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Annual Report 2019
b
2019 ANNUAL REPORT Contents to Annual Report PageOperations Report 1Intellectual Property Report 4Directors' Report 8Auditor Independence Declaration 20Corporate Governance 21Consolidated Statement of Profit or Loss and Other Comprehensive Income 27Consolidated Statement of Financial Position 28Consolidated Statement of Changes in Equity 29Consolidated Statement of Cash Flows 30Notes to the Financial Statements 31Directors' Declaration 52Independent Auditor's Report 53Shareholder Information 58Corporate Information 60 1
ANNUAL REPORT 2019 Operations ReportOverview of Company’s Activities Antisense Therapeutics Limited (“the Company” or “Antisense Therapeutics”) continued its focus on advancing its antisense oligonucleotide products under development. The following report on operations details the research and development activities undertaken by the Company in the period.Partnership with Ionis Pharmaceuticals Inc.Antisense Therapeutics has world-wide exclusive licenses to exploit two antisense compounds (ATL1102 and ATL1103) for all disease indications via its partnership with Ionis Pharmaceuticals Inc (Ionis). As the leader in RNA-targeted drug discovery and development, Ionis has created an efficient, broadly applicable, drug discovery platform that can treat diseases where no other therapeutic approaches have proven effective. Ionis has three approved antisense drugs and a pipeline of more than 40 novel medicines designed to treat a broad range of diseases including cardiovascular diseases, neurological diseases, infectious diseases and pulmonary diseases and cancer.The partnership with Ionis provides Antisense Therapeutics with access to Ionis’ antisense intellectual property and drug development expertise to facilitate the development and commercialisation of the Company's antisense compounds. In turn Ionis receives a share of product commercialisation proceeds received by Antisense Therapeutics.About ATL1102ATL1102 is an antisense inhibitor of CD49d, a subunit of VLA-4 (Very Late Antigen-4). Antisense inhibition of VLA-4 expression has demonstrated activity in a number of animal models of inflammatory disease including asthma and MS, with the MS animal data having been published in a peer reviewed scientific journal. ATL1102 was shown to be highly effective in reducing MS lesions in a Phase IIa clinical trial in RR-MS patients. The ATL1102 Phase IIa clinical data has been published in the medical Journal Neurology (Limmroth, V. et al Neurology, 2014; 83(20):1780-1788).ATL1102 for Duchennes Muscular Dystrophy (DMD)The Company is undertaking a clinical trial of ATL1102 in patients with Duchenne Muscular Dystrophy (DMD). DMD is caused by a mutation in the muscle dystrophin gene leading to severe progressive muscle loss and premature death. One of the most common fatal genetic disorders, DMD affects approximately one in every 3,500 to 5,000 males worldwide. A key challenge in the management of DMD patients is to reduce the inflammation that exacerbates the muscle fibre damage. It has been reported in scientific literature that patients with DMD who have a greater number of T cells with high levels of CD49d (ATL1102's biological target) on their surface have more severe and rapid disease progression. ATL1102 is being developed as a novel treatment for the inflammation that exacerbates muscle fibre damage in DMD patients for which the current available treatment is corticosteroids. Corticosteriods have a range of serious side effects when used for a prolonged period as required in DMD. As a consequence, there is an acknowledged high need for new therapeutic approaches for the treatment of inflammation associated with DMD.The open label six-month dosing trial of ATL1102 in nine non-ambulant patients with DMD aged between 10 and 18 years is being conducted at the neuromuscular centre of the Royal Children's Hospital (RCH) which operates the largest clinic in the southern hemisphere treating children with DMD.The primary endpoints of the trial relate to the safety and tolerability of ATL1102. The efficacy of ATL1102 will also be assessed in terms of its effects on disease processes and progression (e.g. the upper limb strength and function of the boys).On 29th August 2018 the Company advised that the first patient had been dosed in the Phase II clinical trial, and that commencement of the trial represented an important development milestone for the Company and for DMD patients seeking potentially better and safer treatments. What is Duchennes Muscular
Dystrophy?
Duchenne Muscular Dystrophy (DMD) is an X-linked
disease that affects 1 in 3,600 to 5,000 live male
births (Bushby et al, 2010). DMD occurs as a result
of mutations in the dystrophin gene which causes
a defect in the protein or reduction or absence of
the dystrophin protein. Children with DMD have
dystrophin deficient muscles and are susceptible to
contraction induced injury to muscle which triggers
the immune system which exacerbates muscle
damage (Pinto Mariz, 2015). Ongoing deterioration
in muscle strength affects lower limbs leading to
impaired mobility, and also affects upper limbs,
leading to further loss of function and self-care
ability. The need for wheelchair use can occur
in early teenage years, with respiratory, cardiac,
cognitive dysfunction also emerging. With no
intervention, the mean age of life is approximately
19 years. The management of the inflammation
associated with DMD is currently via the use of
corticosteroids, which have insufficient efficacy and
significant side effects.
2
2019 ANNUAL REPORT ProgressOn 18th January 2019 the Company advised that the trial was over 50% enrolled with 5 of the intended 9 patients having entered the study.On 13th March the Company announced details of a share placement to accelerate the development of ATL1102 in DMD. The capital raising was backed by the Company's major institutional shareholders Australian Ethical Investment and Platinum Asset Management, with the capital raised to be directed to accelerate development planning for ATL1102 including discussions with regulatory authorities, initially in Europe, on the design and conduct of the next clinical trial of ATL1102 in DMD and on the development path for product registration. The Company had received advice from international regulatory consultants that, based on the consultant's review of the existing preclinical and clinical data generated in the development of ATL1102 to that time, the Company could seek approval to conduct a Phase IIb clinical trial of the drug in DMD patients in Europe.On 4th April 2019 the Company advised that seven patients were enrolled in the DMD clinical trial and that one patient had completed dosing and the two month monitoring period. The Company also advised that no Serious Adverse Events had been reported to that date.On 24th May 2019 Antisense Therapeutics announced that the DMD clinical trial was fully enrolled and that three patients had completed their 24 weeks of dosing with four patients in the treatment phase of the study and the final two patients screened and scheduled to commence their dosing.Events After The Balance Sheet DateOn 24th July 2019 the Company advised that five patients had completed their 24 weeks of dosing in the DMD clinical trial with the remaining four patients at various points within the treatment phase of the study.Antisense Therapeutics also advised that no Serious Adverse Events (SAE's) had been reported to that point in time and that the Data Safety Monitoring Board had been periodically evaluating the safety related trial data and had on each occasion recommended continuation of the trial with no safety concerns. Dosing of all patents in the trial is to be completed in early November 2019.The Company advised that it expects to report trial results shortly after the completion of dosing, though as previously advised, as the Phase II DMD clinical trial is an open label study there may be an opportunity for non statistical read-outs on preliminary data prior to the completion of dosing in all patients. This would require a sufficient number of patients to have completed 24 weeks of dosing and for all patients to have passed at least the mid-point (12 week) dosing mark for the Company to be confident and certain of the robustness of such results for disclosure.Operations Report continued What is Multiple Sclerosis?
Multiple Sclerosis (MS) is a life-long, chronic disease
that progressively destroys the central nervous
system (CNS). It affects approximately 400,000
people in North America and more than 1 million
worldwide. It is a disease that affects more women
than men, with onset typically occurring between 20
and 40 years of age. Symptoms of MS may include
vision problems, loss of balance, numbness, difficulty
walking and paralysis. In Australia MS affects over
15,000 people.
3
ANNUAL REPORT 2019 ATL1102 for Multiple Sclerosis (MS)The Company previously reported that it had submitted an Investigational New Drug (IND) application to the FDA for the conduct of a Phase IIb trial in MS patients and had received notification from the FDA that the study could proceed at a lower (25mg/week) dose for 6 months under a partial hold introduced by the FDA.The Company continues to consider the conditions that could allow MS patients to receive higher doses of ATL1102, including potentially generating additional data while also monitoring the progress of the ATL1102 DMD trial which could provide support for undertaking studies in MS patients at and above the FDA approved dose.ATL1103 for AcromegalyATL1103 also referred to as atesidorsen is an antisense drug designed to block growth hormone receptor (GHr) expression thereby reducing levels of the hormone insulin-like growth factor-I (IGF-I) in the blood and is a potential treatment for diseases associated with excessive growth hormone action. By inhibiting GHr production, ATL1103 in turn reduces IGF-I levels in the blood (serum). There are a number of diseases that are associated with excess GH and IGF-I action. These diseases include acromegaly, an abnormal growth disorder of organs, face, hands and feet; diabetic retinopathy, a common disease of the eye and a major cause of blindness; diabetic nephropathy, a common disease of the kidney and major cause of kidney failure, and certain forms of cancer.ATL1103 is in clinical development as a treatment for acromegaly. Normalizing serum IGF-I levels is the therapeutic goal in the treatment of acromegaly and reducing the effects of IGF-I has a potential role in the treatment of diabetic retinopathy, nephropathy and certain forms of cancer. The Company conducted a successful Phase II trial of ATL1103 with the trial having met its primary efficacy endpoint by showing a statistically significant average reduction in sIGF-1 levels. The results of the Phase II trial have been published in the leading peer-reviewed medical Journal, the European Journal of Endocrinology. (Trainer et al, Eur J Endocrinol, 2018 May 22 - 179: 97-108). The Company also conducted a high dose study of ATL1103 in adult patients with acromegaly in Australia. The US FDA and European Commission have granted Orphan Drug designation to ATL1103 for treatment of Acromegaly.The Company executed a global agreement with innovative early access provider myTomorrows (Amsterdam, The Netherlands) to implement an Early Access Program (EAP) for ATL1103, for treatment of acromegaly that was to initially be established in selected countries within the European Union (EU).ATL1103 drug product has been labelled and packaged and has been stored in the United Kingdom for shipment to myTommorrows in the Netherlands for potential EAP distribution subject to myTommorrows clearance for importation.The Company advised that additional (to what has been required to support clinical trial usage) product data and documentation has had to be, and was being generated in order for the ATL1103 drug product to be supplied in accordance with required regulatory and quality standards for use in the EAP and that Antisense Therapeutics was continuing to work closely with myTommorrows in order that this process may be finalised and product imported and released by myTommorrows for use in the EAP. The Company advised it would provide further update on the program when additional information became available.Events after balance dateOn 26th August 2019 the Company provided a market update on the status of the EAP confirming that to date the Company has been unable to obtain myTomorrows’ clearance for importation of ATL1103 drug product being stored in the United Kingdom. The Company also noted that following a review by an external Quality Person (QP), requested by myTomorrows, of the ATL1103 manufacturing documentation, the QP advised that due to the material intended for use in the EAP being supplied by a different manufacturer to the one used for the manufacture of material previously used in the Phase II clinical trial of ATL1103, it would first need to be approved by a European Health authority for use in a new clinical trial, for the material to be cleared for the EAP. The Company stated that it had not expected this clinical trial approval prerequisite for ATL1103 EAP initiation, with this R&D Tax Incentive
During the year the Company received from the ATO a
payment of $284,900 in relation to R&D expenditure
incurred in the previous financial year.
Financial Position
At 30 June 2019, the Company had cash reserves
(including Term Deposits of greater than three months) of
$2,903,542 (2018: $4,299,059).
Events After The balance Sheet Date
No matters or circumstances have arisen since the end
of the reporting period, not otherwise disclosed in this
report, which significantly affected, or may significantly
affect, the operations of the Company, the result of those
operations, or the state of affairs of the Company in
subsequent financial periods.
Intellectual Property Report
Antisense Therapeutics currently has 10 patent families with
80 patents registered or in the process of being registered
and 13 patent applications pending covering its two
antisense drugs ATL1102 and ATL1103 and their applications.
Antisense Therapeutics has also licensed from Ionis
Pharmaceuticals, Ionis proprietary patents and applications
directed to the antisense drug platform together with rights
to other Ionis manufacturing patent families.
Since reporting on the status of the Company’s
intellectual property portfolio in the 2018 Annual Report
the Company has expanded its patent portfolio as follows:
• European patent 13743020.3 has been registered in 10
countries and Australian patent 2014280847 has been
allowed covering ATL1103 use in combination with
other acromegaly treatments as follows:
• European 13743020.3 covering ATL1103 and other
antisense to GHr used in combination with second
line GHr antagonist Somavert to reduce serum IGF-I
and protects the invention to 2033;
• Australian patent 2014280847 has been accepted
covering ATL1103 and other antisense to GHr used
in combination with first line Somatostatin analogue
treatment to reduce serum IGF-I protecting the
invention to 2034;
What is Acromegaly?
Acromegaly is a serious chronic life threatening disease
triggered by excess secretion of growth hormone
(GH) by benign pituitary tumours. Oversupply of GH
over stimulates liver, fat and kidney cells, through
their GH receptors, to produce excess levels of Insulin-
Like Growth Factor-I (IGF-I) in the blood manifesting
in abnormal growth of the face, hands and feet, and
enlargement of body organs including liver, kidney
and heart. The primary treatments for acromegaly
are to surgically remove the pituitary gland and/or
drug therapy to normalize GH and serum IGF-I levels.
In North America and Europe there are approximately
85,000 diagnosed acromegaly patients with about half
requiring drug therapy.
4
2019 ANNUAL REPORT new requirement coming on top of the additional data the Company had been asked by myTomorrows to collect and generate to show the comparability of the current batch of ATL1103 material to the earlier batch used in clinical trials. The Company highlighted that a new clinical trial would require a substantial financial commitment to proceed with the next phase of clinical development for ATL1103 and as the Company’s current development focus was being directed towards the clinical development of ATL1102 in DMD, the Company stated that it would not apply further resources to the EAP process and would continue to direct its focus and funds on the ATL1102 for DMD program. The Company also noted though that circumstances could present in the future where the Company may have the capacity and justification to continue to invest in the further clinical development of ATL1103, including activation of an EAP and also that the Company was also continuing to pursue the potential out-licensing of ATL1103 to support and fund its ongoing clinical development and was entertaining preliminary interest from some regionally based pharmaceutical companies.Operations Report continued Country
Patent application or Patent No.
Current Status
Expiry
ATL1103 Patent Portfolio**
USA
USA
USA
7,803,781
8,299,039
8,637,484
Patent Registered
Patent Registered
Patent Registered
International
PCT/US2004/005896
National Phase applications
Australia
Canada
Europe
Denmark
Finland
France
Germany
Italy
Spain
Sweden
Switzerland
The Netherlands
United Kingdom
Europe
Denmark
Finland
France
Germany
Italy
Spain
Sweden
Switzerland
The Netherlands
United Kingdom
Japan
Japan
2004217508
2,517,101
04715642.7
Patent Registered
Patent Registered
Regional Phase – granted
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
11194098.7 Divisional of 04715642.7
Regional Phase – granted
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
4837555
2014-042448 Divisional of 2006-508878
Patent Registered
New Zealand
542595
Patent Registered
2025*
2024*
2024*
2024*
2024
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024*
2024
5
ANNUAL REPORT 2019 • European 15155831.9 covering ATL1102 in the treatment of relapsing and active forms of multiple sclerosis with brain lesions has been registered in 10 European countries protecting the invention to 2029;• US patent 9,885,048 has been granted covering the use of ATL1102 in treatments to reduce circulating leukocytes to 2031;• International application PCT/AU2018/05153 and US provisional patent application 14/404561 have been filed covering the use of ATL1102 in the ATL1102 treatment of Duchenne's Muscular Dystrophy to 2039;The progress outlined above has added significant intellectual property to our portfolio. Patents have been registered for new applications and filed in important indications that underpin Antisense Therapeutics commercialisation plans for its antisense drugs. Country
Patent application or Patent No.
