Computing the future
of medicineTM
e-therapeutics plc
Annual report and accounts 2023
We integrate computational
power and biology to discover
life-transforming RNAi medicines.
Vision
Solve human disease through computation
Mission
Integrating computational power and biological data
to discover life-transforming RNAi medicines
Purpose
Build an in-house pipeline of more effective medicines at a greater
speed and significantly reduced costs compared to industry standards
Contents
Strategic report
01 Highlights
02 Overview
03
Investment case
04 Chair’s statement
06 CEO’s statement
10 CFO’s review
12 Management Q&A
14 Strategic summary
16 Our strategy
20 Therapeutic pipeline
23 Business model
24 Stakeholder engagement
28 Environmental, social and governance
29 Risk management
Corporate governance
Financial statements
33 Governance
34 Board of directors
35 Scientific advisory board
36 Executive team
38 Corporate governance statement
45 Audit committee report
57
Independent auditors report
60
Income statement and statement of
comprehensive income
61 Statement of changes in equity
62 Statement of financial position
63 Statement of cash flow
46 Remuneration committee report
64 Notes to the financial statements
48 Remuneration policy
51 Statement of remuneration
54 Directors’ report
56 Directors’ responsibilities statement
Annual General Meeting
80 Notice of Annual General Meeting
82 Explanatory notes to the resolutions
Advisors
-
see Inside Back Cover
To view our website visit:
www.etherapeutics.co.uk
HIGHLIGHTS
Operational highlights
Pipeline
• RNAi strategy delivering a rapidly growing in-house
pipeline of early first-in-class candidates, against target
genes discovered using our HepNetTM computational
platform. Comprehensive in vivo proof-of-concept data
packages being generated.
• Active across a variety of areas of high unmet medical
need, including cardiovascular disease, non-alcoholic
steatohepatitis (NASH) and haematology. Investing in the
cardiometabolic space as a key focus area.
Data
• Expansion of world’s most comprehensive knowledge base
of hepatocyte-centric biology to capture and model
complex biological processes in the liver and tissues
influenced by the liver, completing proprietary curation of
100s of data sources.
• Increased integration of HepNetTM functionality and
continued validation of our tools, in particular our
hepatocyte-specific knowledge graph and proprietary
target identification approaches.
• Mapping of human genetic validation of potential targets
completed for more informed target triage.
Computation
• Integration of large language models (LLMs), such as
OpenAI's GPT model, to radically enhance computational
capabilities and transform HepNetTM into a dynamic
knowledge resource.
• Expansion of artificial intelligence (AI) approaches that
learn from experimental data deployed into siRNA (short
interfering RNA) drug design.
IP
• Sustained intellectual property (IP) activity with patent
applications filed on eight further inventions arising from
the Company’s proprietary GalNAc-siRNA technology,
GalOmicTM.
Partners
• New collaboration with iTeos Therapeutics in immuno-
oncology announced on 5 April 2022. Several milestone
payments received since, in addition to upfront
consideration, following the successful identification of
potential targets and small molecule compounds.
• Successful completion of Galapagos NV collaboration in
idiopathic pulmonary fibrosis (IPF), with all near-term
milestones achieved demonstrating our ability to
effectively identify potential therapeutic strategies and
targets.
Post Period Highlights
• Filing of four new patent applications to protect innovation
around novel gene targets, and associated disease relevant
biology as well as proprietary siRNA stabilisation
chemistries.
• Additional milestone achieved in collaboration with iTeos
Therapeutics, resulting in an additional payment to the
Company.
Financial highlights
Revenue
£0.5m
2023
2022
£0.5m
£0.5m
Successful fundraise
£13.5m
2023
£13.5m
2022
£22.5m
Year-end cash and short-term
investment bank deposits
£31.7m
2023
2022
£31.7m
£26.4m
2021
£0.3m
2021
£13.2m
2021 £12.80m
Operating loss
£10.2m
2023
2022
£10.2m
£9.6m
R&D spend
£7.2m
2023
2022
£7.2m
£6.1m
2021
£4.5m
2021
£2.7m
R&D tax credit receivable
£1.5m
2023
2022
£1.5m
£1.5m
2021
£0.8m
01
Strategic reporte-therapeutics plc Annual report and accounts 2023 OVERVIEW
Better medicines faster
To materially increase the likelihood of successfully developing effective medicines, it is
essential to overcome some fundamental obstacles in drug development:
Biology… there is a limited understanding of human biology across the biopharma industry
Druggability… conventional modalities are often challenged by an inability to design and develop
a drug despite having identified a potential target
Efficiency… the R&D process is slow and expensive with poor methods of de-risking therapeutic
hypotheses early
Novelty… new target discovery remains rare, with crowded competitive landscapes around the
same established targets
At e-therapeutics, we have developed a powerful validated platform approach to help overcome these obstacles. By
uniquely connecting the worlds of computation and RNA interference (RNAi) we can rapidly generate and prosecute novel
potential drug candidates in a reproducible and translatable way.
Hepatocyte-focused
computational biology
platform to identify
novel gene targets,
improve drug design
and increase
automation
learn more on page 18
Computational
Biology Platform
RNAi Platform
RNAi platform
to generate
GalNac-siRNA
drug candidates
that silence novel
gene targets
We use our HepNetTM computational biology platform to
model disease complexity, test millions of therapeutic
hypotheses in silico and then rank potential novel gene
targets. Our GalOmicTM platform then allows us to generate
RNAi medicines that specifically silence those genes.
The medicines we create are focused on silencing genes
expressed in hepatocytes (liver cells) which perform key
functions in biological processes vital for human health and
represent important targets for a broad range of diseases.
02
e-therapeutics plc Annual report and accounts 2023 INVESTMENT CASE
Our investment case
Unique market position
Computational biology pedigree
Our highly differentiated market position combining
computational drug discovery with RNAi as a modality
enables us to prosecute therapeutic hypotheses at some
of the fastest speeds and lowest development costs
currently available in the industry.
We have a long history in computationally modelling
biology and enabling drug discovery. The expertise in this
space and proprietary technology have been successfully
translated to focus on hepatocytes and identifying novel
targets.
learn more on page 16
learn more on page 18
Single-cell focus advantage
Unrivalled hepatocyte knowledge
Hepatocyte-targeted interventions offer the opportunity
to address a large variety of diseases and potentially
access thousands of gene targets while also enabling a
focus on highly specific datasets and tools that promote
superior computational depth and accuracy.
We have built the world’s most comprehensive
knowledge resource in hepatocyte-centric biology,
creating a ‘Google for hepatocytes’ that models complex
biological processes in the liver and in tissues influenced
by the liver.
learn more on page 16
learn more on page 7
Proven RNAi platform
Expanding in-house pipeline
Benchmarking studies have demonstrated our
GalOmicTM RNAi platform can effectively silence genes
to industry leading standards. The platform is now being
actively used to generate drug candidates that silence
novel disease-associated genes identified by HepNetTM.
We are growing an in-house pipeline of compelling first-in-
class and ‘first-on-target’ RNAi candidates to treat a wide
range of complex liver-associated diseases that are being
rapidly progressed towards the clinic.
learn more on page 19
learn more on page 20
High barrier to entry
Demonstrable speed of execution
The field of RNAi requires a high degree of technical
expertise while operating in a highly active intellectual
property landscape. We have deep expertise in the
space across biology, chemistry, and IP.
In less than three years we have built and validated an entire
proprietary RNAi platform approach, pivoted our
computational biology platform to hepatocyte-focused
target identification and generated a wealth of in-house
experimental data.
learn more on page 16
learn more on page 7
03
Strategic reporte-therapeutics plc Annual report and accounts 2023 CHAIR'S STATEMENT
A year of progress
Our RNAi focus
The focus on RNAi as a modality of choice enables the
Company to realise some key advantages associated with
this ground-breaking technology which include:
• High specificity against their target gene, thus minimising
potential off-target effects
• No druggability issues, being able to silence virtually any
gene in the genome
• Long duration of action, supporting infrequent
administration and reduced patient burden
• Reversible effects (no changes to DNA)
• Good safety profile
The recent strategic focus on RNAi, together with the use of
sophisticated computational approaches to identify novel
therapies, has resulted in a frenetic period of innovation
which is outlined throughout this report.
Our hepatocyte expertise
Whilst our methodology is applicable to a wide range of
diseases, our focus is specific to diseases associated with the
liver. Hepatocytes are highly metabolically active cells, and
their targeting enables the Company to develop therapeutic
strategies in a broad variety of therapeutic areas, including
cardiovascular, metabolic, renal, and rare diseases.
Developing and protecting a pipeline
During the year, the Company has further leveraged its
HepNetTM computational biology platform to identify novel
gene targets resulting in the initiation of our own in-house
therapeutic pipeline. This represents a move away from
earlier stage partnering towards prosecuting our own ideas
where we believe there is greater potential for later-stage
higher value commercial opportunities.
The in-house pipeline contains a number of novel targets
undergoing advanced experimental evaluation and
prosecution. Behind this sits a large portfolio of additional
ideas for targets that are constantly being discovered and
assessed in silico as well as experimentally.
Importantly, we continue to protect our innovation through
patent applications for Intellectual Property Rights around
novel gene targets and associated disease-relevant biology
discoveries, as well as proprietary siRNA stabilisation
chemistries. During the reported year, and continuing into
the new financial year, we have filed a series of patent
applications to protect 17 inventions.
I am pleased to report a year of
significant progress across all
elements of the business
culminating in the rapid
establishment of an in-house
pipeline of RNAi candidates and
the continued advancement of
our highly differentiated
computational tools and
approach.
Prof Trevor M Jones CBE FMedSci
Independent Non-Executive Chair
04
e-therapeutics plc Annual report and accounts 2023 Board and governance
As an AIM-quoted company we have chosen to apply the
2018 Quoted Companies Alliance Corporate Governance
Code (the “QCA Code”). The Board remains committed to
high standards of corporate governance that ensure the
Company operates in a transparent and ethical way that
delivers value for employees, shareholders and stakeholders.
This includes activities undertaken during the period across
the areas of risk management control, financial planning,
organisational structure, and resource allocation.
People and culture
The Board is committed to building a diversified inclusive
workplace and creating a thriving culture of integrity and
trust where people can freely innovate. During the period
we have sought ways to further develop initiatives that
promote employee wellbeing and engagement. We
continue to seek and attract high calibre talent with plans to
add further expert resource to the existing team in the year
ahead.
Our move from Oxford to London has been completed
successfully and places us in a position to access a larger
pool of talent without losing our close proximity to the
centres of excellence in Oxford and Cambridge.
Financial position
Through the activities of the Audit Committee, the Board,
and the Executive Management Team, the Company
continues to implement and maintain robust financial
controls and reporting.
Via a £13.5m fundraise announced in September 2022, we
strengthened our financial position which provides us with
the capital to support the execution of our immediate
strategy. The fundraising also provided an important
endorsement of our differentiated approach and expertise
in integrating computational power and biological data to
accelerate the discovery of novel RNAi medicines. I would
like to acknowledge and thank our shareholders for their
continued support.
I am delighted to represent this dynamic and progressive
company as its Chair. We are in a strong position financially,
making good scientific progress and are committed to
creating value for all our stakeholders.
Prof Trevor M Jones CBE FMedSci
Independent Non-Executive Chair
4 May 2023
05
Strategic reporte-therapeutics plc Annual report and accounts 2023 CEO’S STATEMENT
A positive year
I am pleased to report that 2022
has been a successful year in the
execution phase of our strategy
and that the process of
nomination and execution of
pre-clinical targets using our
RNAi platform is well underway.
Ali Mortazavi
Chief Executive Officer
06
2022/23 was a pivotal year for e-therapeutics as we made
significant progress towards realising our goal of
Computing the Future of MedicineTM. Through our
innovative computational approach and RNAi-based
therapeutic modality, we were able to rapidly identify and
pursue promising targets in multiple disease areas. We are
now well-positioned to advance our pipeline of first-in-
class preclinical RNAi candidates across multiple
therapeutic areas, making significant progress in just one
year.
Pivot from small molecules to RNAi: GalOmicTM
The opportunity to pivot into RNAi as a modality of choice
to prosecute our novel target ideas presented several key
advantages. In particular, focussing on GalNAc-conjugated
siRNA, using our proprietary GalOmicTM platform, allows us
to leverage the existing safety and performance precedent
of a commercial-stage technology and take more biological
risks by pursuing novel targets. In addition, RNAi enables
rapid and comparatively inexpensive candidate generation
once a target is selected. This allows us to have multiple
‘shots on goal’ for the same cost as a single small molecule
programme with a much higher probability of success.
Critically, domain knowledge of the RNAi therapeutics space
is extremely niche, and I believe that the previous
experience in the field of our senior leadership team will
prove to be a crucial component of our success.
We have now shown across multiple targets that we can
design and synthesise lead GalNAc-conjugated siRNAs in
approximately 6 months and at an approximate cost of
$500K (including healthy in vivo pharmacology). This
capability has enabled us to generate and progress drug
candidates at a greatly accelerated pace and scale compared
to more traditional modalities, and we believe that RNAi-
based therapeutics have the potential to transform the
treatment landscape across multiple disease areas.
Significant progress in RNAi IP, drug design and
speed of execution
During the year, we have also made significant progress in
our intellectual property (IP) portfolio, with the filing of
multiple patent applications to protect both our RNAi
platform (GalOmicTM) inventions and novel targets. We
have gained significant new know-how whilst optimising
our drug design process and reducing the associated
timelines. These include the protection of siRNA chemical
modification “stamps” thereby reducing the number of
permutations and combinations in our screening cascades
as well as predictive methodologies to reduce the number
of sequences that need to be tested for in vivo studies.
This is part of our goal to apply computation across all
aspects of our business, eventually allowing us to
confidently predict the attributes of our siRNA molecules
without the need for cell-based or in vivo screening. This
will allow us to progress our siRNA molecules from in silico
drug design straight to in vivo experiments, increasing our
e-therapeutics plc Annual report and accounts 2023 speed of execution. In addition, following the success of the
mRNA-based COVID-19 vaccines, we have noted a
significant change in policy from regulators to use
compelling computational data to help reduce preclinical
timelines and start first in human (FIH) clinical trials as
quickly as possible. We believe, given that computation and
data is used at every step of our drug discovery efforts, ETX
is extremely well-positioned to take advantage of the
changing regulatory landscape going forward.
HepNetTM: Our computational solution to human
biology modelling and novel target ID
We continue to make significant strides in our expansion of
HepNetTM, the most comprehensive hepatocyte data and
analytics resource in the world. HepNetTM enables
generation and analysis of biological network models,
providing a novel and mechanistic approach to drug
discovery that explicitly considers the true complexity of
biology. Our computational network models represent, as
closely as possible, the biological systems ETX is seeking to
impact. The approach allows us to identify, prioritise and test
millions of hypotheses in silico to make more reliable
predictions with higher confidence and generate gene
target hypotheses based on large complex data sets.
HepNetTM was built on the Company’s previously established
proprietary network biology knowledge, tools and
algorithms to model and interrogate human biology. This
powerful modular platform was originally cell type agnostic.
Extensive work has recently been undertaken to extend its
capability and to leverage the focus on a single modality,
RNAi, to create the most comprehensive and integrated
proprietary hepatocyte-centric data resource.
We have invested in the licensing and generation of a range
of proprietary liver omics data resources to support disease
related process and target discovery, particularly in the
realm of cardiometabolic disorders. The Company’s
proprietary hepatocyte-focused Knowledge Graph has
been further enhanced with additional data derived from
both experimental Natural Language Processing (NLP)
approaches and through AI-driven predictive approaches
to knowledge inference. This allows the discovery of hidden
relationships in data whilst providing the capability to
impute missing information. Furthermore, the application of
robust standards of validation for all our tools and
approaches remains an important focus, and this rigour will
continue to be a critical part of our development going
forward.
In terms of scalability, the HepNetTM platform and data
resources are now entirely cloud-based, ushering in a new
era of effectively unlimited computational power and data
storage. Using cutting-edge technologies we have been
able to speed up our analytical pipelines by orders of
magnitude, reducing compute times from weeks or months
to a few hours. This has enabled the development of
proprietary large-scale statistical approaches to analysis that
were previously unfeasible.
RNAi strategy has been quickly executed
January 2023
Further patent application filings on novel on
novel targets and new siRNA chemistries
September 2022
In-house pipeline announced,
advancing experimental evaluation and
prosecution of novel targets across a
range of cardiometabolic indications
August 2022
Further patent applications filed to protect
inventions in novel targets, siRNA chemistries
and GalNAc-siRNA silencing construct designs
February 2022
Nomination of first in-house RNAi target
November 2021
RNAi Platform benchmarking complete,
demonstrating gold standard depth and
duration of gene knockdown patent
applications filed
April 2021
Hepatocyte-specific computational
biology platform migration and target
selection strategies commence
February 2021
RNAi Platform benchmark studies
commence
October 2020
Ali Mortazavi appointed as CEO and starts
building expert RNAi team
07
Strategic reporte-therapeutics plc Annual report and accounts 2023 CEO’S STATEMENT CONTINUED
HepNetTM has been instrumental in enabling us to develop a
deep understanding of hepatocyte biology and giving us
the ability to identify novel targets for potential drug
candidates. We have continued to build on the platform,
generating proprietary data inputs, exploring additional
datasets of interest, and keeping our data foundation
updated. Through this, we have been able to generate a
multitude of potential target hypotheses, enabling us to
rapidly prosecute many high conviction, computationally-
derived gene targets in relevant disease areas as possible.
Target nomination and pipeline
We believe that we now have a robust process to assess and
prosecute any hepatocyte gene target from idea to FIH
studies. In addition, we are continually refining and
improving our methodologies, algorithms, datasets and
implementing one of the fastest cascades in preclinical drug
development. This has resulted in the Company having a
number of high conviction therapeutic target-indication
pairs which can be prosecuted at speed, dependent on our
capital position.
Our preclinical pipeline has progressed at a rapid rate and
we have initiated preclinical activities for additional targets
while continuing to pursue previous projects. We expect to
nominate our first candidate for IND/CTA enabling studies
before the end of 2023, while we continue to advance
projects through construct design and in vitro studies into
in vivo testing. Cardiometabolic indications continue to be a
key focus, but we remain open to pursuing promising
hepatocyte-expressed targets identified by our
computational methods that have effects in other disease
areas, as exemplified by our active haematology
programmes.
Through this pipeline, we aim to translate our discoveries
into real-world, highly specific, and effective medicines in
record time. We have also continued to nominate new
targets, with a key pipeline priority being targets within
cardiometabolic indications, such as cardiovascular disease
(CVD) and non-alcoholic steatohepatitis (NASH). We have
active programmes in these areas, and we plan to continue
to add projects across metabolic syndrome indications.
Non-dilutive funding opportunities via collaborations/
partnerships remains a key component of the Company’s
strategy. Future collaborations will be in line with our
current liver and RNAi focus, with an expectation for
later-stage partnerships that maximise value retention and
reflect the development of ETX’s early in-house RNAi
pipeline. A balance will be found between preclinical assets
to partner and assets that the Company will progress to
early clinical trials to reach a more significant value
inflection point.
08
KPIs
Corporate
38
full time employees
£13.5m
fundraise in September 2022
17
inventions protected through patent filings
1
existing pharmaceutical collaboration successfully
completed in Idiopathic Pulmonary Fibrosis
1
new pharmaceutical collaboration signed in
immuno-oncology
Technology
14m
hepatocyte specific data points
16,000 genes and 1,300
hepatocyte associated diseases in knowledge base
Outperformance
of proprietary network algorithms against industry
standards
Millions
of hypotheses identified & tested in silico
Pipeline
Multiple
RNAi targets in preclinical development
10s
of further target hypotheses undergoing assessment
1000s
of accessible target genes in
multiple disease areas
e-therapeutics plc Annual report and accounts 2023 Large Language Models and GPT-4
I believe that the most significant development at
e-therapeutics over the past year occurred during Q4 2022,
when we began investigating the integration of large
language models (LLMs) and GPT-4 as a core component
and enabling technology within all of our computational
efforts. The drug discovery landscape is on the brink of a
transformative revolution, driven by LLMs such as GPT-4. As
I have already stated, e-therapeutics has made remarkable
progress in multiple discovery programs, transitioning from
small molecule discovery to hepatocyte-targeted GalNAc-
siRNA drugs, and our HepNetTM proprietary platform for
insights and predictions.
Nevertheless, a weakness in our computation has been the
immaturity of NLP algorithms to couple large corpora of
text alongside our machine learning (ML) and statistical
approaches. However, LLMs, such as GPT-4, now offer a
unique opportunity to revolutionise e-therapeutics' text
capabilities and materially enhance HepNet’sTM capabilities.
By placing LLMs at the core of our computation and
harnessing GPT-4's capabilities, we can create specialised
LLM "agents" and transform HepNetTM into a dynamic
knowledge resource. Integration of GPT-4 and LLMs
integration will provide a unifying framework from which to
drive every aspect of our pipeline and position
e-therapeutics as a global leader in hepatocyte biology and
related diseases. Our long-term vision is to fully automate
the preclinical drug discovery process, using GPT-4 and
LLMs to access real-time information and interface with
external applications, ultimately accelerating the
development of life-saving treatments.
Immediate use cases for LLMs include our "Straight to In
vivo" project, target identification, patent extraction, and an
in silico cell type delivery project. We aim to create a robust
pipeline and business model leveraging GPT-4 and LLMs'
full potential, ensuring our place at the forefront of the
AI-driven drug discovery revolution.
By integrating GPT-4 and LLMs, e-therapeutics will continue
to break new ground in drug discovery, create novel
therapeutic strategies, and improve patient outcomes.
Central to this vision is the ongoing advancement of our
RNAi chemistry platform (GalOmicTM) for developing
hepatocyte targeted GalNAc-siRNA drugs. These cutting-
edge AI technologies hold the key to unlocking new
treatments for various diseases and conditions, transforming
the future of medicine.
In conclusion, integrating GPT-4 and LLMs into our drug
discovery pipeline will revolutionise hepatocyte biology,
RNAi chemistry, and the development of novel therapeutics.
By harnessing these AI technologies, we can accelerate the
development of life-saving treatments, improve patient
outcomes, and realise our vision of computing the future of
medicine.
Collaborations
In April 2022, we announced a new collaboration with iTeos
Therapeutics. We are using our unique computational
methodology to enable the discovery of highly
differentiated novel immuno-oncology therapeutics. The
work is progressing well against pre-defined plans and
milestones. As well as receiving near-term cash payments
material to the revenue of the Company, we are eligible to
receive undisclosed milestone payments through preclinical
and clinical development, in addition to regulatory
milestones, per programme. Several milestone payments
have been received since we first announced this
collaboration and, after the period, we have achieved an
additional success milestone associated with a further cash
payment to the Company.
The collaboration with Galapagos NV (Galapagos) in
idiopathic pulmonary fibrosis (IPF) has now successfully
concluded and offers further evidence and third-party
validation of our ability to effectively identify potential
therapeutic strategies and targets computationally. We
achieved all near-term milestones resulting in several cash
payments to the Company. The future of the identified hits
and targets will be determined by Galapagos according to
its strategic priorities. If progressed, we are eligible to
receive further milestones throughout development and
commercial stages.
Capital raise
2022/23 was an extremely difficult year for the
biotechnology sector. However, in September 2022 we
successfully raised £13.5m through a share placing and
subscription with M&G Investments which we believe is a
recognition of our unique business model. This capital
injection enables us to continue our growth and
development. I would like to take this opportunity to thank
M&G for their continued support.
Conclusion
In conclusion, I believe that 2022/23 will be seen as a
transformative year for e-therapeutics. Through our
computational approach, we have been able to generate a
multitude of potential target hypotheses and progress an in-
house pipeline of preclinical RNAi candidates across multiple
therapeutic areas. I would like to reiterate that we believe
that LLMs such as GPT-4 are a new enabling technology
that will completely transform our business. Given our
established position in computational drug discovery, we are
ideally positioned to capitalise on this opportunity and look
forward to the future with great confidence.
Ali Mortazavi
Chief Executive Officer
04 May 2023
09
Strategic reporte-therapeutics plc Annual report and accounts 2023 CFO'S REVIEW
Delivering results
This has been another year of
significant progress towards
building and populating an internal
pipeline of high-conviction early
RNAi assets. In addition, the
Company raised net proceeds of
£13.4m through an equity issue in
order to fund its ongoing R&D
activities, including expansion of
the Company's GalOmicTM and
HepNetTM platform capabilities.
