BENITEC BIOPHARMA LTD
ANNUAL REPORT 2016
Giving disease the silent treatment ™
General information
The financial statements cover Benitec Biopharma Limited as a Group consisting of Benitec Biopharma Limited and
the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian
dollars, which is Benitec Biopharma Limited's functional and presentation currency.
Benitec Biopharma Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
F6 /1-15 Barr Street
Balmain, NSW 2041
A description of the nature of the Group's operations and its principal activities are included in the Directors' report,
which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 30 August 2016.
The directors have the power to amend and reissue the financial statements.
TABLE OF CONTENTS
Chairman’s and CEO’s Letter
Corporate governance
Operating and financial review
Directors’ report
Auditor’s Independence Declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor's report to the members of Benitec Biopharma Limited
Corporate directory
Shareholder information
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Chairman’s and CEO’s Letter
October 14, 2016
Dear Shareholder
We are pleased to present Benitec Biopharma’s Annual Report for 2016.
Although 2016 was a year of mixed results, and there have been several challenges, we have a lot to look forward
to in the future. We believe the key to our long-term success is quickly adapting to changing circumstances and
knowing when to evolve our strategy to leverage opportunities. What remains unchanged is our focus on gene
therapy, and ddRNAi in particular, a significant area of scientific innovation and possibility.
To that end, in February of this year we announced the Board’s decision to discontinue the hepatitis C program,
following a review of the commercial opportunities for TT-034. This was a difficult decision to make, but it was clear
that the hepatitis C program did not offer the commercial value necessary to attract a worthwhile partnership deal
and, as a result, did not warrant additional expenditure or focus of company resources beyond completion of
patients in Cohort 4.
Last month we released the final clinical data from the TT-034 clinical study which showed that while TT-034 met its
24–week primary endpoint, based on safety within liver and other organs, and while transduction of hepatic tissues
was seen, there was no significant decrease in viral load in treated patients at the dosing levels adopted for the trial;,
which was a secondary endpoint of the study. We expect to publish the full set of the results in a peer-reviewed
journal.
There have been many positive outcomes from this first clinical study, not only for our other therapeutic programs,
but also for the field of gene therapy as a whole. We have taken these important lessons and implemented design
changes in our clinical constructs to ensure hepatitis B and our other therapeutic programs benefit from this study.
The company remains focused on advancing its other pipeline programs, including hepatitis B, age-related macular
degeneration (AMD) and oculopharyngeal muscular dystrophy (OPMD). The company believes that each of these
programs presents attractive commercial opportunities and community benefits.
This has been a year of important internal changes within Benitec. Our strategy has evolved over the years and we
now position ourselves as a product development company where our highly qualified research staff develops our
own pipeline and intellectual property. With a deliberate move towards product development, along with the
growth in the scientific team, it became clear that we needed to implement other critical internal changes to position
us for future success.
The leadership team commenced a comprehensive review of the scientific pipeline, enhanced project management
practices, and consolidated and restructured resources. These critical enhancements ensure that future activities
are outcome-driven and that there is greater discipline governing timelines, deliverables and cash management.
With recent appointments to the executive team we believe we have an executive team with the right skills and
experience to deliver the strategy, and the appropriate structure and processes in place to continually drive
improvements in the business.
Over the next twelve months, Benitec will continue to advance its pipeline programs towards and establish
collaborations or co-development arrangements.
We want to take this opportunity to thank our dedicated team who have served with distinction and thank our
shareholders for their ongoing support. We remain committed to developing our ddRNAi technology to one-day
change the way we treat human disease and cure patients. We look forward to a bright future.
Peter Francis
Chairman
Greg West
Chief Executive Officer
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
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CORPORATE GOVERNANCE
The Company’s directors and management are committed to conducting the Group’s business in an ethical
manner and in accordance with the highest standards of corporate governance.
The Company has adopted and substantially complies with the ASX Corporate Governance Principles and
Recommendations (3rd Edition) (‘Recommendations’) to the extent appropriate to the size and nature of the Group’s
operations.
The Company has prepared a Corporate Governance Statement which sets out the corporate governance practices
that were in operation throughout the financial year for the Company, identifies any Recommendations that have
not been followed, and provides reasons for not following such Recommendations.
The Company’s Corporate Governance Statement and policies, which were approved by the Board of directors on
30 August 2016 can be found on its website:
http://www.benitec.com/investor-centre/governance
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
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OPERATING AND FINANCIAL REVIEW
Biopharma Limited’s (the ‘Company’ or ‘Benitec’) novel, proprietary therapeutic technology combines gene
silencing and gene therapy with a goal of providing sustained, long-lasting silencing of disease-causing genes from
a single administration.
DNA-directed RNA interference (‘ddRNAi’) is being used to develop a pipeline of product candidates for the
treatment of numerous chronic and life-threatening human diseases, such as hepatitis B (‘HBV’), age-related macular
degeneration (‘AMD’), and oculopharyngeal muscular dystrophy (‘OPMD’).
By combining the specificity and gene silencing effect of RNA interference with gene therapy, ddRNAi has the
potential to produce long-lasting silencing of disease-causing genes from a single administration, which could
eliminate the requirement for patient compliance to take regular doses of medicine for long-term management of
their disease.
The Company has set the following priorities:
•
Progress its pipeline of proprietary ddRNAi-based therapeutics
o
o
o
On February 26, 2016 the Company announced that it would wind-down its hepatitis C program and
terminate the program upon completion of patients in Cohort 4 in its Phase I/IIa clinical trial for TT-
034. Further detail on the termination of the program is included in subsequent sections of this
operating and financial review (’OFR’).
Benitec is committed to completing the collection of trial data and monitoring patients through the
required four and a half year long-term safety follow-up period. Final data supporting the primary and
secondary endpoints of the study will be reported by the last quarter of the 2016 calender year when
the study is completed. Although the hepatitis C program is being discontinued, it is important to note
that early stage TT-034 clinical trial results indicated TT-034 was safe and well tolerated, meeting the
primary endpoint of the study and, as such, will assist in other programs.
The other three therapeutic indications (HBV, AMD and OPMD) are being progressed through their
respective stages in the development pathway. The Company will require additional financing to
conduct clinical trials with these product candidates. Further detail of individual programs is provided
in subsequent sections of this Operating and Financial review (OFR).
•
•
Continue the Company’s leadership position in ddRNAi-based therapeutics
o
Benitec remains the only company to date to advance an RNAi therapeutic via systemic administration
by gene therapy vectors.
o
Further develop and improve the ddRNAi platform technology and its associated intellectual property position
Develop in-house ddRNAi platform technology and program related intellectual property, and in-
license complementary technologies, as appropriate, to support the product pipeline. One such
example is the Company’s relationship with 4D Molecular Therapeutics, LLC (4DMT) to develop a
suitable vector to deliver the Company’s ddRNAi constructs to a large majority of the retinal cells of
the eye from a single intravitreal injection to treat human ocular diseases.
• Develop drug candidates in Benitec’s core disease areas and partner selectively to commercialise and expand
the Company’s pipeline
o
o
Selectively form collaborations to expand the Company’s capabilities and product offerings into a
range of diseases and potentially to accelerate the development and commercialisation of ddRNAi
therapeutics more broadly.
Advance programs in core disease areas to appropriate stage of proof of concept to commercialise
with pharmaceutical companies. As an example, Benitec recently acquired full rights to its pre-clinical
hepatitis B program from its collaborator, Biomics Biotechnologies, to enable the independent
progression of the product candidate and simplify partnering negotiations. In order to acquire full
rights to the hepatitis B program that was previously developed by Joint Venture with Biomics, Benitec
paid the JV partner $2.5million in upfront payments ($2million cash, $500k shares), with a further
$3.5million and single digit royalties that may be payable to Biomics in the instance that constructs
developed during the joint venture are commercialised.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
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o
o
Where appropriate we seek to progress one or more programs through to commercialisation. For
example, Benitec’s pipeline program to treat an orphan indication, OPMD, is seen as a candidate for
this approach.
Out-license use of ddRNAi for applications and therapeutics outside of the Company’s immediate
focus to expand Benitec’s franchise of ddRNAi-based therapeutics. As an example, Benitec licensed
ddRNAi to Circuit Therapeutics to develop the technology in the area of intractable pain.
•
Pursue indications with high unmet medical need or large patient populations
o
o
Programs currently being pursued at Benitec are severe diseases with high unmet medical need or
large patient populations that have well characterised gene targets with the potential to be silenced,
thus preventing the disease-causing gene from being expressed.
The Company also intends to develop ddRNAi applications in novel technologies, such as chimeric
antigen receptor T cells, or CAR-T, for a range of additional disease areas.
In-house programs
As of June 30, 2016, Benitec has three pipeline programs in development. Using the capital raised from the successful
NASDAQ listing in August 2015 and the capital raised in April 2014, the Company continues to progress these
development programs. Highlights of progress over the previous 12 months include:
(1) Hepatitis B – BB-HB-331: The Company is developing BB-HB-331 for the treatment of HBV, which infects up to
240 million people worldwide, resulting in up to 780,000 deaths per year. The key features and milestones of the
HBV program are as follows:
o BB-HB-331 is designed to be a single administration ddRNAi-based monotherapy or to be used in
combination therapy with other anti-viral medications. BB-HB-331 is delivered using a gene therapy
vector that targets the liver and inhibits viral replication as well as restricts viral RNA levels and
subsequent HBV protein production on a long-term basis. As both HBV and HCV replicate in the liver,
Benitec has designed BB-HB-331 to mimic the design elements of TT-034, which might expedite the
regulatory pathway of this drug;
o
In July 2015 the Company acquired full rights to BB-HB-331 from China-based Biomics Biotechnologies.
To facilitate independent development and simplify partnering opportunities, Benitec made the
decision to develop BB-HB-331 as a solely-owned program;
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
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OPERATING AND FINANCIAL REVIEW
o
o
o
o
In October 2015 the Company entered into a Manufacturing Services Agreement with Lonza, Inc. to
develop a scalable manufacturing process for Benitec’s ddRNAi products delivered by Adeno-
Associated Virus (AAV) capsids;
In December 2015 the Company announced positive in vitro data demonstrating the efficacy of BB-HB-
331 and supporting the progression of BB-HB-331 into in vivo preclinical testing. The data was
presented at the HEPDART 2015 conference in the US in December 2015;
In March 2016 the Company announced results of its recent in vivo efficacy study of BB-HB-331. Key
findings of the in vivo study indicate that a single BB-HB-331 treatment in the PhoenixBio (PXB) mouse
model can result in suppression of HBV. These results demonstrate the potential utility of an approach
that combines RNAi with gene therapy to treat HBV, and the Company intends to advance the HBV
program towards the clinic. The hepatitis B program continues to attract considerable interest from
pharmaceutical companies; and
The Company anticipates releasing additional in vivo efficacy and acute toxicology data at the end of
this calendar year.
(2)
Age-related macular degeneration (‘AMD’): AMD is the leading cause of irreversible vision loss in the United
States, affecting an estimated 1.75 million people and it is estimated that 196 million people will be affected
by AMD worldwide by 2020. The aim of this program is to develop a therapeutic that provides long-term
treatment of AMD from a single intravitreal injection. The Company believes this could replace the need for
regular injections of therapeutics into the eye, which is the current standard of care. The key milestones
achieved over the last 12 months and next steps include:
o
o
o
o
Three ddRNAi-based therapies are in development – BB-AMD-211 and BB-AMD-233 for the treatment
of wet AMD and BB-AMD-231 for the treatment of both wet and dry AMD;
The Company has entered into collaboration with 4D Molecular Therapeutics (4DMT) for the
development of the delivery vector for ocular-based ddRNAi products.
Biodistribution with the novel capsids developed in conjunction with 4DMT and in vivo proof of concept
efficacy studies are expected to be completed by the end of calendar year 2016; and
Subject to additional financing, the Company plans to file an IND application in calendar year 2018.
(3) Oculopharyngeal Muscular Dystrophy (OPMD): Benitec is developing a ddRNAi treatment for the treatment
of OPMD. In this novel treatment the Company is developing a “knock down & replace” approach, silencing a
mutant gene in conjunction with its replacement with healthy wild type gene. OPMD is an autosomal-
dominant inherited, slow-progressing, late-onset degenerative muscle disorder that usually starts in patients
during their 40s or 50s. The disease is manifested by progressive swallowing difficulties (dysphagia) and eyelid
drooping (ptosis). OPMD is caused by a specific mutation in the poly(A)-binding protein nuclear 1, or PABPN1,
gene. OPMD is a rare disease and has been reported in at least 33 countries. Patients suffering with OPMD
are well identified and are aggregated in particular regions, which we believe should simplify clinical
development and in house commercialisation. Key milestones achieved over the last 12 months and next steps
include:
o
o
Preliminary in vivo studies in an animal model of OPMD have been completed and the results support
the proof of concept of this approach with individual components. This data was presented at the 13th
Annual Meeting of the British Society for Gene and Cell Therapy that was held in London, U.K. on April
15, 2016;
In August 2015 the Company signed an extension to the Collaboration Agreement with Royal Holloway
University of London; and
o Work has been completed to identify a proposed clinical candidate and to optimise the in vivo delivery.
