TIDMVAL
RNS Number : 6492W
ValiRx PLC
27 April 2021
27 April 2021
("ValiRx", the "Company" or the "Group")
Full Year Results for the year ended 31 December 2020
Launch of new strategy and significant structural changes
implemented
Phase 1/2 clinical trial close out and reporting of lead asset
VAL201
London, UK - ValiRx plc (AIM:VAL), a clinical stage drug
development company, is pleased to announce its audited results for
the year ended 31 December 2020.
Highlights
Operational Highlights:
-- Launch of a new strategy and implemented significant
structural changes to develop a risk-diversified approach to
early-stage drug development.
-- Providing the scientific, financial and commercial framework
to enable rapid translation of innovative science into clinical
development.
-- New management and board appointed to deliver the strategy.
Dr Suzanne Dilly was appointed to the board as Chief Executive and
Dr Kevin Cox joined as the Non-executive Chairman of the board.
-- Phase 1/2 clinical trial close out and reporting of lead
asset VAL201, demonstrating good safety and tolerability and early
indications of efficacy.
-- Excellent progress in identifying new collaborative pipeline
projects, with KTH222 from Kalos Therapeutics under initial
evaluation.
Financial Highlights:
-- Combined total of GBP4.2m raised through equity placings and
warrant exercises during 2020 to provide runway for commercial and
scientific progress with the existing pipeline (VAL201, VAL301,
VAL401, BC201) and implementation of the strategy.
-- Cash balance at 31 December 2020 GBP1,846,901; Cash balance
at 31 March 2021 GBP1,502,885, demonstrating quarterly cash
requirement of approximately GBP350,000.
Post period highlights:
-- Extension of the collaboration between ValiRx and Physiomics
PLC to enable the systematic analysis of ValiRx's clinical results
using Physiomics Virtual Tumour model and related software to delve
deeper into the data. This will benefit the scientific foundation
of VAL201, and its use in prostate cancer, as well as two other
programmes involving the peptide, namely VAL301 and BC201.
A copy of the 2020 Annual Report & Accounts, together with a
Notice of Annual General Meeting, will be sent to all shareholders
in the next few days. A further announcement will made in due
course.
Dr Suzy Dilly, Chief Executive Officer of ValiRx, commented:
"The launch of our new strategy has enabled us to start building
connections with universities, institutions and medical research
charities. Innovators and technology transfer departments alike
have been able to introduce us to a range of fascinating projects.
We are looking forward to 2021 and are confident in the outlook for
ValiRx."
For further information, please contact:
ValiRx plc Tel: +44 (0) 2476
796496
www.valirx.com
Suzanne Dilly, CEO Suzanne.Dilly@valirx.com
Cairn Financial Advisers LLP (Nominated Tel: +44 (0) 20 7213
Adviser) 0880
Liam Murray / Jo Turner / Ludovico
Lazzaretti
Peterhouse Capital Limited (Sole Broker) Tel: +44 (0) 20 7469
Duncan Vasey / Lucy Williams / Eran 0930
Zucker
Optimum Strategic Communications Tel: +44 (0) 20 8148
Supriya Mathur/ Shabnam Bashir 3040
valirx@optimumcomms.com
About ValiRx plc
ValiRx accelerates the development of treatments in oncology and
women's health to improve patient lives. We provide the scientific,
financial and commercial framework towards enabling rapid
translation of innovative science into clinical development.
With our extensive and proven experience in research and drug
development, we select and incubate promising novel drug candidates
and guide them through an optimised process of development, from
pre-clinical studies to clinic and investor-ready assets.
Integrating science and business
We connect diverse disciplines across scientific, technical and
commercial domains, with the aim of achieving a more streamlined,
less costly, drug development process. We work closely with our
selected collaborators and leverage the combined expertise required
for science to advance.
Lead candidates from our portfolio are out-licensed or partnered
with investors through ValiRx subsidiary companies for further
clinical development and commercialisation.
https://www.valirx.com/
Chairman's Report for the year ended 31 December 2020
Having joined ValiRx in June 2020, I can only really comment on
activity in the second half of the year with any great insight.
Nevertheless, despite all the turmoil of the coronavirus pandemic
and restrictions on the Board to meet in person, I believe that
ValiRx has made excellent progress in realigning its strategy and
consolidating the position of all key projects. We also achieved a
major milestone with the close out and reporting of the VAL201
Phase I/II clinical trial, demonstrating good safety and
tolerability and early indications of efficacy.