Michael Bretherton
Chief Financial Officer
10
Revenue
Revenue of £0.5m for the year (2022: £0.5m) relates mainly
to the recognition of upfront payments and the
achievement of milestones under the immuno-oncology
collaboration agreement with iTeos in addition to a
remaining milestone payment with Galapagos on successful
conclusion of the collaboration in idiopathic pulmonary
fibrosis.
We are actively generating valuable data packages for
several target genes and indications, and currently have live
targets progressing through in vivo studies and disease
models, together with additional targets in earlier stages. In
addition, we continue target identification and triaging,
continuously generating additional targets ready for project
initiation. This is further validation of the Company’s ultimate
goal of developing a highly differentiated in-house RNAi
pipeline with future scope for early-stage partnering and
revenue generation.
Fundraise
An equity fundraise of £13.4m (gross £13.5m less related
costs and commissions of £0.1m) was announced in
September 2022 by way of a direct subscription by funds
managed by M&G Investment Management Limited. The
net proceeds are being used to expand the Company’s
platform capabilities and RNAi asset pipeline.
R&D expenditure
R&D expenditure totalled £7.2m this year (2022: £6.1m).
Significant progress has been made in further developing
the Company’s RNAi therapeutics platform and we have
now filed patent applications to protect 17 inventions,
including around stabilising chemical modifications enabling
specific hepatocyte targeting. The Company has also
continued to advance its HepNetTM computational platform
and to leverage the focus on a single modality, RNAi, to
create the most comprehensive and integrated proprietary
hepatocyte-centric data resource. This platform enables
generation and analysis of biological network models,
providing a novel and mechanistic approach to drug
discovery that explicitly considers the true complexity of
biology.
Administrative expenditure
Administrative expenditure for the year totalled £3.5m
(2022: £3.9m) inclusive of a share-based payment employee
option charge of £0.2m (2022: £0.5m). The decreased
administration cost is mainly due to a reduction of the
share-based payment charge which results from a
significant number of options lapsing in relation to
employee leavers during the year.
e-therapeutics plc Annual report and accounts 2023 Operating loss
The operating loss for the year of £10.2m is £0.6m higher
than that in the prior year. This is mainly attributable to
increased R&D expenditure reflecting further progress and
development of our business strategy to compute the
future of medicine.
received of £1.5m, partially offset by an underlying net
outflow cash burn of £9.6m. That cash burn relates mainly to
operating losses exclusive of non-cash charges in respect of
share-based payment employee option costs of £0.2m, and
depreciation, amortisation and impairment costs of £0.5m.
In addition, £0.2m was spent on the acquisition of capital
equipment and capitalised patents and IP during the year.
Interest and investment income
Interest and investment income for the year amounted to
£0.5m (2022: £0.1m). The increase includes interest income
higher by £0.2m on higher cash deposit balances and
improved deposit rates, coupled with receipt of a £0.2m
dividend from a non-operating subsidiary which was
dissolved in the year and following which the Company no
longer has any subsidiaries.
R&D tax credits and loss for the year
The income statement includes an R&D tax credit of £1.5m
(2022: £1.5m) in relation to the current year, resulting in a
loss for the year of £8.3m (2022: £8.1m). The R&D tax credit
claim has not yet been submitted to HM Revenue and
Customs. Historically the amounts received have been
materially in line with our calculated tax receivable estimate
included at the year-end.
Cash flow
Year-end cash and short-term investment bank deposits
amounted to £31.7m, which is £5.3m higher than at the
previous year-end. The increase reflects an equity
fundraise inflow of £13.4m, together with R&D tax credits
Financial review
Financial outlook
In the coming financial year, we will drive forward with our
strategic plans for nomination and execution of preclinical
targets using our GalOmicTM platform. Non-dilutive funding
opportunities via collaborations/partnerships remains a key
component of the Company’s strategy and a balance will be
found between preclinical assets to partner and assets that
the Company will progress to early clinical trials.
Our budget, which has been prepared to reflect the above
strategic plans, shows that we have sufficient funds to
continue in operational existence for at least 12 months from
the signing of these financial statements. We anticipate a
considerable increase in our rate of spend and our budget
remains prudent and incorporates discretionary spend
which could be scaled back if considered appropriate.
Michael Bretherton
Chief Financial Officer
4 May 2023
Revenue
£0.5m
2022: £0.5m
2021: £0.3m
Increase/(decrease)
in cash and short-term
investment bank deposits
Cash and short-term
investment bank deposits
balance
£5.3m
£31.7m
2022: £13.6m
2021: £8.9m
2022: £26.4m
2021: £12.8m
R&D tax credit
receivable
£1.5m
2022: £1.5m
2021: £0.8m
R&D spend
Operating loss
Loss for the year
£7.2m
£10.2m
£8.3m
2022: £6.1m
2021: £2.7m
2022: £9.6m
2021: £4.5m
2022: £8.1m
2021: £3.7m
Average
headcount
38
2022: 32
2021: 18
11
Strategic reporte-therapeutics plc Annual report and accounts 2023 MANAGEMENT Q&A
Management Q&A
What was the rationale for moving away from small molecules?
Historically we made strong progress in using computation to model biology and discover novel small
molecules, with a 100-1000x increased hit rate compared to industry standards which was reproducible across
internal and partnered projects. However, the discovery and development of small molecules poses myriad of
issues (e.g. druggability, specificity, time, cost) that make it less tractable for a small company to build a deep,
proprietary pipeline based on this modality.
As we increased the focus on target identification, RNAi is a better fit than small molecules given its higher
degree of specificity when it comes to drugging a particular gene target. In addition, the characteristics of
RNAi as a modality with no druggability issues, fast drug design times at a far lower cost, mean that we can
carry the accelerative impact of computation through to pipeline execution.
Consequently, we can now address some of the fundamental obstacles associated with more traditional drug
discovery, invest in our own ideas, and retain value by building an in-house pipeline with a relatively small
team and modest R&D expenditure.
Does moving away from small molecules make your previous technology, data, and
research progress redundant?
No. Much of the technology, particularly the development of our computational biology platform, remains a
fundamental part of our approach in interrogating biology to learn about key disease-relevant mechanisms
and derive new targets.
Building on the strong foundation we had in place, our computational biology platform’s capability has been
extended and leveraged for hepatocyte specificity and increased target identification power. New modules
such as bioinformatic siRNA design have also been added.
What is your core strategy?
Our core strategy centres around utilising computational methods to gain a better understanding
of human disease biology and design better, life-transforming RNAi based medicines. In summary,
this encompasses:
• Discovering novel hepatocyte targets
• Building an in-house pipeline of highly differentiated RNAi medicines
• Generating strong experimental data packages and realising part of the value of those candidates
through commercial partnerships
• Using computational methods across the board to accelerate the R&D process and increase its probability
of success
Are you looking to sign an RNAi partnership deal?
Yes, this is a key part of our strategy. We expect future collaborations to be at a later stage, maximising value
retention and reflecting the development of our in-house pipeline. A balance will be found between
partnered preclinical assets and assets that we will progress to early-stage clinical trials.
Q
A
Q
A
Q
A
Q
A
12
e-therapeutics plc Annual report and accounts 2023 Q
A
Q
A
Q
A
Q
A
Q
A
Q
A
How many computationally generated targets are you working on?
We are actively generating valuable data packages for several target genes and indications. We continue to
build our cardiometabolic focus with one project making good progress through in vivo studies and
additional targets in earlier stages. Furthermore, we entered late-stage in vivo experiments in different
disease models in haematology. In addition, we continue target identification and triaging, continuously
generating additional targets ready for project initiation.
How do you know your computational approach is working?
The hit rate of predicted active molecules which pass stringent criteria in the wet laboratory is a clear metric
that validates our computational predictions and methods. In our projects this hit rate has consistently been
100-1000 fold higher than the industry standard rate. This is across different therapeutic areas both internally
and with partners, who run the screening and counter screening assay systems themselves.
In addition, we have run a series of validation analyses to confirm that our target identification methods are
able to predict targets likely to be sufficiently causal and impactful in disease. For instance, we have assessed
our ability to recover targets that have been validated with positive clinical data.
What are your plans for HepNetTM?
We will continue to develop HepNetTM across all elements of the platform, from deepening the proprietary
hepatocyte-centric data resource, to refining its analytical, predicative and network biology modelling
capabilities.
The biggest limitation currently facing RNAi as a highly potent, patient-friendly, and reproducible commercial
stage modality, is the identification of novel hepatocyte targets to address indications with high unmet medical
need. We plan to leverage HepNet’sTM unrivalled data and suite of computational tools to unearth better
therapeutic targets for human diseases.
What differentiates you from all the other AI-led biotech’s in the space?
We are the only company combining computation and RNAi, with a liver-associated disease focus and the
added edge of a comprehensive proprietary data foundation that is hepatocyte specific. Our validated network
biology-centred approach to computational methods and tools, while AI-enhanced, focusses on building
mechanistic versus statistical models of biology, which is key for drug discovery. Using our proprietary
HepNetTM and GalOmicTM technologies, has enabled us to create something extremely rare – a reproducible
target discovery engine and therapeutic platform that leads to fast clinical candidate generation.
Given the challenging economic environment, how confident are you that you can
succeed?
The fundamentals of the company remain very strong – a validated RNAi platform, rapid scientific
progress, a differentiated strategy placing us in a unique market position, and, very importantly, an
excellent team of people to execute our strategy. We believe this makes us attractive to investors
regardless of stock market dynamics and, given our modest market capitalisation, presents good value
compared to similar stage biotech company valuations.
What will we see from you over the next 12 months?
We aim to advance our in-house pipeline and increase the number of novel targets we prosecute. We will also
continue to innovate our computational approaches and data foundation with a hepatocyte-centric focus,
implement LLMs across HepNetTM, successfully complete our existing partnership and work to secure a future
RNAi partnership. We will also continue to invest in talent and build a high-performing team and culture.
13
Strategic reporte-therapeutics plc Annual report and accounts 2023 STRATEGIC SUMMARY
Strategic Summary
Our strategy is to combine the power of HepNetTM, our computational biology platform, with
GalOmicTM, our RNAi gene silencing platform, to generate an in-house pipeline of life-
transforming medicines for patients.
2022 Progress
Continue to develop HepNetTM, our hepatocyte-centric computational biology platform
• Enhanced computational discovery and target ID capabilities.
• Expanded highly differentiated hepatocyte-specific data resource including additional liver omics datasets and
ongoing integration of experimental data.
• Advanced cell type-specific AI-enhanced tools and precision discovery approaches.
• Transferred platform and data resource to be entirely cloud-based enabling greater computational power and
unlimited scalability.
Further advance our GalOmicTM RNAi platform
• Continued development of proprietary enabling RNAi technology.
• Patents filed for eight further inventions arising from proprietary GalNAc-siRNA technology.
Develop an in-house pipeline of novel candidates
• Rapidly growing in-house pipeline of first-in-class candidates derived from target genes discovered using HepNetTM.
• Pipeline addressing areas of high unmet need in cardiometabolic indications and promising hepatocyte-expressed
targets with extra-hepatic effects in other disease areas.
• Progressing projects through construct design and in vitro studies into in vivo testing.
• Large number of further target hypotheses undergoing assessment.
Enter into collaborations that maximise value retention
• Validation and monetisation of disease process and target ID computational capabilities:
1. Upfront and several milestone payments received for new collaboration with iTeos in immuno-oncology.
2. Galapagos collaboration successfully concluded in IPF triggering multiple milestone payments.
• Active exploration of future RNAi partnering opportunities.
Create an efficient and high-performing company
• Successful strategic pivot away from small molecules to RNAi as a modality of choice, increasing focus
and direction.
• Increased blend across informatics and biology-focused business functions.
• Implementation of more structure around project management and reporting.
• Continued investment in attracting and retaining a talented team.
14
e-therapeutics plc Annual report and accounts 2023 2023 Focus
Continue to innovate around HepNetTM and GalOmicTM
• Further develop and validate hepatocyte target ID capabilities.
• Increase the predictive power of our computational tools for siRNA design to minimise in vitro screening.
• Continue to generate proprietary data to feed into HepNetTM.
• Explore additional datasets of interest to embed in HepNetTM, either public or licensed.
• Keep our data foundation updated and our RNAi inventions protected.
Develop an in-house pipeline of novel candidates
• Advance selected existing programmes towards the clinic.
• Continue to learn about novel hepatocyte biology mechanisms for medicine generation.
Enter into collaborations that maximise value retention
• Continue to deliver on iTeos collaboration and realise further upside.
• Seek partnerships around pipeline candidates and/or HepNetTM and GalOmicTM.
Create an efficient and high-performing company
• Build a dedicated project and portfolio management function.
• Continue to refine frameworks, structures and standard operating procedures for increased efficiency.
• Continued investment in attracting and retaining a talented team.
15
Strategic reporte-therapeutics plc Annual report and accounts 2023 OUR STRATEGY
Approach
We summarise our approach as Computing the Future of MedicineTM. This means embedding
computation in every aspect of the R&D process to improve drug discovery and overcome the
inherent challenges associated with discovering new drugs for patients quickly.
Pioneering computationally driven RNAi
medicines
We use computation to rapidly identify promising targets.
This approach helps us to:
• Generate in silico network models which help us
understand and analyse connections between genes and
proteins in a hepatocyte-centric biological ecosystem.
• Interrogate biological processes to generate hypotheses
and test millions of potential interventions including the
downstream effect of silencing a specific gene.
• Uncover novel biology and the right mechanisms/nodes
to target as a therapeutic strategy in a given indication.
• Bioinformatically design novel GalNAc-siRNA drug
candidates with higher predictive power.
Computational methods not only help us start with a
better model of biology to understand complex systems,
but also make the whole target identification process
reproducible end-to-end so that the discovery of each
novel drug is not a brand new scientific problem.
When this approach is integrated with the significant
advantages associated with RNAi as a modality, the
accelerative effect of using computation can be carried
forward into the rapid prosecution of therapeutic ideas.
Clear benefits associated with hepatocyte-
centric approach
Focusing on hepatocytes combines the advantages of
being able to tackle a wide variety of therapeutic areas
with the greater computational depth and accuracy that
comes from a single-cell approach.
Key hepatocyte characteristics:
• The liver plays a critical role in human health and is
associated with a broad range of diseases with high
unmet medical need. Hepatocytes are highly influential
both within and beyond the liver.
• Over 12,000 genes are expressed in hepatocytes and
are amenable to our GalOmicTM-siRNA platform, which
can selectively deliver to hepatocytes.
Advantages of focussing on one cell type:
• Reduced complexity and increased depth of
knowledge which improves the accuracy of our
computational methods and analytical tools.
• Retained ability to model the cross-talk of hepatocytes
with other cells in the body by capturing signals that
leave the cells to influence other cell types/tissues and
vice versa.
• Enhanced ability to invest in more specific data sources,
establish wet lab assays and generate proprietary
experimental datasets, which are then integrated into
our comprehensive hepatocyte knowledge base .
Hepatocytes
103 cell types
involved in cell-cell
interactions with
hepatocytes
654 cellular
receptors
bind proteins secreted
by hepatocytes
124
Tissues influence
hepatocytes via
protein ligands
127
Hepatocyte protein
ligands signal to
other tissues
High level of influence over other cell types
16
Brain
Skin
Eye
Lung
Liver
Bone
Heart
Pancreas
Kidney
Adipose
tissue
Spleen
e-therapeutics plc Annual report and accounts 2023 Graphic for p.19
Using RNAi to deliver on our computational advantage
We want to have a tangible impact. It is not enough to just discover novel targets. We want to translate those discoveries
into real world, highly specific, and effective medicines in record time.
The use of RNAi-based therapeutics as a breakthrough, clinically validated, and now commercial-stage therapeutic
modality allows us to generate and progress drug candidates at a greatly accelerated pace and scale compared to more
traditional modalities.
Small molecule
approaches
Target
Nomination
Drug
Discovery
Drug
Design
up to 5 years
Target
nomination
Drug
Design
RNAi approach
c. 6 months
Additional advantages:
Specific
Translatable
Reproducible
Safe
Patient-friendly
But it’s not just about speed of execution. RNAi based medicines have some compelling characteristics:
Specific: Sparing other cell types in the body, helping to ensure that therapeutic levels of a drug
are delivered to one cell type and target one gene
Translatable: The test agent used for target validation becomes the clinical candidate
Druggable: Can selectively silence any gene in hepatocytes
© Confidential | Powerpoint template doc 2022
1
Reproducible: New drug candidates can be generated quickly by changing the existing genetic sequence
to target a different gene and treat a different disease
Safe: Clinical studies have demonstrated siRNAs are safe and well tolerated
Patient friendly: Infrequent subcutaneous administration and long therapeutic effect (duration of action).
Typically months before the next injection is needed.
17
Strategic reporte-therapeutics plc Annual report and accounts 2023 OUR STRATEGY CONTINUED
A platform approach where biotech meets tech
To deliver our approach we have developed two proprietary platforms:
Data and learnings captured, constantly improving predictive power
Target
nomination
Computational
Biology Platform
RNAi Platform
Therapeutic
pipeline
"human plus machine”
HepNetTM – Identifying novel gene targets
A proprietary computational biology platform that leverages an unparalleled hepatocyte-specific knowledge base, creates,
and analyses biological network models, providing a novel and mechanistic approach to drug discovery.
• World-class hepatocyte data resource
• Biological process modelling
• Target hypothesis generation and
testing
in silico
• Drug design improvement
• Increased automation
Target
nomination
RNAi platform
Therapeutic
pipeline
The platform considers the true complexity of biology, utilising large complex data sets and our world class hepatocyte-
centric knowledgebase to make more reliable predictions. HepNetTM then generates, prioritises, and tests millions of
hypotheses in silico to identify better therapeutic targets with higher confidence. The most attractive targets are prosecuted
using our GalOmicTM RNAi platform.
18
ETX Expertisee-therapeutics plc Annual report and accounts 2023 HepNetTM- Discovering relevant biological
HepNet - Visualising relevant biological processes and disease mechanisms
processes and disease mechanisms
HepNet - Exploring potential therapeutic targets
HepNetTM - Exploring potential
therapeutic targets
© Confidential | Powerpoint template doc 2022
1
© Confidential | Powerpoint template doc 2022
2
GalOmicTM – Silencing novel gene targets
A proprietary platform that enables us to generate GalNAc-siRNA first-in-class drug candidates that target hepatocytes in
the liver and selectively silence novel disease-associated genes identified by HepNetTM
Target
nomination
Computational
Biology Platform
• Gene silencing
• Hepatocyte targeting
• Proprietary chemistry
• GalNAc-siRNA candidate generation
Therapeutic
pipeline
RNAi is a biological process that occurs naturally within our cells to help regulate gene expression. The mechanism by which
RNAi mediates its biological function is specific targeting of messenger RNA (mRNA) molecules, which carry the
instructions cells need to make proteins out of the genetic manual encoded in our DNA.
GalOmicTM enables us to generate proprietary potent and safe siRNA therapeutics by creating synthetic molecules to
silence the expression of disease-associated genes in a highly specific manner. Additional levels of specificity can be
achieved by coupling siRNA molecules to delivery systems for cell type-specific targeting.
Our siRNA constructs are conjugated to GalNAc (N-Acetylgalactosamine) moieties, which mediate highly specific delivery
to hepatocytes in the liver. As the liver is a highly active organ, hepatocyte targeting unlocks opportunities in a wide variety
of therapeutic areas.
This hepatocyte specificity spares other cell types in the body and ensures that therapeutic levels of the drug reach the
target cells.
19
Strategic reporte-therapeutics plc Annual report and accounts 2023 THERAPEUTIC PIPELINE
Therapeutic pipeline: progressing
preclinical RNAi candidates
In backing our own ideas, we have been able to quickly progress an in-house pipeline of first-in-class preclinical RNAi
candidates across multiple therapeutic areas. As an indicator of the novelty of our approach and current portfolio, no
competitors, RNAi or otherwise, are active on the targets we are prosecuting at the time of target nomination.
A key pipeline priority is targets within cardiometabolic indications, where we already have active programmes in
cardiovascular disease (CVD) and non-alcoholic steatohepatitis (NASH), and we plan to continue to add projects across
metabolic syndrome indications. Furthermore, we are pursuing promising hepatocyte-expressed targets in non-
cardiometabolic areas, such as haematology.
Graphic for p.22
Therapeutic strategy
First-in-class/first-on-
target RNAi candidates
Cardiometaboli
c indications
Hepatocyte-
expressed genes
with effects in non-
cardiometabolic
indications
Accelerated execution
Hepatocyte
associated
disease areas
Cardiovascular
Metabolic
Diabetes
Haematology
Obesity
NASH
Rare
Other
NOVEL CANDIDATES
in preclinical progression
TARGET
HYPOTHESES
10s of ideas undergoing
assessment
Use of proprietary computational methods across the board - from data to siRNA construct
design Rapid generation of target validation datasets and IP
© 2023 e-therapeutics. All rights reserved. Non-Confidential
2
20
e-therapeutics plc Annual report and accounts 2023 Disease Area Focus
Cardiometabolic Disease
Cardiovascular and metabolic diseases (CVMD) represent
the leading cause of global mortality. Despite the recognised
unmet need in cardiometabolic disease, there is a relative
lack of investment in the space by key biopharma players
and investors (e.g. between 2016 and 2021, for every active
clinical-stage program in CVD there were 18 oncology
programmes). This represents a key opportunity in a very
large addressable market, as well as for sector investment
and partnering, given that there is a shortage of potentially
effective therapies in development.
A key challenge in reducing cardiovascular events is the
heterogeneity and complexity of the underlying aetiology,
which is poorly understood. The overall risk of a severe
cardiovascular event is driven by several risk factors
including arteriosclerosis and what is referred to as
‘metabolic syndrome’, characterised by a combination
of hypertension, obesity, and diabetes.
These diseases all share strong links to liver biology and
therefore could be addressable with a liver-targeted
approach such as our GalOmicTM platform.
A key barrier to innovation in the cardiometabolic field is the
identification of novel targets and mechanisms of action that
account for complex and variable disease aetiology. Our
approach is uniquely positioned to transform the treatment
landscape in the space. Hepatocytes, which we target using
GalOmicTM, are centrally involved in lipid and glucose
homeostasis, and we leverage HepNetTM to identify novel
targets.
We currently have preclinical candidates in development
for the treatment of cardiovascular disease (CVD) and
non-alcoholic steatohepatitis (NASH):
Cardiovascular Disease (CVD)
Disease Demographics
Risk drivers
Chronic Inflammation/Obesity
Severe CV
events driving
mortality
Ischemic
stroke
Myocardial
infarction
Heart failure
Hypertension
Dyslipidemia/
Atherosclerosis
Insulin Resistance/Diabetes
• Globally, an estimated 550 million people are living with heart and circulatory diseases
• Cardiovascular disease is a leading cause of death causing 20% of deaths in the US4 and resulting in annual costs of $29bn
in the US.
Patient Need
• Despite advances in lipid management, atherosclerosis remains a major cause of cardiovascular disease. There is a need for
novel targets to tackle the independent risk factors driving atherosclerotic cardiovascular disease risk and progression.
• People living with metabolic syndrome continue to be at markedly increased risk of experiencing severe cardiovascular
events and need new effective treatments for prevention.
21
Strategic reporte-therapeutics plc Annual report and accounts 2023 THERAPEUTIC PIPELINE CONTINUED
Non-Alcoholic Fatty Liver Disease (NAFLD)/Non-alcoholic steatohepatitis (NASH)
Disease Demographics
• Non-alcoholic fatty liver disease (NAFLD) is an increasingly prevalent progressive condition with a complex
pathophysiology, affecting up to 25% of the World’s population.
• While early stages tend to be asymptomatic and are potentially reversible, it can develop into chronic hepatitis, cirrhosis
and the development of hepatocellular carcinoma; resulting in directly attributable medical costs estimated in excess of
$100bn in the US.
Normal
Liver
NAFL
(steatosis)
NASH
w/o fibrosis
NASH
+ fibrosis
NASH
fibrosis + cirrhosis
Hepatocellular
carcinoma
Patient Need
• Despite the tremendous unmet need, there are no US Food and Drug Administration (FDA) or European Medicines
Agency (EMA) approved treatments and recent years have seen several clinical programs for a range of targets fail.