The Company plans to initiate an in vivo proof of concept efficacy study in an animal model of OPMD
with its proposed clinical candidate and data is anticipated to be released early in calendar year 2017.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
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(4) Hepatitis C – ‘TT-034’: On December 18, 2012, the Group announced the appointment of Synteract, Inc. as its
Clinical Research Organisation responsible for the progression of TT-034 into Phase I/IIa clinical trials in the
U.S. The Group has negotiated a contract with favourable commercial terms, in some instances requiring
prepayment, for Synteract to continue to manage the Phase I/IIa clinical trial and the long term patient follow-
up through 2016 and beyond.
While the Company announced on February 20, 2016 that is was terminating the HCV program, Benitec is committed
to completing the study and the company’s estimate of the cost, assuming all patients remain in the study and the
follow up continues to 2021 is a maximum of $1.0 million. The scenario of all patients remaining in the study to 2021
is most unlikely and the actual cost is likely to be far less than that amount.
The key achievements over the reporting period for the HCV program are as follows:
o The four clinical sites participating in the study include the Duke Clinical Research Unit, University of
California San Diego, the Texas Liver Institute and Methodist Health System Clinical Research Institute
in Dallas;
o Nine patients have been dosed to date;
o Data from patients in the early cohorts were presented at the American Association for the Study of
Liver Diseases (AASLD) conference in San Francisco in December 2015. This data indicates that a single
infusion of TT-034 is reaching the liver and has a favourable safety profile. These interim results on
safety and clinical activity are in line with expectations; and
o Final study data is expected to be reported by the last quarter of 2016 calendar year once the database
is locked.
(5) Non-Small Cell Lung Cancer: Benitec was developing a ddRNAi therapeutic to target drug-resistant NSCLC
and re-sensitise the tumours to chemotherapy by silencing the TUBB3 gene. The Company undertook
preclinical proof-of concept studies in collaboration with researchers at the University of New South Wales.
As a result of feedback from potential commercial partners, the program was terminated as announced at
the Company’s AGM in November 2015, allowing resources to be focused on developing other preclinical
programs which have attracted stronger interest from potential commercial partners and investors
Licensed programs
In addition to the Company’s in-house development programs, Benitec has licensed its ddRNAi technology to
companies who are developing therapeutic programs in five disease areas that are outside of Benitec’s pipeline
areas. These licenses have been granted to small early-stage biotechnology companies with modest upfront and
early development milestone payments and greater milestone payments due upon later-stage program success.
A key development in the licensed programs has been Spark Therapeutic’s acquisition of Genable Technologies
Limited on the 7th March 2016, Benitec’s licensee for retinitis pigmentosa, with continued support for Genable’s
RhoNova product in development.
The following table sets forth the out-licensed product candidates and their development status
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
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OPERATING AND FINANCIAL REVIEW
HIV/AIDS: In March 2012, Benitec granted a non-exclusive, royalty-bearing, worldwide license to a U.S.-based
biotechnology company, Calimmune, Inc. Under the agreement, Calimmune could develop, use and commercialise
ddRNAi to silence up to three targets for the treatment or prevention of HIV/AIDS. Calimmune's approach was
developed with core technology from the laboratory of Dr. David Baltimore, a Nobel Laureate in the area of
HIV/AIDS, and involves silencing the gene that codes for a receptor protein known as CCR5. Calimmune's HIV/AIDS
treatment is known as Cal-1.
The license provides for modest upfront and milestone payments and single-digit percentage royalty payments on
net sales. In addition, Benitec receives a percentage of any sub-licensing revenues received. Unless terminated at
an earlier date, the license agreement continues until the expiration or termination of all patents subject to the
license. The Company may terminate the license agreement in the event of certain breaches by Calimmune or if
Calimmune commences an action or proceeding with respect to the patent rights that are the subject of the
license. Calimmune may terminate the license agreement at will.
In 2014, Calimmune commenced a Phase I/IIa clinical trial of Cal-1. The goal of the trial is to assess the safety of the
therapy, to determine the ease of use and feasibility of the approach for HIV/AIDS patients and to evaluate what, if
any, side effects there may be. Calimmune has reported that, following review by the DSMB of the first cohort of
patients for the trial, a second patient cohort was dosed, consisting of four patients, who received a
preconditioning regimen designed to make the treatment more effective.
Cancer Immunotherapy: In August 2013, an exclusive, royalty-bearing, worldwide license was granted to a U.S.-
based biotechnology company, Regen Biopharma Inc. to use ddRNAi for silencing expression of indoleamine 2,3—
dioxygenase, or IDO, in dendritic cells. Regen is developing a cancer immunotherapy using the licensed technology.
IDO is associated with immune-suppression and is overexpressed in some cancers. Regen has reported preclinical
evidence that modification of these cells using ddRNAi targeting the silencing of IDO may significantly enhance
their efficacy in cancer immunotherapy. Regen's first treatment, which is for breast cancer, is called dCellVax.
The license provides for modest upfront and milestone payments, payable in cash or stock of Regen's parent
company at Regen's discretion, and single-digit percentage royalty payments on net sales. In addition, Benitec
receives a percentage of any sub-licensing revenues received. Unless terminated at an earlier date, the license
agreement continues until the expiration or termination of all patents subject to the license. The Company may
terminate the license agreement in the event of certain breaches or if Regen has not met a defined sales milestone
or commences an action or proceeding with respect to the patent rights. Regen may terminate the license
agreement, in whole or in part, at will.
In November 2014, Regen announced the FDA had issued an IND number for a proposed Phase I/II clinical trial
assessing safety with signals of efficacy for dCellVax.
Retinitis Pigmentosa: In March 2016, Spark Therapeutics acquired Genable Technologies Limited for a
combination of cash and common stock. Spark has indicated support for continuing the development of RhoNova.
In July 2012, an exclusive, royalty-bearing, worldwide license was granted to Ireland-based biotechnology
company, Genable Technologies Limited to use, develop or commercialise RNAi for treatment or prevention of
retinitis pigmentosa. Genable's treatment involves suppression of the mutant and normal genes, and replacement
with a normal RHO gene that has been modified to be resistant to ddRNAi gene silencing. Genable has reported
that it established proof of concept in an in vivo model of the disease. Genable's treatment for retinitis
pigmentosa, GT308, is named RhoNova.
The license provides for modest upfront and milestone payments and single-digit percentage royalty payments on
net sales, as well as a percentage of any sub-licensing revenues received. Unless terminated at an earlier date, the
license agreement continues until the expiration or termination of all patents subject to the license. Benitec may
terminate the license agreement in the event of certain breaches or if Genable commences an action or
proceeding with respect to the patent rights that are the subject of the license. Genable may terminate the license
agreement at will.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
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In October 2014, the European Medicines Agency (EMA) granted RhoNova Advanced Therapy Medicinal Product
classification. The classification enables Genable to procure centralised scientific advice and guidance from EMA
regulators on RhoNova's ongoing development. In 2013, the FDA granted Genable orphan drug designation for
RhoNova.
Huntington’s disease: In December 2012, Benitec granted a non-exclusive, royalty-bearing, worldwide license to a
Netherlands-based biotechnology company, uniQure biopharma B.V. to use, develop or commercialise RNAi
therapeutics for Huntington's disease. The license grants to uniQure rights to develop, use and commercialise an
AAV vector with a ddRNAi cassette targeting the gene associated with Huntington's disease, or the Htt gene, or an
AAV-RNAi-based product for Huntington's disease directed to up to three gene targets specific to Huntington's
disease.
The license provides for modest upfront and milestone payments and single-digit percentage royalty payments on
net sales, and also a percentage of any sub-licensing revenues received. Under the agreement, uniQure has an
option to convert the license to an exclusive license depending upon achievement of certain preclinical milestones,
and also to acquire additional licenses to our ddRNAi technology for other specific diseases. Unless terminated at
an earlier date, the license agreement continues until the expiration of either all patents subject to the license or
regulatory exclusivity, whichever is longer. Benitec may terminate the license agreement in the event of certain
breaches or if uniQure has not met a defined sales milestone or commences an action or proceeding with respect
to the patent rights that are the subject of the license. uniQure may terminate the license agreement at will.
In addition, Benitec granted uniQure rights to technology that were in-licensed from Galapagos NV, which may be
terminated independently of the Benitec license, or will automatically terminate in the event that our license of
technology from Galapagos NV expires or is terminated.
In May 2013, uniQure announced that it, along with its partners in a pan-European consortium devoted to finding a
gene therapy cure for Huntington's disease, were awarded a 2.5 million Euros grant for use in the development of a
RNAi-based approach. uniQure has reported that it is using RNAi to non-specifically knock down all expression of the
Htt gene and to specifically inhibit the mutant allele of the Htt gene. Evaluation of these two approaches is in
progress.
Intractable Neuropathic Pain: In November 2014, an exclusive, royalty-bearing, worldwide license was granted to
a U.S.-based biotechnology company, Circuit Therapeutics, Inc. to use ddRNAi for the development of treatments
for and the prevention of pain. Under the licensing agreement, Circuit has rights to develop, use and
commercialise treatments that use ddRNAi to silence Nav1.7, a sodium ion channel that is exclusively expressed in
certain sensory nerves and is critical for generation of pain.
The license provides for modest upfront and milestone payments and single-digit percentage royalty payments on
net sales, and a percentage of any sub-licensing revenues received. Unless terminated at an earlier date, the
license agreement continues until the expiration or termination of all patents subject to the license. Benitec has
the rights to terminate the license agreement in the event of certain breaches or if Circuit commences an action or
proceeding with respect to the patent rights. The license may also be terminated if Circuit has not met certain
sales and development milestones. Circuit may terminate the license agreement at will.
Intellectual property
Benitec manages a substantial portfolio of patents relating to the ddRNAi platform technology, improvements to
this technology and its pipeline programs. The Company continues to hold a dominant position in the field of
expressed RNAi and it defends its position in this space. With the limited patent term remaining on the platform
patents licensed from CSIRO, Benitec’s focus has increasingly been on establishing patent protection for its pipeline
and products in development with the aim of securing competitive and commercially relevant intellectual property
position for each of its programs.
Key developments:
•
Patents granted in Canada and Europe in the patent family titled “RNAi expression constructs” which claim the
ddRNAi constructs of TT-034 with a single promoter driving expression of three shRNAs;
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
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OPERATING AND FINANCIAL REVIEW
•
•
•
•
•
Patents accepted and awaiting grant in the US and Europe in the patent family titled “HBV Treatment” which
claim the HBV target and ddRNAi sequences jointly developed with Biomics Biopharma, and subsequently
assigned to Benitec;
National application for the “Age-related macular degeneration treatment” patent family filed in Hong Kong,
and national application for the “Pain treatment” patent family filed in Canada;
New PCT application titled “Reagents for treatment of HBV infection and uses thereof” filed for the HBV
program claiming target sequences of interest and related product candidates independently developed by
Benitec’s scientists;
Two new provisional patent applications filed to claim new inventions of target sequences and product
candidates in the hepatitis B and OPMD programs;
The appeal hearing at the European patent office for the revoked Graham patent EP1555317 was upheld with
consistent reasoning for the decision from both the opposition and appeals divisions of the EPO; Graham patent
family currently has two pending applications in Europe. In some instances, this will involve pursing multiple
applications for each program in key jurisdictions.