During the latter half of 2020 the Company successfully made
significant changes to the way it operates and its strategic focus.
Operational changes included:
-- re-structuring the Board to ensure a breadth of skills and experience
-- reducing costs and streamlining the organisation
-- exiting non-core technologies that did not support the strategy
-- re-locating the office outside of London, and
-- introducing the new shareholder engagement process.
The successful fund-raise in July 2020 and completion of these
changes means that we now have a period of stability to implement
the new strategy and also to make commercial and scientific
progress with VAL201, VAL301, VAL401 and BC201.
The realignment of the strategy to focus on 'Connected
Innovation' and the development of a risk-balanced pipeline of
earlier stage projects is progressing well. The business
development team is building good relationships with a wide range
of innovators and investors and we have already identified a number
of interesting technologies which have entered our rigorous
evaluation process. The nature of our assessments means that not
all projects will be adopted into the pipeline therefore being
visible and accessible to scientists developing novel technologies
will be necessary to maintain a good flow of opportunities.
The new website and communications plan has been designed to
ensure ValiRx is recognised as a company that is 'open for
business'.
Selecting a commercial partner for VAL201 remains a high
priority for ValiRx and completion of the clinical trial and study
report at the end of 2020 has enabled us to actively engage with a
variety of interested parties. Due diligence of the science and
clinical data, commercial negotiations and internal decision-making
processes will all be on the critical path to a successful
outcome.
Effective communication with shareholders has also been high on
the agenda for ValiRx throughout 2020 and the Board is committed to
implementing processes that ensure information is made available in
a timely, fair and transparent way, and meets the regulatory
requirements of an AIM listed company. However, given the nature of
the biopharmaceutical industry, the uncertainties of novel
scientific development and the importance of commercial
confidentiality, there are likely to be periods when news flow is
slow. The adoption of the new strategy, focusing on multiple
programmes of earlier stage science, should increase the frequency
of scientific updates, as the need for patient confidentiality and
lengthy clinical processes will no longer be as relevant. As the
Covid rules gradually relax, we are looking forward to the time
when we can meet shareholders face-to-face and the opportunity to
put more colour on the business activities.
I believe the new strategy will deliver long term growth and
value creation for shareholders, but we are only at the beginning
of this journey and our activities in 2021 will be focused on
maintaining the momentum initiated in 2020.
We very much value the continued commitment of our shareholders
and thank you for your support and understanding through a period
of significant change for the Company and during an unprecedented
world crisis.
Kevin Cox
Chairman
26 April 2021
Chief Executive Officer's Report for the Year Ended 31 December
2020
The key theme for 2020 has been creating stability. Against the
backdrop of the pandemic as well as significant management and
strategy changes in the Company, I am delighted to summarise a year
of substantial progress at ValiRx.
VAL201 in prostate cancer
VAL201 is a short peptide being studied for the treatment of
prostate cancer. The peptide structure is inspired by the structure
of the naturally occurring androgen receptor and is designed to
intercept and prevent the binding of the androgen receptor to SRC
kinase; an enzyme implicated in cancerous cell growth pathways. By
preventing the androgen-mediated activation of SRC kinase, VAL201
can prevent cancerous cell proliferation (or growth) without
interfering with other functions of the androgen receptor or SRC
kinase. This precision method, mimicking a natural process,
proposes a high specificity of cancer treatment, with a lower side
effect profile.
In November 2020, ValiRx received the full dataset to be used
for the Clinical Study Report from the Phase 1/2 clinical trial of
lead asset, VAL201, for the treatment of locally advanced or
metastatic prostate cancer and other solid tumours and performed at
University College Hospital (UCLH), London. The dataset provides a
complete breakdown of the full data of safety and tolerability as
well as evidence for encouraging disease impact as observed during
the clinical trial. This data has been used to formulate the
Clinical Study Report and to report the results on the
www.clinicaltrials.gov database. Additional detailed analysis of
the results will form the basis of peer-reviewed journal
publications.
About the VAL201-001 clinical trial
The clinical trial opened to recruitment in December 2014 and
closed in January 2020. Patients were scheduled for treatment of a
once weekly injection of VAL201 in 3-week cycles for a maximum of 6
cycles. A total of 12 patients received at least 1 dose of
VAL201.