Haematology
The liver is the primary site of synthesis of most procoagulant and anticoagulant proteins, making it a central organ in
non-malignant haematological disorders affecting haemostasis and thrombosis.
Disease Demographics
• Non-malignant haematological disorders affecting haemostasis and thrombosis cover a range of diseases including
anaemias, haemorrhagic disorders, blood cell disorders and disorders involving blood-forming organs or the immune
mechanism.
• Across indications, the economic cost related to these conditions is estimated at €11bn in Europe.
Patient Need
• Rare haematological diseases that are multigenic or have allele heterogeneity and/or phenotypic plasticity continue to be
undertreated despite overall improvements in the standard of care.
• Using our network biology approach, we are ideally placed to identify novel targets that can better address complex
disease biology, while the infrequent, patient-friendly profile of our RNAi therapeutics is well suited to patients’ needs.
• We are currently investigating two therapeutic targets in preclinical development.
Other therapeutic areas
Reflecting the high levels of metabolic activity of our cell type of focus – hepatocytes – we are also investigating additional
therapeutic areas enabled by targeting the liver with our GalOmicTM platform. These include other cardiometabolic
indications, as well as non-cardiometabolic ones, selected to maximise our exposure in areas of high unmet medical needs.
Our diversified therapeutic portfolio spans across common and rare diseases, including indications with both hepatic and
extra-hepatic manifestations.
22
e-therapeutics plc Annual report and accounts 2023
BUSINESS MODEL
Business Model
Traditional drug discovery approaches the discovery of each drug as a brand new scientific
problem. With RNAi based drugs we can generate a more translatable, reproducible, and
balanced portfolio where drug development largely becomes an execution problem.
This reproducibility is key to our business model and
commercial strategy, as it builds a discovery engine where
the same timelines and costs apply to the early stages of any
pipeline programme. We aim to prosecute as many high
conviction, computationally-derived gene targets in relevant
disease areas as possible.
Partnering revenue going forward is principally expected to
be generated by collaborating with biopharmaceutical
players with complementary capabilities to advance our
active pipeline assets. We can leverage our HepNetTM
platform to identify de novo targets and then design
RNAi-based candidates (using GalOmicTM) against them.
We believe this approach is commercially robust and fulfils a
need in pharma for biotechnology innovation, whilst aiming
to accelerate the journey to key validating datasets, ahead
of generating human data in the clinic.
Using HelpNetTM, we are able to generate a multitude of
potential target hypotheses. Given the size of the Company
and the need for focus on a few selected targets to make
tangible progress, we are unable to prosecute all of these
targets at once. However, having a large volume of novel
ideas is advantageous to cater for pipeline attrition, diversify
our commercial approach and attract partners.
Opportunity to maximise value
Exploring opportunities to collaborate with
biopharmaceutical partners is a key component of our
business model and over time we expect to derive a mix of
revenues from these partnerships by either licensing or
co-developing the liver-targeting RNAi therapeutic
candidates being generated in our pipeline.
The stage at which we enter these partnerships will vary but
a balanced approach will be found between preclinical
assets to partner and assets that the Company will progress
to early clinical trials to reach a more significant value
inflection point.
Hepatocyte
target ideas
(not actual)
Target
validation
experiments
(not actual)
Novel candidates
in progress
$ Value
Phase 1
Clinical
Target
nomination
Lead ID
Candidate nomination
Drug
design
Disease
model
IND/CTA
enabling
Time
12 months
23
Strategic reporte-therapeutics plc Annual report and accounts 2023 STAKEHOLDER ENGAGEMENT
Section 172(1) statement
Openly engaging and maintaining strong relationships with stakeholders forms a critical part
of our strategy. The Directors recognise that proactive dialogue, and the consideration
of consequent feedback, contributes directly to our long-term success and creates value for
our shareholders, employees, partners and suppliers.
S172 Statement
The Directors are aware of their duty under Section 172(1) of the Companies Act 2006, to act in the way
they consider, in good faith, would be most likely to promote the success of the Company for the
benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
• The likely consequence of any decision in the long term
• The interests of the Company’s employees
• The need to foster the Company’s relationships with suppliers, customers, and others
• The impact of the Company’s operations on the community and environment
• The desirability of the Company maintaining a reputation for high standards of business conduct
• The need to act fairly as between members of the Company
The Company has adopted the Corporate Governance Code for Small and Mid-Sized Quoted
Companies from the Quoted Companies Alliance (the QCA code). The QCA code is an appropriate
code of conduct for the Company’s size and stage of development. Details of how the Company
applies the principles of the QCA Code are set out in the Corporate Governance section of this report.
learn more on page 33
Responsibility
Our Approach
The likely consequences of any decision in the
long term
The Company's long-term strategic objectives, including progress made
during the year and principal risks to these objectives, are shown in the
Our Strategy and Risk Management sections of this Strategic Report.
The interests of the Company’s employees
Our employees are fundamental to us achieving our long-term strategic
objectives, as more fully disclosed in Principle 3 of the Corporate
Governance Statement.
The need to foster the Company’s business
relationships with suppliers, customer and
others
A consideration of our relationship with wider stakeholders and their
impact on our long-term strategic objectives is also disclosed in Principle 3
of the Corporate Governance Statement.
The impact of the Company’s operations on
the community and the environment
The Company operates honestly and transparently. We consider the
impact on the environment of our day-to-day operations and how we can
minimise this. Further disclosure on how we promote a corporate culture
based on ethical values and behaviours is included in Principle 8 of the
Corporate Governance Statement and in the Risk Management section.
The desirability of the Company maintaining a
reputation for high standards of business
conduct
Our intention is to behave in a responsible manner, operating within high
standards of business conduct and good corporate governance. Not only is
this covered in our Corporate Governance Statement but is also
epitomised in the Risk Management section.
The need to act fairly as between members of
the Company
Our intention is to behave responsibly towards our shareholders and treat
them fairly and equally, so that they too may benefit from the successful
delivery of our strategic objectives.
24
e-therapeutics plc Annual report and accounts 2023 Engaging with our stakeholders
Employees
CROs
Why we engage
The Company relies on the qualities of its people for
success. While the Company may be relatively small, it
recognises the importance of a diverse and engaged
workforce and the value of each persons’ contribution.
How we engage
• Provision for the development of skills and knowledge.
• Promotion of principles and policies to ensure
equality and diversity.
• Regular formal and informal contact at a corporate,
divisional and team level to create understanding of
the Company’s strategy, progress, and achievements.
• Regular sharing of key news and information to ensure
employees are informed and engaged.
• Anonymised surveys to gauge employee satisfaction
and enable employee feedback.
• Regular discussions at a senior management and Board
level on how to maintain a positive company culture.
Why we engage
The Company does not have in-house wet
laboratories, so enables the selection of the best
experimental expertise for each therapeutic
programme and ensures the most efficient use of
capital. The Company works with world leading
external organisations who provide the experimental
capacity and capabilities needed to advance our
candidates.
How we engage
• Maintain a variety of trusted contract research
organisation (CRO) relationships with no single
provider being unduly favoured.
• Select the right partner depending on the specific
needs and expertise required for each project.
• Agree clear project timelines and milestones in
advance which are then monitored closely.
• Undertake communications to closely track project
progress including daily correspondence, high
frequency update meetings and regular site visits.
Value and outcomes
• Amongst 38 employees there are 12 nationalities.
• Engagement initiatives in the areas of employee
social events, learning & development, appraisal
systems, transparent reporting, flexible working, and
competitive reward structures.
• Clear understanding of our corporate values linked
to ‘objectives and key results’ (OKR) approach.
• Strong evidence of mutual respect and honesty as
key working practices.
Value and outcomes
• Generating preclinical data critical to validate and
progress the Company’s RNAi candidates.
• Valuable CRO input, insight, and expertise to guide
quick data-driven decisions.
• Experimental data to refine our computational tools
and improve algorithmic predictive power.
• Reducing development costs while assessing
promising therapeutic hypotheses at speed and
scale.
25
Strategic reporte-therapeutics plc Annual report and accounts 2023 STAKEHOLDER ENGAGEMENT CONTINUED
Pharmaceutical partners
Advisors
Why we engage
The Company’s unique model helps to overcome
critical challenges associated with drug discovery and
development. Collaborations with industry partners
offer the opportunity to work with disease area and
clinical experts that can help turn potential therapeutic
candidates into novel medicines for patients.
Why we engage
The Company works closely with advisors to provide
additional insight and expertise. This is done from a
corporate perspective to ensure critical business
functions are enhanced and from an R&D perspective
to gain independent input on our therapeutic areas of
interest and programmes.
How we engage
• Pre-agree detailed workplans towards key
deliverables, which are reflected by the financial
structure of the agreement.
• Maintain close interactions with our partners
throughout a project to ensure good information
flow, informed decision making and intellectual
exchange.
• Balance in-house and partnering of our pre-clinical
RNAi assets to maximise value retention, while
exploring platform-based collaborations leveraging
access to HepNetTM and GalOmicTM
Value and outcomes
• Successful conclusion of collaboration with
Galapagos NV in idiopathic pulmonary fibrosis (IPF).
All milestones were achieved demonstrating our
ability to effectively identify potential therapeutic
strategies and targets computationally.
• Positive progress in immune-oncology collaboration
with iTeos Therapeutics Inc. with achievement of
early-stage milestones.
• Such collaborations have provided valuable learnings
and validation of the Company’s approach in
addition to the monetary value.
• Helping patients with high unmet need by bringing
new RNAi therapies to the market at an increased
scale.
How we engage
• Maintain good relationships with highly regarded key
opinion leaders (KOLs) to add industry, research,
clinical and patient perspectives in key disease areas
of interest.
• Regular consultation with the Scientific Advisory
Board and participation at various events and
meetings that benefit the Company.
Value and outcomes
• Prevents the Company from operating in a vacuum
by providing external expert insight across all drug
discovery and development stages as therapeutic
areas.
• Detailed independent analysis and assessment of
strategy and therapeutic pipeline.
• Broader market intelligence relating to current/
future disease landscapes and clinical trial
considerations.
26
e-therapeutics plc Annual report and accounts 2023 Data providers
Shareholders
Why we engage
Building a deep data resource is critical for the
successful application of computational methods to
interrogate biology and discover novel gene targets.
Data from external providers is used in combination
with the Company’s proprietary data which is
captured in a continual feedback loop to ensure our
learnings are used to improve future prediction and
discovery.
How we engage
• Ongoing long-term agreements with leading data
providers in the areas of biological and chemical
data.
• Fast and efficient processes that facilitate data
ingestion and updates.
• Collaborative feedback mechanisms that enable
suggestions for data improvement.
• Constant assessment that data sources meet
strategic requirements and contribute to the
development of HepNetTM.
Value and outcomes
• The integration of complex datasets to create an
unrivalled proprietary hepatocyte knowledge
resource.
• The ability to effectively model and interrogate
human biology and processes within the liver.
• Strong relationships with data providers that enable
the continual expansion of data diversity to suit the
Company’s specialisation in RNAi and hepatocytes.
Why we engage
As an AIM quoted company listed on the London
Stock Exchange the Company recognises the
importance of consistent communications with
shareholders to provide a clear understanding of its
strategy and business performance.
How we engage
• Proactive dialogue with shareholders through timely
and relevant news distribution across the Regulatory
News Service (RNS) and multi-media channels.
• Conduct planned investor relations events to
educate and inform.
• Provide the opportunity for meetings with the
management team for existing investors, potential
investors, and analysts.
• Feedback from institutional investors following
twice-yearly roadshow meetings held following
full-year and half-year results reporting.
• A regularly maintained investor relations section on
the website providing key information on the
Company, its shareholders and corporate
governance updates under AIM Rule 26.
• Hosting of an Annual General Meeting (AGM) that
allows institutional and private shareholders to
engage with the Directors of the Company.
Value and outcomes
• Transparency of the Company, its strategy and
business operations.
• A well-informed investor base that clearly
understands the benefits and risks associated with
the Company’s investment case.
• Investors that can play an active role in monitoring
and safeguarding the governance of the Company.
• Ensuring investors views are heard and embedded
into Board decision making.
27
Strategic reporte-therapeutics plc Annual report and accounts 2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE
ESG strategy
As a company seeking to discover and
develop new medicines, we are committed to
having a positive impact on people’s lives.
Over the period we have placed an increasing
importance on extending our responsibilities
beyond the Company’s mission and purpose
to incorporate an active ESG strategy.
This is our first formal ESG statement which builds on
existing activity by identifying a framework of priorities and
ambitions that we will hold ourselves accountable to moving
forward. We look forward to providing further information
as this journey continues and demonstrating our progress
against these commitments in future Annual Reports.
ENVIRONMENTAL
RESPONSIBILITY
SOCIETAL
VALUE
ESG
focus
NURTURING
TALENT
ETHICAL
STANDARDS
Societal Value
Ethical Standards
Our ambition
Have a positive impact on society at a global level by
discovering and developing novel therapeutics in areas of
high unmet need
Our approach
• Accelerate the rate at which new therapeutic treatments
are discovered and developed for patients in need
• Maximise the efficiency and yield of capital invested in
R&D by combining computational methods and a powerful
therapeutic modality (RNAi) with distinct time, cost, and
translatability advantages
• Engage with non-profit and patient organisations
to advance research in the key disease areas we focus on
Our ambition
Operate with integrity through the maintenance of very
high professional standards
Our approach
• Ensure robust governance that promotes high ethical
standards and transparency
• Build trusted relationships with our stakeholders by being
clear, honest and open in all our communications and
transactions
• Responsibly harness technology as a force for good that
drives greater efficiency and effectiveness in medicinal
research
Environmental Responsibility
Nurturing Talent
Our ambition
Reduce the environmental impact of our business operations
and measure improvement
Our approach
• Minimise environmental impact of experimental work
by doing as much as possible computationally and
streamlining the stages of the R&D process that rely on in
vitro and in vivo work
• Review and effectively manage our energy and carbon
emissions
• Embed sustainability as a key consideration in partner and
supplier agreements
• Use technology to embrace remote, flexible, and
collaborative ways of working
Our ambition
Continue to craft a diverse and positive culture establishing
us as a ‘go-to’ employer in the biotech sector where people
are able do their best work
Our approach
• Live by our Company values to deliver meaningful and
impactful work
• Support our people by investing in initiatives that will
increase wellbeing and personal development
• Create opportunities that enhance communication and
engagement
• Provide a financial, benefits and feedback structure that
recognises, celebrates, and rewards performance
28
e-therapeutics plc Annual report and accounts 2023 RISK MANAGEMENT
Principal risks and uncertainties
Set out in the table below are the principal risks and uncertainties that the Board considers
could adversely impact the business together with an explanation of how they are managed
and controlled. Some risks are common across the industry, while others reflect current
business operations or specific elements of the Company’s strategy.
The Company has initiated, and follows, a robust system of risk management and business continuity.
The system can be summarised as:
• The Board, with support from the Audit Committee, identify procedures to minimise risk impact and ensure
implementation of a ‘Risk Management System’ "RMS”.
• The Executive Committee manages the internal control and day-to-day execution of the RMS which includes
considerations on risk assessment, mitigation policies, Company asset safeguarding, information reliability and the health
and safety of employees.
• The RMS is embedded through the entire business through a top-down and bottom-up approach (see Diagram)
• Risks are continually monitored, and specialists are engaged where appropriate to mitigate identified risks.
• Risk assessments and risk registers are used to drive business continuity planning and employee policies.
Diagram - Risk Management System - top down and bottom up approach
Board
Risk management
Operational:
Executive
Executive
Employee
Third party
Compliance:
Audit
IT and systems
Financial and legal
29
Strategic reporte-therapeutics plc Annual report and accounts 2023 RISK MANAGEMENT CONTINUED
Strategic Risks
Risk
Management and mitigation
Funding the business
We anticipate generating non-dilutive
funding via revenues from commercial
agreements with pharmaceutical
partners. If we are unable to do this
reliance falls on raising further capital
from investors or potential M&A
opportunities.
General market trends, which are
unrelated to our performance may
have an adverse effect on our market
capitalisation. Against a negative
economic climate raising capital is
currently challenging.
Eventual failure to generate additional
funding will compromise the ability to
achieve our strategic objectives and
operate as a going concern.
Feasibility of drug candidates
There is a risk we may not successfully
progress any viable drug candidates.
Drug candidates fail due to a lack of
efficacy or potency, unacceptable
toxicology results or insurmountable
challenges in medicinal chemistry.
This is the main reason that the
conventional pharmaceutical R&D
model takes many years and billions
of dollars from discovery to approved
medicines.
• Gross proceeds of £13.5m raised in September 2022 provide sufficient capital to
execute immediate strategic objectives
• Strengthening of the business development function with a significant
investment in establishing an expert market intelligence team to identify the
best strategic and commercial opportunities for pipeline assets
• Our technology approach and focus on RNAi as a modality enables us to make
fast early pre-clinical progress for relatively modest cost against industry
standards
• Detailed financial planning and analysis is regularly undertaken. This ensures our
existing financial position is constantly monitored and, if required, appropriate
budgetary adjustments are made
• Together with our nominated advisor, we are in continuous proactive dialogue
with investors and the wider investor community to manage capital market risk
• Focus on the continued enhancement of computational approaches designed
to improve predictive power and identification of therapeutic targets with the
greatest chance of success
• Ensure asset risk is diversified across the in-house therapeutic pipeline
• Positive advantages associated with GalNAc-siRNA medicines lead to a higher
confidence that the novel gene targets we identify are ‘druggable’
• The probability of success associated with RNAi being highly specific and
translatable from animals to humans is significantly higher than other drug
modalities
Protecting our intellectual property (IP)
If IP rights are not adequately secured
or defended against infringement,
or conversely become subject to
infringement claims by others,
commercial exploration could be
compromised or completely inhibited.
• Overseen by our experienced Chief Intellectual Property Officer we actively
manage IP, engaging with specialists to protect our inventions, periodically
monitor freedom to operate and defend IP rights. The Company has recently
filed patent applications protecting 17 inventions
• The operation and maintenance of our technology platforms requires detailed
know-how and specialist expertise which would be difficult and timing-
consuming for competitors to replicate
30
e-therapeutics plc Annual report and accounts 2023 Strategic Risks continued
Risk
Management and mitigation
Competition and new technologies
The scientific and technological sectors
are by their nature innovative and fast
moving. There is a risk that competitors
with greater financial resource develop
new, more developed technologies that
render our approaches less competitive.
Any failure associated with these
risks will have a material impact on
our competitiveness and financial
performance.
• We continue to invest in and progress scientific R&D and technologies to create
new differentiated internal assets that will be valuable to our customers
• Considerable innovation has been undertaken in the period developing the data
resources, biology modelling and novel target identification capabilities of
HepNetTM
• The GalOmicTM platform has also been significantly developed to further
improve siRNA construct design capabilities, speed of execution and our robust
IP position.
Operational Risks
Risk
Management and mitigation
Availability of non-human primates (NHP) for research
A post-pandemic shortage of NHP is
affecting the biopharmaceutical sector
at large.
There is a risk that reduced availability
of NHPs may slow down our
experimental progress and our ability
to validate hypotheses.
Reliance on key suppliers
We work with various key suppliers
to provide data for our platform
technologies and perform experimental
work in the wet laboratory. Retaining
good relationships with these suppliers
is important in order to execute key
elements of our strategy. Failure to do
so would delay our progress.
There is a risk that suppliers will not
deliver the expected quality of data
or to the agreed timelines, which may
result in inferior research output.
• We are anticipating our need for more NHP in good time and have mapped
suppliers in different geographies, establishing relationships
• We are planning to conservative timeline and cost estimates, assuming long lead
times to secure slots with CROs that have access to NHP and an increased cost
for any experiments requiring these animals
• We undertake effective supply chain management and diversify, where
practicable, the use of specialist suppliers to reduce the risk of over reliance on
any one organisation
• The CROs we use to carry out experimental studies are carefully selected
through a diligence process. All research data is systematically quality controlled,
reviewed and reanalysed internally to ensure consistent quality and standards
• We continuously assess alternative and complementary data providers while also
generating our own proprietary data, which mitigates reliance on any one data
provider
Information governance and security
A cyber-attack, whether by a
third party or insider, may incur
significant costs, cause disruption to
our technology infrastructure and
compromise IP.
Any breach in our cyber-security may
incur severe reputational damage, loss
of key stakeholder confidence and
negative investor sentiment.
As a consequence of increased remote
working additional risks arise which
increases the necessity to secure,
monitor and protect our technology
infrastructure and workforce.
As part of our risk management framework, we undertake best practice cyber-
security and information management. We have been independently audited by
an accredited body and been awarded Cyber Essentials Plus certification which
requires us to maintain:
• a business continuity management strategy and established information privacy
and security policies;
• regular employee training which is provided in-house and via third parties;
• physical and software-based protection, such as firewalls, anti-malware,
anti-phishing, encryption, and website risk analysis, which is reviewed as part of
regular system vulnerability testing;
• regular data backups or key systems and information which are tested regularly;
• a register of our categorised data, recording access limitation and security
measures, including a review of our data processors, cloud-based storage
providers and organisational data flows; and
• a log of all security incidents, which is reported to the Board
There have been no significant incidents and no cyber breaches during the year.
31
Strategic reporte-therapeutics plc Annual report and accounts 2023 RISK MANAGEMENT CONTINUED
Operational Risks continued
Risk
Management and mitigation
People and culture
There is a risk that we fail attract,
recruit, develop and retain the
global talent needed to develop our
technology, progress our candidates
and deliver on our strategy.
There is a risk that increased remote
working can erode successful collective
working and knowledge sharing which
may impact collaborative innovation.
The loss of key employees might
weaken our capabilities and negatively
impact our business.
• We are committed to an active people planning and development programme
to ensure employees feel valued, can develop professionally, and are
competitively rewarded. This includes industry benchmarking, effective
performance management systems and regular employee feedback surveys
• We work with specialist recruitment agencies to ensure we hire the skills we
need through best-in-class talent acquisition approaches
• Our Reward Gateway employee engagement platform supports the mental,
physical and financial wellbeing of our people
• Employees are provided with all the technologies and equipment they need to
be safe and comfortable when working flexibly
• We have built a strong culture of cross-team collaboration that operates
regardless of in-person or virtual ways of working
This Strategic Report was approved by the Board of Directors on 4 May 2023 and is signed on its behalf by:
Ali Mortazavi
Chief Executive Officer
4 May 2023
32
e-therapeutics plc Annual report and accounts 2023 GOVERNANCE
Corporate governance
statement
Chairman’s introduction to governance
Statement by the Non-Executive Chairman
On behalf of the Board, I have the pleasure of presenting
the Corporate Governance Statement for the year ended
31 January 2023. I am responsible for leading the Board to
ensure that the Company has in place the strategy, people
and structure to deliver value to shareholders and other
stakeholders over the medium to long term, supported by
a corporate culture based on sound ethical values and
behaviour, as more fully explained in the Corporate
Governance Statement on the following pages.
The Directors recognise the fundamental need for good
corporate governance in providing an efficient, effective, and
dynamic system to ensure that the Company is managed in
the right way for the benefit of all shareholders over the
medium to long term. As mentioned in my statement for the
previous year, the Board of e-therapeutics has chosen to
apply the QCA Corporate Governance Code (the “QCA
Code”) published by The Quoted Companies Alliance. The
QCA Code is a pragmatic and practical tool, which adopts a
principles-based approach to corporate governance, which
the Directors believe is an appropriate framework for the
relatively small company that e-therapeutics is, at an early
revenue-generating stage of development.
In compliance with the QCA Code I hold the position of
Non-Executive Chairman, Ali Mortazavi is the Chief
Executive Officer and Michael Bretherton is a Non-
Executive Director and Interim Chief Financial Officer.
We continue to search for an additional Non-Executive
Director to further strengthen the Board.
As individual Directors we are mindful of our statutory duty
to act in the way each of us considers, in good faith, would
be most likely to promote the success of the Company for
the benefits of its members as a whole, as set out in our
S.172(1) Statement on page 24.
We regularly review how we govern the Company, working
for the best long-term interests of our shareholders in an
open, transparent, and ethical manner. Further, during the
year, we have ensured that these principles have been
communicated to all staff.
The principal methods of communicating our application of
the QCA Code are this annual report and accounts and
through our website, at www.etherapeutics.co.uk/investors/
corporate-governance. The QCA Code sets out ten
principles, in three broad categories.