Current Status
Expiry
ATL1103 Patent Portfolio** continued
USA
USA
7,846,906
8,623,836
ATL1103 GHbP reduction Patents
USA
USA
9,371,530
9,988,635
ATL1103 Combination with Somavert Patents
Patent Registered
Patent Registered
Patent Registered
Patent Registered
International
PCT/AU2013/000095
National Phase Applications
Australian
Canada
2013214698
2863499
Europe***
13743020.3
Japan
New Zealand
USA
USA
2014-555044
629004
9,717,778
9,821,034
ATL1103 Combination with Somatostatin agonist Patents
International
PCT/AU2014/000613
Australian
Canada
Europe***
Japan
New Zealand
USA
2014280847
2918787
14810926.7
2016-518801
715825
14/897896
ATL1102 Patent Portfolio**
ATL1102 MS active brain lesion reduction Patents
Patent Registered
Under Examination
Regional Phase granted.
Patent registered in the 10
European countries above
Patent Registered
Patent Registered
Patent Registered
Patent Registered
International Phase
Accepted
Under Examination
Under Examination
Under Examination
Filed
Under Examination
International
PCT/US2009/003760
National Phase applications
AU 2009271678
2,728562
09798248.2
Australia
Canada
Europe***
Denmark
Finland
France
Germany
Italy
Spain
Sweden
Switzerland
6
Patent Registered
Patent Registered
Regional Phase - granted
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
Patent Registered
2024*
2024*
2024*
2024*
2033
2033
2033
2033
2033
2033
2033
2034
2034
2034
2034
2034
2034
2029*
2029
2029*
2029*
2029*
2029*
2029*
2029*
2029*
2029*
2019 ANNUAL REPORT Intellectual Property Report continued Country
Patent application or Patent No.
Current Status
The Netherlands
United Kingdom
Europe***
15155831.9 Divisional of 09798248.2
Patent Registered
Patent Registered
Allowed In the process of
being registered in the 10
European countries above
Patent Registered
Japan
Japan
USA
USA
2011-516297
2014-208153 (Divisional of 2011-5516297)
Patent Registered
8,415,314
8,759,314
Patent Registered
Patent Registered
ATL1102 MS hypointense brain lesion reduction Patent
International
PCT/AU2018/050598
Filed
ATL1102 Methods of reducing circulating leukocytes
Australia
Canada
USA
2011301712
2811228
9,885,048
Patent Registered
Under Examination
Patent Registered
ATL1102 Therapeutic uses and methods (for treating Muscular Dystrophy)
US Continuation
– in-part
16/404561
International
PCT/AU2018/051353
Filed
Filed
ATL1102 Methods of mobilizing leukemia cells (for treating AML)
International
PCT/AU 2016/051059
National Phase applications
Australia
Canada
Europe
USA
2016/051059
3007424
16861126.7
15/971938
Filed
Filed
Filed
Filed
Expiry
2029*
2029*
2029*
2029*
2029*
2029*
2029*
2038
2031*
2031*
2031*
2039
2039
2036*
2036
2036*
2036*
* Potential for up to 5 year extensions to the patent term once the product is a registered drug.
** ATL1102 and ATL1103 are also protected internationally by other Ionis proprietary antisense technology patents and
applications to which Antisense Therapeutics has world-wide license including US7015315 to 2023. The Ionis ATL1102
product patent family referred to in the 2018 annual report expired in 2019..
*** Designates all member states of European patent countries including all extension states.
7
ANNUAL REPORT 2019 Directors' Report
Directors
The Board of Directors of Antisense Therapeutics Limited present their report on the consolidated entity (referred to
hereafter as ‘the Company’) consisting of Antisense Therapeutics Limited and the entities it controlled at the end of, or
during, the Year Ended 30 June 2019. In order to comply with the provisions of the Corporations Act 2001, the Board of
Directors report as follows:
Mr Robert W Moses bA, MbA, FAICD, FAIM, Independent Non-Executive Chairman
Appointed to the Board
23 October 2001
Last elected by shareholders
29 November 2018
Experience
Robert (Bob) Moses was formerly Corporate Vice President of CSL Limited. Mr.
Moses draws on more than 40 years’ experience in the pharmaceutical/biotechnology
industry. During the period 1993-2001, Mr. Moses played a central role in CSL's
development internationally. Prior to joining CSL, Mr. Moses was Managing Director
of commercial law firm Freehills, Chairman and CEO of a NASDAQ listed medical
service company, and Corporate Manager of New Business Development at ICI (now
Orica). Mr. Moses is also the former Non-Executive Chairman of TGR Biosciences Pty
Ltd. Mr. Moses also spent 17 years in various management roles at the multinational
pharmaceutical company Eli Lilly.
Interest in shares & options
7,200,000 ordinary shares and 1,418,888 options over ordinary shares.
Committees
Chairman of the Remuneration Committee and member of the Audit Committee.
Directorships held in other
listed entities
Nil
Mr Mark Diamond bSc, MbA, Managing Director
Appointed to the Board
31 October 2001
Experience
Mark Diamond has over 30 years’ experience in the pharmaceutical and biotechnology
industry. Before joining Antisense Therapeutics Limited as MD and CEO in 2001, Mr.
Diamond was employed in the US as Director, Project Planning/Business Development
at Faulding Pharmaceuticals. Prior to this he held the positions of Senior Manager,
Business Development and In-licensing within Faulding's European operation based in
the UK and International Business Development Manager with Faulding in Australia.
Interest in shares & options
3,600,000 ordinary shares and 642,772 options over ordinary shares.
Committees
Directorships held in other
listed entities
Nil
Nil
8
2019 ANNUAL REPORT Dr Graham Mitchell AO, RDA, bVSc, FACVSc, PhD, FTSE, FAA, Independent Non-Executive Director
Appointed to the Board
24 October 2001
Last elected by shareholders
29 November 2017
Experience
Graham Mitchell through Foursight Associates Pty Ltd ("Foursight"), formerly acted as
joint Chief Scientist for Victorian Government Departments. Dr. Mitchell is a Principal
and CEO of Foursight. Dr. Mitchell has held the position of Director of Research in the
R&D Division of CSL Limited and for many years was a research scientist and later a
Board member at The Walter & Eliza Hall Institute (WEHI).
Interest in shares & options
347,514 ordinary shares and 48,036 options over ordinary shares.
Committees
Member of the Remuneration Committee and Chairman of the Audit Committee.
Directorships held in other
listed entities
Nil
Dr Gary Pace bSc, PhD, Independent Non-Executive Director
Appointed to the Board
9 November 2015
Experience
Gary Pace has more than 40 years of experience in the development and
commercialization of advanced technologies in biotechnology, pharmaceuticals,
medical devices and the food industries. He has long-term board level experience
with both multi-billion and small cap companies. In 2003 Dr. Pace was awarded a
Centenary Medal by the Australian Government “for service to Australian society
in research and development”, and in 2011 was awarded Director of the Year
(corporate governance) by the San Diego Directors Forum. In addition he has held
visiting academic positions at the Massachusetts Institute of Technology and the
University of Queensland. Dr. Pace is an elected Fellow of the Australian Academy of
Technological Sciences and Engineering.
Interest in shares & options
1,236,138 ordinary shares
Committees
Nil
Directorships held in other
listed entities
Dr. Pace is currently a director of ResMed, Pacira Pharmaceuticals Inc.
Mr William Goolsbee bA, Independent Non-Executive Director
Appointed to the Board
15 October 2015
Experience
William (Bill) Goolsbee was founder, Chairman and Chief Executive Officer of Horizon
Medical Inc. from 1987 until its acquisition by a unit of UBS Private Equity in 2002.
Mr. Goolsbee was a founding Director of ImmunoTherapy Corporation in 1993, and
became Chairman in 1995, a position he held until overseeing the successful acquisition
of ImmunoTherapy by AVI Biopharma, Inc. (now Sarepta Therapeutics) in 1998. Mr.
Goolsbee served as Chairman of privately held BMG Pharma LLC, a pharmaceutical
company, from 2006 through 2011 and of Metrodora Therapeutics until 2015.
Interest in shares & options
1,014,843 ordinary shares and 84,400 options over ordinary shares.
Committees
Nil
Directorships held in other
listed entities
Mr. Goolsbee was until the end of 2016 a Director of Sarepta Therapeutics Inc.
9
ANNUAL REPORT 2019 Directors' Report continued
Mr Phillip Hains, Company Secretary and Chief Financial Officer
Appointed
9 November 2006
Experience
Phillip Hains is a Chartered Accountant operating a specialist public practice, 'The
CFO Solution'. The CFO Solution focuses on providing back office support, financial
reporting and compliance systems for listed public companies. A specialist in the public
company environment, Mr Hains has served the needs of a number of company boards
and their related committees. He has over 30 years' experience in providing businesses
with accounting, administration, compliance and general management services.
Principal Activities
The principal activity of Antisense Therapeutics
Limited during the financial year was the research and
development of novel antisense pharmaceuticals.
Dividends
No dividends have been paid or declared since the
end of the previous financial year, nor do the Directors
recommend the declaration of a dividend.
Significant Changes in the State of Affairs
There have been no significant changes in the state of
affairs of the Company during the year.
Significant Events After the Balance Date
As noted in the Operations report under the section on
ATL1103 for Acromegaly as an Event after the balance
date, on 26 August 2019 the Company provided a market
update on the status of the EAP confirming that to date
the Company had been unable to obtain myTomorrows’
clearance for importation of ATL1103 drug product and
that the material would first need to be approved by a
European Health authority for use in a new clinical trial,
for the material to be cleared for the EAP. The Company
stated that a new clinical trial would require a substantial
financial commitment to proceed, greater than expected
and as its development focus was being directed
towards the clinical development of ATL1102 in DMD, the
Company stated that it would not apply further resources
to the EAP process and would continue to direct its focus
and funds on the ATL1102 for DMD program.
There have been no other significant events occurring
after the balance date which may affect either the
Company's operations or results of those operations or
the Company's state of affairs.
Likely Developments and Expected Results
The likely developments in the Company's operations, to
the extent that such matters can be commented upon, are
covered in the 'Operations Report’.
Operating and Financial Review
The net loss after tax of the Company for Year Ended
30 June 2019 was $2,944,499 (2018 loss : $2,331,015)
This result has been achieved after fully expensing all
research and development costs.
The Company had a cash reserve of $2,903,542 at 30
June 2019. ($4,299,059 at 30 June 2018 (including Term
Deposits greater than three months))
The 'Operations Report' provides further details
regarding the progress made by the Company since
the prior financial period, which have contributed to its
results for the year.
Risk Management
The Board is responsible for overseeing the establishment
and implementation of the risk management system, and
to review and assess the effectiveness of the Company's
implementation of that system on a regular basis.
The Board and senior management will continue to
identify the general areas of risk and their impact on the
activities of the Company. The potential risk areas for the
Company include:
10
2019 ANNUAL REPORT • efficacy, safety and regulatory risk of pre-clinical and
clinical pharmaceutical development;
could have a negative impact on the Company's specific
drug development and commercialisation plans.
• financial position of the Company and the financial
outlook;
• economic outlook and share market activity;
• changing government policy (Australian and overseas);
• competitors' products/research and development
programs;
• market demand and market prices for therapeutics;
• environmental regulations;
• ethical issues relating to pharmaceutical research and
development;
• the status of partnership and contractor relationships;
• other government regulations including those
specifically relating to the biotechnology and health
industries; and
• occupational health and safety and equal opportunity law.
Management will continue to perform a regular review of
the following:
• the major risks that occur within the business;
• the degree of risk involved;
• the current approach to managing the risk; and
• where appropriate, determine:
• any inadequacies of the current approach; and
• possible new approaches that more efficiently and
effectively address the risk.
No assurance can be given that the Company's product
development efforts will be successful, that any potential
product will be safe and efficacious, that required
regulatory and pricing reimbursement approvals will be
obtained, that the Company's products will be capable of
being produced in commercial quantities at an acceptable
cost or at all, that the Company will have access to
sufficient capital to successfully advance the products
through development or to find suitable development
or commercial partners for the development and or
commercialisation of the products and that any products, if
introduced, will achieve market acceptance.
Additional Capital Requirements
Pharmaceutical R&D activities require a high level of funding
over a long period of time to complete the development
and commercialisation of pharmaceutical products. There is
no assurance that additional funding will be available to the
Company in the future or be secured on acceptable terms.
If adequate funds are not available, the Company's business
will be materially and adversely affected. If the Company
is unable to access capital to continue the development
of its products, then this could adversely impact on the
collaboration and licensing agreement with Ionis. If the
Company unable to meet certain performance obligations, it
may lead to a dispute with Ionis. Unresolved disputes may in
turn lead to potential termination of the license granted by
Ionis to the Company to exploit relevant products, with the
relevant product rights then returning to Ionis.
biotechnology Companies – Inherent Risks
Partnering and licensing
Pharmaceutical Research and Development (R&D)
Pharmaceutical R&D involves scientific uncertainty and
long lead times. Risks inherent in these activities include
uncertainty of the outcome of the Company's research
results; difficulties or delays in development of any of the
Company's drug candidates; and general uncertainty related
to the scientific development of a new medical therapy.
The Company's drug compounds require significant
pre-clinical and human clinical development prior to
commercialisation, which is uncertain, expensive and
time consuming. There may be adverse side effects or
inadequate therapeutic efficacy of the Company's drug
candidates which would prevent further commercialisation.
There may be difficulties or delays in the manufacturing
or testing of any of the Company's drug candidates. There
may also be adverse outcomes with the broader clinical
application of the antisense technology platform which
Due to the significant costs in drug discovery and
development it is common for biotechnology companies
to partner with larger biotechnology or pharmaceutical
companies to help progress drug development. While
the Company has previously entered into such licensing
agreements with pharmaceutical partners, there is no
guarantee that the Company will be able to maintain such
partnerships or license its products in the future. There
is also no guarantee that the Company will receive back
all the data generated by or related intellectual property
from its licensing partners. In the event that the Company
does license or partner the drugs in its pipeline, there is
no assurance as to the attractiveness of the commercial
terms nor any guarantee that the agreements will generate
a material commercial return for the Company.
11
ANNUAL REPORT 2019 Directors' Report continued
Technology and Intellectual Property Rights
Securing rights to technology and patents is an integral
part of securing potential product value in the outcomes of
pharmaceutical R&D. The Company's success depends, in
part, on its ability to obtain patents, maintain trade secret
protection and operate without infringing the proprietary
rights of third parties. There can be no assurance that any
patents which the Company has in licensed or may own,
access or control will afford the Company commercially
significant protection of its technology or its products
or have commercial application, or that access to these
patents will mean that the Company will be free to
commercialise its drug candidates. The granting of a
patent does not guarantee that the rights of others are not
infringed or that competitors will not develop technology
or products to avoid the Company's patented technology
or try to invalidate the Company’s patents, or that it will
be commercially viable for the Company to defend against
such potential actions of competitors.
Accordingly, investment in companies specialising in drug
development must be regarded as highly speculative.
The Company strongly recommends that professional
investment advice be sought prior to such investments.
Environmental Regulation and Performance
The Company is involved in pharmaceutical research
and development, much of which is contracted out to
third parties, and it is the Director’s understanding that
these activities do not create any significant/material
environmental impact. To the best of the Company's
knowledge, the scientific research activities undertaken by,
or on behalf of, the Company are in full compliance with all
prescribed environmental regulations.