Patients were eligible if they were: Adult men (over the age of
18) with incurable locally advanced or metastatic prostate cancer
who had relapsed following radiotherapy treatment, are in 'watchful
waiting' or where a policy of intermittent hormone therapy had been
decided. Patients were expected to have no or only mild symptoms
relating to their prostate cancer.
In February 2021, ValiRx entered into a new agreement with
Physiomics PLC (AIM:PYC)("Physiomics"), an oncology consultancy
using mathematical models to support the development of cancer
treatment regimens and personalised medicine solutions. The new
agreement supersedes the previous agreement between Physiomics and
the Group announced on 13 September 2011.
Under the terms of the new agreement, ValiRx will benefit from
Physiomics' experience in modelling the effects of prostate cancer
treatment, as well the use of the latest version of its Virtual
Tumour(TM) technology, which will be applied to derive valuable
information from the additional data generated by the completed
clinical trial of VAL201. Physiomics will also support ValiRx in
modelling the use of the VAL201 peptide in endometriosis (VAL301)
and Coronavirus (BC201).
Physiomics has developed a quantitative systems pharmacology
approach that uses pre-clinical and clinical data to model the
activity of a drug candidate. This data can be used to explore the
mechanism of action, disease impact and optimal dosing
strategies.
VAL301 in endometriosis
VAL301, the same peptide ingredient as VAL201, is being
investigated for the treatment of women with endometriosis in the
preclinical stage of development.
VAL301 presents an opportunity to suppress hormone-driven
cellular growth in the absence of outright hormone suppression. By
interrupting only the hormone driven cell growth while sparing the
other hormone activities, the infertility and related side effects
are potentially avoided.
Currently in preclinical testing, this theoretical benefit will
be looked for in future trials.
The Company announced on 1 May 2020 that a Material Transfer
Agreement was signed with an undisclosed Japanese pharmaceutical
company, which is carrying out laboratory-based evaluations using
their own processes to determine whether to enter a licensing
agreement with ValiRx for further development of the project.
The Company continues to actively pursue additional options with
other interested parties during the period of evaluation by the
Japanese company.
VAL401 in adenocarcinoma
VAL401 was originally developed for treating lung cancer. VAL401
completed an exploratory phase 2 trial in late-stage cancer
patients in 2017. The data indicated that some patients treated
with VAL401 benefited an improvement in quality of life,
particularly in measures of pain, nausea, anxiety and insomnia; and
a statistically significant improvement in overall survival from
time of diagnosis when compared to case matched control patients
from the same clinic. Following discussions with clinical key
opinion leaders it was suggested that patients with pancreatic
cancer could derive great benefit from a product like VAL401 due to
improvements to severe abdominal pain, lack of appetite and nausea
related to the disease. Consequently, the next trial for VAL401
will include pancreatic cancer patients with the aim to help
exemplify both the therapeutic and palliative effects of
VAL401.
As VAL401 is the reformulation of a widely used generic drug,
with a well-documented safety profile and targeting an underserved
disease with low survival rates, we expect regulators to have a
favourable view on approval.
On 14 January 2020, the Company announced that its subsidiary,
ValiSeek Limited, signed a letter of intent with Tangent
Reprofiling Limited and Black Cat Bio Limited to enable Black Cat
Bio Limited to seek funding for the further development of VAL401.
When an undisclosed threshold of funding is reached, the VAL401 IP
license will be transferred from ValiSeek to Black Cat Bio, and all
shareholders of ValiSeek, including ValiRx, will become
shareholders of Black Cat Bio.
BC201 in Covid-19
BC201 is a combination of the peptide ingredient of
VAL201/VAL301 with complementary active components to dampen this
excessive immune response and consequently improve severe symptoms
of Covid-19.
The theoretical action of the peptide is two-fold: by blocking
the Androgen Receptor mediated activity of SRC Kinase, the peptide
is postulated to down-regulate the expression of TMPRSS2 a
transmembrane protein believed to be required for Coronavirus cell
entry; and by directly dampening the immune response.
On 2 June 2020, the Company announced that it had entered into a
collaboration agreement with Oncolytika Limited and Black Cat Bio
Limited to consider the potential for VAL201 to be used in
conjunction with other components for treatment of patients
suffering a hyperimmune response after Coronavirus SARS-CoV2
infection.
