Computing the
future of medicineTM
e-therapeutics plc
Annual report and accounts 2024
We integrate
computational
power and biology
to discover life-
transforming RNAi
medicines.
Vision
Solve human disease through computation
Mission
Integrate 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
Strategic report
01
Highlights
02 At a glance
03 Investment case
04 Chairman’s statement
06 Chief Executive Officer’s statement
10
Financial review
12
Our approach
14
Therapeutic pipeline
16
Business model
18
Our strategy
20 Section 172(1) statement
21
Stakeholder engagement
24 Environmental, social and
governance
25 Risk management
Corporate governance
29 Chairman’s introduction
to governance
30 Board of Directors
31
Executive Team
32 Corporate governance statement
35 Governance structure
39 Audit Committee report
40 Remuneration Committee report
42 Remuneration policy
45 Statement of remuneration
48 Directors’ report
50 Directors’ responsibilities statement
Financial statements
51
Independent Auditor’s report
54 Income statement
54 Statement of comprehensive income
55 Statement of changes in equity
56 Statement of financial position
57
Statement of cash flow
58 Notes to the financial statements
Annual General Meeting
73 Notice of Annual General Meeting
75 Explanatory notes to the resolutions
78 Advisors
To view our site visit:
www.etherapeutics.co.uk
Contents
Strategic report
HIGHLIGHTS
Operational highlights
Pipeline
• Unveiled a therapeutic pipeline of five GalOmic™ RNA
interference (RNAi) programs spanning a variety of
therapeutic areas with high unmet need.
• Completed positive preclinical proof-of-concept data
packages for four GalOmic™ assets.
• Selected two assets for progression towards the clinic,
with IND-enabling studies to commence in due course:
ETX-312 for the treatment of metabolic dysfunction-
associated steatohepatitis (MASH) and ETX-407 for dry
age-related macular degeneration.
Data
• Expansion of data on metabolic dysfunction and
associated fatty liver disease through strategic
collaboration with Arcturis Data (Arcturis) to integrate
Arcturis’ high quality, clinically rich real-world evidence
(RWE) patient data within HepNet™.
• Generation of a wealth of in-house experimental data
significantly expanding the proprietary datasets that
feed into HepNet™.
Computation
• Advanced projects developing and implementing large
language models (LLMs) across e-therapeutics’ processes
and systems, further enhancing computational
capabilities.
• Continued to leverage our HepNet™ computational
platform, including network analytics, a hepatocyte-
specific knowledge graph, and predictive short
interfering RNA (siRNA) construct design capabilities to
rapidly develop life-transforming RNAi therapies.
• Last near-term milestone successfully achieved in
collaboration with iTeos Therapeutics in immuno-oncology,
resulting in an additional payment to the Company and
further validating its computational approach to identifying
novel targets.
Intellectual property (IP)
• Sustained IP activity with priority patent applications
filed on nine further inventions, and international patent
applications filed for eight inventions arising from the
Company’s proprietary GalNAc-siRNA technology,
GalOmic™.
People
• Continued investment in leading industry talent,
including new hires on the East Coast of the USA, a
major biotech hub.
• Effective 20 September 2023, Timothy Bretherton
assumed the role of Chief Financial Officer (CFO,
non-Board).
Post period highlights
• Successful fundraise of £28.9 million announced in April
2024 by way of a subscription by funds managed by
M&G Investment Management Limited and Richard
Griffiths, both existing shareholders of the Company.
• Completed cancellation of admission of our Ordinary
Shares to trading on AIM as of 9 May 2024.
• Strengthened the Board of Directors with the appointment
of Lord David Prior as Chair, as of 23 May 2024.
Revenue
£0.3m
Average headcount
35
Operating loss
£13.8m
Year-end cash*
£20.7m
R&D spend
£10.2m
R&D tax credit receivable
£1.9m
Financial highlights
2024
£0.3m
2023
£0.5m
2022
£0.5m
2024
£20.7m
2023
£31.7m
2022
£26.4m
2024
£13.8m
2023
£10.2m
2022
£9.6m
2024
35
2023
38
2022
32
2024
£10.2m
2023
£7.2m
2022
£6.1m
2024
£1.9m
2023
£1.5m
2022
£1.5m
*
Year-end cash and short-term investment bank deposits.
01
e-therapeutics plc Annual Report 2024
AT A GLANCE
Better medicines faster
To materially increase the likelihood of successfully developing
effective medicines it is essential to overcome some fundamental
obstacles in drug development:
Our GalOmic™ RNAi platform is underpinned by proprietary siRNA chemistry knowledge and intellectual property, enabling
creation of potent and durable GalNAc-siRNA therapies. Our HepNet™ computational platform is formed of a vast
hepatocyte-specific knowledgebase and advanced computational approaches that are implemented across the entire drug
development process, from the identification of novel gene targets to the in silico design of GalOmic™ constructs. Together,
GalOmic™ and HepNet™ allow us to rapidly discover and develop life-transforming medicines for patients.
e-therapeutics has 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 previously
undiscovered potential drug candidates in a reproducible and translatable way.
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.
Biology
Limited understanding
of human biology across
the biopharma industry
Conventional modalities
are often challenged by
an inability to design
and develop a drug
despite having
identified a potential
target
The R&D process is slow
and expensive with poor
methods of de-risking
therapeutic hypotheses
early
New target discovery
remains rare, with
crowded competitive
landscapes around the
same established
targets
Druggability
Efficiency
Novelty
HepNetTM
Our hepatocyte-focused
computational platform that enables
identification of novel gene targets,
improves drug design, and increases
automation.
GalOmicTM
Our proprietary RNAi platform that
generates potent and safe GalNAc-
siRNA therapeutics to selectively
silence novel disease-associated genes
in hepatocytes.
Computational
platform
RNAi platform
02
e-therapeutics plc Annual Report 2024
Strategic report
Our investment case
INVESTMENT CASE
Unique market position
Our highly differentiated market position combining
computation and AI with the RNAi therapeutic modality
enables us to consistently develop therapies at the fastest
pace and lowest development cost currently available in
the industry.
Well-established computational platform
We have extensive experience using computation to model
complex biology. This specialist expertise and proprietary
computational technology underpin HepNet™, our world-
class hepatocyte-focused computational platform that
drives every stage of our drug development process.
1
2
Expanding therapeutic pipeline
We have a growing in-house pipeline of compelling "first-on-
target" GalOmic™ candidates across a wide range of disease
areas with high unmet need. These assets are being rapidly
progressed towards the clinic, with our most advanced assets
currently progressing to IND-enabling studies.
Demonstrable speed of execution
Through the unique combination of computation and RNAi,
we progress assets from target identification to beginning of
preclinical proof-of-concept experiments in less than six
months. This enables us to identify clinical candidates in
under a year. We continually leverage cutting-edge
developments in computation to further reduce
R&D timelines.
3
4
Single-cell focus advantage
Hepatocyte-targeted interventions offer the opportunity to
address a large variety of diseases through access to
thousands of gene targets, while avoiding side effects
caused by systemic knockdown. This also allows us to focus
on highly specific datasets and tools that promote superior
computational depth and accuracy.
High barrier to entry
In addition to the need for proprietary computational
methods, operating in the field of RNAi requires a high
degree of technical, platform and IP know-how. We have
deep expertise in the space across biology, chemistry, and IP.
5
6
03
e-therapeutics plc Annual Report 2024
CHAIRMAN’S STATEMENT
genes, distinguishing it from other RNAi therapeutics
companies with vastly overlapping pipelines. Notably,
ETX-407 and ETX-312 are now progressing to IND-enabling
studies after demonstrating significant potential in
addressing unmet needs in dry age-related macular
degeneration (dry AMD) and metabolic dysfunction-
associated steatohepatitis (MASH) respectively. This
highlights ETX’s commitment to strategic investment in the
progression of specific assets towards the clinic, enabling
higher value partnering opportunities. These achievements,
alongside the successful completion of preclinical proof-of-
concept studies in representative disease models for
ETX-148 (for the treatment of haemophilia and bleeding
disorders) and ETX-291 (for the treatment of
cardiometabolic disease), mark critical milestones in the
Company’s quest to deliver transformative RNAi treatments
to patients.
This impressive and rapid progression of assets is a direct
result of ETX’s unique combination of RNAi as a genetic
medicine modality and the HepNet™ computational
platform. Together, this creates a reproducible drug
development engine that has thus far yielded an
outstanding success rate. The Company continues to apply
AI approaches at all stages of discovery and development,
from novel target gene identification to siRNA sequence
design, improving efficiency at every step.
The integration of large language models (LLMs) into
HepNet™ will further accelerate the development of
life-transforming RNAi medicines. The Company has spent
the last year identifying the most impactful use cases for
LLM agents whilst developing the necessary infrastructure
and models. This period of development will enable a
smooth transition into the implementation phase of the
projects during the next year. Unlike other companies
leveraging the recent developments in AI, ETX has a robust
starting position in applying computation to biology and a
huge breadth of proprietary hepatocyte-specific data. LLM
technology may be widely available, but ETX has the
expertise and data to enable effective, tailored, and
meaningful application.
People and culture
During the past year ETX has strengthened the team with
additional hires in the East Coast of the United States,
creating a hub in the thriving biotech community in Boston.
Across the Company, ETX continues to drive a dynamic
environment that allows the team to pursue innovative ideas
and take advantage of cutting-edge technology, as
demonstrated by the ability to leverage the latest
advancements in LLMs quickly once the technology had
sufficiently matured. This has been further enhanced by the
decision to return to the London office four days a week with
US colleagues visiting regularly, allowing the team to
collaborate and communicate with ease.
A year of tangible advancement
This year was marked by
significant scientific
advancements and financial
resilience, all of which
underscore the Company’s
commitment to redefining the
landscape of RNAi therapeutics
through computational and
AI-driven innovations.
Lord David Prior
Independent Non-Executive Chairman
I am delighted to present this statement on behalf of
the Board of e-therapeutics (ETX). However, as I joined
the Board very recently, I cannot take any credit for
what follows.
This year was marked by significant scientific
advancements and financial resilience, all of which
underscore the Company’s commitment to redefining the
landscape of RNAi therapeutics through computational
and AI-driven innovations.
Realising the potential of AI and RNAi
This year ETX announced its GalOmic™ therapeutic
pipeline, the tangible product of its innovative approach to
drug development. The Company is successfully
prosecuting multiple GalOmic™ assets targeting novel
04
e-therapeutics plc Annual Report 2024
Q&A with David
Q What differentiates e-therapeutics from other
AI-led biotech companies?
A e-therapeutics is the only company combining a
dedicated in-house effort in advanced
computation with siRNA, a well-tolerated and
highly specific modality. This unique combination
has enabled the Company to create something
extremely rare – a reproducible drug
development engine that leads to fast clinical
candidate generation. In addition, e-therapeutics’
extensive experience in computational biology
means the Company is well positioned to leverage
new developments in the space quickly, as
exemplified by the ongoing integration of
specialist LLM agents into the HepNet™ platform.
Q What do you think is limiting RNAi’s potential to
become the next big modality?
A RNAi is a very attractive modality. siRNA-based
medicines are safe, clinically validated and dosed
infrequently by subcutaneous injection. However,
many RNAi biotech companies have difficulty
identifying novel targets with disease-modifying
potential, resulting in a high degree of overlap
between pipelines. This on-target competition
and limited innovation, particularly in the
GalNAc-siRNA space, give the appearance of
limited potential. Through use of its HepNet™
computational platform, e-therapeutics proves
that the modality enables access to a wide variety
of opportunities, even when focused on a single
cell type, hepatocytes.
Q How has e-therapeutics’ in-house therapeutic
pipeline developed over the last year?
A After a period of focus, e-therapeutics has now
publicly announced its therapeutic pipeline of five
preclinical GalOmic™ assets. The pipeline spans a
variety of therapeutic areas, from prevalent
cardiometabolic disease to rare haematology,
owing to the wide influence the liver has
throughout the body. During the year
e-therapeutics progressed four assets to the end
of preclinical proof-of-concept and are
advancing two of these programs to IND-
enabling studies. ETX-258 has progressed from
target nomination to drug design and will soon be
entering disease models relevant to its
undisclosed indication. In addition, the Company
has a pool of further targets undergoing target-
indication assessment that will keep its early
pipeline populated. Together, this progress, which
has been achieved by a lean team, demonstrates
the Company’s ability to develop GalOmic™ RNAi
assets at pace, driven and supported by insights
from HepNet™.
