2017
BIONOMICS
ANNUAL
REPORT
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CONTENTS
01 HIGHLIGHTS
02 CHAIRMAN’S LETTER
03 CEO AND MANAGING DIRECTOR’S REPORT
13
INTELLECTUAL PROPERTY PORTFOLIO
14 BOARD OF DIRECTORS
16 MANAGEMENT
17 DIRECTORS’ REPORT
36 ANNUAL CONSOLIDATED FINANCIAL STATEMENTS
77
INDEPENDENT AUDIT REPORT
82 SHAREHOLDER INFORMATION
84 COMPANY PARTICULARS
01
VISION
BIONOMICS IS A GLOBAL, CLINICAL
STAGE BIOPHARMACEUTICAL COMPANY
LEVERAGING PROPRIETARY PLATFORM
TECHNOLOGIES, IONX AND MULTICORE,
TO DISCOVER AND DEVELOP A DEEP
PIPELINE OF NOVEL DRUG CANDIDATES
TARGETING ION CHANNELS
HIGHLIGHTS
COLLABORATION
PROGRESS
BNC210 CLINICAL
SUCCESS
STRATEGY
REFINED
• Merck & Co (MSD)
• Positive topline
• Focussed strategy
collaboration milestone
triggered as therapeutic
candidate entered
clinical development
for the treatment of
Alzheimers disease
• US$10 million payment
by MSD to Bionomics
Phase 2 data reported
in patients with
Generalised Anxiety
Disorder (GAD)
• Phase 2 clinical trial
of BNC210 in Post
Traumatic Stress
Disorder (PTSD)
initiated in Australia
and the USA
builds on Bionomics’
strengths in ion
channel targeted
small molecule
drug discovery and
development
• ‘Off strategy’ oncology
assets BNC101
and BNC105 to be
monetised
02
CHAIRMAN’S LETTER
DEAR SHAREHOLDERS
Fiscal Year 2017 has been very
pleasing for Bionomics as many
elements of our long term strategy
and value of our ionX and MultiCore
drug discovery platforms were
realised with exciting progress in
our clinical pipeline both through our
important collaboration with MSD
(known as Merck & Co., Inc., in the US and Canada), success
of our internal candidate BNC210 in a Phase 2a
clinical trial in Generalized Anxiety Disorder (GAD), initiation
of a multi-centre Phase 2b clinical trial of BNC210 in Post-
Traumatic Stress Disorder (PTSD), strengthening of our Board
of Directors and Management and solid financial results.
Our strong collaboration with MSD, one of the leading
pharmaceutical companies in the world, is exemplified
on multiple fronts. As part of a research collaboration
and license agreement announced in June 2014, the
Bionomics and MSD teams have worked closely together
to deliver a candidate therapy now in clinical development
for the treatment of cognitive dysfunction associated
with Alzheimer’s disease. The first administration of a
candidate therapy in a clinical trial in early 2017 triggered
a US$10 million milestone payment to Bionomics. This
payment not only strengthened our balance sheet, but
further validates Bionomics’ proprietary drug discovery
technology and capabilities.
Beyond the R&D collaboration, MSD became a shareholder
of Bionomics in 2015 and the two companies have worked
together since 2013 to co-sponsor an annual symposium
in Adelaide to highlight emerging opportunities for
the treatment of major debilitating neurological
and psychiatric disorders with presentations from
international and Australian researchers and clinicians
across academia and industry.
The clinical development progress of our internal pipeline
was equally pleasing to report with positive Phase 2a
clinical data from a trial evaluating the effects of BNC210 on
anxiety-associated neural networks in patients with GAD.
We now eagerly await the completion of enrolment and
results from a separate Phase 2b clinical trial being
undertaken in the US and Australia in patients with PTSD,
a common condition that is very poorly served by existing
medications. Top line results from the multi-centre PTSD
trial are anticipated in mid-calendar year 2018.
2016 marked changes of the Board of Directors with the
addition of Messrs David Wilson, Alan Fisher and Peter
Turner bolstering our experience in global investment,
finance and drug development.
The new Board has undertaken a major review of the
Company’s strategy in 2017 and determined that we should
continue to build and make significant investments in
R&D where there has been both clinical and commercial
success. These investments will focus on Bionomics’
acknowledged world-leading expertise in ion channel
biology which has led to our relationship with MSD, previous
partnerships with Merck KGaA and Ironwood and which
underpins the mechanism of action of our lead therapeutic
candidate BNC210. In line with this strategic focus, we will
seek to monetise our non-ion channel assets, the cancer
therapeutic candidates BNC101 and BNC105. In parallel,
we will complete the ongoing BNC101 clinical trial in
patients with metastatic colon cancer, where biomarker
and other data are anticipated in late 2017, and support
the current BNC105 trials which have attracted external
funding. Difficult operational decisions have also been made
which include the closure of our operations in San Diego,
which were originally established to focus on development
of BNC101, and our retirement from the CRC for Cancer
Therapeutics. Closure of the San Diego site allowed us to
consolidate our business and R&D operations in Australia
and France making greater use of existing synergies.
It is pleasing to report that FY17 delivered solid financial
results. Revenue increased 128% to $18.6 million. The
reported loss after tax for FY17 was $6.7 million compared
to $16.6 million in FY16. The closing cash position at 30
June 2017 was $42.9 million compared to $45.5 million at
30 June 2016.
The Board thanks Dr Deborah Rathjen and the
Management team, which as of August 2017 includes
an additional highly experienced international executive
Mr Steven Lydeamore, for the progress the Company
has made in the past 12 months. We acknowledge and
sincerely thank all our shareholders for their continued
support and we look forward to sharing with you news on
clinical and partnership progress in the coming year.
Yours faithfully
Errol De Souza
Chairman and Non-Executive Director
03
CEO AND MANAGING DIRECTOR’S REPORT
DEAR SHAREHOLDERS
Bionomics is a biopharmaceutical
company developing innovative
therapeutics for diseases of the
central nervous system (CNS) and
cancer. Our primary proprietary
chemistry platform MultiCore
in combination with our ionX ion
channel drug discovery platform
enables us to fast track the discovery and development of
novel therapeutic candidates which have the potential to
alter the treatment paradigm and substantially improve
the lives of patients.
Your Company achieved a number of key milestones
in FY17 and it gives me great pleasure to report on the
following clinical development progress:
• The Phase 2a success of our lead program BNC210,
which is in development for the treatment of anxiety
disorders, disorders where anxiety is also present
including in depression and stress and trauma
related disorders.
• The initiation in Australia and the US of a Phase 2b
clinical trial of BNC210 in patients with PTSD.
• The completion of the first milestone in our ongoing
collaboration with MSD (known as Merck & Co.,
Inc., Kenilworth NJ, USA in the US and Canada) to
develop novel candidates for treatment of cognitive
dysfunction associated with Alzheimer’s disease. As
part of a research collaboration and license agreement
announced in June 2014, the first administration of
a candidate therapy in a clinical trial in February
2017 triggered a US$10 million milestone payment to
Bionomics. Under our agreement with MSD, Bionomics
received US$20 million in an upfront payment and is
eligible to receive up to US$506 million for reaching
pre-defined research and clinical development
milestones. In addition, our agreement includes
eventual undisclosed royalties on product sales.
• Bionomics’ clinical stage oncology assets continued
to make progress during the year. In particular, the
BNC101 Phase 1 clinical trial in patients with advanced,
metastatic colon cancer reached its recommended
Phase 2 dose level of 15mg/kg without evidence of dose
limiting toxicities or other significant safety issues. With
identification of the recommended Phase 2 dose level,
the Company initiated enrolment of the final expansion
cohort of the study.
Financially, Bionomics continues to be in a strong position
to progress its development of BNC210 in PTSD. As the
Company matures, its strategy will focus on its core strength
and an area of significant competitive advantage in ion
channel biology and drug discovery. It is worth spending a
little time to discuss our technology platforms and to provide
details on the clinical programs, financial performance,
revised strategy and outlook for the coming year.
04
CEO AND MANAGING DIRECTOR’S REPORT
IONX AND MULTICORE PLATFORM TECHNOLOGIES
Bionomics’ early genomics research in epilepsy
provided the tools to form the ionX platform for the rapid
identification of potential therapeutic candidates targeting
both voltage and ligand gated ion channels. The combination
of ionX and MultiCore chemistry, through the acquisition
of Iliad Chemicals Pty Ltd in 2005, underpins both BNC210
and our collaboration with MSD. These technologies are
validated by our important collaboration with MSD and
previous partnerships with Merck KGaA and Ironwood.
• Identifies drug
candidates targeting
both ligand gated and
voltage gated ion channels
• Proprietary cell lines and
screen approaches
• Comprehensive in vivo
models validate target
biology
• A diversity
oriented chemistry
platform for the discovery of
small molecule drug candidates
• Computer aided pharmacophore
modelling • Scaffold hopping
synthetic approaches rapidly
create diversity on small,
focused libraries • Parallel,
differentiated chemical
series of potential drug
candidates
• Anxiety
• Depression
• Alzheimer’s disease
• Cognition / memory
• Pain
• Epilepsy
THE COMBINATION OF
IONX AND MULTICORE
CHEMISTRY UNDERPINS
BOTH BNC210 AND
OUR COLLABORATION
WITH MSD.
05
BNC210: NEXT GENERATION DRUG CANDIDATE TO TREAT ANXIETY, DEPRESSION & PTSD
Potential Competitive Advantages of BNC210*
* Based on data from preclinical studies and Phase 1 clinical trials.
No
sedation
No withdrawal
syndrome
No memory
impairment
Fast
acting
No drug / drug
interactions
Once-a-day
dosing
Drug
BNC210
Valium and other BZD
Prozac and certain other SSRI / SNRI
ANXIETY TREATMENTS
• Dominated by benzodiazepines
• Associated with sedation, addiction and
tolerance and cognitive disturbances
• Not recommended for long-term treatment
DEPRESSION TREATMENTS
• SSRIs and SNRIs used to treat depression and anxiety
• Modest efficacy late onset of action, discontinuation, changes in weight,
sexual dysfunction and increased thoughts of suicide in adolescents
• Many have black box warnings
BNC210, AN INNOVATIVE FIRST-IN-CLASS
MODULATOR OF α7 NICOTINIC ACETYLCHOLINE
RECEPTOR (ALPHA7 RECEPTOR)
BNC210 works by subtly down-modulating the activity of
the alpha7 ion channel receptor through a process called
allosteric modulation. In this way, BNC210 normalises
the effects of a neurotransmitter, acetylcholine, on brain
function. Excessive neurotransmission by acetylcholine
has been linked to the symptoms of anxiety and depression
and to stress-induced behaviours.
Throughout the clinical trials conducted to date, BNC210
has continued to demonstrate its strong potential in
meeting an unmet medical need for a fast-acting anxiolytic
agent without the side effects of existing treatments
such as sedation, addiction, impaired memory and motor
co-ordination. BNC210 has also demonstrated anti-
depressant activity in preclinical models.
BNC210 ACTION DEPENDS ON ACETYLCHOLINE
NEUROTRANSMISSION
NORMAL MOOD
MOOD DISORDER
BNC210 RESTORES
NORMAL MOOD
Ca++
α7 nAChR
+
BNC210
ACh
Ca++
BCN210
Ca++ INFLUX
Ca++ INFLUX
Ca++ INFLUX
BNC210 FOR THE TREATMENT OF GENERALIZED
ANXIETY DISORDER
In September 2016, we were very pleased to announce
exciting, positive results from the Phase 2a clinical trial
of BNC210 in patients with GAD. These results were very
encouraging with BNC210 not only meeting the primary
and secondary end points for the clinical trial but also
outperforming the current standard of care, lorazepam.
This double-blinded and placebo controlled trial in
previously un-medicated patients with GAD evaluated the
effects of BNC210 on neural networks activated in anxiety,
including during the performance of anxiety inducing
tasks. This trial used the anxiety provoking emotional
faces task whilst patients underwent a form of brain
imaging known as functional Magnetic Resonance Imaging
(fMRI). Imaging occurred across the whole brain but for the
primary endpoint analysis was focused on the amygdala
which is the brain’s emotional centre. The clinical trial also
evaluated defensive behaviour using the Joystick Operated
Runway Task (JORT) which uses a force-sensing interface
to obtain an objective measure of the intensity of threat
avoidance motivation.
The data from this trial demonstrated that treatment with
300mg BNC210 significantly reduced bi-lateral amygdala
06
CEO AND MANAGING DIRECTOR’S REPORT
reactivity to fearful faces relative to placebo treatment.
Amygdala hyperactivity has been associated with GAD and
other anxiety related disorders. Anxiolytic drugs including
the benzodiazepines such as lorazepam, have been
shown to diminish this hyper-reactivity, suggesting that
normalisation of amygdala activity is critical to successful
treatment of symptoms.
Further analysis of the data since the market
announcement on 21 September 2016 also showed that
connectivity between the amygdala and the anterior
cingulate cortex was reduced in patients treated with
BNC210 indicating that BNC210 reduces activation of
anxiety-related neural circuits which are constantly
switched on in anxiety disorders.
Fear or anxiety result in the expression of a range of
defensive behaviours, which are aimed at escaping from
the source of danger or motivational conflict. A secondary
endpoint of the trial was to determine the effect of BNC210
on defensive behaviour using the JORT. In simple terms,
the JORT is similar to a PAC-MAN game where anxiety
and fear are induced by the threat of punishment. In
the JORT, BNC210 administration at both 300mg and
2,000mg was associated with a significant decrease in the
intensity of threat avoidance behaviour and again BNC210
outperformed lorazepam in this regard. The results of the
JORT further support the anti-anxiety effect of BNC210.
BIONOMICS HOSTS WORLD-CLASS KEY OPINION
LEADER (KOL) EVENTS
Bionomics hosted and participated in world class events to
share key data from the BNC210 GAD clinical trial:
• Presentation at Society for Neuroscience (SFN) Annual
Conference in San Diego on 16 November 2016.
• Presented at Biotech Showcase 2017 in San Francisco
on 11 January 2017.
• Hosted a KOL meeting on 23 March 2017 in New York
with Professor Allan H Young, MB ChB, MPhil, PhD,
FRCPsych, FRCPC, FRSB, Professor Marina Picciotto,
PhD. and Dr. Adam Perkins, PhD presenting.
• Hosted a KOL meeting on 10 May 2017 in London with
Professor Allan H Young, Dr. Adam Perkins and Dr Sue
O’Connor, PhD. Bionomics’ VP, Neuroscience Research
presenting.
• Presentation by Professor Allan H Young, at the Society
of Biological Psychiatry Annual Convention on 18 May
2017 in San Diego.
07
BNC210 MAY REPRESENT A PROMISING TREATMENT
OPTION FOR PTSD
PREVALENCE OF PTSD AMONGST DIFFERENT
POPULATIONS IN THE UNITED STATES:
The positive results from our clinical trial in patients with
GAD has provided proof of biology broadly for anxiety
disorders and conditions where anxiety is present with
other conditions, most notably PTSD. Recruitment of
patients in a Phase 2b BNC210 PTSD trial, the “RESTORE”
trial, was initiated in the second half of calendar year 2016
with expanded recruitment of up to 192 patients across
multiple trial sites in Australia and the US. The treatment
of PTSD is both complex and challenging because current
medications, such as selective serotonin reuptake
inhibitors, benzodiazepines and anti-psychotics have
limited effects in patients and have multiple side effects.
In fact, the use of benzodiazepines by PTSD patients is
actively discouraged.
Patients with PTSD display multiple symptoms in the
clusters of intrusion, avoidance, arousal and reactivity, and
negative alterations of cognition and mood. PTSD is a set of
reactions that can develop in some people who have been
through a traumatic event like combat, a natural disaster,
a car accident, or sexual assault, which threatened their
life or safety, or that of others around them. People who
7%-8% OF TOTAL POPULATION
VETERANS
30% Vietnam veterans
10% Desert Storm veterans
6%-11% Afghanistan veterans
12%-20% Iraq veterans
CHILDREN AND WOMEN
60% Female rape victims
30%-60% Children who have survived specific disasters
100% Children witness to parental homicide or sexual assault
FIRST RESPONDERS
16% Fire-fighters
4%-14% Police
FOLLOWING DISASTERS
2% Natural disaster
28% Terrorism episode
29% Plane crash
suffer from PTSD continue to experience memories and
feelings of intense fear, helplessness or horror long after
the trauma was experienced.
PTSD PRESENTS IN A HIGHLY INDIVIDUALISED MANNER WITH A COMPLEX AND CHALLENGING SET
OF SYMPTOMS THAT VARIES FROM PATIENT TO PATIENT
RE-EXPERIENCING
AVOIDANCE
ANXIETY
THE MECHANISM
AND PHARMACOLOGY
OF BNC210 INDICATE ITS
THERAPEUTIC POTENTIAL
FOR SEVERAL PTSD
SYMPTOM CLUSTERS
DEPRESSION
SLEEP DISTURBANCES
HYPER-AROUSAL / REACTIVITY
08
CEO AND MANAGING DIRECTOR’S REPORT
The prevalence of PTSD in society is high with the associated
economic burden also considerable. It is estimated in the US
alone that up to 8% of the population will suffer from PTSD
at some point during their lifetimes, with the occurrence in
women higher at 10% compared to men at 4%.
PTSD patients need:
• More effective treatments
• Treatments without side-effects since side-effects are
one of the reasons people fail to take their medications
• Treatments that are non-addictive and without the
potential to be abused
• Treatments that are safe to give with other drugs
commonly prescribed for the disorder
BNC210 has demonstrated its potential to affect different
symptom clusters experienced by sufferers of PTSD
through its anxiolytic and anti-depressant activity, ability
to reduce hyperarousal and ability to extinguish fear.
BIONOMICS SHOWCASES BNC210 DATA AT
INVITATION-ONLY PTSD STATE OF THE SCIENCE
SUMMIT HOSTED BY US ARMY MEDICAL RESEARCH
AND MATERIEL COMMAND
Bionomics was invited to participate in and to present
its BNC210 clinical trial results at the PTSD State of the
Science Summit hosted by the US Army Medical Research
and Materiel Command in June 2017 in West Virginia.
This summit brought together experts from government,
academia and industry in a format that included scientific
presentations from key opinion leaders and working
parties addressing key questions around the topic of
the Pathophysiology of PTSD: Rethinking Drug Targets.
Bionomics’ invitation to this event further highlighted our
position as a key subject matter expert in the development
of more effective drug therapies for the treatment of PTSD.
US MARKET RESEARCH
INDICATES CONSIDERABLE
MARKET POTENTIAL FOR
BNC210
In both GAD and PTSD, BNC210
may offer a paradigm change in
treatment.
US market research,
commissioned by Bionomics
indicates considerable market
potential for BNC210 with
the addressable US market
opportunity in GAD estimated
at US$2.7 billion and PTSD at
US$4.7 billion. This substantial
piece of research involved
outreach to over 30 KOLs and
up to seven health insurance
companies in the US.
THE POTENTIAL MARKET VALUE OF BNC210
US Prevalence and Revenue Potential
17M
Eligible Pt. Population
8.7-9M
8-8.5M
6.5-7M
7M
5M
1.3M
1.0M
3-3.5M
0.5M
1.5M
PTSD
$4.7B
MDD+Anx
BP+Anx
$3.2B
$1.5B
Panic
$4.4B
Eligible Patient US Market Potential
1.0M
SAD
$2.5B
0.5M
Agitation
$1.6B
0.9M
GAD
$2.7B
Assume 5% premium to Trintellix 2016 AWP for 30-day supply of $380 — Compliance Adjusted
• Innovative, first-in-class
• Unmet need in large patient population
• Advancement in care
• Limited branded competition
• Ability to achieve large market share
1 3.4-4% prevalence >18yrs., ~25% of patients diagnosed and treated
2 6.7% prevalence, ~50% co-morbid anxiety, ~50% diagnosed and treated
3 ~2.9% prevalence, 50% co-morbid anxiety (range in literature 25 to 75%), ~50% diagnosed and treated
4 ~2.7% prevalence, ~50% diagnosed and treated
5 ~6.8% prevalence, 15-20% diagnosed and treated
6 ~3.1% dementia prevalence >40yrs., ~9% agitation patients diagnosed and treated
7 3.1% CAD prevalence, assumes ~25% diagnosed and treated, ~50% of SSRI patients treated are partial responders or relapsers
09
Under the 2014 agreement, MSD funds all early-stage
and clinical development of any candidate within
the collaboration and is responsible for worldwide
commercialisation. Bionomics received US$20 million in
an upfront payment and is eligible to receive up to US$506
million for reaching pre-defined research and clinical
development milestones. In addition, our agreement
includes eventual undisclosed royalties on product sales.
BIONOMICS AND MSD PARTNER IN AN ANNUAL
SYMPOSIUM: FRONTIERS OF NEUROSCIENCE
RESEARCH
The annual Bionomics & MSD Symposium is now in its fifth
year in 2017. This year the event will occur as a satellite
event in association with the annual AusBiotech industry
conference in Adelaide on 26 October 2017. Further
details are available on Bionomics’ website. This year, our
annual symposium will look at Frontiers of Neuroscience:
Feelings and Forgetting and we are anticipating a large
crowd of leading industry, academic and clinical experts
interested in new advances and novel target research
across memory, pain, sleep and mood disorders.
This co-hosted annual symposium has continued to grow
year on year. Last year’s Symposium At the Frontiers
of Neuroscience: Memory, Movement & Mood saw over
210 registrations from researchers, medical personnel
and patient support groups as well as investors and life
science analysts. Of particular note was the keynote
presentation by Dr David Michelson, Vice President
Neuroscience, Clinical Research, MSD on Approaching
an Answer to Alzheimer’s Disease? Antibodies, BACE,
and Beyond.
Some of the key presentations at the symposium this year
will be:
• Professor Steve Williams, IoPPN Kings College London
& Maudsley Hospital on MR Neuroimaging to Facilitate
the Drug R&D Process - from Mouse to Man
• Professor Ole Isacson, Professor of Neurology &
Neuroscience, Harvard Medical School on Novel
Concepts from Human Cell Biology and Genetics for
Neurodegenerative Disease Treatments
• Dr Richard Hargreaves, Corporate Vice President
Neuroscience & Imaging, Celgene on Seeing the
Problems and Devising Solutions for Neurodegenerative
Disease
MSD COLLABORATION IN COGNITIVE DYSFUNCTION
REACHED FIRST CLINICAL MILESTONE TRIGGERING
US$10 MILLION PAYMENT TO BIONOMICS
In February 2017, we were delighted to announce
the completion of the first milestone in our ongoing
collaboration with MSD to develop novel candidates
for treatment of cognitive dysfunction associated with
Alzheimer’s disease. As part of a research collaboration
and license agreement announced in June 2014, the first
administration of a candidate therapy in a clinical trial
triggers a US$10 million milestone payment to Bionomics.
We are particularly excited that MSD has initiated a clinical
trial evaluating a candidate developed under our cognition
collaboration. This milestone provides validation of the
utility of our drug discovery platform to identify high-
quality candidates as well as our strategic approach to
partner selected assets. The portfolio of products under
our collaboration with MSD are designed to address
cognitive dysfunction in important CNS indications, and
Alzheimer’s disease is of chief importance among these as
there remains an urgent need for new treatments.
10
CEO AND MANAGING DIRECTOR’S REPORT
BNC101, A FIRST-IN-CLASS COMPOUND IN
ONCOLOGY, FOR THE TREATMENT OF METASTATIC
COLON CANCER AND OTHER SOLID TUMOUR TYPES
During FY17, Bionomics continued to progress the
development of its anti-cancer stem cell agent
BNC101. The BNC101 Phase 1 clinical trial in patients
with advanced, metastatic colon cancer reached its
recommended Phase 2 dose level of 15mg/kg without
evidence of dose limiting toxicities or other significant
safety issues. With the identification of the recommended
Phase 2 dose level, the Company initiated enrolment of
the final expansion cohort of the study.
BNC101 is an anti-LGR5 cancer stem cell drug candidate
being developed to treat solid cancers. It aims to
prevent or delay tumour recurrence by targeting LRG5,
a cancer stem cell (CSC) marker that is over-expressed
in metastatic colorectal cancers and other solid tumour
types. Inhibition of LGR5 by BNC101 results in the
inhibition of a CSC survival pathway, known as the Wnt
pathway. Emerging data demonstrates that cancer stem
cells can generate an environment in the tumour that
suppresses the immune system from functioning as it
normally would to attack tumour cells.
In April 2017, Bionomics presented new pre-clinical
data of BNC101 at the American Association for Cancer
Research (AACR) conference in Washington, DC. The
data showed in mouse models of colon cancer that
treatment with BNC101 and a checkpoint inhibitor has
a greater reduction in T regulatory cells. T regulatory
cells are an immune suppressive cell and when BNC101
was administered it produced an increase in tumour
attacking cytotoxic T cells compared to treatment with
the checkpoint inhibitor alone. Further preclinical data
11
BNC105, A NOVEL VASCULAR DISRUPTING AGENT
WITH IMMUNE MODULATING ACTIVITY, FOR CANCER
TREATMENT
BNC105 is being developed for the treatment multiple
forms of cancer. The mechanism of action of BNC105
in treating cancer aims to disrupt the blood vessels
that nourish tumours, which has a distinct number of
advantages over traditional forms of chemotherapy.
BNC105 was developed by using our proprietary MultiCore
technology to create novel compounds that effectively
shut down tumour blood vessels without affecting other
organ blood vessels. More recent evidence has indicated
that BNC105 also acts to restore the immune response
within solid tumours, providing an avenue for synergy with
immune-oncology agents such as checkpoint inhibitors.