Black Cat Bio Limited is co-ordinating the project overall, with
project management of specific elements contributed by ValiRx and
Oncolytika. ValiRx will provide samples of VAL201 to enable the
testing program. Subject to a successful outcome, ValiRx will
receive 40% of any licensing income generated by the project.
Outlook
After a period of re-alignment and consolidation throughout
2020, we look forward to the new strategy beginning to have the
desired impact in 2021.
Over the course of the new financial year, we are targeting up
to four new projects entering the evaluation stage of our process,
with at least two of those progressing to a full license. R&D
expenditure during this period will increase to cover the initial
evaluation costs and support programmes as they enter the fully
licensed period. The expected costs are budgeted and incorporated
into our cash forecasts.
Where appropriate, in-licenced programmes will be positioned in
a subsidiary company, or a Special Purpose Vehicle ("SPV") and
third-party funding and/or partners will be sought towards the end
of the preclinical development period, subject to successful
outcomes of the required experiments.
Our research strategy aims to mitigate risks by two means.
Firstly, by carrying out initial evaluations of therapeutic
candidates prior to incorporation into our pipeline we will be able
to establish suitability with minimal cost before making long term
commitments. Secondly, we intend to evaluate multiple projects each
year across a range of technologies and applications with the aim
of creating a risk balanced portfolio and a steady flow of
opportunities for further development.
Dependent on the nature and the specific requirements of each
programme, additional personnel may be required, either recruited
directly into ValiRx or into the relevant SPV. The objective would
be to build on the expertise of the existing team, while
maintaining the flexibility of a virtual biotech model. Team growth
is built into our financial planning over the next 2-3 years but
will ultimately be determined according to the needs and resources
available to the Company.
As a result of the funds raised in 2020 and significant costs
reductions, and assuming no major unforeseen circumstances, we
anticipate that our current cash balance will be sufficient to
progress the strategy as described over the twelve month period.
Subject to successful outcomes, the ongoing out-licencing
discussions for the Company's clinical assets will further extend
the cash runway and potentially allow an expansion of
activities.
Suzanne Dilly
Chief Executive Officer
26 April 2021
Financial overview
Our financial results show the total comprehensive loss for the
year ended 31 December 2020 of GBP1,443,248 (2019: GBP2,388,707)
and a loss per share of 3.81p (2019: Loss 33.08p).
Research and developments costs were GBP230,115 for the year
ended 31 December 2020 as compared to GBP984,457 in 2019, a
decrease of GBP754,342.
Administrative expenses, before loss on disposal of intangible
assets of GBP154,968, were GBP1,276,619 for the year ended 31
December 2020 as compared with GBP1,860,379 in 2019, a decrease of
GBP583,760.
I would like to thank the staff and Board members for all their
contributions and shareholders for their continued support during
these difficult times.
Consolidated Statement of Profit or Loss and Other Comprehensive
Income for the year ended 31 December 2020
2020 2019
GBP GBP
------------------------------ ---------------- ---------------------
CONTINUING OPERATIONS
Other operating income 11,077 146,517
Research and development (230,115) (984,457)
Administrative expenses (1,431,587) (1,860,379)
OPERATING LOSS (1,650,625) (2,698,319)
Discount on settlement of
financial liability 122,000 -
Finance costs (14,880) (21,175)
------------------------------- ---------------- ---------------------
LOSS BEFORE INCOME TAX (1,543,505) (2,719,494)
Income tax credit 75,182 293,738
------------------------------- ---------------- ---------------------
LOSS AFTER INCOME TAX (1,468,323) (2,425,756)
Non-controlling interest 25,075 37,049
------------------------------- ---------------- ---------------------
TOTAL COMPREHENSIVE LOSS FOR
THE YEAR (1,443,248) (2,388,707)
------------------------------- ---------------- ---------------------