Title
Genetic constructs for delaying or
repressing the expression of a
target gene (Graham patent
family)1
Technology patents
Patent number
Filing date
US 6,573,099
19 June 1998
Control of gene expression
(Graham family patent)
WO1999049029
19 March 1999
Methods and means for
obtaining modified phenotypes
(Waterhouse patent family)2
WO1999053050
7 April 1999
Genetic Silencing
WO2001070949
16 March 2001
Double-stranded nucleic acid
WO2004106517
3 June 2004
Status
Graham patent family member;
granted 3 June 2003; Re-
examination Certificate
(US90/008096) issued 8 March
2011
Granted
US (8067383, 8168774, 7754697,
8048670, 8053419, 8431547,
9029527), Australia, Canada,
Europe (under opposition), UK,
Hong Kong, India, Japan, Korea,
Mexico, New Zealand, Singapore,
South Africa
Additional Pending applications
US, Brazil, Europe
Granted
US, Australia, China, Europe
(under opposition), Japan, New
Zealand
Additional Pending applications
US, Canada, Europe
Granted
Singapore, South Africa, UK
Additional Pending applications
Brazil
Granted
Australia, New Zealand,
Singapore, South Africa
1 Benitec has an exclusive, irrevocable worldwide license from CSIRO for human therapeutics
2 Benitec has an exclusive, irrevocable worldwide license from CSIRO for human therapeutics
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
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Title
Multiple promoter expression
cassettes
simultaneous
delivery of RNAi agents (Hepatitis
C)
for
Program specific patents
Patent number
Filing date
WO2005087926
4 March 2005
expression
RNAi
(Hepatitis C)
constructs
WO2006084209
3 February 2006
Status
Granted
US (7727970, 8283461, 8691967),
Australia, Canada, China, Europe,
Israel, Japan, Korea
Additional Pending applications
Europe
Granted
US (7803611, 8076471, 8993530),
Australia, Canada, China, Europe,
Hong Kong, New Zealand
Additional Pending applications
US
RNAi expression constructs with
liver-specific enhancer/promoter
(Hepatitis virus)
US 8,008,468
16 February 2006 Granted on 30 August 2011
Minigene expression
(Hepatitis)
cassette
US 8,129,510
30 March 2007
Granted on 6 March 2012
HBV treatment (Hepatitis B)
WO2012055362
27 October 2011
Pain treatment
WO2013126963
28 February 2013
Age related macular degeneration
treatment (AMD)
WO2014107763
8 January 2014
for
Reagents
of
hepatitis B virus (HBV) infection
and uses thereof (Hepatitis B)
treatment
PCT/AU2016/050
340
5 May 2015
Granted
US (9080174)
Accepted (awaiting grant)
US, Europe
Additional Pending applications
Australia, Brazil, Canada, China,
Hong Kong, India, Korea, Russia,
US
Pending
Australia, Canada, Europe, US
Pending
Australia, Canada, China, Europe,
Hong Kong, India, Israel, Japan,
Mexico, Singapore, South Africa,
South Korea, Russia, US
Filed
Reagents for treatment of OPMD
and uses thereof (OPMD)
provisional
US
62/322,745
14 April 2016
Filed
for
of
Reagents
hepatitis B virus (HBV) infection
and use thereof (Hepatitis B)
treatment
provisional
US
62/332,245
5 May 2016
Filed
Commercialisation
Business development remains a major focus for Benitec, consistent with the Company’s strategy to:
• Partner pipeline programs with other biotechnology and pharmaceutical companies at major value
inflection points,
• Establish co-development and collaboration arrangements for non-pipeline projects with pharmaceutical
companies using the ddRNAi platform, and
• Out-license ddRNAi to companies who are developing therapeutics independently.
The Company continues to generate strong interest from a number of potential partners with a particular focus on
hepatitis B, AMD and the ddRNAi platform.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 10
DIRECTORS' REPORT
The directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the 'Group') consisting of Benitec Biopharma Limited (referred to hereafter as the 'Company' or
'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2016.
Directors
The following persons were directors of Benitec Biopharma Limited during the whole of the financial year and up to
the date of this report, unless otherwise stated:
Mr Peter Francis
Mr Kevin Buchi
Dr John Chiplin
Mr Iain Ross
Ms Megan Boston (appointed 16 August 2016)
Dr Peter French (resigned on 9 December 2015)
Refer to 'Information on directors' section below for details of director's qualifications, experience and expertise,
other directorship, special responsibilities and interests in shares and options.
Principal activities
During the financial year the principal continuing activities of the Group consisted of progressing programs through
the clinic, the commercialisation of the Group's unique Intellectual Property ('IP'), development of its therapeutic
pipeline and pre-clinical programs, funding, and protecting and building the IP estate.
The Group has a pipeline of in-house and partnered therapeutic programs based on its patented gene-silencing
technology, ddRNAi. It is developing treatments for chronic and life-threatening human conditions such as hepatitis
B, wet age-related macular degeneration, and oculopharyngeal muscular dystrophy based on this technology. In
addition, the Group has licensed its ddRNAi technology to other biopharmaceutical companies who are progressing
their programs towards the clinic for applications including HIV/AIDS, retinitis pigmentosa, cancer immunotherapy,
Huntington’s disease, and neuropathic pain.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the Group after providing for income tax amounted to $24,778,000 (30 June 2015: $11,509,000).
The Group generated revenue of $247,000 from licensing its technology (30 June 2015: $307,000) and $217,000
interest revenue (30 June 2015: $774,000). The group also received research and development grants amounting to
$3,590,000 included in other income (30 June 2015: $2,318,000).
Refer to the 'Operating and financial review' ('OFR') section immediately preceding this Directors' report for further
commentary on the review of operations.
Significant changes in the state of affairs
During the year the Company had the following significant changes in the state of affairs:
NASDAQ listing
To become a globally recognised company and to achieve validations comparable to those of peer companies
within the RNAi community, Benitec successfully completed a NASDAQ listing in August 2015, raising
approximately $18.8 million (US$13.8 million) before costs. The additional capital has been applied to advance the
Company’s pipeline programs according to its commitment in the F-1 document that was filed with the US SEC at
the time of the listing. The US IPO gives Benitec presence in one of the largest capital markets and creates the
opportunity to achieve optimal valuation as the Company advances its pipeline programs.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 11
Termination of hepatitis C program
The Company announced that it would terminate further development of its hepatitis C program once dosing of
patients in Cohort 4 in the Phase I/IIa clinical trial for TT-034 was completed. A number of effective therapies have
become available for the treatment of hepatitis C since Benitec commenced its clinical trial in January 2014.
Several competitors have made improvements in the efficacy, delivery and success rates of their products while
continuing to reduce pricing and treatment duration.
TT-034 has been shown to be safe and well tolerated, meeting the primary endpoint of the study. Completing the
work with patients in Cohort 4 can provide Benitec with valuable data that supports and validates the Company’s
ddRNAi technology platform and other pipeline programs.
Hepatitis B preclinical data
Benitec’s hepatitis B program delivered promising pre-clinical data in a mouse model, demonstrating robust and
durable suppression of the hepatitis B virus in vivo following a single administration. This in vivo data validates in
vitro findings previously observed in human hepatocytes isolated from the appropriate mouse model. The
Company’s HBV program continues to attract commercial interest from potential pharma partners and this
preclinical data adds to the data package being developed for partnering purposes. The data has recently been
presented at several international conferences.
Termination of lung cancer
With the benefit of feedback from pharma companies and investors, Benitec decided to terminate its non-small
cell lung cancer program, allowing the Company to focus its resources on developing the other pipeline programs.
The lung cancer program has provided significant insights into optimising ddRNAi design and delivery.
Refer to OFR for details of significant changes in the Group's state of affairs.
Writeoff of preclinical deposit
The Company has reached a settlement agreement on the 26 August 2016 for the return of $900,000 of the
$2.7million advanced as a prepayment for the conduct of a lung cancer trial (see above). This has resulted in a
writeoff of $1.8million of the prepayment which was previously disclosed as a current asset. Refer to Note 9 and
10. The $900,000 is due to be paid prior to 31 December 2016.
There were no other significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
Restructuring of Senior Executive team
Benitec announced a restructure of its executive team with appointment of Mr Greg West as permanent CEO,
Dr Cliff Holloway as Chief Business and Operating Officer, and Mr Bryan Dulhunty as Chief Financial Officer. The
changes signify an important new era for the Company and strengthens its core capabilities with their combined
expertise in global biotechnology and biopharmaceutical sectors. Benitec remains committed to its articulated
strategy to develop and enhance its ddRNAi technology platform, establish co-development and collaboration
arrangements for non-pipeline projects, and to out-license ddRNAi to companies that are developing therapeutic
programs independently.
On appointment of Mr West as CEO, Mr West was granted 2.2million options vesting over 3 years and expiring in 5
years. The exercise price is 16.65 cents per option.
Appointment of new Audit and Risk Committee Chair
Benitec announced the appointment of Ms Megan Boston as Director of the Company and Chair of the Audit and
Risk Committee on the 16 of August 2016. Ms Boston has significant experience in finance, audit, risk
management, compliance and corporate governance sectors with listed entities and government organisations in
Australia. Mr. Iain Ross step down as Chair of the Audit and Risk Committee on the appointment of Miss Boston.
No other matter or circumstance has arisen since 30 June 2016 that has significantly affected, or may significantly
affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 12
DIRECTORS' REPORT
Likely developments and expected results of operations
The Group will continue to progress programs through the clinic, seek commercialisation opportunities with big
Pharma and others for its unique IP, develop its therapeutic pipeline and pre-clinical programs, protect and build
the Group’s IP estate and secure adequate funding. Refer to OFR for further commentary.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Mr Peter Francis
Non-Executive Chairman
LLB, Grad Dip (Intellectual Property)
Peter is a partner at Francis Abourizk Lightowlers (‘FAL’), a firm of
commercial and technology lawyers with offices in Melbourne. He is a legal
specialist in the areas of intellectual property and licensing and provides
legal advice to a large number of corporations and research bodies.
Optiscan Imaging Limited
None
Member of the Remuneration and Nomination Committee and Audit and
Risk Committee
424,174 ordinary shares
3,000,000 options over ordinary shares
Mr Kevin Buchi
Non-Executive Director
BA (Chemistry), MBA, CPA
Kevin currently serves as the CEO of TetraLogic Pharmaceuticals
Corporation, a public U.S. Biotechnology company. Prior to that, Kevin
served as Chief Executive Officer (‘CEO’) of Cephalon, Inc. through its $6.8
billion acquisition by Teva Pharmaceutical Industries (‘Teva’) in October
2011. After the acquisition he served as Corporate Vice President, Global
Branded Products of Teva. Kevin joined Cephalon, Inc. in 1991 and held
various positions, including Chief Operating Officer, Chief Financial Officer
and Head of Business Development prior to being appointed CEO.
TetraLogic Pharmaceuticals Corporation
Stemline Therapeutics, Inc., Forward Pharma A/S, Alexza Pharmaceuticals,
Inc. and Epirus Biopharmaceuticals, Inc.
Member of the Audit and Risk Committee and Remuneration and
Nomination Committee
861,539 ordinary shares
1,240,000 options over ordinary shares
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 13
Name:
Title:
Qualifications:
Experience and expertise:
Dr John Chiplin
Non-Executive Director
BPharm, MRPharmsS, Ph.D (Pharmacy)
John is a founder of and has served as a Managing Director of investment
company, Newstar Ventures Ltd., since 1998. More recently, he has served
as a director of Medistem, Inc. through its acquisition by Intrexon
Corporation
in 2014, as founding Chief Executive Officer of Arana
Therapeutics Limited from 2006 through its acquisition by Cephalon, Inc. in
2009, as director of Domantis Ltd through its acquisition by GlaxoSmithKline
plc in 2006, and as Managing Director of ITI Life Sciences Fund from 2003 to
2005. He currently serves on the board of directors of Adalta Pty Ltd, Batu
Biologics Inc., Cynata Therapeutics Limited (CYP.AX), Prophecy Inc.,
ScienceMedia Inc., Scancell Holdings plc (SCLP.L, Executive Chairman),
Sienna Cancer Diagnostics and The Coma Research Institute. John’s
Pharmacy and PhD degrees are from the University of Nottingham,
Nottingham, United Kingdom.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Cynata Therapeutics Limited (CYP.AX), Scancell Holdings plc (SCLP.L,
Executive Chairman)
Calzada Ltd. and Medistem, Inc.
Chair of the Remuneration and Nomination Committee
200,000 ordinary shares
1,240,000 options over ordinary shares
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Mr Iain Ross
Non-Executive Director
B.Sc (Hons), C.Dir
Iain has over 30 years’ experience in the international life sciences sector.
Following a career with multi-national companies including Sandoz, Fisons
plc and Hoffman La Roche, Mr. Ross joined the Board of Celltech Group plc
in 1991 and was responsible for building Celltech Biologics, the contract
manufacturing division which was later sold to Alusuisse Lonza. For the last
20 years he has undertaken a number of start-ups and development stage
companies as a board member on behalf of private equity groups and
banks, including Quadrant Healthcare plc, Allergy Therapeutics Ltd, Eden
Biodesign Ltd, Phadia AB and Silence Therapeutics plc. Currently Iain is
Executive Chairman of e-Therapeutics plc (LSE:ETX) and Biomer Technology
Ltd and is a Director of Premier Veterinary Group plc (LSE:PVG). He is a
Director of Novogen Limited whose shares are traded on both the
Australian Securities Exchange and NASDAQ and Anatara Lifesciences
Limited (ASX:ANR). He is a Qualified Chartered Director of the UK Institute
of Directors and Vice Chairman of the Council of Royal Holloway, University
of London. Iain is qualified to serve as director because of his extensive
experience working with a mix of small and large pharmaceutical
companies.