Strategic report
Financial position
Financially, the Company has demonstrated remarkable
resilience. Closing the year with a cash position of £20.7m is
a testament to its prudent financial and operational
management. In Q4, the Company achieved its final
near-term success milestone from its collaboration with
iTeos, further strengthening its financial position. This strong
financial footing enables the Company to continue its
ambitious research and development efforts, even in the
face of challenging macroeconomic and sector conditions.
Post period
Following the conclusion of the 2023/24 financial year, ETX
has continued to make significant strides. In April 2024, the
Company announced a proposed raise of £28.9 million
through a subscription by M&G Investment Management
Limited and Richard Griffiths. The net proceeds will advance
multiple GalOmic™ pipeline assets towards the clinic, initiate
clinical trials for one program, and pursue further candidate
compounds. This funding will also accelerate the integration
of AI systems into HepNet™.
Additionally, the Company announced its decision to delist
from the London Stock Exchange’s Alternative Investment
Market (AIM). This move was influenced by the lack of
institutional UK interest during a recent raise roadshow and
feedback indicating a preference for private or NASDAQ-
listed companies. Transitioning away from AIM is expected
to attract a broader and more receptive investor base,
aligning with ETX’s strategic goals.
Looking ahead
As we move into 2024, we do so with great confidence and a
clear plan. The progress the Company has made positions us
strongly to advance our assets towards the clinic, with the
ultimate goal of delivering life-transforming therapies to
patients. The Company’s success is a collective achievement,
made possible by the hard work and talent of its team, the
trust of its partners, and the strong, long-term support of its
shareholders. I would also like to take this opportunity to
particularly thank Professor Trevor Jones for his enormous
contribution. I look forward to continuing to work with him
and the rest of the Board to help e-therapeutics achieve its
strategic goals.
On behalf of the Board, I extend our deepest gratitude for
your continued support. Together, we are entering a new
phase in medicine, driven by the powerful combination of
computation and RNAi. We look forward to sharing our
journey with you in the year ahead and beyond.
Lord David Prior
Independent Non-Executive Chairman
5 June 2024
05
e-therapeutics plc Annual Report 2024
CHIEF EXECUTIVE OFFICER’S STATEMENT
2023/24 has been an important year for e-therapeutics,
marking the beginning of a period of effective execution in
advancing our therapeutic pipeline. Over the past 12 months
we have delivered solid pipeline progress, generating
positive preclinical proof-of-concept data for four
GalOmic™ RNAi assets. Data generated on our GalOmic™
assets have also further validated HepNet™’s ability to
identify novel gene targets with disease-modifying potential
and design potent, long-acting siRNA constructs in silico.
Taken together, this demonstrates, with multiple case
studies, the validity of our business model and confirms the
robustness of our strategy since the pivot to the RNAi drug
modality. The potential of e-therapeutics as a biotech
company that fully integrates the latest advances in
computation and artificial intelligence is clear, ultimately
leading to the development of life-transforming RNAi
medicines for patients.
Therapeutic pipeline
We have made exciting progress in advancing our pipeline
of novel and highly differentiated RNAi therapies. The
positive proof-of-concept data generated in the past year
has confirmed our ability to develop RNAi therapies with
disease-modifying potential across a broad range of
therapeutic areas. We progressed our most recent programs
from target nomination to completion of preclinical proof-
of-concept within 12 months, an impressive improvement
on the industry standard. Our current pipeline spans
indications within cardiometabolic disease, haematology,
and ophthalmology, showcasing the breadth of diseases that
can be treated with hepatocyte-targeted therapies.
ETX-407 for the treatment of dry age-related macular
degeneration (dry AMD) exemplifies our ability to impact
diseases affecting organs beyond the liver. Dry AMD is a
highly prevalent disease, affecting approximately 176 million
people globally with 16% progressing to legal blindness
within two years. Current treatments are highly invasive,
administered weekly by intravitreal injection (directly into
the eye). Preclinical data suggests that ETX-407 could be
dosed quarterly by subcutaneous injection, providing a
much lower burden option for the millions that suffer from
dry AMD.
We also remain focused on the cardiometabolic space,
through the development of ETX-312 for the treatment of
metabolic dysfunction-associated steatohepatitis (MASH)
and ETX-291 for the treatment of cardiometabolic disease.
MASH is an area that has seen significant activity over recent
months in terms of clinical readouts and large business
development transactions. There is now one treatment
approved for the indication, but many patients that take it
do not achieve clinically meaningful outcomes. In addition,
current data suggests that there are still a significant number
of patients that do not meet primary endpoints in clinical
trials of emerging therapies. Preclinical data from an
industry-leading diet-induced obesity (DIO) model of MASH
showed that ETX-312 administration leads to an impressive
reduction in hepatic steatosis and inflammation, the key
drivers of MASH pathophysiology. To account for the role
that combination treatments will likely play in the future
A positive year
The potential of e-therapeutics
as a biotech company that fully
integrates the latest advances
in computation and artificial
intelligence is clear, ultimately
leading to the development
of life-transforming RNAi
medicines for patients.
Ali Mortazavi
Chief Executive Officer
06
e-therapeutics plc Annual Report 2024
Q&A with Ali
Q Are you limited by only targeting genes in
the liver?
A No – we have 16,000 hepatocyte-expressed
genes in our knowledgebase which could be
targeted by our GalOmic™ RNAi therapies. Many
genetic medicine competitors continue to target
the same, obvious genes, but we can identify
novel targets with disease-modifying potential,
something that cannot be easily achieved with
traditional drug discovery approaches. In addition,
hepatocytes interact with a wide variety of cells
and tissues across the body, allowing us to impact
a wide variety of diseases beyond the liver, as
exemplified by our haemophilia (ETX-148) and
dry age-related macular degeneration (ETX-407)
programs.
Q What is e-therapeutics’ indication strategy?
A We develop therapies for any disease that has
high unmet medical need. Our pipeline includes
therapies for both rare and prevalent indications
across a wide variety of disease areas,
demonstrating the versatility of our liver-
targeting RNAi therapies. Before target-indication
pairs enter our pipeline, we assess the current and
emerging treatment landscape to ensure that
there is sufficient unmet need that could be
addressed with a GalOmic™ RNAi asset. This
means we always aim for our medicines to be life
transforming, whilst also de-risking our
investment in the development process.
Q How do your computational approaches
improve the drug development process?
A Our HepNet™ computational platform enables us
to make better medicines faster through
generation of novel insights and increased
automation across all stages of drug development,
from the identification of novel targets to in silico
design of preclinical siRNA constructs. This has
resulted in tangible improvements on the
traditional drug discovery process. For example,
we have been able to significantly reduce costs
associated with development by minimising the
number of sequences requiring in vitro screening
through use of our AI siRNA design and efficacy
prediction model.
Strategic report
treatment of MASH, ETX-312 was also assessed in
combination with emerging treatments. This included a
combination with GLP-1 receptor agonists which resulted in
increased efficacy compared to either therapy alone. We
consider these results to be extremely significant in the
context of the approved and emerging MASH treatment
landscape and we look forward to presenting further data in
the near future. Should the preclinical data from ETX-312
translate to humans, this asset could become part of the
future standard of care for patients with MASH.
During the year we also completed preclinical proof-of-
concept packages for ETX-291 for the treatment of
cardiometabolic disease and ETX-148 for the treatment of
haemophilia. ETX-291 targets a gene with human genetic
evidence of disease-modifying benefit. Cardiometabolic
disease is driven by a multitude of different factors, meaning
considerable cardiovascular risk remains when patients are
treated with therapies affecting a single risk factor. The
residual risk is often attributed to a complicated network of
overlapping factors, highlighting the need for therapies with
a pleiotropic effect. In preclinical studies in a representative
disease model, ETX-291 impacted multiple cardiometabolic
disease drivers, meaning it has the potential to treat a broad
range of cardiometabolic indications.
ETX-148 is being developed as a safe and effective
treatment for haemophilia A and B, and potentially other
bleeding disorders. Despite there being several approved
therapies in the space, recent studies have shown that
significant unmet need remains, including high treatment
burden and impact on quality of life. Histological data from a
preclinical haemophilia joint bleed (haemarthrosis) model
suggests ETX-148 can effectively protect against joint
damage due to bleeding. Joint bleeds make up 70–80% of all
bleeds in haemophilia. In addition, ETX-148 could be dosed
quarterly by subcutaneous injection, offering a low burden
treatment option. Extensive safety experiments have shown
that prophylactic ETX-148 treatment is also compatible with
emergency haemophilia treatments such as factor VIII,
factor IX, and bypassing agents, without increasing
thrombotic risk. The proof-of-concept data generated
indicates that ETX-148 has the potential to be an effective
pan-haemophilia therapy with low treatment burden and
the option to safely take emergency treatments if needed,
in line with our target product profile for this asset.
In our January business update we announced a crucial step
forward as a company: our plan to progress two of our
GalOmic™ assets into IND-enabling studies. We will be
conducting these studies in a staggered fashion. ETX-312
IND-enabling studies have now commenced and ETX-407
will follow in due course. This demonstrates our ongoing
commitment to creating a balanced pipeline across several
therapeutic areas, comprised of preclinical assets to partner
early and assets that we will progress to early clinical trials to
reach a more significant value inflection point, retaining
more value. Non-dilutive funding opportunities via
partnerships remain a key component of our strategy and
data generated on our first few GalOmic™ RNAi programs is
validating our platforms.
07
e-therapeutics plc Annual Report 2024
KPIs
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Therapeutic pipeline continued
Our earlier pipeline opportunities include ETX-258, which is
progressing in an undisclosed indication and we hope to
reveal further details about this program within the next
year. In addition, we have multiple novel gene targets
currently under evaluation, providing a constant supply of
pipeline program opportunities that can be pursued.
HepNet™: expanding our knowledgebase and
integration of LLMs
Our therapeutic pipeline is underpinned by our HepNet™
computational platform, which we continually innovate on,
iterate, and improve. HepNet™ can be divided into four core
layered capabilities which access the extensive proprietary
and public data foundation within the platform: network
analytics, a hepatocyte-specific knowledge graph, AI-driven
siRNA design, and a recently developed hepatocyte-specific
LLM agent ecosystem.
Through application of our network analytics to our world-
class hepatocyte knowledgebase and leveraging our
knowledge graph, we have been able to identify novel,
disease-modifying gene targets with an impressive success
rate. All nominated pipeline targets investigated to date
have yielded positive results in preclinical studies, which we
attribute to the successful combination of artificial
intelligence and our proprietary RNAi drug platform.
Our network approach to target identification allows us to
account for the true complexity of disease biology, meaning
we can nominate target-indication pairs with confidence.
We also continually expand HepNet™’s foundational data, as
exemplified by our collaboration with Arcturis Data to
integrate Arcturis’ Real-World Evidence (RWE) within
HepNet™. Arcturis’ RWE utilises a platform comprised of
high quality, clinically rich real-world data and analytical
expertise derived from its unique access to anonymised
patient data. This data will give us further unique insights
into the biological mechanisms driving metabolic
dysfunction and associated fatty liver disease that we can
target to deliver effective RNAi medicines to patients.
In last year’s Annual Report, I announced our intention to
leverage the recent advances in LLMs and integrate them
within HepNet™. A key focus of the past year has been
identifying use cases for which we can develop LLM agents
to significantly improve laborious processes or materially
enhance our pre-existing computational approaches. This
has led to the initiation of a variety of projects, including the
enhancement of our AI siRNA design and efficacy prediction
model. This model is already capable of designing and
predicting the most potent and long-acting GalOmic™
siRNA sequences in silico, significantly reducing the number
of siRNA sequences screened in vitro and reducing cost of
development.
Technology
Pipeline
5
GalOmic™ RNAi programs currently in
preclinical development
14m
hepatocyte-specific data points
4
GalOmic™ assets with preclinical
proof-of-concept data
2
programs progressing to
IND-enabling studies in house
1000s
of accessible target genes in multiple disease areas
Millions
of hypotheses identified and tested in silico
Multiple
target-indication pairs in viable target pool
Outperformance
of proprietary network algorithms against
industry standards
20,000
coding and non-coding genes
in knowledgebase
3,000
hepatocyte-associated diseases
in knowledgebase
08
e-therapeutics plc Annual Report 2024
Strategic report
The addition of an LLM agent will further enhance our
predictive power with the ultimate goal of bypassing in vitro
screening, further reducing timelines and costs associated
with development.