12
2019 ANNUAL REPORT Risk Management continuedBiotechnology Companies – Inherent Risks continuedRegulatory ApprovalsComplex government health regulations, which are subject to change, add uncertainty to obtaining approval to undertake clinical development or obtaining marketing and pricing reimbursement approval for pharmaceutical products.Delays may be experienced in obtaining such approvals, or the regulatory authorities may require repeat of different or expanded animal safety studies or human clinical trials, and these may add to the development cost and delay products from moving into the next phase of drug development and up to the point of entering the market place. This may adversely affect the competitive position of products and the financial value of the drug candidates to the Company.There can be no assurance that regulatory clearance will be obtained for a product or that the data obtained from clinical trials will not be subject to varying interpretations. There can be no assurance that the regulatory authorities will agree with the Company's assessment of future clinical trial results or with the suitability of the Company's regulatory submissions for clinical trial, early access or product marketing approval as applicable.CompetitionThe Company will always remain subject to the material risk arising from the intense competition that exists in the pharmaceutical industry. A material risk therefore exists that one or more competitive products may be in human clinical development now or may enter into human clinical development in the future. Competitive products focusing on or directed at the same diseases or protein targets as those that the Company is working on may be developed by pharmaceutical companies or other antisense drug companies including Ionis or any of its other collaboration partners or licensees. Such products could prove more efficacious, safer, more cost effective or more acceptable to patients than the Company product. It is possible that a competitor may be in that market place sooner than the Company and establish itself as the preferred product. Directors' Meetings
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the
number of meetings attended by each Director were as follows:
board Meetings
Meetings of committees
Audit
Remuneration*
No. eligible to
attend
No. attended
No. eligible to
attend
No. attended
No. eligible to
attend
No. attended
Robert W Moses
Mr Mark Diamond
Dr Graham Mitchell
Dr Gary Pace
Mr William Goolsbee
6
6
6
6
6
6
6
5
6
6
2
2
2
2
2
2
2
1
2
2
1
-
1
1
1
1
-
1
1
1
(*) A performance and remuneration review was conducted during the April Board meeting.
Committee Membership
As at the date of this report the Company had an Audit Committee and Remuneration Committee, with membership of
the committees as follows:
Audit Committee
Remuneration Committee*
Chairman
Dr Graham Mitchell
Members
Mr Robert W Moses
Mr Robert W Moses
Dr Graham Mitchell
Indemnification and Insurance of Directors and Officers
Under the Company’s constitution:
(a) To the extent permitted by law and subject to the restrictions in section 199A and 199B of the Corporations Act
2001, the Company indemnifies every person who is or has been an officer of the Company against any liability (other
than for legal costs) incurred by that person as an officer of the Company where the Company requested the officer
to accept appointment as Director.
(b) To the extent permitted by law and subject to the restrictions in sections 199A and 199B of the Corporations Act
2001, the Company indemnifies every person who is or has been an officer of the Company against reasonable legal
costs incurred in defending an action for a liability incurred by that person as an officer of the Company.
The Company has insured its Directors, the Company Secretaries and executive officers for the financial year ended 30
June 2019. Under the Company's Directors' and Officers' Liability Insurance Policy, the Company cannot release to any
third party or otherwise publish details of the nature of the liabilities insured by the policy or the amount of the premium.
Accordingly, the Company relies on section 300(9) of the Corporations Act 2001 to exempt it from the requirement to
disclose the nature of the liability insured against and the premium amount of the relevant policy.
The Company also has in place a Deed of Indemnity, Access and Insurance with each of the Directors. This Deed:
(1) indemnifies the Director to the extent permitted by law and the Constitution against certain liabilities and legal
costs incurred by the Director as an officer of any Group Company;
13
ANNUAL REPORT 2019
Directors' Report continued
(2) requires the Company to maintain, and pay the
premium for, a D&O Policy in respect of the Director;
and
Auditor Independence and Non-Audit
Services
(3) provides the Director with access to particular papers
Auditor’s Independence Declaration
and documents requested by the Director for a
Permitted Purpose,
both during the time that the Director holds office and
for a seven year period after the Director ceases to be an
officer of any Group Company, on the terms and conditions
contained in the Deed.
Indemnification of Auditors -
Ernst and Young
To the extent permitted by law, the Company has agreed
to indemnify its auditors, Ernst and Young, as part of the
terms of its audit engagement agreement against claims
by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst
and Young during or since the financial year.
Proceedings on Behalf of the Company
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in
any proceedings to which the Company is a party, for the
purpose of taking responsibility on behalf of the Company
for all or part of those proceedings.
No proceedings have been brought or intervened in on
behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.
Share Options on Issue as at the Date of
the Report
Unissued Shares
The unissued ordinary shares of Antisense Therapeutics
Limited under option as at the date of this report were:
The Auditors Independence Declaration as required under
section 307C of the Corporations Act 2001 for the year
ended 30 June 2019 has been received and can be found
in the ‘Auditor’s Independence Declaration’ section of this
Annual Report.
Non-Audit Services
The following non-audit services were provided by the
entity's auditor, Ernst and Young. The Directors are satisfied
that the provision of non-audit services is compatible with
the general standard of independence for auditors imposed
by the Corporations Act 2001. The nature and scope of
each type of non-audit service provided means that auditor
independence was not compromised.
Ernst and Young received or are due to receive the
following amounts for the provision of non-audit services:
2019
$
2018
$
Tax compliance services
20,148
19,648
20,148
19,648
Rounding off
The Company is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument
2016/191 and in accordance with that Instrument, amounts
in the consolidated financial statements and directors’
report have been rounded off to the nearest dollar, unless
otherwise stated.
Remuneration Report (Audited)
1. Remuneration Report Overview
Class
Date of Expiry
Exercise
Price
No. Under
Option
ANPOB
19 December 2019
$0.08
68,681,794
This Remuneration Report outlines the Director and
Executive remuneration arrangements of the Company as
required by the Corporations Act 2001 and its Regulations.
This report details the nature and amount of remuneration
of each Director of Antisense Therapeutics Limited and all
other Key Management Personnel.
14
2019 ANNUAL REPORT For the purposes of this report, Key Management
Personnel (KMP) are defined as those persons having
authority and responsibility for planning, directing and
controlling the major activities of the Company, directly
or indirectly, including any Director (whether Executive or
otherwise) of the Company.
This report details the nature and amount of remuneration
for each Director of Antisense Therapeutics Limited, and
for the other Key Management Personnel.
Name
Directors:
Position
Mr Robert W Moses
Independent Non-Executive
Chairman
Mr Mark Diamond
Managing Director
Dr Graham Mitchell
Independent Non-Executive
Director
Mr William Goolsbee Independent Non-Executive
Director
Dr Gary Pace
Independent Non-Executive
Director
Other key management personnel:
Dr George Tachas
Director, Drug Discovery &
Patents
Ms Nuket Desem
Director, Regulatory
Mr Phillip Hains
Company Secretary
Shareholder wealth reflects this speculative and volatile
market sector. No dividends have ever been declared by
the Company.
The Company continues to focus on the research and
development of its intellectual property portfolio with the
objective of achieving key development and commercial
milestones in order to add further Shareholder value.
The Company’s performance over the previous five
financial years is as follows:
Net loss financial year 2019
Net loss financial year 2018
Net loss financial year 2017
Net loss financial year 2016
Net loss financial year 2015
$2,944,499
$2,331,015
$2,754,799
$2,514,443
$706,918
The Company’s share price over the previous five financial
years is as follows:
30 June 2019
30 June 2018
30 June 2017
30 June 2016
30 June 2015
$0.045
$0.025
$0.033
$0.031
$0.12
2. Principles Used to Determine the Nature and
Amount of Remuneration
C. THE REMUNERATION COMMITTEE
A. REMUNERATION POLICY
The Remuneration Policy ensures that Directors and
Senior Management are appropriately remunerated having
regard to their relevant experience, their performance, the
performance of the Company, industry norms/standards
and the general pay environment as appropriate. The
Remuneration Policy has been established to enable the
Company to attract, motivate and retain suitably qualified
Directors and Senior Management who will create value
for shareholders.
B. REMUNERATION POLICY VERSUS COMPANY
PERFORMANCE
The Company's Remuneration Policy is not directly based
on the Company's earnings. Prior to the year ended 30
June 2019, the Company's earnings had remained negative
since inception due to the nature of the Company.
The Remuneration Committee of the Board of Directors
of Antisense Therapeutics Limited is responsible for
overseeing the Remuneration Policy of the Company and
for recommending or making such changes to the policy as
it deems appropriate.
D. NON-EXECUTIVE DIRECTOR REMUNERATION
Objective
The Remuneration Policy ensures that Non-Executive
Directors are appropriately remunerated having regard
to their relevant experience, individual performance, the
performance of the Company, industry norms/standards
and the general pay environment as appropriate.
15
ANNUAL REPORT 2019 Directors' Report continued
Remuneration Report (Audited) continued
Structure
2. Principles Used to Determine the Nature and
Amount of Remuneration continued
Structure
The Company's Constitution and the ASX Listing Rules
specify that the aggregate remuneration of Non-Executive
Directors shall be determined from time to time by a
General Meeting. An amount (not exceeding the amount
approved at the General Meeting) is determined by the
Board and then divided between the Non-Executive
Directors as agreed. The latest determination was at
the General Meeting held on 13 November 2001 when
shareholders approved the aggregate maximum sum to
be paid or provided as remuneration to the Directors as a
whole (other than the Managing Director and Executive
Directors) for their services as $300,000 per annum.
In the year ended 30 June 2019, the Non-Executive
Directors were remunerated in aggregate $240,677 per
annum, excluding superannuation.
The manner in which the aggregate remuneration is
apportioned amongst Non-Executive Directors is reviewed
periodically.
The Board is responsible for reviewing its own
performance. Board, and Board committee performance, is
monitored on an informal basis throughout the year with a
formal review conducted during the financial year.
No retirement benefits are payable other than statutory
superannuation, if applicable.
E. EXECUTIVE DIRECTOR AND EXECUTIVE OFFICER
REMUNERATION
Objective
The Remuneration Policy ensures that Executive
Directors are appropriately remunerated having regard
to their relevant experience, individual performance, the
performance of the Company, industry norms/standards
and the general pay environment as appropriate.
The Non-Executive Directors are responsible for evaluating
the performance of the Managing Director, who in
turn evaluates the performance of the other Senior
Executives. The evaluation process is intended to assess
the Company's business performance, whether long-
term strategic objectives are being achieved and the
achievement of individual performance objectives.
The performance of the Managing Director and Senior
Executives are monitored on an informal basis throughout
the year and a formal evaluation is performed annually.
Fixed Remuneration
Executives' fixed remuneration comprises salary and
superannuation and is reviewed annually by the Managing
Director, and in turn, the Remuneration Committee or the
full Board. This review takes into account the Executives'
experience, performance in achieving agreed objectives
and market factors as appropriate.
Variable Remuneration - Short Term Incentive Scheme
All Executives are entitled to participate in the Employee
Short Term Incentive Scheme which provides for annual
cash bonuses for outstanding performance in the
achievement of key corporate and individual objectives.
The Remuneration Committee approves the issue of cash
bonuses following the recommendations of the Managing
Director in his review of the performance of the Executives
and the Company as a whole.
The Short Term Incentive Scheme operates as follows:
The Board determines whether Executives are eligible
for bonuses on an annual basis. The cash bonuses, based
on the recommendations of the Managing Director for
outstanding performance, are not linked to any specific
Key Result Areas (KRA’s). The maximum achievable
bonus for an Executive is 35% of the Executive's base
salary. There were no bonuses paid under the Short Term
Incentive Scheme during the year.
Variable Remuneration - Long Term Incentive Scheme
Executives may also be provided with longer-term incentives
through the Company's Employee Option Plan, to allow the
Executives to participate in and benefit from the growth
of the Company as a result of their efforts and to assist
in motivating and retaining those key employees over the
long term. Continued service is the condition attached
to the vesting of the options. The Board at its discretion
determines the total number of options granted to each
Executive. There were no options granted under the Long
Term Incentive Scheme during the year.
16
2019 ANNUAL REPORT 3. Details of Remuneration
A. DETAILS OF REMUNERATION
The remuneration for each Director and each of the other Key Management Personnel of the Company during the Year
Ended 30 June 2019 was as follows:
30 June 2019
Directors
Mr Robert W Moses
Mr Mark Diamond
Dr Graham Mitchell
Mr William Goolsbee (1)
Dr Gary Pace (1)
Other Key Management Personnel
Dr George Tachas
Ms Nuket Desem (2)
Mr Phillip Hains (3)
Short-term employee
benefits
Post-employment
benefits
Long-term
benefits
Cash salary & fees
$
Pension & Super
Contribution $
Long Service
Leave $
56,293
391,951
36,500
69,534
69,534
623,812
233,910
146,626
99,000
479,536
1,103,348
Total $
61,641
445,779
39,968
69,534
69,534
5,348
27,450
3,468
-
-
-
26,378
-
-
-
36,266
26,378
686,456
21,707
12,804
-
34,511
70,777
15,836
9,084
-
271,453
168,514
99,000
24,920
538,967
51,298
1,225,423
(1) The US Directors are paid USD$50,000 per annum.
(2) Employee is engaged on a Part Time contract and commenced with the Company 25 July 2018.
(3) Remunerated through The CFO Solution (see Section 5 below and the Company Secretary details for further detail).
The remuneration for each Director and each of the other Key Management Personnel of the Company during the Year
Ended 30 June 2018 was as follows:
30 June 2018
Directors
Mr Robert W Moses
Mr Mark Diamond
Dr Graham Mitchell
Mr William Goolsbee (1)
Dr Gary Pace (1)
Other Key Management Personnel
Dr George Tachas
Mr Phillip Hains (2)
Short-term employee
benefits
Post-employment
benefits
Long-term
benefits
Cash salary & fees
$
Pension & Super
Contribution $
Long Service
Leave $
Total $
56,293
366,000
36,500
65,489
65,489
589,771
220,185
99,000
319,185
908,956
5,348
27,450
3,468
-
-
-
61,641
6,991
400,441
-
-
-
39,968
65,489
65,489
36,266
6,991
633,028
20,918
-
20,918
57,184
4,206
-
4,206
11,197
245,309
99,000
344,309
977,337
(1) The US Directors are paid USD$50,000 per annum.
(2) Remunerated through The CFO Solution (see Section 5 below and the Company Secretary details above for further detail).
17
ANNUAL REPORT 2019
Directors' Report continued
Remuneration Report (Audited) continued
4. Share-based Compensation
Shareholdings
The number of shares in the Company held during the financial year by each Director and other Key Management Personnel
of the Company, including their personally related parties, are set out below. No shares were granted to Directors and Key
Management Personal during the period as compensation.
balance at
start of the
year
Granted
as Com-
pensation
Options
Exercised
Net
Change
Other
Total
balance held nominally
at the end of the
reporting period
30 June 2019
Directors
Mr Robert W Moses
Mr Mark Diamond
Dr Graham Mitchell
Mr William Goolsbee
Dr Gary Pace
6,721,072
3,442,144
347,514
1,014,843
1,236,138
12,761,711
Other Key Management Personnel
Dr George Tachas
Ms Nuket Desem
Mr Phillip Hains (1)
1,536,564
36,666
5,602,528
7,175,758
19,937,469
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
478,928
7,200,000
157,856
3,600,000
-
-
-
347,514
1,014,843
1,236,138
636,784 13,398,495
-
-
-
-
1,536,564
36,666
5,602,528
7,175,758
636,784 20,574,253
-
-
-
-
-
-
-
-
-
(1) Remunerated through The CFO Solution (see Section 5 below and the Company Secretary details above for further detail).