In this Corporate Governance Statement I have set out the
Company's application of the QCA Code, including, where
appropriate, cross-references to other sections of the
annual report and accounts. Further information on how we
comply with the QCA principles can be found on our
website above.
The SARS-CoV-2 pandemic has provided unique challenges
in delivering a robust governance management framework. I
am pleased to report that the working from home policy
that we agreed with staff and that was instituted in 2020 has
now successfully transitioned into a hybrid working phase
and is working efficiently for the safety of our people and
the compliance of the Company with corporate governance
principles.
Prof Trevor M Jones CBE FMedSci
Independent Non-Executive Chairman
4 May 2023
Standing agenda and key topics considered by the
Board in 2022/23
At each meeting comprehensive Board packs are
provided in advance and the following standing items
are discussed:
• strategy;
• management accounts and financial KPIs;
• progress reports on major R&D projects;
• recruitment and people update;
• business development update; and
• intellectual property update
Key topics considered by the Board in 2022/23
• Review, debate and challenge of the corporate
strategy and plan
• Risk management and internal controls, including a
robust assessment of the principal risks
• Budget to 31 January 2023
• Operating model and resource allocation
• Organisational structure review and adjustment
• Financial results announcements, presentations,
reports and accounts and market updates (annual
and half year)
• Investor engagement
33
Governancee-therapeutics plc Annual report and accounts 2023 BOARD OF DIRECTORS
Leading with experience
KEY TO COMMITTEE MEMBERSHIP
R
Remuneration Committee
A
Audit Committee
Chair of Committee
Michael Bretherton
Non-Executive Director and Interim
Chief Financial Officer
R
A
Appointed to board
February 2020
Skill and experience
Michael was appointed to the Board as a
Non-Executive Director in February 2020
and subsequently took on the additional role
as Interim Chief Financial Officer with effect
from December 2021. Michael has many
years of financial and commercial
experience as a Director of numerous AIM
quoted companies including DeepMatter
Group plc, Tissue Regenix Group plc,
Nanoco Group plc and Ceres Power
Holdings plc. Michael has a degree in
Economics from Leeds University and is a
member of the Institute of Chartered
Accountants in England and Wales. His early
career included working as an accountant
and manager with PriceWaterhouse for
seven years in London and Abu Dhabi.
Michael is currently also Chief Executive
Officer of Sarossa plc, Chairman of Adams
plc and Hardy plc and a Non-Executive
Director of Blake Holdings Limited and ORA
Limited.
Prof Trevor M Jones CBE FMedSci
Independent Non-Executive Chairman
Ali Mortazavi
Chief Executive Officer
Appointed to board
February 2020
Skill and experience
Ali was appointed to the Board as Executive
Chairman in February 2020 and Chief
Executive Officer in October 2020, retaining
his position as Chairman, and subsequently
split these roles in March 2021 to continue as
Chief Executive Officer. Ali has extensive
experience in the biotechnology sector and
financial markets. His most recent roles
include Chief Executive Officer of Silence
Therapeutics plc, from 2012 to 2018, as well
as a founder shareholder of Evolution
Group, a UK-based investment bank, from
2001 to 2008. Ali is an experienced investor
in small companies and has held numerous
declarable stakes in listed/private
biotechnology and technology companies.
Ali holds a BSc in Computer Science, an
International Master of chess and a former
professional chess player. During his chess
career, Ali was actively involved in the
development of chess databases and the
analysis of chess positions using chess
computer engines.
R
A
Appointed to board
October 2015
Skill and experience
Trevor was appointed to the Board in
October 2015 as a Non-Executive Director
and appointed Independent Non-Executive
Chairman in March 2021. Trevor has over
40 years’ distinguished experience in the
pharmaceutical and biotechnology industry
as well as in academia. He is a member of
the boards of Techimmune LLC and
Ascension Healthcare plc and a Visiting
Professor at King’s College London; he holds
honorary degrees and Gold Medals from
eight universities. Previously, Trevor held
significant roles in industry including
Director of Allergan Inc. from 2005 to 2015
and R&D Director of The Wellcome
Foundation from 1987 to 1994, where he was
responsible for the development of AZT,
Zovirax, Lamictal, Malarone and other
medicines. Trevor has also held a number of
advisory and regulatory roles including
Director General of the Association of the
British Pharmaceutical Industry (ABPI); board
member of the European Federation of
Pharmaceutical Industries and Associations
(EFPIA) and the International Federation of
Pharmaceutical Manufacturers &
Associations (IFPMA); a member of the UK
Government regulatory agency The
Medicines Commission; a member of the UK
Government Pharmaceutical Industry
Ministerial Strategy Working Group on
Pharmaceuticals; an advisor to the Cabinet
Office on the Human Genome Project; a
member of the Prime Minister’s Task Force
on the Competitiveness of the
Pharmaceutical Industry (PICTF); and Chair
of the Government Advisory Group on
Genetics Research.
34
e-therapeutics plc Annual report and accounts 2023 SCIENTIFIC ADVISORY BOARD
Dr Paul Burke
Chair of SAB
Commenced role
May 2020
Prof John Mattick
Member of SAB
Dr Bill Harte
Member of SAB
Commenced role
September 2020
Commenced role
September 2020
Skill and experience
Bill is a pharmaceutical veteran and serial
entrepreneur with more than 30 years in
both research and executive positions. He
currently serves as the Chief Translational
Officer at the Case Western Reserve
University School of Medicine, advising and
translating preclinical programmes into
patients. Previously, Bill had executive roles
at Amgen, Bristol Myers Squibb, Visum
Therapeutics and E3X Therapeutics. Dr
Harte’s broad experience spans
computational chemistry, structural biology
and modelling, medicinal chemistry, product
development and portfolio prioritisation as
well as CEO experience. Bill has also done
extensive work with top-tier VC firms.
Skill and experience
John is Professor of RNA Biology at UNSW
Sydney, and one of the world’s foremost
experts in the field. He was previously the
Chief Executive of Genomics England,
Executive Director of the Garvan Institute of
Medical Research in Sydney, Director of the
Institute for Molecular Biology at the
University of Queensland, and Director of
the Australian Genome Research Facility. He
has published over 300 scientific articles,
which have been cited over 70,000 times. His
work has received editorial coverage in
Nature, Science, Scientific American and
The New York Times, among others. His
awards include the International Union of
Biochemistry and Molecular Biology Medal,
the Australian Government Centenary
Medal, the University of Texas MD Anderson
Cancer Center Bertner Award for
Distinguished Contributions to Cancer
Research, and the Human Genome
Organisation Chen Medal for Distinguished
Achievement in Human Genetics and
Genomic Research.
Skill and experience
Paul is Principal of Burke Bioventures LLC, a
biotechnology consultancy based in
Cambridge, Massachusetts, focused on
translating research breakthroughs –
particularly those based on nanotechnology,
targeting and RNA – into products. He
provides strategic advice and scientific
direction for biotechnology, pharmaceutical
and drug delivery companies and interim
R&D management of venture-backed
start-ups.
Dr Burke was formerly the Founding Head
of Pfizer’s global Centre of Excellence for
targeted drug delivery and imaging, and
Chief Technology Officer of the
Oligonucleotide Therapeutics Unit.
Previously he was Executive Director, RNA
Therapeutics at Merck & Co., where he led
delivery R&D, charged with developing
enabling technologies for maximising the
value from the company’s $1.1bn acquisition
of Sirna Therapeutics. The effort
encompassed five discovery and preclinical
departments and multiple external
partnerships. Paul joined Merck following a
decade-long tenure at Amgen, where he
held positions of increasing responsibility
including his most recent as Executive
Director, Pharmaceutics. He received his BSc
in Chemistry with Distinction and
Departmental Honours from Harvey Mudd
College and his PhD in Biological Chemistry
from MIT. He is an Affiliate Professor of
Bioengineering at the University of
Washington and, for the winter 2017 term,
was the Distinguished Visiting Professor at
City of Hope’s Beckman Research Institute.
35
Governancee-therapeutics plc Annual report and accounts 2023 EXECUTIVE TEAM
Executive Team
Ali Mortazavi
Chief Executive Officer
Alan Whitmore
Chief Scientific Officer
Laura Roca-Alonso
Chief Operating Officer
Commenced executive role
October 2020
Commenced executive role
December 2014
Commenced executive role
April 2020
Skill and experience
Ali was appointed to the Board as Executive
Chairman in February 2020 and Chief
Executive Officer in October 2020, retaining
his position as Chairman, and subsequently
split these roles in March 2021 to continue as
Chief Executive Officer. Ali has extensive
experience in the biotechnology sector and
financial markets. His most recent roles
include Chief Executive Officer of Silence
Therapeutics plc, from 2012 to 2018, as well
as a founder shareholder of Evolution
Group, a UK-based investment bank, from
2001 to 2008. Ali is an experienced investor
in small companies and has held numerous
declarable stakes in listed/private
biotechnology and technology companies.
Skill and experience
Alan has been instrumental in defining and
developing the conceptual framework on
which e-therapeutics’ computational
platform is based. Alan moved from
academia into biotech over ten years ago
and he has worked in both drug delivery and
drug discovery. Alan is a clinician scientist
with over 30 years’ experience in cell biology
research and clinical medicine in a variety of
roles including MRC Fellow, UCL Laboratory
for Molecular Cell Biology; Visiting Fellow,
The Jackson Laboratory, US; Lecturer and
Medical Advisor, UCL Institute of
Ophthalmology; and Hon Senior Lecturer,
UCL School of Pharmacy, as well as senior
clinical management positions. He gained a
BSc in Biology and Computing, and a PhD in
Neuroscience from the University of
London, followed by postdoctoral work in
Cambridge and medical studies at Oxford
leading to the BMBCh in Clinical Medicine.
Skill and experience
Laura oversees business and corporate
development, alliance management,
competitive intelligence, and strategic
communications. She works to maximise the
value of our platform technologies and the
growth of the business. Laura teams up with
the rest of the Executive Leadership Team
to devise and drive the execution of the
Company’s corporate strategy. Laura has a
background in genetic medicines and has
previously held senior business development
and strategy positions during
transformational times at fast-paced biotech
companies such as Gyroscope Therapeutics
(acquired by Novartis) and Silence
Therapeutics plc. Laura received her PhD
from Imperial College London, MRes in
Biomedicine from UCL and BSc (Hons) in
Biotechnology from UAB.
36
e-therapeutics plc Annual report and accounts 2023 Timothy Bretherton
Director of Finance and Operations
Alison Gallafent
Chief Intellectual Property Officer
Commenced executive role
August 2022
Commenced executive role
June 2021
Skill and experience
Timothy is a qualified chartered accountant
with 12 years’ experience in operational and
finance roles. Includes line management to
deliver all aspects of financial accounting,
control, reporting and analysis, budgeting,
and forecasting. Prior to joining the
Company, Timothy was a Consulting
Manager at PwC London for 4 years where
he led numerous rationalisation projects to
design and implement improved accounts
and budgetary workflow automation
processes and to provide value added
services to client operational stakeholders.
He has also spent 3 years in audit at Mazars
London and 4 years with Zurich Insurance
plc in a variety of roles. Timothy holds a BA
(Hons) in Economics received from
University of Leicester.
Skill and experience
Alison is a UK Chartered Patent Attorney
and European Patent Attorney, with many
years of intellectual property experience in
the pharmaceutical and biotech industries.
Alison has previously worked as in-house
Patent Counsel for a range of pharmaceutical
companies, such as Merck & Co., Glaxo
Wellcome and PLIVA, and more recently as
Head of IP at Silence Therapeutics plc. She
has also held senior Patent Attorney roles in
several leading international law firms, and
has successfully represented many
international pharmaceutical companies in
high-profile and pivotal patent cases before
the European Patent Office. In recent years,
Alison has developed a wealth of knowledge
of the siRNA patent landscape and how to
strategically operate in this IP space.
37
Governancee-therapeutics plc Annual report and accounts 2023 CORPORATE GOVERNANCE STATEMENT
Corporate governance statement
Deliver growth: Principles 1–4 of the QCA code
Establish a strategy and business model which promote long-term value for shareholders
We bring to the biotechnology and pharmaceutical industries the power to discover new and better drugs in a more
efficient and effective way – our RNAi therapeutic programmes and network-driven approach are disruptive to the
conventional pharmaceutical R&D model.
Seek to understand and meet shareholder needs and expectations
The Board is keen to promote greater awareness of the Company and a detailed report on the Company's activities
during the reporting period is contained within the Chief Executive Officer’s Statement. More recent Company
announcements may be found at www.etherapeutics.co.uk/investors/regulatory-announcements.
Responsibility for day-to-day shareholder liaison lies with Ali Mortazavi as Chief Executive Officer and ultimately lies
with the Board.
The Company receives occasional feedback direct from investors. The Directors take all feedback very seriously and
shareholders’ views and concerns are carefully considered by the Board, with appropriate action being taken where
necessary. None of the feedback received from investors has involved non-compliance with the QCA Code.
Take into account wider stakeholder and social responsibilities and their implications for long-term success
In addition to our shareholders, we believe our main stakeholder groups are our employees, suppliers, and customers.
Employees
Our people give us the knowledge that feeds into our network biology expertise and our core technological
capabilities and that knowledge flows through our business model to directly create value for our shareholders.
Accordingly, the long-term success of the Company relies upon the knowledge and dedication of our people, as is
reflected in our strategic objectives. The Board therefore understands the importance of employee engagement, not
only by offering a beneficial remuneration package and professional development support, but in engaging
employees with the strategy of the Company. We continue to develop and enhance our people strategy on an
ongoing basis.
Suppliers
We engage in open discussions with key suppliers and expert advisors to review progress on internal discovery
programmes, platform technology and corporate functions to ensure that we continue to remain aligned with our
strategic objectives.
Customers
We approach all of our commercial collaborations with honesty and transparency. A successful working relationship is
beneficial to all parties involved as successful projects can lead to further deals that would add value to both our
shareholders and our customers, either through advancing an asset further through the drug discovery process or by
applying our expertise and technologies, such as our RNAi therapeutic platform and our NDD or GAINs technologies,
to a different area of biology or in a different way to the same area of biology.
Health and safety
We are committed to high standards of health and safety at work and understand that successful health and safety
management involves integrating sound principles and practice into its day-to-day management arrangements and
requires the collaborative effort of all of our employees. Our health and safety procedures are independently audited
on an annual basis.
Sustainability
We care about our planet and are committed to minimising our impact on the environment. Through the use of our
in-silico discovery engine, we dramatically reduce the number of therapeutic hypotheses that are experimentally
tested. This reduction in wet laboratory need translates into multiple resource savings, including the use of animals,
energy, water and general overheads that typically contribute to a company’s environmental footprint. In addition,
our recent migration to cloud-based computing, including both our platform and entire back office, will help us
further reduce our carbon footprint as our providers are targeting to be carbon neutral in the next two years.
Embed effective risk management, considering both opportunities and threats, throughout the
organisation
The Board has overall responsibility for the Company’s internal control systems and for monitoring their
effectiveness and is accountable for identifying procedures to minimise risk impact and implementing
these at every level of the business in an ongoing process overseen by the Audit Committee.
1
2
3
4
38
e-therapeutics plc Annual report and accounts 2023 Maintain a dynamic management framework: Principles 5–9 of the QCA code
5
6
7
8
Maintain the Board as a well-functioning, balanced team led by the Chair
To enable the Board to discharge its duties, briefing papers are distributed to all Directors in advance of Board and
Committee meetings. All Directors have access to the advice and services of the Company Secretary who is
responsible for ensuring that the Board procedures are followed, and that applicable rules and regulations are
complied with. The Board is responsible to shareholders and sets the Company’s strategy for achieving long-term
success. It is ultimately responsible for the management, governance, controls, risk management, direction and
performance of the Company. The Directors are searching for an additional Non-Executive Director to strengthen
the Board and ensure it is sufficiently resourced to discharge its governance obligations on behalf of all stakeholders.
Board of Directors
The composition of the Board has remained unchanged during the last year and comprises Trevor Jones as Non-
Executive Chairman, Ali Mortazavi as Chief Executive Officer and Michael Bretherton as Non-Executive Director.
Michael also took on the role of Interim Chief Financial Officer. The Directors are also searching for an additional
Non-Executive Director to strengthen the Board.
A formalised Executive Committee was established in 2020, made up of senior management and Ali Mortazavi to
manage the day-to-day operational delivery of the business model and corporate strategy. A Scientific Advisory
Board was also created during that year.
The biographies of the Board, Scientific Advisory Board and Executive Team, are on pages 34 to 37. All Directors also
have access to the Company Secretary.
Ensure that between them the Directors have the necessary up-to-date experience and skills
The current Directors’ biographical details are set out on page 34 and provide an indication of the breadth of skills
and experience of the Board. Full details of the Board’s skills and experience can be found on page 42.
Evaluate Board performance based on clear and relevant objectives, seeking continuous
improvements
The Chief Executive Officer of the Company is measured against a clearly defined set of personal objectives agreed
by the Board and monitored by the Remuneration Committee. The Board keeps under review its composition and the
balance of skills and experience of Non-Executive Directors.
Promote a corporate culture that is based on ethical values and behaviours
We value individuality and self-awareness and at the heart of our organisation is a philosophy of honesty and
authenticity. The Company adopts a policy of equal opportunities and diversity in the recruitment and engagement
of staff, as well as during the course of their employment. We endeavour to promote the best use of our human
resources on the basis of individual skills and experience, matched against those required for the work to be
performed.
We recognise the importance of investing in our employees, , and provide opportunities for training and personal
development and encourage the involvement of employees in the planning and direction of their own work in line
with our people strategy. We are committed to respecting the human rights of our employees, to providing them with
favourable working conditions that are free from unnecessary risk and to maintaining fair and competitive terms and
conditions of service at all times.
These values are applied regardless of age, race, religion, gender, sexual orientation or disability.
Whilst the Company will continue to make all appointments based on the best candidate for the role, it is
acknowledged that diversity supports the strength and future success of the business, and the Company remains
focused on achieving the right level of diversity whether related to ethnicity, gender, creed or culture.
We understand that the inherent uncertainty around the long-term outlook of an R&D company can impact morale
and we address this by being honest about the Company’s prospects and emphasising that the contribution of each
individual counts and is recognised. Regular meetings are held at which all employees have an opportunity to discuss
any matters that they wish to raise in an open forum and receive updates on performance against our strategic aims.
The Chief Executive Officer and all members of the Executive Committee are available and willing for all employees
to discuss more sensitive or personal matters.
39
Governancee-therapeutics plc Annual report and accounts 2023 CORPORATE GOVERNANCE STATEMENT CONTINUED
9
Maintain governance structures and processes that are fit for purpose and support good decision
making
As Non-Executive Chairman, Trevor Jones is responsible for leadership of the Board, ensuring its effectiveness in all
aspects of its role, setting its agenda in consultation with the other Directors and ensuring that the Directors receive
accurate, timely and clear information.
He also facilitates effective communication with shareholders and facilitates the effective contribution of Non-
Executive Directors. Ali Mortazavi, as Chief Executive Officer, is responsible for the operational management of the
Company and the implementation of Board strategy and policy. There is a dedicated staff member who is responsible
for the health and safety matters of the Company and who also acts as Data Protection Officer.
The Board is responsible to shareholders for the effective stewardship of the Company’s affairs and there is a formal
schedule of matters reserved for decision by the Board in place which enables the Board to provide leadership and
ensure effectiveness. A copy of this schedule is available on the Corporate Governance page of our website.
Board Committees
The Board has established Audit and Remuneration Committees. Given the size of the Board, a nomination
committee has not been established. New appointments of Directors are considered by the Board as a whole.
As noted in section 5 of this Corporate Governance Statement the Directors are also searching for an additional
Non-Executive Director to strengthen the Board and the composition of the Audit and Remuneration Committees.
Audit and Remuneration Committees
The Committees’ terms of reference can be found on the Corporate Governance page of our website. The Audit
Committee Report and the Remuneration Committee Report for the year ended 31 January 2023 are set out on page
45 and page 46 respectively.
Build trust: Principle 10
Communicate how the Company is governed and performing
10
The Board has established an Audit Committee and a Remuneration Committee. As mentioned above,
the work of each of the Board Committees undertaken during the year ended 31 January 2022 is
detailed in the Audit Committee Report and the Remuneration Committee Report on the pages noted
in section 9 of this Corporate Governance Statement above.
The results of the proxy votes received in relation to the 2022 Annual General Meeting are available at
www.etherapeutics.co.uk/reports-results. No resolutions had a significant proportion (>20%) of votes
cast against them at that meeting.
The Board has a healthy dialogue with all of its stakeholders, and throughout the course of the financial
year the Board communicates with shareholders to seek their views, concerns and expectations.
40
e-therapeutics plc Annual report and accounts 2023 Governance structure
As Non-Executive Chairman, Trevor Jones is responsible for organising the business of the
Board, ensuring its effectiveness, and setting its agenda in consultation with the other Directors.
He facilitates the effective contribution of the Directors and ensures that they receive accurate,
timely and clear information and that they communicate effectively with shareholders.
Below is a summary of the various Boards that are currently in place along with their key duties
and responsibilities
Executive Team
Audit Committee
• The Executive Team assists the Board in
implementing strategy and policies and managing
the operational and financial performance of the
Company.
• Led by Ali Mortazavi as Chief Executive Officer.
• The Audit Committee is responsible for all aspects of
the financial reporting of the Company and ensuring
the internal controls are adequate to sufficiently
mitigate risk.
• Led by Michael Bretherton as Chair of the Audit
Committee.
• Further details can be found within the Audit
Committee Report on page 45.
Members: See pages 36-37
Members: See page 34
Board
• The Board is responsible for establishing a strategy and business model which promote long-term value for
shareholders in alignment with the Company's vision, mission, and values.
• Oversees the adoption and delivery of the corporate governance model.
• Led by Trevor Jones as Non-Executive Chairman.
Members: See page 34
Remuneration Committee
Scientific Advisory Board
• The Remuneration Committee is responsible for
ensuring the levels of remuneration are sufficient to
attract and retain the Executive Directors and senior
management needed in order to support the
Company's strategy and promote long-term
sustainable success.
• Led by Trevor Jones as Chair of the Remuneration
Committee.
• Further details can be found within the
Remuneration Committee Report on page 46.
• The SAB provides strategic advice and insight to
help the Company continue to grow and meet its
future commercial goals.
• The members of the SAB have a significant amount
of industry experience including, but not limited to,
genetics, computational approaches to drug
discovery and deep drug development expertise,
across small molecules and RNAi.
• Led by Dr Paul Burke as Chair of the SAB.
Members: See page 34
Members: See page 35
41
Governancee-therapeutics plc Annual report and accounts 2023 CORPORATE GOVERNANCE STATEMENT CONTINUED
Board and Committee skills and experience
The Board and Committees have a broad range of skills, including in-depth experience in the biotechnology and
pharmaceutical sector, and an appropriate balance of financial and public market skills and experience to enable the Board to
deliver the Company's strategy for the benefit of shareholders over the medium to long term. The balance of skills and
experience of the Board and Committees during the year under review and up to the date of this report is summarised
below:
Executive Director
Ali Mortazavi
Non-Executive Directors
Trevor Jones
Michael Bretherton
Executive Committee
Alan Whitmore
Laura Roca-Alonso
Timothy Bretherton
Alison Gallafent
Biotech
pharma sector
Financial
Strategic
leadership
Corporate
governance
Employee
engagement
and
remuneration
Other public
company
(Board level)
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
Each Director takes responsibility for maintaining their own
skill set, which includes roles and experience with other
boards and organisations, as well as attending formal training
and seminars. The experience and knowledge of each of the
Directors gives them the ability to constructively challenge
the Company's strategy and to scrutinise performance.
Directors may also take independent professional advice at
the Company's expense where necessary in the
performance of their duties.
Throughout their period in office, the Directors are regularly
updated on the Company's business, the competitive and
regulatory environments in which it operates, corporate
social responsibility matters and other changes affecting the
Company and the industry it operates in as a whole by
written briefings and meetings with senior management
and, where appropriate, external advisors. Directors are also
advised on appointment of their legal and other duties and
obligations as a Director of an AIM-listed company, both in
writing and in meetings with the Company Secretary and
NOMAD. They are reminded of these duties, and they are
also updated on changes to the legal and governance
requirements of the Company and on themselves as
Directors.