In February 2017, Bionomics announced grant funding
for a new BNC105 clinical trial in combination with
pembrolizumab, a checkpoint inhibitor developed by MSD,
and a collaboration between the Peter MacCallum Cancer
Centre and the Olivia Newton-John Cancer Wellness &
Research Centre. The $2.25m grant, from the Victorian
Cancer Agency, is funding a BNC105 trial in combination
with pembrolizumab in patients with advanced melanoma
who are unresponsive to standard treatments. This
investigator initiated clinical trial is in addition to the grant
funded clinical trial in patients with Chronic Lymphocytic
Leukemia in progress at Dartmouth College in the US
and a Novartis-funded biomarker study which is utilizing
patient samples from the previously completed Phase 2
clinical trial in patients with metastatic renal cancer.
FINANCIAL PERFORMANCE
The Company is in a strong position to continue to execute
its clinical and discovery programs with $42.874 million in
cash and cash equivalents at 30 June 2017 (compared to
$45.450 million at 30 June 2016).
Revenue increased by 128% to $18.606 million, reflecting
the US$10 million milestone payment under Bionomics’
agreement with MSD. Cash receipts for the period
were $29.413 million, which consists of income under
Bionomics’ agreement with MSD including a milestone
payment of US$10 million in March 2017, contract services
by our wholly owned subsidiaries Neurofit SAS and
Prestwick Chemical SAS, sales of chemical libraries
by Prestwick and payment received under the Federal
Government’s R&D Tax Incentive of $9.505 million.
The reported loss after tax for FY17 was $6.749 million
compared to $16.592 million in FY16.
highlight the ability of BNC101 to induce the recruitment
of Natural Killer cells to the LGR5 positive cells through
an effect known as Antibody-Dependent Cell-mediated
Cytotoxicity (ADCC).
Targeting the LGR5 positive cancer stem cell component
of colorectal cancer with BNC101 may release potential
suppression of checkpoint inhibitor activity to leverage
greater therapeutic benefit to a colorectal cancer patient
population. Colorectal cancer is the second most prevalent
cancer type, yet overall survival is significantly behind
other high occurrence cancers. In metastatic colorectal
cancer, five-year survival is just 12% with current
treatment options offering minimal therapeutic benefit to
the patient population. The global market for metastatic
colorectal cancer treatments is estimated to reach US$9.4
billion by 2020.
12
CEO AND MANAGING DIRECTOR’S REPORT
OUTLOOK
FY17 has been an exciting breakthrough year for
Bionomics as we work to deploy state-of-the-art therapies
for the treatment of diseases of the CNS and cancer.
Bionomics has been recognised at several world-class
events throughout the year and been given excellent
opportunities to highlight the effectiveness of our drug
discovery platforms and clinical candidates.
We will continue with our Phase 2b BNC210 trial in
patients with PTSD and we anticipate results mid-calendar
year 2018.
As the Company matures, it’s strategy will focus on its
core strength and an area of significant competitive
advantage in ion channel biology and drug discovery. In
pursuing this path, there is a recognition that our clinical
stage oncology assets BNC105 and BNC101 are no longer
“on strategy”. Bionomics will therefore seek to monetise
both assets in parallel with its currently committed
support of investigator initiated clinical trials funded by
granting bodies and Pharma companies.
BIONOMICS WILL FOCUS ON ITS CORE
STRENGTH AND AN AREA OF SIGNIFICANT
COMPETITIVE ADVANTAGE IN ION CHANNEL
BIOLOGY AND DRUG DISCOVERY.
In addition to the clinical development of BNC210,
Bionomics will seek further opportunities to execute its
partnership strategy through new licensing agreements
for assets across its portfolio of drug candidates.
I extend my thanks for our hard-working team and the
Board for their support over the course of the year. I
also acknowledge and thank our shareholders for your
continued investment in Bionomics’ strategy and I look
forward to reporting on progress of our pipeline of
innovative drug candidates over the coming year.
Yours faithfully
Dr Deborah Rathjen
CEO and Managing Director
OUR STRATEGY
With sharper focus in our strategy and our decision to
“play to our strengths” in ion channel biology where we
believe Bionomics is globally competitive, some important
but difficult strategic and operational decisions have been
taken and implemented.
Bionomics has retired from the Co-operative Research
Centre (CRC) for Cancer Therapeutics after an association
of over 10 years. In June 2016, Bionomics received its
share (US$736,815) of the upfront payment under a
licensing agreement for the PRMT5 project with MSD
under its collaborative arrangements with the CRC.
This strategic decision was taken to allow Bionomics to
strengthen its focus on its core expertise in ion channel-
based drug discovery and its proprietary platforms ionX
and MultiCore. Despite its retirement from the CRC,
Bionomics remains eligible for future payments under the
PRMT5 license agreement.
Bionomics has also closed its operations in San Diego,
with consequent cost savings in FY17 and beyond. Closure
of the San Diego site has allowed us to consolidate our
business and R&D operations in Australia and France
making greater use of existing synergies. Our operations
in San Diego were originally established to focus on
development of BNC101 and with BNC101 now in clinical
development all the necessary skills and expertise for
this program are covered by our Adelaide-based oncology
research team.
13
INTELLECTUAL PROPERTY PORTFOLIO
WE ARE THE OWNER ON RECORD OF 117 ISSUED
PATENTS ACROSS 58 FAMILIES AND 106 PENDING
PATENT APPLICATIONS ACROSS 33 FAMILIES FILED
IN EUROPE, THE UNITED STATES AND ASIA.
THE BIONOMICS PATENT PORTFOLIO INCLUDES:
9
patent families covering
BNC210 and congeners and
their use in the treatment
of anxiety and other
disorders
18
patent families covering
BNC105 and congeners and
their use in the treatment
of cancer
8
patent families covering
BNC101and its use in
targeting cancer stem
cells
8
patent families covering
BNC164 and congeners and
their use in the treatment
of autoimmune disease
1
patent application
covering
chronic pain
2
patent families covering
Parkinson’s disease and
related disorders
12
patent families covering
discoveries made utilizing
Bionomics’ technology
platforms
Through the worldwide Patent Cooperation Treaty (PCT) mechanism, Bionomics and its related companies were granted
18 patents this financial year, 37 PCT patent applications entered the national and regional phases of examination,
1 PCT patent application and 4 provisional patent applications were filed.
14
BOARD OF DIRECTORS
DR ERROL DE SOUZA PhD
CHAIRMAN AND
NON-EXECUTIVE DIRECTOR
DR DEBORAH RATHJEN
BSc (Hons), PhD, MAICD, FTSE
CEO AND MANAGING DIRECTOR
MR PETER TURNER
BSc, MBA, GAICD
NON-EXECUTIVE DIRECTOR
Dr De Souza is a leader in the
development of therapeutics for
treatment of central nervous
system (CNS) disorders. He is
currently President and CEO
of Neuropore Therapies Inc.,
and is the former President and
CEO of US biotech companies
Biodel Inc. (NASDAQ:BIOD),
Archemix Corporation and
Synaptic Pharmaceutical
Corporation (NASDAQ:SNAP).
Dr De Souza formerly held senior
management positions at Aventis
Pharmaceuticals, Inc. (now Sanofi)
and its predecessor Hoechst Marion
Roussel Pharmaceuticals, Inc.
Most recently, he was Senior Vice
President and Site Head of US Drug
Innovation and Approval (R&D), at
Aventis, where he was responsible
for the discovery and development
of drug candidates through
Phase 2a clinical trials for CNS and
inflammatory disorders. Prior to
Aventis, he was a co-founder and
Chief Scientific Officer of Neurocrine
Biosciences (NASDAQ:NBIX).
Dr De Souza has served on multiple
editorial boards, National Institutes
of Health (NIH) Committees and is
currently a Director of several public
and private companies.
Dr Rathjen joined Bionomics in 2000
from Peptech Limited, where she
was General Manager of Business
Development and Licensing.
Dr Rathjen was a co-inventor of
Peptech’s TNF technology and leader
of the company’s successful defence
of its key TNF patents against a legal
challenge by BASF. Dr Rathjen has
significant experience in company
building and financing, mergers
and acquisitions, therapeutic
product research and development,
business development, licensing and
commercialisation. Dr Rathjen has
been recognised both in Australia
and internationally through awards
and honours including the 2004
AusBiotech President’s Medal, 2006
Flinders University Distinguished
Alumni Award, 2009 BioSingapore
Asia Pacific Biotechnology Woman
Entrepreneur of the Year, 2009
Regional Finalist Ernst & Young –
Entrepreneur of the Year, 2014
Woman Executive of the Year
BioPharm Industry Awards. In 2015
Dr Rathjen was included in the Top 50
most influential Australian business
women by The Australian newspaper.
Mr Turner is a former
senior executive with global
experience in CSL, a large
multinational organisation in the
biopharmaceutical industry. He
has been an Executive director and
COO of CSL and was the founding
President of CSL Behring working in
Europe and the United States from
2000 to 2011. Mr Turner provided
strategic, technical and commercial
leadership and was responsible for
the integration of large company
acquisitions in Europe, the United
States and Japan. He has been
responsible for significant company
re-structuring and turnaround
and has overseen thirteen new
product launches in the United
States and Europe and more in other
jurisdictions. During his tenure
overseas sales grew from US$140
million to $3.4 billion. Mr Turner
is a Non-Executive director of
Virtus Health and the Chair of NPS
MedicineWise. He is a former Chair
of Ashley Services Group.
15
MR DAVID WILSON
NON-EXECUTIVE DIRECTOR
Mr Wilson is Chairman and founding
partner of WG Partners and has over
30 years’ experience in the City of
London. Previously Mr Wilson was
CEO of Piper Jaffray Ltd, where he
also served as Global Chairman
of Healthcare and on the Group
Leadership Team. Mr Wilson has
held senior positions at ING Barings
as Joint Head of UK Investment
Banking Group, Deutsche Bank as
Head of Small Companies Corporate
Finance and UBS as Head of Small
Companies Corporate Broking.
Mr Wilson currently serves as non
executive Director of Bionomics
Limited and was previously Senior
Independent Director of Optos plc
prior to its successful sale of Nikon
Corporation for c.$400m as well as
a non executive director of
BerGenBio AS.
MR ALAN FISHER
BCom, FCA, MAICD
NON-EXECUTIVE DIRECTOR
Mr Fisher has extensive and
proven experience in restoring and
enhancing shareholder value. He
spent 24 years at world-leading
accounting firm Coopers & Lybrand
as Lead Advisory Partner where he
headed and grew the Melbourne
Corporate Finance Division.
Following this tenure Alan developed
his own business as a corporate
advisor and for the past 20 years
has specialised in M&A, business
restructurings, strategic advice
and capital raisings for small cap
companies. He is currently Non-
Executive Chairman of Centrepoint
Alliance Limited and Non-Executive
Director and Chair of the Audit and
Risk Committees of IDT Australia
Limited and Thorney Technology
Limited. He is also the Managing
Director of Fisher Corporate
Advisory and DMC Corporate.
Mr Fisher holds a Bachelor of
Commerce from Melbourne
University, is a Fellow of the Institute
of Chartered Accountants Australia,
a member of the Australian
Institute of Company Directors
and the Turnaround Management
Association.
16
MANAGEMENT
DR DEBORAH RATHJEN
BSc (Hons), PhD, MAICD, FTSE
CEO AND MANAGING DIRECTOR
Dr Rathjen joined Bionomics in 2000
from Peptech Limited, where she
was General Manager of Business
Development and Licensing. Dr
Rathjen was a co-inventor of
Peptech’s TNF technology and leader
of the company’s successful defence
of its key TNF patents against a legal
challenge by BASF. Dr Rathjen has
significant experience in company
building and financing, mergers
and acquisitions, therapeutic
product research and development,
business development, licensing and
commercialisation. Dr Rathjen has
been recognised both in Australia
and internationally through awards
and honours including the 2004
AusBiotech President’s Medal, 2006
Flinders University Distinguished
Alumni Award, 2009 BioSingapore
Asia Pacific Biotechnology Woman
Entrepreneur of the Year, 2009
Regional Finalist Ernst & Young
- Entrepreneur of the Year, 2014
Woman Executive of the Year
BioPharm Industry Awards. In 2015
Dr Rathjen was included in the Top 50
most influential Australian business
women by The Australian newspaper.
MR JACK MOSCHAKIS
BEc, DIPLaw (BAB) NSW, GDipBA, FCIS
LEGAL COUNSEL AND COMPANY
SECRETARY
Mr Moschakis brings a depth of
legal knowledge with over 25 years’
experience as a legal practitioner.
He has worked in senior legal
/ company secretary roles in
the South Australian electricity
industry for over 10 years and
has expertise in energy law and
energy related commercial and
contractual matters. His most recent
position was at mining company
Rex Minerals Ltd where he worked
as a legal consultant. Prior to this,
Mr Moschakis worked at Thomsons
Lawyers, a top tier Adelaide law firm
that is now part of the national law
firm of Thomson Geer, as an energy
and infrastructure consultant. Mr
Moschakis holds a Bachelor of
Economics (Adelaide), Diploma
in Law (BAB-NSW) and Graduate
Diploma in Business Administration
(Adelaide). He is a Fellow of the
Institute of Chartered Secretaries
/ Governance Institute of Australia,
Member of the Law Society of South
Australia and the Association of
Corporate Counsel.
MR STEVEN LYDEAMORE
MBA, CPA
CHIEF FINANCIAL OFFICER
Mr Lydeamore is a Certified
Practising Accountant with 25
years’ international pharmaceutical
experience. He has senior executive
experience spanning Asia Pacific,
Europe, Latin America and North
America in finance, business
development, mergers and
acquisitions, sales and marketing,
manufacturing and research and
development. Mr Lydeamore worked
in various finance roles for F.H.
Faulding & Co. Limited in Australia
over a ten year period followed by
four years in the United States at
Mayne Pharma (USA) Limited. For
the eleven years prior to joining
Bionomics, Mr Lydeamore worked
for Apotex Inc., the largest Canadian-
owned pharmaceutical company,
most recently as President,
Apobiologix. Mr Lydeamore holds
a Bachelor of Business (Applied
Economics) (Deakin) and a Master of
Business Administration (RMIT). He
is a member of CPA Australia and
Licensing Executives Society (U.S.A.
and Canada), Inc.
17
DIRECTORS’ REPORT
Your Directors present their report on the financial statements
of the Group for the year ended 30 June 2017, comprising
the parent entity Bionomics Limited (Bionomics) and its
subsidiaries. In order to comply with the Corporations Act
2001, the Directors report as follows:
Directors
The following persons were Directors of Bionomics during the
period and up to the date of this report:
• Mr Graeme Kaufman, Non-Executive Chairman
(until 31 August 2016)
• Dr Errol De Souza, Non-Executive Director and from
1 September 2016, Non-Executive Chairman
• Dr Deborah Rathjen, Chief Executive Officer
and Managing Director
• Mr Trevor Tappenden, Non-Executive Director
(until 8 November 2016)
• Dr Alan W Dunton, Non-Executive Director
(until 4 July 2016)
• Mr David Wilson, Non-Executive Director
• Mr Peter Turner, Non-Executive Director
• Mr Alan Fisher, Non-Executive Director
(from 1 September 2016)
Except as noted above, the Directors held office during the whole
of the financial year and since the end of the financial year.
Principal Activities
The principal activities of the Company and its controlled
entities (the Group) during the period include the discovery
and development of novel drug candidates focused on the
treatment of central nervous system disorders and cancer by
leveraging our proprietary platform technologies.
Operating Results
Consolidated revenue for the year to 30 June 2017 increased
by 128% to $18,606,356. Other income for the year to 30 June
2017 decreased by 29% to $9,645,501 and primarily relates to
the Research and Development (R&D) Tax Incentive, foreign
government grants and interest income. This compared with
revenue of $8,143,288 and other income of $13,584,627 for the
year to 30 June 2017. The operating loss after tax of the Group
for the year to 30 June 2017 was $6,749,615 compared with the
prior year after tax loss of $16,592,410.
The cash position at 30 June 2017 was $42,873,656 with
restricted cash of $550,000 and $384,000 classified as current
and non-current other financial assets (2016: $45,450,382
with restricted cash of $550,000 and $384,000 classified as
current and non-current other financial assets).
The financial performance of key operating segments of Drug
discovery and development and Contract services are included
in Note 4.
Review of Operations
Bionomics is a global, clinical-stage biopharmaceutical
company, leveraging our proprietary platform technologies to
discover and develop a deep pipeline of best-in-class, novel
drug candidates focused on ion channel mediated disorders,
including conditions of the Central Nervous System (CNS)
and oncology.
Ion Channel Expertise to Drive Growth
Our ionX and MultiCore drug discovery platforms are validated
through our partnership with Merck & Co., or MSD as it is
known outside the US and Canada and both platforms serve
as a source of significant competitive advantage in addressing
under-served therapeutic areas including anxiety, depression,
pain and Alzheimer’s disease.
Our Important Relationship with MSD Made Significant Progress
Our collaboration with MSD in cognition reached an
important milestone with the first dosing in a clinical trial in
February 2017. The milestone occurred with the initiation of
a Phase 1 clinical study of a candidate Alzheimer’s disease
treatment. The achievement of this milestone by MSD
triggered a payment of US$10 million to Bionomics. We
are excited that MSD initiated this clinical trial evaluating
a candidate developed under our June 2014 cognition
collaboration. This milestone provides validation of the
utility of our drug discovery platform to identify high-
quality candidates as well as our strategic approach to
partner selected assets. The portfolio of products under our
collaboration with MSD are designed to address cognitive
dysfunction in important CNS indications, and Alzheimer’s
disease is of chief importance among these as there remains
an urgent need for new treatments.
Under the 2014 agreement, MSD funds all early-stage
and clinical development of any candidate within
the collaboration and is responsible for worldwide
commercialisation. Bionomics previously received US$20
million in upfront payments and is eligible to receive up to
US$506 million for reaching predefined research and clinical
development milestones, plus eventual undisclosed royalties
on any product sales.
In November 2016 MSD and Bionomics hosted its annual
joint Symposium in Adelaide, Australia focused on Frontiers
in Neuroscience Research: Memory, Mood and Movement.
Symposium speakers included some of the world’s most
respected experts in the fields of memory, movement
and mood and attendees benefited from reports on latest
advances in the science and treatment options for Alzheimer’s
disease, Parkinson’s disease and anxiety. The successful
Symposium was well received with over 210 registrations.
Attendees included researchers, medical personnel and
18
DIRECTORS’ REPORT
patient support groups as well as investors and life science
analysts. The keynote presentation was given by Dr David
Michelson, Vice President Neuroscience & Ophthalmology,
Clinical Research, MSD.
BNC210 Positive Phase 2 Clinical Trial Results Prepared
the Foundation for Further Development and Partnering
with Significant Commercial Opportunities Identified in Post
Traumatic Stress Disorder
During the period Bionomics continued the development of
BNC210 reporting positive clinical trial results in September
2016 from a robust Phase 2, placebo and lorazepam
controlled, double blinded, 4-way cross over design, clinical
trial which confirmed using brain imaging technology
that BNC210 reduced the activity of known brain circuitry
associated with anxiety. The effect of BNC210 was superior to
that of standard of care lorazepam in reducing anxiety during
the performance of anxiety inducing tasks, including the
Joystick Operated Runway Task.
BNC210 is a novel, proprietary, negative allosteric modulator
of the alpha-7 nicotinic acetylcholine receptor, or the α7
receptor. In six completed Phase 1 clinical trials, BNC210
has demonstrated safety and tolerability in over 190 healthy
subjects and shown initial indications of efficacy in the
absence of side effects such as sedation, memory loss,
impairment of motor co-ordination and potential for addiction.
The α7 receptor is highly expressed in the amygdala which
forms part of the emotional centre of the brain and it can be
considered a key driver of emotional responses. In the Phase
2 GAD trial BNC210 inhibited amygdala activation in response
to anxiety-inducing signals, a strong endorsement for its
continued development for the treatment of anxiety disorders,
conditions where co-morbid anxiety exist such as in Major
Depressive Disorder and Bipolar Disorder and stress and
trauma related disorders.
Bionomics has an ongoing multi-centre, placebo controlled,
double-blinded Phase 2 clinical trial of BNC210 in patients
with PTSD. The clinical trial is being conducted in Australia
and the US. Results from this clinical trial, which will enrol
192 patients, are anticipated in 2018.
Strong Market Opportunity for BNC210
Market research commissioned by Bionomics conducted by
market research firm Torreya Insights indicates that the US
market opportunity for BNC210 in GAD alone is estimated to
be US$2.7 billion p.a. This market research also indicates that
the US market opportunity for BNC210 in PTSD is estimated
to be US$4.7 billion p.a. PTSD is anticipated to provide a more
rapid path to market than GAD, with the potential for further
FDA Fast Track and breakthrough designation with positive
Phase 2 data.
Our Clinical Stage Oncology Assets Continue to Mature,
But Are Now “Off Strategy”
In addition to the successes of its ion channel-based
neuroscience programs, Bionomics continued to develop
its cancer drug pipeline utilising non-dilutive financing with
Pharma company support where possible while the Company
prioritises investment in its ion channel programs.
The ongoing BNC101 Phase 1 clinical trial in patients with
advanced, metastatic colon cancer reached its recommended
Phase 2 dose level of 15mg/kg without evidence of dose
limiting toxicities or other significant safety issues. With
identification of the recommended Phase 2 dose level the
Company initiated enrolment of the final expansion cohort of
the study. BNC101 is a first-in-class, high-affinity, anti-LGR5
humanised monoclonal antibody targeting cancer stem cells.
Exposure levels observed in the 15 mg/kg patient cohort
were similar to efficacious exposure levels seen in preclinical
models. In-depth analysis of patient samples for biomarker
evaluation is ongoing in parallel with the expansion cohort.
This data is anticipated to be reported, together with the
completion of the expansion cohort in the current quarter.
In February 2017 Bionomics announced grant funding for a
new investigator initiated BNC105 clinical trial in combination
with Keytruda, a checkpoint inhibitor developed by MSD and
a collaboration between the Peter MacCallum Cancer Centre
and the Olivia Newton-John Cancer Wellness & Research
Centre. The $2.25m grant from the Victorian Cancer Agency
is funding a BNC105 trial in combination with Keytruda in
patients with advanced melanoma who are unresponsive to
standard treatments. This investigator initiated clinical trial
is in addition to the grant funded clinical trial in patients with
Chronic Lymphocytic Leukemia in progress at Dartmouth
College in the US and a Novartis-funded biomarker study
which is utilising patient samples from the Phase 2 clinical
trial in patients with metastatic renal cancer.
Strategic Realignment to Focus on Ion Channel Assets
As part of our strategic realignment, management and Board
reached a decision to focus on our essential operations in
Australia and France, making the most of the clearly identified
operational synergies, and to close our US operations. The
decision to close our US operations was implemented in June
2017, with savings identified moving forward.
Outlook
Bionomics is in a strong position to progress its development
of BNC210 in PTSD and other indications and to support
our important relationship with MSD. In the second half of
calendar year 2018, we anticipate Phase 2 data from the
ongoing BNC210 trial in patients with PTSD.
As the Company matures, its strategy will focus on its core
strength and an area of significant competitive advantage in
19
ion channel biology and drug discovery. In pursuing this path
there is a recognition that our clinical stage oncology assets
BNC105 and BNC101 are no longer “on strategy”. Bionomics
will therefore seek to monetize both assets in parallel with its
currently committed support of investigator initiated clinical
trials funded by granting bodies and Pharma companies.
Near-term data in the ongoing BNC101 trial in patients with
metastatic colon cancer is anticipated to assist in value
realisation.
Bionomics will seek further opportunities to execute its
partnership strategy through new licensing agreements for
assets across its portfolio of drug candidates.
Dividends
The Directors do not propose to make any recommendation
for dividends for the current financial year. There were no
dividends declared in respect of the previous financial year.
Significant Changes in the State of Affairs
There were no significant changes in the state of affairs of the
Group during the financial year.
Subsequent Events
No other matters or circumstances have arisen since the
end of the financial year which significantly affect or may
significantly affect the results of the operations of the Group.
Likely Developments and Expected Results of Operations
The Group will continue to undertake drug discovery and
will seek to commercialise the outcomes of its research and
development in the form of drug candidates for the treatment
of CNS diseases and cancer.
Environmental Regulation
The Group is subject to environmental regulations and other
licenses in respect of its facilities in Australia, USA and
France. The Group is subject to regular inspections and audits
by responsible State and Federal authorities. The Group
was in compliance with all the necessary environmental
regulations throughout the year ended 30 June 2017 and no
related issues have arisen since the end of the financial year to
the date of this report.
INFORMATION ON DIRECTORS
Dr ERROL DE SOUZA PhD
Chairman – Non-Executive Director since 28 February 2008
and Non- Executive Chairman from 1 September 2016
Experience and Expertise
Dr De Souza is a leader in the development of therapeutics
for treatment of CNS disorders. He is currently President and
CEO of Neuropore Therapies Inc. and is the former President
and CEO of US biotech companies Biodel Inc. (NASDAQ:BIOD),
Archemix Corporation and Synaptic Pharmaceutical
Corporation (NASDAQ:SNAP). Dr De Souza formerly held
senior management positions at Aventis Pharmaceuticals,
Inc. (now Sanofi) and its predecessor Hoechst Marion Roussel
Pharmaceuticals, Inc. Most recently, he was Senior Vice
President and Site Head of US Drug Innovation and Approval
(R&D), at Aventis, where he was responsible for the discovery
and development of drug candidates through Phase 2a clinical
trials for CNS and inflammatory disorders. Prior to Aventis,
he was a co-founder and Chief Scientific Officer of Neurocrine
Biosciences (NASDAQ:NBIX). Dr De Souza has served on
multiple editorial boards, National Institutes of Health (NIH)
Committees and is currently a Director of several public and
private companies.