Options and Rights
The number of options over ordinary shares in the Company held during the financial year by each Director of Antisense
Therapeutics Limited and other Key Management Personnel of the Company, including their personally related parties, are
set out below:
30 June 2019
balance
at start of
the year
Granted
as Com-
pensation
Options
Exercised
Net
Change
Other
Total
vested at
end of the
year
Total vested
and exercisable
at the end of
the year
balance held
nominally at
the end of the
reporting period
Directors
Mr Robert W Moses
1,418,888
Mr Mark Diamond
Dr Graham Mitchell
Mr William Goolsbee
Dr Gary Pace
642,772
48,036
84,400
-
2,194,096
Other Key Management Personnel
Dr George Tachas
Ms Nuket Desem
Mr Phillip Hains (1)
153,808
7,334
928,471
1,089,613
3,283,709
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,418,888
1,418,888
642,772
48,036
84,400
-
642,772
48,036
84,400
-
- 2,194,096
2,194,096
-
-
-
-
153,808
7,334
928,471
1,089,613
- 3,283,709
153,808
7,334
928,471
1,089,613
3,283,709
-
-
-
-
-
-
-
-
-
(1) Remunerated through The CFO Solution (see Section 5 below and the Company Secretary details above for further detail).
18
2019 ANNUAL REPORT 5. Employment Contracts of Key Management
Signed in accordance with a resolution of the Directors.
Personnel
At the date of this report, the employment conditions of
the Managing Director, Mr Mark Diamond and other Key
Management Personnel were formalised in contracts
of employment. Mr Mark Diamond is employed under
a contract, which commenced on 31 October 2001.
Subsequent to this contract a notice period for Mr
Diamond of between two and four months was negotiated
depending upon the party ending the agreement.
Mr Robert W Moses
Independent Non-Executive Chairman
Dr George Tachas is employed under a contract which
commenced 17 November 2001. A subsequent amendment
to this contract provided a notice period of between one
month and two months depending on the party ending the
contract.
Mr Mark Diamond
Managing Director and Chief Executive Officer
Dated: This day 30th day of August 2019
Ms Nuket Desem is employed under a contract which
commenced 25 July 2018. This contract provides for a
notice period of one month by either party.
Antisense Therapeutics Limited has a contract with The
CFO Solution, a specialist public practice, focusing on
providing back office support, financial reporting and
compliance systems for listed public companies. Through
this contract the services of Mr Phillip Hains were provided.
The contract commenced on 9 November 2006 and can
be terminated with three months’ notice of either party.
6. Additional Information
(A) EQUITY ISSUED AS PART OF REMUNERATION FOR
THE YEAR ENDED 30 JUNE 2019
During the financial year ended 30 June 2019, Nil options
have been exercised. No options were granted or lapsed by
any of the Key Management Personnel.
(B) LOANS TO DIRECTORS AND OTHER KEY
MANAGEMENT PERSONNEL
There were no loans made to Directors or other Key
Management Personnel of the Company, including their
personally related parties.
(C) OTHER TRANSACTIONS WITH OTHER KEY
MANAGEMENT PERSONNEL
Transactions between Key Management Personnel are
on normal commercial terms and conditions no more
favourable than those available to other parties unless
otherwise stated.
19
ANNUAL REPORT 2019 Auditor’s Independence Declaration
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com
Auditor’s Independence Declaration to the Directors of Antisense
Therapeutics Limited
As lead auditor for the audit of the financial report of Antisense Therapeutics Limited for the financial year
ended 30 June 2019, I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation
to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Antisense Therapeutics Limited and the entities it controlled during the
financial year.
Ernst & Young
Joanne Lonergan
Partner
Melbourne
30 August 2019
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
20
2019 ANNUAL REPORT Corporate Governance
21
ANNUAL REPORT 2019 The Board of Directors of Antisense Therapeutics Limited ("the Company") is responsible for the corporate governance of the Company and guides and monitors the business and affairs of the Company on behalf of its shareholders.The format of the Corporate Governance Statement is based on the Australian Stock Exchange Corporate Governance Council's ("the Council") "Corporate Governance Principles and Recommendations". In accordance with the Council's recommendations, the Corporate Governance Statement must contain certain specific information and must disclose the extent to which the Company has followed the guidelines during the period.Where a recommendation has not been followed, that fact must be disclosed, together will the reasons for the departure. The Company’s Corporate Governance Statement is structured with reference to the Council's principles and recommendations, which are as follows:Principle 1. Lay solid foundations for management and oversightPrinciple 2. Structure the board to add valuePrinciple 3. Act ethically and responsiblyPrinciple 4. Safeguard integrity in corporate reportingPrinciple 5. Make timely and balanced disclosurePrinciple 6. Respect the rights of shareholdersPrinciple 7. Recognise and manage riskPrinciple 8. Remunerate fairly and responsiblyCommensurate with the spirit of the ASX Corporate Governance Principles and Recommendations, the Company has followed each recommendation where the Board has considered the recommendation to be an appropriate benchmark for corporate governance practices, taking into account factors such as the size of the Company and the Board, resources available and activities of the Company. Where the Company's corporate governance practices depart from the Principles and Recommendations, the Board has offered full disclosure of the nature of, and reason for, the adoption of its own practice.The Company’s corporate governance practices were in place throughout the year ended 30 June 2019. For further information on the corporate governance policies adopted by the Company, please refer to its website: www.antisense.com.auPrinciple 1:Lay solid foundations for management and oversightRole of the BoardIt is the role of the Board of Directors to represent and protect the interests of the Company's shareholders. The Board is responsible for the corporate governance of the Company and guides and monitors the business and affairs of the Company.In furtherance of its responsibilities, the Board of Directors will:• review, evaluate, provide input into and approve, on a regular basis, the Company's corporate governance strategy;• monitor senior management's performance and implementation of strategy, and ensure appropriate resources are available;• review, evaluate and approve the Company's budget and forecasts;• review, evaluate, approve and monitor major resource allocations and capital investments, and any acquisitions and divestitures;• review and monitor the financial and operating results of the Company;• review and evaluate the overall corporate organisational structure, the assignment of senior management responsibilities and plans for senior management development and succession;• review, evaluate and approve compensation strategy as it relates to senior management of the Company;• review and ratify systems of risk management and internal compliance and control, codes of conduct, and legal compliance;• appoint and remove the Managing Director (Chief Executive Officer);• ratify the appointment and, where appropriate, the removal of the Chief Financial Officer and the Company Secretary;• monitor its own performance and recommend and implement appropriate changes in composition and size. Corporate Governance continued
The Company is committed to increasing diversity
amongst its employees, and not just in the area of gender
diversity. Our workforce is employed based on the
right person for the job regardless of their gender, age,
nationality, race, religious beliefs, cultural background,
sexuality or physical ability or appearance.
Executive and Board positions are filled by the best
candidates available without discrimination. The
Company is committed to increasing gender diversity
within these positions when appropriate appointments
become available. The Company is also committed to
identifying suitable persons within the organisation, and
where appropriate opportunities exist, advance diversity
to support the promotion of talented employees into
management positions.
The Company has not set any gender specific diversity
objectives as it believes that multicultural diversity and
other diversity factors are equally important within its
organisation.
The following table demonstrates the Company’s gender
diversity as at 30 June 2019:
Number of
Males
Number of
Females
Directors
Key Management Personnel
Other Company Employees
5
1
-
-
1
1
board Performance Review
The Board considers the ongoing development and
improvement of its own performance, the performance
of individual directors and Board Committees as critical to
effective governance.
The Board has adopted an informal self-evaluation process
to measure its own performance. The performance of the
Board and individual directors is reviewed at least every
year by the Board as a whole. This process includes a
review in relation to the composition and skills mix of the
Directors of the Company. Performance reviews involve
analysis based on key performance indicators aligned with
the financial and non-financial objectives of the Company.
A performance review in accordance with the processes
disclosed occurred during the 2019 financial year.
Principle 1:
Lay solid foundations for management
and oversight continued
Role of Management
Through the Chief Executive Officer / Managing Director,
management is responsible to the Board for the:
(1) Development and implementation of agreed
corporate strategy and performance objectives;
(2) Undertaking the day to day activities of the Company;
(3) Identifying all matters to be included in a risk profile
of the Company and ensuring that effective risk
management systems are implemented and adhered to;
(4) Observing the code of conduct;
(5) Ensuring that the Board is fully informed of all matters
which may have a material impact on the ability of the
Company to meet its obligations.
board Appointments
The Company undertakes comprehensive reference checks
prior to appointing a director, or putting that person
forward as a candidate to ensure that person is competent,
experienced, and would not be impaired in any way from
undertaking the duties of director. The Company provides
relevant information to shareholders for their consideration
about the attributes of candidates together with whether
the Board supports the appointment or re-election.
The terms of the appointment of a non-executive director,
executive directors and senior executives are agreed upon
and set out in writing at the time of appointment.
The Company Secretary
The Company Secretary is accountable directly to the
Board, through the Chairman, on all matters to do with
the proper functioning of the Board, including agendas,
Board papers and minutes, advising the Board and its
Committees (as applicable) on governance matters,
monitoring that the Board and Committee policies and
procedures are followed, communication with regulatory
bodies and the ASX and statutory and other filings.
Diversity
The Company values the differences between its
personnel and the valuable contribution that these
differences can make to the Company. The Company is an
equal opportunity employer and aims to recruit executives
and employees from as diverse a pool of qualified
candidates as reasonably possible based on their skills,
qualifications and experience.
22
2019 ANNUAL REPORT Performance Review of KMP
On at least an annual basis, the Board conducts a formal
performance review of the Chief Executive Officer and
any other key management personnel (KMP). The Board
assesses the performance of KMP against qualitative and
quantitative key performance indicators relevant to each
KMP. A performance review of KMP occurred during the
2019 financial year in accordance with this process.
Independent Advice
The Board has procedures to allow Directors, in the
furtherance of their duties, to seek independent
professional advice at the Company's expense.
Principle 2:
Structure the Board to add value
board composition
The length of service, skills, experience and expertise
of each Director in office at the date of this report and
throughout the 2019 financial year are included in the
Directors' Report under the section headed 'Directors'.
The Company's Board Charter stipulates that at least
50% of the Directors on the board should be independent
Directors. Directors of Antisense Therapeutics Limited are
considered to be independent when they are independent
of management and free from any business or other
relationship that could materially interfere with the
exercise of their independent judgement.
In the context of Director independence, to be considered
independent, a Non-Executive Director may not have a
direct or indirect material relationship with the Company.
The board considers that a material relationship is one
which impairs or inhibits, or has the potential to impair or
inhibit, a Director's exercise of judgement on behalf of the
Company and its shareholders.
From a quantitative perspective, an item is considered to
be quantitatively immaterial if it is equal to or less than 5%
of the relevant base amount. It is considered to be material
(unless there is qualitative evidence to the contrary) if it is
equal to or greater than 10% of the relevant base amount.
In accordance with the definition of independence above,
and the materiality thresholds described, the majority of
Directors are independent as set out below:
Name
Position
Mr Robert W Moses
Dr Graham Mitchell
Dr Gary Pace
Mr William Goolsbee
Independent Non-Executive
Chairman
Independent Non-Executive
Director
Independent Non-Executive
Director
Independent Non-Executive
Director
In accordance with the definition of independence above,
and the materiality thresholds described, the majority of
Directors are independent as set out below:
Name
Term in Office
Mr Robert W Moses
Mr Mark Diamond
Dr Graham Mitchell
Mr William Goolsbee
Dr Gary Pace
17 years
17 years
17 years
3 years
3 years
To ensure the Board is appropriately equipped to discharge
its responsibilities, it has developed guidelines for the
nomination and selection of Directors and for the operation
of the Board. As the Antisense Therapeutics Limited's
Board is not a large board, a formal nomination committee
has not been established, as it is perceived that no real
efficiencies would be gained from the existence of such
a committee. The charter of the nomination committee
has been incorporated into the Board Charter and by
this action the Board of Directors considers all matters
that would be relevant for a nomination committee. For
additional details please refer to the Company's Board
Charter on its website.
Induction of New Directors and Ongoing
Development
Any new Directors will be issued with a formal Letter of
Appointment that sets out the key terms and conditions
of their appointment, including Director's duties, rights
and responsibilities, the time commitment envisaged, and
the Board's expectations regarding involvement with any
Committee work.
A new director induction program is in place and Directors
are encouraged to engage in professional development
activities to develop and maintain the skills and knowledge
needed to perform their role as Directors effectively.
23
ANNUAL REPORT 2019 Corporate Governance continued
Principle 3:
Act ethically and responsibly
Code of Conduct
As part of its commitment to recognising the legitimate
interests of stakeholders, the Company has established a
Code of Conduct to guide compliance with legal and other
obligations to legitimate stakeholders.
The Board acknowledges the legitimate interest of various
stakeholders such as employees, clients, customers,
government authorities, creditors and the community
as a whole. As a good corporate citizen, it encourages
compliance and commitment to appropriate corporate
practices that are fair and ethical via its 'Code of Conduct'.
Trading in Company Securities
The Company has a 'Code of Practice - Buying & Selling
of Shares' that regulates the dealings by Directors and
employees, in shares, options and other securities issued
by the Company. The policy has been formulated to
ensure that Directors and employees are aware of the
legal restrictions on trading in Company securities while in
possession of unpublished price sensitive information.
The Audit Committee consists of two independent Non-
Executive Directors. Given the current size of the Company,
the Board believes that an Audit Committee consisting
of two members is sufficient to enable the committee to
discharge its mandate effectively. The members of the
Audit Committee during the year were Dr Graham Mitchell
(Chairperson) and Mr Robert W Moses.
For details on the number of meetings for the Audit
Committee held during the year and the attendances at
those meetings, refer to the Directors' Report under the
section headed 'Meetings of Directors'.
CEO and CFO Declarations
The CEO and CFO have provided the Board with a
declaration that, in their opinion, the financial records
of the entity have been properly maintained and that
the financial statements comply with the appropriate
accounting standards and give a true and fair view of the
financial position and performance of the entity and that
the opinion has been formed on the basis of a sound
system of risk management and internal control which is
operating effectively.
External Auditor
Principle 4:
Safeguard integrity in corporate reporting
The Company's external auditor attends each annual
general meeting and is available to answer any questions
with regard to the conduct of the audit and their report.
Audit Committee
The Audit Committee operates under a charter approved
by the Board. It is the Board's responsibility to ensure that
an effective control framework exists within the entity. This
includes ensuring that there are internal controls to deal
with both the effectiveness and efficiency of significant
business processes. This includes the safeguarding of
assets, the maintenance of proper accounting records
and the reliability of financial information as well as non-
financial considerations. The Board has delegated the
responsibility for the establishment and maintenance of a
framework of internal control and ethical standards for the
management of the Company to the Audit Committee.
The Audit Committee also provides the Board with
additional assurance regarding the reliability of financial
information for inclusion in the financial statements. All
members of the Audit Committee are Non-Executive
Directors. The Audit Committee is also responsible for the
nomination of the external auditor and for reviewing the
adequacy of the scope and quality of the annual statutory
audit and half year statutory review. The Audit Committee
Charter can be found on the Company's website.
24
Prior approval of the Board must be gained for non-audit
work to be performed by the external auditor. There are
qualitative limits on this non-audit work to ensure that the
independence of the auditor is maintained.
There is also a requirement that the audit partner
responsible for the audit not perform in that role for more
than five years.
Principle 5:
Making timely and balanced disclosure
The Company has a Disclosure Policy which outlines the
disclosure obligations of the Company as required under
the ASX Listing Rules and Corporations Act. The policy is
designed to ensure that procedures are in place so that the
market is properly informed of matters which may have a
material impact on the price at which Company securities
are traded.