In addition, we will be using LLM agents to improve the
target-indication pair assessment that each novel gene
target undergoes before it enters our target pool and is
nominated. This process ensures that each pipeline program
is initiated with confidence in biology, developability, and
commercial tractability, ensuring that asset risk is diversified
across our therapeutic pipeline. A specialist LLM agent is
being developed that will be trained on relevant data
sources, increasing the speed and scale of assessment. This
agent will surpass previous methods of target-indication pair
assessment which are largely manual and time consuming.
We expect this development to drive significant growth of
our viable target pool.
Over the past year we have invested heavily in LLM
infrastructure, and model development and refinement. This
fundamental foundational work will allow us to continue
seamlessly integrating LLM agents into HepNet™’s processes
and I look forward to being able to update you on this
exciting progress soon.
In terms of external validation of our computational
methods, we successfully achieved our final near-term
milestone from our collaboration with iTeos in immuno-
oncology, as announced in January. The Company is eligible
to receive further payment if our discoveries are pursued
further by iTeos. This successful partnership with iTeos
provides additional evidence of the power of our
computational approaches to drug discovery that are
embedded in HepNet™.
Intellectual property
The Company continues to execute on its active IP strategy
that is indicative of both the high volume of novel
innovations being generated and the critical importance
ETX attributes to protecting its inventions. The patent
applications filed over the period 31 January 2023 to
31 January 2024 cover 17 inventions arising from the
Company’s innovation around novel target genes, novel
siRNA therapeutics, and novel siRNA chemistries. In addition,
the Company continues to carry out regular freedom to
operate (FTO) searches and analysis.
Organisation
We continue to invest in leading biotech talent, building on
our multi-disciplinary team of experts in computation and
RNAi therapeutics. This is exemplified by our recent hires in
the USA, driven by our desire to hire the best talent and
resulting in a strategic and lean presence on the East Coast.
In September 2023, we announced that Michael Bretherton
had stepped down from his role as interim CFO and will now
focus on his role as a Non-Executive Director of the
Company. Timothy Bretherton, Director of Finance and
Operations, assumed the CFO role (non-Board).
In November 2023, we sadly and unexpectedly lost Alison
Gallafent, our Chief Intellectual Property Officer. Alison
joined the Company in June 2021, and was fundamental in
building our robust GalOmic™ intellectual property portfolio
as we pivoted from small molecules to RNAi. She was a
wonderful colleague and is greatly missed by all at ETX.
Post period
In April 2024, we announced a proposed raise of
£28.9 million before expenses by way of a subscription by
funds managed by M&G Investment Management Limited
and Richard Griffiths, existing shareholders. The net
proceeds will be used to advance multiple GalOmic™
pipeline assets towards the clinic, initiate clinical trials for one
program, and pursue further candidates. The strengthened
cash position will also enable the accelerated development
and integration of cutting-edge AI systems into HepNet™.
Additionally, we delisted from the London Stock Exchange’s
Alternative Investment Market (AIM). During a February/
March 2024 roadshow, the Board was disappointed by the
lack of UK institutional interest in our innovative, technology-
driven value propositions. Importantly, ETX struggled to get
sufficient engagement from the vast majority of the
institutions who were approached, reflecting the risk appetite
of the UK markets. This was further supported by feedback
which indicated a preference for private or NASDAQ-listed
companies, suggesting a limited audience for ETX on AIM. We
believe this transition will better position us to attract a
broader and more receptive investor base.
In May 2024, we announced the appointment of Lord David
Prior as Chair of the Board. David’s vast healthcare
experience will be invaluable as we advance our GalOmic™
therapies towards the clinic. I look forward to collaborating
with him to deliver on our mission of discovering life-
transforming medicines. Professor Trevor Jones will now
focus on his role as Non-Executive Director, and I would like
to thank him for his dedicated service as Chair and his
ongoing commitment to e-therapeutics.
Outlook
e-therapeutics is now firmly established as one of the
leading global TechBio companies. We are perfectly
positioned to take advantage of the new industrial
revolution in AI coupled with our proprietary RNAi drug
platform. As such, we look forward to the future with great
confidence.
Ali Mortazavi
Chief Executive Officer
5 June 2024
09
e-therapeutics plc Annual Report 2024
FINANCIAL REVIEW
Revenue
Revenue of £0.3m for the year (2023: £0.5m) relates to the
final near-term milestone payment by iTeos following the
successful conclusion of the immuno-oncology collaboration.
Under the terms of the agreement, e-therapeutics is eligible
to receive milestone payments if our discoveries are pursued
further by iTeos.
During this year the Company announced its GalOmic™
therapeutic pipeline, through which we have successfully
nominated and prosecuted multiple GalOmic™ assets, with
two progressing into IND-enabling studies. This has been
aided by the integration of LLMs into our computational
platform, HepNet™, which is able to identify novel gene
targets with a high success rate. The Company will continue to
develop its therapeutic pipeline and innovate on its platforms,
providing opportunities for revenue generation through
licensing and collaborations.
R&D expenditure
R&D expenditure totalled £10.2m this year (2023: £7.2m). This
includes increased spend within the Company’s therapeutic
pipeline execution, generating preclinical proof-of-concept
data for four GalOmic™ RNAi assets.
The pipeline is underpinned by our HepNet™ computational
platform, validating its ability to identify novel gene targets
and design siRNA constructs in silico. Significant investment
has also been made to incorporate LLMs and transformer
technology into our platforms and deploying advanced
analytics and AI. We have further enhanced our AI siRNA
design and efficacy prediction model and advanced the LLM
agent ecosystem, with ongoing integration into HepNet™.
We continue to maintain an active IP strategy over our
inventions, having filed further priority and international
patent applications arising from innovation around novel
target genes and from the Company’s proprietary GalNAc
siRNA technology, GalOmic™.
Administrative expenditure
Administrative expenditure for the year totalled £3.9m (2023:
£3.5m). The increased administrative cost largely reflects
higher employment costs and other inflationary increases
which will continue to be tightly controlled going forward.
Operating loss
The operating loss for the year amounted to £13.8m which is
£3.6m higher than that in the prior year. This is mainly
attributable to R&D expenditure increased by £3.0m, together
with a small reduction in revenues and a small increase in
administrative costs.
Interest and investment income
Interest and investment income for the year amounted to
£0.7m (2023: £0.5m). The increase mainly reflects improved
deposit rates on higher average cash deposit balances.
Delivering results
The post year end equity
fundraise of £28.9m will
significantly strengthen our
financial position and continue to
fund our ongoing R&D activities
into 2026.
Timothy Bretherton
Chief Financial Officer
10
e-therapeutics plc Annual Report 2024
Strategic report
R&D tax credits and loss for the year
The loss for the year amounted to £11.2m (2023: £8.3m) after
allowance for an R&D tax credit receivable of £1.9m (2023: £1.5m).
The R&D tax credit claim has not yet been submitted to HM
Revenue and Customs but historically the amounts received have
been materially in line with our calculated tax receivable estimates.
Cash flow
Year-end cash balances totalled £20.7m, which is £11.0m lower
than at the previous year end. This reflects £13.8m of operating
losses together with £0.2m of capital spend in excess of
depreciation, amortisation and impairment costs, partially offset
by a tax credit cash receipt of £1.5m and interest income
received of £0.7m, coupled with favourable working capital cash
inflows of £0.8m.
Fundraise and delist from AIM post year end
An equity fundraise of £28.9m was announced in April 2024
together with a proposed delist from the AIM market.
The fundraise proceeds are expected to be received in early July
2024 and will continue to fund the Company’s R&D activities
into 2026.
The delist from AIM became effective on 9 May 2024 and a
Matched Bargain Facility was established on the same day to
provide a means for continued dealing in e-therapeutics shares.
The Company will explore the option of listing on NASDAQ in
due course.
Financial outlook
The post year end equity fundraise of £28.9m will significantly
strengthen our financial position and underwrite our ability to
drive forward with our strategic plans to advance multiple
GalOmic™ pipeline assets towards the clinic and initiate clinical
trials on one program. The Company will also keep its early
pipeline well populated and accelerate development and
integration of cutting-edge AI systems into HepNet™.
Timothy Bretherton
Chief Financial Officer
5 June 2024
Revenue
£0.3m
(2023: £0.5m; 2022: £0.5m)
(Decrease)/increase in cash and short-term
investment bank deposits
(£11.0m)
(2023: £5.3m; 2022: £13.6m)
Cash and short-term investment bank
deposit balance
£20.7m
(2023: £31.7m; 2022: £26.4m)
R&D tax credit receivable
£1.9m
(2023: £1.5m; 2022: £1.5m)
R&D spend
£10.2m
(2023: £7.2m; 2022: £6.1m)
Operating loss
£13.8m
(2023: £10.2m; 2022: £9.6m)
Loss for the year
£11.2m
(2023: £8.3m; 2022: £8.1m)
Average headcount
35
(2023: 38; 2022: 32)
Financial review
11
e-therapeutics plc Annual Report 2024
OUR APPROACH
Computing the future of medicine™
We describe our approach as computing the future of medicine™. This means embedding
computation into every aspect of the R&D process to improve the quality of drug discovery
and overcome the inherent cost and time challenges associated with discovering new drugs for
patients.
GalOmic™ RNAi platform
GalNAc-siRNAs knock down the messenger RNA (mRNA) of target genes in hepatocytes through a process called RNA
interference (RNAi), resulting in highly specific gene silencing with an exceptional safety profile. Our GalOmic™ platform
encompasses proprietary siRNA chemistry knowledge protected by a robust intellectual property portfolio, enabling
development of our potent and long-acting GalOmic™ RNAi medicines.
Hepatocyte-specific target mRNA knockdown
Clinically validated modality with exceptional
tolerability and safety profile
Typically at least three-month duration of action,
administered quarterly by subcutaneous injection
Highly translatable from animals to humans
Protected by a robust IP portfolio
Optimised GalOmic™ chemistry maximises
therapeutic activity
Highly specific gene silencing
GalOmic™ GalNAc-siRNA
binds to ASGPR receptor on
surface of hepatocyte
siRNA enters
hepatocyte
siRNA enters RISC
and unzips
RISC binds to
target mRNA
Resulting in
degradation of
target mRNA
Read more on our website www.etherapeutics.co.uk
Target ID and
target-indication
assessment
AI-driven GalOmic™
drug design
Target
nominated
Development
of GalOmicTM asset with
novel target gene
12
e-therapeutics plc Annual Report 2024
Strategic report
HepNet™ computational platform
HepNet™ drives forward discovery of our GalOmic™ assets at every stage, making time and cost
efficiencies whilst enhancing our scientific insights. HepNet™ can be divided into four core
computational approaches applied to extensive proprietary and curated public data sources within the
platform, including our world-class hepatocyte-specific knowledgebase.
H
H
H
H
H
H H
H H
H
H
H
H
H
H
H
H
H
H
H
H
H
Hepatocyte-associated
therapeutic areas
Metabolic
Cardiovascular
Immunology
Gastrointestinal
Haematology
Liver Diseases
Rare Diseases
And More
Addressable diseases
Hepatocytes have a high level of influence over other cell types. We capture interactions between hepatocytes
and other cell types and tissues within HepNet™, meaning we can identify hepatocyte-expressed targets that
play a key role in a wide variety of diseases with high unmet need.
Stage
HepNet™ data foundation
HepNet™ computational
approach
Output
Novel gene targets with
disease-modifying potential
Target-indication pair risk
score
siRNA sequences ranked by
efficacy
Network analytics
Hepatocyte knowledge graph
Large language model agents
Extensive proprietary and
public data
siRNA sequences with
GalOmic™ modification
patterns
AI siRNA design and efficacy
prediction model
Target ID
Target-indication
assessment
GalOmic™
siRNA design
Proprietary
hepatocyte-specific
knowledgebase
Breast
Brain
Eye
Endometrium
Heart Muscle
Lung
Placenta
Adipose Tissue
Oesophagus
Salivary Gland
Skeletal Muscle
Skin
Testis
Bone Marrow
Stomach
Rectum
Liver
Colon
Small Intestine
Kidney
Tongue
PBMC
Prostate
Bronchus
Pancreas
Ovary
Thymus
Hepatocyte-Tissue
Interactions
13
e-therapeutics plc Annual Report 2024
THERAPEUTIC PIPELINE
Therapeutic pipeline
We are progressing a broad therapeutic pipeline of GalOmic™ RNAi therapies, driven by
insights from our HepNet™ computational platform. Our target pool contains multiple
additional target-indication pairs ready for nomination, ensuring a constant supply of novel
target genes for our pipeline.