The Company Secretary provides information and advice on
corporate governance and individual support to Directors
on any aspect of their role. The Company Secretary is also
responsible for ensuring that Board procedures are followed,
that the Company complies with company law and AIM
Rules and that the Board receives the information it needs to
fulfil its duties effectively.
e-therapeutics is a strong supporter of diversity in the
boardroom and remains of the opinion that appointments to
the Board should be made relative to a number of different
criteria, including diversity of gender, background and
personal attributes, alongside the appropriate skill set,
experience and expertise.
42
e-therapeutics plc Annual report and accounts 2023 Independence of Directors
The Board has considered and determined that, since the
date of his respective appointment, Trevor Jones is
independent in character and judgement and he:
• has not been an employee of the Company within the last
five years;
• has not, or has not had within the last three years, a
material business relationship with the Company;
• has no close family ties with any of the Company’s
advisors, Directors or senior employees;
• does not hold cross-directorships or have significant links
with other Directors through involvement in other
companies or bodies; and
• does not represent a significant shareholder.
Michael Bretherton is not considered independent because
of his potential dealing with one of the Company’s major
shareholders, Richard Griffiths. Richard Griffiths owns 29.26%
of the ordinary share capital of e-therapeutics through a
number of his controlled companies including Blake
Holdings Limited, where Michael is also a Non-Executive
Director. Michael is deemed independent in all other
matters.
The QCA Code recommends that a board has at least two
independent non-executive directors.
Michael Bretherton, who was appointed as a Non- Executive
Director of the Company in February 2020, also took on the
role of Interim Chief Financial Officer with effect from
December 2021.
The Non-Executive Directors constructively challenge and
help develop proposals on strategy and bring strong
judgement, knowledge, and experience to the Board’s
deliberations. The Non-Executive Directors are of sufficient
experience and competence that their views carry
significant weight in the Board’s decision making.
Trevor Jones receives 50% of his remuneration by the issue
of fully paid shares and the Board does not deem this to
impugn his independence as a Non-Executive Director but
considers rather that this arrangement aligns the interests of
shareholders and the Non- Executive Directors in an
appropriate manner. Trevor is, therefore, considered to be
independent.
The Company Secretary maintains a register of outside
interests and any potential conflicts of interest are reported
to the Board. The Non-Executive Directors have regular
opportunities to meet without the Chief Executive Officer
being present (including time after Board and Committee
meetings).
Time commitments
On joining the Board, Non-Executive Directors receive a
formal appointment letter, which identifies the terms and
conditions of their appointment and, in particular, the time
commitment expected of them. A potential Director
candidate (whether an Executive Director or Non-Executive
Director) is required to disclose all significant outside
commitments prior to their appointment. The Board is
satisfied that the Non- Executive Director and Non-
Executive Chairman can, and do, devote sufficient time to
the Company’s business.
43
Governancee-therapeutics plc Annual report and accounts 2023 CORPORATE GOVERNANCE STATEMENT CONTINUED
Attendance at Board and Committee meetings
During the financial year, the Board met seven times by video conference in person and by telephone. In addition, authority
was delegated on an ad hoc basis to subcommittees to deal with statutory matters, such as the final approval of the
announcements of the full year results and interim statement. Attendance at those subcommittee meetings is not reported
below. The number of meetings attended by each Director who held office during the year was as follows:
Executive Director
Ali Mortazavi
Non-Executive Directors
Trevor Jones
Michael Brethertona
SAB
Paul Burke
John Mattick
Bill Harte
Executive Committee
Alan Whitmore
Laura Roca-Alonso
Timothy Brethertonb
Alison Gallafent
Jonny Wray c
Stephanie Maley d
Board
Audit
Committee
Remuneration
Committee
Scientific
Advisory
Board
Executive
Committee
7/7
7/7
7/7
2/2
2/2
2/2
2/2
2/2
-
10/10
-
-
-
-
-
10/10
9/10
5/5
9/10
5/5
4/5
a. Michael Bretherton has also taken on the role of CFO with effect from 31 December 2021.
b. Timothy Bretherton joined the Executive Committee on 30th August 2022
c. Jonny Wray ceased to be a member of the Executive Committee on 12th August 2022
d. Stephanie Maley ceased to be a member of the Executive Committee on 31st August 2022
Attendance is expressed as the number of meetings attended/number eligible to attend. Directors’ attendance by invitation
at meetings of Committees of which they are not a member is not reflected in the above table.
Board performance
The Board is mindful that it needs to continually monitor and identify ways in which it might improve its performance and
recognises that board evaluation is a useful tool for enhancing a board’s effectiveness.
Any performance-related remuneration is determined by the Remuneration Committee.
In conducting the formal annual evaluation, the Board undertakes an assessment of its own performance, balance of skills,
experience, independence, diversity (including gender diversity) and other factors relevant to its effectiveness (and also of
that of its committees) and the performance of its individual Directors.
44
e-therapeutics plc Annual report and accounts 2023 AUDIT COMMITTEE REPORT
Audit Committee report
Statement by the Chair of the Audit Committee
On behalf of the Board, I am pleased to present our Audit
Committee Report for the year ended 31 January 2023.
The Audit Committee is chaired by me, Michael Bretherton.
The other member is Trevor Jones.
The Audit Committee is responsible for all aspects of the
financial reporting of the business and has considered not
only the integrity of financial reporting, but also how the
challenges faced by the Company may flow through into
internal control and the procedures implemented to
sufficiently mitigate risk.
The Company’s risk management, including review of
principal risks and mitigations, is a permanent focus of the
Audit Committee, although particular focus would be made
in the context of any issues raised by the independent
Auditor, a member of the Board or any employee under the
whistleblowing policy.
The Audit Committee is also responsible for monitoring the
integrity of the financial statements of the Company and
any formal announcements relating to the Company’s
financial performance, including a review of the Company’s
accounting policies and areas of significant judgement and
uncertainty.
The Audit Committee manages the relationship between
the Company and its external Auditor.
The independence of the Auditor is kept under review and
is considered at least annually with the aid of a
memorandum presented to the Audit Committee by the
Auditor.
The Audit Committee reviews the fee proposals presented
by the Auditor and the scope of work is monitored carefully
to ensure that independence is not compromised. Audit
fees for the Company for the year amounted to £60,000
(2022: £58,000) and non-audit fees amounted to £nil (2022:
£nil).
During 2022, the Audit Committee considered it
appropriate to propose a retendering of the audit contract
and which resulted in the appointment of Crowe U.K. LLP as
external Auditor to the Company in replacement of Grant
Thornton UK LLP. The Audit Committee is satisfied with the
independence, objectivity and effectiveness of the current
external Auditor and does not consider it necessary at this
stage to propose a further retendering of the audit contract.
A resolution for the reappointment of Crowe U.K. LLP as the
statutory Auditor will therefore be proposed at this year’s
Annual General Meeting.
No other formal recommendations have been made to the
Board by the Audit Committee and no external reports have
been commissioned on financial control processes during
the year ended 31 January 2023.
Whilst Trevor is considered independent, I am not because
I also act as a Non-Executive Director on the board of Blake
Holdings Limited, a company controlled by, and through
which shares in e-therapeutics are held by, Richard Griffiths,
a significant shareholder of the Company. In addition, I also
took on the role of Interim Chief Financial Officer with effect
from December 2021.
Given that there are currently only two Non-Executive
Directors on the Board, and given my relevant financial skills
and experience, Trevor and I believe that it is the right
course of action for me to chair this Committee and that my
potential conflicts of interest do not impair my ability to do
so. However, in the meantime, we will continue to search for
an additional independent Non-Executive Director to
strengthen the Board and the Audit Committee.
At the invitation of the Committee, representatives of the
external Auditor usually attend Committee meetings.
Two meetings of the Audit Committee were held during the
year ended 31 January 2023 and one further meeting after
the year end. In addition to formal reviews of reports from
the external Auditor, the Audit Committee discussed
matters relating to financial policy, controls and reporting,
as follows:
Date
April 2022
December 2022
April 2023
Matters discussed
Review of external audit for the year
ended 31 January 2022
Internal controls and risk management
Review of external audit planning
report including audit risk areas for the
year ended 31 January 2023
Review of external audit for the year
ended 31 January 2023
Internal controls and risk management
The Audit Committee acts independently to ensure the
interests of shareholders are protected in relation to
financial reporting, internal controls, and risk management.
Michael Bretherton
Chair of the Audit Committee
4 May 2023
45
Governancee-therapeutics plc Annual report and accounts 2023 REMUNERATION COMMITTEE REPORT
Remuneration Committee
report
Statement by the Chair of the Remuneration Committee
The parts of the Statement of Remuneration that are
subject to audit are highlighted within that statement.
The Remuneration Committee is mindful of shareholder
views and interests, and we believe that our Directors’
Remuneration Policy continues to be aligned with the
achievement of the Company’s business objectives. As
always, the Annual General Meeting provides an
opportunity for face-to-face discussions on important
matters for the Company and its shareholders and I will be
available to answer any questions you may have.
The Remuneration Committee aims to attract, retain, and
motivate the executive management of the Company.
Prof Trevor M Jones CBE FMedSci
Chair of the Remuneration Committee
4 May 2023
As Chair of the Remuneration Committee, I am pleased to
present our Directors’ Remuneration Report for the year
ended 31 January 2023.
This report does not constitute a full directors’ remuneration
report in accordance with the Companies Act 2006. As a
company whose shares are admitted to trading on AIM, the
Company is not required by the Companies Act 2006 to
prepare such a report. We do, however, aim to achieve
transparency in our decision-making process and have
regard to the principles of the QCA Code which we consider
to be appropriate for an AIM-listed company of our size.
This report provides details of remuneration for all Directors
and gives a general statement of policy on Directors’
remuneration as it is currently applied. It also provides a
summary of the long-term share incentive scheme currently
in place.
The Directors’ Remuneration Policy and Statement of
Remuneration which follow this Annual Statement set out
the Remuneration Committee’s approach to future
remuneration and provide details of remuneration for the
year ended 31 January 2023. This report is intended to
provide shareholders with sufficient information to judge the
impact of the decisions taken by the Remuneration
Committee and to assess whether remuneration packages
for Directors are fair in the context of business performance.
46
e-therapeutics plc Annual report and accounts 2023 Key responsibilities of the Remuneration
Committee
The Remuneration Committee is responsible for reviewing
and recommending the framework and policy for
remuneration of the Executive Director. The Remuneration
Committee is responsible for recommending any changes in
the structure of remuneration packages for the Executive
Director. It also plays an important role when an Executive
Director joins and leaves the Company. It recommends to
the Board the terms of employment for any appointment of
an Executive Director and any subsequent changes which
may be needed.
It also reviews any payments which might arise on
termination of an Executive Director’s contract.
The Remuneration Committee recognises the importance of
our reward and performance strategy in recruiting and
retaining high-quality individuals who can lead, develop and
sustain business growth over the longer term, bearing in
mind that, being an R&D business only starting out on its
revenue-generating activities, the long-term prospects are
higher risk than non-R&D companies and that the Directors
need to be awarded accordingly.
Membership and meetings of the Remuneration
Committee
The Remuneration Committee is chaired by me, Trevor
Jones, the Independent Non-Executive Chairman. The other
member is Michael Bretherton, who is a Non-Executive
Director of the Company. Michael also acts as a Non-
Executive Director on the board of Blake Holdings Limited, a
company controlled by, and through which shares in
e-therapeutics are held by, Richard Griffiths, a significant
shareholder of the Company. Michael is, therefore, not
deemed to be independent but, due to the small size of the
Board, he is required to sit on the Remuneration Committee.
We do not believe his potential conflicts of interest impact
his ability to be a balanced and impartial member of the
Committee. We will continue to search for an additional
independent Non-Executive Director to strengthen the
Board and the Remuneration Committee.
The Company Secretary acts as secretary to the
Remuneration Committee.
Other Directors may attend by invitation of the
Remuneration Committee. It is a fundamental principle that
no individual should be able to participate in discussions
about their own remuneration. The Remuneration
Committee operates within terms of reference adopted by
the Committee and updated and approved by the Board in
March 2022.
The Remuneration Committee met two times during the
year ended 31 January 2023 and one further meeting after
the year end. The main matters of business were:
• the establishment of corporate goals and performance
targets for individual Executive Team members;
• the approval of performance targets for Chief Executive
Officer (CEO) and;
• a review of CEO performance achievement against
targets and;
• a review and approval of CEO and executive team
member salary and bonus awards.
The Remuneration Committee did not undertake formal
benchmarking of Directors’ remuneration in the year ended
31 January 2023, although it did compare current
remuneration with published surveys, and does not have
retention agreements with any external remuneration
consultants. Advice is taken from external advisors as
needed in relation to specific questions and projects.
The policy of the Remuneration Committee is to ensure that
the Executive Director is fairly rewarded for his individual
contribution to the Company's overall performance and to
provide a competitive remuneration package to the
Executive Directors (including long-term option award
incentive plans under the Company’s Long-Term Incentive
Plan 2020 (LTIP) and, pre- November 2020, under the Share
Plan 2013 (PSP) to attract, retain and motivate individuals of
the experience and competence required to ensure that the
Company is managed successfully in the interests of
shareholders.
In addition, the Remuneration Committee’s policy is to
reward performance in a way which seeks to align the
interests of management with those of shareholders.
47
Governancee-therapeutics plc Annual report and accounts 2023 REMUNERATION POLICY
Remuneration Policy
Policy on executive remuneration
Purpose and link to strategy
Operation
Maximum potential value
Basic salary
Attract and retain Executive
Directors with sufficient
experience and
competence to deliver
strategy.
Benefits
Provide benefits consistent
with the role.
Discretionary bonus
Incentivise achievement of
business objectives by
providing a reward for
performance against annual
targets.
Long-term incentives
Alignment of interests with
shareholders delivered in
the form of shares.
Pension
Attract and retain Executive
Directors for the long term
by providing funding for
retirement.
Paid in 12 equal monthly
instalments during the year
Reviewed annually and as required to reflect the role, responsibility
and performance of the individual and the Company and informally
to take into account rates of pay for comparable roles in similar
companies. There is no prescribed minimum or maximum increase.
Current annual rates are set out on page 53.
Currently these consist of health
insurance and membership of a
Group life assurance scheme.
The Remuneration Committee reviews the level of benefit provision
from time to time and has the flexibility to add or remove benefits
to reflect changes in market practices or the operational needs of
the Company.
Paid in cash after the end of the
financial year to which it relates.
Targets are based on the appropriate progression of specific
projects, together with the performance of the business as a whole.
Payment of any bonus is subject to the overarching direction of the
Remuneration Committee.
Grant of awards under the PSP
(pre-November 2020) and LTIP
(November 2020 onwards).
Participants are entitled to
acquire award shares after a
vesting period and subject to
payment of an exercise price.
The Executive Directors are
entitled to participate in money
purchase arrangements.
There is no individual limit. For performance metrics attached to
outstanding rewards see page 52 and Note 9 to the financial
statements.
The Company makes payments of 10% of basic salary into any
pension scheme or similar arrangement as the participating
Executive Director may reasonably request. Such payments are not
counted for the purpose of determining bonuses or awards under
the PSP/LTIP.
Long-term incentives
Long-term incentive option awards are used to ensure that
the focus of Directors remains on the long-term added
value to the shareholders. No long-term incentive option
awards were made to Directors in the current or previous
year. The Remuneration Committee will consider granting
further options at the appropriate time upon careful
consideration of the Company’s performance and long-
term goals.
Remuneration policy for all employees
All employees of the Company are entitled to base salary,
benefits and bonus. The opportunity to earn a bonus is
made available to all of the Company’s employees. The
maximum opportunity available is based on the seniority
and responsibility of the role.
All the Company’s employees are eligible to be considered
for long-term incentive option awards under the Long-Term
Incentive Plan 2020.
48
e-therapeutics plc Annual report and accounts 2023 Statement of consideration of employment
conditions of employees
The Remuneration Committee receives reports on an annual
basis on the level of pay rises awarded across the Company
and takes these into account when determining total
remuneration for Executive Directors.
In addition, the Remuneration Committee receives regular
reports on the structure of remuneration for senior
management in the tier below the Executive Director and
uses this information to ensure a consistency of approach
for the most senior managers in the Company. The
Remuneration Committee also approves the award of any
long-term option award incentives for the most senior
managers in the Company.
The Remuneration Committee does not specifically invite
colleagues to comment on the Directors’ Remuneration
Policy, but it does take note of any comments made by
colleagues.
Statement of consideration of shareholder views
As Chair of the Remuneration Committee, I may consult with
major shareholders from time to time, or when any
significant remuneration changes are proposed, to
understand their expectations with regard to Executive
Directors’ remuneration, and report back to the
Remuneration Committee. The Remuneration Committee
previously consulted with certain major shareholders in
relation to the introduction of the long-term incentive
option awards plan. Any other concerns raised by individual
shareholders are also considered. The Remuneration
Committee also takes into account emerging best practice.
Approach to recruitment remuneration
The Remuneration Committee’s approach to recruitment is
to offer a market competitive remuneration package
sufficient to attract candidates who are appropriate to the
role but without paying any more than is necessary.
Any new Executive Director’s regular remuneration package
would include the same elements and be in line with the
policy table set out earlier in this Directors’ Remuneration
Policy, including the same limits on performance-related
remuneration.
Non-Executive Directors’ fee policy
The policy for the remuneration of the Non-Executive
Directors is as set out below. Non-Executive Directors
cannot participate in the PSP or LTIP. Non-Executive
Directors are not eligible for Company pension
contributions.
Purpose and link to strategy
Attract Non-Executive Directors with a broad range of
experience and skills to oversee the implementation of the
Company’s strategy.
Operation
Non-Executive Director fees are determined by the Board
within the limits set out in the articles of association and are paid
in 12 equal monthly instalments during the year (subject to
part-payment of fees in fully paid shares by agreement
between the Company and the Director). Notice periods are
three months by the Company or Non-Executive Director.
Maximum potential value
There is no prescribed minimum or maximum range increase.
Current annual salary fee rates are set out on page 53.
49
Governancee-therapeutics plc Annual report and accounts 2023 REMUNERATION POLICY CONTINUED
Executive Directors’ service contracts, notice periods and termination payments
Provision
Policy
Notice periods in
Executive Director’s
service contracts
Six months by the Company or Executive Director. The Executive Director may be required to work during
the notice period.
Compensation for loss
of office
Depending on the notice period, no more than 12 months’ basic salary and benefits (including Company
pension contributions and other non-cash benefits).
Treatment of annual
bonus on termination
Bonuses which have already been declared and paid before the giving of notice may be retained by the
Executive Director.
Treatment of unvested
PSP or LTIP awards
Awards lapse on the termination of employment, although the Board has an absolute discretion (which may
be exercised within the 30-day period following the termination of employment) to permit part of the
awards to be exercised during the 90-day period thereafter.
Exercise of discretion
Intended only to be relied upon to provide flexibility in exceptional or inequitable circumstances. The
Remuneration Committee’s determination will take into account the particular circumstances of the
Executive Director’s departure and the recent performance of the Company.
All Directors
All Directors are subject to re-election every three years. No compensation is payable if they are required
to stand down.
In the event of the negotiation of a compromise or
settlement agreement between the Company and a
departing Director, the Remuneration Committee may make
such payments it considers reasonable in settlement of
potential legal claims. Such payments may also include
reasonable reimbursement of professional fees in
connection with such agreements. The Remuneration
Committee may also include the reimbursement of
repatriation costs or fees for professional or outplacement
advice in the termination package, if it considers it
reasonable to do so. It may also allow the continuation of
benefits for a limited period.
Michael Bretherton was appointed as a Non-Executive
Director in February 2020 and subsequently also took on the
role of Interim Chief Financial Officer with effect from
December 2021. Whilst his salary fee rate was increased to
£120,000 per annum during his period as Interim Chief
Financial Officer, his contract letter of appointment
remained unchanged with a notice period of three months
and no payment of Company pension contributions, all in
line with the Non-Executive Directors’ fee policy. Michael’s
current annual salary fee rate is set out on page 53.
Directors’ service contracts and letters of
appointment
Copies of the current Directors’ service contracts and letters
of appointment (listed below) are available for inspection at
the Company’s registered office.
Director
Ali Mortazavi
Trevor Jones
Date of service contract/letter of
appointment
10 February 2020 and subsequently
11 October 2020
28 October 2015 and subsequently
23 February 2021
Michael Bretherton
10 February 2020
Directors’ insurance and indemnity
Directors’ and officers’ liability insurance is provided at the
cost of the Company for all Directors and officers. The
articles of association provide for the Company to indemnify
Directors against losses and liabilities properly incurred in
the execution of their duties.
50
e-therapeutics plc Annual report and accounts 2023 STATEMENT OF REMUNERATION
Statement of Remuneration
Remuneration arrangements for the Executive Director are set by the Remuneration Committee. Remuneration is designed
to align the Executive Director’s remuneration with shareholders’ interests. As well as fixed compensation, the Executive
Director and other employees can receive cash bonuses based on achievement of individual and corporate objectives.
The Remuneration Committee decides the bonuses to be awarded.
The remuneration of the Directors for the years ended 31 January 2023 and 31 January 2022 is shown below:
Executive Director
Ali Mortazavi
Non-Executive Directors
Trevor Jones
Michael Brethertonb
Executive Director
Ali Mortazavia
Non-Executive Directors
Trevor Jones
Michael Brethertonb
2023
Contributions
to money
purchase
schemes
£’000
Benefits in
kind
£’000
Total
remuneration
£’000
Base salary
£’000
Bonus
£’000
208
55
120
283
–
–
–
–
21
–
–
21
41
–
–
41
270
55
120
445
2022
Contributions
to money
purchase
schemes
£’000
Benefits in
kind
£’000
Total
remuneration
£’000
Base salary
£’000
Bonus
£’000
200
54
53
307
94
–
–
94
20
–
–
20
34
–
–
34
348
54
53
455
a. Ali Mortazavi was awarded a £62,500 bonus entitlement by the Remuneration Committee in respect of the year ended 31 January 2023 but he has
waived this entitlement and therefore no bonus is payable to him.
b. Michael Bretherton was appointed as a Non-Executive Director on 10 February 2020 and subsequently also took on the role of Interim CFO with
effect from December 2021. Michael’s salary was increased during that period in accordance with his expanded role. His current annual salary fee rate
is set out on page 53.
51
Governancee-therapeutics plc Annual report and accounts 2023
STATEMENT OF REMUNERATION CONTINUED
Upon his initial appointment in February 2020, Ali Mortazavi was awarded 9,672,836 share options under the Share Plan 2013
(PSP) with an exercise price of 0.1p and a vesting period of two years.
The options had a performance condition attached whereby options will only vest if the share price stays above 6.0p for 30
consecutive days. More information can be found in Note 9 to the financial statements.
Options granted to, and held by, Directors who served during the year are summarised below:
Ali Mortazavi
Years ended 31 January 2023 and 2022
Options
granted
during the
year
No.
Options
exercised
during the
year
No
Options
forfeited
during the
year
No
Options
held at end of
the year
No.
–
–
–
–
–
–
9,672,836
9,672,836
Options held
at beginning
of the year
No.
9,672,836
9,672,836
The options granted to, and held by, Directors who served during the year, represent the following awards:
Years ended 31 January 2023 and 2022
At end of year
At beginning
of year
Exercise
price (p)
Date from
which exercisable
Expiry date
Ali Mortazavi
9,672,836
9,672,836
0.1
11 February 2022 11 February 2030
The mid-market price of the Company’s shares at 31 January 2023 (the last trading day of the period) was 16.10p and the
range during the year was 33.50p to 15.47p.
Directors’ shareholdings
The Directors of the Company who served during the year, and their interests in the issued ordinary shares of the Company,
were as follows:
Ali Mortazavi
Trevor Jones
Michael Bretherton
Ordinary shares of
0.1p each at 31 January 2023
50,941,666
1,167,741
500,000
During the period between 31 January 2023 and 28 April 2023, the Company received no notifications under the Market
Abuse Regulation. Details of the most recently notified transactions in the ordinary shares of the Company by the Directors
are available on the Company’s website at www.etherapeutics.co.uk/investors/regulatory-announcements.
52
e-therapeutics plc Annual report and accounts 2023 Conclusion
This report is intended to provide shareholders with
sufficient information to judge the impact of the decisions
taken by the Remuneration Committee and to assess
whether remuneration packages for Directors are fair in the
context of business performance.
The Remuneration Committee is mindful of shareholder
views, and we believe that our Directors’ Remuneration
Policy is aligned with the achievement of the Company’s
business objectives and the interests of shareholders.