2019 ANNUAL REPORT The Board has designated the Company Secretary
as the person responsible for overseeing and co-
ordinating disclosure of information to the ASX as well
as communicating with the ASX. In accordance with ASX
Listing Rules the Company immediately notifies the ASX of
information concerning the Company:
(a) that a reasonable person would or may expect to
have a material effect on the price or value of the
Company's securities; and
(b) that would, or would be likely to, influence persons
who commonly invest in securities in deciding
whether to acquire or dispose of the Company's
securities.
Principle 6:
Respect the rights of shareholders
The Company is committed to providing current and
relevant information to its shareholders.
The Company respects the rights of its shareholders,
and to facilitate the effective exercise of the rights, the
Company is committed to:
(a) communicating effectively with shareholders through
ongoing releases to the market via ASX information
and general meetings of the Company;
(b) giving shareholders ready access to balanced and
understandable information about the Company and
corporate proposals;
(c) making it easy for shareholders to participate in
general meetings of the Company; and
Any shareholder wishing to make inquiries of the Company
is advised to contact the registered office. All public
announcements made by the Company can be obtained
from the ASX's website www.asx.com.au
Shareholders may elect to, and are encouraged to, receive
communications from the Company and its securities
registry electronically.
The Company maintains information in relation to its
corporate governance documents, Directors and senior
executives, Board and committee charters, annual reports
and ASX announcements on the Company’s website.
Principle 7:
Recognise and managing risk
The Board is committed to the identification, assessment
and management of risk throughout the Company’s
business activities.
The Board has established a policy for risk oversight and
management within the Company. This is periodically
reviewed and updated. Management reports risks
identified to the Board through the monthly Operations
Report, and via direct and timely communication to the
Board where and when applicable. During the reporting
period, management has reported to the Board as to
the effectiveness of the Company’s management of its
material business risks. The Company does not have an
internal audit function.
The Company faces risks inherent to its business,
including economic risks, which may materially impact
the Company’s ability to create or preserve value for
security holders over the short, medium or long term. The
Company has in place policies and procedures, including
a risk management framework (as described in the
Company’s Risk Management Policy), which is developed
and updated to help manage these risks. The Board does
not consider that the Company currently has any material
exposure to environmental or social sustainability risks.
The Company does not have separate risk committee.
The Board as whole is responsible is responsible for
overseeing the establishment and implementation of the
risk management system. Due to the size of the Board and
the Company, it is perceived that no real efficiencies would
be gained from the existence of separate risk committee.
The Board review’s the entity’s risk management
framework at least annually to satisfy itself that it
continues to be sound. A review of the Company’s risk
management framework was conducted during the 2019
financial year.
25
ANNUAL REPORT 2019 Corporate Governance continued
26
2019 ANNUAL REPORT Principle 8:Remunerate fairly and responsiblyIt is the Company's objective to maintain a high quality Board and executive team by remunerating Directors at relevant market conditions. To assist in achieving this objective the Remuneration Committee remunerates Directors and executives having regard to their performance and the performance of the Company.The expected outcomes of the remuneration policies and practices are to enable the Company to motivate, retain and attract Directors and executives who will create value for shareholders.Details relating to the policy for performance evaluation and the amount of remuneration (monetary and non-monetary) paid to each Director and to each of the five highest-paid (non-director) executives during the year, are set out in the Directors' Report under the section headed 'Remuneration Report'.The members of the Remuneration Committee at the date of this report were all independent Non-Executive Directors, being Mr Robert W Moses and Dr Graham Mitchell. Details relating to performance evaluation are set out in the Directors' Report under the section headed 'Remuneration Report'. For details on the number of meetings of the Remuneration Committee held during the year and the attendees at those meetings, refer to the Directors' Report under the section headed 'Meetings of Directors'.In accordance with the Company’s share trading policy, participants in any equity based incentive scheme are prohibited from entering into any transaction that would have the effect of hedging or otherwise transferring the risk of any fluctuation in the value of any unvested entitlement in the Company’s securities to any other person.Further details in relation to the company’s remuneration policies are contained in the Remuneration Report, within the Directors’ report. Annual Financial Statements
Consolidated Statement of Profit or Loss
and other Comprehensive Income
For the year ended 30 June 2019
Interest from external parties
Government grants
Other income
Depreciation expenses
Administrative expenses
Occupancy expenses
Patent expenses
Research and development expenses
Foreign exchange gains/(losses)
Loss before tax
Income tax benefit
Loss for the year
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive loss for the year, net of tax
Loss per share
Basic loss per share
Diluted loss per share
The accompanying notes form part of these financial statements.
Notes
4
4
4
4
4
4
5
8
8
2019
$
66,168
10,098
576,690
652,956
2018
$
25,553
-
272,424
297,977
(5,377)
(6,413)
(1,563,390)
(1,282,542)
(115,879)
(114,062)
(137,761)
(210,316)
(1,760,729)
(1,006,810)
(14,319)
(8,849)
(2,944,499)
(2,331,015)
-
-
(2,944,499)
(2,331,015)
-
-
(2,944,499)
(2,331,015)
(0.76)
(0.76)
($1.20)
($1.20)
27
ANNUAL REPORT 2019
Consolidated Statement of Financial Position
For the year ended 30 June 2019
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Other current assets
Non-Current Assets
Plant and equipment
TOTAL ASSETS
LIAbILITIES
Current Liabilities
Trade and other payables
Employee benefit liabilities
Non-Current Liabilities
Non-current portion of employee benefit liability
TOTAL LIAbILITIES
NET ASSETS
EQUITY
Contributed equity
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of these financial statements.
Notes
2019
$
2018
$
9
10
11
12
13
14
14
2,903,542
1,899,059
606,468
186,221
331,162
164,235
-
2,400,000
3,696,231
4,794,456
2,299
2,299
7,675
7,675
3,698,530
4,802,131
551,486
328,269
879,755
332,619
248,241
580,860
9,084
-
888,839
580,860
2,809,691
4,221,271
15
63,938,429
62,405,510
(61,128,738)
(58,184,239)
2,809,691
4,221,271
28
2019 ANNUAL REPORT
Consolidated Statement of Changes in Equity
For the year ended 30 June 2019
As at 1 July 2017
Loss for the period
Total comprehensive income
Issue of share capital (Note 15)
Transactions costs on options issues/capital raising
Shares issued
At 30 June 2018
As at 1 July 2018
Loss for the period
Total comprehensive income
Contributed
Equity
(Note 15)
Accumulated
Losses
Notes
Total
$
$
$
57,706,647 (55,853,224)
1,853,423
-
-
(2,331,015)
(2,331,015)
(2,331,015)
(2,331,015)
5,040,653
(344,350)
2,560
-
-
-
5,040,653
(344,350)
2,560
62,405,510 (58,184,239)
4,221,271
62,405,510 (58,184,239)
4,221,271
-
-
(2,944,499)
(2,944,499)
(2,944,499)
(2,944,499)
Issue of share capital
Transactions costs on options issues/capital raising
At 30 June 2018
15.a
15.a
1,600,000
(67,081)
-
-
1,600,000
(67,081)
63,938,429
(61,128,738)
2,809,691
The accompanying notes form part of these financial statements.
29
ANNUAL REPORT 2019 Consolidated Statement of Cash Flows
For the year ended 30 June 2019
OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
R&D tax concession refund
Notes
2019
$
2018
$
(3,288,028)
(2,718,085)
74,692
284,900
16,918
399,374
Net cash flows used in operating activities
19
(2,928,436)
(2,301,793)
INVESTING ACTIVITIES
Term Deposits (Over 90+ days)
Net cash flows used in investing activities
FINANCING ACTIVITIES
Proceeds from issues of securities
Capital raising costs
Net cash flows from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
The accompanying notes form part of these financial statements.
2,400,000
(2,400,000)
2,400,000
(2,400,000)
1,600,000
5,043,214
(67,081)
(344,350)
1,532,919
4,698,864
9
9
1,004,483
(2,929)
1,899,059
1,901,988
2,903,542
1,899,059
30
2019 ANNUAL REPORT
Notes to the Financial Statements
For the year ended 30 June 2019
Note 1:
Significant Accounting Policies
1.a Corporate Information
The financial report of Antisense Therapeutics Limited
and its subsidiaries (the ‘Company’) for the Year Ended
30 June 2019 was authorised for issue in accordance with
a resolution of the Directors on 28th August 2018. The
financial report is for the Company consisting of Antisense
Therapeutics Limited and its subsidiaries.
Antisense Therapeutics Limited is a listed public company
limited by shares incorporated and domiciled in Australia
whose shares are publicly traded on the Australian
Securities Exchange. The Company also has a Level 1
American Depository Receipt (ADR) program traded on
the US over-the-counter market.
The principal activity of the Company is the research and
development of novel antisense pharmaceuticals.
1.b basis of Preparation
The financial report is a general purpose financial
report, which has been prepared in accordance with the
requirements of the Corporations Act 2001 and Australian
Accounting Standards, required for a for-profit entity.
The financial report has been prepared on an accruals
basis and is based on historical costs. These consolidated
financial statements are presented in Australian dollar
($), which is the Company’s functional and presentation
currency. The Company is of a kind referred to in
ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191 and in accordance with
that instrument, amounts in the consolidated financial
statements and directors’ report have been rounded off to
the nearest dollar, unless otherwise stated.
Management is required to make judgements, estimates
and assumptions about carrying values of assets and
liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on
historical experience and various other factors that are
believed to be reasonable under the circumstance, the
results of which form the basis of making the judgements.
Actual results may differ from these estimates. The
estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised
if the revision affects only that period, or in the period of
the revision and future periods if the revision affects both
current and future periods.
Judgements made by management in the application
of Australian Accounting Standards that have significant
effects on the financial statements and estimates with a
significant risk of material adjustments in the next year are
disclosed, where applicable, in the relevant notes to the
financial statements.
Accounting policies are selected and applied in a manner
which ensures that the resulting financial information
satisfies the concepts of relevance and reliability, thereby
ensuring that the substance of the underlying transactions
or other events is reported.
Reclassification
Certain amounts reported in prior years in the financial
statements have been reclassified to conform to the
current year's presentation.
Going Concern
The Directors have prepared the 2019 financial report on
a going concern basis, which contemplates continuity of
normal business activities and the realisation of assets
and the settlement of liabilities in the ordinary course of
business.
The Company incurred a loss from ordinary activities
of $2,944,499 during the year ended 30 June 2019
($2,331,015 to 30 June 2018) and incurred an operating
cash outflow of $2,928,436 ($2,301,793 year to 30 June
2018). The cash balance at 30 June 2019 is $2,903,542
($4,299,059 as at 30 June 2018).
As at 30 June 2019, the Company had a net assets position
of $2,809,691 (June 2018: $4,221,271) and current assets
exceed current liabilities by $2,807,392 (June 2018:
current assets exceed current liabilities by $4,213,596). The
Company anticipates receiving an R&D Tax incentive refund
later in this calendar year in relation to R&D expenditure for
the year ending 30 June 2019 (including that associated
with the ongoing clinical trial of ATL1102 in DMD).
While the Company projects that its existing cash reserves
and the anticipated tax refund should fund operations
into 2020, the Company will need to access additional
capital for further development of its various development
projects and to continue to pay its debts as and when
they fall due. The Company has approximately 68.7 million
listed options ($0.08 excercisable, expiry 19 December
2019) which if exercised could provide a substantial capital
influx (over $5.4 million if fully executed).
31
ANNUAL REPORT 2019 Notes to the Financial Statements
For the year ended 30 June 2019
Note 1:
Significant Accounting Policies continued
1.b basis of Preparation continued
Going Concern continued
After consideration of the available facts the Directors
have concluded that the going concern basis is appropriate
given the Company's track record of raising capital and
the progress of its development activities including the
ongoing clinical trial of ATL1102 in DMD. Accordingly, the
financial statements do not include adjustments relating
to the recoverability and classification of recorded asset
amounts, or the amounts and classification of liabilities
that might be necessary should the Company not continue
as a going concern.
1.c Statement of Compliance
The financial report complies with Australian Accounting
Standards as issued by the Australian Accounting Standards
Board and International Financial Reporting Standards
("IFRS") as issued by the International Accounting
Standards Board.
1.d New, Revised or Amending Accounting
Standards and Interpretations Adopted
The following new, revised or amended Accounting
Standards have been adopted for the year ended 30
June 2019:
The Company has adopted AASB 9 from 1 July 2018.
Financial assets are measured at amortised cost if it is held
within a business model whose objective is to hold assets
in order to collect contractual cash flows which arise on
specified dates and that are solely principal and interest.
Debt investments are measured at fair value through other
comprehensive income if it is held within a business model
whose objective is to both hold assets in order to collect
contractual cash flows which arise on specified dates that
are solely principal and interest as well as selling the asset
on the basis of its fair value. All other financial assets are
classified and measured at fair value through profit or
loss unless the consolidated entity makes an irrevocable
election on initial recognition to present gains and losses
on equity instruments (that are not held-for-trading
or contingent consideration recognised in a business
combination) in other comprehensive income ('OCI').
Allowances for impairment are recognised using an
'expected credit loss' ('ECL") model. Impairment is
measured using a 12 month ECL method unless the credit
risk on a financial instrument has increased significantly
since initial recognition in which case the lifetime ECL
method is adopted. For receivables, a simplified approach
to measuring expected credit losses using a lifetime
expected loss allowance is available.
The Company has applied AASB 9 retrospectively.
Adoption of AASB9 has resulted in changes of accounting
policies but no adjustment to the financial statements
comparatives.
The following Australian Accounting Standards and
Interpretations have recently been issued or amended but
are not yet effective and therefore have not been adopted
by the Company for the annual reporting period ended 30
June 2019:
• (a) AASB 15 Revenue from Contracts with Customers
The Company has adopted AASB 15, which supersedes
AASB 111 Construction Contracts, AASB 18 Revenue
and relater Interpretations, from 1 July 2018. Revenue
from contracts with customers is recognised to
depict the transfer of promised goods or services to
customers at an amount that reflects the consideration
to which the entity expects to be entitled in exchange
for those goods or services. This is based on a contract-
based revenue recognition model with a measurement
approach that is based on an allocation of the
transaction price. Credit risk is presented separately as
an impairment expense rather than adjusted against
revenue. Contracts with customers are presented in
the statement of financial position as a contract liability,
a contract asset or a receivable, depending on the
relationship between the entity's performance and the
customer's payment. Customer acquisition costs and
costs to fulfil a contact are, subject to certain criteria,
capitalised as an asset and amortised over the contract
period.
In applying AASB15, the Company has elected to use
the modified retrospective method, and did not restate
the comparatives. On applying this standard, there were
no material adjustments required or impact on the
financial statements, as there is currently no revenue
from customer contracts.
32
2019 ANNUAL REPORT
Title of standard AASb 16 Leases
Nature of change
AASB 16 was issued in February 2016. It will result in almost all leases being recognised on the balance
sheet by lessees, as the distinction between operating and finance leases is removed. Under the new
standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised.
The only exceptions are short-term and low-value leases.
Impact
The actual impact of applying AASB 16 on the financial statements in the period of initial application
will depend on the composition of the Company's lease portfolio, the extent to which the Company
chooses to use practical expedients and recognition exemptions, final discount rates used in calculating
the lease liability, final determination of reasonably certain renewal options and the new accounting
policies which are subject to change until the Company presents its financial statements that include
the date of initial application.
The group expects to recognise right-of-use assets and lease liabilities within an approximate range of
$210,000 to $240,000 on 1 July 2019 (after adjustments for prepayments and accrued lease payments
recognised as at 30 June 2019). Overall net assets will be approximately $5,000 to $7,000 lower, and
net current assets will be approximately $125,000 to $130,000 lower due to the presentation of a
portion of the liability as a current liability.
As at the reporting date, the Company has non-cancellable operating lease commitments of
$249,480, see Note 17.