Current Directorships (in addition to Bionomics Limited)
Listed companies: Director of Catalyst Biosciences Inc.
(NASDAQ:CBIO)
Former Listed Directorships in Last Three Years
Biodel Inc. (NASDAQ:BIOD), Targacept, Inc. (NASDAQ: TRGT)
Special Responsibilities
Chairman of Independent Board Committee
Member of Audit and Risk Management Committee
Member of the Nomination and Remuneration Committee
Interests in Shares and Options at Date of Report
266,698 ordinary shares in Bionomics Limited
600,000 unlisted options over ordinary shares in Bionomics
Limited
Mr GRAEME KAUFMAN
Chairman – Non-Executive until 31 August 2016
Director - 18 September 2012 until 31 August 2016
Experience and Expertise
Mr Kaufman has wide ranging experience across the
biotechnology sector, spanning scientific, commercial and
financial areas. His experience with CSL Limited, Australia’s
largest biopharmaceutical company included responsibility
20
DIRECTORS’ REPORT
for all of their manufacturing facilities, and the operation of an
independent business division operating in the high technology
medical device market. As CSL’s General Manager Finance,
Mr Kaufman had global responsibility for finance, strategy
development, human resources and information technology.
Mr Kaufman has also served as an Executive Director of ASX-
listed Circadian Technologies and a Non-Executive Director
of Amrad Corporation. He was previously Executive Vice
President Corporate Finance with Mesoblast Limited and is
currently Executive Chairman of IDT Australia Limited and
non-executive Chairman of Paradigm Biopharmaceuticals
Limited.
Current Directorships (in addition to Bionomics Limited)
Listed companies: Executive Chairman, IDT Australia
Limited (ASX:IDT) (since June 2013); Chairman Paradigm
Biopharmaceuticals Limited (ASX:PAR) (since August 2014)
Former Listed Directorships in Last Three Years
Non-Executive Director, Cellmid Limited (ASX:CDY)
(from August 2012 until June 2015)
Special Responsibilities
Member of Audit and Risk Management Committee
Interests in Shares and Options at Date of Report
178,750 ordinary shares in Bionomics Limited
1,000,000 unlisted options over ordinary shares in Bionomics
Limited
Dr DEBORAH RATHJEN BSc (Hons), PhD, MAICD, FTSE
Chief Executive Officer and Managing Director
Director since 18 May 2000
Experience and Expertise
Dr Rathjen joined Bionomics in 2000 from Peptech Limited,
where she was General Manager of Business Development
and Licensing. Dr Rathjen was a co-inventor of Peptech’s TNF
technology and leader of the company’s successful defence
of its key TNF patents against a legal challenge by BASF. Dr
Rathjen has significant experience in company building and
financing, mergers and acquisitions, therapeutic product
research and development, business development, licensing
and commercialisation. Dr Rathjen has been recognised
both in Australia and internationally through awards and
honours including the 2004 AusBiotech President’s Medal,
2006 Flinders University Distinguished Alumni Award, 2009
BioSingapore Asia Pacific Biotechnology Woman Entrepreneur
of the Year, 2009 Regional Finalist Ernst & Young, Young
Entrepreneur of the Year, and 2014 Woman Executive of the
Year BioPharm Industry Awards. In 2015 Dr Rathjen was
included in the Top 50 most influential Australia business
women by The Australian newspaper.
Current Directorship (in addition to Bionomics Limited)
Listed companies: Nil
Other: ANFF Limited, Director of CTX CRC Limited
(concluded June 2017),
Former Listed Directorships in Last Three Years
Nil
Special Responsibilities
Chief Executive Officer and Managing Director
Member of Independent Board Committee
Interests in Shares and Options at Date of Report
2,485,901 ordinary shares in Bionomics Limited
2,255,000 unlisted options over ordinary shares in Bionomics
Limited
Mr TREVOR TAPPENDEN CA, FAICD
Non-Executive Director
Director from 15 September 2006 to 8 November 2016
Experience and Expertise
Mr Tappenden commenced his career as a Non-Executive
Director in 2003 after a career with Ernst & Young spanning
30 years. During his time at Ernst & Young, Mr Tappenden
held a variety of positions including Managing Partner of the
Melbourne Office, member of the Board of Partners, Head
of the Victorian Government Services Group and National
Director of the Entrepreneurial Services Division. He holds
directorship in various private, government and not-for-
profit organisations and is the Chairman of the Audit and Risk
Management Committees of many of those organisations.
Current Directorships (in addition to Bionomics Limited)
Listed companies: Nil
Other: Director, Buckfast Pty Ltd; Director & Chairman,
Intellicomms Pty Ltd; Director & Chairman, RMIT University
Foundation; Director, Museum Victoria
Former Listed Directorships in Last Three Years
Nil
Special Responsibilities
Chairman of Audit and Risk Management Committee
Interests in Shares and Options at Date of Report
49,924 ordinary shares in Bionomics Limited
Nil unlisted options over ordinary shares in Bionomics Limited
21
Dr ALAN W DUNTON BCom, FCA, MAICD
Non-Executive Director
Retired 4 July 2016
Experience and Expertise
Dr Dunton is a seasoned pharmaceutical/biotechnology
industry executive, with extensive product and company
leadership experience. Dr Dunton’s career has ranged from
responsibility for overall leadership of large pharma R&D
organisations to private biotechnology companies. Dr Dunton
is currently Senior Vice President, Research and Development
at Purdue Pharma, LLP and has discovery, development,
and regulatory experience across all functional areas for
the complete life cycle management of products as well as
raising capital to create shareholder value. Dr Dunton created
Danerius, LLC, a pharma/biotech consulting company covering
the industry, venture capital groups and government agencies.
Dr Dunton has played a key role in the development of more
than 20 products to regulatory approval. Dr Dunton holds
a MD degree from New York University School of Medicine,
where he completed his residency in internal medicine.
Current Directorships (in addition to Bionomics Limited)
Listed companies: Director, Palatin Technologies, Inc.
(NYSE:PTN); Director, Oragenics, Inc. (NYSE: OGEN)
Former Listed Directorships in Last Three Years
Targacept, Inc. (NASDAQ: TRGT)
Special Responsibilities
Nil
Interests in Shares and Options at Date of Report
Nil ordinary shares in Bionomics Limited
500,000 unlisted options over ordinary shares in Bionomics
Limited
Mr DAVID WILSON
Non-Executive Director
Director since 16 June 2016
Experience and Expertise
Mr Wilson is Chairman and founding partner of WG Partners and
has over 30 years’ experience in the City of London. Previously
Mr Wilson was CEO of Piper Jaffray Ltd, where he also served
as Global Chairman of Healthcare and on the Group Leadership
Team. Mr Wilson has held senior positions at ING Barings as
Joint Head of UK Investment Banking Group, Deutsche Bank as
Head of Small Companies Corporate Finance and UBS as Head
of Small Companies Corporate Broking. Mr Wilson currently
serves as Non-Executive Director of Bionomics Limited and
was previously Senior Independent Director of Optos plc prior
to its successful sale of Nikon Corporation for c.$400m as well
as a Non-Executive Director of BerGenBio AS.
Current Directorships (in addition to Bionomics Limited)
Listed companies: Nil
Former Listed Directorships in Last Three Years
Optos plc
Special Responsibilities
Member of Independent Board Committee
Member of Audit and Risk Management Committee
Member of the Nomination and Remuneration Committee
Interests in Shares and Options at Date of Report
200,000 ordinary shares in Bionomics Limited
500,000 unlisted options over ordinary shares in Bionomics
Limited
Mr PETER TURNER BSc, MBA, GAICD
Non-Executive Director
Director since 16 June 2016
Experience and Expertise
Mr Turner is a former senior executive with global
experience in CSL, a large multinational organisation in
the biopharmaceutical industry. He has been an Executive
Director and COO of CSL and was the founding President
of CSL Behring working in Europe and the United States
from 2000 to 2011. Mr Turner provided strategic, technical
and commercial leadership and was responsible for the
integration of large company acquisitions in Europe, the
United States and Japan. He has been responsible for
significant company re-structuring and turnaround and has
overseen thirteen new product launches in the United States
and Europe and more in other jurisdictions. During his tenure,
overseas sales grew from US$140 million to $3.4 billion. Mr
Turner is a Non-Executive Director of Virtus Health and the
Chair of NPS MedicineWise. He is a former Chair of Ashley
Services Group.
Current Directorships (in addition to Bionomics Limited)
Listed companies: Director, Virtus Health Limited (ASX:VRT)
(since June 2013)
Former Listed Directorships in Last Three Years
Chair: Ashley Services Group Limited (ASX:ASH) (July 2014 to
October 2015)
Special Responsibilities
Member of Independent Board Committee
Chair of Nomination and Remuneration Committee
Interests in Shares and Options at Date of Report
100,000 ordinary shares in Bionomics Limited
500,000 unlisted options over ordinary shares in Bionomics
Limited
Mr JACK MOSCHAKIS BEc, DIPLaw (BAB) NSW, GDipBA, FCIS
Legal Counsel and Company Secretary
Experience and Expertise
Mr Moschakis brings a depth of legal knowledge with over 25
years’ experience as a legal practitioner. He has worked in
senior legal / company secretary roles in the South Australian
electricity industry for over 10 years and has expertise in
energy law and energy related commercial and contractual
matters. His most recent position was at mining company
Rex Minerals Ltd where he worked as a legal consultant.
Prior to this, Mr Moschakis worked at Thomsons Lawyers,
a top tier Adelaide law firm that is now part of the national
law firm of Thomson Geer, as an energy and infrastructure
consultant. Mr Moschakis holds a Bachelor of Economics
(Adelaide), Diploma in Law (BAB) NSW and Graduate Diploma
in Business Administration (Adelaide). He is a Fellow of the
Institute of Chartered Secretaries / Governance Institute of
Australia, Member of the Law Society of South Australia and
the Association of Corporate Counsel.
22
DIRECTORS’ REPORT
Mr ALAN FISHER BCom, FCA, MAICD
Non-Executive Director
Director since 1 September 2016
Experience and Expertise
Mr Fisher has extensive and proven experience in restoring
and enhancing shareholder value. He spent 24 years at world-
leading accounting firm Coopers & Lybrand as Lead Advisory
Partner where he headed and grew the Melbourne Corporate
Finance Division. Following this tenure Alan developed his own
business as a corporate advisor and for the past 20 years has
specialised in M&A, business restructurings, strategic advice
and capital raisings for small cap companies. He is currently
Non-Executive Chairman of Centrepoint Alliance Limited
and Non-Executive Director and Chair of the Audit and Risk
Committees of IDT Australia Limited and Thorney Technology
Limited. He is also the Managing Director of Fisher Corporate
Advisory and DMC Corporate. Mr Fisher holds a Bachelor
of Commerce from Melbourne University, is a Fellow of the
Institute of Chartered Accountants Australia, a member of the
Australian Institute of Company Directors and the Turnaround
Management Association.
Current Directorships (in addition to Bionomics Limited)
Listed companies: Chairman, Centrepoint Alliance Limited
(ASX: CAF); NED and Chairman of A&RC IDT Australia Limited
(ASX: IDT); NED and Chairman of A&RC Thorney Technology
Limited (ASX: TEK).
Former Listed Directorships in Last Three Years
Nil
Special Responsibilities
Chair of Audit and Risk Management Committee
Member of Nomination and Remuneration Committee
Interests in Shares and Options at Date of Report
Nil ordinary shares in Bionomics Limited
500,000 unlisted options over ordinary shares in Bionomics
Limited
23
MEETINGS OF DIRECTORS
The following table sets out the number of Directors’ meetings (including meetings of committees of Directors) held during the
financial year and the number of meetings attended by each Director (while they were a director or committee member).
MEETINGS OF DIRECTORS
MEETINGS OF AUDIT AND
RISK MANAGEMENT (ARM)
COMMITTEE
MEETINGS OF THE
NOMINATION AND
REMUNERATION
COMMITTEE 1
INDEPENDENT
BOARD
COMMITTEE 2
Held
Eligible
Attended
Held
Eligible
Attended
Held
Attended
Held
Attended
to Attend
to Attend
Mr Graeme Kaufman
Dr Deborah Rathjen3
Mr Trevor Tappenden
Dr Errol De Souza
Dr Alan W Dunton
Mr David Wilson
Mr Peter Turner 4
Mr Alan Fisher 5
9
9
9
9
9
9
9
9
1
9
3
9
-
9
9
8
1
9
2
9
-
9
9
8
4
4
4
4
-
4
4
4
1
4
1
4
-
3
3
3
1
4
1
4
-
2
3
3
1
1
1
1
-
-
-
-
1
1
1
1
-
-
-
-
-
1
-
1
-
1
1
-
-
1
-
1
-
1
1
-
1 The Directors of the Remuneration Committee met in respect of the prior (2016) financial year.
The meeting for the current year occurred after the close of this (2017) financial year.
2 Independent Board Committee established 21 March 2016 to deal with the Sec 203D Notice
3 Attends ARM Committee, Nomination and Remuneration Committee by invitation
4 Appointed Chair of the Remuneration Committee and Chair of the Nomination Committee from 9 August 2016. The Nomination
Committee merged with the Remuneration committee in May 2017 to be the Nomination and Remuneration Committee.
5 Appointed Chair ARM Committee from 8 November 2016
REMUNERATION REPORT
This remuneration report, which forms part of the Directors’ Report, sets out information about the remuneration of the
Company’s Key Management Personnel (KMP) for the financial year ended 30 June 2017. The term ‘KMP’ refers to those persons
having authority and responsibility for planning, directing and controlling the activities of the consolidated entity (the Group),
directly or indirectly, including any director (whether executive or otherwise) of the Group. The prescribed details for each person
covered by this report are detailed below under the following headings:
1. Key Management Personnel
2. Remuneration Policy
3. Relationship Between the Remuneration Policy and Company Performance
4. Remuneration of Key Management Personnel
5. Key Terms of Service Agreements.
24
DIRECTORS’ REPORT
1. Key Management Personnel (KMP)
NON-EXECUTIVE DIRECTORS
POSITION
Mr Graeme Kaufman
Dr Errol De Souza
Mr Trevor Tappenden
Dr Alan W Dunton
Mr David Wilson
Mr Peter Turner
Mr Alan Fisher
EXECUTIVE DIRECTOR
Dr Deborah Rathjen
OTHER KMP
Ms Melanie Young
Dr Jens Mikkelsen
Mr Jack Moschakis
Mr Anthony Colasin
Mr Stephen Birrell
NED & Chairman - retired 31 August 2016
Chairman - from 1 September 2016
Retired 8 November 2016
Retired 4 July 2016
Non-Executive Director
Non-Executive Director
Non-Executive Director from 1 September 2016
Chief Executive Officer and Managing Director
Chief Financial Officer (Until 19 May 2017)
Chief Scientific Officer
Legal Counsel & Company Secretary
Chief Business Officer
Interim Chief Financial Officer - from 22 May 2017 to 9 August 2017
Except as noted, the above persons held their current position for the whole of the financial year and since the end of the financial year.
2. Remuneration Policy
Non-Executive Director Remuneration Policy
Non-Executive Directors’ fees are reviewed regularly,
taking into account comparable remuneration data from
the biotechnology sector, with the most recent increase
having taken effect in 2012. Non-Executive Directors’ fees
are determined within an aggregate Directors’ fee pool limit
that is approved by shareholders. The current aggregate
Non-Executive Directors’ fee pool limit is $500,000 per annum
and was approved by shareholders on 14 November 2012.
This amount (or some part of it) is to be divided among the
Non-Executive Directors as determined by the Board and
reflecting the time and responsibility related to the Board
and committees. The Group does not provide for retirement
allowances to its Non-Executive Directors.
The Chairman and Non-Executive Directors’ base board
fees are $120,000 per annum and $65,000 per annum
respectively, inclusive of any statutory Australian
superannuation contributions. The Chairman of the Audit
and Risk Management Committee receives an additional
$15,000 per annum inclusive of superannuation, of which
Mr Trevor Tappenden received $5,333 (retired 8 November
2016) and Mr Alan Fisher received $9,666. The Chairman of
the Nomination and Remuneration Committee receives an
additional $15,000 per annum inclusive of superannuation, of
which Mr Peter Turner received an additional $6,995 (inclusive
of superannuation) for services relating to his additional
duties. Dr Errol De Souza received an additional $10,000 per
annum for being the Chair of the Scientific Advisory Board, a
role he relinquished following his appointment as Chairman of
the Company. The total fees paid to Non-Executive Directors
for the year ended 30 June 2017 was $372,899 compared to the
aggregate Directors’ fee pool limit of $500,000.
Non-Executive Directors may receive share options on their
initial appointment to the Board or at other such times, as
approved by shareholders.
Any value that may be attributed to options issued to
Non-Executive Directors is not included in the shareholder
approved aggregate limit of Directors’ fees. There were
500,000 share options granted to each of the four
Non-Executive Directors during the year as part of their
remuneration, following approval by Shareholders at the 2016
Annual General Meeting. The share option grants;
• Conserve cash that would otherwise have to be provided as
Directors’ fees;
• Align the interests of Directors with shareholders;
• Are not contingent on tenure and do not therefore
compromise the director’s independence;
• Exercise is spread over multiple time periods, to promote
continuous improvement in value; and
• Can only be traded under the company’s Share Trading
Policy in a trading window when the market is fully
informed.
25
Executive Remuneration Policy and Framework
The objective of the Group’s executive remuneration policy
and framework is to ensure that the Group can attract and
retain high calibre executives capable of managing the Group’s
operations and achieving the Group’s strategic objectives, and
focus these executives on outcomes necessary for success.
The Executives total remuneration package framework
comprises:
The Board determines whether the incentive award should be
in share options or cash. The default award is share options,
as this is in accord with the Company’s philosophy that a
continuum of KPI achievement pre and post any award is
required to progressively improve shareholder value, and that
options are an appropriate payment vehicle because a reward
is only realised if there is further KPI achievement resulting in
improved shareholder value.
• Base pay and benefits, including superannuation and other
In summary, performance incentives:
entitlements;
• Performance incentives paid as share options or cash; and
• Equity awards through participation in the Bionomics
employee equity plans.
The combination of these comprises the executive KMP’s total
remuneration.
The Board reviews and approves the base pay, benefits,
incentive payments and equity awards of the Chief Executive
Officer and Managing Director and other executives reporting
directly to the Chief Executive Officer and Managing Director.
Base Pay and Benefits
Executives receive their base pay and benefits structured
as a Total Fixed Remuneration (TFR) package which may
be delivered as a combination of cash and prescribed non-
financial benefits at the executives’ discretion. Superannuation
(or local equivalent) is included in TFR. There are no
guaranteed base pay increases in any executive contract.
Base pay and benefit levels are reviewed annually and an
assessment made against market comparable positions.
Factors taken into account in determining remuneration
include levels of remuneration in other biotechnology
companies, a demonstrated record of performance, internal
relativities, and the company’s capacity to pay. An executive’s
base pay and benefit levels may also be reviewed if the
position’s accountabilities increase in scope and impact.
During the year there were increases provided to the Chief
Executive Officer and Managing Director and executives in the
order of 3%.
Performance Incentives
Executive positions have no pre-determined bonus or equity
opportunity, however performance incentives may be awarded
at the end of the performance review cycle upon achievement
of specific Board approved (i) individual, and (ii) company-
related KPIs with a weighting of 50% each.
Following a performance evaluation against these KPIs, the
amount of possible incentive payable to each executive is
determined by the Board based on the CEO’s recommendation,
and to the CEO by the Board based on the Board’s assessment
of her performance.
• Are based on achievement against annual KPIs;
• Recognise that in a biotechnology company shareholder
value is realised if there is successive periods of annual KPI
achievement across the management team;
• Require a payment vehicle that recognises the KPI
achievements, but only has value if there are shareholder
returns after the award is made; and
• Are paid as share options that vest progressively over a 5
year period.
In exceptional circumstances, the Board will consider cash
payment instead of or in addition to an option award if the
executive:
• Already has significant shareholdings; and / or
• Resides in a country where an option award is inappropriate
due to local regulation or taxes; and / or
• Is likely to be in a position whereby the executive may be
unable to exercise options because of insider knowledge
and / or an extended blackout period; and / or
• The KPI achievement is, in the judgement of the board, of
such significance to materially position the Company for
further shareholder value enhancement.
Performance incentives paid as Options conserves cash. They
align the interests of executives with shareholders, have a
look back element on what was achieved in the financial year,
and a look forward element requiring enhanced shareholder
value beyond market expectations at the time of the award for
the incentive to be realised. The Board considers this to be the
right approach for a company of Bionomics’ size and nature
and at this stage in its lifecycle.
The Board continues to review the performance assessment
and incentive structure to ensure it remains effective.
Equity Awards
Equity awards for executives and employees are provided by a
combination of equity plans that may include:
• An Employee Share Plan;
• An Employee Share Plan ($1,000 Plan); and
• An Employee Share Option Plan.
26
DIRECTORS’ REPORT
Participation in these plans is at the Board’s discretion and
no individual has an ongoing contractual right to participate
in a plan or to receive any guaranteed benefits. For key
appointments, an initial allocation of equity may be offered
as a component of their initial employment agreement. The
structure of equity awards is under the active review of the
Nomination & Remuneration Committee to ensure it meets
good corporate practice for a company of Bionomics’ size,
nature and company lifecycle.
Employee Share Plan
The Bionomics Employee Share Plan (ESP) was approved by
shareholders at the November 2014 Annual General Meeting.
It may involve the Company providing an interest-free limited
recourse loan to eligible employees to purchase shares under
this ESP. The Company takes security over the Shares to
secure repayment of the loan. The purpose of this ESP is to
provide eligible employees with an incentive to remain with
the Company and to improve the longer-term performance of
the Company and its returns to shareholders. The issue price
will be determined by the Board at its sole discretion, with
the intention to base it on market value at the time. No Shares
were issued to employees under the ESP during this financial
year or to the date of this report.
Employee Share Plan ($1,000 Plan)
All executives and staff, excluding Directors, are eligible to
participate in the Bionomics Employee Share Plan ($1,000
Plan). The objective of the $1,000 Plan is to assist in the
attraction and retention of employees of the Company, and to
provide encouragement to become shareholders. An annual
allocation of up to $1,000 of shares may be granted and taxed
on a concessional basis. Shares are granted under the $1,000
Plan for no consideration and are escrowed for 3 years while
participants are employed by the Company. None were issued
during this financial year or to the date of this report.
Employee Share Option Plan
Options may be granted under the Bionomics Limited
Employee Share Option Plan (ESOP) which was last approved
by shareholders at the 2014 Annual General Meeting. All
executives and staff are eligible to participate in the Plan. The
objective of the Plan is to assist in the recruitment, reward,
retention and motivation of employees of the Company.
Options are granted under the Plan for no consideration.
More particularly, the Plan is utilised to award options to
executives if they achieve specified KPIs. It may also be used
for shareholder approved Non-Executive Director grants in
addition to cash fees. The exercise price of options granted
under the Plan must be not less than the market price at
the time the decision is made to invite a participant to apply
for options. The exercise price is calculated as the volume-
weighted average price (VWAP) of the shares in the 7 days
preceding the approval to grant the options.
3. Relationship Between the Remuneration Policy
and Company Performance
The Company’s remuneration policy aligns executive reward
with the interests of shareholders. The primary focus is
on growth in shareholder value through the achievement
of research, development, regulatory and commercial
milestones. The performance goals are not necessarily linked
to financial performance measures typical of companies
operating in other market segments.
Share options and/or cash bonuses are granted to executive
KMP based on their level of Key Performance Indicator (KPI)
achievement. Achievement of KPIs should result in increases
in shareholder value. However, the Company provides share
options rather than a cash award for KPI achievement (unless
there are exceptional circumstances). This is because share
options only have realisable value if there is an increase in
shareholder value. That is, further improvement beyond the
KPI achievement on which the award is based is required for
the executives to realise value.
The incentive framework, therefore, combines a “look back”
element to reward the achievement of KPIs necessary to
enhance value, with a “look forward” element requiring
improvement beyond this level of achievement for the
executive to actually realise value. This is typical of a
biotechnology company at Bionomics’ stage of its lifecycle.
Bionomics’ approach to its remuneration framework ensures:
• Executives focus on meaningful KPIs,
• The best performers receive higher reward,
• Cash is conserved through the use of options,
• There is relatively less dilution from option grants
because they are selectively granted rather than
universally granted,
• Executives must continue to perform to realise value, and
• Executive reward is aligned with shareholder interests.
KPIs may include (but are not limited to) successful
negotiations of commercial contracts, achieving key research,
development and regulatory milestones, and ensuring the
availability of adequate capital to achieve stated objectives.
There is no direct link between the determination of fixed
pay and the Company’s financial performance (specifically,
revenue and net (loss)/profit included in the table below) or
share price.
The calculation of the annual incentive award for executive
KMP is by reference to the achievement of specific milestones
and targets approved by the Board. Milestones and targets
generally relate to:
• Efficiently conducting the Company’s development
programs;
27
• Executing Bionomics’ partnership strategy, both new and
existing;
• Demonstrating the power of Bionomics’ discovery
capabilities; and
• Maintaining adequate capital reserves.
These KPIs have been established to support the Company
achieving its overall objectives. Executive KMP have 50%
of their performance incentives tied to the achievement
of corporate goals and the remaining 50% is tied to the
achievement of individual goals.