Program
Indication
Target ID
Drug design
Proof-of-concept
IND-enabling
Multiple targets
ETX-312
MASH
ETX-148
Haemophilia
ETX-407
Dry AMD
ETX-291
Cardiometabolic
disease
ETX-258
Undisclosed
MASH – metabolic dysfunction-associated steatohepatitis
AMD – age-related macular degeneration
Read more on our website
www.etherapeutics.co.uk
ETX-312 for treatment of MASH | IND-enabling
Disease description
Metabolic dysfunction-associated steatotic liver disease (MASLD)
is a spectrum of disease characterised by accumulation of fat in
the liver (hepatic steatosis). MASH represents a severe form of
MASLD that can lead to fibrosis, cirrhosis, and premature mortality
Market
• Approximately 25% of the world’s population are estimated to
have MASLD (~2 billion people), with 20-25% of these
progressing to MASH (~500 million)[1,2]
• Global market valued at USD 2.5b in 2022, rising to USD 108b
by 2030[3]
ETX opportunity
• Effective treatment - there is currently only one approved
treatment for MASH, and many people that take it do not achieve
clinically meaningful outcomes. In addition, many patients in clinical
trials of emerging treatments do not meet primary clinical
endpoints
• Low treatment burden – quarterly subcutaneous dosing
Worsening NAS
No change in NAS
1 point improvement in NAS
≥2 point improvement in NAS
NAFLD Activity Score (NAS)
[1] Younossi, Zobair M.; Koenig, Aaron B.; Abdelatif, Dinan; Fazel, Yousef; Henry, Linda;
Wymer, Mark. Global epidemiology of non-alcoholic fatty liver disease–Meta-analytic
assessment of prevalence, incidence, and outcomes. Hepatology 64(1):p 73-84, July
2016. | DOI: 10.1002/hep.28431.
[2] Bellentani S. The epidemiology of non-alcoholic fatty liver disease. Liver Int. 2017 Jan;37
Suppl 1:81-84. doi: 10.1111/liv.13299. PMID: 28052624.
[3] Vantage Market Research, Non-alcoholic steatohepatitis (NASH) market – global
industry assessment and forecast.
ETX-312 dramatically improves NAS in a highly
translatable diet-induced obesity MASH
model, both alone and in combination with
emerging MASH treatments
Lean Chow Vehicle
Vehicle SC
Control SiRNA
ETX-312
GLP-1
ETX-312 + GLP-1
THR-Beta
ETX-312 + THR-Beta
100
60
20
80
40
0
Percentage of Animals (%)
14
e-therapeutics plc Annual Report 2024
Strategic report
ETX-407 for treatment of dry AMD | IND-enabling
ETX-148 for treatment of haemophilia A and B | Proof-of-concept complete
ETX-291 for treatment of cardiometabolic disease | Proof-of-concept complete
Disease description
AMD is a progressive degenerative disease of the retina resulting in severe
vision loss; dry AMD affects 90% of cases and can lead to legal blindness
Market
• ~196 million patients with AMD globally (as of 2020), progressing to 288 million
by 2040. 90% of people with AMD have dry AMD[1]
• AMD market valued at USD 7.8b in 2022, increasing to USD 22.8b by 2031
(across seven major markets)[2]
ETX opportunity
• Systemic approach to treatment - quarterly subcutaneous injections
improve upon highly invasive intravitreal injections that are current
standard of care
• Human genetic support – Asset de-risked by human genetic evidence
demonstrating the link between gene and disease
Disease description
An inherited bleeding disorder in which the blood does not clot properly,
resulting in joint bleeds that can cause painful and debilitating joint damage
Market
• Most common rare disease: ~200,000 people diagnosed with haemophilia
worldwide[3]
• Estimated market size of USD 9.7b in 2022 (across eight major markets)[4]
ETX opportunity
• Pan-haemophilia efficacy – ability to prevent joint bleeds in haemophilia A
and B, the primary driver of bleeding rates
• Low treatment burden – quarterly subcutaneous dosing provides lower
treatment burden than standard-of-care
• Safety – bleed protection without increasing risk of thrombosis, including
when co-administered with emergency bleed treatments
Disease Description
Cardiometabolic disease encompasses multiple conditions including obesity,
cardiovascular disease, metabolic syndrome, and Type 2 diabetes
Market
• Cardiometabolic diseases are among the leading causes of mortality and
morbidity globally
• Global market valued at USD 125.3b in 2022[5]
ETX opportunity
• Pleiotropic effect – target knockdown positively impacts wide spectrum of
cardiometabolic disease drivers, including insulin resistance, fibrinogen,
LDL-C, and free fatty acids, resulting in more effective cardiovascular risk
reduction
• Large addressable market – pleiotropic mechanism of action means ETX-291
has the potential to treat a wide variety of cardiometabolic indications
• Human genetic support – loss of function of target linked to reduction in
coronary artery disease risk, de-risking development
Injured knee without treatment
ETX-148 administration results in
improved joint histology in
haemophilia joint bleed model
Insulin
resistance
Increased
fibrinogen
Elevated LDL-C,
triglycerides
Increased free
fatty acids
Cardiometabolic
risk factors
Cardiometabolic
diseases
Metabolic
syndrome
Obesity
Type 2
diabetes
Cardiovascular
disease
Healthy vision
Vision with dry AMD
[1] Global prevalence of age-related macular degeneration and disease burden projection for 2020 and 2040: a systematic review and meta-analysis, Wong, Wan Ling et al.
The Lancet Global Health, Volume 2, Issue 2, e106 - e116.
[2] Global Data [accessed March 2024], 7MM including US, UK, Japan, Spain, France, Germany and Italy.
[3] World Federation of Haemophilia Annual Global Survey, 2020.
[4] Global Data [accessed March 2024], 8MM including US, UK, China, Japan, Spain, France, Germany and Italy.
[5] Market Research Future, Cardiometabolic Disease Market [published March 2024].
Injured knee with ETX-148 treatment
15
e-therapeutics plc Annual Report 2024
Our process
Opportunities to maximise value
Multi-disciplinary team
Our people are our most important
asset and the driver of the overall
performance of the Company. We
have prioritised a seamless
integration of computation with
biology, chemistry, and the drug
development process to empower
teams across the Company to
deliver on ambitious objectives.
World-class
hepatocyte-specific
knowledgebase
We leverage our extensive
hepatocyte-specific data, including
proprietary data from preclinical
experiments, licensed data, and
carefully curated public data.
Enabling platform
technology
We utilise cutting-edge software
engineering, AI, and computational
approaches developed in-house to
drive forward every stage of
development of our GalOmic™
assets.
Intellectual property
We have a robust IP portfolio
protecting our proprietary
GalOmic™ RNAi chemistry, pipeline
assets, and target hypotheses
generated by HepNet™.
Advisors
We engage with trusted advisors
and key opinion leaders to support
e-therapeutics with flexible access
to leading expertise and qualified
advice in all areas of the business,
including clinical insights in
therapeutic areas of interest.
By combining computation with the RNAi modality, we have built a drug
development engine where reduced timelines and costs apply to the
early stages of any pipeline program. This maximises the number of
assets we can prosecute and gives us exposure to a variety of disease
areas. 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.
In-house pipeline
Through the unique combination of HepNet™ and GalOmic™, we can
rapidly take programs from target identification through preclinical
development, and beyond, with modest investment compared to
industry standards. To ensure our pipeline has a balanced risk portfolio,
before nomination, each potential target-indication pair undergoes a
standard and systematic assessment which scores the risk associated
with developing a GalOmic™ pipeline program upfront. This allows us to
de-risk programs early and ensures pipeline programs are nominated
with confidence in biology, developability, and commercial tractability.
Licensing and collaborations
We have a broad pipeline of GalOmic™ assets that will drive significant
value for the Company. We aim to strike a balance between partnering
early and investing more in development to realise additional value. We
may also engage in discovery collaborations with biopharmaceutical
companies, using HepNetTM and GalOmicTM to discover and develop
RNAi therapies for specific disease areas.
Key inputs
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.
Target ID and
target-indication
assessment
AI-driven
GalOmic™ drug
design
Target
nominated
Development of
GalOmicTM asset with
novel target gene
16
e-therapeutics plc Annual Report 2024
How we’re different
ETX is improving upon the traditional drug
development process
1
Key industry problem: Same target genes
The ETX approach:
HepNet™ computational platform identifies novel gene
targets with disease-modifying potential.
The value:
A highly differentiated pipeline of life-transforming
RNAi medicines.
2
Key industry problem: Too slow
The ETX approach:
Unique combination of HepNet™ and GalOmic™
enables rapid and reproducible drug development.
The value:
Reduces the time and cost associated with
development, allowing more shots on goal.
3
Key industry problem: High risk
The ETX approach:
• Network-based target identification accounts for the
full complexity of biological processes.
• RNAi modality is highly specific and translatable across
species.
• Detailed target-indication assessment allows us to
nominate targets with confidence in biology,
developability, and commercial viability.
The value:
Ensures we are investing in viable programs, increasing
the likelihood of treatments progressing through clinical
trials and getting to the patients that need them.
Delivering value
Employees
We provide a safe and rewarding work
environment in which individuals can build on
their current experience, develop new skills, and
stretch outside their comfort zone.
Partners
We form open and collaborative working
relationships based on trust with our partners. We
deploy the best of our technological abilities, skills,
and talent to ensure the success of our
collaborations.
Patients
Our approach to significantly increasing the
efficiency of the discovery process translates into
the potential to get better medicines to patients
faster. In addition, our computational platform can
enable discovery in areas where no progress is
currently being made, ultimately aiming to serve
patients who currently have no treatment options.
Shareholders
We focus on building long-term value for our
shareholders. We aim to increase the probability
of success of the therapeutic candidates we invest
in and create near-term value inflection points by
executing on our hybrid business model at the
intersection of two highly active fields.
Strategic report
17
e-therapeutics plc Annual Report 2024
Our strategy is to combine the computational power of HepNet™ with our GalOmic™
chemistry platform to generate an in-house pipeline of life-transforming RNAi
medicines for patients.
We believe this strategy can help us better understand human biological complexity,
which will lead to the accelerated discovery and development of effective therapies.
Strategic summary
2023 progress
1
Developing a differentiated
pipeline of novel RNAi therapies
• Publicly disclosed therapeutic pipeline of five GalOmic™ assets spanning a
broad range of therapeutic areas
• Generated positive proof-of-concept data for four programs
• Two GalOmic™ clinical candidates nominated
• Additional novel targets identified and assessed in silico by HepNet™
2
Continuing innovation around
HepNet™ and GalOmic™
• Refined and validated our AI-driven predictive siRNA design
• Expanded HepNet™’s hepatocyte-specific knowledgebase
• Continued generation of proprietary experimental data to feed into
HepNet™
• Initiation of projects dedicated to development and integration of large
language model (LLM) agents within HepNet™
• Priority patent applications filed on nine further inventions, and
international patent applications filed for eight RNAi inventions arising from
GalOmic™
3
Advancing our business through
collaboration
• Continued to deliver on iTeos target identification collaboration and
achieved final near-term success milestone
• Initiated collaboration with Arcturis Data to incorporate Real-World
Evidence into HepNet™ data foundation
4
Building a scalable, high
performing company
• Refined frameworks, structures, and standard operating procedures for
increased efficiency
• Continued investment in attracting and retaining a talented team
OUR STRATEGY
18
e-therapeutics plc Annual Report 2024
2024 focus
1
Developing a differentiated
pipeline of novel RNAi
therapies
• Advance toward the clinic: progress IND-enabling studies on ETX-312 for
MASH and initiate IND-enabling studies on ETX-407 for dry AMD
• Complete preclinical proof-of-concept studies for ETX-258 in an
undisclosed indication
• Nominate additional targets and initiate preclinical development
• Continue growth of the viable target pool of assessed target-indication
pairs
2
Continuing innovation around
HepNet™ and GalOmic™
• Full integration of the siRNA design and efficacy prediction LLM agent within
existing AI model, enhancing predictive power and enabling bypass of in vitro
screening for all programs by 2H2024
• Continued development of LLM agents to increase speed, throughput, and
objectivity of target-indication assessment
• Identification of additional use cases for LLM technology
• Continued evolution of GalOmic™ platform leveraging emerging chemistry
• Additional patent application filings on GalOmic™ chemistry and sequences
3
Advancing our business
through collaboration
• Complete MASH-focused Real-World Evidence collaboration with Arcturis
Data
• Establish additional R&D collaborations to bolster our capabilities
• Seek partnerships with biopharmaceutical companies around pipeline
programs, GalOmic™, and HepNet™, under structures that enable substantial
value retention
4
Building a scalable, high
performing company
• Further evolve operating procedures and governance to fit the needs of the
business and continue to enable agile decision making
• Increased emphasis on living by the Company values, celebrating progress,
and rewarding the team
• Continued investment in attracting and retaining a talented team
Strategic report
19
e-therapeutics plc Annual Report 2024
Section 172(1) Statement
Board considerations and decisions
Below is a list of some key topics that have been a focus for the Board in 2024, outlining how consideration of stakeholder
interests has influenced decisions.