The Company does not act in the capacity as a lessor and hence the Company does not expect any
lessor impact on the consolidated financial statements.
Mandatory
application date/
Date of adoption
by Company
The Company will apply the standard from its mandatory adoption date of 1 July 2019.
The Company intends to apply the modified retrospective transition approach and will not restate
comparative amounts for the year prior to first adoption. Right-of-use assets will be measured at
the amount of the lease liability on adoption (adjusted for any prepaid or accrued lease expenses).
1.e Principles of Consolidation
1.f Summary of Significant Accounting Policies
The consolidated financial statements incorporate the
assets and liabilities of all subsidiaries of Antisense
Therapeutics Ltd as at 30 June 2019 and the results of all
subsidiaries for the year then ended.
Subsidiaries are all those entities where the Company
is exposed, or has rights, to variable returns from the
Company’s involvement with the entity and has the ability
to affect those returns through the Company’s power to
direct the activities of the entity. The existence and effect
of potential voting rights that are currently exercisable or
convertible are considered when assessing whether the
Company controls another entity.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Company. They are de-
consolidated from the date that control ceases.
In preparing the consolidated financial statements, all
intercompany balances and transactions, and unrealised
profits/losses arising within the consolidated entity are
eliminated in full. Unrealised losses are also eliminated
unless the transaction provides evidence of the
impairment of the asset transferred. Investments in
subsidiaries are accounted for at cost in the separate
financial statements of Antisense Therapeutics Limited.
a) Government Grants
Government grants are recognised when there is
reasonable assurance that the grant will be received
and all grant conditions will be complied with.
When the grant relates to an expense item, it is
recognised as income over the periods necessary to
match the grant on a systematic basis to the costs that
it is expected to compensate.
The Company currently receives grant funding in
the form of the R&D Tax Incentive together with the
Innovation Connections Grant. The grant funding is
to facilitate research projects in collaboration with
Publicly Funded Research Organisation to develop new
ideas to commercial potential.
b) Borrowing Costs
Borrowing costs are expensed using the effective
interest method.
c) Leases
The minimum lease payments of operating leases,
where the lessor effectively retains substantially all of
the risks and benefits of ownership of the leased item,
are recognised as an expense on a straight-line basis.
33
ANNUAL REPORT 2019
Note 1:
Significant Accounting Policies continued
1.f Summary of Significant Accounting Policies
continued
d) Cash and Cash Equivalents
Cash and short-term deposits in the Statement of
Financial Position comprise cash at bank and in hand
and short-term deposits with an original maturity of
three months or less.
For the purposes of the Cash Flow Statement,
cash and cash equivalents consist of cash and cash
equivalents as defined above.
e) Foreign Currencies
The functional currency of the Company is based
on the primary economic environment in which the
Company operates. The functional currency of the
Company is Australian dollars.
Transactions in foreign currencies are converted to
local currency at the rate of exchange at the date of
the transaction.
Amounts payable to and by the Company outstanding
at reporting date and denominated in foreign
currencies have been converted to local currency using
rates prevailing at the end of the financial year.
All exchange differences are taken to profit or loss.
f)
Income Taxes
Deferred income tax is provided on all temporary
differences at the balance date between the tax bases
of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred income tax liabilities are recognised for
all taxable temporary differences except where the
deferred income tax liability arises from the initial
recognition of an asset or liability in a transaction that
is not a business combination and, at the time of the
transaction, affects neither the accounting loss nor
taxable profit or loss.
Deferred income tax assets are recognised for all
deductible temporary differences, carry-forward of
unused tax assets and unused tax losses, to the extent
that it is probable that taxable profit will be available
against which the deductible temporary differences,
and the carry-forward of unused tax assets and unused
tax losses can be utilised except where the deferred
34
income tax asset relating to the deductible temporary
differences arises from the initial recognition of an
asset or liability in a transaction that is not a business
combination and, at the time of transaction, affects
neither the accounting loss nor taxable profit or loss.
The carrying amount of deferred income tax assets
is reviewed at each balance date and reduced to the
extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured
at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled,
based on tax rates (and tax laws) that have been
enacted or substantively enacted at balance date.
Deferred Tax assets are recognised for unused tax
losses to the extent that it is probable that taxable
profit will be available against which the losses can be
utilised. Significant management judgement is required
to determine the amount of deferred tax assets that
can be recognised, based upon the likely timing and
the level of future taxable profits together with future
tax planning strategies.
Given the history of losses, there is limited support for
the recognition of these losses as deferred tax assets.
On this basis, Antisense Therapeutics Limited has
determined it cannot recognise deferred tax assets on
the tax losses carried forward. Further, on this basis,
deferred tax assets have not been recognised related
to temporary differences.
Income taxes relating to items recognised directly in
equity are recognised in equity and not in profit or loss.
g) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of
the amount of GST, except:
• where the GST incurred on a purchase of goods
and services is not recoverable from the taxation
authority, in which case the GST is recognised as
part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
• receivables and payables are stated with the
amount of GST included.
Cash flows arising from operating activities are
included in the Cash Flow Statement on a gross basis
(i.e. including GST) and the GST component of cash
2019 ANNUAL REPORT Notes to the Financial StatementsFor the year ended 30 June 2019
flows arising from investing and financing activities,
which is recoverable from, or payable to, the taxation
authority are classified as operating cash flows.
Commitments and contingencies are disclosed net
of the amount of GST recoverable from, or payable
to, the taxation authority. The net amount of GST
recoverable from or payable to, the taxation authority
is included as part of the receivables or payables in the
Statement of Financial Position.
h) Plant and Equipment
Plant and equipment are measured at cost less
any accumulated depreciation and any impairment
losses. Such assets are depreciated over their useful
economic lives as follows:
Life
Method
An impairment loss is recognised for the amount
by which the asset's carrying amount exceeds its
recoverable amount. Recoverable amount is the higher
of an asset's fair value less costs of disposal and value
in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there
are separately identifiable cash inflows that are largely
independent of the cash inflows from other assets
or groups of assets (cash-generating units). Non-
financial assets that suffer an impairment are tested
for possible reversal of the impairment whenever
events or changes in circumstances indicate that the
impairment may have reversed.
An impairment exists when the carrying value of an
asset exceeds its estimated recoverable amount. The
asset is then written down to its recoverable amount.
Equipment
3-5 years Straight line
k) Trade and Other Payables
i) Research and Development Costs
Research costs are expensed as incurred.
An intangible asset arising from development
expenditure on an internal project is recognised only
when the Company can demonstrate the technical
feasibility of completing the intangible asset so that
it will be available for use or sale, its intention to
complete and its ability to use or sell the asset, how
the asset will generate future economic benefits, the
availability of resources to complete the development
and the ability to measure reliably the expenditure
attributable to the intangible asset during its
development.
Following initial recognition of the development
expenditure, the cost model is applied requiring the
asset to be carried at cost less any accumulated
amortisation and accumulated impairment losses. Any
expenditure so capitalised is amortised over the period
of expected benefits from the related project.
The carrying value of an intangible asset arising from
development expenditure is tested for impairment
annually when the asset is not available for use, or
more frequently when an indication of impairment
arises during the reporting period.
j)
Impairment of Non-Financial Assets
The carrying values of non-financial assets are tested
for impairment whenever events or changes in
circumstances indicate that the carrying amount may
not be recoverable.
Trade and other payables are carried at amortised
cost and represent liabilities for goods and services
provided to the Company prior to the end of the
financial year that are unpaid and arise when the
Company becomes obliged to make future payments
in respect of the purchase of these goods and services.
Licensing fees are recognised as an expense when it is
confirmed that they are payable by the Company.
l) Employee Benefits
Wages, salaries and annual leave
Liabilities for wages and salaries, including non-
monetary benefits and annual leave payments
expected to be settled within 12 months of the
reporting date are recognised in other provisions in
respect of employees' service up to the reporting date.
They are measured at the amounts expected to be
paid when the liabilities are settled.
Long Service Leave
The liability for long service leave is recognised for
employee benefits and measured as the present value
of expected future payments to be made in respect
of services provided by employees up to the reporting
date. Consideration is given to expected future wage
and salary levels, experience of employee departures,
and periods of service. Expected future payments are
discounted using market yields at the reporting date
on national corporate bonds with terms to maturity
and currencies that match, as closely as possible, to
the estimated future cash outflows.
35
ANNUAL REPORT 2019
Notes to the Financial Statements
For the year ended 30 June 2019
Note 2: Information Relating to the Antisense Therapeutics Limited (the Parent)
2019
$
2018
$
3,696,231
4,794,456
2,299
7,675
3,698,530
4,802,131
879,755
580,860
9,084
-
(888,839)
(580,860)
63,938,429
62,405,510
(61,128,738)
(58,184,239)
2,809,691
4,221,271
(2,944,499)
(2,331,015)
(2,944,499)
(2,331,015)
ASSETS
Current assets
Non-current assets
Total assets
LIAbILITIES
Current liabilities
Non-current liabilities
Total liabilities
EQUITY
Contributed equity
Retained earnings
Total equity
Net loss for the year
Total comprehensive loss of the Parent entity
36
2019 ANNUAL REPORT Note 1:Significant Accounting Policies continued1.f Summary of Significant Accounting Policies continuedm) Contributed Equity Ordinary shares are classified as equity. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction (net of tax) of the share proceeds received.n) Earnings Per Share Basic earnings per share is calculated as net gain attributable to members, adjusted to exclude costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted earnings per share is calculated as net gain attributable to members, adjusted for:• costs of servicing equity (other than dividends);• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses;• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.o) Parent Information The financial information for the parent entity, Antisense Therapeutics Limited, disclosed in Note 2 has been prepared on the same basis as the consolidated statements with the exception of investments in subsidiaries which are carried at costs less any impairment. Note 3: Revenue and Other Income
REVENUE
Government grants
Interest from external parties
Total revenue
OTHER INCOME
Research and development tax concession
Total other income
Total revenue & other income
Note 4: Expenses
Administrative Expenses
Compliance expenses
Office expenses
Corporate employee expenses
Business development expenses
Total administrative expenses
Occupancy Expenses
Rent
Other expenses
Total occupancy expenses
Research and Development Expenses
ATL 1102
ATL 1103
R&D Staff Costs
Total Research and Development Expenses
Patent expenses
Depreciation expenses
Foreign exchange gains/(losses)
Total Expenses
2019
$
10,098
66,168
76,266
2018
$
-
25,553
25,553
576,690
576,690
652,956
272,424
272,424
297,977
2019
$
251,856
43,830
894,931
372,773
2018
$
221,922
38,609
678,913
343,098
1,563,390
1,282,542
106,710
9,169
115,879
774,219
316,470
670,040
100,999
13,063
114,062
364,427
420,606
221,777
1,760,729
1,006,810
137,761
210,316
5,377
14,319
6,413
8,849
3,597,455
2,628,992
37
ANNUAL REPORT 2019 Notes to the Financial Statements
For the year ended 30 June 2019
Note 5: Income Tax
Accounting loss before income tax
At Australia's statutory income tax rate of 27.5% (2018: 27.5%)
Research and development tax concession
Non-assessable grant income
Section 40-880 deductions
Entertainment
Tax (benefit)/losses not previously recognised
Income tax expense reported in the statement of profit or loss
Income tax attributable to a discontinued operation
Income tax expense/(benefit) attributable to the Company
Deferred Tax
Deferred tax assets and liabilities:
Accruals
Provision for annual leave & long service leave
Other
Net deferred tax asset/(liability) not recognised
Previously unbooked losses
Net deferred tax asset/(liability)
Tax Losses
2019
$
2018
$
2,944,499
2,331,015
(809,737)
(641,029)
494,400
(158,590)
(36,984)
1,192
509,719
-
-
-
-
24,505
(3,468)
685,971
(81,727)
(39,377)
1,032
75,130
-
-
-
(8,308)
(20,092)
1,569
21,037
(26,831)
(21,037)
26,831
-
-
Antisense Therapeutics Limited has unconfirmed, unrecouped tax losses in Australia which have not been brought to
account. The ability to be able to recognise a deferred tax asset in respect of these tax losses will be dependent upon
the probability that future taxable profit will be available against which the unused tax losses can be utilised and the
conditions for deductibility imposed by Australian tax authorities will be complied with.
Unused tax losses for which no deferred tax asset has been recognised
46,695,391
44,841,864
46,695,391
44,841,864
2019
$
2018
$
38
2019 ANNUAL REPORT Note 6: Key Management Personnel Compensation
The aggregate compensation made to Directors and other Key Management Personnel of the Company is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
2019
$
2018
$
1,103,348
908,956
70,777
51,298
57,184
11,197
1,225,423
977,337
For more information on Key Management Personnel Compensation, please refer to the Remuneration Report contained
under Directors’ Report.
Note 7: Auditors’ Remuneration
The auditor of Antisense Therapeutics Limited is Ernst and Young.
Amounts received or due and receivable by Ernst and Young for:
An audit or review of the financial report of the entity
58,240
50,985
2019
$
2018
$
Other services in relation to the entity:
Tax compliance services
Note 8: Earnings per share (EPS)
20,148
78,388
19,648
70,633
Basic EPS is calculated by dividing profit for the year attributable to ordinary equity holders of the Parent by the
weighted average number of ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the net profit attributable to ordinary equity holders of the Parent (after adjusting
for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding during
the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive
potential ordinary shares into ordinary shares.
The following table reflects the income and share data used in the basic and diluted EPS computations:
Net profit/(earnings/(losses)) used in the calculation of basic and diluted earnings/
(losses) per share
2019
$
2018
$
(2,944,449)
(2,331,015)
Weighted average number of ordinary shares for basic EPS
386,097,675
194,630,185
Adjustments for calculation of diluted earnings/(losses) per share:
Weighted average number of ordinary shares adjusted for the effect of dilution
386,097,675
194,630,185
There have been no other conversions to, call of, or subscriptions for ordinary shares, or issues of potential ordinary
shares since the reporting date and before the completion of this financial report.
As at 30 June 19, the Company had 68,681,794 options outstanding, which are convertible into 68,681,794 ordinary
shares at $0.08 exercise price, at the election of the option holders. Upon conversion, these shares could potentially
dilute basic earnings per share in the future, but were not included in the calculation of diluted earnings per share
because they are anti-dilutive for the current period.
39
ANNUAL REPORT 2019 Notes to the Financial Statements
For the year ended 30 June 2019
Note 9: Cash and Cash Equivalents
Cash at bank and on hand
Short-term deposits
2019
$
2018
$
403,542
399,059
2,500,000
1,500,000
2,903,542
1,899,059
The interest rate on cash at bank at 30 June 2019 was 0.10%p.a. (2018: 0.10% p.a.). And the interest rates on term
deposits at 30 June 2019 were 1.95% p.a. (2018: 2.24% p.a.) for 30 days, 1.83% p.a (2018: 2.30%) for 60 days,1.74% p.a.
(2018: 2.30%) for 90 days. The term deposits have maturity periods of 60 days and 90 days.
Note 10: Trade and Other Receivables
Trade receivables
Government grants
Research and development tax concession receivable
Interest receivable
Other receivables
Note 11: Other Current Assets
Term deposit (greater than 3 months)
2019
$
834
10,098
564,043
3,376
28,117
606,468
2018
$
-
-
272,253
11,900
47,009
331,162
2019
$
-
-
2018
$
2,400,000
2,400,000
The interest rates on term deposits at 30 June 2018: 2.42% for 120 days and 1.45% (2018: 2.55% and 2.48%) for 180 days.
