contingent future
liabilities and business operations; risks related to the changes
in market prices of the Company's ordinary shares; the Company's
ability to hire and retain key personnel; changes in law or
regulations affecting the Company; international, national or local
economic, social or political conditions that could adversely
affect the Company and its business; conditions in the credit
markets; risks associated with assumptions the Company makes in
connection with its critical accounting estimates and other
judgments.