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.
Section 172(1) 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 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; and
• 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 in 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.
The following disclosure describes how the Directors have had regard to the matters set out in Section 172(1) (a) to (f) and forms
the Directors’ statement under Section 414CZA of the Companies Act 2006.
Responsibility
Our approach
• The likely consequences of any
decision in the long term
• The interests of the Company’s
employees
• The need to foster the
Company’s business
relationships with suppliers,
customers and others
• The impact of the Company’s
operations on the community
and the 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’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
• Our employees are fundamental to us achieving our long-term strategic objectives, as
more fully disclosed in our Corporate Governance Statement
• A consideration of our relationship with wider stakeholders and their impact on our
long-term strategic objectives is also disclosed in our Corporate Governance Statement
• 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 our Corporate Governance Statement and in the Risk
Management section
• Our intention is to behave in a responsible manner, operating within high standards of
business conduct and good corporate governance in alliance with our Corporate
Governance Statement and in the Risk Management section
• 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
20
e-therapeutics plc Annual Report 2024
Why we engage
The Company does not have in-house wet
laboratories, so enables the selection of the best
experimental expertise for each therapeutic program
and ensures the most efficient use of capital. The
Company works with world-leading external
organisations which 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
• 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
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 person’s 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
Value and outcomes
• Engagement initiatives in the areas of employee
social events, learning and 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
Employees
Engaging with our stakeholders
CROs
Strategic report
STAKEHOLDER ENGAGEMENT
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e-therapeutics plc Annual Report 2024
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 programs.
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
• Participation at various conferences, 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
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.
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 development and partnering
of our preclinical RNAi assets to maximise value
retention, while exploring platform-based
collaborations leveraging access to HepNet™
and GalOmic™
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
• Achievement of last near-term milestone associated
with immuno-oncology collaboration with iTeos
Therapeutics Inc.
• 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
STAKEHOLDER ENGAGEMENT CONTINUED
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e-therapeutics plc Annual Report 2024
Pharmaceutical partners
Advisors
Why we engage
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 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
• 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 its
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
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 HepNet™
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
Strategic report
23
e-therapeutics plc Annual Report 2024
Data providers
Shareholders
ESG strategy
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
As a company seeking to discover and
develop new medicines, we are committed to
having a positive impact on people’s lives. We
continue to place importance on extending
our responsibilities beyond the Company’s
mission and purpose to incorporate an active
ESG strategy.
SOCIETAL
VALUE
ETHICAL
STANDARDS
ENVIRONMENTAL
RESPONSIBILITY
NURTURING
TALENT
ESG
focus
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
Societal value
Our ambition
Reduce the environmental impact of our business operations
and measure improvement
Our approach
• Minimise the 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
Environmental responsibility
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
• Undertake a detailed ESG materiality assessment with an
external sustainability consultant to develop new ESG
initiatives that can deliver the maximum impact and
improvement
• Responsibly harness technology as a force for good that
drives greater efficiency and effectiveness in medicinal
research
Ethical standards
Our ambition
Continue to cultivate a culture that is inclusive and
empowering for all, establishing ourselves as an employer of
choice, where our people can bring the best of who they are
to their work
Our approach
• Live by our Company values to deliver meaningful and
impactful work
• Support our people by investing in initiatives that enhance
their wellbeing
• Embrace transparent and open communications and
create opportunities to listen to and act on feedback
• Offer different ways for our team to learn, develop, and go
places they didn’t think possible
• Provide a feedback and reward framework that recognises
and celebrates success
Nurturing talent
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e-therapeutics plc Annual Report 2024
Strategic report
Principal risks and uncertainties
RISK MANAGEMENT
The following table summarises 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, identifies 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
Board
Risk management
Operational:
Compliance:
Executive
Employee
Third party
Financial and legal
IT and systems
Executive
Audit
Diagram – Risk Management System – top-down and bottom-up approach
25
e-therapeutics plc Annual Report 2024
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.
• Strong business development function with 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 enable us to make
fast early preclinical 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
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.
• 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,
supported by detailed target-indication assessment performed on every asset
• 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.
• We actively manage IP, engaging with specialists to protect our inventions,
periodically monitor freedom to operate and defend IP rights
• The operation and maintenance of our technology platforms require detailed
know-how and specialist expertise which would be difficult and time consuming
for competitors to replicate
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 R&D, progressing our enabling technologies to
generate novel and highly differentiated internal assets that will be valuable to
the Company and/or prospective collaborators
• We take advantage of cutting-edge developments when they can materially
benefit our platform; considerable innovation has been undertaken in the period
to integrate large language model technology into the HepNet™ platform
• The GalOmic™ platform has also been significantly developed to further
improve siRNA construct design capabilities, speed of execution, and our robust
IP position
Strategic risks
RISK MANAGEMENT CONTINUED
26
e-therapeutics plc Annual Report 2024
Strategic report
Operational risks
Risk
Management and mitigation
Availability of non-human primates (NHPs) for research
A post-pandemic shortage of NHPs 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.
• We are anticipating our need for more NHPs in good time and have mapped
suppliers in different geographies and have established relationships
• We use conservative timeline and cost estimates, assuming long lead times to
secure slots with CROs that have access to NHPs and an increased cost for any
experiments requiring these animals
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.
In addition, there is a risk that
geopolitical issues, and resulting
legislation, may impact our ability to use
certain suppliers when developing our
therapies, e.g. the BioSecure Act.
• 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
• We proactively monitor the regulatory landscape for changes in legislation that
may impact the use of certain providers, including the BioSecure Act, and have
contingency measures in place
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
increase 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.
27
e-therapeutics plc Annual Report 2024
Risk
Management and mitigation
People and culture
There is a risk that we fail to 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 5 June 2024 and is signed on its behalf by:
Ali Mortazavi
Chief Executive Officer
5 June 2024
Operational risks continued
RISK MANAGEMENT CONTINUED
28
e-therapeutics plc Annual Report 2024
Strategic report
Governance
Chairman’s introduction to
governance
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 2024. 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 of the Company as a whole 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. 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 and Ali Mortazavi is the Chief
Executive Officer. Trevor Jones and Michael Bretherton are
both Non-Executive Directors. Michael Bretherton also took
oversight of the financial function between December 2021
and September 2023, when Timothy Bretherton became
Chief Financial Officer.
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
Section 172(1) Statement.
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 within this Annual Report and on our
website https://www.etherapeutics.co.uk/investors/.
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, references to other sections of the Annual
Report.
Lord David Prior
Independent Non-Executive Chairman
5 June 2024
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e-therapeutics plc Annual Report 2024
Standing agenda and key topics considered by
the Board in 2023/24
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 2023/24
• 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 2024
• 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
BOARD OF DIRECTORS
Leading with experience
KEY TO COMMITTEE MEMBERSHIP
R
A
Remuneration Committee
Audit Committee
Chair of Committee
Lord David Prior
Independent Non-Executive
Chairman
Commenced role
May 2024
Skill and experience
Lord Prior is Deputy Chairman UK and Global Senior Advisor at Lazard. He served as Chair of Norfolk and
Norwich University Hospitals NHS Foundation Trust from 2002 – 2012 before becoming Chair of the Care
Quality Commission. In 2015, he was appointed Parliamentary Under Secretary of State for Health and
created a Life Peer.
In December 2016, he was appointed as Parliamentary Under Secretary of State at the Department of
Business, Energy & Industrial Strategy, with specific responsibility for developing industrial strategy. He
stepped down from this role in October 2017 to become Chair of University College London Hospitals and
subsequently became Chair of NHS England, a Director of Genomics England and a member of the UK
Life Sciences Council to March 2022.
He was educated at Cambridge University and subsequently qualified as a barrister. He trained in finance
at Lehman Brothers and Lazard Freres in New York before holding a number of senior positions within the
industrial sector, including British Steel, where he was Commercial Director. He was elected MP for North
Norfolk in 1997 and became CEO and Deputy Chair of the Conservative Party.
He is currently Chair of Protas, a not-for-profit clinical trials business, Chair of the Cambridge Life
Sciences Council, Chair of Science Capital Imperial, a venture fund aligned with Imperial College, and a
member of the Novo Nordisk Sustainability Advisory Council.
Professor Trevor Jones CBE
Independent Non-Executive
Director
Commenced role
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 to May 2024. 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 seven 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.
Michael Bretherton
Non-Executive Director
Commenced role
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 to
September 2023. 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.
Ali Mortazavi
Chief Executive Officer
Commenced role
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 CEO 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
R
A
R
A
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e-therapeutics plc Annual Report 2024
Strategic report
Governance
EXECUTIVE TEAM
Executive Team
Ali Mortazavi
Chief Executive Officer
Commenced executive role
October 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.
Alan Whitmore
Chief Scientific Officer
Commenced executive role
December 2014
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.
Laura Roca-Alonso
Chief Operating and
Business Officer
Commenced executive role
April 2020
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 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.
Timothy Bretherton
Chief Financial Officer
Commenced executive role
September 2023
Skill and experience
Timothy is a qualified chartered accountant with 12 years’ experience in operational and finance roles.
Prior to joining the Company, Timothy was a Consulting Manager at PwC London for four 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 three years in audit at Mazars London and four years with Zurich Insurance plc in a
variety of roles. Timothy holds a degree in Economics received from the University of Leicester.
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e-therapeutics plc Annual Report 2024
Deliver growth: Principles 1–4 of the QCA Code
1
Establish a purpose, 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 programs and network-driven approach are disruptive to the
conventional pharmaceutical R&D model.
2
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.
3
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/. 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.
CORPORATE GOVERNANCE STATEMENT
Corporate Governance Statement
32
e-therapeutics plc Annual Report 2024
4
Take into account wider stakeholder interests including social and environmental 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
programs, 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 computational 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 our 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.
5
Embed effective risk management, internal controls and assurance activities, considering both
opportunities and threats, throughout the organisation
The Board has overall responsibility for the Company’s internal control and assurance 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.
Maintain a dynamic management framework: Principles 5–9 of the QCA Code
6
Establish and 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.
Board of Directors
The current composition of the Board comprises David Prior as Non-Executive Chairman, Ali Mortazavi as Chief
Executive Officer, Trevor Jones as Non-Executive Director and Chair of the Renumeration Committee and Michael
Bretherton as Non-Executive Director and Chair of Audit Committee. Michael also took on the role of Interim Chief
Financial Officer between December 2021 – September 2023. 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. All Directors also have access to the Company Secretary.
Strategic report
Governance
33
e-therapeutics plc Annual Report 2024
7
Maintain appropriate governance structures and ensure that, individually and collectively, directors
have the necessary up-to-date experience, skills and capabilities
The Board comprises of the Chief Executive Officer, Non-Executive Chairman and two Non-Executive
Directors,showing the board is well supported and independent. The board also maintains a broad skillset to ensure it
has the necessary responsibilities to fulfil the governance responsibilities. Experience consists, but is not limited to,
technology and software, growth and innovation, financial and pharma/biotech sector.