40
2019 ANNUAL REPORT Note 12: Property, Plant and Equipment
Property, plant & equipment
Cost
At 1 July 2017
At 30 June 2018
At 1 July 2018
At 30 June 2019
Depreciation and impairment
At 1 July 2017
Depreciation charge for the year
At 30 June 2018
At 1 July 2018
Depreciation charge for the year
At 30 June 2019
Gross value
Accumulated depreciation
Note 13: Trade and Other Payables
Trade payables
Accrued expenses
Other payables
Note 14: Employee Benefit Liabilities
Current
Current employee provisions
Non-current
Long service leave
$
191,645
191,645
191,645
191,645
(177,557)
(6,413)
(183,970)
(183,970)
(5,377)
(189,347)
2019
$
2018
$
191,645
191,645
(189,346)
(183,970)
2,299
7,675
2019
$
103,755
224,287
4,577
2018
$
165,694
194,075
4,577
332,619
364,346
2019
$
2018
$
328,269
328,269
248,241
248,241
9,084
9,084
-
-
41
ANNUAL REPORT 2019 Notes to the Financial Statements
For the year ended 30 June 2019
Note 15: Contributed Equity
Ordinary fully paid shares
Options over ordinary shares
Note 15(a): Ordinary Shares
Reconciliation of share movement in the period:
Note
15(a)
15(b)
2019
$
2018
$
62,698,317
61,165,398
1,240,112
1,240,112
63,938,429
62,405,510
2019
No.
$
2018
No.
$
At the beginning of the period
371,618,638
61,165,398
161,559,408
56,466,535
Shares issued during the year
48,484,849
1,600,000
210,059,230
Transaction costs relating to share issues
-
(67,081)
-
5,043,213
(344,350)
balance at the end of the year
420,103,487
62,698,317
371,618,638
61,165,398
Details of movement in shares:
2019
Details
Numbers
13 March 2019
Share Placement
48,484,849
48,484,849
2018
06 April 2018
Details
Numbers
Institutional Placement to Australian
Ethical Investment
24,233,911
07 May 2018
Non-Renounceable Entitlement Issue
181,045,377
09 May 2018
Non-Renounceable Entitlement Issue
4,747,942
28 June 2018
Conversion of Options (ANPOB)
32,000
210,059,230
Issue Price
$
0.0333
Issue Price
$
0.024
0.024
0.024
0.08
AUD
$
1,600,000
1,600,000
AUD
$
581,614
4,345,089
113,950
2,560
5,043,213
Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number
of shares held. At shareholder meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands. The ordinary shares have no par value.
42
2019 ANNUAL REPORT Note 15(b): Options
Reconciliation of option movement in the period:
2019
No.
$
2018
No.
$
At the beginning of the period
68,713,794
1,240,112
68,713,794
1,240,112
Options exercised during the period
-
-
(32,000)
-
68,681,794
1,240,112
68,681,794
1,240,112
Note 16: Reserves
Note 17: Commitments and Contingencies
Nature and Purpose of the Reserve
Operating Lease Commitments
The option reserve recognises the proceeds from the
issue of options over ordinary shares and the expense
recognised in respect of share based payments.
During the year ended 30 June 2019 there was no activity.
There was no activity during the year ended 30 June 2018
other than options exercised.
Options Outstanding as at 30 June 2019:
On issue at beginning of year
Issued during the year
Exercised during the year
Expired during the year
Forfeited during the year
No. of Options
20 Dec 2016
68,681,794
-
-
-
-
Future minimum rentals payable under non-cancellable
operating leases as at 30 June are, as follows:
Within one year
After one year but not more
than five years
2019
2018
$
$
110,430
27,000
139,050
-
249,480
27,000
The lease expenditure commitments relate to the leasing
of office premises which is contractually non-cancellable
operating lease commitment excluding any extension
options. The existing lease expiries 30 September 2019;
has been executed and extended with an expiry now to 30
September 2021.
Outstanding at balance sheet date
68,681,794
There are no contingencies in the current or preceding year.
Expired subsequent to balance date
Exercised subsequent to balance date
Outstanding at date of Directors’
Report
Original number of recipients
Number of current holders
Exercise price
Exercise period from
To (expiration day)
-
-
-
1,529
1,529
$0.08
20 Dec 2016
19 Dec 2019
The following proportion of options
vest from the dates shown:
100%
19 Dec 2019
43
ANNUAL REPORT 2019 Notes to the Financial Statements
For the year ended 30 June 2019
Note 18: Operating Segments
The Company has identified its operating segments based on the internal reports that are reviewed and used by the
management team in assessing performance and determining allocation of the resources.
The operating segments are identified by management based on the manner in which the expenses are incurred, and for
the purpose of making decisions about resource allocation and performance assessment.
Discrete financial information about each of these operating segments is reported by the executive management team to
the board on a regular basis.
For the management purposes, the Company prepares its reporting for the following two operating segments that has
been identified based on its antisense oligonucleotide products that are currently under development:
• ATL1102; and
• ATL1103
The assets and liabilities of the Company are not allocated to a segment.
All revenue and expenses that do not directly relate to these two operating segments have been currently reported as
unallocated.
30 June 2019
ATL1102
ATL1103
Segment revenue
Segment result
Net result
$
564,043
(950,566)
(386,523)
Unallocated
(Note a)
$
76,266
Total
$
652,956
$
12,647
(407,739)
(2,239,150)
(3,597,455)
(395,092)
(2,162,884)
(2,944,499)
30 June 2018
ATL1102
ATL1103
Segment revenue
Segment result
Net result
$
-
(96,349)
(96,349)
$
272,424
(385,024)
(112,600)
Unallocated
(Note a)
$
25,553
Total
$
297,977
(2,147,619)
(2,628,992)
(2,122,066)
(2,331,015)
44
2019 ANNUAL REPORT Note 18(a): Unallocated breakdown
Unallocated revenue
Interest from external parties
Unallocated result
Compliance expenses
Business development expenses
Employee expenses
Patent expenses
Other expenses
Note 19: Cash Flow Information
Reconciliation of cash flow from operations with loss after income tax
2019
$
76,266
76,266
(251,856)
(372,773)
(1,258,204)
(137,761)
(218,557)
2018
$
25,553
25,553
(221,922)
(343,098)
(900,690)
(210,316)
(471,593)
(2,239,151)
(2,147,619)
2019
$
2018
$
Cash flow reconciliation
Reconciliation of net loss after tax to net cash flows from operations:
Net loss before tax
(2,944,499)
(2,331,015)
Adjustments to reconcile loss before tax to net cash flows:
Depreciation expense
Working capital adjustments:
Movement in trade and other receivables
Movement in prepayments
Movement in trade and other payables
Movement in other current assets
Movement in provisions
5,377
6,413
(275,306)
(21,986)
218,867
-
89,111
96,740
870
(31,736)
30,000
(73,065)
Net cash flows used in operating activities
(2,928,436)
(2,301,793)
45
ANNUAL REPORT 2019 Notes to the Financial Statements
For the year ended 30 June 2019
Note 20: Events After the Reporting
Period
As noted in the Operations Report under the section on
ATL1103 for Acromegaly as an Event after the balance
date, on 26 August 2019 the Company provided a market
update on the status of the EAP confirming that to date
the Company has been unable to obtain myTomorrows’
clearance for importation of ATL1103 drug product being
stored in the United Kingdom. The Company also noted
that following a review by an external Quality Person (QP),
requested by myTomorrows, of the ATL1103 manufacturing
documentation, the QP advised that due to the material
intended for use in the EAP being supplied by a different
manufacturer to the one used for the manufacture
of material previously used in the Phase II clinical trial
of ATL1103, it would first need to be approved by a
European Health authority for use in a new clinical trial,
for the material to be cleared for the EAP. The Company
stated that it had not expected this clinical trial approval
prerequisite for ATL1103 EAP initiation, with this new
requirement coming on top of the additional data the
Company had been asked by myTomorrows to collect and
generate to show the comparability of the current batch of
ATL1103 material to the earlier batch used in clinical trials.
The Company highlighted that a new clinical trial would
require a substantial financial commitment to proceed with
the next phase of clinical development for ATL1103 and
as the Company’s current development focus was being
directed towards the clinical development of ATL1102 in
DMD, the Company stated that it would not apply further
resources to the EAP process and would continue to direct
its focus and funds on the ATL1102 for DMD program.
The Company also noted though that circumstances
could present in the future where the Company may
have the capacity and justification to continue to invest
in the further clinical development of ATL1103, including
activation of an EAP and also that the Company was also
continuing to pursue the potential out-licensing of ATL1103
to support and fund its ongoing clinical development and
was entertaining preliminary interest from some regionally
based pharmaceutical companies
There have not been any matters or circumstances, other
than that referred to in the financial statements or notes
thereto, that have arisen since the end of the financial year,
which significantly affected, or may significantly affect, the
operations of Antisense Therapeutics Limited, the results
of those operations or the state of affairs of Antisense
Therapeutics Limited in future financial years.
Note 21: Related Party Transactions
The following are identified as Key Management Personnel
for the year:
• Mr Robert W Moses
• Mr Mark Diamond
• Dr Graham Mitchell
• Mr William Goolsbee
• Dr Gary Pace
• Dr George Tachas
• Ms Nuket Desem
There have been related part transactions during the
period ending 30 June 2019 totalling $1,250 with
Walter & Eliza Hall Institute (WEHI) of which Dr. Mitchell
is a Director. All transactions were made on normal
commercial terms and conditions and at market rates.
There were no further transactions with related parties
during the current financial year other than those declared
on the Remuneration Report.
Note 22: Financial Risk Management
Objectives and Policies
Note 22(a): Financial Instruments
The Company's financial instruments consist of cash and
cash equivalents, trade and other receivables and trade
and other payables:
2019
$
2018
$
2,903,542
1,899,059
Cash and cash
equivalents
Other current assets
-
2,400,000
Trade and other
receivables
Trade and other
payables
32,327
58,909
(551,486)
(332,619)
The fair values of cash and short-term deposits, trade and
other receivables, trade and other payables approximate
their carrying amounts largely due to the short-term
maturities of these instruments.
The Company does not have any derivative instruments at
30 June 2019 (2018: Nil).
46
2019 ANNUAL REPORT Note 22(b): Risk Management Policy
Note 22(d): Financial Risk Management
The Board is responsible for overseeing the establishment
and implementation of the risk management system, and
reviews and assesses the effectiveness of the Company's
implementation of that system on a regular basis.
The main risks the Company is exposed to through its
operations are interest rate risk, foreign exchange risk,
credit risk and liquidity risk.
The Board and Senior Management identify the general
areas of risk and their impact on the activities of the
Company, with Management performing a regular review
of:
• the major risks that occur within the business;
• the degree of risk involved;
• the current approach to managing the risk; and
•
if appropriate, determine:
(i) any inadequacies of the current approach; and
(ii) possible new approaches that more efficiently and
effectively address the risk.
Interest Rate Risk
The Company is exposed to interest rate risks via the cash
and cash equivalents that it holds. Interest rate risk is the
risk that a financial instruments value will fluctuate as a
result of changes in market interest rates. The objective of
managing interest rate risk is to minimise the Company's
exposure to fluctuations in interest rate that might impact
its interest revenue and cash flow.
To manage interest rate risk, the Company locks a portion
of the Company's cash and cash equivalents into term
deposits. The maturity of term deposits is determined
based on the Company's cash flow forecast.
Management report risks identified to the Board through
the Operations Report at Board Meetings and periodically
via direct communication as relevant risks are identified.
The Company seeks to ensure that its exposure to undue
risk which is likely to impact its financial performance,
continued growth and survival is minimised in a cost-
effective manner.
Interest rate risk is considered when placing funds on term
deposits. The Company considers the reduced interest
rate received by retaining cash and cash equivalents in
the Company's operating account compared to placing
funds into a term deposit. This consideration also takes
into account the costs associated with breaking a term
deposit should early access to cash and cash equivalents
be required.
Note 22(c): Capital Risk Management
The Company's objectives when managing capital are to
safeguard the Company's ability to continue as a going
concern and to maintain an optimal capital structure so
as to maximise shareholder value. In order to maintain
or achieve an optimal capital structure, the Company
may issue new shares or reduce its capital, subject to the
provisions of the Company's constitution.
The capital structure of the Company consists of equity
attributed to equity holders of the Company, comprising
contributed equity, reserves and accumulated losses
disclosed in Notes 15 and 16. By monitoring undiscounted
cash flow forecasts and actual cash flows provided to the
Board by the Company's Management the Board monitors
the need to raise additional equity from the equity
markets.
ANNUAL REPORT 2019 47
47
ANNUAL REPORT 2019 Notes to the Financial Statements
For the year ended 30 June 2019
Note 22(d): Financial Risk Management continued
Interest Rate Risk continued
Weighted
Average
Effective
Interest
Rate
Floating
Interest
Rate
Fixed
Interest
Rate
within
Year
Fixed
Interest
Rate 1 to 5
Years
Fixed
Interest
Rate over
5 Years
%
$
$
Cash & cash equivalents
2.00
403,142 2,500,000
Trade & other receivables
-
-
-
2.00
403,142 2,500,000
Financial Liabilities
Trade & other payables
-
-
-
Weighted
Average
Effective
Interest
Rate
Floating
Interest
Rate
Fixed
Interest
Rate
within
Year
Fixed
Interest
Rate 1 to 5
Years
Fixed
Interest
Rate over
5 Years
%
$
$
30 June 2019
Financial Assets
30 June 2018
Financial Assets
Cash & cash equivalents
2.00
398,659
1,500,000
Trade & other receivables
Other Current Assets
-
2.48
-
-
- 2,400,000
4.48
398,659 3,900,000
Financial Liabilities
Trade & other payables
-
-
-
Non-
Interest
bearing
$
Total
$
400
2,903,542
32,327
32,327
32,327 2,935,869
551,486
551,486
Non-
Interest
bearing
$
Total
$
400
1,899,059
58,909
58,909
- 2,400,000
59,309 4,357,968
332,619
332,619
$
-
-
-
-
$
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
There has been no change to the Company's exposure to interest rate risk or the manner in which it manages and
measures its risk in the year ended 30 June 2019.
The Company has conducted a sensitivity analysis of the Company's exposure to interest rate risk. The percentage
change is based on the expected volatility of interest rates using market data and analysts forecasts. The analysis shows
that if the Company's interest rate was to fluctuate as disclosed below and all other variables had remained constant,
then the interest rate sensitivity impact on the Company's profit after tax and equity would be as follows:
(Higher) / Lower
(Higher) / Lower
2019
29,304
(29,304)
2018
42,991
(42,991)
2019: +1% (2018: +1%)
2019: -1% (2018: -1%)
48
2019 ANNUAL REPORT
Foreign Currency Risk
The Company is exposed to foreign currency risk via the trade and other receivables and trade and other payables that
it holds. Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign
exchange rates. The Company aims to take a conservative position in relation to foreign currency risk hedging when
budgeting for overseas expenditure however; the Company does not have a policy to hedge overseas payments or
receivables as they are highly variable in amount and timing, due to the reliance on activities carried out by overseas entities
and their billing cycle.
The following financial assets and liabilities are subject to foreign currency risk:
Trade and other payables (AUD/USD)
Trade and other payables (AUD/GBP)
Trade and other payables (AUD/EUR)
2019
$
7,617
89
1,912
2018
$
22,645
1
943
Foreign currency risk is measured by regular review of our cash forecasts, monitoring the dollar amount and currencies
that payment are anticipated to be paid in. The Company also considers the market fluctuations in relevant currencies to
determine the level of exposure. If the level of exposure is considered by Management to be too high, then Management
has authority to take steps to reduce the risk.