In last year’s Remuneration Report, it was reported that
incentive remuneration for the 2016 Financial Year was not
finalised during the year and therefore the results would be
reported this year. The Board determined that for FY2016 no
incentive payments would be made to executive KMP.
Important milestones directly related to Board approved FY17
KPI’s achieved by Bionomics’ executives included:
• The initiation of a Phase 1 clinical study of a candidate
Alzheimer’s disease treatment. The achievement of this
milestone by MSD triggered a payment of US$10 million to
Bionomics;
• The continued development of BNC210 reporting positive
clinical trial results in September 2016 from a robust
Phase 2 clinical trial which confirmed using brain imaging
technology that BNC210 reduced anxiety in patients with
GAD through its modulation of known brain circuitry;
• BNC101 Phase 1 clinical trial in patients with advanced,
metastatic colon cancer reached its recommended Phase
2 dose level of 15mg/kg without evidence of dose limiting
toxicities or other significant safety issues;
• Obtained a grant to initiate a new BNC105 clinical trial in
combination with Keytruda, a collaboration between the
Peter MacCallum Cancer Centre and the Olivia Newton-
John Cancer Wellness & Research Centre. The $2.25m
grant, from the Victorian Cancer Agency, is funding a
BNC105 trial in combination with Keytruda, a checkpoint
inhibitor developed by MSD, in patients with advanced
melanoma who are unresponsive to standard treatments;
• Achieving board specified financial targets.
Incentive remuneration applicable to achievement of FY17
milestones as set out above has not been finalised and will be
included in next year’s Remuneration Report.
The tables below set out summary information about the consolidated entity’s earnings and movements in shareholder wealth for
the five years to 30 June 2017.
30 JUNE 2017
$
30 JUNE 2016
$
30 JUNE 2015
$
30 JUNE 2014
$
30 JUNE 2013
$
Revenue
18,806,356
8,143,288
6,827,277
19,921,506
Net (Loss) / Profit before tax
(6,227,039)
(17,324,118)
(17,277,206)
Net (Loss) / Profit after tax
(6,749,615)
(16,592,410)
(16,949,405)
3,946,945
3,206,616
3,724,169
(9,963,175)
(10,001,350)
Share price at start of year
Share price at end of year
Dividends paid
Basic earnings per share
Diluted earnings per share
30 JUNE 2017
CENTS
30 JUNE 2016
CENTS
30 JUNE 2015
CENTS
30 JUNE 2014
CENTS
30 JUNE 2013
CENTS
28.0
40.0
-
(1.0)
(1.0)
41.5
28.0
-
(3.0)
(3.0)
55.0
41.5
-
(4.0)
(4.0)
34.0
55.0
-
1.0
1.0
30.0
34.0
-
(2.7)
(2.7)
28
DIRECTORS’ REPORT
4. Remuneration of Key Management Personnel
The following tables show details of the remuneration received by the Directors and the executive key management personnel of
the Group for the current and previous financial years.
DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL – 2017
SHORT-TERM BENEFITS
POST-
EMPLOYMENT
CASH SALARY
AND FEES
$
NON-
MONETARY
BENEFITS
$
SUPER-
ANNUATION
$
LONG-TERM
EMPLOYEE
BENEFITS
ANNUAL AND
LONG SERVICE
LEAVE
$
SHARE-BASED
PAYMENTS
OPTIONS
$
58,333
18,265
65,749
441,523
25,977
122,878
65,000
707
401,299
254,631
282,694
262,868
17,843
2,017,767
-
-
-
64,980
-
-
-
-
-
10,122
-
15,029
-
90,131
5,542
1,735
6,246
19,616
2,468
-
-
-
-
16,701
19,616
16,346
1,695
89,965
-
-
-
12,790
-
-
-
-
-
-
2,426
-
-
35,191
23,640
33,653
30,866
-
35,191
33,653
30,373
21,121
3,635
16,324
-
6,088
TOTAL
$
99,066
43,640
105,648
569,775
28,445
158,069
98,653
31,080
422,420
285,089
321,060
294,243
25,626
15,216
269,735
2,482,814
NAME
Mr Alan Fisher
Mr Graeme Kaufman
Mr Peter Turner
Dr Deborah Rathjen
Mr Trevor Tappenden
Dr Errol De Souza*
Mr David Wilson
Dr Alan Dunton
Mr Anthony Colasin
Ms Melanie Young
Mr Jack Moschakis
Dr Jens Mikkelsen
Mr Stephen Birrell
* Includes Scientific Advisory Board Fee of $10,000.00
DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL – 2016
SHORT-TERM BENEFITS
POST-
EMPLOYMENT
CASH SALARY
AND FEES
$
NON-
MONETARY
BENEFITS
$
109,589
73,059
83,544
49,106
2,500
24,917
2,283
436,468
151,145
180,739
-
-
-
-
-
-
-
70,343
-
11,042
SUPER-
ANNUATION
$
10,411
6,941
-
-
-
-
217
19,308
-
18,219
LONG-TERM
EMPLOYEE
BENEFITS
ANNUAL AND
LONG SERVICE
LEAVE
$
-
-
-
-
-
-
-
SHARE-BASED
PAYMENTS
OPTIONS
$
45,867
-
-
-
-
-
-
70,395
-
14,343
9,402
-
26,712
TOTAL
$
165,867
80,000
83,544
49,106
2,500
-
2,500
605,916
151,145
251,055
NAME
Mr Graeme Kaufman
Mr Trevor Tappenden
Dr Errol De Souza
Dr Alan W Dunton 2
Mr David Wilson 3
Dr Jonathan Lim1
Mr Peter Turner 3
Dr Deborah Rathjen
Dr José Iglesias 4
Ms Melanie Young
29
DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL – 2016 CONT.
SHORT-TERM BENEFITS
POST-
EMPLOYMENT
CASH SALARY
AND FEES
$
308,559
280,692
351,985
NON-
MONETARY
BENEFITS
$
5,917
-
-
SUPER-
ANNUATION
$
16,461
19,308
-
LONG-TERM
EMPLOYEE
BENEFITS
ANNUAL AND
LONG SERVICE
LEAVE
$
19,347
21,702
5,384
SHARE-BASED
PAYMENTS
OPTIONS
$
10,211
10,211
3,391
TOTAL
$
360,495
331,913
360,760
2,054,586
87,302
90,865
131,171
118,258
2,482,182
NAME
Dr Jens Mikkelsen
Mr Jack Moschakis
Mr Anthony Colasin 5
1 Dr Jonathan Lim retired 18 November 2015.
2 Dr Alan Dunton was appointed 29 September 2015 and retired 4 July 2016.
3 Mr David Wilson and Mr Peter Turner were appointed 16 June 2016.
4 Dr José Iglesias’ remuneration package is in Canadian dollars and the above has been translated into Australian dollars.
Dr Iglesias ceased full time employment 15 October 2015, retained under consulting agreement.
5 Mr Anthony Colasin commenced 1 August 2015. Mr Colasin’s remuneration package is in United States dollars and the above has
been translated into Australian dollars.
5. Key Terms of Service Agreements
Remuneration and other terms of employment for the Chief
Executive Officer and Managing Director and the other executive
KMP are formalised in service agreements. Major provisions
of the agreements relating to remuneration are set out below:
• Payment of termination benefit on early termination by the
employer without cause equal to six months’ salary. In the
event of redundancy, purchase or merger of Bionomics by
a third party resulting in a material diminution in duties, six
months’ salary will be paid.
Dr Deborah Rathjen, Chief Executive Officer and Managing Director
• Term of agreement – 5 years commencing 15 August 2015.
• Total remuneration package, to be reviewed annually by
the Board.
• Payment of termination benefit on early termination by the
employer without cause equal to six months’ salary. In the
event of redundancy, purchase or merger of Bionomics by
a third party resulting in a material diminution in duties, an
additional six months’ salary will be paid.
Ms Melanie Young, Chief Financial Officer
• Term of agreement – Until 19 May 2017.
• Total remuneration package to be reviewed annually by
the Chief Executive Officer and Managing Director and
approved by the Board.
Mr Anthony Colasin, Chief Business Officer
• Term of agreement - open commencing 1 August 2015
• Total remuneration package to be reviewed annually by
the Chief Executive Officer and Managing Director and
approved by the Board.
• Ceased employment on 6 June 2017 with the closure of the
San Diego office. Termination effective 18 July 2017.
Mr Stephen Birrell, Interim Chief Financial Officer
• Term of agreement - from 22 May 2017 to 10 August 2017
(otherwise employed as Group Financial Controller).
• Total Remuneration package increased for this period.
• Payment of termination benefit on early termination by the
employer without cause equal to three months’ salary.
Dr Jens Mikkelsen, Chief Scientific Officer
• Term of agreement - open - converted to Consultancy
Agreement during the year.
• Part-time Consulting services ongoing.
Share-based Payments
Share-based payment benefits are provided to employees
via the Bionomics ESOP and the Bionomics Employee
Share Plan.
Mr Jack Moschakis, Legal Counsel and Company Secretary
• Term of agreement – open, commencing 4 May 2015.
• Total remuneration package to be reviewed annually by
the Chief Executive Officer and Managing Director and
approved by the Board.
The market value of shares issued to employees for no cash
consideration under the Employee Share Plan is recognised as
an employee benefits expense with a corresponding increase
in equity when the employees become unconditionally entitled
to the shares.
30
DIRECTORS’ REPORT
Share-based Payments cont.
The Bionomics ESOP and ESP were approved by the Board
and Shareholders in 2014. Employees eligible to participate
in the plan are those who have been a full-time or part-time
employee of the Group for a period of not less than six months
or a Director of the Company.
Options are granted under the plan for no consideration
and vest equally over five years, provided a person remains
employed subject to good leaver provisions (death,
retrenchment or retirement).
The amounts disclosed as remuneration relating to options
are the assessed fair values at grant date of those options
allocated equally over the period from grant date to vesting
date. Fair values at grant date are determined using a Black-
Scholes option pricing model that takes into account the
exercise price, the term of the option, the vesting criteria,
the impact of dilution, the share price at grant date, expected
price volatility of the underlying share, the expected dividend
yield and the risk-free interest rate for the term of the option.
Incentive options are issued at the discretion of the Board
and vest immediately. There are no subsequent performance
conditions attached to the options. The incentive payable
to each executive is determined by the Board based on the
CEO’s recommendation. The incentive calculation is based
50% on the Company meeting corporate objectives and 50%
on the achievement of individual annual KPIs. The Company’s
assessment of milestone performance achievements are
outlined in 3 above. The executive’s KPIs are established with
reference to their contribution to achieving the Company’s
overall objectives.
The terms and conditions of each grant of options affecting
remuneration of Directors and other KMP in this or future
reporting periods are as follows:
GRANT DATE
EXPIRY DATE
Granted in prior periods
November 2008
November 2017
November 2011
December 2012
December 2012
March 2013
December 2013
October 2014
December 2014
August 2016
August 2017
December 2018
December 2019
December 2020
December 2021
December 2022
December 2017
March 2019
March 2020
March 2021
March 2022
March 2023
December 2018
December 2018
December 2020
December 2021
December 2022
October 2019
December 2019
REVISED EXERCISE
PRICE
FAIR VALUE PER
OPTION AT GRANT
DATE
VESTING DATE
$0.2976
$0.3692
$0.9186
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
$0.2846
$0.4176
$0.4176
$0.4176
$0.4176
$0.4176
$0.3301
$0.7224
$0.7224
$0.7224
$0.7224
$0.5643
$0.5643
$0.1591
$0.1419
$0.0475
$0.1751
$0.1751
$0.1751
$0.1751
$0.1751
$0.1614
$0.2001
$0.2001
$0.2001
$0.2001
$0.2001
$0.4647
$0.3291
$0.3291
$0.3291
$0.3291
$0.3523
$0.2705
05-Nov-12
07-Aug-11
15-Aug-12
11-Dec-13
11-Dec-14
11-Dec-15
11-Dec-16
11-Dec-17
11-Dec-12
19-Mar-14
19-Mar-15
19-Mar-16
19-Mar-17
19-Mar-18
17-Dec-13
11-Dec-13
11-Dec-15
11-Dec-16
11-Dec-17
15-Oct-14
04-Dec-14
31
GRANT DATE
EXPIRY DATE
REVISED EXERCISE
PRICE
FAIR VALUE PER
OPTION AT GRANT
DATE
VESTING DATE
Granted in current period
December 2015
December 2015 cont.
May 2016
November 2016
December 2021
December 2022
December 2023
December 2024
December 2025
December 2020
December 2021
December 2022
December 2023
December 2024
December 2025
May 2022
May 2023
May 2024
May 2025
May 2026
November 2022
November 2023
November 2024
November 2025
November 2026
November 2022
November 2023
November 2024
November 2025
November 2026
November 2022
November 2023
November 2024
November 2025
$0.5389
$0.5389
$0.5389
$0.5389
$0.5389
$0.4211
$0.5102
$0.5102
$0.5102
$0.5102
$0.5102
$0.3200
$0.3200
$0.3200
$0.3200
$0.3200
$0.2613
$0.2613
$0.2613
$0.2613
$0.2613
$0.3130
$0.3130
$0.3130
$0.3130
$0.3130
$0.6000
$0.6000
$0.6000
$0.6000
$0.1502
$0.1502
$0.1502
$0.1502
$0.1502
$0.1567
$0.1617
$0.1617
$0.1617
$0.1617
$0.1617
$0.1841
$0.1841
$0.1841
$0.1841
$0.1841
$0.2505
$0.2621
$0.2721
$0.2810
$0.2890
$0.2504
$0.2721
$0.2716
$0.2804
$0.2804
$0.1873
$0.2046
$0.2198
$0.2333
24-Dec-16
24-Dec-17
24-Dec-18
24-Dec-19
24-Dec-20
24-Dec-15
30-Dec-16
30-Dec-17
30-Dec-18
30-Dec-19
30-Dec-20
06-May-17
06-May-18
06-May-19
06-May-20
06-May-21
28-Nov-17
28-Nov-18
28-Nov-19
28-Nov-20
28-Nov-21
28-Nov-17
28-Nov-18
28-Nov-19
28-Nov-20
28-Nov-21
28-Nov-17
28-Nov-18
28-Nov-19
28-Nov-20
Options granted under the plan carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary
share of Bionomics.
32
DIRECTORS’ REPORT
During the year, and since the end of the year to the date of this report, no incentive options were issued to KMP. The following
Directors received incentive options following approval of shareholders;
NAME
NUMBER
GRANTED
DATE
GRANTED
TOTAL FAIR
VALUE *
$
NUMBER
VESTED
% OF
GRANT
VESTED
% OF
GRANT
FORFEITED
Dr Errol De Souza
500,000
28 Nov 2016
Dr Deborah Rathjen
1,000,000
28 Nov 2016
Mr Peter Turner
Mr David Wilson
Mr Alan Fisher
500,000
28 Nov 2016
500,000
28 Nov 2016
500,000
28 Nov 2016
135,470
89,166
130,170
130,170
135,470
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
* Dependent on the date the Options were issued and the exercise price.
During the year, the following key management personnel exercised options that were granted to them as part of their
compensation.
NAME
Dr Errol De Souza
Mr Trevor Tappenden
NUMBER OF OPTIONS
EXERCISED
NUMBER OF
ORDINARY SHARES
ISSUED
AMOUNT PAID
$
AMOUNT UNPAID
$
100,000
100,000
100,000
100,000
29,760
29,760
-
-
Fully Paid Ordinary Shares of Bionomics Limited
BALANCE AT
1 JULY 2016
NUMBER
GRANTED
AS COMP-
ENSATION
NUMBER
RECEIVED
ON EXERCISE
OF OPTIONS
NUMBER
NET OTHER
CHANGE
NUMBER
BALANCE AT
30 JUNE 2017
NUMBER
BALANCE
HELD
NOMINALLY
NUMBER
NAME
Mr Graeme Kaufman
Mr Trevor Tappenden
Dr Errol De Souza
Dr Alan W Dunton
Mr Peter Turner
Mr David Wilson
178,750
379,924
166,698
-
-
-
Dr Deborah Rathjen
2,385,901
Mr Alan Fisher
Mr Jack Moschakis
Dr Jens Mikkelsen
Mr Anthony Colasin
Ms Melanie Young
-
-
-
-
76,549
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
100,000
-
-
-
-
-
-
-
-
-
-
(330,000)
-
-
100,000
200,000
100,000
-
-
-
-
178,750
49,924
266,698
-
100,000
-
-
-
-
-
-
200,000
1,485,901
1,000,000
-
-
-
-
-
-
-
-
-
12,500
89,049
Share options of Bionomics Limited
NAME
Mr Graeme Kaufman
Mr Trevor Tappenden
Dr Errol De Souza
Dr Alan W Dunton
Mr Peter Turner
Mr David Wilson
BALANCE
AT 1 JULY
2016
NUMBER
1,000,000
100,000
200,000
500,000
-
-
33
GRANTED
AS
COMPEN-
SATION
NUMBER
EXERCISED
NUMBER
NET OTHER
CHANGE
NUMBER
BALANCE
AT 30 JUNE
NUMBER
BALANCE
VESTED
AND
EXERCIS-
ABLE AT 30
JUNE 2017
NUMBER
OPTIONS
VESTED
DURING
YEAR
NUMBER
-
-
-
(100,000)
500,000
(100,000)
-
500,000
500,000
1,000,000
900,000
100,000
-
-
-
-
-
-
-
600,000
500,000
500,000
500,000
-
100,000
100,000
-
-
-
-
100,000
-
-
-
-
250,000
-
250,000
-
-
-
-
-
-
-
-
-
-
Dr Deborah Rathjen
2,180,000
1,000,000
Mr Alan Fisher
Mr Jack Moschakis
Dr Jens Mikkelsen
Mr Anthony Colasin
Ms Melanie Young
-
500,000
250,000
250,000
250,000
711,000
-
-
-
-
(925,000)
2,255,000
1,255,0006
-
-
(250,000)
500,000
250,000
-
-
250,000
(711,000)
-
-
-
-
-
-
6 Since the end of year to the date of this Report, 1,000,000 Options have lapsed and therefore the balance exercisable is 255,000
Options
All share options issued to KMP were made in accordance with
the provisions of the Employee Share Option Plan. The number
granted in the above table and in total during the year was
0.62% and 1.5% respectively of common shares outstanding.
During the financial year, 200,000 options were exercised by
KMP at a weighted average exercise price of $0.30 per option
for 200,000 ordinary shares in Bionomics Limited. No amounts
remain unpaid on the options exercised during the financial
year at year end.
Further details of the Employee Share Option Plan and of
share options granted during the 2017 and 2016 financial years
are contained in Note 22 to the financial statements.
Other Transactions with Directors and Other Key Management
Personnel
There were no other transactions with Directors or other KMP
during the financial year.
OTHER INFORMATION
Shares Under Option
Information relating to shares under option is set out in
section 4 of the Remuneration Report. The total number of
shares under option at 30 June 2017 was 11,139,740. This is
2.3% of common shares outstanding as at 30 June 2017.
Shares Issued on the Exercise of Options
432,120 ordinary shares of Bionomics were issued during the
year ended 30 June 2017 on the exercise of options granted
under the Bionomics ESOP.
Warrants
During the year the Company issued 16,082,988 warrants
at an exercise price of $0.5938, being the second tranche in
connection with a private placement to US equity holders.
These warrants are exercisable at the discretion of the holder
and exchangeable for 16,082,988 ordinary shares.
The Company issued 24,124,484 warrants in December
2015 being the first tranche in connection with the private
placement to US equity holders, exchangeable for 24,124,484
ordinary shares at a fixed price of $0.5938.
External Auditor
Deloitte Touche Tohmatsu continues in office in accordance
with section 327B of the Corporations Act 2001.
A copy of the auditors’ independence declaration as required
under section 307C of the Corporations Act 2001 is set out on
page 35.
This Directors’ Report is signed in accordance with a
resolution of Directors made pursuant to Section 298(2) of the
Corporations Act 2001.
Errol De Souza
Chairman
Deborah Rathjen
Chief Executive Officer and
Managing Director
16 August 2017
16 August 2017
34
DIRECTORS’ REPORT
The company previously issued 988,843 warrants
exchangeable for 988,843 ordinary shares at a fixed price
(345,232 at $0.5288 and 643,611 at $0.54) in connection with a
USD Loan or a lower number of shares for nil consideration,
with the number of shares calculated on the basis of a formula
which takes into account the movement in the share price of
the Company from the date of issue to date of exercise of the
warrant.
Insurance of Officers
During the financial year, the Company paid a premium to
insure the Directors and Officers (D&O) of the Company. Under
the terms of this policy the premium paid by the Company is
not permitted to be disclosed.
The liabilities insured are legal costs that may be incurred in
defending civil or criminal proceedings that may be brought
against the D&O in their capacity as D&O of the Company, and
any other payments arising from liabilities incurred by the
D&O in connection with such proceedings, other than where
such liabilities arise out of conduct involving a wilful breach
of duty by the D&O or the improper use by the D&O of their
position or of information to gain advantage for themselves or
someone else or to cause detriment to the Company.
It is not possible to apportion the premium between amounts
relating to the insurance against legal costs and those relating
to other liabilities.
The Company has not otherwise, during or since the end
of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of the
Company or of any related body corporate against a liability
incurred as such an officer or auditor.
Non-Audit Services
The Company may decide to employ the external auditor on
assignments additional to their statutory audit duties where
the external auditor’s expertise and experience with the Group
are important.
Details of the amounts paid to the external auditor for audit
and non-audit services provided during the year are set out in
Note 28 to the financial statements.
The Board has considered the position and, in accordance
with the advice received from the Audit and Risk Management
Committee, is satisfied that the provision of the non-
audit services is compatible with the general standard
of independence for external auditors imposed by the
Corporations Act 2001.
35
AUDITOR’S INDEPENDENCE DECLARATION
36
ANNUAL CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
TABLE OF CONTENTS // FINANCIAL STATEMENTS
The financial statements cover both Bionomics Limited
(“Bionomics”) as an individual entity (Note 32) and the
Group consisting of Bionomics and its subsidiaries. A
description of the nature of the Group’s operations and
its principal activities is included throughout the Annual
Report and the Directors’ Report. The financial statements
are presented in Australian dollars.
Bionomics is a company limited by shares, incorporated
and domiciled in Australia. It is listed on the Australian
Securities Exchange (ASX) (ASX:BNO) and its registered
office is 31 Dalgleish Street, Thebarton, SA 5031.
Through the internet, we have ensured that our corporate
reporting is timely, complete and available globally
at minimum cost to the company. All press releases,
financial statements and other information are available
on our website www.bionomics.com.au.
37 CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
38 CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
39 CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
40 CONSOLIDATED STATEMENT
OF CASH FLOWS
41 NOTES TO THE FINANCIAL
STATEMENTS
76 DIRECTORS’
DECLARATION
77
INDEPENDENT
AUDIT REPORT
37
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE
30 JUNE 2017
$
30 JUNE 2016
$
CONTINUING OPERATIONS
Revenue
Other income
EXPENSES
Research and development expenses
Administration expenses
Occupancy expenses
Compliance expenses
Gain/(loss) on disposal of assets
Finance expenses
LOSS BEFORE TAX
Income tax (expense)/benefit
LOSS AFTER TAX
Other comprehensive income, net of income tax
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations
5
5
6
7
18,606,356
9,645,501
8,143,288
13,584,627
(24,223,275)
(4,851,640)
(2,594,778)
(838,976)
-
(1,970,227)
(6,227,039)
(522,576)
(6,749,615)
(114,093)
(24,770,876)
(7,526,831)
(3,033,209)
(1,686,703)
(140,159)
(1,894,255)
(17,324,118)
731,708
(16,592,410)
968,418
Total Comprehensive Loss for the Year
(6,863,708)
(15,623,992)
LOSS PER SHARE FROM CONTINUING OPERATIONS
Basic Loss per share
Diluted Loss per share
Note
30
30
2017
($0.01)
(1 cent)
($0.01)
(1 cent)
2016
($0.03)
(3 cents)
($0.03)
(3 cents)
THE ABOVE CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME SHOULD BE READ IN CONJUNCTION WITH THE ACCOMPANYING NOTES.
38
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
NOTE
30 JUNE 2017
$
30 JUNE 2016
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Research and development incentives receivable
Other assets
Total Current Assets
NON-CURRENT ASSETS
Property, plant and equipment
Goodwill
Other intangible assets
Other financial assets
Total Non-Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Provisions
Other financial liabilities
Other liabilities
Total Current Liabilities
NON-CURRENT LIABILITIES
Other payables
Borrowings
Provisions
Deferred tax liabilities
Contingent consideration
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Equity Attributable to Owners of the Company
8
10
9
11
12
14
15
16
9
17
18
19
21
20
17
18
19
7
33
22
23
42,873,656
1,354,809
550,000
425,742
8,537,919
736,295
54,478,421
2,617,675
12,264,122
14,330,844
384,000
29,596,641
84,075,062
3,672,573
8,495,873
1,594,410
106,441
19,509
45,450,382
1,401,594
550,000
438,856
9,601,355
643,582
58,085,769
2,835,066
12,441,333
16,062,954
384,000
31,723,353
89,809,122
5,855,143
2,731,837
1,590,979
1,142,320
65,811
13,888,806
11,386,090
341,703
10,013,645
47,545
4,771,162
14,558,628
29,732,683
43,621,489
40,453,573
134,536,428
14,112,877
(108,195,732)
40,453,573
144,938
18,436,717
61,928
5,127,277
10,489,438
34,260,298
45,646,388
44,162,734
134,392,813
11,216,038
(101,446,117)
44,162,734
THE ABOVE CONSOLIDATED STATEMENT OF FINANCIAL POSITION SHOULD BE READ IN CONJUNCTION WITH THE ACCOMPANYING NOTES.