8
Evaluate Board performance based on clear and relevant objectives, seeking continuous
improvement
The performance of 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.
9
Establish a remuneration policy which is supportive of long-term value creation and the company’s
purpose, strategy and culture
The Company maintains a remuneration policy which ensures 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 Director (including long-term option award incentive plans) 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.
Long-term incentive option awards are used to ensure that the focus of Directors remains on the long-term added
value to the shareholders.
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.
Build trust: Principle 10 of the QCA Code
10
Communicate how the Company is governed and is performing by maintaining a dialogue with
shareholders and other key stakeholders
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 2024 is detailed in the Audit Committee
Report and the Remuneration Committee Report. The results of the proxy votes received in relation to the 2024
Annual General Meeting are available at www.etherapeutics.co.uk/investors. 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.
CORPORATE GOVERNANCE STATEMENT CONTINUED
34
e-therapeutics plc Annual Report 2024
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 David Prior as Non-Executive Chairman.
Executive Team
• 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.
Audit Committee
• 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.
Remuneration Committee
• 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.
Strategic report
Governance
Governance structure
As Non-Executive Chairman, David Prior 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 and Committees that are currently in place along
with their key duties and responsibilities.
35
e-therapeutics plc Annual Report 2024
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:
Biotech
pharma sector
Financial
Strategic
leadership
Corporate
governance
Employee
engagement
and
remuneration
Other public
company
(Board level)
Executive Director
Ali Mortazavi
✓
✓
✓
✓
✓
✓
Non-Executive Directors
David Prior
✓
✓
✓
✓
✓
✓
Trevor Jones
✓
✓
✓
✓
✓
Michael Bretherton
✓
✓
✓
✓
✓
✓
Executive Committee
Alan Whitmore
✓
✓
✓
Laura Roca-Alonso
✓
✓
✓
Timothy Bretherton
✓
✓
✓
✓
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 a company, both in writing and in
meetings with the Company Secretary. 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 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. Directors are continually seeking
to bring diversity to the Board and it remains to be a
standing agenda item.
36
e-therapeutics plc Annual Report 2024
Strategic report
Governance
Independence of Directors
The Board has considered and determined that, since the
date of their respective appointment, David Prior and Trevor
Jones are independent in character and judgement and
they:
• have not been an employee of the Company within the
last five years;
• have not, or have not had within the last three years, a
material business relationship with the Company;
• have no close family ties with any of the Company’s
advisors, Directors or senior employees;
• do not hold cross-directorships or have significant links
with other Directors through involvement in other
companies or bodies; and
• do 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 29.97%
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 held the
role of Interim Chief Financial Officer with effect between
December 2021 to September 2023.
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 Directors and Non-
Executive Chairman can, and do, devote sufficient time to
the Company’s business.
37
e-therapeutics plc Annual Report 2024
Attendance at Board and Committee meetings
During the financial year, the Board met six 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:
Board
Audit
Committee
Remuneration
Committee
Scientific
Advisory Board
Executive
Committee
Executive Director
Ali Mortazavi
6/6
2/2
2/2
9/9
Non-Executive Directors
David Priora
–
–
–
Trevor Jones
6/6
2/2
2/2
Michael Bretherton
6/6
2/2
2/2
Scientific Advisory Boardb
Paul Burke
–
John Mattick
–
Bill Harte
–
Executive Committee
Alan Whitmore
9/9
Laura Roca-Alonsoc
8/9
Timothy Bretherton
6/6
2/2
2/2
9/9
Alison Gallafentd
3/6
a.
David Prior joined the board on 23rd May 2024, therefore there were no eligible meetings for him to attend.
b. The scientific Advisory Board was dissolved during FY23/24 in-line with maturation of our in house RNAi pipeline, with plans to engage relevant advisors in due course and
leadership having access to key opinion leaders in the interim.
c. Laura Roca-Alonso was on maternity leave between July 23 to January 24.
d. Alison Gallafent ceased to be a member of the Executive Committee as of November 2023.
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 of that of its Committees) and the performance of its individual
Directors.
CORPORATE GOVERNANCE STATEMENT CONTINUED
38
e-therapeutics plc Annual Report 2024
Strategic report
Governance
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 2024.
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 £66,000
(2023: £60,000) and non-audit fees amounted to £nil
(2023: £nil).
The Audit Committee is satisfied with the independence,
objectivity and effectiveness of the external Auditor and the
Audit Committee has not felt it necessary at this stage to
propose a 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 2024.
The Audit Committee is chaired by me, Michael Bretherton.
The other members are David Prior and Trevor Jones.
Whilst David and Trevor are 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 between December 2021 and September
2023.
Given that there are currently only three Non-Executive
Directors on the Board, and given my relevant financial skills
and experience, David, 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.
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 2024 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
Matters discussed
April 2023
Review of external audit for the year
ended 31 January 2023
Internal controls and risk management
December 2023
Review of external audit planning
report including audit risk areas for the
year ended 31 January 2024
April 2024
Review of external audit for the year
ended 31 January 2024
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
5 June 2024
AUDIT COMMITTEE REPORT
39
e-therapeutics plc Annual Report 2024
As Chair of the Remuneration Committee, I am pleased to
present our Directors’ Remuneration Report for the year
ended 31 January 2024.
This report does not constitute a full directors’ remuneration
report in accordance with the Companies Act 2006. 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 a 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 2024. 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 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
5 June 2024
REMUNERATION COMMITTEE REPORT
Statement by the Chair of the
Remuneration Committee
40
e-therapeutics plc Annual Report 2024
Strategic report
Governance
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 Director. The other
members are Michael Bretherton, who is a Non-Executive
Director of the Company and David Prior, who is the
Independent Non-Executive Chairman. 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.
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.
The Remuneration Committee met two times during the
year ended 31 January 2024 and held 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 the Chief
Executive Officer (CEO);
• 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 2024, 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 Director (including long-term option award
incentive plans under the Company’s Long-Term Incentive
Plan 2020 (LTIP) and, pre-November 2020, under the
Performance 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.
Key responsibilities of the
Remuneration Committee
41
e-therapeutics plc Annual Report 2024
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.
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 in the Statement of Remuneration.
Benefits
Provide benefits consistent
with the role.
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.
Discretionary bonus
Incentivise achievement of
business objectives by
providing a reward for
performance against annual
targets.
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.
Long-term incentives
Alignment of interests with
shareholders delivered in
the form of shares.
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.
There is no individual limit. For performance metrics attached to
outstanding rewards see the Statement of Remuneration and Note
9 to the financial statements.
Pension
Attract and retain Executive
Directors for the long term
by providing funding for
retirement.
The Executive Directors are
entitled to participate in money
purchase arrangements.
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.
42
e-therapeutics plc Annual Report 2024
Strategic report
Governance
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 in the Statement of
Remuneration.
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e-therapeutics plc Annual Report 2024
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 between December
2021 and September 2023. 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
in the Statement of Remuneration.
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
Date of service contract/letter of
appointment
Ali Mortazavi
10 February 2020 and subsequently
11 October 2020
Trevor Jones
28 October 2015 and subsequently
4 June 2024
Michael Bretherton
10 February 2020
David Prior
23 May 2024
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.
REMUNERATION POLICY CONTINUED
44
e-therapeutics plc Annual Report 2024
Strategic report
Governance
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 2024 and 31 January 2023 is shown below:
2024
Base salary
£’000
Bonus
£’000
Contributions
to money
purchase
schemes
£’000
Benefits in
kind
£’000
Total
remuneration
£’000
Executive Director
Ali Mortazavi
223
106
22
44
395
Non-Executive Directors
Trevor Jones
55
–
–
–
55
Michael Brethertona
91
–
–
–
91
369
106
22
44
541
2023
Base salary
£’000
Bonus
£’000
Contributions
to money
purchase
schemes
£’000
Benefits in
kind
£’000
Total
remuneration
£’000
Executive Director
Ali Mortazavi
208
–
21
41
270
Non-Executive Directors
Trevor Jones
55
–
–
–
55
Michael Brethertona
120
–
–
–
120
383
–
21
41
445
a.
Michael Bretherton was appointed as a Non-Executive Director on 10 February 2020 and subsequently also took on the role of Interim CFO between December 2021 and
September 2023. Michael’s salary was increased during that period in accordance with his expanded role.
45
e-therapeutics plc Annual Report 2024
STATEMENT OF REMUNERATION CONTINUED
Upon his initial appointment in February 2020, Ali Mortazavi was awarded 9,672,836 share options under the Performance
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:
Years ended 31 January 2024 and 2023
Options held
at beginning
of the year
No.
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.
Ali Mortazavi
9,672,836
–
–
–
9,672,836
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 2024 and 2023
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 2024 (the last trading day of the period) was 18.13p and the
range during the year was 24p to 8p.
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:
Ordinary shares of
0.1p each at 31 January 2024
Ali Mortazavi
50,941,666
Trevor Jones
1,293,896
Michael Bretherton
500,000
During the period between 31 January 2024 and 5 June 2024, 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 https://www.etherapeutics.co.uk/news-and-media/.
46
e-therapeutics plc Annual Report 2024
Strategic report
Governance
Implementation of Remuneration Policy for the
year ended 31 January 2025
The annual salaries and fees payable under the Directors’
service contracts and letters of appointment as at 5 June
2024 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 5 June
2024
£’000
At 5 June
2023
£’000
Increase/
(decrease)
Ali Mortazavi
232
223
4%
Trevor Jones
40
55
(27%)
Michael Bretherton
40
120
(67%)
David Prior
100
–
N/A
The increased fees for Ali Mortazavi reflect an inflationary
increase of 4% as of 1 March 2024.
The basis for determining annual bonus payments for the
year to 31 January 2025 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 2025. Any
awards will be made subject to appropriate exercise prices
and vesting periods.
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, was
approved by the Remuneration Committee and by the
Board on 5 June 2024.
Prof Trevor M Jones CBE FMedSci
Chair of the Remuneration Committee
5 June 2024
47
e-therapeutics plc Annual Report 2024
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 2024. The Corporate Governance Statement also
forms part of this Directors’ Report.
General information
e-therapeutics plc (the "Company”) is a public limited
company incorporated in the United Kingdom, registered
number 04304473.
Review of business
All operational activities were undertaken through the
Company in both the year ended 31 January 2024 and the
prior year.
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 2024, an indication of likely future
developments, key performance indicators and risks.
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 (2023: £nil).
Directors’ interests
The Directors’ interests in the Company’s shares and options
over ordinary shares are shown in the Remuneration
Committee Report.
Directors’ remuneration
Details of the Directors’ remuneration appear in the
Remuneration Committee Report.
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.
Political donations
The Company made no political donations during the
current or prior year.
Financial instruments – risk management
The Company’s financial risk management policy is set out in
Note 20 to the financial statements.
Directors
The Directors of the Company who served during the year
ended 31 January 2024 and up to the date of this report
were:
Director
Capacity
Ali Mortazavi
Chief Executive Officer
David Prior
Non-Executive Chairman
Trevor Jones
Non-Executive Director
Michael Bretherton
Non-Executive Director*
*
Michael Bretherton was also appointed to the role of Interim Chief Financial
Officer with effect between December 2021 and September 2023.
Major shareholdings
As at 31 May 2024 (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:
Ordinary shares
of 0.1p each
Number
% of ordinary shares
of 0.1p each held at
31 May 2024
Richard Griffiths and
controlled undertakings
175,172,197
29.97
M&G
101,875,000
17.43
Robert Quested
51,550,000
8.82
Ali Mortazavi
50,941,666
8.72
Trillian Ltd
23,752,214
4.06
David Richardson
27,428,003
4.70
Research and development
During the year ended 31 January 2024 the Company’s
expenditure on R&D was £10,247,000 (2023: £7,224,000).
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 Section
172(1) Statement.
A consideration of the Company’s relationship with wider
stakeholders, including suppliers and customers, is disclosed
in our Corporate Governance Statement.
Articles of association and capital structure
The Company’s share capital, 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
48
e-therapeutics plc Annual Report 2024
Strategic report
Governance
be obtained from Companies House in the UK 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 21 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 2024, the Company’s issued share capital
was £584,335 divided into 584,335,487 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 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, Trevor
Jones, who has been director since October 2015, last
re-appointed in June 2021, now needs to be re-elected after
3 years in the forthcoming Annual General Meeting of the
Company on 16 July 2024. Additionally, David Prior was
appointed to the board on 23 May 2024, and will need to be
re-elected at the first Annual General Meeting since
appointment.