Anatara Lifesciences Limited (ASX); Novogen Limted (ASX); Premier
Veterinary Group plc (LSE), and e-Therapeutics plc (LSE)
Ark Therapeutics Group plc; Amarantus Biosciences; Coms plc and Tissue
Therapies Limited
Chair of the Audit and Risk Committee and member of the Remuneration
and Nomination Committee (stepped from being Chairman on 16 August
2016 but remains on the Committee)
66,364 ordinary shares
1,240,000 options over ordinary shares
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 14
DIRECTORS' REPORT
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Ms Megan Boston (appointed 16 August 2016)
Non-Executive Director
B.Comm, CA, GAICD, Grad Diploma Share Trading
Ms Megan Boston is formerly the Managing Director of Omni Market Tide,
a listed technology company specialising in shareholder communications,
investor relations and voting. Megan holds a Bachelor of Commerce and is
a Chartered Accountant with over 10 years’ experience as a non-executive
Director across a range of industries. She has chaired company boards as
well as board sub-committees particularly in the area of finance and risk
management. Megan has completed the Company Directors Course
Diploma run by the Australian Institute of Company Directors. Previously,
Megan held senior executive roles at various banking institutions in the
area of risk and compliance, as well as working for
PricewaterhouseCoopers.
None
Omni Market Tide Limited (ASX)
Chair of the Audit and Risk Committee and member of the Remuneration
and Nomination Committee from 16 August 2016
Nil
Nil
Other current directorships' quoted above are current directorships for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only
and excludes directorships of all other types of entities, unless otherwise stated.
CEO and Company secretary
Mr Greg West was appointed CEO on the 10th August 2016 having filled the interim CEO position since December
2015. Greg has spent the last 10 years in CFO roles in the listed biotech sector. Greg is a Chartered Accountant
with experience in investment banking, financial services and ASX-listed start-ups in the biotech sector. Previously,
he has worked at Price Waterhouse and has held senior finance executive roles in investment banking with
Bankers Trust, Deutsche Bank, NZI and other financial institutions.
Company Secretary
Sakura Holloway was appointed as joint Company Secretary on the 25th August 2016.
Ms Sakura Holloway is an Australian patent attorney with over ten years’ experience in the biotech sector. She has
held senior IP and commercial roles in Australian listed entities and government organisations, including leading
the commercialisation team for RNAi technology at CSIRO, for which Benitec has secured its exclusive IP rights for
human therapeutics. Sakura’s IP experience has been developed through in-house (Arana Therapeutics Ltd, now
Teva Pharmaceuticals, and Garvan Institute) and private practice (FB Rice) roles. During her time at Benitec,
Sakura was an integral team member on the US IPO and NASDAQ listing.
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during
the year ended 30 June 2016, and the number of meetings attended by each director were:
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 15
Peter Francis
John Chiplin
Kevin Buchi
Iain Ross
Peter French
Full Board
Attended
Full Board
Held
Audit and Risk Committee
Attended
Held
16
15
15
14
5
16
16
16
16
6
3
3
-
3
-
3
3
-
3
-
Held: represents the number of meetings held during the time the director held office or was a member of the
relevant committee.
Due to the small number of directors, the Board undertook the duties of the Nomination and Remuneration
Committee.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Consequences of performance on shareholder wealth
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the Group's executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic
objectives and the creation of value for shareholders, and conforms to the market best practice for the delivery of
reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for
good reward governance practices:
●
●
●
●
competitiveness and reasonableness;
acceptability to shareholders;
performance linkage / alignment of executive compensation; and
transparency.
The Nomination and Remuneration Committee is responsible for determining and reviewing remuneration
arrangements for its directors and executives. The performance of the Group depends on the quality of its directors
and executives. The remuneration philosophy is to attract, motivate and retain high performance and high quality
personnel. This committee is currently managed by the Full Board.
The Nomination and Remuneration Committee has structured an executive remuneration framework that is
market competitive and complementary to the reward strategy of the Group.
Alignment to shareholders' interests:
● has economic profit as a core component of plan design;
● focuses on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and
delivering constant or increasing return on assets as well as focusing the executive on key non-financial drivers
of value; and
● attracts and retains high calibre executives.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 16
DIRECTORS' REPORT
Alignment to program participants' interests:
rewards capability and experience;
●
reflects competitive reward for contribution to growth in shareholder wealth; and
●
provides a clear structure for earning rewards.
●
In accordance with best practice corporate governance, the structure of non-executive directors and executive
remunerations are separate.
Non-executive director’s remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors' fees and payments are reviewed annually by the Nomination and Remuneration Committee. The
Nomination and Remuneration Committee may, from time to time, receive advice from independent remuneration
consultants to ensure non-executive directors' fees and payments are appropriate and in line with the market. The
chairman's fees are determined independently to the fees of other non-executive directors based on comparative
roles in the external market. The chairman is not present at any discussions relating to the determination of his own
remuneration. Non-executive directors may receive share options or other incentives.
ASX listing rules require the aggregate non-executive director’s remuneration be determined periodically by a
general meeting. The most recent determination was at the Annual General Meeting held on 13 November 2014,
where the shareholders approved a maximum aggregate remuneration of $500,000.
Executive remuneration
The Group aims to reward executives with a level and mix of remuneration based on their position and responsibility,
which has both fixed and variable components.
Executives typically receive a base salary (which is based on factors such as experience and comparable industry
information), options, and performance incentives. The Board reviews the CEO’s remuneration package, and the
CEO reviews the other senior executives’ remuneration packages, annually by reference to the Group’s performance,
executive performance, and comparable information within the industry.
The performance of executives is measured against criteria agreed annually with each executive and is based
predominantly on the overall success of the Group in achieving its broader corporate goals. Bonuses and incentives
are linked to predetermined performance criteria. The Board may, however, exercise its discretion in relation to
approving incentives, bonuses, and options, and can recommend changes to the CEO’s recommendations. The policy
is designed to attract the highest calibre of executives and reward them for performance that results in long-term
growth in shareholder wealth.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits;
short-term performance incentives;
share-based payments; and
other remuneration such as superannuation and long service leave.
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually
by the Nomination and Remuneration Committee, based on individual and business unit performance, the overall
performance of the Group and comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor
vehicle benefits) where it does not create any additional costs to the Group and provides additional value to the
executive.
The short-term incentives ('STI') program is designed to align the targets of the business units with the targets of
those executives responsible for meeting those targets. STI payments are granted to executives based on specific
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 17
annual targets and key performance indicators ('KPI's') being achieved. KPI's include profit contribution, leadership
contribution and product management.
The long-term incentives ('LTI') include long service leave and share-based payments. Executives may be invited to
participate in the Employee Share Option Plan ('ESOP'). Shares are awarded to executives over a period of three
years based on long-term incentive measures. These include increase in shareholders' value relative to the entire
market and the increase compared to the Group's direct competitors. Australian executives or directors receive a
superannuation guarantee contribution required by the Government and do not receive any other retirement
benefits.
Group performance and link to remuneration
Executive bonus and incentive payments are based on performance and are at the discretion of the Nomination and
Remuneration Committee.
Use of remuneration consultants
During the financial year ended 30 June 2016, the Group did not engage any remuneration consultants, to review
its existing remuneration policies and provide any recommendations on how to improve both the STI and LTI
programs.
Voting and comments made at the Company's 2014 Annual General Meeting ('AGM')
At the AGM held on 13 November 2014, 89% of the votes received supported the adoption of the remuneration
report for the year ended 30 June 2014. The Company did not receive any specific feedback at the AGM regarding
its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel (KMP) of the Group are set out in the following tables.
The key management personnel of the Group consisted of the directors of Benitec Biopharma Limited and the
following persons:
● Mr Greg West – CEO (appointed 10 August) and Company Secretary
● Dr David Suhy - Senior Vice President, Research and Development
● Mr Carl Stubbings - Chief Business Officer (resigned 10 August 2015)
Due to the discontinuation of the Company’s clinical trial program and recently announced management
restructure Georgina Kilfoil, who was disclosed as a KMP in the prior period is not included in this year’s list of
KMP’s.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 18
DIRECTORS' REPORT
Short-term benefits
Cash
bonus monetary
Non-
$
$
Cash salary
and fees
$
Post-
employment
benefits
Super-
annuation
$
Long-term
benefits/
Employee
leave
$
Share-
based
payments
Options
$
Total
$
113,328
78,488
81,230
81,262
-
-
-
-
-
-
-
-
8,550
-
-
-
503,379
120,000
(90,256)
9,024
-
-
-
-
-
212,993
127,796
127,796
127,796
334,871
206,284
209,026
209,058
172,237
714,384
333,333
343,218
263,583
1,797,821
69,000
68,644
27,500
285,144
25,268
42,242
(11,676)
(34,422)
19,308
-
18,748
55,630
13,209
-
-
575,876
115,758
572,704
118,600
307,030
8,875
13,209 1,011,851 3,129,233
Short-term benefits
Cash
bonus
$
Cash salary
and fees
$
Non-
monetary
$
Post-
employment
benefits
Super-
annuation
$
Long-term
benefits
Employee
leave
$
Share-
based
payments
Options
$
Total
$
113,328
56,000
56,000
62,000
400,000
230,000
298,936
83,333
275,000
161,250
1,735,847
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18,783
18,783
-
7,826
18,783
32,178
96,353
-
-
-
-
-
-
64,783
-
-
113,328
120,783
56,000
62,000
90,847
509,630
220,622
224,361
185,077
152,718
97,715
-
469,405
523,297
-
276,236
-
446,501
-
-
291,143
- 1,036,123 2,868,323
2016
Non-Executive
Directors:
Peter Francis
Kevin Buchi
John Chiplin
Iain Ross
Executive Directors:
Peter French
Other Key
Management
Personnel:
Greg West
David Suhy
Carl Stubbings
2015
Non-Executive
Directors:
Peter Francis
Kevin Buchi
John Chiplin
Iain Ross
Executive Directors:
Peter French
Other Key
Management
Personnel:
Greg West
David Suhy
Georgina Kilfoil
Carl Stubbings
Michael Graham
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 19
The proportion of remuneration at risk and the fixed proportion are as follows:
Fixed remuneration
2015
2016
At risk - STI (bonus)
2015
2016
At risk - LTI (options)
2015
2016
36%
38%
39%
39%
100%
46%
100%
100%
-%
-%
-%
-%
-%
-%
-%
-%
64%
62%
61%
61%
-%
54%
-%
-%
Name
Non-Executive
Directors:
Peter Francis
Kevin Buchi
John Chiplin
Iain Ross
Executive Directors:
Peter French
59%
82%
17%
-%
24%
18%
Other Key Management
Personnel:
Greg West
David Suhy
Georgina Kilfoil
Carl Stubbings
66%
67%
-%
88%
53%
57%
33%
66%
12%
12%
-%
9%
-%
-%
-%
-%
22%
21%
-%
3%
47%
43%
67%
34%
The proportion of the cash bonus paid/payable or forfeited is as follows. No part of the forfeited bonus is
payable in future years.
Name
2016
2015
2016
2015
Cash bonus paid/payable
Cash bonus forfeited
Executive Directors:
Peter French
Other Key Management
Personnel:
Greg West
David Suhy
Carl Stubbings
Georgina Kilfoil
100%
100%
100%
50%
-%
-%
-%
-%
-%
-%
-%
-%
-%
50%
-%
-%
-%
-%
-%
-%
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 20
DIRECTORS' REPORT
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Name:
Title:
Agreement commenced: 10 August 2011 (previously CFO and Company Secretary from 23 August 2011)
Details:
Mr Greg West
CEO and Company Secretary
CEO role – Mr West was appointed CEO on the 10th August 2016 with a base salary of
$400,000 plus superannuation of $19,616. Each year Mr West can receive up to a 50% bonus
on his base salary. To be reviewed annually by the Nomination and Remuneration
Committee Greg’s appointment with the Company may be terminated with the Company
giving six months’ notice or by Greg giving six months’ notice. The Company may elect to
pay Greg an equal amount to that proportion of his salary equivalent to six month’s pay in
lieu of notice, together with any outstanding entitlements due to him.
Mr West was appointed interim CEO in October 2015 as well as maintaining his role of CFO
and Company Secretary which he had held since 23 August 2011.