39
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$
SHARE-BASED
PAYMENTS
RESERVE
$
ISSUED
CAPITAL
$
ACCUMU-
LATED LOSSES
$
TOTAL EQUITY
$
BALANCE AT 30 JUNE 2015
Adjustment – Note 2 (iii)
111,990,220
4,206,214
2,336,439
(86,567,048)
31,965,825
-
-
-
1,713,341
1,713,341
RESTATED BALANCE AS 30 JUNE 2015
111,990,220
4,206,214
2,336,439
(84,853,707)
33,679,166
Loss for the period
Exchange differences on translation of
foreign operations
Total Comprehensive Income
Recognition of share-based payments
Issue of ordinary shares and warrants,
net of transaction costs
Issue of ordinary shares under
Employee Share Option Plan
-
-
-
-
22,113,875
288,718
-
968,418
968,418
-
-
-
-
-
-
399,913
3,305,054
-
(16,592,410)
(16,592,410)
-
968,418
(16,592,410)
(15,623,992)
-
-
-
399,913
25,418,929
288,718
BALANCE AT 30 JUNE 2016
134,392,813
5,174,632
6,041,406
(101,446,117)
44,162,734
Loss for the period
Exchange differences on translation
of foreign operations
Total Comprehensive Income
Recognition of share-based payments
Issue of warrants, net of transaction
costs (Note 21)
Issue of ordinary shares under
Employee Share Option Plan
-
-
-
-
-
143,615
-
(114,093)
(114,093)
-
-
-
-
-
-
503,652
2,507,280
-
(6,749,615)
(6,749,615)
-
(114,093)
(6,749,615)
(6,863,708)
-
-
-
503,652
2,507,280
143,615
BALANCE AT 30 JUNE 2017
134,536,428
5,060,539
9,052,338
(108,195,732)
40,453,573
THE ABOVE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY SHOULD BE READ IN CONJUNCTION WITH THE ACCOMPANYING NOTES.
40
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE
CASH FLOWS FROM OPERATING ACTIVITIES
Research and Development Incentives received
Receipts from customers
Payments to suppliers and employees
Tax paid
Interest paid
Net Cash (Used In)/Generated By Operating Activities
29(b)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Payments for purchases of property, plant and equipment
Proceeds from disposals
Net Cash Generated By Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of borrowings
Proceeds from borrowings
Net proceeds from share issues
Net Cash Generated By/(Used In) Financing Activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on the balance of cash held in
foreign currencies
2017
$
9,505,189
19,907,614
(28,836,986)
(65,677)
(1,949,982)
(1,439,842)
1,201,451
(247,511)
-
953,940
(2,324,659)
100,000
143,615
(2,081,044)
(2,566,946)
45,450,382
(9,780)
2016
$
9,491,378
8,079,976
(31,229,508)
-
(1,701,400)
(15,359,554)
1,232,377
(196,707)
68,586
1,104,256
(808,025)
5,787,968
28,222,099
33,202,042
18,946,744
26,512,533
(8,895)
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
29(a)
42,873,656
45,450,382
THE ABOVE CONSOLIDATED STATEMENT OF CASH FLOWS SHOULD BE READ IN CONJUNCTION WITH THE ACCOMPANYING NOTES.
41
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
TABLE OF CONTENTS
42
42
50
50
52
52
53
55
55
55
56
56
56
57
57
58
59
NOTE 1: GENERAL INFORMATION
NOTE 2: SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
NOTE 3: CRITICAL ACCOUNTING ESTIMATES
AND JUDGMENTS
NOTE 4: SEGMENT INFORMATION
NOTE 5: REVENUE AND OTHER INCOME
NOTE 6: EXPENSES
NOTE 7: INCOME TAXES
NOTE 8: CASH AND CASH EQUIVALENTS
NOTE 9: OTHER FINANCIAL ASSETS
NOTE 10: TRADE AND OTHER RECEIVABLES
NOTE 11: INVENTORIES
NOTE 12: OTHER ASSETS
NOTE 13: SUBSIDIARIES
NOTE 14: PROPERTY, PLANT AND EQUIPMENT
NOTE 15: GOODWILL
NOTE 16: OTHER INTANGIBLE ASSETS
NOTE 17: TRADE AND OTHER PAYABLES
59
60
60
60
61
66
66
70
70
71
71
72
72
73
74
74
75
NOTE 18: BORROWINGS
NOTE 19: PROVISIONS
NOTE 20: OTHER LIABILITIES
NOTE 21: OTHER FINANCIAL LIABILITIES
NOTE 22: ISSUED CAPITAL
NOTE 23: RESERVES
NOTE 24: FINANCIAL INSTRUMENTS
NOTE 25: KEY MANAGEMENT PERSONNEL
COMPENSATION
NOTE 26: COMMITMENTS FOR EXPENDITURE
NOTE 27: EVENTS OCCURRING AFTER
REPORTING DATE
NOTE 28: REMUNERATION OF AUDITORS
NOTE 29: CASH FLOW INFORMATION
NOTE 30: LOSS PER SHARE
NOTE 31: RELATED PARTY TRANSACTIONS
NOTE 32: PARENT ENTITY INFORMATION
NOTE 33: CONTINGENT CONSIDERATION
NOTE 34: CONTINGENT LIABILITIES
42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 1: GENERAL INFORMATION
Bionomics Limited (the Company) is a listed public company
incorporated in Australia. The address of its registered office and
principal place of business is as follows:
31 Dalgleish Street
Thebarton, South Australia, 5031
Tel: +61 (0)8 8354 6100
Principal Activities
The principal activities of the Company and its controlled
entities (the Group) during the period include the discovery and
development of novel drug candidates focused on the treatment of
serious central nervous system disorders and cancer by leveraging
proprietary platform technologies.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This financial report includes the consolidated financial statements
and notes of the Group.
(i) Statement of Compliance
These financial statements are general purpose financial
statements which have been prepared in accordance with
the Corporations Act 2001, Accounting Standards and
Interpretations, and comply with other requirements of the law.
The financial statements comprise the consolidated financial
statements of the Group. For the purposes of preparing the
consolidated financial statements, the Company is a for-
profit entity.
Accounting Standards include Australian Accounting Standards
(AASB). Compliance with AASB ensures that the financial
statements and notes of the Company and the Group comply
with International Financial Reporting Standards (IFRS).
The financial statements were authorised for issue by the
Directors on 16 August 2017
(ii) Basis of Preparation
The consolidated financial statements have been prepared
on the basis of historical cost, except for certain non-current
assets and financial instruments that are measured at revalued
amounts or fair values at the end of each reporting period, as
explained in the accounting policies below. Historical cost is
generally based on the fair values of the consideration given in
exchange for assets. All amounts are presented in Australian
dollars unless otherwise noted.
Fair value is 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,
regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating
the fair value of an asset or a liability, the Group takes into
account the characteristics of the asset or liability if market
participants would take those characteristics into account
when pricing the asset or liability at measurement date. Fair
value for measurement and/or disclosure purposes in these
consolidated financial statements is determined on such a
basis, except for share-based payment transactions that are
within the scope of AASB 2 (IFRS 2), leasing transactions that
are within the scope of AASB 117 (IAS 17), and measurements
that have some similarities to fair value but are not fair value,
such as net realizable value in AASB 2 (IFRS 2) or value in use
in AASB 136 (IAS 36).
In addition, for financial reporting purposes, fair value
measurements are categorised into Level 1, 2 or 3 based on
the degree to which inputs to the fair value measurements are
observable and the significance of the inputs to the fair value
measurement in its entirety, which are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity can
access at measurement date;
• Level 2 inputs are inputs, other than quoted prices included
within Level 1, that are observable for that asset or liability,
either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or
liability.
(iii) Change in accounting policy
Deferred tax associated with acquisition of intangibles as a
result of a business acquisition
The IFRS Interpretations Committee has issued an agenda
decision related to the expected manner of recovery of
intangible assets. The Committee was asked to clarify how
an entity determines the expected manner of recovery of an
intangible asset for deferred tax measurement purposes.
Previously the company measured deferred tax liabilities on
the assumption of the tax consequences that would arise solely
from the sale of the assets. Under its new policy, the Company
considers its expected manner of recovery.
The Company has implemented this guidance on a
retrospective basis as a change in accounting policy to AASB
112 Income Taxes. The impact of these changes was to increase
Goodwill by $1,799,104 at 1 July 2015 and 30 June 2016, reduce
accumulated losses by $1,713,341 at 1 July 2015 and $1,729,688
at 30 June 2016 and increase deferred tax liabilities by $85,763
at 1 July 2015 and $69,416 at 30 June 2016.
(iv) Application of New and Revised Accounting Standards
In the current year, the Group has adopted all of the new and
revised Standards and Interpretations issued by the Australian
Accounting Standards Board (AASB) that are relevant to its
operations and effective for the current annual reporting
period. The adoption of these new and revised Standards and
Interpretations has resulted in no significant changes to the
consolidated entity’s accounting policies.
43
New and revised Australian Accounting Standards in issue
but not yet effective
At the date of authorisation of the financial statements, the
Group has not applied the following new and revised Australian
Accounting Standards, Interpretations and amendments that have
been issued but are not yet effective.
Standards and Interpretations in Issue Not Yet Adopted
At the date of authorisation of the financial report, a number of
Standards and Interpretations were in issue but not yet effective.
STANDARD
AASB 9 Financial Instruments
AASB 15 Revenue from Contracts with Customers, 2014-5 Amendments to Australian
Accounting Standards arising from AASB 15, 2015-8 Amendments to Australian
Accounting Standards – Effective date of AASB 15, 2016-3 Amendments to Australian
Accounting Standards Clarifications to AASB 15
EFFECTIVE FOR
ANNUAL REPORTING
PERIODS BEGINNING
ON OR AFTER
EXPECTED TO BE
INITIALLY APPLIED IN
THE FINANCIAL YEAR
ENDING
1 January 2018
30 June 2019
1 January 2018
30 June 2019
AASB 16 ‘Leases’
1 January 2019
30 June 2020
Impact of New and Revised Requirements
Management is currently assessing the potential impact of the
following standards:
AASB 9 ‘Financial Instruments’ (December 2009), and the
relevant amending standards
AASB 9 applies to annual periods beginning on or after 1 January
2018. The Directors of the Company anticipate that the application
of AASB 9 in the future is not anticipated to have a material impact
on amounts reported, based on current transactions, in respect of
the Group’s financial assets and financial liabilities, but will affect
disclosures made in the Group’s consolidated financial statements.
AASB 15 Revenue from Contracts with Customers, AASB 2014-5
Amendments to Australian Accounting Standards arising from
AASB 15, AASB 2015-8 Amendments to Australian Accounting
Standards – Effective Date of AASB 15, and AASB 2016-3
Amendments to Australian Accounting Standards –Clarifications
to AASB 15
AASB 15 applies to annual periods beginning on or after 1 January
2018. The Directors of the Company anticipate that the application
of AASB 15 in the future will not have a material impact on the
amounts reported, based on current transactions, but will affect
disclosures made in the Group’s consolidated financial statements.
AASB 16 ‘Leases’
AASB 16 provides a comprehensive model for the identification of
lease arrangements and their treatment in the financial statements
of both lessees and lessors.
The accounting model for lessees will require lessees to recognise
all leases on balance sheet, except for short-term leases and
leases of low value assets.
AASB 16 applies to annual periods beginning on or after 1
January 2019. The Directors of the Company anticipate that the
application of AASB 16 in the future may have a material impact
on the amounts reported and disclosures made in the Group’s
consolidated financial statements. However, it is not practicable
to provide a reasonable estimate of the effect of AASB 16 until the
Group performs a detailed review.
(v) Accounting Policies
The following significant accounting policies have been adopted
in the preparation and presentation of the financial report:
(a) Basis of Consolidation
The consolidated financial statements incorporate the
financial statements of the Company and entities controlled
by the Company and its subsidiaries. Control is achieved
when the Company:
• Has power over the investee;
•
Is exposed, or has rights, to variable returns from its
involvement with the investee; and
• Has the ability to use its power to affect its returns.
Consolidation of a subsidiary begins when the Company
obtains control over the subsidiary and ceases when the
Company loses control of the subsidiary. Specifically,
income and expenses of a subsidiary acquired or disposed
of during the year are included in the consolidated
statement of profit or loss and other comprehensive income
from the date the Company gains control until the date
when the Company ceases to control the subsidiary.
When necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies
into line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income,
expenses and cash flows relating to transactions
between members of the Group are eliminated in full on
consolidation.
44
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
(b) Foreign Currencies
The individual financial statements of each group entity
are presented in the currency of the primary economic
environment in which the entity operates (its functional
currency). For the purpose of the consolidated financial
statements, the results and financial position of each group
entity are expressed in Australian dollars (‘$’), which is the
functional currency of the Company and the presentation
currency for the consolidated financial statements.
In preparing the financial statements of each individual
group entity, transactions in currencies other than the
entity’s functional currency (foreign currencies) are
recognised at the rates of exchange prevailing at the dates
of the transactions. At the end of each reporting period,
monetary items denominated in foreign currencies are
retranslated at the rates prevailing at that date. Non-
monetary items carried at fair value that are denominated
in foreign currencies are retranslated at the rates
prevailing at the date when the fair value was determined.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised
in profit or loss in the period in which they arise except for
exchange differences on monetary items receivable from
or payable to a foreign operation for which settlement is
neither planned nor likely to occur (therefore forming part
of the net investment in the foreign operation), which are
recognised initially in other comprehensive income and
reclassified from equity to profit or loss on repayment of
the monetary items.
For the purpose of presenting these consolidated financial
statements, the assets and liabilities of the Group’s foreign
operations are translated into Australian dollars using
exchange rates prevailing at the end of the reporting period.
Income and expense items are translated at the average
exchange rates for the period. Exchange differences
arising, if any, are recognised in other comprehensive
income and accumulated in equity.
Goodwill and fair value adjustments to identifiable assets
acquired and liabilities assumed through acquisition of a
foreign operation are treated as assets and liabilities of the
foreign operation and translated at the rate of exchange
prevailing at the end of each reporting period. Exchange
differences arising are recognised in other comprehensive
income and accumulated in equity.
agreements that comprise of up front payments in
connection with out-licensing activities and research
funding, milestone payments based on development
achieved by our collaborators, sales and royalties based
on net sales. For these agreements, the Group applies
revenue recognition criteria to the separately identifiable
components of a single transaction. The total arrangement
consideration is allocated to separately identifiable
components by reference to their fair values. Revenue for
the periods presented included license revenues, contract
services revenues, and rental income.
(i) License revenues in connection with out-licensing of
the Group’s patents and other intellectual property to
our collaborators are recognised when the following
criteria have been met:
• The Group has transferred to the buyer the significant
risks and rewards of ownership of the patents and
intellectual property, and
• The Group does not retain either the continuing
managerial involvement to the degree usually
associated with ownership or the effective control over
the patent and intellectual property.
Where the above criteria are not met, up-front payments
received in connection with out-licensing activities would
be deferred. All up-front license payments so far received
have been recognised upon receipt.
(ii) For milestone receipts the Group’s collaboration
partners may be obligated to make certain payments as
they achieve certain specified milestones in the further
development of the licensed property.
(iii) Contract service revenue relates to the provision of
scientific services for a fee and is recognised when
the services are rendered. The Group’s collaboration
agreements contemplate its involvement in the
ongoing research and development of its partnered
drug candidates, for which the Group is paid fees for
the services rendered. Revenue from such contracts
to provide services is recognised as services are
being rendered. In addition, the Group may enter into
separate arrangements to undertake certain contract
services work for a fee and such fees are recognised
by reference to the proportion of the total cost of
performing the services to the total fee.
(iv) Rental income is recognised on a straight line basis
over the term of the lease.
(c) Revenue Recognition
Revenue is recognised when the amounts of the revenue
can be measured reliably, it is probable that economic
benefits associated with the transaction will flow to the
entity and specific criteria related to the type of revenues
has been satisfied. The Group enters into collaboration
(d) Government Research and Development Incentives
Government grants, including Research and Development
incentives, are recognised at fair value where there is
reasonable assurance that the grant will be received and all
grant conditions will be met.
45
Grants relating to cost reimbursements are recognised as
other income in profit or loss in the period when the costs
were incurred or when the incentive meets the recognition
requirements (if later).
(e) Income Tax
Income tax expense represents the sum of the tax currently
payable and deferred tax.
Current Tax
The tax currently payable is based on taxable profit for
the year. Taxable profit differs from profit before tax as
reported in the consolidated statement of profit or loss and
other comprehensive income because of items of income
or expense that are taxable or deductible in other years
and items that are never taxable or deductible. The Group’s
current tax is calculated using tax rates that have been
enacted or substantively enacted by the end of the reporting
period.
Deferred Tax
Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities
in the consolidated financial statements and the
corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognised
for all taxable temporary differences. Deferred tax assets
are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable
profits will be available against which those deductible
temporary differences can be utilised. Such deferred tax
assets and liabilities are not recognised if the temporary
difference arises from the initial recognition (other than
in a business combination) of assets and liabilities in a
transaction that affects neither the taxable profit nor the
accounting profit. In addition, deferred tax liabilities are
not recognised if the temporary difference arises from the
initial recognition of goodwill.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset realised, based on tax rates
(and tax laws) that have been enacted or substantively
enacted by the end of the reporting period. The
measurement of deferred tax liabilities and assets reflects
the tax consequences that would follow from the manner in
which the Group expects, at the end of the reporting period,
to recover or settle the carrying amount of its assets and
liabilities.
Deferred tax liabilities and assets are offset when there
is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to
income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities
on a net basis.
Current and Deferred Tax for the Year
Current and deferred tax are recognised in profit or loss,
except when they relate to items that are recognised in
other comprehensive income or directly in equity, in which
case the current and deferred tax are also recognised
in other comprehensive income or directly in equity,
respectively. Where current tax or deferred tax arises
from the initial accounting for a business combination, the
tax effect is included in the accounting for the business
combination.
(i) Tax Consolidation Legislation
Bionomics and its wholly-owned Australian controlled
entities have implemented the tax consolidation
legislation effective 31 December 2005.
The head entity, Bionomics, and the controlled entities in
the tax consolidated group account for their own current
and deferred tax amounts. These tax amounts are
measured as if each entity in the tax consolidated group
continues to be a stand-alone taxpayer in its own right.
In addition to its own current and deferred tax amounts,
Bionomics also recognises the current tax liabilities (or
assets) and the deferred tax assets arising from unused
tax losses and unused tax credits assumed from
controlled entities in the tax consolidated group.
Assets or liabilities arising under tax funding
agreements with the tax consolidated entities are
recognised as amounts receivable from or payable to
other entities in the group.
Any difference between the amounts assumed and
amounts receivable or payable under the tax funding
agreement are recognised as a contribution to (or
distribution from) wholly-owned tax consolidated entities.
(f) Business Combinations
Acquisitions of businesses are accounted for using the
acquisition method. The consideration transferred in a
business combination is measured at fair value which is
calculated as the sum of the acquisition-date fair values of
assets transferred by the Group, liabilities incurred by the
Group to the former owners of the acquiree and the equity
instruments issued by the Group in exchange for control of
the acquiree. Acquisition-related costs are recognised in
profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and
the liabilities assumed are recognised at their fair value,
except that:
• Deferred tax assets or liabilities and assets or liabilities
related to employee benefit arrangements are
recognised and measured in accordance with AASB 112
(IAS 12) ‘Income Taxes’ and AASB 119 (IAS 19) ‘Employee
Benefits’ respectively;
46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
• Liabilities or equity instruments related to share-based
payment arrangements of the acquiree or share-based
payment arrangements of the Group entered into to
replace share-based payment arrangements of the
acquiree are measured in accordance with AASB 2 (IFRS
2) ‘Share-based Payment’ at the acquisition date; and
• Assets (or disposal groups) that are classified as held for
sale in accordance with AASB 5 (IFRS 5) ‘Non-current
Assets Held for Sale and Discontinued Operations’ are
measured in accordance with that Standard.
Goodwill is measured as the excess of the sum of the
consideration transferred, the amount of any non-
controlling interests in the acquiree, and the fair value of
the acquirer’s previously held equity interest in the acquiree
(if any) over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed. If,
after reassessment, the net of the acquisition-date amounts
of the identifiable assets acquired and liabilities assumed
exceeds the sum of the consideration transferred, the
amount of any non-controlling interests in the acquiree and
the fair value of the acquirer’s previously held interest in the
acquiree (if any), the excess is recognised immediately in
profit or loss as a gain on bargain purchase.
Where the consideration transferred by the Group in a
business combination includes assets or liabilities resulting
from a contingent consideration arrangement, the contingent
consideration is measured at its acquisition-date fair value.
Changes in the fair value of the contingent consideration
that qualify as measurement period adjustments are
adjusted retrospectively, with corresponding adjustments
against goodwill. Measurement period adjustments
are adjustments that arise from additional information
obtained during the ‘measurement period’ (which cannot
exceed one year from the acquisition date) about facts and
circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair
value of contingent consideration that do not qualify
as measurement period adjustments depends on how
the contingent consideration is classified. Contingent
consideration that is classified as equity is not remeasured
at subsequent reporting dates and its subsequent
settlement is accounted for within equity. Contingent
consideration that is classified as an asset or liability is
remeasured at subsequent reporting dates in accordance
with AASB 139 (IFRS 39), or AASB 137 (IFRS 37) ‘Provisions,
Contingent Liabilities and Contingent Assets’ respectively,
as appropriate, with the corresponding gain or loss being
recognised in profit or loss, respectively.
If the initial accounting for a business combination is
incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts
for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement
period (see above), or additional assets or liabilities are
recognised, to reflect new information obtained about facts
and circumstances that existed as of the acquisition date
that, if known, would have affected the amounts recognised
as of that date.
(g) Impairment of Tangible and Intangible Assets Other than
Goodwill
At the end of each reporting period, the Group reviews the
carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if
any). When it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the
recoverable amount of the cash generating unit to which
the asset belongs. When a reasonable and consistent basis
of allocation can be identified, corporate assets are also
allocated to individual cash generating units, or otherwise
they are allocated to the smallest group of cash generating
units for which a reasonable and consistent allocation basis
can be identified.
A CGU is the smallest identifiable group of assets that
generates cash flow that are largely independent of cash flows
from other assets or group of assets. The cash generating
units are defined as a research program that has the potential
to be commercialised at some point in the future. Achievement
of certain milestones within the research program will
determine when a CGU comes into existence.
Intangible assets with indefinite useful lives are tested for
impairment at least annually, and whenever there is an
indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs
to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the
risks specific to the asset for which the estimates of future
cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash generating unit) is
reduced to its recoverable amount. An impairment loss is
recognised immediately in profit or loss, unless the relevant
asset is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the
carrying amount of the asset (or cash generating unit) is
increased to the revised estimate of its recoverable amount,
but so that the increased carrying amount does not exceed
47
the carrying amount that would have been determined had
no impairment loss been recognised for the asset (or cash
generating unit) in prior years. A reversal of an impairment
loss is recognised immediately in profit or loss, unless the
relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a
revaluation increase.
(h) 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 and bank overdrafts. Bank
overdrafts are shown within borrowings in current liabilities
on the consolidated statement of financial position.
(i) Inventories
Consumables are stated at the lower of cost and net
realisable value.
(j) Property, Plant and Equipment
Land is stated at cost less any impairment losses if
applicable and is not depreciated.
Building, plant and equipment are stated at cost less
accumulated depreciation or accumulated impairment
losses, where applicable.
Depreciation is recognised so as to write off the cost of
assets less their residual values over their useful lives,
using the diminishing value or straight-line methods,
depending on the type of asset. The estimated useful lives,
residual values and depreciation method are reviewed at
the end of each reporting period.
The depreciation rates for each class of depreciable assets are:
• Buildings
• Plant and equipment
• Equipment under lease
25 years
20 – 40%
3 – 5 years
An item of property, plant and equipment is derecognised
upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any
gain or loss arising on the disposal or retirement of an
item of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying
amount of the asset and is recognised in profit or loss.
(k) Financial Assets
Financial assets are classified into the following
specified categories: ‘held-to-maturity’ investments and
‘receivables’. The classification depends on the nature and
purpose of the financial assets and is determined at the
time of initial recognition. All regular way purchases or
sales of financial assets are recognised and derecognised
on a trade date basis. Regular way purchases or sales are
purchases or sales of financial assets that require delivery
of assets within the time frame established by regulation or
convention in the marketplace.
(i) Held-to-Maturity Investments
Bills of exchange and debentures with fixed or
determinable payments and fixed maturity dates that the
Group has the positive intent and ability to hold to maturity
are classified as held-to-maturity investments. Held-
to-maturity investments are measured at amortised cost
using the effective interest method less any impairment.
(ii) Receivables
Trade receivables and other receivables that have fixed
or determinable payments that are not quoted in an
active market are classified as ‘receivables’.
Interest income is recognised by applying the effective
interest rate, except for short term receivables when
the effect of discounting is immaterial.
(iii) Impairment of Financial Assets
Financial assets, other than those at fair value through
profit or loss, are assessed for indicators of impairment
at each reporting date. Financial assets are impaired
where there is objective evidence that as a result of one
or more events that occurred after the initial recognition
of the financial asset the estimated future cash flows of
the investment have been impacted.
For financial assets carried at amortised cost, the
amount of the impairment 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.
The carrying amount of financial assets including
uncollectible trade receivables is reduced by the
impairment loss through the use of an allowance
account. Subsequent recoveries of amounts previously
written off are credited against the allowance account.