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.
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
In April 2024, we announced a proposed raise of £28.9
million before expenses by way of a subscription by funds
managed by M&G Investment Management Limited and
Richard Griffiths, both existing shareholders of the
Company. Net proceeds from the fundraise will be used to
advance multiple GalOmic™ pipeline assets towards the
clinic and initiate clinical trials on one program. We will also
use the proceeds to keep our early pipeline well populated
by pursuing further candidates. The strengthened cash
position will also enable the accelerated development and
integration of cutting-edge AI systems into HepNet™.
In addition, we delisted from the London Stock Exchange’s
Alternative Investment Market (AIM) on 9 May 2024. During
a raise roadshow in February/March 2024, the Board was
extremely disappointed by the lack of institutional UK
interest in our innovative, technology-driven value
propositions. Importantly, ETX struggled to get sufficient
engagement from the vast majority of the institutions who
were approached, reflecting the risk appetite of the UK
markets. This was further supported by feedback from
potential investors that said they would not invest in an AIM
listed company and that ETX would be a far more attractive
proposition as a private or NASDAQ listed company. As
such, we believe that there is a limited available audience
on the AIM market for companies such as ETX.
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 16 July 2024. The
notice convening the meeting is set out on pages 73 and 74
together with a summary of the business to be transacted. A
copy of the notice is also available on the Company’s website
at https://www.etherapeutics.co.uk/investors/financials-
company-documents/
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 2024, we reported cash and liquid resources
of £20,665,000. 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
Cheif Executive Officer
5 June 2024
49
e-therapeutics plc Annual Report 2024
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.
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.
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
Cheif Executive Officer
5 June 2024
50
e-therapeutics plc Annual Report 2024
Financial statements
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 2024,
which comprise:
• Income statement for the year ended 31 January 2024;
• the statement of comprehensive income for the year
ended 31 January 2024;
• the statement of changes in equity for the year ended
31 January 2024;
• the statement of financial position as at 31 January 2024;
• 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 2024 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 £630,000 (2023: £460,000) based on approximately 5%
of loss before tax. We did not consider it necessary
subsequently to amend our assessment. Profit or loss before
tax is a generally accepted auditing benchmark.
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 £441,000 (2023: £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 £31,500 (2023: £23,000). Errors
below that threshold would also be reported to it if, in our
opinion as auditor, disclosure was required on qualitative
grounds.
51
e-therapeutics plc Annual Report 2024
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
Valuation of R&D Tax Receivable
(and related occurrence of R&D
tax credit)
As noted in Note 12, the Company
has £1.9m of R&D tax receivable as
of January 31, 2024. Computation
of R&D tax credit claim requires
significant judgements which are
subjective in nature and therefore,
a risk exists that the tax receivable
balance (and the related expenses)
may have been accounted for
inappropriately.
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 matters 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:
52
e-therapeutics plc Annual Report 2024
Financial statements
• 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 50, 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.
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:
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).
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
Crowe U.K. LLP
Statutory Auditor
London
5 June 2024
53
e-therapeutics plc Annual Report 2024
Income Statement
For the year ended 31 January 2024
FINANCIAL STATEMENTS
Notes
2024
£’000
2023
£’000
Revenue
5
318
475
Cost of sales
–
–
Gross profit
318
475
Research and development expenditure
(10,247)
(7,224)
Administrative expenses
(3,865)
(3,490)
Operating loss
(13,794)
(10,239)
Interest and investment income
10
740
490
Interest expense
11
(27)
(23)
Loss before tax
(13,081)
(9,772)
Taxation
12
1,915
1,498
Loss for the year attributable to equity holders of the Company
(11,166)
(8,274)
Loss per share: basic and diluted
13
(1.91)p
(1.54)p
Statement of Comprehensive
Income
For the year ended 31 January 2024
2024
£’000
2023
£’000
Loss for the financial year
(11,166)
(8,274)
Other comprehensive income
–
–
Total comprehensive loss for the year attributable to equity holders of the Company
(11,166)
(8,274)
54
e-therapeutics plc Annual Report 2024
Financial statements
Statement of Changes in Equity
For the year ended 31 January 2024
Share capital
£’000
Share
premium
£’000
Retained
earnings
£’000
Total
£’000
As at 1 February 2022
515
99,243
(72,032)
27,726
Total comprehensive loss for the year
Loss for the financial year
–
–
(8,274)
(8,274)
Total comprehensive loss for the year
–
–
(8,274)
(8,274)
Transactions with owners, recorded directly in equity
Issue of ordinary shares
67
13,370
–
13,437
Equity-settled share-based payment transactions
–
–
155
155
Total contributions by and distribution to owners
67
13,370
155
13,592
As at 31 January 2023
582
112,613
(80,151)
33,044
Total comprehensive loss for the year
Loss for the financial year
–
–
(11,166)
(11,166)
Total comprehensive loss for the year
–
–
(11,166)
(11,166)
Transactions with owners, recorded directly in equity
Issue of ordinary shares
2
35
–
37
Equity-settled share-based payment transactions
–
–
78
78
Total contributions by and distribution to owners
2
35
78
115
As at 31 January 2024
584
112,648
(91,239)
21,993
55
e-therapeutics plc Annual Report 2024
FINANCIAL STATEMENTS
Statement of Financial Position
As at 31 January 2024
Notes
2024
£’000
2023
£’000
Non-current assets
Intangible assets
14
407
239
Property, plant and equipment
15
988
400
1,395
639
Current assets
Tax receivable
12
1,935
1,500
Trade and other receivables
16
470
259
Prepayments
504
553
Cash and cash equivalents
17
20,665
31,689
23,574
34,001
Total assets
24,969
34,640
Current liabilities
Trade and other payables
18
2,266
1,301
Lease liability
19
393
295
2,659
1,596
Non-current liabilities
Lease liability
19
317
–
Total liabilities
2,976
1,596
Net assets
21,993
33,044
Equity
Share capital
21
584
582
Share premium
112,648
112,613
Retained earnings deficit
(91,239)
(80,151)
Total equity attributable to equity holders of the Company
21,993
33,044
These financial statements were approved and authorised for issue by the Board of Directors on 5 June 2024 and were
signed on its behalf by:
Timothy Bretherton
Chief Financial Officer
Registered number: 04304473
56
e-therapeutics plc Annual Report 2024
Financial statements
Statement of Cash Flow
For the year ended 31 January 2024
Notes
2024
£’000
2023
£’000
Loss for the year
(11,166)
(8,274)
Adjustments for:
Depreciation, amortisation and impairment
14,15
535
468
Loss on disposal of fixed assets
15
1
10
Equity-settled share-based payment expense
9
78
155
Interest income
10
(740)
(490)
Interest expense
11
27
23
Taxation
12
(1,935)
(1,522)
Operating cash flows before movements in working capital
(13,200)
(9,630)
Increase in trade and other receivables
(162)
(75)
Increase in trade and other payables
965
198
R&D tax received
1,500
1,496
Net cash used in operating activities
(10,897)
(8,011)
Interest received
10
740
490
Interest expense
11
(27)
(23)
Acquisition of intangible assets
14
(234)
(142)
Acquisition of property, plant and equipment
15
(247)
(68)
Decrease in short-term investments
17
–
15,051
Net cash (used in)/generated from investing activities
232
15,308
Proceeds from issue of share capital
37
13,437
Repayment of lease liability
19
(396)
(391)
Net cash generated from financing activities
(359)
13,046
Net increase in cash and cash equivalents
(11,024)
20,343
Cash and cash equivalents at 1 February
31,689
11,346
Cash and cash equivalents at 31 January
20,665
31,689
57
e-therapeutics plc Annual Report 2024
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
and the Directors’ Report. 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.
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
2023 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. Material 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 2024, we reported cash and liquid resources of
£20,665,000 inclusive of short-term investment bank
deposits versus an underlying cash burn during the year of
£11,024,000, including R&D tax credits received.
In April 2024, we announced a proposed raise of 28.9 million
before expenses by way of a subscription by funds managed
by M&G Investment Management Limited and Richard
Griffiths, both existing shareholders of the Company.
We have 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 within 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 within 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
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
58
e-therapeutics plc Annual Report 2024
Financial statements
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.
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.
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.
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.
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-of-use property:
Over the remaining lease term
Plant and equipment:
25%–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.
59
e-therapeutics plc Annual Report 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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.
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 are 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:
• 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 reflects
management’s best estimate of each contract’s stage of
completion. Management estimates project progress at
each reporting date, with consideration of project plans
outlined in customer contracts, and remeasures revenue
accordingly. At the year end, deferred revenue liability was
£nil (2023: £nil). Revenue of £318,000 (2023: £475,000) is
made up of £318,000 (2023: £475,000) recognised at a
point in time and £nil (2023: £nil) 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.
60
e-therapeutics plc Annual Report 2024
Financial statements
4. Accounting judgements and sources of
estimation uncertainty continued
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 £1,935,000 (2023: £1,500,000),
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,
with the exception of some activities and assets relating to
2 employees (2023: none) who work via an Employer of
Record in the United States of America.
Revenue recognised of £318,000 (2023: £475,000) includes
£nil (2023: £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 2024.
Revenue during the current financial year was generated
from one external customer. Management expects to enter
into further commercial collaborations in the coming
financial year, diversifying revenue from external customers.
6. Auditor’s remuneration
2024
£’000
2023
£’000
Amounts receivable by the Auditor and its associates in respect of:
– audit of the Company’s annual financial statements
66
60
61
e-therapeutics plc Annual Report 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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:
Number of employees
2024
2023
R&D staff
23
26
Finance and administration staff
11
11
Executive Directors
1
1
35
38
The aggregate payroll costs of these persons were as follows:
2024
£’000
2023
£’000
Wages and salaries
4,107
4,213
Share-based payments (see Note 9)
78
155
Social security costs
470
509
Contributions to money purchase pension schemes
285
316
Compensation for loss of office
59
–
4,999
5,193
The Company makes defined pension contributions into money purchase schemes nominated by employees. The total
expense relating to these plans is £285,000 (2023: £316,000). At the reporting date, there were outstanding contributions of
£33,000 (2023: £40,000) accrued but not yet paid.
8. Directors’ remuneration
2024
£’000
2023
£’000
Directors’ emoluments
519
424
Contributions to money purchase pension schemes
22
21
541
445
The remuneration of the highest paid Director during the year was £373,000 (2023: £249,000). In addition, contributions to
money purchase schemes in respect of the highest paid Director during the year were £22,000 (2023: £21,000).
During the year, one Director (2023: 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.
62
e-therapeutics plc Annual Report 2024
Financial statements
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).
All of the 1,830,000 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:
Date of grant
Number of
instruments at
end of year
Number of
instruments at
beginning of
year
Exercise
price
(p)
Vesting
period Date exercisable
Performance
conditions
March 2019
500,000
1,250,000
2.8
3 years
Upon vesting
Note 1
May 2019
500,000
500,000
2.1
3 years
Upon vesting
Note 1
February 2020
9,672,836
9,672,836
0.1
2 years
Upon vesting
Note 2
March 2020
1,500,000
3,550,000
0.1
3 years
Upon vesting
N/A
April 2020
3,000,000
3,000,000
0.1
3 years
Upon vesting
N/A
June 2021
–
300,000
10.0
3 years
Upon vesting
N/A
June 2021
413,322
500,000
12.0
3 years
Upon vesting
N/A
September 2021
100,000
100,000
20.0
3 years
Upon vesting
N/A
February 2022
700,000
700,000
20.0
3 years
Upon vesting
N/A
March 2022
1,000,000
1,000,000
20.0
3 years
Upon vesting
N/A
May 2022
300,000
600,000
23.2
3 years
Upon vesting
N/A
July 2023
665,000
–
18.0
3 years
Upon vesting
N/A
July 2023
232,500
–
19.0
2 years
Upon vesting
N/A
July 2023
232,500
–
19.0
3 years
Upon vesting
N/A
December 2023
700,000
–
7.0
3 years
Upon vesting
N/A
Total
19,516,158
21,172,836
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 These performance conditions were met in previous years.
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.