The Directors’ Remuneration Report, including the
Remuneration Policy and Statement of Remuneration, were
approved by the Remuneration Committee and by the
Board on 4 May 2023.
Prof Trevor M Jones CBE FMedSci
Chair of the Remuneration Committee
4 May 2023
Implementation of Remuneration Policy for the
year ended 31 January 2024
The annual salaries and fees payable under the Directors’
service contracts and letters of appointment as at 4 May
2023 are set out in the table below, together with any
increase versus those reported in the previous year’s
Directors’ Remuneration Report expressed as a percentage:
Annual base salary/fees
At 4 May
2023
£'000
At 4 May
2022
£'000
Increase/
(decrease)
223
55
120
208
55
120
7%
Nil%
Nil%
Ali Mortazavi
Trevor Jones
Michael Bretherton
The increased fees for Ali Mortazavi reflect an inflationary
increase of 7% as of 1 March 2023.
The basis for determining annual bonus payments for the
year to 31 January 2023 is set out in the Remuneration Policy
pages of this report. The performance targets are
considered commercially sensitive because of the
information that they would provide to the Company’s
competitors but are aligned with the Company’s strategic
objectives set out in the Strategic Report.
The Remuneration Committee may make further awards
under the LTIP during the year ending 31 January 2024. Any
awards will be made subject to appropriate exercise prices
and vesting periods.
53
Governancee-therapeutics plc Annual report and accounts 2023 DIRECTORS’ REPORT
Directors’ report
The Directors present their Annual Report together with the
financial statements and Auditor’s Report for the year ended
31 January 2023. The Corporate Governance Statement on
pages 33 to 44 also forms part of this Directors’ Report.
Political donations
The Company made no political donations during the
current or prior year.
General information
e-therapeutics plc (the "Company”) is a public limited
company incorporated in the United Kingdom, registered
number 04304473, which is listed on the Alternative
Investment Market (AIM) of the London Stock Exchange.
Review of business
All operational activities were undertaken through the
Company in both the year ended 31 January 2023 and the
prior year. The Company previously also had two non-
operating subsidiaries as detailed in Note 16 to the financial
statements, but applications for dissolution and strike off of
these were made in the final quarter of 2022 and the entities
were subsequently removed from the UK Companies House
register. As a result, the Company no longer has any
subsidiaries and all reported assets and liabilities at 31 January
2023 are, therefore, those of the Company and all of the
financial information provided in the Annual Report is for the
Company only.
The Company continues to invest in drug discovery research
activities. The Strategic Report provides a review of the
business, including the Company’s trading for the year
ended 31 January 2023, an indication of likely future
developments, key performance indicators and risks.
Financial instruments – risk management
The Company’s financial risk management policy is set out
in Note 21 to the financial statements.
The Directors of the Company who served during the year
ended 31 January 2023 and up to the date of this report
were:
Directors
Director
Ali Mortazavi
Trevor Jones
Capacity
Chief Executive Officer
Non-Executive Chairman
Michael Bretherton
Non-Executive Director*
* Michael Bretherton took on the additional job of Interim Chief Financial
Officer with effect from 31 December 2021.
Major shareholdings
As at 28 April 2023 (being the latest practicable date prior to
the publication of this report) the Company had been
notified of the following shareholders with 3% or more of
the issued share capital of the Company:
Results and dividend
The Company has reported its financial statements in
accordance with UK adopted international accounting
standards. The results for the period and financial position of
the Company are set out in the Financial Statements and
reviewed in the Financial Review section of the Strategic
Report. The Directors do not recommend the payment of a
dividend (2022: £nil).
Richard Griffiths and
controlled undertakings
M&G
Robert Quested
Ali Mortazavi
Trillian Ltd
David Richardson
Ordinary shares
of 0.1p each
Number
% of ordinary shares
of 0.1p each held at
28 April 2023
170,510,905
101,875,000
52,000,000
50,941,666
29,769,326
26,812,312
29.26
17.48
8.92
8.74
5.11
4.60
Directors’ interests
The Directors’ interests in the Company’s shares and options
over ordinary shares are shown in the Remuneration
Committee Report on page 52.
Research and development
During the year ended 31 January 2023 the Company’s
expenditure on R&D was £7,224,000 (2022: £6,109,000).
Directors’ remuneration
Details of the Directors’ remuneration appear in the
Remuneration Committee Report on page 51.
Directors’ and officers’ liability insurance
The Company has, as permitted by the Companies Act
2006, maintained insurance cover on behalf of the Directors,
indemnifying them against certain liabilities which may be
incurred by them in relation to the Company.
Statement of engagement with suppliers,
customers and others in a business relationship
with the Company
The Directors are mindful of their statutory duty to act in
the way they each consider, in good faith, would be most
likely to promote the success of the Company for the
benefits of its members as a whole, as set out in our S.172(1)
Statement.
A consideration of the Company’s relationship with wider
stakeholders, including suppliers and customers, is disclosed
in Principle 3 of the Corporate Governance Statement.
54
e-therapeutics plc Annual report and accounts 2023 Independent Auditor
In accordance with Section 489 of the Companies Act 2006,
a resolution for the reappointment of Crowe U.K. LLP as
Auditor of the Company is to be proposed at the
forthcoming Annual General Meeting. Crowe U.K. LLP was
first appointed as Auditor of the Company by the Board in
January 2023 following a tender process.
Subsequent events
There were no material subsequent events requiring
disclosure in the financial statements.
Annual General Meeting
The Annual General Meeting of the Company will be held at
the Company’s registered office at 4 Kingdom Street,
Paddington, London W2 6BD at 12:30 on 18 July 2023. The
notice convening the meeting is set out on pages 80 and 81
together with a summary of the business to be transacted.
A copy of the notice is also available on the Company’s
website at www.etherapeutics.co.uk/ investors/reports-
results.
Going concern
Although the Company has recognised revenue from
commercial deals during the current and prior year, it is still
largely reliant on its cash balance to fund ongoing
operations.
At 31 January 2023, we reported cash and liquid resources of
£31,689,000. The Board has prepared a detailed budget
covering the forthcoming financial year, together with
financial projections for the year thereafter. These support
the view that the Company has sufficient cash to meet its
operational requirements for at least 12 months from the
signing of these financial statements.
By order of the Board
Ali Mortazavi
Chief Executive Officer
4 May 2023
Articles of association and capital structure
The Company’s share capital, traded on AIM, comprises a
single class of ordinary shares of 0.1p each in nominal value,
each carrying one vote and all ranking equally. The rights
and obligations attaching to the Company’s ordinary shares
are set out in the Company’s articles of association, copies of
which can be obtained from Companies House in the UK,
downloaded from the Company’s website at www.
etherapeutics.co.uk/investors/Aim Rule 26 or by writing to
the Company Secretary at 4 Kingdom Street, Paddington,
London W2 6BD.
Details of the issued share capital, together with details of
the movements in the Company’s issued share capital during
the year, are shown in Note 22 to the financial statements.
There are no restrictions on the transfer or voting of
securities in the Company, and there are no agreements
known to the Company which might result in such
restrictions.
There are no shareholdings carrying special rights with
regard to the control of the Company.
As at 31 January 2023, the Company’s issued share capital
was £582,159 divided into 582,159,332 ordinary shares of 0.1p
each in nominal value.
Re-election of Directors
The appointment of the Chief Executive Officer is
terminable by either the Company or the Chief Executive
Officer on six months’ notice. The appointments of both of
the other Directors are terminable by either the Company or
the individual Director on three months’ notice. Each
appointment is contingent on satisfactory performance and
on re-election criteria.
In accordance with the Company’s articles of association,
each Director must be subject to re-election at least every
three years. All newly appointed Directors are also subject to
election by the shareholders at the first Annual General
Meeting following their appointment. Accordingly, Ali
Mortazavi, who has been a Director since 10 February 2020
and was last re-elected by shareholders in March 2020, will
again offer himself for re-election at the forthcoming Annual
General Meeting of the Company on 18 July 2023.
Disclosure of information to Auditor
Each Director who held office at the date of approval of this
report confirms that, so far as the Director is aware, there is
no relevant audit information of which the Company’s
Auditor is unaware and the Director has taken all the steps
that he or she ought to have taken as a Director to make
himself or herself aware of any relevant audit information
and to establish that the Company’s Auditor is aware of that
information. This confirmation is given and should be
interpreted in accordance with the provisions of Section 418
of the Companies Act 2006.
55
Governancee-therapeutics plc Annual report and accounts 2023 DIRECTORS’ RESPONSIBILITIES STATEMENT
Directors’ Responsibilities
Statement
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations.
Responsibilities statement
We confirm that, to the best of our knowledge:
• the financial statements, prepared in accordance with the
relevant reporting framework, give a true and fair view of
the assets, liabilities, financial position and profit or loss of
the Company;
• the Strategic Report includes a fair review of the
development and performance of the business and the
position of the Company, together with a description of
the principal risks and uncertainties that they face; and
• the Annual Report and financial statements, taken as a
whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the
Company’s position and performance, business model and
strategy.
Ali Mortazavi
Chief Executive Officer
4 May 2023
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the
Directors are required to prepare the financial statements in
accordance with UK adopted international accounting
standards. Under company law, the Directors must not
approve the accounts unless they are satisfied that they give
a true and fair view of the state of affairs of the Company
and of the profit or loss of the Company for that period. In
preparing these financial statements, IAS 1 requires that
Directors:
• properly select and apply accounting policies;
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• provide additional disclosures when compliance with the
specific requirements in IFRS are insufficient to enable
users to understand the impact of particular transactions,
other events and conditions on the entity’s financial
position and financial performance; and
• make an assessment of the Company’s ability to continue
as a going concern.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website (www.etherapeutics.co.uk).
Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
56
e-therapeutics plc Annual report and accounts 2023 INDEPENDENT AUDITOR’S REPORT
Independent auditor’s report
to the members of e-therapeutics plc
Opinion
We have audited the financial statements of e-therapeutics
plc (the “Company”) for the year ended 31 January 2023,
which comprise:
• the income statement for the year ended 31 January 2023;
• the statement of comprehensive income for the year
ended 31 January 2023;
• the statement of changes in equity for the year ended 31
January 2023;
• the statement of financial position as at 31 January 2023;
• the statement of cash flows for the year then ended;
• the notes to the financial statements, including significant
accounting policies.
The financial reporting framework that has been applied in
the preparation of the financial statements is applicable law
and UK-adopted international accounting standards.
In our opinion, the financial statements:
• give a true and fair view of the Company's affairs as at 31
January 2023 and of its loss for the year then ended;
• have been properly prepared in accordance with UK-
adopted international accounting standards; and
• have been prepared in accordance with the requirements
of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are
independent of the Company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard
as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for
our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the entity’s
ability to continue to adopt the going concern basis of
accounting included:
• an assessment of the appropriateness of the approach,
assumptions and arithmetic accuracy of the approved
budget used by management when performing their
going concern assessment for a period of at least twelve
months from the date of the approval of the financial
statements;
• our challenge of the underlying data and key assumptions
used to make the assessment and the results of
management’s stress testing, to assess the reasonableness
of economic assumptions.
Based on the work we have performed, we have not
identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast
significant doubt on the entity's ability to continue as a going
concern for a period of at least twelve months from when
the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the
concept of materiality. An item is considered material if it
could reasonably be expected to change the economic
decisions of a user of the financial statements. We used the
concept of materiality to both focus our testing and to
evaluate the impact of misstatements identified.
Based on our professional judgement, we determined overall
materiality for the Company financial statements as a whole
to be £460,000 based on a percentage of loss before tax.
We use a different level of materiality (‘performance
materiality’) to determine the extent of our testing for the
audit of the financial statements. Performance materiality is
set based on the audit materiality as adjusted for the
judgements made as to the entity risk and our evaluation of
the specific risk of each audit area having regard to the
internal control environment. Performance materiality was
set at 70% of materiality for the financial statements as a
whole, which equates to £322,000.
Where considered appropriate performance materiality
may be reduced to a lower level, such as, for related party
transactions and directors’ remuneration.
We agreed with the Audit Committee to report to it all
identified errors in excess of £23,000. Errors below that
threshold would also be reported to it if, in our opinion as
auditor, disclosure was required on qualitative grounds.
57
Financial statementse-therapeutics plc Annual report and accounts 2023 INDEPENDENT AUDITOR’S REPORT CONTINUED
Overview of the scope of our audit
The company’s operations are based in the UK at one central location. The audit team performed a full scope audit of the
financial statements of the company.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) that we identified. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How the scope of our audit addressed
the key audit matter
Occurrence and accuracy of research and
development (“R&D”) tax credit (income
statement) and existence and accuracy of
R&D tax receivable (statement of financial
position)
We identified the occurrence and accuracy
of the R&D tax credit (income statement) and
the existence and accuracy of the R&D tax
receivable (statement of financial position) as
one of the most significant assessed risks of
material misstatement due to error
In responding to the key audit matter, we performed the following
audit procedures:
• obtained an understanding of the relevant controls that
management have implemented over the process for evaluating the
occurrence and accuracy of the R&D tax credit and the existence
and accuracy of the R&D tax receivable;
• obtained management’s R&D tax credit calculation and checked the
mathematical accuracy of the calculations;
• assessed the consistency of the calculation with that of the prior year
and compared the prior year’s receivables to the amounts actually
paid by HMRC;
• engaged our tax specialist to perform an assessment of R&D claim
calculations including the reasonableness of the claim. This included
reviewing the current year expenses for inclusion in the R&D claim,
based on taxation legislation.
Other information
The directors are responsible for the other information
contained within the annual report. The other information
comprises the information included in the annual report,
other than the financial statements and our auditor’s report
thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is
materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be
materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that
there is a material misstatement of this other information,
we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion based on the work undertaken in the course
of our audit
• the information given in the strategic report and the
directors' report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and
• the directors’ report and strategic report have been
prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by
exception
In light of the knowledge and understanding of the
Company and its environment obtained in the course of the
audit, we have not identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect of the following
matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
58
e-therapeutics plc Annual report and accounts 2023 • adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the financial statements are not in agreement with the
accounting records and returns; or
• certain disclosures of directors' remuneration specified by
law are not made; or
• we have not received all the information and explanations
we require for our audit.
Responsibilities of the directors for the financial
statements
As explained more fully in the directors’ responsibilities
statement set out on page 56, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue 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 ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
• We identified the greatest risk of material impact on the
financial statements from irregularities, including fraud, to
be the override of controls by management. Our audit
procedures to respond to these risks included enquiries of
management about their own identification and
assessment of the risks of irregularities, sample testing on
the posting of journals and reviewing accounting estimates
for biases.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some
material misstatements in the financial statements, even
though we have properly planned and performed our audit
in accordance with auditing standards. We are not
responsible for preventing non-compliance and cannot be
expected to detect non-compliance with all laws and
regulations. These inherent limitations are particularly
significant in the case of misstatement resulting from fraud
as this may involve sophisticated schemes designed to avoid
detection, including deliberate failure to record transactions,
collusion or the provision of intentional misrepresentations.
A further description of our responsibilities is available on
the Financial Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report..
Use of our report
This report is made solely to the Company's members, as a
body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company's members those
matters we are required to state to them in an auditor's
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company's
members as a body, for our audit work, for this report, or for
the opinions we have formed.
Leo Malkin
Senior Statutory Auditor
for and on behalf of
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect
material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below:
Crowe U.K. LLP
Statutory Auditor
London
4 May 2023
• We obtained an understanding of the legal and regulatory
frameworks within which the company operates, focusing
on those laws and regulations that have a direct effect on
the determination of material amounts and disclosures in
the financial statements. The laws and regulations we
considered in this context were the Companies Act 2006
and taxation legislation (including in relation to claims for
R&D tax credits).
59
Financial statementse-therapeutics plc Annual report and accounts 2023 FINANCIAL STATEMENTS
Income statement
For the year ended 31 January 2023
Revenue
Cost of sales
Gross profit
Research and development expenditure
Administrative expenses
Operating loss
Interest and investment income
Interest expense
Loss before tax
Taxation
Loss for the year attributable to equity holders of the Company
Loss per share: basic and diluted
Notes
5
10
11
12
13
2023
£’000
475
–
475
(7,224)
(3,490)
(10,239)
490
(23)
(9,772)
1,498
2022
£'000
477
–
477
(6,109)
(3,935)
(9,567)
61
(10)
(9,516)
1,449
(8,274)
(8,067)
(1.54)p
(1.65)p
Statement of comprehensive
income
For the year ended 31 January 2023
Loss for the financial year
Other comprehensive income
Total comprehensive loss for the year attributable to equity holders of the Company
2023
£’000
(8,274)
–
(8,274)
2022
£'000
(8,067)
–
(8,067)
60
e-therapeutics plc Annual report and accounts 2023 Statement of changes in equity
For the year ended 31 January 2023
As at 1 February 2021
Total comprehensive income for the year
Loss for the financial year
Total comprehensive loss for the year
Transactions with owners, recorded directly in equity
Issue of ordinary shares
Equity-settled share-based payment transactions
Total contributions by and distribution to owners
As at 31 January 2022
Total comprehensive income for the year
Loss for the financial year
Total comprehensive loss for the year
Transactions with owners, recorded directly in equity
Issue of ordinary shares
Equity-settled share-based payment transactions
Total contributions by and distribution to owners
As at 31 January 2023
Share capital
£’000
Share
premium
£’000
Retained
earnings
£’000
Total
£’000
421
77,668
(64,455)
13,634
–
–
94
–
94
515
–
–
67
–
67
582
–
–
(8,067)
(8,067)
(8,067)
(8,067)
21,575
–
21,575
99,243
–
490
490
(72,032)
21,669
490
22,159
27,726
–
–
(8,274)
(8,274)
(8,274)
(8,274)
13,370
–
13,370
112,613
–
155
155
(80,151)
13,437
155
13,592
33,044
61
Financial statementse-therapeutics plc Annual report and accounts 2023 FINANCIAL STATEMENTS
Statement of financial position
As at 31 January 2023
Non-current assets
Intangible assets
Property, plant and equipment
Investments
Current assets
Tax receivable
Trade and other receivables
Prepayments
Cash and cash equivalents
Short term investments
Total assets
Current liabilities
Trade and other payables
Lease liability
Non-current liabilities
Lease liability
Total liabilities
Net assets
Equity
Share capital
Share premium
Retained earnings deficit
Total equity attributable to equity holders of the Company
Notes
2023
£’000
2022
£'000
14
15
16
12
17
18
18
19
20
20
22
239
400
–
639
1,500
259
553
31,689
–
102
805
–
907
1,474
236
501
11,346
15,051
34,001
28,608
34,640
29,515
1,301
295
1,596
–
1,596
1,103
391
1,494
295
1,789
33,044
27,726
582
112,613
(80,151)
33,044
515
99,243
(72,032)
27,726
These financial statements were approved and authorised for issue by the Board of Directors on 4 May 2023 and were
signed on its behalf by:
Michael Bretherton
Chief Financial Officer
Registered number: 04304473
62
e-therapeutics plc Annual report and accounts 2023 Statement of cash flow
For the year ended 31 January 2023
Loss for the year
Adjustments for:
Depreciation, amortisation and impairment
Loss on disposal of fixed assets
Equity–settled share–based payment expense
Interest income
Interest expense
Taxation
Operating cash flows before movements in working capital
Increase in trade and other receivables
Increase in trade and other payables
R&D tax received
Net cash used in operating activities
Interest received
Interest expense
Acquisition of intangible assets
Acquisition of property, plant and equipment
Increase in short term investments
Net cash generated/(used) from investing activities
Proceeds from issue of share capital
Proceeds from lease liability
Repayment of lease liability
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 February
Cash and cash equivalents at 31 January
Notes
2023
£’000
2022
£'000
(8,274)
(8,067)
14,15
15
9
10
11
12
10
11
14
15
18
20
20
468
10
155
(490)
23
(1,522)
218
–
490
(61)
10
(1,484)
(9,630)
(8,894)
(75)
198
1,496
(384)
700
779
(8,011)
(7,799)
490
(23)
(142)
(68)
15,051
15,308
13,437
–
(391)
61
(10)
(55)
(908)
(9,029)
(9,941)
21,669
793
(130)
13,046
22,332
20,343
11,346
31,689
4,592
6,754
11,346
The acquisition of property, plant and equipment in the year to 31 January 2022 includes a non-cash amount of £0.79 million
capitalised in respect of a right of use property for which a corresponding non-cash amount has been recognised in
proceeds from lease liability.
63
Financial statementse-therapeutics plc Annual report and accounts 2023 NOTES TO THE FINANCIAL STATEMENTS
Notes to the financial statements
1. General information
e-therapeutics plc is a company incorporated and domiciled
in the UK. The nature of the operations and principal
activities of the Company are set out in the Strategic Report
on pages 1 to 32 and the Directors’ Report on pages 54 and
55. The registered address of the Company is 4 Kingdom
Street, Paddington, London W2 6BD.
These financial statements are presented in the currency of
the economic environment in which the company operates,
being Sterling. Financial information presented has been
rounded to the nearest thousand pounds.
All operational activities were undertaken through the
Company in both the year ended 31 January 2023 and the
prior year. The Company previously also had two non-
operating subsidiaries as detailed in Note 16 to the financial
statements, but applications for dissolution and strike off of
these were made in the final quarter of 2022 and the entities
were subsequently removed from the UK Companies House
register. As a result, the Company no longer has any
subsidiaries and all reported assets and liabilities at 31 January
2023 are, therefore, those of the Company and all of the
financial information provided in the Financial Statements is
for the Company only.
2. Standards and interpretations applied for the
first time
No new standards, amendments or interpretations have
become effective for the first time in these financial
statements that have a material impact on the amounts
reported or disclosures made.
Certain new accounting standards and interpretations have
been published that are not mandatory for 31 December
2022 reporting periods and have not been early adopted by
the Company. None of these are expected to have a
material impact on the Company in the current or future
reporting periods and on foreseeable future transactions.
3. Significant accounting policies
Basis of accounting
The financial statements have been prepared on a going
concern basis under the historical cost basis of accounting,
except where fair value measurement is required under UK
adopted international accounting standards. The principal
accounting policies are set out below and have, unless
otherwise stated, been applied consistently to all years
presented.
Going concern
Although the company has recognised revenue from
commercial deals during the current and prior year, it is still
largely reliant on its cash balance to fund ongoing
operations.
At 31 January 2023, we reported cash and liquid resources of
£31,689,000 inclusive of short-term investment bank
deposits versus an underlying cash burn during the year of
£9,642,000, excluding R&D tax credits received and net
proceeds from the equity fundraise.
We prepared detailed strategic plans as part of the fundraise
process announced in September 2022, which raised total
gross proceeds of £13,500,000. We have also prepared a
detailed annual budget and follow on projections which
together cover a 24-month period and provide support for
the view that the company has sufficient cash to meet its
operational requirements for at least 12 months from the
signing of these financial statements. The budget includes a
considerable increase in R&D expenditure, in line with
progressing our strategic aims as detailed on pages 14 and 15
of the Strategic Report. This expenditure is largely
uncommitted and discretionary and would be reduced or
postponed if required to manage the company’s cash
resources.
The financial performance and position of the company are
discussed in more detail on pages 10 and 11 of the Strategic
Report.
These financial statements have been prepared on a going
concern basis, given the points discussed above. The
Directors have a reasonable expectation that the company
has adequate resources to continue in operational existence
for the foreseeable future.
Foreign currencies
The financial statements are presented in Sterling, being the
functional currency. Transactions in foreign currencies are
recognised at the rates of exchange prevailing on the dates
of the transactions. At each reporting date, monetary assets
and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing at that date. Exchange
differences are recognised in the Income Statement.
Revenue
Rendering of services under contracts with customers
Revenue is recognised on collaborative transactions in the
area of drug discovery. All contracts with customers are
reviewed individually in accordance with the IFRS 15
five-step process for revenue recognition. Where
consideration is fixed and services are deemed to be
transferred over time, on the basis that customers influence
the direction of the project and therefore the requirements
of the performance obligations to be delivered, revenue is
recognised over time based on the ratio of time spent by
employees in the period to the total time expected to be
spent to complete the performance obligation.