Steps to reduce risk may include the acquisition of foreign currency ahead of the anticipated due date of an invoice or
may include negotiations with suppliers to make payment in our functional currency. Management mitigated foreign
currency risk by purchasing Great British Pounds currency during the current financial year. Should Management
determine that the Company should consider taking out a hedge to reduce the foreign currency risk, they would need to
seek Board approval.
The Company conducts some activities outside of Australia which exposes it to transactional currency movements,
where the Company is required to pay in a currency other than its functional currency.
There has been no change in the manner the Company manages and measures its risk in the Year Ended 30 June 2019.
The Company is exposed to fluctuations in United States dollars, Euros, and Great British Pounds. Analysis is conducted
on a currency by currency basis using sensitivity variables.
The Company has conducted a sensitivity analysis of the Company's exposure to foreign currency risk. The sensitivity
analysis variable is based on the expected overall volatility of the significant currencies, which is based on management’s
assessment of reasonable possible fluctuations taking into consideration movements over the last 6 months each year
and the spot rates at each reporting date. The analysis shows that if the Company's exposure to foreign currency risk was
to fluctuate as disclosed below and all other variables had remained constant, then the foreign currency sensitivity impact
on the Company's loss after tax and equity would be as follows:
(Higher) / Lower
(Higher) / Lower
AUD/USD: 2019: +3% (2018: +3%)
AUD/USD: 2019: -3% (2018: -3%)
AUD/GBP: 2019: +3% (2018: +3%)
AUD/GBP: 2019: -3% (2018: -3%)
AUD/EUR: 2019: +3% (2018: +3%)
AUD/EUR: 2019: -3% (2018: -3%)
2019
229
(229)
3
(3)
57
(57)
2018
679
(679)
-
-
8
(8)
49
ANNUAL REPORT 2019 Notes to the Financial Statements
For the year ended 30 June 2019
Note 22(d): Financial Risk Management continued
Credit Risk
The Company is exposed to credit risk via its cash and cash equivalents and trade and other receivables. Credit risk is the
risk that a counter-party will default on its contractual obligations resulting in a financial loss to the Company. To reduce
risk exposure for the Company's cash and cash equivalents and other receivables, it places them with high credit quality
financial institutions.
Historically the Company has had minimal trade and other receivables, with the majority of its funding being provided
via shareholder investment. Traditionally the Company's trade and other receivables relate to GST refunds and Research
and Development Tax Concession amounts due to the Company from the Australian Tax Office. At 30 June 2019 GST
accounted for $19,882 (2018: $3,434) of the trade and other receivables, respectively. At 30 June 2019, accrued interest
from the Commonwealth Bank amounted to $3,376 (2018: $11,900).
The trade and other receivables at 90+ days also include the rent bond on the office premises of $8,231. This is not
considered impaired. The Board believes that the Company does not have significant credit risk at this time in respect of
its trade and other receivables.
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with
the group, and a failure to make contractual payments for a period of greater than 121 days past due.
The expected loss rates are based on the payment profiles of receivables over a period of 60 months before 30 June
2019 and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted
to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to
settle the receivables.
As at 30 June 2019, the Company concludes that there is no significant exposure to credit risk due to Trade Receivables
comprising of statutory entitlements of R&D Tax Incentive and GST refund.
The Company has analysed its trade and other receivables below. All trade and other receivables disclosed below have
not been impaired.
2019 Trade and other receivables
2018 Trade and other receivables
0-30 days
31-60 days
61-90 days
90+ days
$
32,327
58,909
$
-
-
$
-
-
$
-
-
50
2019 ANNUAL REPORT
Liquidity Risk
The Company is exposed to liquidity risk via its trade and other payables. Liquidity risk is the risk that the Company will
encounter difficulty in raising funds to meet the commitments associated with its financial instruments. Responsibility for
liquidity risk rests with the Board who manage liquidity risk by monitoring undiscounted cash flow forecasts and actual
cash flows provided to them by the Company's Management at Board meetings to ensure that the Company continues to
be able to meet its debts as and when they fall due. Contracts are not entered into unless the Board believes that there
is sufficient cash flow to fund the associated commitments. The Board considers when reviewing its undiscounted cash
flow forecasts whether the Company needs to raise additional funding from the equity markets.
The Company has analysed its trade and other payables below:
2019 Trade and other payables
2018 Trade and other payables
Note 23: Company Information
Information about subsidiaries
0-30 days
31-60 days
61-90 days
90+ days
$
551,486
332,619
$
-
-
$
-
-
$
-
-
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy:
Name
Principal Activities
Country of incorporation
Antisense Therapeutics (HK) Pty Ltd
Provision of licenses
Australia
% Equity interest
2019
100
2018
100
ANNUAL REPORT 2019 51
51
ANNUAL REPORT 2019
Directors' Declaration
In accordance with a resolution of the Directors of Antisense Therapeutics Limited, we state that:
1.
In the opinion of the Directors:
(a) the consolidated financial statements and notes of Antisense Therapeutics Limited for the financial Year Ended
30 June 2019 are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity's financial position as at 30 June 2019 and of its
performance for the Year Ended on that date; and
(ii) complying with Accounting Standards and the Corporations Regulations 2001;
(b) the consolidated financial statements and notes also comply with International Financial Reporting Standards as
disclosed in Note 1.c; and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
2. This declaration has been made after receiving the declarations required to be made to the Directors by the chief
executive officer and chief financial officer in accordance with section 295A of the Corporations Act 2001 for the
financial Year Ended 30 June 2019.
On behalf of the board,
Signed in accordance with a resolution of the Directors.
Mr Robert W Moses
Independent Non-Executive Chairman
Mr Mark Diamond
Managing Directer and Chief Executive Officer
Dated: This day 30th day of August 2019
52
2019 ANNUAL REPORT Independent Auditor's Report
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Independent auditor’s report to the members of Antisense
Therapeutics Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Antisense Therapeutics Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June
2019, the consolidated statement of comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year then ended, notes to the financial statements,
including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a) giving a true and fair view of the consolidated financial position of the Group as at 30 June 2019 and of
its financial performance for the year ended on that date; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report
section of our report. We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that
are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1b in the financial report, which indicates that the Group incurred a net loss
of $2.94m and a cash outflow from operations of $2.93m during the year ended 30 June 2019. These
conditions along with the other factors outlined in Note 1b indicate that a material uncertainty exists
that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
53
ANNUAL REPORT 2019 Independent Auditor's Report continued
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. In addition to the matter described in the Material Uncertainty Related to
Going Concern section, we have determined the matters described below to be the key audit matters to
be communicated in our report. For each matter below, our description of how our audit addressed the
matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
1. Research & Development tax benefit
Why significant
How our audit addressed the key audit matter
Our procedures included the following:
Evaluated the methodology and assumptions used
by the Group in calculating the R&D income tax
credit claim receivable with reference to the
applicable legislation and in conjunction with our
R&D taxation specialists.
Assessed the mathematical accuracy of the
Group’s calculations.
Compared historical estimates against the actual
claims received in prior years.
Under the Australian Government’s Research &
Development (“R&D”) income tax credit regime, the
Group is entitled to an R&D credit on eligible R&D
expenditure incurred including the decline in value
of depreciating assets used in eligible R&D activities.
The Group has estimated the R&D credit for the
year ended 30 June 2019 and recognised the amount
receivable under the scheme upon filing their
claim along with the lodgement of their tax return.
The estimated amount of $564,043 is recorded
as Other income in the Consolidated Statement
of Comprehensive Income and a receivable in the
Consolidated Statement of Financial Position.
The Group’s policy for accounting for this income
and the receivable are disclosed in Note 1.
This was considered a key audit matter due to
the quantum of the receivable recorded and the
judgment associated with applying the relevant
income tax legislation.
54
2019 ANNUAL REPORT 2. Completeness and accuracy of
expenditure and accruals
Why significant
How our audit addressed the key audit matter
The Group has entered into a number of contractual
service agreements during the period to support
the clinical trial of ATL 1102 in the treatment
of Duchennes Muscular Dystrophy at the Royal
Children’s Hospital in Melbourne.
Our procedures included the following:
Assessed the terms of active clinical trial
contracts to assess whether expenditure has
been recorded in the correct period;
This clinical trial is ongoing.
The Group has recognised $1,760,729 of Research
and Development expenditure in relation to these
contracts for the year ended 30 June 2019 in the
Consolidated Statement of Comprehensive Income,
which includes accrued expenditure for services
received but not invoiced which are recognised in
the Consolidated Statement of Financial Position.
Assessed the Company’s trading account bank
statements subsequent to 30 June 2019 for any
payments related to the FY19 period;
Performed inquiries of management regarding
the status of work and receipt of invoices
subsequent to 30 June 2019 containing services
related to the FY19 period not appropriately
accrued.
The Group’s policy for accounting for this expenditure
and the liability are disclosed in Note 1.
Assessed the Group’s accounting policy and
disclosures in the financial report
This was considered a key audit matter due to the
quantum of contracts entered during the period
and the complexity associated with the timing of
the Group’s incurring expenditure and liabilities
for services received, as the trials extend across
reporting periods.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Company’s 2019 Annual Report, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related
assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
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.
55
ANNUAL REPORT 2019 Independent Auditor's Report continued
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards 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 this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
56
2019 ANNUAL REPORT We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 17 to 24 of the directors' report for the year
ended 30 June 2019.
In our opinion, the Remuneration Report of Antisense Therapeutics Limited for the year ended 30 June
2019, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Ernst & Young
Joanne Lonergan
Partner Melbourne
30 August 2019
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
57
ANNUAL REPORT 2019 Shareholder Information
As at 25 October 2019
Number of Holders of Equity Securities
Distribution of Quoted Security holders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 +
Total number of
shareholders
Unmarketable
parcels
(under $500)
Ordinary Shares
420,146,641 fully paid ordinary shares are held by 1,925
individual shareholders.
All ordinary shares carry one vote per share.
Options
68,638,640 options exercisable at $0.08 on or before 19
December 2019, are held by 1,299 individual holders.
Options do not carry a right to vote. Voting rights will be
attached to the unissued shares when the options have
been exercised.
Twenty Largest Ordinary Shareholders
Shareholders
1
2
3
4
5
NATIONAL NOMINEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
CITYCASTLE PTY LTD
CITYCASTLE PTY LTD
6 MR ROBERT WILLIAM MOSES
7
8
9
10
11
12
13
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
DEAN PROPERTY TEAM ASSET PTY LTD
BNP PARIBAS NOMINEES PTY LTD
SHARED OFFICE SERVICES PTY LTD
SKED PTY LTD
STATEMOOR PTY LTD
BAYSPEC PTY LTD
14 MR DAVID KENLEY
15 MR MARK DIAMOND
16 MRS MADELINE THOMSON
17 MR JAN MARACH & MRS RENATA MARACH
18 MR LESLIE SMITH
19 MR SEK YUEN WAN
20 MR JAMES EDWARDS
Total
Total balance of remaining holders
No. of Holders
Ordinary Shares
Listed Options
117
149
204
1,018
437
1,925
275
Number
76,361,174
27,776,365
14,837,011
11,747,369
8,160,866
7,200,000
6,365,152
6,100,000
5,372,843
5,136,426
4,839,792
4,500,000
4,000,000
3,780,000
3,600,000
3,564,467
3,443,030
3,000,000
2,688,095
2,640,432
205,113,022
215,033,619
235
459
209
311
85
1,299
1,053
%
18.175%
6.611%
3.531%
2.796%
1.942%
1.714%
1.515%
1.452%
1.279%
1.223%
1.152%
1.071%
0.952%
0.900%
0.857%
0.848%
0.819%
0.714%
0.640%
0.628%
48.82%
51.18%
58
2019 ANNUAL REPORT
Twenty Largest Listed Option Holders
Option holders
1
XCELERATE TRADING PTY LTD
2 MS LEE GARDINER
3 MR JAN MARACH & MRS RENATA MARACH
4 MR LESLIE SMITH
5. MR DAVID BOUDVILLE
6
7
CITYCASTLE PTY LTD
DEAN PROPERTY TEAM ASSET PTY LTD
8 MR ANDREW LEONARD CLARK
9 MR CRAIG MATTHEW JONES
10 MR ROBERT WILLIAM MOSES
11
CITICORP NOMINEES PTY LIMITED
12 MR FAROUK AHMED
13 MR HARRISON DONNER
14 MR SELVAYOGAN DEVAROYAN
15
16
17
18
BROKEN RIDGE PTY LTD
DEAN PROPERTY TEAM ASSET PTY LTD
SHARED OFFICE SERVICES PTY LTD
BAYSPEC PTY LTD
19 OPTHEA LIMITED
20 MR SINI MATHEW
Total
Total balance of remaining holders
Unquoted Equity Securities Holdings Greater Than 20%
Nil
Substantial Shareholders
Number
5,258,773
4,597,803
4,102,050
3,000,000
2,393,992
2,132,754
1,900,000
1,583,600
1,561,700
1,418,888
1,281,605
1,121,638
1,101,234
1,100,000
1,080,000
1,000,000
804,176
800,000
734,429
720,236
37,692,878
30,945,762
%
7.662%
6.699%
5.976%
4.371%
3.488%
3.107%
2.768%
2.307%
2.275%
2.067%
1.867%
1.634%
1.604%
1.603%
1.573%
1.457%
1.172%
1.166%
1.070%
1.049%
54.92%
45.08%
The names of substantial shareholders the Company is aware of from the register or who have notified the Company in
accordance with Section 671B of the Corporations Act are:
NATIONAL NOMINEES LIMITED ACF AUSTRALIAN ETHICAL INVESTMENT LIMITED
PLATINUM INVESTMENT MANAGEMENT LIMITED
CITYCASTLE PTY LTD
No. of Shares
77,735,287
26,335,114
25,816,429
59
ANNUAL REPORT 2019
Corporate Information
AbN 41 095 060 745
DIRECTORS
SOLICITORS
Minter Ellison
Rialto Towers
Level 23, 525 Collins Street, Melbourne Victoria 3000
Australia
BANKERS
Commonwealth Bank of Australia
Melbourne Victoria
AUDITORS
Ernst and Young
8 Exhibition Street, Melbourne Victoria 3000
Australia
WEBSITE
www.antisense.com.au
Mr Robert W Moses
Independent Non-Executive
Chairman
(Appointed: 23 October 2001)
Mr Mark Diamond
Managing Director
(Appointed: 31 October 2001)
Dr Graham Mitchell
Independent Non-Executive
Director
(Appointed: 24 October 2001)
Dr Gary Pace
Independent Non-Executive
Director
(Appointed: 9 November 2015)
Mr William Goolsbee
Independent Non-Executive
Director
(Appointed: 15 October 2015)
COMPANY SECRETARY
Mr Phillip Hains
Company Secretary and Chief Financial Officer
REGISTERED OFFICE
6-8 Wallace Avenue, Toorak Victoria 3142
Australia
Telephone:
+61 (0)3 9827 8999
PRINCIPAL PLACE OF BUSINESS
6-8 Wallace Avenue, Toorak Victoria 3142
Australia
Telephone:
Facsimile:
+61 (0)3 9827 8999
+61 (0)3 9827 1166
SHARE REGISTER
Boardroom Pty Ltd
Level 12, 225 George Street, Sydney NSW 2000
Australia
Telephone:
1300 737 760
Antisense Therapeutics Limited shares are listed on the
Australian Stock Exchange (ASX)
American Depository Receipts (ADR) - OTC:ATHJY
60
2019 ANNUAL REPORT
THIS PAGE IS INTENTIONALLY BLANK.
61
ANNUAL REPORT 2019 6-8 Wallace Avenue,
Toorak Victoria 3142
Australia
T: + 61 (0)3 9827 8999
F: + 61 (0)3 9827 1166
Annual Report 2019