LOSS PER SHARE - BASIC AND
DILUTED (3.81p) (33.08p)
------------------------------- ---------------- ---------------------
Consolidated Statement of Financial Position for the year ended
31 December 2020
2020 2019
GBP GBP
ASSETS
NON-CURRENT ASSETS
Goodwill 1,602,522 1,602,522
Intangible assets 1,329,188 1,620,207
Property, plant and equipment - -
Right-of-use assets 20,995 -
------------------------------- --------------------- ------------------
2,952,705 3,222,729
------------------------------- --------------------- ------------------
CURRENT ASSETS
Trade and other receivables 66,735 90,083
Tax receivable 71,346 291,787
Cash and cash equivalents 1,846,901 -
1,984,982 381,870
------------------------------- --------------------- ------------------
TOTAL ASSETS 4,937,687 3,604,599
-------------------------------- --------------------- ------------------
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 9,669,828 9,417,225
Share premium 24,380,356 20,596,143
Merger reserve 637,500 637,500
Reverse acquisition reserve 602,413 602,413
Share option reserve 540,803 830,449
Retained earnings (30,919,728) (29,729,817)
-------------------------------- --------------------- ------------------
4,911,172 2,353,913
Non-controlling interests (155,888) (130,813)
-------------------------------- --------------------- ------------------
TOTAL EQUITY 4,755,284 2,223,100
-------------------------------- --------------------- ------------------
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings 44,486 -
Lease liabilities 13,439 -
------------------------------- --------------------- ------------------
57,925 -
------------------------------- --------------------- ------------------
CURRENT LIABILITIES
Trade and other payables 111,342 1,182,084
Bank overdraft - 5,634
Borrowings 5,514 193,781
Lease liabilities 7,622 -
-------------------------------
124,478 1,381,499
------------------------------- --------------------- ------------------
TOTAL LIABILITIES 182,403 1,381,499
-------------------------------- --------------------- ------------------
TOTAL EQUITY AND LIABILITIES 4,937,687 3,604,599
-------------------------------- --------------------- ------------------
Consolidated Statement of Changes in Equity for the year ended
31 December 2020
Reverse Share-based
Share Share Merger acquisition payment Non-controlling Retained
capital premium reserve reserve reserve interest earnings Total
GBP GBP GBP GBP GBP GBP GBP GBP
Balance
at
1
January
2019 8,680,694 19,779,905 637,500 602,413 885,963 (93,764) (27,461,771) 3,030,940
Changes
in
equity
Loss for
the
year - - - - - (37,049) (2,388,707) (2,425,756)
Issue of
shares 736,531 1,105,969 - - - - - 1,842,500
Costs of
shares
issued - (289,731) - - - - - (289,731)
Lapse of
share
options
and
warrants - - - - (120,661) - 120,661 -
Movement
in
year - - - - 65,147 - - 65,147
Balance
at
31
December
2019 9,417,225 20,596,143 637,500 602,413 830,449 (130,813) (29,729,817) 2,223,100
---------- -------------------- ----------------------- --------------- ---------------- ------------------ ----------------- ----------------------- --------------------
Changes
in
equity
Loss for
the
year - - - - - (25,075) (1,443,248) (1,468,323)
Issue of
shares 252,603 3,993,579 - - - - - 4,246,182
Costs of
shares
issued - (245,675) - - - - - (245,675)
Exercise
of
warrants - 50,447 - - (50,447) - - -
Lapse of
share
options
and
warrants - - - - (253,337) - 253,337 -
Movement
in
year - (14,138) - - 14,138 - - -
Balance
at
31
December
2020 9,669,828 24,380,356 637,500 602,413 540,803 (155,888) (30,919,728) 4,755,284
---------- -------------------- ----------------------- --------------- ---------------- ------------------ ----------------- ----------------------- --------------------
Merger reserve
The merger reserve of GBP637,500 exists as a result of the
acquisition of ValiRx Bioinnovation Limited. The merger reserve
represents the difference between the nominal value of the share
capital issued by the Company and the fair value of ValiRx
Bioinnovation at 3 October 2006, the date of acquisition
Reverse acquisition reserve
The reverse acquisition reserve exists as a result of the method
of accounting for the acquisition of ValiRx Bioinnovation Limited
and ValiPharma Limited.