All other revenue for services is recognised at the point at
which the performance obligation, as defined in the contract
and as aligned to a customer deliverable, has been
64
e-therapeutics plc Annual report and accounts 2023 completed. Every performance obligation has a defined
transaction price. Milestone payments, all of which have a
defined transaction price, will be recognised when the
related performance obligation is satisfied, and the company
considers that it is highly probable that there will not be a
significant reversal of cumulative revenue in future periods.
e-therapeutics utilises its powerful computer-based
platform technologies in the delivery of its projects with
collaborators. Licence income fees associated with the right
to access the company’s proprietary platform throughout
the project are recognised as revenue over the length of the
contract in accordance with IFRS 15.B58. Customers may be
invoiced wholly or partly upfront, with the balance upon
completion of specific performance obligations. The
company recognises contract liabilities on the Balance Sheet
for consideration received in excess of the revenue
recognised.
Interest income and expenditure
Interest income and expenditure is recognised in the Income
Statement as it accrues on a timely basis, by reference to the
principal outstanding and effective interest rate applicable.
Research and development expenditure credit (RDEC) is
recognised within operating loss.
Current tax is the expected tax payable on the taxable profit
for the year, using tax rates enacted or substantively enacted
at the Balance Sheet date, and any adjustment to tax
payable in respect of previous years. R&D tax credits are
recognised in the period to which the corresponding R&D
spend relates, to the extent that any R&D tax credits
receivable are expected to be recovered and meet R&D tax
rule requirements.
Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable
profit, using tax rates that are expected to apply in the
period when the liability is settled or the asset is realised
based on tax laws that have been enacted or substantively
enacted at the Balance Sheet date. A deferred tax asset is
recognised only to the extent that it is probable that future
taxable profits will be available against which deductible
temporary differences can be utilised.
Expenses
Defined contribution pension plans
Payments to defined contribution pension plans are
recognised as an expense when employees have rendered
services entitling them to the contributions.
Share-based payment transactions
Equity-settled share-based payments to employees are
measured at fair value of the equity instruments at the grant
date, excluding the effect of non-market-based vesting
conditions. Details regarding the determination of the fair
value are included in Note 9.
The grant-date fair value is expensed over the vesting
period, based on the company’s estimate of equity
instruments that will eventually vest. At each Balance Sheet
date, the company revises its estimate of the number of
equity instruments expected to vest as a result of the effect
of non-market-based vesting conditions. The impact of the
revision of the original estimate is recognised in the Income
Statement such that the cumulative share-based payments
charge reflects the revised amount. The share-based
payments charge is matched by a corresponding credit to
the retained earnings reserve in the Statement of Changes
in Equity.
Taxation
Tax is recognised in the Income Statement except to the
extent that it relates to items recognised directly in equity, in
which case it is recognised in equity. Small and medium-
sized enterprise (SME) R&D tax credits receivable are
recognised within taxation in the Income Statement.
Intangible assets
Goodwill
Goodwill is initially recognised and measured as set out in
the "Business combinations" policy above. Goodwill is not
amortised but is tested at least annually for impairment,
reducing the carrying amount down to the recoverable
amount if this is lower. The recoverable amount is calculated
as the higher of fair value less costs to sell and value in use.
Goodwill is stated at cost less accumulated impairment
losses.
R&D expenditure
All R&D expenditure, which comprises a proportion of
employee salaries and directly attributable overheads, is
currently recognised in the Income Statement as incurred on
the basis that the recognition criteria of IAS 38 ’Intangible
Assets’ are currently not met.
Patents and trademarks
External expenditure on the creation of patents and
trademarks is capitalised and carried at cost less
accumulated amortisation and accumulated impairment
losses. Expenditure to maintain patents and trademarks after
the date of their grant is written off as incurred. Patents and
trademarks are amortised on a straight-line basis over the
remainder of their term from the date of their grant.
Derecognition
An intangible asset is derecognised on disposal or when no
future economic benefits are expected from use or disposal.
Gains or losses from derecognition of an intangible asset are
recognised in the Income Statement.
65
Financial statementse-therapeutics plc Annual report and accounts 2023 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and any recognised impairment
losses. Depreciation is charged to the Income Statement on
a straight-line basis over the estimated useful lives of the
assets, on the following bases:
Right-to-use property: Over the remaining lease term
Plant and equipment:
33% per annum
Fixtures and fittings:
15% per annum
Depreciation methods, useful lives and residual values are
reviewed at each Balance Sheet date, with the effect of any
changes in estimate accounted for on a prospective basis.
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. The
gain or loss arising on the disposal of an asset is determined
as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in the
Income Statement.
Impairment of intangible and tangible assets
The carrying amounts of the company’s intangible and
tangible assets are reviewed at each Balance Sheet date to
determine whether there is any indication of impairment. If
any such indication exists, the asset’s recoverable amount is
estimated, and an impairment loss is recognised in the
Income Statement to the extent that the carrying amount of
an asset or its cash-generating unit exceeds its recoverable
amount.
Where an impairment loss subsequently reverses, the
carrying amount of the asset or its cash-generating unit is
increased to the revised estimate of its recoverable amount,
but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had
no impairment loss been recognised for the asset or
cash-generating unit in prior years.
Leased assets
Right-of-use assets are measured at cost, being the initial
measurement of the lease liability plus any prepaid amounts
and less depreciation which is calculated on a straight-line
basis over the lease term. A corresponding lease liability is
recognised at the present value of lease payments unpaid at
the Balance Sheet date. Interest accrues on the lease liability
at a rate of interest appropriate for financing such assets or
as stipulated on the lease agreement. Subsequent to initial
measurement, the liability will be reduced by lease
payments.
The company has elected to account for short-term leases
of 12 months or less and low value leases using the practical
expedients. Payments in relation to these leases are
recognised as an expense in the Income Statement on a
straight-line basis over the lease term.
Investment in subsidiaries
Investments in subsidiaries are shown in the Company
Balance Sheet at cost less any appropriate provision for
impairment. The Company had no subsidiaries at 31 January
2023.
Financial Instruments
The company applies IFRS 9 ’Financial Instruments’. Financial
assets and financial liabilities are recognised in the
company’s Balance Sheet when the company becomes a
party to the contractual provisions of the instrument and are
initially measured at fair value.
Financial assets
All financial assets will be realised through the collection of
contractual cash flows; hence they are subsequently
measured at amortised cost using the effective interest
method, less expected credit losses judged as the
discounted probability weighted outcomes of default at
recognition. Interest income and expense is recognised in
the Income Statement as interest accrues using the
effective interest rate.
Financial liabilities
All financial liabilities are measured at amortised cost using
the effective interest method. The company derecognises
financial liabilities when the company’s obligations are
discharged, cancelled or expired. The difference between
the carrying amount and the consideration payable is
recognised in the Income Statement. Interest expense is
recognised in the Income Statement, except for short-term
payables when the recognition of interest would be
immaterial.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, demand
deposits and term deposits with an initial maturity of not
more than three months.
4. Accounting judgements and sources of
estimation uncertainty
The preparation of financial statements requires
management to make judgements, estimates and
assumptions that may affect the application of accounting
policies and the reported amounts of assets, liabilities,
income and expenses. The estimates and underlying
assumptions are reviewed on a going concern basis.
The following are the key judgements that management has
made in the process of applying the company’s accounting
policies and that have the most significant effect on the
amounts recognised in these financial statements:
66
e-therapeutics plc Annual report and accounts 2023 • As detailed in Note 3, there are various revenue streams
from collaborative partnerships. Management reviews
these revenue streams against the IFRS 15 criteria to
establish whether revenue should be recognised over time
or at a point in time. Revenue recognised over time results
in a difference between upfront cash receipts and revenue
recognised, the balance of which is recorded on the
Balance Sheet. Revenue recognised from collaborative
partnerships and corresponding contract liabilities reflect
management’s best estimate of each contract’s stage of
completion. Management estimates project progress at
each reporting date, with consideration to project plans
outlined in customer contracts, and remeasures revenue
accordingly. At the year end, deferred revenue liability was
£nil (2022: £nil). Revenue of £475,000 (2022: £477,000) is
made up of £475,000 (2022: £400,000) recognised at a
point in time and £nil (2022: £77,000) over time.
• The Directors have not recognised a deferred tax asset
based on an assessment of the probability that future
taxable income will be available against which the
deductible temporary differences and tax loss carry-
forwards can be utilised. The potential deferred tax asset is
disclosed in Note 12.
The following are the key assumptions concerning
estimation uncertainty that may have a significant risk of
causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year:
• The current tax receivable, of £1,500,000 (2022:
£1,474,000), represents an R&D tax credit based on an
advance claim with HMRC. The final receivable is subject
to judgement and the correct application of complex R&D
tax rules. The minimum receipt approved by HMRC could
be £nil. Historically, final claims have been successful and
materially in line with the receivable recognised in the
financial statements. The company expects the current
year to be successful too.
5. Segmental reporting
Financial information is reported to the Company’s Chief
Executive Officer (the Chief Operation Decision Maker) as
one business segment, being that of drug discovery.
All company activities are carried out in the UK and all of the
company’s assets and liabilities are located in the UK.
Revenue recognised of £475,000 (2022: £477,000) includes
£nil (2022: £nil) of deferred revenue at the beginning of the
period.
There are no performance obligations from existing revenue
contracts that are unsatisfied or partially satisfied as at
31 January 2023.
Revenue during the current financial year was generated
from two external customers. Management expects to enter
into further commercial collaborations in the coming
financial year, diversifying revenue from external customers.
6. Auditor’s remuneration
Amounts receivable by the Auditor and its associates in respect of:
– audit of the Company’s annual financial statements
2023
£’000
2022
£'000
60
58
7. Staff numbers and costs
The average number of persons employed by the Company (including Executive Directors and excluding Non-Executive
Directors) during the year, analysed by category, was as follows:
R&D staff
Finance and administration staff
Executive Directors
Number of employees
2023
2022
26
11
1
38
21
10
1
32
67
Financial statementse-therapeutics plc Annual report and accounts 2023 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Share-based payments (see Note 9)
Social security costs
Contributions to money purchase pension schemes
Compensation for loss of office
2023
£’000
4,213
155
509
316
–
5,193
2022
£'000
3,637
490
455
279
47
4,908
The Company makes defined pension contributions into money purchase schemes nominated by employees. The total
expense relating to these plans is £316,000 (2022: £279,000). At the reporting date, there were outstanding contributions of
£40,000 (2022: £33,000).
8. Directors’ remuneration
Directors’ emoluments
Contributions to money purchase pension schemes
Compensation for loss of office
2023
£’000
424
21
–
445
2022
£'000
435
20
–
455
The remuneration of the highest paid Director during the year was £249,000 (2022: £328,000). Contributions to money
purchase schemes in respect of the highest paid Director during the year were £21,000 (2022: £20,000).
During the year, one Director (2022: one) accrued retirement benefits under a money purchase scheme. No Director sold or
exercised share options during the year. Further information on the Directors’ remuneration can be found within the
Remuneration Committee Report on pages 46 to 53.
68
e-therapeutics plc Annual report and accounts 2023 9. Share-based payments
The company uses share options to incentivise, attract and retain the best people as part of our comprehensive people
strategy and to align remuneration with the medium to long-term strategic goals of the company. All options granted
before October 2020 were granted under the e-therapeutics Performance Share Plan 2013 (PSP) and all options granted
from October 2020 onwards were granted under the e-therapeutics Long-Term Incentive Plan 2020 (LTIP), which was
launched in the previous year.
All of the 2,600,000 share options granted during the year carry no performance conditions other than for remaining as an
employee on the basis that the key aim was to ensure the continued motivation of the current employees and to attract
certain new skills integral to the Company’s scale-up growth ambitions, details of which are included in the Strategic Report
accompanying these financial statements. Despite the absence of performance conditions on share options granted during
the year, management understands the importance of attaching performance conditions to share options granted and will
continue to fully consider this on a case-by-case basis depending on how the granting of options fits in with our overall
people strategy.
Vesting periods reflect a period of time that management believes will motivate and retain employees whilst taking into
account the stage of R&D development and business lifecycle of e-therapeutics.
The terms and conditions of all options in issue during the year are shown below:
Number of
instruments at
end of year
Number of
instruments at
beginning of
year
Exercise
price
p
Vesting
period Date exercisable
Performance
conditions
1,250,000
500,000
9,672,836
3,550,000
3,000,000
–
–
–
–
300,000
500,000
100,000
700,000
1,000,000
600,000
1,427,778
500,000
9,672,836
3,700,000
3,000,000
1,700,000
500,000
100,000
300,000
600,000
500,000
100,000
–
–
–
21,172,836
22,100,614
2.80
2.08
0.1
0.1
0.1
0.1
3.0
0.1
3.0
10.0
12.0
20.0
20.0
20.0
23.2
3 years Upon vesting
3 years Upon vesting
2 years Upon vesting
3 years Upon vesting
3 years Upon vesting
3 years Upon vesting
3 years Upon vesting
3 years Upon vesting
3 years Upon vesting
3 years Upon vesting
3 years Upon vesting
3 years Upon vesting
3 years Upon vesting
3 years Upon vesting
3 years Upon vesting
1
1
2
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Date of grant
March 2019
May 2019
February 2020
March 2020
April 2020
November 2020
December 2020
December 2020
March 2021
June 2021
June 2021
September 2021
February 2022
March 2022
May 2022
Total
Note 1
Options vest on a straight-line basis between 50% and 100% if share performance is between the minimum and maximum performance targets. These
targets are based on the percentage increase in share price in relation to a comparator group of peer companies.
Note 2
These options were granted to Ali Mortazavi, current CEO, upon his initial appointment as Executive Chairman in February 2020. The options include
the performance condition whereby they will vest in full, at the end of the vesting period, if e-therapeutics’ share price reaches and remains at 6.0p for
a period of 30 consecutive days at any time during that period. This performance condition was met in previous years.
69
Financial statementse-therapeutics plc Annual report and accounts 2023 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
If any of the above options remain unexercised after a period of ten years from the date of grant they will automatically
expire, with the exception of 800,000 options issued in November 2020, which expire seven years after the date of grant.
The number and weighted average exercise prices of share options are as follows:
Options
Outstanding at the beginning of the year
Exercised during the year
Forfeited during the year
Expired during the year
Granted during the year
Outstanding at the end of the year
Exercisable at the end of the year
Weighted
average
exercise price
2023
p
Weighted
average
exercise price
2022
p
Number of
options
2023
Number of
options
2022
1.1
–
(3.4)
–
20.7
3.1
0.5
22,100,614
–
(3,527,778)
–
2,600,000
21,172,836
11,422,836
0.4
–
(5.2)
–
10.3
1.1
–
22,622,836
–
(3,772,222)
–
3,250,000
22,100,614
–
The options outstanding at the year end have a weighted average remaining contractual life of seven years (2022: eight
years).
Where options have performance conditions attached, the fair value of those options have been valued using the Monte
Carlo option pricing model. Where options have no performance conditions attached, the fair value of those options have
been valued using the Black Scholes option pricing model. In both models, volatility has been estimated by reference to
historical share price data over a period commensurate with the expected term of the options awarded.
The assumptions for the option grants during the current year were:
Date of grant
Option pricing model used
Share price at date of grant (p)
Minimum vesting period
Exercise price (p)
Expected volatility
Risk-free rate
Dividend yield
Number of shares
Fair value per option (p)
May
2022
March
2022
Feb
2022
Black Scholes
25.15
3 years
23.20
82.67%
1.57%
0%
600,000
13.98
Black Scholes
24.00
3 years
20.00
84.85%
1.31%
0%
1,000,000
14.11
Black Scholes
30.20
3 years
20.00
83.41%
1.32%
0%
1,000,000
19.10
The total expense recognised for the year arising from equity-settled share-based payments is as follows:
Company equity-settled share-based payments
2023
£’000
155
2022
£'000
490
70
e-therapeutics plc Annual report and accounts 2023 10. Interest income
Bank interest receivable
Dividend from subsidiary (see note 16)
11. Interest expense
Lease interest payable
12. Tax
SME R&D tax credit receivable for the current year
Adjustments for prior year in respect of SME R&D tax credit
Current tax credit
Deferred tax
Total tax credit on loss on ordinary activities
2023
£’000
242
248
490
2023
£’000
23
2023
£’000
(1,483)
(15)
(1,498)
–
(1,498)
2022
£'000
61
-
61
2022
£'000
10
2022
£'000
(1,439)
(10)
(1,449)
–
(1,449)
The standard rate of corporation tax applied to reported profit is 19% (2022: 19%). The credit for the year can be reconciled
to the Income Statement as follows:
Loss before tax
Tax at the UK corporation tax rate of 19% (2022: 19%)
Expenses not deductible for tax purposes
Enhanced relief for SMEs in relation to R&D
Unrelieved tax losses
Income not taxable
Other
Adjustments in respect of prior year
Total tax credit for the year
2023
£’000
(9,772)
(1,857)
(3)
(635)
1,034
(47)
25
(15)
2022
£'000
(9,519)
(1,809)
(4)
(619)
920
-
73
(10)
(1,498)
(1,449)
71
Financial statementse-therapeutics plc Annual report and accounts 2023 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
The total tax credit recognised within the Income Statement is £1,522,000(2022: £1,484,000), which is made up the small or
medium-sized enterprise (SME) R&D tax relief of £1,498,000 (2022: £1,449,000) and research and development expenditure
credit (RDEC) of £24,000 (2022: £35,000). The SME tax credit is shown within taxation, as reconciled above. The RDEC is
included within administrative expenses in the Income Statement on the basis that the RDEC is treated as taxable income,
being an "above the line" relief.
The tax receivable on the Balance Sheet, of £1,500,000 (2022: £1,474,000), is made up of current year SME tax relief of
£1,483,000 (2022: £1,439,000) and RDEC of £17,000 (2022: £35,000). Historically, R&D credits relating to both the SME scheme
and the RDEC scheme have been received from HMRC as a single payment.
The company has accumulated losses available to carry forward against future trading profits of £38,162,000 (2022:
£33,623,000). No deferred tax has been recognised in respect of tax losses since it is uncertain at the Balance Sheet date as
to whether future profits will be available against which the unused tax losses can be utilised. The estimated value of the
deferred tax asset not recognised, measured at the main rate of 25% which will become effective from 1 April 2023 (2022:
19%), is £10,237,000 (2022: £9,792,000).
The current year R&D credit has not yet been approved by HMRC and, therefore, there is a risk that this claim may not be
successful.
13. Loss per share
The calculation of the basic and diluted earnings per share is based on the following data:
Earnings for the purposes of basic earnings per share and diluted earnings per share, being loss
attributable to owners of the Company (£’000)
Weighted average number of ordinary shares for the purposes of basic earnings per share and
diluted earnings per share (number)
Loss per share – basic and diluted (p)
2023
2022
(8,274)
(8,067)
537,346,310
(1.54)
488,342,124
(1.65)
Diluted EPS is calculated in the same way as basic EPS but also with reference to reflect the dilutive effect of share options in
existence at the year end over 21,172,836 (2022: 22,100,614) ordinary shares (see Note 9). The diluted loss per share is,
however, identical to the basic loss per share, as potential dilutive shares are not treated as dilutive where they would reduce
the loss per share.
72
e-therapeutics plc Annual report and accounts 2023 14. Intangible assets
Cost
As at 1 February 2021
Additions
As at 31 January 2022
Additions
Disposals
As at 31 January 2023
Amortisation and impairment
As at 1 February 2021
Impairment losses
Amortisation charge for the year
As at 31 January 2022
Amortisation charge for the year
Disposals
As at 31 January 2023
Net book value
As at 1 February 2021
As at 31 January 2022
As at 31 January 2023
Goodwill
£’000
Patents and
trademarks
£’000
2,824
–
2,824
–
(2,824)
1,350
55
1,405
142
–
–
1,547
Total
£’000
4,174
55
4,229
142
(2,824)
1,547
2,824
1,267
4,091
–
–
25
11
2,824
1,303
–
(2,824)
–
–
–
–
5
–
1,308
83
102
239
25
11
4,127
5
(2,824)
1,308
83
102
239
Research and development costs of £7,224,000 (2022: £6,109,000) have been recognised in the Income Statement.
Amortisation
Amortisation has been charged on patents for which the registration process is complete, over the term granted.
Amortisation is included within administrative expenses.
The goodwill in the Balance Sheet arose following the hive-up of the trade and assets of InRotis Technologies Limited in
2007. That goodwill was fully impaired during 2020, reflecting the fact that the Company’s business model was then founded
upon a very different, and significantly advanced, technological capability versus that at the date of the hive-up in 2007. This
goodwill was accounted for as disposed in the current year following an application for dissolution and strike off of InRotis
Technologies that was made in the final quarter of 2022. InRotis Technologies was subsequently removed from the UK
Companies House register – see note 16.
73
Financial statementse-therapeutics plc Annual report and accounts 2023 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
15. Property, plant and equipment
Cost
As at 1 February 2021
Additions
Disposals
As at 31 January 2022
Additions
Disposals
As at 31 January 2023
Depreciation
As at 1 February 2021
Depreciation charge for the year
Disposals
As at 31 January 2022
Depreciation charge for the year
Disposals
As at 31 January 2023
Net book value
As at 1 February 2021
As at 31 January 2022
As at 31 January 2023
Right-of-use
property
£’000
Plant and
equipment
£’000
Fixtures and
fittings
£’000
123
802
(123)
802
–
–
802
92
148
(123)
117
401
–
518
31
685
284
214
64
–
278
68
(23)
323
168
31
–
199
55
(13)
241
46
79
82
103
42
–
145
–
–
145
101
3
–
104
7
–
111
2
41
34
Total
£’000
440
908
(123)
1,225
68
(23)
1,270
361
182
(123)
420
463
(13)
870
79
805
400
Disclosure relating to the corresponding lease relating to the right-of-use asset is shown in Note 20. Depreciation charges
are included within administrative expenses.
16. Investments in subsidiaries
Cost
As at 1 February 2021, 31 January 2022 and 31 January 2023
Provision for impairment
As at 1 February 2021, 31 January 2022 and 31 January 2023
Net book value
As at 1 February 2021, 31 January 2022 and 31 January 2023
Total
£'000
2,374
2,374
–
The Company previously held 100% of the ordinary share capital of two subsidiary undertakings as follows:
InRotis Technologies Limited
Dormant
Searchbolt Limited
Non-operational
4 Kingdom Street, Paddington,
London, W2 6BD, UK
4 Kingdom Street, Paddington,
London, W2 6BD, UK
05019565
06323379
Principal activity
Registered address
Registered number
Provisions for full impairment against the cost of both of these investments in subsidiaries had been made in previous years
to reflect an expected nil recoverable amount after taking in to account losses incurred by these to date, together with
anticipated future losses. At Searchbolt, however, actual historic losses incurred were £248,086 lower than anticipated and a
capital reduction was subsequently undertaken in November 2022 in order to create distributable reserves and permit the
payment of a capital dividend of £248,086 to the Company later that month.
74
e-therapeutics plc Annual report and accounts 2023 Applications for dissolution and strike off of both of these investments in subsidiaries were made in the final quarter of 2022
and the entities were subsequently removed from the UK Companies House register. As a result, the Company no longer
has any subsidiaries.
17. Trade and other receivables
Trade receivables
Other receivables
2023
£’000
–
259
259
2022
£'000
–
236
236
There is no expected credit loss provision in respect of other receivables in the current or prior year for the company. All
debts are not past due in the current or prior year. The Company’s management has received no indication that any
unimpaired amounts will be irrecoverable. Further details of financial assets are shown in Note 21.
18. Cash and cash equivalents and short term investments
Cash at bank and in hand
Bank deposits on 32 days notice
Bank deposits on 35 days notice
Cash and cash equivalents
2023
£’000
3,616
12,879
15,194
31,689
2022
£'000
3,316
8,030
–
11,346
Short term investments (bank deposits on 95 day notice)
–
15,051
Total cash and cash equivalents and short term investments
31,689
26,397
The Company’s primary objective is to minimise the risk of a loss of capital and to eliminate any loss of liquidity which would
have a detrimental effect on the business. Short term surplus funds are deposited with reputably rated banks for maturities
of not more than 35 days.
19. Trade and other payables
Current
Trade payables
Other taxation and social security
Other payables
Accrued expenses
2023
£’000
429
124
70
678
1,301
2022
£'000
199
4
40
860
1,103
The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed
credit terms. Further details of financial liabilities are shown in Note 21.
75
Financial statementse-therapeutics plc Annual report and accounts 2023 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
20. Lease liability
Current
Lease liability
Non-current
Lease liability
2023
£’000
2022
£'000
295
–
295
391
295
686
The lease liability relates to one office property. The second lease began in October 2021 and has a remaining term of 9
months. The corresponding right-of-use asset is disclosed in Note 15.