Changes in the carrying amount of the allowance
account are recognised in profit or loss.
(l) Intangible Assets
(i) Intellectual Property
Acquired intellectual property is recognised as an
asset at cost and amortised over its useful life. There is
currently no internally generated intellectual property
that has been capitalised. Intellectual property with a
finite life is amortised on a straight line basis over that
life. Intellectual property with an indefinite useful life
is subjected to an annual impairment review. There is
currently no intellectual property with an indefinite life.
48
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
Current useful life of all existing intellectual property is
in the range of 5 to 20 years.
The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at each balance date.
(n) Trade and Other Payables
These amounts represent liabilities for goods and services
provided to the Group prior to the end of financial year
which are unpaid. The amounts are unsecured and are
usually paid within 45 days of recognition.
(ii) Goodwill
Goodwill arising on an acquisition of a business
is carried at cost as established at the date of the
acquisition of the business (see Note 2(f) above) less
accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is
allocated to each of the Group’s cash generating units
(or groups of cash generating units) that is expected to
benefit from the synergies of the combination.
A CGU to which goodwill has been allocated is tested
for impairment annually, or more frequently when there
is an indication that the unit may be impaired. If the
recoverable amount of the cash generating unit is less
than its carrying amount, the impairment loss is allocated
first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the
unit pro rata based on the carrying amount of each asset
in the unit. Any impairment loss for goodwill is recognised
directly in profit or loss. An impairment loss recognised
for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash generating unit, the
attributable amount of goodwill is included in the
determination of the profit or loss on disposal.
(iii) Intangible Assets Acquired in a Business Combination
Intangible assets acquired in a business combination
and recognised separately from goodwill are initially
recognised at their fair value at the acquisition date
(which is regarded as their cost).
Subsequent to initial recognition, intangible assets
acquired in a business combination are reported at
cost less accumulated amortisation and accumulated
impairment losses, on the same basis as intangible
assets that are acquired separately.
(m) Research and Development
Expenditure on research activities, undertaken with the
prospect of obtaining new scientific or technical knowledge
and understanding, is recognised as an expense when it
is incurred. Expenditure on development activities are
capitalised only when technical feasibility studies identify
that the project will deliver future economic benefits and
these benefits can be measured reliably. Development
costs have a finite life and are amortised on a systematic
basis matched to the future economic benefits over the
useful life of the project. At year end there are currently no
capitalised development costs.
(o) Employee Benefits
(i) Short-term and Long-term Employee Benefits
A liability is recognised for benefits accruing to
employees in respect of wages and salaries, annual
leave, long service leave and sick leave when it is
probable that settlement will be required and they
are capable of being measured reliably. Liabilities
recognised in respect of short-term employee
benefits, are measured at their nominal values using
the remuneration rate expected to apply at the time of
settlement. Liabilities recognised in respect of long
term employee benefits are measured as the present
value of the estimated future cash outflows to be
made by the Group in respect of services provided by
employees up to reporting date.
(ii) Retirement Benefits Costs
Retirement benefits are contributions made to
employee superannuation funds and are charged as
expenses when incurred. These contributions are made
to external superannuation funds and are not defined
benefits programs. Consequently, there is no exposure
to market movements on employee superannuation
liabilities or entitlements.
(iii) Share-based Payments
Share-based compensation benefits are provided to
employees via the Bionomics Employee Share Option
Plan and an Employee Share Plan.
The fair value of shares issued to employees for no
cash consideration under the Employee Share Plan
is recognised as an employee benefits expense with
a corresponding increase in equity. The fair value is
measured at grant date and recognised on a straight
line basis over the vesting period, based on the Group’s
estimate of equity instruments that will eventually vest.
The Employee Share Plan is currently not active.
The disclosure in the Remuneration Reports and Note
22 relates to the ESOP. The Bionomics ESOP was
approved by the Board and shareholders in 2014. Staff
eligible to participate in the plan are those who have
been a full-time or part-time employee of the Group
for a period of not less than six months or a director
of the Group. Options are granted under the plan for
no consideration and vest equally over five years,
unless they are bonus options which vest immediately.
The amounts disclosed as remuneration relating to
49
options are the assessed fair values at grant date of
those options allocated equally over the period from
grant date to vesting date. Fair values at grant date are
independently determined using a Black-Scholes option
pricing model that takes into account the exercise price,
the term of the option and the vesting criteria.
(p) Borrowings (Other Financial Liabilities)
(i) Warrants
Warrants issued by the Group in connection with
bank loans or issued capital are classified as either
financial liabilities or as equity in accordance with the
substance of the contractual arrangement. Where the
warrants do not meet the definition of equity, they are
initially measured at fair value with a corresponding
reduction to the associated borrowings if associated
with bank loans or as an allocation of proceeds received
if associated with a share issue. Subsequent to initial
recognition, the liability is fair valued until the warrant
is issued, with gains or losses recognised in the profit or
loss. See Note 21 for further details.
(ii) Other Borrowings
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of
the borrowings using the effective interest method.
(iii) Classification
Borrowings are classified as current liabilities unless
the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the balance
sheet date.
(q) Borrowing Costs
All borrowing costs are recognised in profit or loss in the
period in which they are incurred.
(r) Leases
Leases of property, plant and equipment where the Group
has substantially all the risks and rewards of ownership are
classified as finance leases. Finance leases are capitalised
at the lease’s inception at the lower of the fair value of the
leased property and the present value of the minimum
lease payments. The corresponding rental obligations,
net of finance charges, are included in other long term
payables. Each lease payment is allocated between the
liability and finance charges so as to achieve a constant rate
on the finance balance outstanding. The interest element
of the finance cost is charged to the profit or loss over the
lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each
period. The property, plant and equipment acquired under
finance leases is depreciated over the shorter of the asset’s
useful life and the lease term.
Leases in which a significant portion of the risks and
rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under
operating leases (net of any incentives received from the
lessor) are charged to profit or loss on a straight-line basis
over the period of the lease.
Lease income from operating leases is recognised in
income on a straight-line basis over the lease term.
(s) Issued Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new
shares or options, or for the acquisition of a business, are
deducted directly from equity.
(t) Earnings/(Loss) per Share
(i) Basic Earnings/(Loss) per Share
Basic earnings/(loss) per share is calculated by dividing
the profit/(loss) after income tax attributable to equity
holders of the company, excluding any costs of servicing
equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during
the year, adjusted for bonus elements in ordinary
shares issued during the year.
(ii) Diluted Earnings/(Loss) per Share
Diluted earnings/(loss) 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 options.
(u) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the
amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is
recognised as part of the cost of 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 taxation authority
is included with other receivables or payables in the
consolidated statement of financial position.
Cash flows are presented on a gross basis. The GST
component of cash flow arising from investing or financing
activities which are recoverable from, or payable to the
taxation authority, are presented as operating cash flow.
50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 3: CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of our consolidated financial statements requires
the Group to make estimates and judgments that can affect the
reported amounts of assets, liabilities, revenues and expenses,
as well as the disclosure of contingent assets and liabilities at the
date of the financial statements. The Group analyses the estimates
and judgments and base estimates and judgments on historical
experience and various other assumptions that are believed to be
reasonable under the circumstances. Actual results may vary from
the estimates. The significant accounting policies are detailed in
Note 2 for the year ended 30 June 2017. Summarised below are the
accounting policies of particular importance to the portrayal of the
financial position and results of operations and that require the
application of significant judgment or estimates by management.
Impairment of Goodwill and Other Intangible Assets
The Group assesses annually, or whenever there is a change in
circumstances, whether goodwill or other intangible assets may
be impaired. Determining whether goodwill and other intangible
assets are impaired requires an estimation of the value in use of
the cash generating units to which goodwill or other intangible
assets have been allocated. The value in use calculation is
judgmental in nature and requires the Group to make a number of
estimates including the future cash flows expected to arise from
the cash generating units based on actual current market deals for
drug compounds within the cash generating unit and over a period
covering drug discovery, development, approval and marketing
as well as, a suitable discount rate in order to calculate present
value. The cash flow projections are further weighted based on the
observable market comparables probability of realising projected
milestone and royalty payments. When the carrying value of the
cash generating unit exceeds its recoverable amount, the cash
generating unit is considered impaired and the assets in the cash
generating unit are written down to their recoverable amount.
Impairment losses are recognised in the consolidated statement of
Drug discovery and development
Contract services
profit or loss and other comprehensive income. A detailed valuation
was performed as of 30 June 2017 and each computed fair value
(based on a value-in-use model) of our cash generating unit was
in excess of the carrying amount respectively. As a result of this
evaluation, it was determined that no impairment of goodwill or
other intangible assets existed at 30 June 2017.
Contingent Consideration
As a result of the acquisition of Eclipse Therapeutic, Inc. (Eclipse)
during the year ended 30 June 2013, the Group determines and
recognises at each reporting date the fair value of the additional
consideration that may be payable to Eclipse security holders
due to potential royalty payments based on achieving late-stage
development success or partnering outcomes based on Eclipse
assets. Such potential earn-out payments are recorded at fair
value and include a number of significant estimates including
adjusted revenue projections and expenses, probability of such
projections and a suitable discount rate to calculate present value.
NOTE 4: SEGMENT INFORMATION
Information reported to the chief operating decision maker for
the purposes of resource allocation and assessment of segment
performance focuses on the nature of work processes performed.
The Group’s reportable segments under AASB 8 are:
• Drug discovery and development is the discovery, development
and commercialisation of compounds to match a target product
profile; and
• Contract services is the provision of scientific services on a fee
for service basis to both external and internal customers.
Information regarding these segments is presented below.
(a) Segment Revenues and Results
The following is an analysis of the Group’s revenue and results
by reportable operating segment for the following periods:
SEGMENT REVENUE
YEAR ENDED
SEGMENT PROFIT
YEAR ENDED
30 JUNE 2017
$
30 JUNE 2016
$
30 JUNE 2017
$
30 JUNE 2016
$
16,417,428
5,754,121
5,482,777
6,633,847
(1,128,304)
(9,808,151)
325,019
483,527
22,171,549
12,116,624
(803,285)
(9,324,624)
Less: Intercompany revenue included in contract services
(3,722,308)
(4,129,972)
-
-
Corporate
Interest income
Corporate financing expenses
Corporate administration expenses
Loss Before Income Tax (Continuing Operations)
157,115
156,636
157,115
156,636
18,606,356
8,143,288
(646,170)
(9,167,988)
1,203,748
1,226,530
(1,931,235)
(1,855,829)
(4,853,382)
(7,526,831)
(6,227,039)
(17,324,118)
Revenue reported above for Contract services includes intersegment sales. There were no intersegment sales for the other reportable segment.
Segment profit represents the result for each segment without allocation of central administration expenses and investment and other revenue.
NOTE 4: SEGMENT INFORMATION CONT
(b) Segment Assets and Liabilities
The following is an analysis of the Group’s assets and liabilities by reportable operating segment:
ASSETS
Drug discovery and development
Contract services
Corporate
Total Assets
LIABILITIES
Drug discovery and development
Contract services (excluding intercompany liabilities)
Corporate
Total Liabilities
51
30 JUNE 2017
$
30 JUNE 2016
$
42,279,000
40,443,463
5,760,733
5,145,211
48,039,733
45,588,674
36,035,329
44,220,448
84,075,062
89,809,122
2,267,126
2,753,546
4,085,898
2,631,311
38,600,817
38,929,179
43,621,489
45,646,388
The Board receive information on liabilities for the Group as a whole as well as liability information for the Contract services segment.
The Board receive information on non-current assets for the Group as a whole as well as non-current asset information for the Contract
services segment. Additions to non-current assets:
Contract services
Drug discovery and development
(c) Other Segment Information
The segment result above has been determined after including the following items:
DEPRECIATION AND AMORTISATION YEAR ENDED
Drug discovery and development
Contract services
(d) Revenue from Major Products and Services
The following is an analysis of the Group’s external revenue from its major products and services:
Contract services
Licensing fees
Other
30 JUNE 2017
$
30 JUNE 2016
$
87,096
160,415
247,511
56,366
90,841
147,207
30 JUNE 2017
$
30 JUNE 2016
$
1,511,247
231,383
1,742,630
1,797,975
139,637
1,937,612
30 JUNE 2017
$
30 JUNE 2016
$
5,375,625
13,073,615
7,986,652
-
157,116
156,636
18,606,356
8,143,288
52
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 4: SEGMENT INFORMATION CONT
(e) Geographical Information
The Group operates in three geographical areas, Australia, France and United States of America. The Group’s external revenue and
information about its non-current assets by geographical segment are detailed below:
Australia
France
USA
REVENUE FROM EXTERNAL
CUSTOMER YEAR ENDED
NON-CURRENT ASSETS
YEAR ENDED
30 JUNE 2017
$
30 JUNE 2016
$
30 JUNE 2017
$
30 JUNE 2016
$
15,628,250
2,978,106
5,184,589
2,958,699
27,274,500
29,372,475
2,297,886
2,315,926
-
-
24,255
34,952
18,606,356
8,143,288
29,596,641
31,723,353
(f) Information about Major Customers
Included in revenues for the drug discovery and development segment is $13,066,771 (2016: $4,017,825) from one party. No other
customer contributed 10% or more to the Group’s revenue for both 2017 and 2016.
NOTE 5: REVENUE AND OTHER INCOME
Revenue
Contract services
Royalties
Rent income
Other Income from Continuing Operations
Gain on revaluation of warrants
Interest income
Foreign Government grants
Government Research and Development Incentives (i)
2017
$
2016
$
5,375,625
13,073,615
157,116
6,983,198
1,003,454
156,636
18,606,356
8,143,288
-
1,203,748
1,542,463
6,899,290
1,270,763
1,226,530
1,590,917
9,496,417
9,645,501
13,584,627
(i) The Government Research and Development Incentives include cash refunds provided by the Australian Government for 43.5% (2016:
45%) of eligible research and development expenditures by Australian entities having a tax loss and less than A$20 million in revenue.
The grants are calculated at the end of the fiscal year to which they relate, based on the expenses incurred in and included in the fiscal
year’s Australian income tax return after registration of the research and development activities with the relevant authorities. There are
no unfulfilled conditions or other contingencies attaching to the government Research and Development Incentive. Potentially eligible
overseas expenditure awaiting government approval pending review of applications submitted during the year ended 30 June 2017 has
been excluded from the calculation of the Research and Development Incentive and if approved, will result in an additional receipt of
approximately $5 thousand (2016: $87k).
NOTE 6: EXPENSES
Loss before income tax benefit includes the following specific expenses:
Finance Expenses
- Interest expense on bank and other loans
- Interest expense on contingent consideration
- Interest obligations under finance leases
2017
$
2016
$
1,810,388
158,992
847
1,699,818
158,399
36,038
1,970,227
1,894,255
NOTE 6: EXPENSES CONT.
Depreciation and Amortisation
- Building
- Plant and equipment
- Equipment under lease
Amortisation of Non-Current Assets
- Intellectual property
Rental Expense on Operating Leases
- Minimum lease payments
Employment Benefit Expenses of:
- Wages and salaries
- Superannuation
- Share-based payments
Unrealised foreign currency loss
Gain/(Loss) on Disposal of Assets
- Plant and equipment
NOTE 7: INCOME TAXES
(a) Income Tax Recognised in Profit or Loss
Current Tax
In respect of the current year *
In respect of the prior year
Deferred Tax
Recognised in current year
Total income tax (benefit)/expense
53
2016
$
153,116
254,896
213,205
621,217
2017
$
121,383
162,609
172,605
456,597
1,286,033
1,316,395
1,110,502
1,159,792
6,873,276
8,654,851
434,791
503,652
7,811,719
874,223
464,904
399,913
9,519,668
2,148,737
-
(140,159)
2017
$
670,133
65,677
735,810
(213,234)
(213,234)
522,576
2016
$
32,293
-
32,293
(764,001)
(764,001)
(731,708)
* In the current year this liability has been reduced by the withholding tax ($650,613) associated with the milestone payment received.
(b) Reconciliation to Accounting Loss
Loss from continuing operations
Tax at the Australian tax rate of 30% (2016: 30%)
Tax Effect of Non-Deductible / Non-Assessable Amounts
Foreign exchange reversed on consolidation
Exempt income from government assistance
Entertainment
Contingent consideration
Share-based payments
2017
$
2016
$
(6,227,039)
(17,324,118)
(1,868,111)
(5,197,235)
(127,606)
59,220
(2,440,421)
(3,145,028)
3,915
1,349,224
151,095
3,054
601,292
119,974
54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 7: INCOME TAXES CONT.
(b) Reconciliation to Accounting Loss cont.
Research and development expenditure
Warrant revaluation loss/(gain)
Other non-assessable income
Temporary differences not recorded as an asset
Tax losses not recorded
Effect of different tax rates in other jurisdictions
Effect of unused tax losses, in the current period
(c) Net Deferred Tax Liability Recognised
Net deferred tax liability is attributable to the following deferred tax asset/(liability) items:
Property, plant & equipment denominated in EUR
Intangibles denominated in EUR
Intangibles denominated in USD
Tax losses denominated in USD
(d) Movement in Net Deferred Tax Liability
Opening balance
Adjustments (Note 2 (iii))
Opening balance restated
Recognised in income
Recognised in equity
Closing Balance
(e) Net Deferred Tax Asset Not Recognised
Revenue tax losses
Net timing difference
2017
$
2016
$
4,704,800
5,352,657
431,329
(1,547)
(54,667)
416,281
(64,362)
(1,977,354)
522,576
2017
$
(514,543)
(56,293)
(340,155)
(290)
1,340,404
710,145
(40,641)
(195,105)
(731,708)
2016
$
(536,906)
(69,416)
(4,600,501)
(5,065,557)
400,175
544,602
(4,771,162)
(5,127,277)
2017
$
2016
$
(5,127,277)
(5,634,395)
-
(85,763)
(5,127,277)
(5,720,158)
213,234
142,881
764,001
(171,120)
(4,771,162)
(5,127,277)
2017
$
2016
$
15,460,023
17,021,096
3,156,007
3,210,676
18,616,030
20,321,772
Deferred tax assets have not been recognised in respect to these items as it is not probable at this time that future taxable profits will be
available against which the Group can utilise the benefit.
(f) Tax Consolidation
Relevance of tax consolidation to the Group
The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated group under Australian taxation law.
Bionomics is the head entity in the tax-consolidated group. Tax expense/benefit, deferred tax liabilities and deferred tax assets arising
from temporary differences of the members of the tax-consolidated group are recognised in the separate financial statements of the
members of the tax-consolidated group using the ‘separate taxpayer within group’ approach by reference to the carrying amounts in
the separate financial statements of each entity and the tax values applying under tax consolidation. Current tax liabilities and assets
and deferred tax assets arising from unused tax losses and relevant tax credits of the members of the tax-consolidated group are
recognised by the Company (as head entity in the tax-consolidated group).
55
NOTE 8: CASH AND CASH EQUIVALENTS
Cash at the end of the financial year as shown in the statements of cash flows is reconciled to items in the Consolidated Statement of
Financial Position as follows:
Current
Cash at bank and on hand
Deposits at call
The weighted average interest rate on these deposits is 2.4% per annum (2016: 2.8% per annum).
NOTE 9: OTHER FINANCIAL ASSETS
Restricted deposits held as security and not available for use
Disclosed in the Financial Statements as:
Current assets
Non-current assets
2017
$
2016
$
42,450,973
19,664,774
422,683
25,785,608
42,873,656
45,450,382
2017
$
2016
$
934,000
934,000
550,000
384,000
934,000
550,000
384,000
934,000
The Group holds two restricted term deposits of $550,000 and $384,000 as security for a loan (Note 18(i)) and as security for a bank
guarantee respectively that are not available for use. The interest rate on these deposits is 2.7% (2016: 2.7%) and maturity dates are 2 July
2018 and 17 September 2017 respectively (2016: 2 January 2017 and 23 September 2016 respectively).
NOTE 10: TRADE AND OTHER RECEIVABLES
Current
Trade receivables
GST and Value Added Tax (VAT) receivables
Other
2017
$
825,312
133,954
395,543
2016
$
1,238,028
141,097
22,469
1,354,809
1,401,594
The average credit period on sales of services is 60 days. No interest is charged on trade receivables for the first 60 days from the date of the
invoice. Thereafter, interest is charged at 2% per annum on the outstanding balance. Allowances for doubtful debts are recognised against
trade receivables based on estimated irrecoverable amounts determined by reference to past default experience of the counterparty and an
analysis of the counterparty’s current financial position. The Group has not recognised an allowance for doubtful debts.
Before accepting any new customer, the Group reviews the quality of the customer, and this is reviewed prior to commencing new major
work. Of the trade receivables balance at the end of the 2017 year, the Group’s largest customer, Merck, represented 43% of the total balance
of trade receivables (2016: Merck 79% of the total balances).
Trade receivables disclosed above include amounts (see below for aged analysis) that are past due at the end of the reporting period for
which the Group has not recognised an allowance for doubtful debts because there has not been a significant change in credit quality and the
amounts (which include interest accrued after the receivable is more than 60 days outstanding) are still considered recoverable.
56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 10: TRADE AND OTHER RECEIVABLES CONT.
Age of receivables that are past due but not impaired
60-90 days
90-120 days
Total
Average age (days)
2017
$
-
226
226
48
2016
$
660
2,241
2,901
56
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the
date credit was initially granted up to the end of the reporting period. Typically, the concentration of credit risk is limited due to the fact that
the customer base is large and unrelated, except as noted above.
NOTE 11: INVENTORIES
Current
Consumables
NOTE 12: OTHER ASSETS
Current
Prepayments
Accrued income
2017
$
2016
$
425,742
438,856
2017
$
733,665
2,630
736,295
2016
$
643,249
333
643,582
NOTE 13: SUBSIDIARIES
Details of the Group’s subsidiaries at the end of the reporting period are as follows:
ENTITY
Head Entity
PRINCIPAL ACTIVITY
COUNTRY OF
INCORPORATION
2017
2016
PERCENTAGE OWNED
(%)
Bionomics Limited
Research and Development
Australia
Subsidiaries of Bionomics Limited
Neurofit SAS
Contract Research Organisation
Iliad Chemicals Pty Limited
Asset owner
France
Australia
Bionomics, Inc.
PC SAS
Research and Development
United States
Contract Research Organisation
France
N/A
100
100
100
100
N/A
100
100
100
100
57
NOTE 14: PROPERTY, PLANT AND EQUIPMENT
FREEHOLD
LAND AT
COST
$
BUILDING
AT COST
$
PLANT AND
EQUIPMENT
AT COST
$
EQUIPMENT
UNDER
FINANCE
LEASE
AT COST
$
TOTAL
$
Cost at 30 June 2015
256,522
1,880,896
3,536,559
600,507
6,274,484
Additions
Disposals
Foreign currency exchange differences
-
-
7,618
14,797
(30,484)
55,857
132,410
(644,930)
63,847
-
147,207
(8,120)
(683,534)
-
127,322
Cost at 30 June 2016
264,140
1,921,066
3,087,886
592,387
5,865,479
Additions
Disposals
Foreign currency exchange differences
-
-
(1,176)
53,484
194,027
-
(8,562)
-
(2,516)
-
-
-
247,511
-
(12,254)
Cost at 30 June 2017
262,964
1,965,988
3,279,397
592,387
6,100,736
Accumulated Depreciation at 30 June 2015
Depreciation (Note 6)
Disposals
Foreign currency exchange differences
Accumulated Depreciation at 30 June 2016
Depreciation (Note 6)
Disposals
Foreign currency exchange differences
Accumulated Depreciation at 30 June 2017
Net Carrying Amounts at 30 June 2016
Net Carrying Amounts at 30 June 2017
-
-
-
-
-
-
-
-
-
(56,763)
(2,572,486)
(194,680)
(2,823,929)
(153,116)
(254,896)
(213,205)
5,039
1,431
461,630
(61,487)
8,120
-
(621,217)
474,789
(60,059)
(203,409)
(2,427,239)
(399,765)
(3,030,413)
(121,383)
(162,609)
(172,605)
(456,597)
-
738
-
3,211
-
-
-
3,949
(324,054)
(2,586,637)
(572,370)
(3,483,061)
264,140
262,964
1,717,657
1,641,934
660,647
692,760
192,622
20,017
2,835,066
2,617,675
Non-Current Assets Pledged as Security
Refer to Note 18 for information on non-current assets pledged as security by the Group.
NOTE 15: GOODWILL
Carrying Amount at 30 June 2015
Adjustment (see Note 2 (iii))
Carrying Amount at 30 June 2015 (restated)
Additions
Foreign currency exchange differences
Carrying Amount at 30 June 2016
Additions
Foreign currency exchange differences
Carrying Amount at 30 June 2017
(a) Impairment Tests
$
10,488,633
1,799,104
12,287,737
-
153,596
12,441,333
-
(177,211)
12,264,122
There are two Cash Generating Units (CGUs), Drug discovery and development, and Contract services. These are the same as the
operating segments identified in Note 4. Management tests annually whether goodwill or indefinite life intangibles have suffered any
impairment, in accordance with the accounting policy stated in Note 2(l)(i) and (l)(ii), Note 2(g) respectively. For the purpose of impairment
testing all goodwill is allocated to the Drug discovery and development CGU.
58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 15: GOODWILL CONT.
Determining whether goodwill or intangibles are impaired requires an estimation of the value in use of the cash generating units to which
goodwill or indefinite life intangibles have been allocated. The value in use calculation requires the entity to estimate the future cash
flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value over the expected
life cycle of the commercialisation of the assets - in line with the average patent life and development cycle of the drug compound. A post-
tax discount rate of 15% has been used.