Name:
Title:
Agreement commenced: 28 August 2012
Details:
Dr David Suhy
Senior Vice President, Research and Development
Base salary for the year ended 30 June 2016 of $USD250,000 plus superannuation, to be
reviewed annually by the Nomination and Remuneration Committee. David’s appointment
with the Company may be terminated without notice.
Name:
Title:
Agreement commenced: 28 May 2012
Details:
Carl Stubbings
Chief Business Officer
Base salary for the year ended 30 June 2016 of $275,000 plus superannuation, to be
reviewed annually by the Nomination and Remuneration Committee. Carl’s appointment
with the Company may be terminated with the Company giving three months’ notice or by
Carl giving three months’ notice. The Company may elect to pay Carl an equal amount to
that proportion of his salary equivalent to three month’s pay in lieu of notice, together with
any outstanding entitlements due to him.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the
year ended 30 June 2016.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and
other key management personnel in this financial year or future reporting years are as follows:
Grant date
No. granted
Expiry date
Fair value
per option
Exercise price at grant date
12/11/2015
6,720,000
12/11/2020
$0.77
$0.234
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 21
Options granted carry no dividend or voting rights. Options vest over five years with vesting based on remaining in
service.
Details of options over ordinary shares granted, vested and lapsed for directors and other key management
personnel as part of compensation during the year ended 30 June 2016 are set out below:
Number
of
options
granted
840,000
1,400,000
Name
Peter
Francis
Kevin
Buchi
John
Chiplin
Iain
Ross
Peter
French* 2,800,000
840,000
840,000
Value
per
options
at
grant
date
Value of
options
at grant
date
Grant date
Number
vested/
(forfeited)
Exercise
price
Vested
and first
exercise
date
Last
exercise
date
12/11/2015
0.234
$328,161
466,666
0.77
12/11/2015 12/11/2020
12/11/2015
0.234
$196,896
280,000
0.77
12/11/2015 12/11/2020
12/11/2015
0.234
$196,896
280,000
0.77
12/11/2015 12/11/2020
12/11/2015
0.234
$196,896
280,000
0.77
12/11/2015 12/11/2020
12/11/2015
0.234
$656,319
(2,800,000)
0.77
-
-
*All Options granted lapsed on termination of employment on 9th December 2015
Consequences of performance on shareholder wealth
The earnings of the Group for the five years to 30 June 2016 are summarised below:
Loss after income tax
2012
$'000
(4,113)
2013
$'000
(3,488)
2014
$'000
(7,039)
2015
$'000
(11,509)
2016
$'000
(24,778)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end ($)
Basic earnings per share (cents per share)
2012
0.43
(0.43)
2013
2014
0.38
(8.25)
1.15
(7.78)
2015
0.69
(9.96)
2016
0.097
(17.41)
Additional disclosures relating to key management personnel
In accordance with Class Order 14/632, issued by the Australian Securities and Investments Commission, relating to
'Key management personnel equity instrument disclosures', the following disclosure relates only to equity
instruments in the Company or its subsidiaries.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 22
DIRECTORS' REPORT
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Ordinary shares
Peter Francis
Kevin Buchi
John Chiplin
Iain Ross
Peter French
Carl Stubbings
Balance at
1 July
2015
Received as
part of
remuneration
Exercise of
options**
Disposals/
other
Balance at
30 June
2016
424,174
861,539
200,000
66,364
591,785
136,787
2,280,649
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
424,174
861,539
200,000
66,364
591,785
136,787
2,280,649
None of the shares include in the table are held nominally by KMP.
Option holding
The number of options over ordinary shares in the Company held during the financial year by each director and
other members of key management personnel of the Group, including their personally related parties, is set out
below:
Balance at
1 July 2015
Granted
Exercised
Expired/
forfeited/ot
her
Balance at
30 June
2016
Vested and
exercisable
Vested and
unexercisable
Options over
ordinary
shares
Peter Francis
Kevin Buchi
John Chiplin
Iain Ross
Greg West
David Suhy
Peter French
Carl Stubbings
1,600,000
400,000
400,000
400,000
1,000,000
1,200,000
2,600,000
1,000,000
8,600,000
1,400,000
840,000
840,000
840,000
-
-
2,800,000
-
6,720,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,400,000)
(1,000,000)
(6,400,000)
3,000,000
1,240,000
1,240,000
1,240,000
1,000,000
1,200,000
-
-
8,920,000
2,066,666
680,000
680,000
680,000
706,666
933,334
-
-
5,746,666
-
-
-
-
-
-
-
-
-
Other transactions with key management personnel and their related parties
Legal services at normal commercial rates totalling $116,540 (2015: $143,684) were provided by Francis Abourizk
Lightowlers, a law firm in which Peter Francis is a partner and has a beneficial interest.
Consultancy fees were paid for executive duties totalling $165,983 (2015: $118,013) provided by NewStar Ventures
Ltd, a corporation in which John Chiplin is a director and has a beneficial interest. This concludes the remuneration
report, which has been audited.
This concludes the remuneration report, which has been audited.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 23
Shares under option
Unissued ordinary shares of Benitec Biopharma Limited under option at the date of this report are as follows:
Grant date
Expiry date
Exercise
price
Number
under option
26 September 2011 *
17 November 2011 **
7 February 2012 **
16 November 2012 **
10 November 2013 *
22 August 2013 **
28 February 2014 ***
15 May 2014 **
17 December 2014 **
6 May 2015 **
20 August 2015 ****
12 November 2015*
9 August 2016**
26 September 2016
17 November 2016
7 February 2017
16 November 2017
18 May 2018
22 August 2018
28 February 2019
15 May 2019
17 December 2019
6 May 2020
21 August 2020
12 November 2020
9 August 2021
$1.250
$1.250
$1.250
$1.250
$0.620
$1.250
$1.260
$1.500
$1.250
$1.250
$USD 0.275
$0.77
$0.1665
2,800,000
600,000
156,000
400,000
400,000
480,000
13,246,203
180,000
2,634,000
650,000
11,500,000
3,920,000
2,200,000
39,166,203
Non-Executive Directors options
*
** ESOP options
*** Unlisted options
**** Warrants. These options represent 575,000 unlisted warrants. Each warrant represents is convertible into 20 shares. The
exercise price of each warrant is convertible on the payment of $USD5.50 ($USD 0.275 per share).
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share
issue of the Company or of any other body corporate.
Shares issued on the exercise of options
No Options were exercised during the year.
There were no amounts unpaid on the shares issued.
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives
of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor
of the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
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.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 24
DIRECTORS' REPORT
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by
the auditor are outlined in note 20 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by
another person or firm on the auditor's behalf), is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 20 to the financial statements do not
compromise the external auditor's independence requirements of the Corporations Act 2001 for the following
reasons:
● all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor;
● none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity
for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards; and
• all services have been pre-approved by the audit committee.
Officers of the Company who are former partners of Grant Thornton Audit Pty Ltd
There are no officers of the Company who are former partners of Grant Thornton Audit Pty Ltd.
Rounding of amounts
The Parent entity has applied the relief available to it under ASIC Corporations (Rounding in Financial/Directors’
Reports). Instrument 2016/191 and accordingly amounts in the financial statements and Directors’ Report have been
rounded off to the nearest $1,000, or in certain cases, to the nearest dollars.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set
out on the following page.
Auditor
Grant Thornton Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations
Act 2001.
On behalf of the directors
______________________________
Peter Francis
Chairman
30 August 2016
Sydney
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 25
AUDITOR’S INDEPENDENCE DECLARATION
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 26
FINANCIAL STATEMENT AND NOTES TO THE FINANCIAL STATEMENT
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2016
Revenue
Other income
Expenses
Royalties and licence fees
Research and development
Employee benefits expense
Share-based expense
Travel related costs
Consultants costs
Occupancy costs
Corporate expenses
Net loss foreign exchange
IPO costs
Writeoff of clinical trial prepayment
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit for the year attributable to the owners of
Benitec Biopharma Limited
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Total comprehensive income for the year attributable to the owners of
Benitec Biopharma Limited
Basic earnings per share
Diluted earnings per share
Consolidated
Note
2016
$'000
2015
$'000
4
5
6
10
7
16
464
1,081
3,590
2,891
(139)
(13,287)
(6,283)
(1,746)
(1,023)
(1,020)
(718)
(1,211)
(414)
(1,191)
(1,800)
(40)
(6,228)
(3,425)
(1,503)
(1,039)
(882)
(275)
(1,018)
-
(1,071)
-
(24,778)
(11,509)
-
-
(24,778)
(11,509)
(19)
6
(24,797)
(11,503)
Cents
Cents
28
28
(17.41)
(17.41)
(9.96)
(9.96)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 27
Statement of financial position
As at 30 June 2016
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2016
$'000
2015
$'000
8
9
10
11
12
13
18,230
977
177
19,384
21,787
123
3,154
25,064
506
506
456
456
19,890
25,520
833
202
1,035
18
18
1,053
1,449
193
1,642
-
-
1,642
18,837
23,878
14
15
16
147,641
2,565
(131,369)
129,631
2,038
(107,791)
18,837
23,878
The above statement of financial position should be read in conjunction with the accompanying notes
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 28
FINANCIAL STATEMENT AND NOTES TO THE FINANCIAL STATEMENT
Statement of changes in equity
For the year ended 30 June 2016
Consolidated
Issued
capital
$'000
Reserves
$'000
Accumulated
losses
$'000
Total
equity
$'000
Balance at 1 July 2014
129,186
641
(96,286)
33,541
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs
Share-based payments
Transfer of expired share-based payments
Transfer to share capital for options exercised
-
-
-
337
-
-
108
-
6
6
(11,509)
-
(11,509)
6
(11,509)
(11,503)
-
1,503
(4)
(108)
-
-
4
-
337
1,503
-
-
Balance at 30 June 2015
129,631
2,038
(107,791)
23,878
Consolidated
Issued
capital
$'000
Reserves
$'000
Accumulated
losses
$'000
Total
equity
$'000
Balance at 1 July 2015
129,631
2,038
(107,791)
23,878
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
-
(19)
(24,778)
-
(24,778)
(19)
(19)
(24,778)
(25,797)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 14)
Share-based payments (note 29)
Transfer of expired share-based payments
18,010
-
-
-
1,746
(1,200)
-
-
1,200
18,010
1,746
-
Balance at 30 June 2016
147,641
2,565
(131,369)
18,837
The above statement of changes in equity should be read in conjunction with the accompanying notes
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 29
Statement of cash flows
For the year ended 30 June 2016
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Research and development grants
Interest received
Payments to suppliers and employees (inclusive of GST)
Consolidated
Note
2016
$'000
2015
$'000
340
3,590
217
(24,355)
307
2,318
774
(13,091)
Net cash used in operating activities
27
(20,208)
(9,692)
Cash flows from investing activities
Purchase of property, plant and equipment
11
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
IPO and share issue transaction costs
Net cash from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
(342)
(342)
19,462
(1,952)
17,510
(3,040)
21,787
(517)
(505)
(505)
385
(333)
52
(10,145)
31,359
573
Cash and cash equivalents at the end of the financial year
8
18,230
21,787
The above statement of cash flows should be read in conjunction with the accompanying notes
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 30
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
New, revised or amending Accounting Standards and Interpretations adopted
In the current year, the Group has applied two amendments to AASBs issued by the Australian Accounting
Standards Board (AASB) that are mandatorily effective for an accounting period that begins on or after 1 July
2015, and therefore relevant for the current year end.
AASB 2015-3 ‘Amendments to Accounting Standards arising from the Withdrawal of AASB 1031 Materiality’
This amendment completes the withdrawal of references to AASB 1031 in all Australian Accounting Standards and
Interpretations, Australian allowing that Standard to effectively be withdrawn.
AASB 2015-4‘Amendments to Accounting Financial Requirements Australian Groups with Foreign Parent’
The amendments to AASB 128 align the relief available in AASB 10 and AASB 128 in respect of the financial
reporting requirements for Australian groups with a foreign parent. The amendments require Standards that the
ultimate Australian entity shall apply the equity method in reporting accounting for interests in associates and joint
ventures if either the Australian entity or the group is a reporting entity, or both the entity and group a are
reporting entities.
The application of these amendments does not have any material impact on the disclosures or the amounts
recognised in the Group's consolidated financial statements.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Certain new accounting standards and interpretations have been published that are not mandatory
for 30 June 2016 reporting periods and have not been early adopted by the group. The group’s
assessment of the impact of these new standards and interpretations is set out below.