The Company has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months
or less) or leases for which the underlying asset value is low. Payments made under such leases are expensed on a straight-
line basis. The amount recognised within administrative expenses for short-term leases was £19,000 (2022: £12,000) and the
minimum lease payment at the Balance Sheet date totalled £nil (2022: £23,000). The amount recognised within
administrative expenses for low value leases was £6,000 (2022: 1,000) and the minimum lease payment at the Balance Sheet
date was £11,000 (2022: £17,000). The movement in the Company’s lease liability, as reflected in the cash flow, is as follows:
£'000
23
793
(130)
686
–
(391)
295
As at 1 February 2021
Additions
Repayments
As at 31 January 2022
Additions
Repayments
As at 31 January 2023
76
e-therapeutics plc Annual report and accounts 2023 21. Financial instruments
The prime objectives of the Company’s policy towards financial instruments are to maximise returns on the Company’s cash
balances, manage the Company’s working capital requirements and finance the Company’s ongoing operations. Details of
the significant accounting policies for each class of financial asset, financial liability and equity instrument are disclosed in
Note 3.
The carrying amount of financial assets, all measured as loans and receivables at amortised cost, and financial liabilities, all
measured at amortised cost, is as follows:
Financial assets
Included within other receivables (Note 17)
Cash and cash equivalents (Note 18)
Short term investments (bank deposits on 95 day notice) (Note 18)
Financial liabilities
Trade payables (Note 19)
Lease liability (Note 20)
Included within other payables (Note 19)
2023
£’000
2022
£'000
259
31,689
–
31,948
429
295
70
794
236
11,346
15,051
26,633
199
686
40
925
Management believes that there is no material difference between the carrying value of financial assets or financial liabilities
and their fair value. There were no net gains or losses, except interest revenue and expenditure, recognised in the Income
Statement in relation to financial assets or liabilities recognised at amortised cost. Interest and investment income received
on cash balances and fixed-term deposits totalled £490,000 (2022: £61,000). Interest expenditure recognised on lease
liabilities and cash balances totalled £23,000 (2022: £10,000).
Capital management
The Company finances its operations through its revenue generating commercial collaborations, the issue of new shares and
the management of working capital. The Company’s capital resources are managed to ensure it has resources available to
invest in operational activities designed to generate future income. These resources were represented by £31,689,000 of
cash and short term investment bank deposits as at 31 January 2023 (2022: £26,397,000).
Management of financial risk
The key risks associated with the Company’s financial instruments are credit risk, liquidity risk and interest rate risk. The
Board is responsible for managing these risks and the policies adopted, which have remained largely unchanged throughout
the year, and are set out below.
77
Financial statementse-therapeutics plc Annual report and accounts 2023 NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Credit risk
The Company has adopted a treasury policy that aims to maintain a high level of security of deposited funds as well as
optimising income generated from those funds and ensuring that the Company has adequate working capital for ongoing
activities. Management considers the credit risks on liquid funds to be limited, since the counterparties are banks with high
credit ratings and balances are monitored to prevent reliance on any one bank. There are no material supplier financing
arrangements. A list of approved deposit counterparties with monetary limits for each is maintained and is reviewed by the
Audit Committee.
The carrying amount of trade and other receivables, of £259,000 (2022: £236,000), represents the maximum exposure to
credit risk from financial assets excluding cash. Management does not expect any future credit loss; hence no loss allowance
has been recognised in these financial statements for the current or prior year. Management considers the Company’s
exposure to credit risk to be immaterial.
The Company only deals with reputable customers and customers are required to pay an upfront element, which mitigates
the credit risk. Credit terms average 20 days (2022: 33 days).
Liquidity risk
The Company manages its liquidity risk by monitoring short-term cash flows, both short and long term, against monthly
forecast requirements and longer-term cash flows against annual budgets and rolling monthly cash forecasts and by
matching the maturity profiles of financial assets and liabilities. All of the financial assets disclosed in the table above have a
contractual maturity of not more than 35 days (2022: not more than 95 days).
Interest rate risk
The Company has deemed interest-bearing debt in issue applying to the lease liability at a deemed rate appropriate for
financing of such assets and which has been determined as 4.1%. Interest payable on lease liability balances was £20,000
(2022: £10,000). Interest received on bank deposit balances was £195,000 (2022: £61,000), earned at interest rates of between
0% and 3.35% (2022: 0% and 1%). Management does not consider that a fluctuation in interest rates would have a material
impact on the Company.
Foreign exchange rate risk
Financial assets and liabilities at the year end and at the prior year end that are not originally Sterling balances are
immaterial. Net foreign exchange losses of £140,000 (2022: £82,000) are recognised in administrative expenses.
22. Share capital
The share capital of e-therapeutics plc consists of fully paid ordinary shares with a nominal value of £0.001 each. The
Company has one class of ordinary shares, which carries no right to fixed income. All shares are equally eligible to receive
dividends and the repayment of capital and represent one vote at shareholders’ meetings.
In issue as at 1 February
Share issue
Total shares authorised and in issue as at 31 January – fully paid
No. of ordinary shares
2023
’000
514,571
67,588
2022
'000
420,773
93,798
582,159
514,571
As part of an equity fundraise initiative during the year, 67,500,000 shares were issued with an allotment date of
30 September 2022 at a price of 20.0p per share to raise gross proceeds of £13.5 million for general working capital
purposes and to enable e-therapeutics’ next stage of growth and value creation by expanding its platform capabilities
and asset pipeline.
In addition, 88,263 shares were issued during the year as part-payment of Non-Executive Director fees. Proceeds received
in excess of the nominal value of the shares issued during the year have been included in share premium. As at 31 January
2023, the Company had 582,159,332 (2022: 514,571,069) ordinary shares of 0.1p each in issue.
78
e-therapeutics plc Annual report and accounts 2023 23. Capital commitments
At the year end, the Company had not entered into contractual commitments for the acquisition of any capital items (2022:
£nil).
24. Related parties
The remuneration of the Directors, who are the key management personnel of the Company, is disclosed in Note 8.
Key management personnel
The Executive Committee and Board of Directors are designated as key management personnel. Key management
personnel remuneration includes the following expenses:
Short-term employee benefits
Salaries including bonuses
Social security costs
Health insurance
Compensation for loss of office and payments in lieu of notice
Post-employment benefits
Defined contribution pension plans
Share-based payments
Total remuneration
2023
£’000
1,549
203
48
–
1,800
102
160
2,062
2022
£'000
1,980
257
41
47
2,325
113
353
2,791
No key management personnel exercised share options during the year (2022: nil).
25. Subsequent events
There have been no events since the Balance Sheet date that require disclosure in these financial statements.
79
Financial statementse-therapeutics plc Annual report and accounts 2023 OTHER INFORMATION
Notice of Annual General Meeting
of e-therapeutics plc
(Incorporated and registered in England and Wales under
company number 04304473)
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION.
Special business
To consider and, if thought fit, to pass the following
resolutions, of which resolution 5 will be proposed as an
ordinary resolution, and resolution 6 will be proposed as a
special resolution:
If you are in any doubt about its content or as to what
action you should take, you should consult your
stockbroker, solicitor, accountant or other independent
professional advisor authorised under the Financial Services
and Markets Act 2000 if you are in the United Kingdom, or
another appropriately authorised independent advisor if
you are in a territory outside the United Kingdom.
If you have sold or transferred all your shares in
e-therapeutics plc, please pass this document and the
accompanying proxy form to the purchaser or transferee or
to the stockbroker or other agent through whom you made
the sale or transfer, for transmission to the purchaser or
transferee.
Notice is hereby given that the 2023 Annual General
Meeting of e-therapeutics plc (the “Company”) will be held
at the Company’s registered office at 4 Kingdom Street,
Paddington, London W2 6BD at 12:30 on 18 July 2023 to
consider and, if thought fit, pass the following resolutions as
ordinary resolutions other than resolution 6, which will be
proposed as a special resolution:
Ordinary business
1.
To receive the accounts for the financial year ended
31 January 2023 together with the Directors’ Report and
the Auditor’s Report for that period.
2. To re-elect Ali Mortazavi as a Director of the Company,
who has been a Director since 10 February 2020 and
was last re-elected by shareholders in March 2020.
3. To re-appoint Crowe U.K. LLP as the Auditor of the
Company.
4. To authorise the Directors to set the remuneration of
the Auditor of the Company.
5. That the Directors be and are hereby generally and
unconditionally authorised for the purposes of Section
551 of the Companies Act 2006 (the "Act") to exercise all
the powers of the Company to allot shares and grant
rights to subscribe for, or convert any security into,
shares:
a) up to an aggregate nominal amount (within the
meaning of Section 551(3) and (6) of the Act) of
£194,219.78 (being 1/3 (approximately 33.33%) of the
Company’s issued share capital as at close of
business on 3 May 2023), such amount to be
reduced by the nominal amount allotted or granted
under (b) below in excess of such sum; and
b) comprising equity securities (as defined in Section
560(1) of the Act) up to an aggregate nominal
amount of £388,439.55 (being 2/3 (approximately
66.67%) of the Company’s issued share capital as at
close of business on 3 May 2023), such amount to be
reduced by any allotments or grants made under (a)
above, in connection with or pursuant to an offer by
way of a rights issue in favour of holders of ordinary
shares in proportion (as nearly as practicable) to the
respective number of ordinary shares held by them
on the record date for such allotment (and holders
of any other class of equity securities entitled to
participate therein or, if the Directors consider it
necessary, as permitted by the rights of those
securities), but subject to such exclusions or other
arrangements as the Directors may consider
necessary or appropriate to deal with fractional
entitlements, record dates or legal, regulatory or
practical difficulties which may arise under the laws
of or the requirements of any regulatory body or
stock exchange in any territory or any other matter
whatsoever, these authorities to expire on the earlier
of: (i) the date falling 15 months after the date of the
passing of this resolution; and (ii) the conclusion of
the Annual General Meeting of the Company in
2024 (save that the Company may before such
expiry, make any offer or enter into any agreement
which would or might require shares to be allotted
or rights to be granted, after such expiry and the
Directors may allot shares, or grant rights to
subscribe for or to convert any security into shares,
in pursuance of any such offer or agreement as if
the authorisations conferred hereby had not
expired).
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e-therapeutics plc Annual report and accounts 2023
6. That, subject to the passing of resolution 5 above, the
Recommendation
Directors be and are hereby authorised pursuant to
Section 570(1) of the Act to allot equity securities (as
defined in Section 560(1) of the Act) of the Company
for cash pursuant to the authorisation conferred by that
resolution, as if Section 561 of the Act did not apply to
any such allotment, provided that this power shall be
limited to the allotment of equity securities for cash:
a) in connection with or pursuant to an offer of or
invitation to acquire equity securities (but in the
case of the authorisation granted under resolution
5(a), by way of a rights issue only) in favour of
holders of ordinary shares in proportion (as nearly as
practicable) to the respective number of ordinary
shares held by them on the record date for such
allotment (and holders of any other class of equity
securities entitled to participate therein or, if the
Directors consider it necessary, as permitted by the
rights of those securities), but subject to such
exclusions or other arrangements as the Directors
may consider necessary or appropriate to deal with
fractional entitlements, record dates or legal
regulatory or practical difficulties which may arise
under the laws of or the requirements of any
regulatory body or stock exchange in any territory
or any other matter whatsoever; and
b)
in the case of the authorisation granted under
resolution 5(a) above, and otherwise than pursuant
to paragraph (a) of this resolution, up to an
aggregate nominal amount of £194,219.78 (being
1/3 (approximately 33.33%) of the Company’s
issued share capital as at close of business on 3 May
2023) and this power shall expire on the earlier of:
(i) the date falling 15 months after the date of the
passing of this resolution; and (ii) the conclusion of
the Annual General Meeting of the Company to be
held in 2024 (save that the Company may, at any
time before the expiry of such power, make any
offer or enter into any agreement which would or
might require equity securities to be allotted after
the expiry of such power and the Directors may
allot equity securities in pursuance of any such
offer or agreement as if such power conferred
hereby had not expired).
Your Board believes that the resolutions to be proposed as
ordinary and special business at the 2023 Annual General
Meeting are in the best interests of the Company and its
shareholders as a whole. Accordingly, your Directors
unanimously recommend that shareholders vote in favour
of the resolutions, as they intend to do in respect of their
own beneficial holdings of shares in the Company.
Action to be taken
A form of proxy for use at the AGM is enclosed. You are
requested to complete and return the form of proxy in
accordance with the instructions printed thereon as soon as
possible and in any event so that it is received by the
Company’s registrar, Neville Registrars Limited, Neville
House, Steelpark Road, Halesowen B62 8HD not later than
12:30 on 14 July 2023.
The right to attend and vote at the 2023 Annual General
Meeting is determined by reference to the Company’s
register of members. Only a member entered in the register
of members as at close of business on 14 July 2023 (or, if the
2023 Annual General Meeting is adjourned, in the register of
members as at the close of business on the date which is two
business days before the time of the adjourned 2023 Annual
General Meeting) is entitled to attend and vote at the 2023
Annual General Meeting.
By order of the Board
Timothy Bretherton
Company Secretary
4 May 2023
Registered office
4 Kingdom Street
Paddington
London
W2 6BD
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Other informatione-therapeutics plc Annual report and accounts 2023
OTHER INFORMATION CONTINUED
Explanatory notes to the
resolutions
The notes on the following pages explain the resolutions to
be proposed at the 2023 Annual General Meeting of
e-therapeutics plc (the “Company”) to be held at the
Company’s registered office at 4 Kingdom Street,
Paddington, London W2 6BD at 12:30 on 18 July 2023.
Resolutions 1 to 5 are proposed as ordinary resolutions. This
means that for each of those resolutions to be passed, more
than half of the votes cast must be in favour of each
resolution. Resolution 6 is proposed as a special resolution.
This means that for that resolution to be passed, at least
three-quarters of the votes cast must be in favour of each
resolution.
Resolution 1 – Adoption of reports and accounts
For each financial year, the Directors are required to present
the Directors’ Report, the audited accounts and the
Auditor’s Report to shareholders at a general meeting. The
financial statements and reports laid before the 2023 Annual
General Meeting are for the financial year ended 31 January
2023, and the Company proposes a resolution on its financial
statements and reports.
Resolution 2 – Election of Directors
In accordance with the Company’s articles of association,
each Director must be subject to re-election at least every
three years. Accordingly, Ali Mortazavi, who has been a
Director since 10 February 2020 and was last re-elected by
shareholders in March 2020, will again stand for re-election
by shareholders. His biography appears on page 34 of the
Annual Report and Accounts for the year ended 31 January
2023.
The Board is satisfied that Ali Mortazavi will contribute
effectively and demonstrate commitment to his role as Chief
Executive Officer. Accordingly, the Board unanimously
recommends the election of Ali Mortazavi.
Resolutions 3 and 4 – Reappointment of Auditor and
Auditor’s remuneration
Resolutions 3 and 4 propose the reappointment of Crowe
U.K. LLP as the Company’s Auditor for the year ending 31
January 2024 and the authorisation of the Directors to agree
the Auditor’s remuneration. The Directors will delegate this
authority to the Audit Committee.
Resolution 5 – Authority to allot shares
Your Directors may only allot shares or grant rights over
shares if authorised to do so by shareholders. This resolution,
if passed, will give the Directors flexibility to act in the best
interests of shareholders, when the opportunity arises, by
issuing new shares. Accordingly, resolution 5 will be
proposed as an ordinary resolution to grant new authorities
to allot shares and grant rights to subscribe for, or convert
any security into, shares: (a) up to an aggregate nominal
amount of £194,219.78; and (b) in connection with a rights
issue up to an aggregate nominal amount (reduced by
allotments under part (a) of the resolution) of £388,439.55.
These amounts represent approximately 33.33% and 66.67%
respectively of the total issued ordinary share capital of the
Company as at close of business on 3 May 2023, being the
last practicable day prior to the publication of this notice. If
given, these authorities will expire on the earlier of the date
falling 15 months after the date of the passing of this
resolution and the conclusion of the Annual General Meeting
of the Company in 2024.
Your Directors have no present intention of issuing shares
pursuant to this authority, although they did undertake an
equity share issue fundraise in June 2021 pursuant to an
authority taken at the last Annual General Meeting. As at the
date of this notice the Company holds no treasury shares.
Resolution 6 – Disapplication of pre-emption rights
Your Directors also require additional authority from
shareholders to allot equity securities for cash and otherwise
than to existing shareholders pro rata to their holdings.
Resolution 6 will be proposed as a special resolution to grant
such an authority. Apart from offers or invitations in
proportion to the respective number of shares held, the
authority will be limited to the allotment of equity securities
for cash up to an aggregate nominal value of £194,219.78
(being approximately 33.33% of the Company’s issued
ordinary share capital as at close of business on 3 May 2023,
being the last practicable day prior to the publication of this
notice). If given, this authority will expire on the earlier of the
date falling 15 months after the date of the passing of this
resolution and the conclusion of the Annual General Meeting
of the Company in 2024.
82
e-therapeutics plc Annual report and accounts 2023 Procedural and explanatory notes
The following notes explain your general rights as a
shareholder of the Company and your right to vote by proxy
at this meeting.
form not later than 12:30 on 14 July 2023 or 48 hours
before the time for holding any adjourned meeting or
(in the case of a poll not taken on the same day as the
meeting or adjourned meeting) for the taking of the
poll at which it is to be used or lodged.
Entitlement to vote
1.
The right to attend and vote at the 2023 Annual
General Meeting is determined by reference to the
Company’s register of members. Only a member
entered in the register of members as at close of
business on 14 July 2023 (or, if the 2023 Annual General
Meeting is adjourned, in the register of members as at
the close of business on the date which is two business
days before the time of the adjourned 2023 Annual
General Meeting) is entitled to attend and vote at the
2023 Annual General Meeting and a member may vote
in respect of the number of ordinary shares registered
in the member’s name at that time. Changes to the
entries in the register of members after that time shall
be disregarded in determining the rights of any person
at the 2023 Annual General Meeting.
2. A member entitled to attend, speak and vote at the
meeting convened by the above notice is entitled to
appoint one or more proxies to exercise all or any of his
or her rights to attend, speak and vote at a meeting of
the Company. On a poll vote, all of a member’s voting
rights may be exercised by one or more duly appointed
proxies.
3. A form of appointment of proxy is enclosed. To appoint
the chair as proxy, this form must be completed, signed
and sent or delivered to Neville Registrars Limited,
Neville House, Steelpark Road, Halesowen, West
Midlands B62 8HD. In the case of a member which is a
company, the proxy form must be executed under its
common seal or signed on its behalf by an officer of the
Company or an attorney of the Company. If you return
more than one proxy appointment in respect of a share,
that received last by the registrar before the latest time
for the receipt of proxies will take precedence.
6.
In the case of joint holders of shares, where more than
one of the joint holders purports to appoint a proxy,
only the appointment submitted by the most senior
holder will be accepted. Seniority is determined by the
order in which the names of the joint holders appear in
the Company’s register of members in respect of the
joint holding (the first named being the most senior).
7. CREST members who wish to appoint a proxy or proxies
by using the CREST electronic appointment service may
do so by using the procedures described in the CREST
Manual (available via www.euroclear.com/CREST)
subject to the provisions of the Company’s articles of
association. CREST personal members or other CREST
sponsored members, and those CREST members who
have appointed a voting service provider(s), should
refer to their CREST sponsor or voting service
provider(s), who will be able to take the appropriate
action on their behalf. To be valid, the appropriate
CREST message, regardless of whether it constitutes
the appointment of a proxy or an amendment to the
instructions given to a previously appointed proxy, must
be transmitted so as to be received by our agent,
Neville Registrars Limited, whose CREST participant ID
is 7RA11, by 12:30 on 14 July 2023. The Company may
treat as invalid a proxy appointment sent by CREST in
the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
8. Save through CREST, we do not have a facility to
receive proxy forms electronically. Therefore, you may
not use any electronic address referred to in the proxy
form or any related document to submit your proxy
form.
Voting results
4. The form of proxy includes a vote withheld option.
Please note that a vote withheld is not a vote in law and
will not be counted in the calculation of the proportion
of the votes for and against any particular resolution.
The results of the voting at the 2023 Annual General
Meeting will be announced through a regulatory information
service and will appear on our website, www.etherapeutics.
co.uk, as soon as reasonably practicable.
5. The appointment of a proxy and the original or duly
certified copy of the power of attorney or other
authority (if any) under which it is signed or
authenticated should be deposited with Neville
Registrars Limited at the address shown on the proxy
83
Other informatione-therapeutics plc Annual report and accounts 2023 OTHER INFORMATION CONTINUED
Inspection of documents
9. The following documents are available for inspection
during normal business hours at the registered office
of the Company on any business day and they may also
be inspected at the Company’s London office at
4 Kingdom Street, Paddington, London W2 6BD from
12:15 on the day of the meeting until the conclusion of
the meeting:
9.1
copies of Directors’ service contracts with the
Company; and
9.2 copies of the Non-Executive Directors’ letters of
appointment.
The statement of the rights of members in relation to
the appointment of proxies in paragraph 2 above does
not apply to Nominated Persons. The rights described
in that paragraph can only be exercised by members of
the Company.
12. As at close of business on 3 May 2023, being the last
practicable day prior to the publication of this notice,
the Company’s issued share capital comprised
582,659,332 ordinary shares of 0.1p. Each ordinary share
carries the right to one vote at a general meeting of the
Company and, therefore, the total number of voting
rights in the Company as at the date of this notice is
582,659,332.
Corporate representatives
Members’ requests under Section 527 of the Act
10. A shareholder of the Company which is a corporation
13. Under Section 527 of the Act members meeting the
may authorise a person or persons to act as its
representative(s) at the 2023 Annual General Meeting.
In accordance with the provisions of the Act, each such
representative may exercise (on behalf of the
corporation) the same powers as the corporation could
exercise if it were an individual shareholder of the
Company, though there are restrictions on more than
one such representative exercising powers in relation to
the same shares.
Nominated persons
11. Any person to whom this notice is sent as a person
nominated under Section 146 of the Act to enjoy
information rights (a "Nominated Person") may, under
an agreement between him/her and the member by
whom he/she was nominated, have a right to be
appointed (or to have someone else appointed) as a
proxy for the 2023 Annual General Meeting. If a
Nominated Person has no such proxy appointment right
or does not wish to exercise it, he/she may, under any
such agreement, have a right to give instructions to the
member as to the exercise of voting rights.
threshold requirements set out in that section have the
right to require the Company to publish a statement on
a website setting out any matter relating to: (i) the audit
of the Company’s accounts (including the Auditor’s
Report and the conduct of the audit) that are to be laid
before the 2023 Annual General Meeting; or (ii) any
circumstance connected with an Auditor of the
Company ceasing to hold office since the last Annual
General Meeting. The Company may not require the
members requesting any such website publication to
pay its expenses in complying with Sections 527 or 528
of the Act. Where the Company is required to place a
statement on a website under Section 527 of the Act, it
must forward the statement to the Company’s Auditor
not later than the time when it makes the statement
available on the website. The business which may be
dealt with at the 2023 Annual General Meeting includes
any statement that the Company has been required
under Section 527 of the Act to publish on a website.
Website
14. A copy of this notice, and other information required
by Section 311A of the Act, can be found at
www.etherapeutics.co.uk.
Except as provided above, members who have general
queries about the meeting should contact the Company
Secretary in writing at the Company’s registered office. No
other methods of communication will be accepted
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e-therapeutics plc Annual report and accounts 2023
Advisors
Nominated advisor and broker
SP Angel Corporate Finance LLP
Prince Frederick House
4th Floor
35-39 Maddox Street
London
W1S 2PP
Auditor to the Company
Crowe U.K. LLP
55 Ludgate Hill
London
EC4M 7JW
Registrar
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
B62 8HD
Solicitors
Stephenson Harwood LLP
1 Finsbury Circus
London
EC2M 7SH
Bankers
Bank of Scotland
75 George Street
Edinburgh
EH2 3EW
Company Secretary
Timothy Bretherton
4 Kingdom Street
Paddington
London
W2 6BD
Other information e-therapeutics plc
4 Kingdom Street
Paddington
London
W2 6BD
United Kingdom
(Registered Office)
Tel: +44 (0) 20 4551 8888
Incorporated in England and Wales, company number: 04304473
etherapeutics.co.uk