Allocation of Goodwill to Group CGU’s
The carrying amount of goodwill was allocated to the following CGU’s:
Drug discovery and development
Contract services
2017
$
2016
$
12,264,122
12,441,333
-
-
Drug Discovery and Development
The recoverable amount of this CGU is determined based on a value in use calculation which uses cash flow projections based on
observable market comparables for drug compounds within the CGU over a period of twenty years covering drug discovery, development,
approval and marketing, and a post-tax discount rate of 15% per annum (2016: 25% per annum pre-tax). The cash flow projections are
weighted based on the observable market comparables probability of realising projected milestone and royalties payments.
Management believes that the application of discounted cash flows of observable market comparables for one drug compound is
reasonable to be applied to other compounds within the CGU at their respective development phases.
Management believes that any reasonably possible change in the key assumptions on which recoverable amount is based would not
cause the aggregate carrying amount to exceed the aggregate recoverable amount of the CGU.
No growth rates have been included in the forecast. As the full discovery and development lifecycle has been taken into account with the
cashflows, no terminal value has been used.
NOTE 16: OTHER INTANGIBLE ASSETS
Intellectual Property
The acquired intellectual property includes the Company’s MultiCore technology, its BNC101 drug candidate and its BNC105 drug candidate.
Each item is carried at its fair value as at its date of acquisition, less accumulated amortisation charges. The remaining amortisation periods
for each item are between 5 and 20 years. There is currently no internally generated intellectual property capitalised.
Gross Carrying Amount at 30 June 2015
Additions
Foreign currency exchange differences
Gross Carrying Amount at 30 June 2016
Additions
Foreign currency exchange differences
Gross Carrying Amount at 30 June 2017
Accumulated Amortisation Amount at 30 June 2015
Amortisation (Note 6)
Foreign currency exchange differences
Accumulated Amortisation Amount at 30 June 2016
Amortisation (Note 6)
Foreign currency exchange differences
Accumulated Amortisation Amount at 30 June 2017
Net Carrying Amount 30 June 2016
Net Carrying Amount 30 June 2017
$
24,248,948
-
547,640
24,796,588
-
(582,956)
24,213,632
(7,321,329)
(1,316,395)
(95,910)
(8,733,633)
(1,286,033)
136,878
(9,882,788)
16,062,954
14,330,844
NOTE 17: TRADE AND OTHER PAYABLES
Current
Trade payables
Accrued expenses
Non-Current
Other payables
59
2017
$
2016
$
1,900,212
1,772,361
3,672,573
2,633,103
3,222,040
5,855,143
341,703
144,938
The average credit period on purchases of goods is 45 days. No interest is paid on the trade payables. The Group has financial risk
management policies in place to ensure that all payables are paid within the credit timeframe.
NOTE 18: BORROWINGS
Unsecured – at Amortised Cost
Commercial bill (i)
Secured – at Amortised Cost
Finance lease liabilities (ii)
Equipment mortgage (iii)
Bank loan (iv)
Disclosed in the financial statements as:
- Current liabilities
- Non-current liabilities
2017
$
2016
$
550,000
550,000
-
404,138
57,611
431,021
17,555,380
20,129,922
18,509,518
21,168,554
8,495,873
2,731,837
10,013,645
18,436,717
18,509,518
21,168,554
(i) The rolling commercial bill line is secured by a restricted deposit of $550,000 (2016: $550,000) and shown in Note 9.
(ii) Lease lines are secured by the leased plant and equipment (refer Note 14) and have an average interest rate of per annum 7.05%
(2016: 7.05% per annum) and terms of three to five years.
(iii) The equipment mortgage loans are for equipment (which secure the loans) and have an interest rate of 5.61% and have terms of three to
five years (2016: three to five years).
(iv) Bank loan is a secured US $13.5 million (2016: US$15 million) borrowing. The loan bears interest at a rate of 8.9% (2016: 8.15%)
and repayable in equal installments over 30 months. The loan is collateralised by substantially all of the Group’s assets, other than
intellectual property. The loan further contains customary conditions of borrowing, events of default and covenants, including covenants
that restrict the ability to dispose of assets, merge with or acquire other entities, incur indebtedness and make distributions to holders
of capital stock. Should an event of default occur, including the occurrence of a material adverse change, the Group could be liable for
immediate repayment of all obligations under the loan agreement. There were no breaches of covenants as of 30 June 2017.
The unused facilities available at 30 June 2017 of the Group’s bank overdraft is $57,712 (2016: $59,693) and equipment finance facility is
$295,857 (2016: $269,080). There is no unused facility in relation to the commercial bill line.
Interest Rate Risk
The Group’s exposure to interest rates and the effective weighted average interest rate by maturity period is set out in Note 24.
60
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 19: PROVISIONS
Current
Employee benefits
Non-Current
Employee benefits
NOTE 20: OTHER LIABILITIES
Current
Unearned services income
NOTE 21: OTHER FINANCIAL LIABILITIES
Current
Warrants
Conditional warrants
Balance at Beginning of Period
Warrants value at date of issue
Conditional warrants initial value
Change in value recognised in profit or loss
Balance at End of Period
2017
$
2016
$
1,594,410
1,590,979
47,545
61,928
2017
$
2016
$
19,509
65,811
2017
$
2016
$
106,441
-
106,441
1,142,320
-
72,802
1,069,518
1,142,320
122,544
87,170
(2,507,280)
2,203,369
1,471,401
(1,270,763)
106,441
1,142,320
Refer Note 22(e) for details about the fair value of the warrant.
Warrants
A derivative was recognised in relation to the warrants issued by the Group in connection with the USD loan included in Note 18(iv). These
warrants are currently exercisable at the discretion of the holder and exchangeable for either 988,843 (2016: 988,843) ordinary shares at a
fixed price (345,232 at $0.5288 and 643,611 at $0.54) or a lower number of shares for nil consideration, with the number of shares calculated
on the basis of a formula which takes into account the movement in the share price of the Company from the date of issue to date of exercise
of the warrant.
The warrants expiry dates are as follows:
NUMBER
EXPIRY DATE
345,232
643,611
Oct-20
Nov-19
A derivative was recognised in relation to the conditional warrants issued by the Group in connection with the private placement of shares in
December 2015 (see Note 22(a)). Under the Share Placement Agreement 16,082,988 warrants for 16,082,988 ordinary shares at a fixed price
($0.5938) are required to be issued at the earlier of the approval of shareholders for the issue of the warrants and the passage of 12 months
from the date of the agreement. The warrants were issued in December 2016 and the fair value of the conditional warrants at that date was
transferred to equity.
The warrants and conditional warrants were initially measured at fair value in accordance with AASB 139 (IAS 39). The value of the warrants
and conditional warrants liability is remeasured at each balance date with any movement in valuations recognised in the profit or loss.
NOTE 22: ISSUED CAPITAL
(a) Issued and Paid-Up Capital
Ordinary shares – fully paid
Treasury stock
Total
61
2017
SHARES
2016
SHARES
481,456,441
481,024,341
38,125
75,625
481,494,566
481,099,966
Movements in Ordinary Shares and Treasury Stock (restricted shares issued subject to Employee Share Plan Loan Agreements) respectively,
of the Company during the past two years were as follows:
DATE
DETAILS
Ordinary Shares
30 June 2015
Closing Balance
Share issue – Employee Share Option Plan option exercise
Placements (net of warrants)1
30 June 2016
Closing Balance
Share issue – Employee Share Option Plan option exercise
30 June 2017
Closing Balance
Treasury Stock
30 June 2015
Closing Balance
Share issue – Employee Share Plan Loan Agreements
30 June 2016
Closing Balance
Share issue – Employee Share Plan Loan Agreements
30 June 2017
Closing Balance
Total Issued Capital
NUMBER OF
SHARES
$
418,236,369
111,990,220
921,250
288,718
61,866,702
22,113,875
481,024,321
134,392,813
432,120
143,615
481,456,441
134,536,428
-
75,625
75,625
(37,500)
38,125
481,494,566
-
-
-
-
-
-
1 The placements are net of the warrants issued in December 2015 for 24,124,484 ordinary shares at a fixed price ($0.5938), valued at
$3,305,054 and conditional warrants for 16,082,988 ordinary shares at a fixed price ($0.5938), valued at $2,203,369, as at issue date. The
warrants and conditional warrants were valued using a Black-Scholes methodology. As at 30 June 2016, the conditional warrants had not
been issued and are disclosed under “Other financial liability (current)” in Note 21.
Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998.
Therefore, the Company does not have a limited amount of authorised capital and issued shares do not have a par value.
(b) Ordinary Shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number
of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is
entitled to one vote and upon a poll each share is entitled to one vote.
(c) Option Modification
The terms of the options under the Bionomics Employee Share Option Plan were modified at 30 June 2014 for all options on issue prior to
the fully underwritten 1:8 non-renounceable rights issue announced on 4 March 2013. The exercise price for all outstanding options were
adjusted under ASX Listing Rule 6.22 and are shown in the table below in this Note 22(d)(i).
(d) Share Options
When exercised, each option is convertible into one ordinary share. The exercise price is based on the weighted average price at which
the Company’s shares traded on the ASX during the seven trading days immediately before the options are issued.
(i) The Bionomics Employee Share Option Plan
The terms and conditions of the Bionomics Employee Share Option Plan are summarised in Note 2(o)(iii). The following options listed
are outstanding at reporting date.
62
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 22: ISSUED CAPITAL CONT.
GRANT DATE
EXPIRY DATE
EXERCISE PRICE
NUMBER
FAIR VALUE
AT GRANT DATE
Oct-07
Jan-08
Jul-08
Nov-08
Mar-09
Jun-09
Nov-09
Jul-10
Nov-10
Nov-11
Dec-11
Mar-12
Jun-12
Aug-12
Dec-12
Oct-17
Jan-18
Jul-17
Jul-18
Nov-17
Nov-17
Nov-18
Mar-18
Mar-19
Mar-19
Jun-18
Jun-19
Nov-17
Nov-18
Nov-19
Jul-19
Jul-20
Nov-17
Nov-18
Nov-19
Aug-17
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Mar-18
Mar-19
Mar-20
Mar-21
Mar-22
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Aug-17
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
$0.2876
$0.3776
$0.3576
$0.3576
$0.2976
$0.2776
$0.2776
$0.2876
$0.2876
$0.2876
$0.2476
$0.2476
$0.2976
$0.2976
$0.2976
$0.3176
$0.3176
$0.3076
$0.3076
$0.3076
$0.9186
$0.5156
$0.5156
$0.5156
$0.5156
$0.5156
$0.5026
$0.5026
$0.5026
$0.5026
$0.5026
$0.3356
$0.3356
$0.3356
$0.3356
$0.3356
$0.2846
$0.2846
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
$0.3176
5,000
4,000
14,000
14,000
100,000
10,000
10,000
2,120
10,000
2,120
4,000
4,000
100,000
100,000
100,000
10,000
10,000
100,000
100,000
100,000
1,000,000
100,000
100,000
100,000
100,000
100,000
5,000
5,000
5,000
5,000
5,000
8,000
8,000
8,000
8,000
8,000
37,500
65,000
200,000
200,000
200,000
200,000
200,000
5,000
5,000
5,000
5,000
5,000
$0.36
$0.33
$0.28
$0.29
$0.17
$0.09
$0.10
$0.11
$0.12
$0.12
$0.20
$0.21
$0.19
$0.20
$0.20
$0.19
$0.20
$0.16
$0.17
$0.17
$0.05
$0.33
$0.36
$0.37
$0.39
$0.40
$0.29
$0.30
$0.32
$0.34
$0.35
$0.16
$0.17
$0.18
$0.19
$0.20
$0.13
$0.16
$0.18
$0.19
$0.20
$0.21
$0.22
$0.21
$0.22
$0.23
$0.24
$0.25
63
NOTE 22: ISSUED CAPITAL CONT.
GRANT DATE
EXPIRY DATE
EXERCISE PRICE
NUMBER
FAIR VALUE
AT GRANT DATE
May-13
Aug-13
Oct-13
Dec-13
Oct-14
Dec-14
Apr-15
May-15
Jul-15
Oct-15
May-19
May-20
May-21
May-22
May-23
Aug-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-23
Dec-18
Dec-18
Dec-19
Dec-19
Dec-20
Dec-20
Dec-21
Dec-21
Dec-22
Dec-22
Dec-23
Oct-19
Dec-19
Apr-21
Apr-22
Apr-23
Apr-24
Apr-25
May-21
May-22
May-23
May-24
May-25
Jul-20
Jul-21
Jul-21
Jul-22
Jul-22
Jul-23
Jul-23
Jul-24
Jul-24
Jul-25
Jul-25
Oct-21
Oct-22
Oct-23
$0.3745
$0.3745
$0.3745
$0.3745
$0.3745
$0.3301
$0.6014
$0.6014
$0.6014
$0.6014
$0.6014
$0.7224
$0.3301
$0.7224
$0.6875
$0.7224
$0.6875
$0.7224
$0.6875
$0.7224
$0.6875
$0.6875
$0.5643
$0.5643
$0.5029
$0.5029
$0.5029
$0.5029
$0.5029
$0.4246
$0.4246
$0.4246
$0.4246
$0.4246
$0.4341
$0.4341
$0.4152
$0.4341
$0.4152
$0.4341
$0.4152
$0.4341
$0.4152
$0.4341
$0.4152
$0.4575
$0.4575
$0.4575
64,000
64,000
64,000
64,000
64,000
122,500
15,000
15,000
15,000
15,000
15,000
100,000
55,000
100,000
4,000
100,000
4,000
100,000
4,000
100,000
4,000
4,000
108,500
75,000
19,000
19,000
19,000
19,000
19,000
288,600
288,600
288,600
288,600
288,600
151,000
15,000
3,000
15,000
3,000
15,000
3,000
15,000
3,000
15,000
3,000
5,000
5,000
5,000
$0.22
$0.24
$0.25
$0.26
$0.27
$0.38
$0.46
$0.48
$0.50
$0.52
$0.54
$0.33
$0.46
$0.36
$0.37
$0.39
$0.39
$0.41
$0.42
$0.43
$0.44
$0.46
$0.35
$0.27
$0.21
$0.23
$0.25
$0.26
$0.27
$0.24
$0.25
$0.27
$0.28
$0.29
$0.20
$0.22
$0.23
$0.24
$0.24
$0.25
$0.26
$0.26
$0.27
$0.28
$0.28
$0.30
$0.32
$0.34
64
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 22: ISSUED CAPITAL CONT.
GRANT DATE
Oct-15 cont.
Dec-15
May-16
Nov-16
Dec-16
EXPIRY DATE
EXERCISE PRICE
NUMBER
FAIR VALUE
AT GRANT DATE
Oct-24
Oct-25
Oct-20
Dec-20
Dec-21
Dec-22
Dec-23
Dec-24
Dec-25
Dec-21
Dec-22
Dec-23
Dec-24
Dec-25
May-22
May-23
May-24
May-25
May-26
Nov-22
Nov-23
Nov-24
Nov-25
Nov-26
Nov-21
Nov-22
Nov-23
Nov-24
Nov-25
Nov-26
Nov-22
Nov-23
Nov-24
Nov-25
Nov-26
Nov-22
Nov-23
Nov-24
Nov-25
Nov-26
Nov-22
Nov-23
Nov-24
Nov-25
Nov-26
Dec-21
$0.4575
$0.4575
$0.4211
$0.4211
$0.5389
$0.5389
$0.5389
$0.5389
$0.5389
$0.5102
$0.5102
$0.5102
$0.5102
$0.5102
$0.3200
$0.3200
$0.3200
$0.3200
$0.3200
$0.2600
$0.2600
$0.2600
$0.2600
$0.2600
$0.3743
$0.2613
$0.2613
$0.2613
$0.2613
$0.2613
$0.3130
$0.3130
$0.3130
$0.3130
$0.3130
$0.3820
$0.3820
$0.3820
$0.3820
$0.3820
$0.6000
$0.6000
$0.6000
$0.6000
$0.6000
$0.3743
5,000
5,000
85,500
60,000
100,000
100,000
100,000
100,000
100,000
50,000
50,000
50,000
50,000
50,000
58,000
58,000
58,000
58,000
58,000
4,000
4,000
4,000
4,000
4,000
302,500
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
5,000
5,000
5,000
5,000
5,000
225,000
225,000
225,000
225,000
100,000
35,000
11,139,740
$0.35
$0.37
$0.29
$0.16
$0.15
$0.17
$0.18
$0.19
$0.20
$0.16
$0.18
$0.19
$0.20
$0.22
$0.18
$0.20
$0.21
$0.22
$0.23
$0.23
$0.24
$0.25
$0.26
$0.27
$0.21
$0.25
$0.26
$0.27
$0.28
$0.29
$0.25
$0.27
$0.27
$0.28
$0.28
$0.22
$0.24
$0.25
$0.26
$0.27
$0.19
$0.20
$0.22
$0.23
$0.23
$0.19
65
Reconciliation of Employee Share Option Plan:
Opening Balance at Beginning of Financial Year
Granted during the financial year
Forfeited during the financial year
Exercised during the financial year
Expired during the financial year
Closing Balance at 30 June
2017
2016
NUMBER OF
OPTIONS
9,698,860
3,382,500
(542,500)
(432,120)
(967,000)
11,139,740
WEIGHTED
AVERAGE
EXERCISE
PRICE
$0.49
$0.39
$0.47
$0.30
$0.52
$0.43
NUMBER OF
OPTIONS
9,798,480
1,716,500
(576,550)
(921,250)
(318,320)
9,698,860
WEIGHTED
AVERAGE
EXERCISE
PRICE
$0.47
$0.47
$0.40
$0.31
$0.39
$0.49
Employee Share Option Plan options exercised during the financial year:
SERIES
NUMBER EXERCISED
EXERCISE PRICE
EXERCISE DATE
01-May-06
05-Nov-08
04-Nov-09
04-Nov-10
16-Nov-06
13-Mar-09
01-Jul-08
TOTAL
20,000
100,000
100,000
100,000
100,000
2,120
10,000
432,120
$0.2176
$0.2976
$0.2976
$0.3076
$0.2976
$0.2876
$0.3576
05-Jul-16
06-Oct-16
04-Nov-16
04-Nov-16
16-Nov-16
13-Mar-17
28-Jun-17
Unlisted Options Vested and Exercisable at the Reporting Date
(ii) Weighted averages
SHARE PRICE AT
EXERCISE DATE
$0.300
$0.445
$0.350
$0.350
$0.380
$0.375
$0.400
2017
NUMBER
2016
NUMBER
5,840,940
6,055,460
The weighted average remaining contractual life of any unlisted share options outstanding at the end of the year is 4.02 years
(2016: 4.02 years).
The assessed fair value at grant date of options granted during the year ended 30 June 2017 is outlined in the Remuneration Report.
The share price at grant date of these options was $0.3743 (2016: between $0.34 and $0.54). The expected average price volatility of
the company’s shares was 64.3% (2016: between 51.4% and 54%). Expected dividend yield was 0% (2016: 0%) and the average risk free
interest rate used was 2.24% (2016: between 2.29% and 2.92%).
(e) Warrants
The weighted average remaining contractual life of the unlisted warrants and conditional warrants outstanding at the end of the year is
4.2 years (2016: 4.4 years)
Warrants recorded in equity
Details of outstanding warrants as at 30 June 2017 are as follows:
GRANT DATE
EXPIRY DATE
EXERCISE PRICE
Dec-15
Dec-20
$0.5938
NUMBER
24,124,484
FAIR VALUE
AT GRANT DATE
$0.1370
66
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 22: ISSUED CAPITAL CONT.
Warrants recorded in Other Financial Liabilities (Note 21)
The assessed fair value at 30 June 2017 of warrants granted is $106,441 (2016: $1,142,320). The share price as at 30 June 2017 was $0.40
(2016: $0.28). The expected average price volatility of the Company’s shares was 67.63% (2016: 55.73%). Expected dividend yield was 0%
(2016: 0%) and the average risk free interest rate as at 30 June 2017 was 2.24% (2016: 1.65%).
NOTE 23: RESERVES
Foreign Currency Translation Reserve (a)
Share-based Payments Reserve (b)
Total Reserves
(a) Foreign Currency Translation Reserve
2017
$
5,060,539
9,052,338
2016
$
5,174,632
6,041,406
14,112,877
11,216,038
Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency translation reserve,
as described in Note 2(b). The reserve is recognised in profit or loss when the investment is disposed of.
(b) Share-Based Payments Reserve
The share-based payments reserve is used to recognise the fair value of options and warrants issued over the vesting period.
Further information about share-based payments is set out in Note 22.
NOTE 24: FINANCIAL INSTRUMENTS
(a) Capital Risk Management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns whilst maximising the return
to stakeholders through the optimisation of the debt and equity balance.
The Group’s overall strategy remains unchanged from 2016. The capital structure of the Group consists of debt, which includes
borrowings (Note 18), cash and cash equivalents (Note 8) and equity attributable to equity holders of the parent, comprising issued capital
(Note 22), reserves (Note 23) and retained earnings.
The Group has global operations, primarily conducted through subsidiary companies established in the markets in which the Group
trades. None of the Group’s entities is subject to externally imposed capital requirements.
The Group’s policy is to fund the research and development activities and operations through the issue of equity and the
commercialisation of Intellectual Property assets. Project specific borrowings are utilised where appropriate and also minor borrowings
for operational assets, as required.
(b) Categories of Financial Instruments
Financial Assets
Receivables
Other financial assets
Cash and cash equivalents
Financial Liabilities
Amortised cost
Contingent consideration at fair value
Reconciliation to Total Assets
Financial assets (as above)
Non-financial assets
2017
$
2016
$
9,892,637
11,002,949
934,000
934,000
42,873,656
45,450,382
53,700,293
57,387,331
22,649,744
27,168,635
14,558,628
10,489,438
37,208,372
37,658,073
53,700,293
57,387,331
30,374,769
32,421,791
84,075,062
89,809,122
(b) Categories of Financial Instruments cont.
Reconciliation to Total Liabilities
Financial liabilities (as above)
Non-financial liabilities
67
2017
$
2016
$
37,208,372
37,658,073
6,413,117
7,988,315
43,621,489
45,646,388
(c) Financial Risk Management Objectives
The Board, through the Audit and Risk Management (ARM) Committee, is responsible for ensuring there are adequate policies in relation
to risk management, compliance and internal control systems. In summary, Group policies are designed to ensure significant strategic,
operational, legal, reputational and financial risks are identified, assessed, and effectively monitored and managed in a manner sufficient
for a company of Bionomics’ size and stage of development to enable achievement of the Group’s business strategy and objectives.
The Group’s risk management policies are managed by the key management personnel and are reviewed by the ARM Committee
according to a timetable of assessment and review proposed by that committee and approved by the Board.
(d) Market Risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates (see (e) below) and interest
rates (see (f) below).
The Group uses derivative financial instruments to manage its exposure to foreign currency risk, if and when appropriate.
Unless approved by the Chief Executive Officer and Managing Director and ARM Committee, interest rate derivatives are not entered into.
The Group measures market risk exposures using sensitivity analysis. There has been no material change to the Group’s exposure to
market risks or the manner in which these risks are managed and measured.
There were no derivative financial instruments outstanding as at 30 June 2017 (2016: nil).
(e) Foreign Currency Risk Management
The Group undertakes certain transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations
arise. Exchange rate exposures are managed in accordance with established policies. The carrying amounts of the Group’s foreign
currency denominated monetary assets and liabilities at the end of the reporting date are as follows:
EUR
USD
GBP
LIABILITIES
2017
$
2016
$
ASSETS
2017
$
2016
$
2,783,829
2,697,299
5,760,733
5,551,524
17,902,620
20,518,217
13,292,465
11,980,244
69,644
617,234
-
-
68
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 24: FINANCIAL INSTRUMENTS CONT.
Foreign Currency Sensitivity Analysis
The Group is mainly exposed to Euros, US dollars and Pound Sterling (GBP).
The following table details the Group’s sensitivity to a 10% increase and decrease in the Australian dollar against the relevant foreign
currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and
represents management’s assessment of the reasonably possible change in foreign currency rates. The sensitivity analysis includes
only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 10% change in foreign
currency rates. A positive number below indicates an increase in profit or equity where the Australian dollar strengthens 10% against the
relevant currency. For a 10% weakening of the Australian dollar against the relevant currency, there would be a comparable impact on
the profit or equity with the balances being the opposite.
Profit or loss
Equity
EUR IMPACT
USD IMPACT
GBP IMPACT
2017
$
2,753
2016
$
2017
$
2016
$
5,999 (i)
417,322
796,036 (ii)
(273,381)
(265,474) (iii)
1,783
(19,857) (v)
2017
$
6,331
-
2016
$
56,112 (iv)
-
(i) This is mainly attributable to the exposure outstanding on EUR payables in the Group at the end of the reporting period.
(ii) This is mainly attributable to the exposure to outstanding USD net assets at the end of the reporting period.
(iii) This is as a result of the changes in fair value of the net investment in subsidiaries denominated in Euros, reflected in the foreign
currency translation reserve.
(iv) This is mainly attributable to the exposure outstanding on GBP payables in the Group at the end of the reporting period.
(v) This is as a result of the changes in fair value of the net investment in subsidiaries denominated in USD, reflected in the foreign
currency translation reserve.
The Group’s sensitivity to foreign currency has decreased during the current year mainly due to the mix of net assets held in non-
Australian dollar denominated currencies, in particular, the USD net borrowings valued through the profit or loss.