•
•
•
AASB 9 Financial Instruments - addresses the classification, measurement and derecognition of financial
assets and financial liabilities and introduces new rules for hedge accounting. In December 2014, the
AASB made further changes to the classification and measurement rules and also introduced a new
impairment model. These latest amendments now complete the new financial instruments standard.
Impact - The entity is yet to undertake a detailed assessment of the impact of AASB 9. However, based on
the entity’s preliminary assessment, the Standard is not expected to have a material impact on the
transactions and balances recognised in the financial statements when it is first adopted for the year
ending 30 June 2019.
Mandatory application date / Date of adoption by group - Must be applied for financial years
commencing on or after 1 January 2018.
Based on the transitional provisions in the completed IFRS 9, early adoption in phases was only
permitted for annual reporting periods beginning before 1 February 2015. After that date, the new
rules must be adopted in their entirety.
AASB 15 Revenue from Contracts with Customers - The AASB has issued a new standard for the
recognition of revenue. This will replace AASB 118 which covers contracts for goods and services.
The new standard is based on the principle that revenue is recognised when control of a good or service
transfers to a customer; so the notion of control replaces the existing notion of risks and rewards.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 31
Note 1. Significant accounting policies (continued)
•
•
•
Impact - The entity is yet to undertake a detailed assessment of the impact of AASB 15. However, based
on the entity’s preliminary assessment, the Standard is not expected to have a material impact on the
transactions and balances recognised in the financial statements when it is first adopted for the year
ending 30 June 2019.
The standard permits a modified retrospective approach for the adoption. Under this approach, entities
will recognise transitional adjustments in retained earnings on the date of initial application (eg 1 July
2017), ie without restating the comparative period. They will only need to apply the new rules to
contracts that are not completed as of the date of initial application.
Mandatory application date / Date of adoption by group - commencing on or after 1 January 2018.
Expected date of adoption by the group: 1 July 2018
AASB 16 Leases - The AASB has issued a new standard for the recognition of leases. This will replace
AASB 117: Leases. The new standard introduces a single lessee accounting model that no longer
requires leases to be classified as operating or financing.
Other major changes include, the recognition of a right-to-use asset and liability, depreciation of right-to-
use assets in line with AASB 116: Property Plant and Equipment, variable lease payments that depend on
an index or rate are included in the initial measurement of lease liability, option for lessee to not separate
non-lease components and account for all components as a lease, and additional disclosure requirements.
Impact - The entity is yet to undertake a detailed assessment of the impact of AASB 16. However, based
on the entity’s preliminary assessment, the Standard is not expected to have a material impact on the
transactions and balances recognised in the financial statements when it is first adopted for the year
ending 30 June 2020.
Mandatory application date / Date of adoption by group - Must be applied for financial years
commencing on or after 1 January 2019.Expected date of adoption by the group: 1 July 2019.
There are no other standards that are not yet effective and that would be expected to have a material impact on
the entity in the current or future reporting periods and on foreseeable future transactions.
Going concern
The directors have prepared the financial statements on a going concern basis after taking into consideration the
net loss for the year of $25,678,000 (2015: $11,509,000) and the cash and cash equivalents balance of $18,230,000
(2015: $21,787,000). The directors have recognised the capital raisings in the last 2 years, performed a review of
the cash flow forecasts, considered the cash flow needs of the Group, and believe that the strategies in place are
appropriate to generate funding which will be sufficient to maintain the going concern status of the Group. If these
strategies are unsuccessful then the Group may need to realise its assets and extinguish liabilities other than in the
ordinary course of business and at amounts different to those disclosed in the financial report.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 32
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
Note 1. Significant accounting policies (continued)
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to
the financial statements, are disclosed in note 2.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 24.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Benitec Biopharma
Limited ('Company' or 'parent entity') as at 30 June 2016 and the results of all subsidiaries for the year then ended.
Benitec Biopharma Limited and its subsidiaries together are referred to in these financial statements as the 'Group'.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when it is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are de-consolidated from the date that control ceases. The Companies
100% owned subsidiary, Tacere Therapeutics, Inc. has a 31 December year end. The Company is reviewing the
appropriate time to align the subsidiary year end to the parent’s year end. For consolidation purposes Tacere
prepares financial statements for the 12 month period ended 30 June that are used to consolidate into the group
accounts.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised
directly in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
Group recognises the fair value of the consideration received and the fair value of any investment retained together
with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the
same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is
responsible for the allocation of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Benitec Biopharma Limited's functional and
presentation currency.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 33
Note 1. Significant accounting policies (continued)
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the
average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting
foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve
in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed
of.
Revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the Group and the revenue can be
reliably measured. Revenue is measured at the fair value of the consideration received or receivable.
Licensing revenue and royalties
Revenue from the granting of licenses is recognised in accordance with the terms of the relevant agreements and is
usually recognised on an accruals basis, unless the substance of the agreement provides evidence that it is more
appropriate to recognise revenue on some other systematic rational basis.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
Government research and development grants
Government grants are recognised at fair value where there is reasonable assurance that the grant will be received
and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods
necessary to match the grant costs they are compensating. Grants relating to assets are credited to deferred income
at fair value and are credited to income over the expected useful life of the asset on a straight-line basis.
Research and development grant revenue is recognised as income when a reliable estimate can be made of the
amounts receivable
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where
applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied
when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively
enacted, except for:
● When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 34
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
Note 1. Significant accounting policies (continued)
● When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures,
and the timing of the reversal can be controlled and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will
be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to
the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same
taxable authority on either the same taxable entity or different taxable entities which intend to settle
simultaneously.
Benitec Biopharma Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income
tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax
consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated group
has applied the 'separate taxpayer within group' approach in determining the appropriate amount of taxes to
allocate to members of the tax consolidated group. No tax sharing agreement has been entered between entities in
the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities
(or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each
subsidiary in the tax consolidated group.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months
after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to
settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in normal operating cycle; it is held primarily
for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other
liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
Trade and other receivables
Other receivables are recognised at amortised cost, less any provision for impairment.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 35
Note 1. Significant accounting policies (continued)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of
the initial measurement, except for financial assets at fair value through profit or loss. They are subsequently
measured at either amortised cost or fair value depending on their classification. Classification is determined based
on the purpose of the acquisition and subsequent reclassification to other categories is restricted.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or
have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. They are carried at amortised cost using the effective interest rate method. Gains and losses are
recognised in profit or loss when the asset is derecognised or impaired.
Impairment of financial assets
The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset
or group of financial assets is impaired. Objective evidence includes significant financial difficulty of the issuer or
obligor; a breach of contract such as default or delinquency in payments; the lender granting to a borrower
concessions due to economic or legal reasons that the lender would not otherwise do; it becomes probable that the
borrower will enter bankruptcy or other financial reorganisation; the disappearance of an active market for the
financial asset; or observable data indicating that there is a measurable decrease in estimated future cash flows.
The amount of the impairment allowance for loans and receivables carried at amortised cost is the difference
between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original
effective interest rate. If there is a reversal of impairment, the reversal cannot exceed the amortised cost that would
have been recognised had the impairment not been made and is reversed to profit or loss.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and
equipment (excluding land) over their expected useful lives as follows:
Leasehold improvements
Plant and equipment
period of the lease term
3-7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit
to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement
and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset
or assets and the arrangement conveys a right to use the asset.
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially
all the risks and benefits incidental to the ownership of leased assets, and operating leases, under which the lessor
effectively retains substantially all such risks and benefits.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 36
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
Note 1. Significant accounting policies (continued)
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-
line basis over the term of the lease.
Impairment of non-financial assets
Other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other
non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. 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. The value-in-use is
the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to
the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are
grouped together to form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries and other employee benefits expected to be settled within 12 months of the
reporting date are measured at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
Employee benefits not expected to be settled within 12 months of the reporting date are measured as the present
value of expected future payments to be made in respect of services provided by employees up to the reporting
date using the projected unit credit method. Consideration is given to expect 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 corporate bonds with terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to directors and senior executives. The plan
currently in place to provide these benefits is the Employee Share Option Plan ('ESOP').
Equity-settled transactions are awards of shares, or options over shares that are provided to employees in exchange
for the rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using Black-Scholes option pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting
conditions that do not determine whether the Group receives the services that entitle the employees to receive
payment. No account is taken of any other vesting conditions.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 37
Note 1. Significant accounting policies (continued)
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over
the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the
award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting
period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting
date less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all
other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases
the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period,
unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
earnings per share.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes,
the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date; and assumes that the transaction will take place
either: in the principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on
its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
Costs related to an initial offering are expensed in the statement of profit or loss and other comprehensive income.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Benitec Biopharma Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the
financial year.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 38
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
Note 1. Significant accounting policies (continued)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or
as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement
of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority.
Comparative figures
When required by accounting standards, comparative figures have been adjusted to conform to changes in the
presentation for the current financial year.
Rounding of amounts
The Parent entity has applied the relief available to it under ASIC Corporations (Rounding in Financial/Directors’
Reports). Instrument 2016/191 and accordingly amounts in the financial statements and Directors Report have been
rounded off to the nearest $1,000, or in certain cases, to the nearest dollars.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its
judgements, estimates and assumptions on historical experience and on other various factors, including
expectations of future events, management believes to be reasonable under the circumstances. The resulting
accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities (refer to the respective notes) within the next financial year are discussed below.
Research and development expenses
Management does not consider the development programs to be sufficiently advanced to reliably determine the
economic benefits and technical feasibility to justify capitalisation of development costs. These costs have been
recognised as an expense when incurred.
Research and development expenses relate primarily to the cost of conducting clinical and pre-clinical trials. Clinical
development costs are a significant component of research and development expenses. Estimates have been used
in determining the expense liability under certain clinical trial contracts where services have been performed but
not yet invoiced. Generally the costs, and therefore estimates, associated with clinical trial contracts are based on
the number of patients, drug administration cycles, the type of treatment and the outcome being measured. The
length of time before actual amounts can be determined will vary depending on length of the patient cycles and the
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 39
Note 2. Critical accounting judgements, estimates and assumptions (continued)
timing of the invoices by the clinical trial partners.
The Group accounts for the federal government research and development grants tax incentive when a reliable
estimate of the amounts receivable can be made.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using either the Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The
accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on
the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss
and equity.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable
that future taxable amounts will be available to utilise those temporary differences and losses. Given the Company’s
and each individual entities’ history of recent losses, the Group has not recognised a deferred tax asset with regard
to unused tax losses and other temporary differences, as it has not been determined whether the Company or its
subsidiaries will generate sufficient taxable income against which the unused tax losses and other temporary
differences can be utilised.
Costs of capital raising
Costs directly attributable to an equity transaction are held in the statement of financial position until the completion
of the transaction. On completion, the costs will be applied against issued capital.
Costs associated with abandoned or sub-optimal equity transactions are expensed to profit or loss in the year the
transaction is determined to no longer be viable under existing conditions.
Note 3. Operating segments
Identification of reportable operating segments
The Group has only one operating segment during the financial year, being the global commercialisation by licensing
and partnering of patents and licences in biotechnology, more specifically in functional genomics, with applications
in biomedical research and human therapeutics. This operating segment is based on the internal reports that are
reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM'))
in assessing performance and in determining the allocation of resources.
The information reported to the CODM is on at least a monthly basis.
The group sources some of its revenue from the United States of America and therefore presents the split by
geographical region.
Geographical information
Australia
United States of America
Sales to external customers
2016
$'000
2015
$'000
247
-
247
307
-
307
Geographical
total assets
2016
$'000
19,076
814
2015
$'000
25,070
450
19,890
25,520
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 40
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
Note 4. Revenue
Sales revenue
Licensing revenue and royalties
Other revenue
Interest
Revenue
Note 5. Other income
Net foreign exchange gain
Federal government research and development grants received for year ended 2015.
(Income from previous period related to year ended 2014).
Other income
Note 6. Expenses
Loss before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
Plant and equipment
Total depreciation
Research and development
Project expenses
Other IP related expenses
Total research and development
Rental expense relating to operating leases
Minimum lease payments
Superannuation expense
Defined contribution superannuation expense
Employee benefits expense excluding superannuation
Employee benefits expense excluding superannuation
Consolidated
2016
$'000
2015
$'000
247
307
217
464
774
1,081
Consolidated
2016
$'000
2015
$'000
-
3,590
573
2,318
3,590
2,891
Consolidated
2016
$'000
2015
$'000
205
85
290
10
87
97
12,240
1,047
4,983
1,245
13,287
6,228
265
179
280
128
6,003
3,297
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 41
Note 7. Income tax benefit
Income tax benefit
Current tax
Aggregate income tax benefit
Numerical reconciliation of income tax benefit and tax at the statutory rate
Loss before income tax benefit
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Legal expenses
Share-based payments
Capital items deductible
Sundry items
Deferred tax asset not brought to account
Income tax benefit
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 30%
Consolidated
2016
$'000
2015
$'000
-
-
-
-
(24,778)
(11,509)
(7,433)
(3,453)
59
524
(476)
500
15
451
(487)
472
(6,826)
6,826
(3,002)
3,002
-
-
64,182
53,866
19,255
16,160
Capital unused tax losses for which no deferred tax asset has been recognised
1,272
1,272
Potential tax benefit at statutory tax rates
382
382
The above potential tax benefit has not been recognised in the statement of financial position. These tax losses are
recognised only if the consolidated entity considers it is probable that future taxable amounts will be available to
utilise those temporary differences and losses.