Consolidated Statement of Cash Flows for the year ended 31
December 2020
2020 2019
Notes GBP GBP
Cash flows from operations
Cash outflow from operations 1 (2,200,088) (1,801,714)
Interest paid (6,252) (3,093)
Tax credit received 295,623 463,144
-------------------------------------- ------ -------------------- ---------------------
Net cash outflow from operating
activities (1,910,717) (1,341,663)
-------------------------------------- ------ -------------------- ---------------------
Cash flows from investing activities
Proceeds from sale of investments - 146,517
Proceeds from sale of intangible
fixed assets 2,000 -
Purchase of intangible fixed
assets (93,287) (396,776)
-------------------------------------- ------ -------------------- ---------------------
Net cash outflow from investing
activities (91,287) (250,259)
-------------------------------------- ------ -------------------- ---------------------
Cash flows from financing activities
Loan repayments (80,000) (138,000)
Bank loan 50,000 -
Repayment of lease liabilities (2,500) -
Share issue 4,132,714 1,576,000
Costs of shares issued (245,675) (224,584)
-------------------------------------- ------ -------------------- ---------------------
Net cash inflow from financing
activities 3,854,539 1,213,416
-------------------------------------- ------ -------------------- ---------------------
Increase/(decrease) in cash
and cash equivalents 1,852,535 (378,506)
Cash and cash equivalents at
beginning of year 2 (5,634) 372,872
-------------------------------------- ------ -------------------- ---------------------
Cash and cash equivalents at
end of year 2 1,846,901 (5,634)
-------------------------------------- ------ -------------------- ---------------------
Notes to the Consolidated Statement of Cash Flows for the year
ended 31 December 2020
1. RECONCILIATION OF OPERATING LOSS TO CASH GENERATED FROM
OPERATIONS
2020 2019
GBP GBP
Operating loss (1,650,625) (2,698,319)
Amortisation and impairment
of intangible assets 227,338 400,519
Depreciation of right-of-use
assets 2,157
Decrease in trade and other
receivables 23,348 84,006
(Decrease)/increase in trade
and other payables (957,274) 346,097
Loss on disposal of intangible
fixed assets 154,968 -
Profit on sale of investments - (146,517)
Share-based payments charge - 212,500
Net cash outflow from operations (2,200,088) (1,801,714)
----------------------------------- -------------------- ---------------------
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 1 January
2020 2020
GBP GBP
--------------------------- ------------ ------------------
Cash and cash equivalents 1,846,901 (5,634)
---------------------------- ------------ ------------------
31 December 1 January
2019 2019
GBP GBP
------------ ------------------
Cash and cash equivalents (5,634) 372,872
---------------------------- ------------ ------------------
Notes to the Consolidated Financial Statements for the year
ended 31 December 2020
1. STATUTORY INFORMATION
ValiRx Plc is a company incorporated in the United Kingdom under
the Companies Act 1985, which is listed on the AIM market of the
London Stock Exchange Plc. The address of its registered office is
Stonebridge House, Chelsmford 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 (GBP).
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 2020. The Company'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 Company for the year ended
31 December 2020 and as applied in accordance with the provisions
of the Companies Act 2006. 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 will
continue in the current accounting year to 31 December 2021.
The Company carries out regular fund-raising exercises in order
that it can provide the necessary working capital for the Group.
Further funds will 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 addition, there are significant uncertainties around the
continuing impact of the COVID-19 pandemic including the extent and
duration of social distancing measures, the inability to travel,
the closure of academic institutions and the impact on the economy.
Management has considered the current economic uncertainty and
market volatility caused by the COVID-19 outbreak. In assessing
whether the going concern assumption is appropriate, management has
reviewed the impact on the business to date and developed a range
of downside scenarios that could impact the business together with
mitigating actions.
The Directors have prepared detailed financial forecasts and
cash flows 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
GBP1,846,901 held by the Group as at 31 December 2020 together with
known receivables 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.
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.
2. LOSS PER SHARE
The loss and number of shares used in the calculation of loss
per ordinary share are set out below:
2020 2019
GBP GBP
Loss for the financial period (1,468,323) (2,425,756)
Non-controlling interest 25,075 37,049
------------------------------------ --------------- -----------------
Loss attributable to owners
of Parent Company (1,443,248) (2,388,707)
------------------------------------ --------------- -----------------
Basic:
Weighted average number of shares 37,898,019 7,221,102
Loss per share (3.81p) (33.08p)
------------------------------------ --------------- -----------------
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'.
The comparative weighted average number of shares has been
adjusted to account of the share capital reorganisation which took
place during 2020 whereby 1 new ordinary share of 0.1p each was
issued in exchange for 125 existing ordinary shares of 0.1p
each.
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
are responsible for the release of this announcement.
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed 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 re ect 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.
Ends
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END
FR SEUFUMEFSEIL
(END) Dow Jones Newswires
April 27, 2021 02:00 ET (06:00 GMT)
Valirx (LSE:VAL)
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