The sensitivity analysis may not represent the quantum of foreign exchange risk because the exposure at the end of the reporting period
does not reflect the exposure during the year. Requirements change during the financial year depending on research and development
activities being undertaken and contract research service financial performance.
Forward Foreign Exchange Contracts
It is the policy of the Group to enter into forward foreign currency contracts to cover specific foreign currency payments and receipts
when appropriate (such as when there is a legal commitment to pay or receive foreign currency or the Chief Executive Officer and
Managing Director has a high degree of confidence (>90%) that a foreign currency exposure will arise).
Under the Group’s Treasury Policy, the Chief Financial Officer (CFO) will manage the foreign exchange transaction risk adopting the
following guidelines:
• Generally, hedge foreign exchange exposure identified above by entering into a forward currency contract.
• The duration of any forward currency contract(s) will approximate the period in which the net currency exposure arises.
• Recognising the uncertainty that exists in projecting forward foreign currency flows, a maximum net foreign currency exposure
position may be held at any point in time.
Due to the long-term nature of the net investment in the Euro and USD denominated wholly owned subsidiaries, the investments will not
be hedged into Australian dollars, with the result that the Australian dollar value of the investments will fluctuate with the market rate
through the foreign currency translation reserve.
There were no forward foreign currency contracts outstanding as at 30 June 2017 (2016: nil).
(f) Interest Rate Risk Management
The Group is exposed to interest rate risk, only in relation to the cash and cash equivalent balance, as entities in the Group invest funds
in both fixed and variable interest rates with various maturities. The Group does not use interest rate swap contracts or forward interest
rate contracts.
69
NOTE 24: FINANCIAL INSTRUMENTS CONT.
Interest Rate Sensitivity Analysis
The sensitivity analysis below has been determined based on the exposure to interest rates at the end of the reporting period and the
stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period.
If interest rates had been 50 basis points higher / (lower) and all other variables were held constant, the Group’s:
• Loss for the year ended 30 June 2017 would increase / (decrease) by $120,338 (2016: increase / (decrease) by $83,722). This is mainly
attributable to the Group’s exposure to interest rates on its variable rate deposits.
The Group’s sensitivity to interest rates has decreased during the current year mainly due to the reduction in interest rates.
(g) Credit Risk Management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The
Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a
means of mitigating the risk of financial loss from defaults.
As of 30 June 2017, Merck represented 43% of the Group’s trade and other receivables (2016: Merck 79%). The credit risk on liquid funds
is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Group’s
maximum exposure to credit risk.
(h) Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with the Board, which has approved an appropriate liquidity risk management
framework for management of the Group’s short, medium and long term funding. The Group manages liquidity risk by continuously
monitoring forecast and actual cash flows and matching maturity profiles of financial assets and liabilities. Included in Note 18 is a listing
of additional undrawn facilities that the group has at its disposal to further reduce liquidity risk.
(i) Liquidity and Interest Rate Risk
The following tables detail the Group’s remaining contractual maturity for its financial liabilities. The tables have been drawn up based
on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The tables
include both interest and principal cash flows.
2017
Non-interest bearing
Finance lease liability
Variable interest rate instruments
Fixed interest rate instruments
TOTAL
2016
Non-interest bearing
Finance lease liability
Variable interest rate instruments
Fixed interest rate instruments
TOTAL
WEIGHTED
AVERAGE
EFFECTIVE
INTEREST
RATE
%
7.05
8.90
4.11
7.05
8.15
4.62
INTEREST RATE MATURITY
LESS THAN
1 MONTH
$
3,672,573
-
142,791
569,109
1 – 3
MONTHS
$
3 – 12
MONTHS
$
-
-
-
-
1 TO 5
YEARS
$
341,703
-
280,975
1,257,478
24,094,830
28,044
126,198
236,004
4,384,473
309,019
1,383,676
24,672,537
5,855,143
-
-
144,938
9,743
19,486
28,382
-
136,910
567,026
282,948
3,247,747
19,892,894
23,878
107,451
330,268
6,568,822
326,312
3,383,580
20,368,100
5 +
YEARS
$
-
-
-
-
-
-
-
-
-
-
TOTAL
$
4,014,276
-
25,776,074
959,355
30,749,705
6,000,081
57,611
23,560,499
1,028,623
30,646,814
70
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 24: FINANCIAL INSTRUMENTS CONT.
(j) Fair Value of Financial Instruments
Some of the Group’s financial assets and liabilities are measured at fair value at the end of each reporting period. The value of other
financial assets and liabilities approximate their fair value. The following table gives information about how the fair values of these
financial assets and liabilities are determined.
FINANCIAL ASSETS /
FINANCIAL LIABILITIES
FAIR VALUE AS AT
30 JUNE
2017
$
30 JUNE
2016
$
FAIR VALUE
HIERARCHY
VALUATION
TECHNIQUE
SIGNIFICANT
UNOBSERVABLE
INPUTS
RELATIONSHIP OF
UNOBSERVABLE INPUTS
TO FAIR VALUE
Contingent consideration in a
business combination (Note 34)
Liabilities –
$14,558,628
Liabilities -
$10,489,438
Level 3
Discounted
cash flow
Warrant (Note 21)
Liabilities -
$106,441
Liabilities -
$1,142,320
Level 2
Black
Scholes
model
Discount rate of
15% (post tax)
and probability
adjusted revenue
projections.
The higher the discount
rate, the lower the value.
The higher the possible
revenue the higher value.
N/A
N/A
The significant inputs used for Level 3 and disclosed above and the inputs used for Level 2 are disclosed in Note 22(e).
RECONCILIATION OF LEVEL 3 FAIR VALUE MEASUREMENTS
Opening Balance
Total gains or losses:
- in profit or loss
Closing Balance
2017
CONTINGENT
CONSIDERATION
IN A BUSINESS
COMBINATION
2016
CONTINGENT
CONSIDERATION
IN A BUSINESS
COMBINATION
10,489,438
8,276,292
4,069,190
14,558,628
2,213,146
10,489,438
The carrying value of all other financial assets and liabilities approximate their fair value.
NOTE 25: KEY MANAGEMENT PERSONNEL 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
Other long-term benefits
Share-based payments
2017
$
2,107,898
89,965
15,216
269,735
2016
$
2,141,888
90,865
131,170
118,258
Total Key Management Personnel Compensation
2,482,814
2,482,181
NOTE 26: COMMITMENTS FOR EXPENDITURE
(a) Finance Leases
The Group leases scientific equipment under finance leases. The average lease term is one year (2016: two years). Under the terms of the
lease, the Group retains ownership at the completion of the agreed term. Interest rates underlying all obligations under finance leases
are fixed at the respective contract dates with the current rate of 7.05% (2016: 5.22% to 7.37%) per annum.
71
FINANCE LEASE LIABILITIES
Within one year
Later than one year but not greater than five
Future finance charges
Present Value of Minimum Lease Payments
Represented in the financial statements (Note 18) by:
Current borrowings
Non-current borrowings
(b) Operating Leases
MINIMUM LEASE PAYMENTS
PRESENT VALUE OF LEASE
PAYMENTS
2017
$
-
-
-
-
-
2016
$
58,458
-
58,458
(847)
57,611
2017
$
-
-
-
-
-
2017
$
-
-
-
2016
$
57,611
-
57,611
-
57,611
2016
$
57,611
-
57,611
Operating leases relate to business premises with lease terms of between two and ten years. The building premise leases have options of
+2 and +5+5 year terms respectively.
Non-Cancellable Operating Lease Commitments
Within one year
Later than one year but not greater than five
Later than five years
Minimum Lease Payments
(c) Rental Agreements
2017
$
2016
$
996,957
2,675,088
-
1,110,502
3,587,894
-
3,672,045
4,698,396
The Group sub-lets areas of its facility under agreements that are renewed annually. Rent received from these agreements is treated
according to the accounting policy outlined in Note 2(c).
Future Rental Income Receivable
Within one year
Later than one year but not greater than five
2017
$
153,009
-
153,009
2016
$
324,698
240,122
564,820
NOTE 27: EVENTS OCCURRING AFTER REPORTING DATE
No matters or circumstances have arisen since the end of the financial year which significantly affect or may significantly affect the results of
the operations of the Group.
NOTE 28: REMUNERATION OF AUDITORS
During the financial year the following services were paid and payable to the external auditor:
Auditor of the Group
Audit or review of financial reports
The auditor of Bionomics Limited is Deloitte Touche Tohmatsu.
2017
$
162,994
162,994
2016
$
719,343
719,343
72
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 29: CASH FLOW INFORMATION
(a) Cash and cash equivalents
For the purposes of the consolidated statement of cash flows, cash and cash equivalents include cash on hand and in banks, net of
outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting period as shown in the consolidated statement of cash
flows can be reconciled to the related items in the consolidated statement of financial position as follows:
Cash and Cash Equivalents (Note 8)
(b) Reconciliation of operating (loss)/profit to net cash outflow from operating activities
(Loss)/Profit for the year
Items in (loss)/profit
Depreciation and amortisation
Share-based payments
Gain on asset disposals
Contingent consideration – accretion interest
Contingent consideration – adjustment to inputs
Amortisation of borrowing costs
Net unrealised foreign exchange differences
Interest received
Warrant mark-to-market
Changes in operating assets and liabilities
(Increase)/Decrease in receivables
Increase in Research and Development Incentive receivables
Decrease/(Increase) in other assets
Increase in inventory
Decrease in provisions
Decrease in other liabilities
(Decrease)/Increase in payables
Decrease in deferred tax liability
2017
$
2016
$
42,873,656
45,450,382
2017
$
2016
$
(6,749,615)
(16,592,410)
1,742,630
503,652
-
158,992
4,338,422
28,659
(504,907)
1,937,612
399,913
140,159
158,399
1,845,907
130,624
1,698,619
(1,203,748)
(1,240,226)
1,471,401
(1,494,676)
41,152
(378,983)
1,063,436
(1,595,956)
(96,014)
11,500
(6,219)
(43,332)
(1,982,617)
(213,234)
635,347
(42,157)
(35,835)
(36,870)
(468,209)
(420,812)
Net Cash (Outflows)/Inflows From Operating Activities
(1,439,842)
(15,359,554)
NOTE 30: LOSS PER SHARE
Basic Loss per share
Diluted Loss per share
2017
($0.01)
(1 cent)
($0.01)
(1 cent)
2016
($0.03)
(3 cents)
($0.03)
(3 cents)
The basic and diluted Loss per share amounts have been calculated using the ‘Loss after income tax’ figure in the consolidated statement of
comprehensive income.
73
NOTE 30: LOSS PER SHARE CONT.
The basic and diluted Loss per share amounts have been calculated using the ‘Loss after income tax’ figure in the consolidated statement of
comprehensive income.
Loss Per Share (Basic and Diluted):
Loss after tax for the year
2017
$
2016
$
(6,749,615)
(16,592,410)
2017
NUMBER
2016
NUMBER
Weighted Average Number of Ordinary Shares - Basic
Weighted average number of ordinary shares used in calculating basic loss per share:
481,350,312
457,258,616
Weighted Average Number of Ordinary Shares - Diluted
Weighted average number of ordinary shares used in calculating basic loss per share:
481,350,312
457,258,616
Shares deemed to be issued for no consideration in respect of:
- Employee options
11,139,740
4,046,000
Weighted Average Number of Ordinary Shares Used in the Calculation of Diluted Loss Per Share
492,490,052
461,304,616
The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of ordinary shares
for the purposes of diluted loss per share.
Employee options
2017
NUMBER
4,422,240
2016
NUMBER
2,905,000
The warrants issued by the Company (see Note 21) have been excluded from the weighted average number of ordinary shares.
The warrants issued by the Company (see Note 21) have been excluded from the weighted average number of ordinary shares.
NOTE 31: RELATED PARTY TRANSACTIONS
(a) Parent Entity
The immediate parent and ultimate controlling party of the Group is Bionomics Limited. Interests in subsidiaries are set out in Note 13.
(b) Key Management Personnel
Disclosures relating to compensation of key management personnel are set out in Note 25 and the Directors’ Report.
(c) Loans to Directors and Other Key Management Personnel
There were no loans to any Directors of the Company or other key management personnel of the Group during the financial year ended 30
June 2017 (2016: $0).
74
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 32: PARENT ENTITY INFORMATION
The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are the same as
those applied in the consolidated financial statements. Refer to Note 2 for a summary of the significant accounting polices relating to the Group.
FINANCIAL POSITION
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
NET ASSETS
Equity
Issued capital
Accumulated losses
Reserves
Total Equity
Financial Performance
Loss for the year
Other comprehensive income
Total Comprehensive Income
YEAR ENDED
30 JUNE 2017
$
YEAR ENDED
30 JUNE 2016
$
51,332,869
56,063,216
20,450,466
19,569,636
71,783,335
75,632,852
11,321,680
9,390,149
24,355,139
28,723,403
35,656,819
38,113,552
36,126,516
37,519,300
134,536,429
134,392,813
(107,411,637)
(102,914,920)
9,001,724
6,041,407
36,126,516
37,519,300
(5,464,127)
(17,275,742)
-
-
(5,464,127)
(17,275,742)
(a) Property, Plant and Equipment Commitments
There are no contractual commitments for the acquisition of property, plant or equipment as at 30 June 2017 (2016: Nil).
(b) Contingent Liabilities and Guarantees
The contingent liabilities and guarantees of the parent are the same as disclosed in Note 34 and Note 9 respectively.
NOTE 33: CONTINGENT CONSIDERATION
During the year ended 30 June 2013, the Company acquired Eclipse Therapeutics, Inc. (Eclipse) into the wholly owned subsidiary Bionomics, Inc.
Part of the consideration are potential cash earn-outs to Eclipse security holders based on achieving late stage development success or
partnering outcomes based on Eclipse assets. Due to the movement in the US dollar, change in projected inputs and unwinding of interest, at
30 June 2017 this was $14,558,628 (30 June 2016: $10,489,438).
75
2017
$
2016
$
10,489,438
8,276,292
158,992
158,399
4,338,422
1,845,907
(428,224)
208,840
14,558,628
10,489,438
Opening Balance
Accretion interest
Adjustment for changes in timing of expected revenue projections
FX movement
Closing Balance
NOTE 34: CONTINGENT LIABILITIES
A contingent liability exists in relation to employee contracts of up to $414,215 (2016: $871,206) in the event of redundancy, purchase or
merger of the Company by a third party resulting in a material diminution in the employee’s duties.
In January 2012, the Company entered into a research and license agreement with Ironwood Pharmaceuticals, Inc., or Ironwood, pursuant
to which Ironwood was granted worldwide development and commercialisation rights for BNC210. In November 2014, the parties mutually
agreed to terminate this license agreement, reverting all rights to BNC210 back to the Company. Our sole obligation to Ironwood is to pay
Ironwood low single digit royalties on the net sales of BNC210, if commercialised. It is not practicable to estimate the future payments of any
such royalties that may arise due to the stage of development of BNC210.
76
DIRECTORS’ DECLARATION
The Directors Declare that:
a) in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable;
b) in the Directors’ opinion, the attached financial statements are in compliance with International Financial Reporting
Standards issued by the International Financial Reporting Standards, as stated in Note 2 to the financial statements;
c) in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations
Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and
performance of the consolidated entity; and
d) the Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act 2001.
On behalf of the Directors
Errol De Souza
Chairman
Deborah Rathjen
Chief Executive Officer and Managing Director
Dated this 16th day of August 2017
77
INDEPENDENT AUDIT REPORT
Deloitte Touche Tohmatsu
ABN 74 490 121 060
11 Waymouth Street
Adelaide, SA, 5000
Australia
Phone: +61 8 8407 7000
www.deloitte.com.au
Independent Auditor’s Report
to the members of Bionomics Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Bionomics Limited (the “Company”) and its subsidiaries (the
“Group”) which comprises the consolidated statement of financial position as at 30 June 2017, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies and other explanatory
information, and the directors ‘declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
1)
giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its financial
performance for the year then ended; and
2)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the time
of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report for the current period. These matters were addressed in the context of our
audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
78
INDEPENDENT AUDIT REPORT
Key Audit Matter
Carrying value of goodwill, intangible assets
and contingent consideration
At 30 June 2017, the Group has goodwill of
$12,264,122, as disclosed in note 15, other
intangible assets of $14,330,884, as disclosed in
note 16 and contingent consideration of
$14,558,628, as disclosed in note 33.
As disclosed in note 3, management uses
significant judgements and estimates in
determining the recoverable amounts of the assets
and the fair value of the contingent consideration
(which is dependent upon the recoverable amount
of the assets).
The key assumptions adopted by management in
determining the recoverable amounts of the assets
and the fair value of the contingent consideration
include:
•
•
the forecast probabilities of achieving the
various phases in the lifecycle of the
development of the drug compounds; and
the likelihood of the Group being able to
identify partnership opportunities with
Pharma companies to further develop their
compounds under licencing agreements and
the value of anticipated milestones under
those agreements.
How the scope of our audit responded to the
Key Audit Matter
Our procedures included, but were not limited to:
•
•
•
•
•
•
•
•
obtaining an understanding of the key
controls associated with the preparation of
the models used to assess the recoverable
amount of the assets and valuation of the
contingent consideration;
agreeing forecast expenditure to Board
approved budgets;
in conjunction with our valuations specialists
critically assessing the forecast probabilities
of achieving projected milestones at the
various phases in the lifecycle of drug
compounds against industry data;
assessing the key assumptions for the value
of milestones and royalty payments at the
various phases against current contractual
arrangements entered into by the Group;
obtaining an understanding of how the Group
structures and prices its licencing agreements
and benchmarks against other industry
participants;
evaluating management’s assessment of the
current timing of the phases of each of the
drug compounds in line with market
announcements made by the Group;
assessing the historical accuracy of
forecasting by management, performing
sensitivity analysis on the key assumptions;
and
assessing the appropriateness of the
disclosures included in note 15 and note 33.
Other Information
The directors are responsible for the other information. The other information comprises the Directors’
Report, which we obtained prior to the date of this auditor’s report, the other information also includes the
following documents which will be included in the annual report (but does not include the financial report
and our auditor’s report thereon): Highlights, Chairman’s Report, CEO & Managing Directors report,
Intellectual property portfolio, Board of Directors, Management, Corporate Governance Statement and
Shareholders’ Information which are expected to be made available to us after that date.
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INDEPENDENT AUDIT REPORT
Our opinion on the financial report does not cover the other information and accordingly we do not and will
not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
When we read the Highlights, Chairman’s Report, CEO & Managing Directors report, Intellectual property
portfolio, Board of Directors, Management, Corporate Governance Statement and Shareholders’
Information, if we conclude that there is a material misstatement therein, we are required to communicate
the matter to the directors and use our professional judgement to determine the appropriate action.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
•
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
80
INDEPENDENT AUDIT REPORT
•
•
•
•
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as a
going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group’s audit. We remain solely responsible for
our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 8 to 18 of the Directors’ Report for the year
ended 30 June 2017.
In our opinion, the Remuneration Report of Bionomics Limited, for the year ended 30 June 2017, complies
with section 300A of the Corporations Act 2001.
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INDEPENDENT AUDIT REPORT
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
DELOITTE TOUCHE TOHMATSU
Penny Woods
Partner
Chartered Accountants
Adelaide, 16 August 2017
82
CORPORATE GOVERNANCE STATEMENT
The Corporate Governance Statement for the 2016/2017 financial year is located on the Company’s website under the “About” tab then
“Corporate Governance” or by copying the following to a web browser http://www.bionomics.com.au/about/corporate-governance
SHAREHOLDER INFORMATION
All shareholder information provided is current as at 14 September 2017
Substantial Shareholders
Substantial holders in the Company are set out below:
ORDINARY SHARES
BVF Partners L.P, BVFINC. and Mark N. Lampert
Ausbil Investment Management Ltd
Private Portfolio Managers Pty Ltd
Equity Securities
There are 5,697 holders of ordinary shares in Bionomics.
The number of shareholdings held in less than marketable parcels is 490.
NUMBER HELD
49,147,193
33,737,603
26,403,534
Voting Rights
There is one class of quoted equity securities issued by the Company, ordinary, with voting rights attached to the ordinary shares.
One share equates to one vote.
Distribution of Holders of Equity Securities
CATEGORY (SIZE OF HOLDING)
ORDINARY SHARES
UNLISTED OPTIONS
WARRANTS
NUMBER OF SECURITY HOLDERS
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
488
1,723
940
2,107
408
5,666
0
5
6
52
19
82
5
5
83
SHAREHOLDER INFORMATION CONT.
Twenty largest holders of each class of quoted equity securities
The names of the 20 largest holders of each class of quoted equity securities are listed below:
NAME
1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2 NATIONAL NOMINEES LIMITED
3 CVC LIMITED
4 US REGISTER CONTROL A/C
5 BELL POTTER NOMINEES LTD (BB NOMINEES A/C)
6 J P MORGAN NOMINEES AUSTRALIA LIMITED
7 BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD DRP
8 CITICORP NOMINEES PTY LIMITED
9 LINK 405 PTY LTD
10 CITICORP NOMINEES PTY LIMITED (COLONIAL FIRST STATE INV A/C)
11 LONGFELLOW NOMINEES PTY LTD (NORGARD SUPER FUND A/C)
12
MR MARK RICHARD POTTER + MRS REBECCA AMY POTTER
(MARK & REBECCA POTTER A/C)
13 WELAS PTY LTD (THE WALES FAMILY SUPER A/C)
14 PROVENDORE PTY LTD (THE WILKS SUPER FUND A/C)
15 CHARMED5 PTY LTD
16 STINOC PTY LIMITED
17 PLUTEUS (NO 164) PTY LIMITED (FRANK WOLF FAMILY A/C)
18 F M WOLF PTY LIMITED (FM WOLF SUPER FUND A/C)
19 LEE SANDS NOMINEES PTY LTD (WAYMOUTH PROP NO 1 A/C)
20 MR CHRISTOPHER REYES
ORDINARY SHARES
NUMBER HELD
PERCENTAGE OF
ISSUED SHARES
66,595,669
63,774,992
22,501,120
21,695,080
18,656,750
17,413,354
14,156,526
13,642,291
7,928,873
4,993,726
4,500,000
4,225,000
3,455,357
3,045,000
2,950,600
2,167,423
2,100,000
2,068,474
1,950,000
1,529,205
13.82
13.23
4.67
4.50
3.87
3.61
2.94
2.83
1.65
1.04
0.93
0.88
0.72
0.63
0.61
0.45
0.44
0.43
0.40
0.32
UNQUOTED EQUITY SECURITIES
NUMBER ON ISSUE
NUMBER OF HOLDERS
Options issued pursuant to Bionomics Limited Employee Share Option Plan
Warrants exchangeable into Bionomics Limited ordinary shares
10,191,290
41,196,315
82
5
279,349,440
57.96
84
COMPANY PARTICULARS
Bionomics, a listed public Company, is domiciled and incorporated
in Australia.
Bionomics’ primary listing is on the Australia Securities
Exchange (ASX).
Bionomics shares are listed on the Australian Securities Exchange
under the code BNO.
DIRECTORS
Dr Errol De Souza
Chairman
REGISTERED AND ADMINISTRATIVE OFFICE
31 Dalgleish Street
Thebarton SA Australia 5031
Telephone: +61 8 8354 6100
Facsimile: +61 8 8354 6199
E-mail: info@bionomics.com.au
Web Address: www.bionomics.com.au
SHARE REGISTRY
Computershare Investor Services Pty Limited
Level 5, 115 Grenfell Street
Adelaide SA Australia 5000
Telephone: 1300 556 161 (within Australia)
+61 3 9415 4000 (outside Australia)
E-mail: web.queries@computershare.com.au
Web Address: www.computershare.com
SOLICITORS
Johnson Winter & Slattery
211 Victoria Square
Adelaide SA Australia 5000
Latham & Watkins LLP
12670 High Bluff Drive
San Diego CA 92130
USA
AUDITORS
Deloitte Touche Tohmatsu
11 Waymouth Street
Adelaide SA Australia 5000
PATENT ATTORNEYS
Griffith Hack
Level 10, 161 Collins Street
Melbourne VIC Australia 3000
Davies Collison Cave
1 Nicholson Street
Melbourne VIC Australia 3000
Knobbe Martens Intellectual Property Law
12790 El Camino Real
San Diego CA 92130
USA
Dr Deborah Rathjen
Mr Peter Turner
Mr David Wilson
Mr Alan Fisher
SENIOR MANAGEMENT
Dr Deborah Rathjen
Mr Jack Moschakis
Chief Executive Officer and
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer
and Managing Director
Legal Counsel and
Company Secretary
Mr Steven Lydeamore
Chief Financial Officer
SCIENTIFIC ADVISORS
Dr Glenn Begley MBBS, PhD, FRACP
Prof Jonathon Cebon MBBS, PhD, FRACP
Dr Philippe Danjou MD, PhD
Dr Jayesh Desai FRACP
Professor Paul Fitzgerald MSc, Phd
Dr Richard Hargreaves PhD
Dr Tim Harris
Dr Ann Hayes BSc, PhD
Dr Ole Isacson MD
Dr Jose Iglesias MD
Dr Fiona McLaughlin PhD, FSB
Dr Jens D Mikkelsen MD, PhD
Professor Danny Rischin MBBS, MD, FRACP
Dr Fiona Thomson PhD
Professor Steven Williams
Dr Frank Yocca PhD
Dr Allan Young
Bionomics ordinary shares commenced trading on the OTCQX
marketplace in the US effective 2 March 2015 under the ticker
code “BNOEF”.
Investors can find current financial disclosure and real-time Level 2
quotes for Bionomics on www.octmarkets.com
For more information, please visit www.otcmarkets.com
2017
BIONOMICS
ANNUAL
REPORT
2
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