There was a prior period reduction to tax losses of $12,434,000 for the consolidated group due to adjustments to
carried forward losses not realised on lodgement of tax returns for the period. The effect was to decrease the tax
losses of the consolidated group from $5,866,000 to $41,432,000 for the year ending 30 June 2015.
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Others
Total deferred tax assets not recognised
Consolidated
2016
$'000
2015
$'000
39
39
58
58
The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been
recognised in the statement of financial position as the recovery of this benefit is uncertain.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 42
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
Note 8. Current assets - cash and cash equivalents
Cash at bank
Cash on deposit
Note 9. Current assets - trade and other receivables
Settlement receivable*
Other receivables
BAS receivable
Consolidated
2016
$'000
2015
$'000
552
17,678
916
20,871
18,230
21,787
Consolidated
2016
$'000
2015
$'000
900
13
64
977
123
-
123
123
* On the 26 August 2016 a settlement agreement was reached for the return of $900,000 of the $2.7million clinical
trial prepayment due to the cancellation of the small cell lung cancer program. See Note 10 for further details.
There is no receivable balance that is either past due or impaired.
Note 10. Current assets - other
Prepayments
Prepaid clinical trials*
IPO costs ***
Other current assets
Consolidated
2016
$'000
2015
$'000
149
-
-
28
177
74
2,700
285
95
3,154
* The Group announced on 3 June 2013 that it had committed to moving its non-small cell lung cancer therapeutic, into clinical development.
The Group is using European-based clinical research organisation Clinical Trials Group ('CTGCRO') to manage both the initial clinical development
and trials. The expected full cost of the clinical trial was paid in advance. This prepayment was made to secure favourable commercial terms with
CTGCRO for the conduct of the trials. As at the 30 June 2015 the trials had still not commenced.
As a result of feedback from pharma companies and investors, the Company decided to discontinue the non-small cell lung cancer program,
allowing resources to be focused on developing the other preclinical programs. The non-small cell lung cancer program provided information
into optimising ddRNAi design and delivery.
The Group reached an agreement on the 26 August 2016 for the return of $900,000 of the prepayment due to the cancellation of the program.
Funds are due to be received prior to 31 December 2016. Refer Note 9. The remaining $1,800,000 has been included as an impairment charge
in the profit and loss statement.
*** IPO costs were incurred during the year for the public offer in the United States and the associated listing on the NASDAQ Global Select
Market. Refer to note 14 for further details.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 43
Note 11. Non-current assets - property, plant and equipment
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Consolidated
2016
$'000
2015
$'000
264
(220)
44
877
(415)
462
506
252
(15)
237
544
(325)
219
456
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are
set out below:
Consolidated
Balance at 30 June 2014
Additions
Depreciation expense
FX loss
Balance at 30 June 2015
Additions
Depreciation expense*
FX loss
Balance at 30 June 2016
Leasehold
Plant and
improvement equipment
$'000
$'000
Total
$'000
8
239
(10)
-
237
12
(205)
-
44
40
266
(87)
-
219
330
(85)
(2)
462
48
505
(97)
-
456
342
(290)
(2)
506
* Deprecation of leasehold assets was accelerated to match the life of the head office lease.
Note 12. Current liabilities - trade and other payables
Trade payables
Other payables
Consolidated
2016
$'000
2015
$'000
538
295
833
760
689
1,449
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 44
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
Note 13. Current liabilities - provisions
Employee benefits
Note 14. Equity - issued capital
Consolidated
2016
$'000
2015
$'000
202
193
Consolidated
2016
Shares
2015
Shares
2016
$'000
2015
$'000
Ordinary shares - fully paid
146,529,096 115,881,763
147,641
129,631
Movements in ordinary share capital
Details
Date
Shares
Issue price
$'000
Balance
Biomics issue*
IPO issue
IPO and share issue transaction costs
30 June 2015
15 July 2015
15 August 2015
115,881,763
647,333
30,000,000
0.7724
0.6488
Balance
The weighted average number of shares on issue
during the twelve months to June 30, 2016 was
30 June 2016
146,529,096
142,312,486
129,631
500
19,463
(1,953)
147,641
* During the year Benitec acquired full rights to its pre-clinical hepatitis B program from its collaborator, Biomics Biotechnologies, to enable the
independent progression of the product candidate and simplify partnering negotiations. In order to acquire full rights to the hepatitis B program
that was previously developed by Joint Venture with Biomics, Benitec paid the JV partner $2.5million in upfront payments ($2million cash,
$500k shares), with a further $3.5million and single digit royalties payable to Biomics upon successful commercialization of the program.
(consistent with ASX announcement of 9 July 2015).
Issued capital
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company
in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par
value and the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 45
Note 14. Equity - issued capital (continued)
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure
to reduce the cost of capital.
The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders.
Operating globally, the Group develops speciality pharmaceutical products. The overall strategy of the Group is to
continue its drug development programs, which depends on selling assets and raising additional equity to fund the
activities.
The capital risk management policy remains unchanged from the 2015 Annual Report.
Note 15. Equity - reserves
Foreign currency reserve
Share-based payments reserve
Consolidated
2016
$'000
2015
$'000
(1,319)
3,884
(1,300)
3,338
2,565
2,038
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of
foreign operations to Australian dollars.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 30 June 2014
Foreign currency translation
Share-based payments
Transfer of expired share-based payments
Transfer to share capital for options exercised
Balance at 30 June 2015
Foreign currency translation
Share-based payments
Transfer of expired share-based payments
Foreign
currency
$'000
Share-based
payments
$'000
Total
$'000
(1,306)
6
-
-
-
1,947
-
1,503
(4)
(108)
641
6
1,503
(4)
(108)
(1,300)
3,338
2,038
(19)
-
-
-
1,746
(1,200)
(19)
1,746
(1,200)
Balance at 30 June 2016
(1,319)
3,884
2,565
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 46
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
Note 16. Equity - accumulated losses
Accumulated losses at the beginning of the financial year
Loss after income tax benefit for the year
Transfer from share-based payment reserve for expired options
Accumulated losses at the end of the financial year
Note 17. Equity - dividends
Consolidated
2016
$'000
2015
$'000
(107,791)
(24,778)
1,200
(96,286)
(11,509)
4
(131,369)
(107,791)
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 18. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk and interest
rate risk) and liquidity risk. The Group’s principal financial instruments comprise receivables, payables, cash and
short-term deposits. The Group manages its exposure to key financial risks, including interest rate and currency risk
in accordance with the Company financial risk management policy. The objective of the policy is to protect the assets
and provide a solid return.
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
Consolidated
2016
$'000
2015
$'000
18,230
977
19,307
21,787
123
21,910
833
833
1,499
1,499
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk
through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity
analysis and cash flow forecasting.
At the 30 June 2016 the Company held USD cash or cash equivalents of AUD$8.8m and trade payables and accruals
of $300k. Net USD exposure in AUD of $8.5m. Each 1 cent movement in the AUD/USD exchange rate has an +/-
effect of AUD $88k on profit and net assets of the Company.
Interest rate risk
The Group generates income from interest on surplus funds. At reporting date, the Group had the following assets
exposed to Australian variable interest rate risk that are not designated in cash flow hedges:
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 47
Note 18. Financial instruments (continued)
As at the reporting date, the Group had the following variable rate cash and cash equivalents outstanding:
Consolidated
2016
2015
Weighted
average
interest rate
%
Balance
$'000
Weighted
average
interest rate
%
Cash and cash equivalents
Net exposure to cash flow interest rate risk
1%
18,230
18,230
3.26%
Balance
$'000
21,787
21,787
An analysis by remaining contractual maturities in shown in 'liquidity and interest rate risk management' below.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Group. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying
amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and
notes to the financial statements. The Group does not hold any collateral.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash
equivalents) to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and
liabilities.
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date
on which the financial liabilities are required to be paid.
Consolidated - 2016
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Total non-derivatives
Consolidated - 2015
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Total non-derivatives
Weighted
average
interest rate
%
1 year or less Between 1
and 2 years
Between 2
and 5 years
$'000
$'000
$'000
Over 5 years Remaining
contractual
maturities
$'000
$'000
-%
-%
538
295
833
-
-
-
-
-
-
-
-
-
538
295
833
Weighted
average
interest rate
%
1 year or less Between 1
and 2 years
Between 2
and 5 years
$'000
$'000
$'000
Over 5 years Remaining
contractual
maturities
$'000
$'000
-%
-%
760
689
1,449
-
-
-
-
-
-
-
-
-
760
689
1,449
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 48
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
Note 18. Financial instruments (continued)
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 19. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is
set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Note 20. Remuneration of auditors
Consolidated
2016
$
2015
$
2,048,543
55,630
13,209
1,011,851
1,735,847
96,353
-
1,036,123
3,129,233
2,868,323
During the financial year the following fees were paid or payable for services provided by Grant Thornton Audit Pty
Ltd, the auditor of the Company:
Audit services - Grant Thornton Audit Pty Ltd
Audit or review of the financial statements
Other audit services
- F1 review
- S8 review
Other services - Grant Thornton Audit Pty Ltd
Tax compliance and corporate advisory services
IPO services
Consolidated
2016
$
2015
$
178,250
95,000
23,695
10,200
-
-
22,250
-
20,050
180,000
22,250
200,050
234,395
295,050
Note 21. Contingent liabilities and commitments
On December 18, 2012, the Group announced the appointment of Synteract, Inc. as its Clinical Research
Organisation responsible for the progression of TT-034 into Phase I/IIa clinical trials in the U.S. The Group has
negotiated a contract with favourable commercial terms, in some instances requiring prepayment, for Synteract to
continue to manage the Phase I/IIa clinical trial and the long term patient follow-up through 2016 and beyond.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 49
Note 21. Contingent liabilities and commitments (continued)
While the Company announced on February 20, 2016 that is was terminating the HCV program, Benitec is committed
to completing the study and the company’s estimate of the cost, assuming all patients remain in the study and the
follow-up continues to 2021 is a maximum of $1.0 million. The scenario of all patients remaining in the study to 2021
is most unlikely and the actual cost is likely to be far less than the nominated contingency of $1 million.
On November 11, 2014, the Group entered into a Collaborative Research and License Agreement with 4D Molecular
Therapeutics (4DMT) to identify and develop adeno-associated virus (“AAV”) vector variants optimised for gene
delivery to tissues within the eye using 4D technology and products combining such optimized AAV vector variants
with Benitec’s ddRNAi technology, for further development and commercialization by Benitec under license from
4D Molecular. Under this agreement the Group shall fund 4DMT for the studies to be carried out by 4DMT according
to the research plan that was agreed between the parties.
On June 28, 2016, the Group signed a contract with PhoenixBio Co., Ltd to conduct a study evaluating the anti-HBV
efficacy of its HBV preclinical asset in combination with standard of care therapies in HBV GT C infected PXB-mice.
The Group has contracted for scientific work on the therapeutic programs, as described above, and payments due
within the next 12 month’s total approximately $2,716,000. (2015: $2,892,000)
In addition, Benitec during the year acquired full rights to its pre-clinical hepatitis B program from its collaborator,
Biomics Biotechnologies, to enable the independent progression of the product candidate and simplify partnering
negotiations. In order to acquire full rights to the hepatitis B program that was previously developed by Joint Venture
with Biomics, Benitec paid the JV partner $2.5million in upfront payments ($2million cash, $500k shares), with a
further $3.5million and single digit royalties that may be payable to Biomics, in the instance that constructs
developed during the joint venture are commercialised. Commercialisation is uncertain at this time.
Note 22. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
2016
$'000
2015
$'000
126
98
224
118
378
496
Operating lease commitments includes contracted amounts for offices under non-cancellable operating leases
expiring within 3 years with, in some cases, options to extend. The leases have various escalation clauses. On
renewal, the terms of the leases are renegotiated.
Parent entity
Benitec Biopharma Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 25.
Key management personnel
Disclosures relating to key management personnel are set out in note 19 and the remuneration report in the
directors' report.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 50
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
Note 23. Related party transactions
Transactions with related parties
The following transactions occurred with related parties:
Payment for other expenses:
Legal services paid / payable to Francis Abourizk Lightowlers, a law firm in which Mr
Peter Francis is a partner and has a beneficial interest.
Consultancy fees for executive duties paid/payable to NewStar Ventures Ltd, a
corporation in which Dr John Chiplin is a director and has a beneficial interest.
Consolidated
2016
$
2015
$
116,540
143,684
165,983
118,013
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting
date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 24. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
2016
$'000
2015
$'000
(25,917)
(25,917)
(9,562)
(9,562)
18,948
20,237
845
863
26,763
27,108
1,574
1,574
147,641
3,884
(132,151)
129,631
3,338
(107,435)
19,374
25,534
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 51
Note 24. Parent entity information (continued)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2016 and 30 June 2015.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2016 (2015: nil), other than the contingent liabilities
described in note 21.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2016 and 30 June
2015.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except
for the following:
● Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
● Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may
be an indicator of an impairment of the investment.
Note 25. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 1:
Name
Benitec Australia Limited
Benitec Biopharma Limited
Benitec, Inc.
Benitec LLC
RNAi Therapeutics, Inc.
Tacere Therapeutics, Inc.*
Principal place of business /
Country of incorporation
Australia
United Kingdom
USA
USA
USA
USA
Ownership interest
2015
2016
%
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
* Note Tacere year end is 31 December which was the year end date when the Company was acquired.
Note 26. Events after the reporting period
Restructuring of Senior Executive team
Benitec announced a restructure of its executive team with appointment of Mr Greg West as permanent CEO, Dr
Cliff Holloway as Chief Business and Operating Officer, and Mr Bryan Dulhunty as Chief Financial Officer. The
changes signify an important new era for the Company and strengthens its core capabilities with their combined
expertise in global biotechnology and biopharmaceutical sectors. Benitec remains committed to its articulated
strategy to develop and enhance its ddRNAi technology platform, establish co-development and collaboration
arrangements for non-pipeline projects, and to out-license ddRNAi to companies that are developing therapeutic
programs independently.
On appointment of Mr West as CEO, Mr West was granted 2.2million options vesting over 3 years and expiring in 5
years. The exercise price is 16.65 cents per option.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 52
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
Note 26. Events after the reporting period (continued)
Appointment of new Audit and Risk Committee Chair
Benitec announced the appointment of Ms Megan Boston as Director of the Company and Chair of the Audit and
Risk Committee on the 16 of August 2016. Ms Boston has significant experience in finance, audit, risk
management, compliance and corporate governance sectors with listed entities and government organisations in
Australia. Mr. Iain Ross step down as Chair of the Audit and Risk Committee on the appointment of Miss Boston.
No other matter or circumstance has arisen since 30 June 2016 that has significantly affected, or may significantly
affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Note 27. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax benefit for the year
Adjustments for:
Accrued provision Promega
Depreciation and amortisation
Share-based payments
Unrealised Foreign exchange
Issue of ordinary shares to Biomics *
Impairment of prepayment
Change in operating assets and liabilities:
(Increase) in trade and other receivables
Decrease in other current assets
(Decrease)/increase in trade and other payables
Increase in employee benefits
Net cash used in operating activities
Consolidated
2016
$'000
2015
$'000
(24,778)
(11,509)
60
290
1,746
506
500
1,800
(854)
1,178
(683)
27
(20,208)
-
97
1,503
(567)
-
-
(1)
98
661
26
(9,692)
* During the year Benitec acquired full rights to its pre-clinical hepatitis B program from its collaborator, Biomics Biotechnologies, to enable the
independent progression of the product candidate and simplify partnering negotiations. In order to acquire full rights to the hepatitis B program
that was previously developed by Joint Venture with Biomics, Benitec paid the JV partner $2.5million in upfront payments ($2million cash,
$500k shares), with a further $3.5million and single digit royalties payable to Biomics upon successful commercialization of the program.
(consistent with ASX announcement of 9 July 2015).
Note 28. Earnings per share
Consolidated
2016
$'000
2015
$'000
Loss after income tax attributable to the owners of Benitec Biopharma Limited
(24,778)
(11,509)
Weighted average number of ordinary shares used in calculating basic earnings per
share
Weighted average number of ordinary shares used in calculating diluted earnings per
share
142,312,486 115,507,308
142,312,486 115,507,308
Number
Number
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 53
Note 28. Earnings per share (continued)
Basic earnings per share
Diluted earnings per share
Cents
Cents
(17.41)
(17.41)
(9.96)
(9.96)
Outstanding options to acquire ordinary shares are not considered dilutive for the years ended 30 June 2016 and 30
June 2015.
On 15 July 2015 the, Company issued 647,333 ordinary shares for acquisition of IP rights, refer note 14.
On 15 August 2015, the Company issued 30,000,000 ordinary shares and 10,000,000 options refer note 14.
Note 29. Share-based payments
Benitec Biopharma Limited Employees Share Option Plan (ESOP):
Description of plan
The Group may from time to time issue employee’s options to acquire shares in the parent at a fixed price. Each
option when exercised entitles the option holder to one share in the Parent Company. Options are exercisable on or
before an expiry date, do not carry any voting or dividend rights and are not transferable except on death of the
option holder.
The following table shows the number and weighted average exercise price (WAEP) of share options issued under
the ESOP:
2016
Number
2016
WAEP
2015
Number
2015
WAEP
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Lapsed or forfeited during the year
12,500,000
6,720,000
-
(7,000,000)
1.234
0.77
-
1.06
8,608,000
4,284,000
(320,000)
(72,000)
1.229
1.250
0.521
1.250
Outstanding at the end of the year
12,220,000
1.079
12,500,000
1.234
Options exercisable at the end of the year
8,292,000
7,734,334
Details of ESOP share options outstanding as at end of year:
Grant date
Expiry date
Exercise
price
26/09/2011
17/11/2011
07/02/2012
18/07/2012
16/11/2012
22/08/2013
10/11/2013
15/05/2014
17/12/2014
06/05/2015
12/11/2015
26/09/2016
17/11/2016
07/02/2017
18/07/2017
16/11/2017
22/08/2018
18/05/2018
15/05/2019
17/12/2019
06/05/2020
12/11/2020
1.25
1.25
1.25
1.25
1.25
1.25
0625
1.50
1.25
1.25
0.77
2016
Number
2,800,000
600,000
156,000
-
400,000
480,000
400,000
180,000
2,634,000
650,000
3,920,000
12,220,000
2015
Number*
2,800,000
1,800,000
156,000
400,000
400,000
2,080,000
400,000
180,000
3,334,000
950,000
-
12,500,000
*The prior year options numbers initially only included shares issued under the employee share option plan. The
note this year includes both shares issued under the employee share option scheme and the directors option
scheme.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 54
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
Note 29. Share-based payments (continue)
The weighted average remaining life of the options issued under the ESOP at 30 June 2016 was 2 years and 7
months (2015: 3 years and 4 months).
For the options granted during the year, the valuation model inputs used to determine the fair value at the grant
date are as follows
Grant date
Expiry date
12/11/2015
17/12/2020
Share price
at grant date
$0.40
Exercise
price
Expected * Dividend
volatility
yield
$0.77
88.35%
-%
Risk-free
interest rate
2.4 %
Fair value
at grant date
$0.2344
Total expenses arising from share-based payment transactions recognised during the period as part of employee
benefit expense were $1,745,947 (2015: $1,502,726).
* expected volatility was determined by reference to Bloomberg for the Benitec share price based on historical
volatility
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 55
DIRECTORS' DECLARATION
30 JUNE 2016
In the directors' opinion:
● the attached financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
● the attached financial statements and notes comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board as described in note 1 to the financial statements;
● the attached financial statements and notes give a true and fair view of the Group's financial position as at 30
June 2016 and of its performance for the financial year ended on that date; and
● there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
______________________________
Peter Francis
Chairman
30 August 2016
Sydney
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 56
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BENITEC BIOPHARMA LIMITED
30 JUNE 2016
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 57
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BENITEC BIOPHARMA LIMITED
30 JUNE 2016
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 58
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BENITEC BIOPHARMA LIMITED
30 JUNE 2016
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 59
CORPORATE DIRECTORY
30 JUNE 2016
Directors
CEO
Joint Company secretaries
Mr Peter Francis - Non-Executive Chairman
Ms Megan Boston - Non-Executive Director
Mr Kevin Buchi - Non-Executive Director
Dr John Chiplin - Non-Executive Director
Mr Iain Ross - Non-Executive Director
Mr Greg West
Mr Greg West and Ms Sakura Holloway
Notice of annual general meeting The details of the annual general meeting of Benitec Biopharma Limited are:
Registered office
Share register
Auditor
Bankers
Level 17
383 Kent Street
Sydney, NSW 2000
Thursday 17 November 2016 at 10:00 am (AEST)
F6A/1-15 Barr Street
Balmain, NSW 2041
Head office telephone: +61 2 9555 6986
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford, VIC 3067
Shareholders Enquiries: 1300 787 272
Grant Thornton Audit Pty Ltd
Level 17
383 Kent Street
Sydney, NSW 2000
Westpac Banking Corporation
274 Darling Street
Balmain, NSW 2041
Stock exchange listing
Benitec Biopharma Limited shares are listed on the Australian Securities
Exchange in Australia (ASX: BLT)
Benitec Biopharma Limited shares are listed on the NASDAQ Global Select Market
in United States (NASDAQ: BNTC; NASDAQ: BNTCW)
Website
www.benitec.com
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 60
SHAREHOLDER INFORMATION
30 JUNE 2016
The shareholder information set out below was applicable as at 1 August 2016.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total Shareholders
Holding less than a marketable parcel
Equity security holders
Number
of holders
of ordinary
shares
852
1,357
570
1,001
179
3,959
1,835
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
DALIT PTY LTD
CITICORP NOMINEES PTY LIMITED
MJGD NOMINEES PTY LTD
MERRILL LYNCH(AUSTRALIA)NOMINEES PTY LIMITED
CSIRO
LONCETA PTY LTD
MRS JACLYN STOJANOVSKI + MR CHRIS RETZOS + MRS SUZIE RETZOS
MR ANTON WASYL MAKARYN + MRS MELANIE FRANCES MAKARYN
DR RUSSELL KAY HANCOCK
SAM GOULOPOULOS PTY LTD
TE & J PASIAS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
TIGCORP NOMINEES PTY LTD
J KEVIN BUCHI
VALUEADMIN COM PTY LTD
MR PAUL LEONARD GRIMSHAW + MR DAYNE PAUL GRIMSHAW (PAUL GRIMSHAW
FAMILY SUPER FUN)
TELOSAMA SUPER PTY LTD
IRWIN BIOTECH NOMINEES P/L (BIOA A/C)
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Ordinary shares
Number held
23,644,641
12,277,329
5,339,848
5,311,545
3,600,235
2,408,738
1,924,658
1,525,000
1,500,000
1,282,645
1,000,000
1,000,000
1,000,000
898,074
872,892
861,539
856,510
825,850
800,000
750,000
67,679,504
% of total
shares
issued
16.14
8.38
3.64
3.62
2.46
1.64
1.31
1.04
1.02
0.88
0.68
0.68
0.68
0.61
0.60
0.59
0.58
0.56
0.55
0.51
46.19
Page | 61
Unquoted equity securities
NED Options
ESOP Options
ESOP Options
ESOP Options
NED Options
ESOP Options
Unlisted Options - placement
ESOP Options
ESOP Options
ESOP Options
Unlisted Options – Nasdaq warrants
NED Options
Total
Substantial holders
Substantial holders in the Company are set out below:
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
DALIT PTY LTD
CITICORP NOMINEES PTY LIMITED
Voting rights
The voting rights attached to ordinary shares are set out below:
Number
on issue
Number
of holders
2,800,000
600,000
156,000
400,000
400,000
480,000
13,246,203
180,000
2,634,000
650,000
11,500,000
3,920,000
36,966,203
-
-
-
-
-
-
-
-
-
-
-
-
Ordinary shares
% of total
shares
issued
16.14
8.38
3.64
3.62
Number held
23,644,641
12,277,329
5,339,848
5,311,545
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
There are no other classes of equity securities.
BENITEC BIOPHARMA LIMITED
ANNUAL REPORT 2015-2016
Page | 62
BENITEC BIOPHARMA LTD
ABN 64 068 943 662
F6 / 1-15 Barr Street
Balmain NSW 2041 Australia
Tel: +61 (0) 2 9555 6986
Email: info@benitec.com
www.benitec.com