63
e-therapeutics plc Annual Report 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
9. Share-based payments continued
If any of the above options remain unexercised after a period of ten years from the date of grant they will automatically
expire.
The number and weighted average exercise prices of share options are as follows:
Options
Weighted
average
exercise price
2024
p
Number of
options
2024
Weighted
average
exercise price
2023
p
Number of
options
2023
Outstanding at the beginning of the year
3.1
21,172,836
1.1
22,100,614
Exercised during the year
(1.1)
(2,050,000)
–
–
Forfeited during the year
(7.7)
(1,436,678)
(3.4)
(3,527,778)
Expired during the year
–
–
–
–
Granted during the year
14.0
1,830,000
20.7
2,600,000
Outstanding at the end of the year
4.0
19,516,158
3.1
21,172,836
Exercisable at the end of the year
0.8
15,586,518
0.5
11,422,836
The options outstanding at the year end have a weighted average remaining contractual life of seven years
(2023: seven 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
December
2023
July
2023
July
2023
July
2023
Option pricing model used
Black Scholes
Black Scholes
Black Scholes
Black Scholes
Share price at date of grant (p)
9.05
17.98
17.92
17.92
Minimum vesting period
3 years
3 years
2 years
3 years
Exercise price (p)
7.00
18.00
19.00
19.00
Expected volatility
61.76%
60.66%
60.63%
60.63%
Risk-free rate
4.06%
4.70%
5.11%
4.98%
Dividend yield
0%
0%
0%
0%
Number of shares
700,000
665,000
232,500
232,500
Fair value per option (p)
4.70
7.94
6.19
7.65
The total expense recognised for the year arising from equity-settled share-based payments is as follows:
2024
£’000
2023
£’000
Company equity-settled share-based payments
78
155
64
e-therapeutics plc Annual Report 2024
Financial statements
10. Interest income
2024
£’000
2023
£’000
Bank interest receivable
740
242
Dividend from subsidiary
–
248
740
490
11. Interest expense
2024
£’000
2023
£’000
Lease interest payable
27
23
12. Tax
2024
£’000
2023
£’000
SME R&D tax credit receivable for the current year
(1,915)
(1,483)
Adjustments for prior year in respect of SME R&D tax credit
–
(15)
Current tax credit
(1,915)
(1,498)
Deferred tax
–
–
Total tax credit on loss on ordinary activities
(1,915)
(1,498)
The standard rate of corporation tax applied to reported profit is 25% (2023: 19%). The credit for the year can be reconciled
to the Income Statement as follows:
2024
£’000
2023
£’000
Loss before tax
(13,082)
(9,772)
Tax at the UK corporation tax rate of 25% (2023: 19%)
(3,140)
(1,857)
Expenses not deductible for tax purposes
7
(3)
Enhanced relief for SMEs in relation to R&D
(280)
(635)
Unrelieved tax losses
1,541
1,034
Income not taxable
–
(47)
Other
(43)
25
Adjustments in respect of prior year
–
(15)
Total tax credit for the year
(1,915)
(1,498)
65
e-therapeutics plc Annual Report 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
12. Tax continued
The total tax credit recognised within the Income Statement is £1,935,000 (2023: £1,522,000), which is comprised of the small
or medium-sized enterprise (SME) R&D tax relief of £1,919,000 (2023: £1,498,000) and research and development
expenditure credit (RDEC) of £16,000 (2023: £24,000). The SME tax credit is shown within taxation, as reconciled above. The
RDEC is included within research and development expenditure 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 £1,935,000 (2023: £1,500,000), is made up of current year SME tax relief of
£1,915,000 (2023: £1,483,000) and RDEC of £20,000 (2023: £17,000). 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 £44,615,000
(2023: £38,162,000). 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 a standard rate of 25% which became effective from 1 April 2023 (2023:
25%), is £11,871,000 (2023: £10,237,000).
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 loss per share is based on the following data:
2024
2023
Losses for the purposes of basic loss per share and diluted loss per share, being loss attributable to
owners of the Company (£’000)
(11,166)
(8,274)
Weighted average number of ordinary shares for the purposes of basic loss per share and diluted
loss per share (number)
584,335,487
537,346,310
Loss per share – basic and diluted (p)
(1.91)
(1.54)
Diluted LPS is calculated in the same way as basic LPS but also with reference to reflect the dilutive effect of share options in
existence at the year end over 19,516,158 (2023: 21,172,836) 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.
66
e-therapeutics plc Annual Report 2024
Financial statements
14. Intangible assets
Goodwill
£’000
Patents and
trademarks
£’000
Total
£’000
Cost
As at 1 February 2022
2,824
1,405
4,229
Additions
–
142
142
Disposals
(2,824)
–
(2,824)
As at 31 January 2023
–
1,547
1,547
Additions
–
234
234
Disposals
–
–
–
As at 31 January 2024
–
1,781
1,781
Amortisation and impairment
As at 1 February 2022
2,824
1,303
4,127
Amortisation charge for the year
–
5
5
Disposals
(2,824)
–
(2,824)
As at 31 January 2023
–
1,308
1,308
Amortisation charge for the year
–
4
4
Impairment losses
–
62
62
As at 31 January 2024
–
1,374
1,374
Net book value
As at 1 February 2022
–
102
102
As at 31 January 2023
–
239
239
As at 31 January 2024
–
407
407
Research and development costs of £10,247,000 (2023: £7,224,000) 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.
67
e-therapeutics plc Annual Report 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
15. Property, plant and equipment
Right-of-use
property
£’000
Plant and
equipment
£’000
Fixtures and
fittings
£’000
Total
£’000
Cost
As at 1 February 2022
802
278
145
1,225
Additions
–
68
–
68
Disposals
–
(23)
–
(23)
As at 31 January 2023
802
323
145
1,270
Additions
811
247
–
1,058
Disposals
(802)
(2)
–
(804)
As at 31 January 2024
811
568
145
1,524
Depreciation
As at 1 February 2022
117
199
104
420
Depreciation charge for the year
401
55
7
463
Disposals
–
(13)
–
(13)
As at 31 January 2023
518
241
111
870
Depreciation charge for the year
402
61
6
469
Disposals
(802)
(1)
–
(803)
As at 31 January 2024
118
301
117
536
Net book value
As at 1 February 2022
685
79
41
805
As at 31 January 2023
284
82
34
400
As at 31 January 2024
693
267
28
988
Disclosure relating to the corresponding lease relating to the right-of-use asset is shown in Note 19. Depreciation charges
are included within administrative expenses.
16. Trade and other receivables
2024
£’000
2023
£’000
Trade receivables
–
–
Other receivables
470
259
470
259
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 20.
68
e-therapeutics plc Annual Report 2024
Financial statements
17. Cash and cash equivalents
2024
£’000
2023
£’000
Cash at bank and in hand
4,877
3,616
Bank deposits on 32 days’ notice
5,563
12,879
Bank deposits on 35 days’ notice
10,225
15,194
Cash and cash equivalents
20,665
31,689
The Company’s treasury policy 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.
18. Trade and other payables
2024
£’000
2023
£’000
Current
Trade payables
1,089
429
Other taxation and social security
109
124
Other payables
96
70
Accrued expenses
972
678
2,266
1,301
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 20.
19. Lease liability
2024
£’000
2023
£’000
Current
Lease liability
393
295
Non-current
Lease liability
317
–
710
295
The lease liability relates to one office property. The second lease began in October 2023 and has a remaining term of
21 months. The corresponding right-of-use asset is disclosed in Note 15.
69
e-therapeutics plc Annual Report 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
19. Lease liability continued
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 £nil (2023: £19,000) and the
minimum lease payment at the Balance Sheet date totalled £nil (2023: £nil). The amount recognised within administrative
expenses for low value leases was £6,000 (2023: £6,000) and the minimum lease payment at the Balance Sheet date was
£5,000 (2023: £11,000). The movement in the Company’s lease liability, as reflected in the cash flow, is as follows:
£’000
As at 1 February 2022
686
Additions
–
Repayments
(391)
As at 31 January 2023
295
Additions
811
Repayments
(396)
As at 31 January 2024
710
20. 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:
2024
£’000
2023
£’000
Financial assets
Included within other receivables (Note 16)
470
259
Cash and cash equivalents (Note 17)
20,665
31,689
21,135
31,948
Financial liabilities
Trade payables (Note 18)
1,089
429
Lease liability (Note 19)
710
295
Included within other payables (Note 18)
96
70
1,895
794
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 £740,000 (2023: £490,000). Interest expenditure recognised on lease
liabilities and cash balances totalled £27,000 (2023: £23,000).
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 £20,665,000 of
cash and short-term investment bank deposits as at 31 January 2024 (2023: £31,689,000).
70
e-therapeutics plc Annual Report 2024
Financial statements
20. Financial instruments continued
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.
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 £470,000 (2023: £259,000), 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 23 days (2023: 20 days).
Liquidity risk
The Company manages its liquidity risk by monitoring short-term cash flows, 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 have a contractual maturity of not more than 35
days (2023: not more than 35 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 at rates between 4.1% and 9.3%. Interest payable on lease liability
balances was £27,000 (2023: £20,000). Interest received on bank deposit balances was £740,000 (2023: £195,000), earned at
interest rates of between 0% and 4.40% (2023: 0% and 3.35%). 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. A net foreign exchange gain of £36,000 (2023 net loss: £140,000) is recognised in administrative expenses.
21. 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.
No. of ordinary shares
2024
’000
2023
’000
In issue as at 1 February
582,159
514,571
Share issue
2,176
67,588
Total shares authorised and in issue as at 31 January – fully paid
584,335
582,159
2,050,000 shares were issued during the year on the exercise of share options. In addition, 126,155 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 2024, the Company had 584,335,487 (2023:
582,159,332) ordinary shares of 0.1p each in issue.
71
e-therapeutics plc Annual Report 2024
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22. Capital commitments
At the year end, the Company had not entered into contractual commitments for the acquisition of any capital items
(2023: £nil).
23. 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:
2024
£’000
2023
£’000
Short-term employee benefits
Salaries including bonuses
1,705
1,549
Social security costs
215
203
Health insurance
51
48
Compensation for loss of office and payments in lieu of notice
49
–
2,020
1,800
Post-employment benefits
Defined contribution pension plans
75
102
Share-based payments
63
160
Total remuneration
2,158
2,062
Jonny Wray ceased to be a member of the executive team as of August 2022 and his employment ended in February 2023.
He exercised options in April 2023 to acquire 500,000 shares at an exercise price of 2.8p and in September 2023 to acquire
750,000 shares at an exercise price of 0.1p. No current key management personnel exercised share options during the year
(2023: nil).
24. Subsequent events
In April 2024, the Company announced an equity subscription fundraise of £28.9 million by M&G Investment Management
Limited and by Richard Griffiths, both existing shareholders of the Company. The proceeds are execpted to be received in
early July 2024.
After that date, the Company announced a proposed delisting of its shares from the London Stock Exchange’s Alternative
Investment Market (AIM) and which subsequently became effective on 9 May 2024.
72
e-therapeutics plc Annual Report 2024
Other information
Notice of Annual General Meeting
of e-therapeutics plc
NOTICE OF ANNUAL GENERAL MEETING
(Incorporated and registered in England and Wales under
company number 04304473)
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION.
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 2024 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 16 July 2024 to
consider and, if thought fit, pass the following resolutions as
ordinary resolutions other than resolution 7, which will be
proposed as a special resolution:
Ordinary business
1.
To receive the accounts for the financial year ended
31 January 2024 together with the Directors’ Report and
the Auditor’s Report for that period.
2.
To re-elect Trevor Jones as a Director of the Company,
who has been a Director since 28 October 2015 and was
last re-elected by shareholders in June 2021.
3.
To re-elect David Prior as a Director of the company,
who was appointed by the Board on 23 May 2024, as
Non-Executive Chairman.
4.
To reappoint Crowe U.K. LLP as the Auditor of the
Company.
5.
To authorise the Directors to set the remuneration of
the Auditor of the Company.
Special business
To consider and, if thought fit, to pass the following
resolutions, of which resolution 6 will be proposed as an
ordinary resolution, and resolution 7 will be proposed as a
special resolution:
6. 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
£194,778.49 (being 1/3 (approximately 33.33%) of the
Company’s issued share capital as at close of
business on 5 June 2024), 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 £389,556.99 (being 2/3 (approximately
66.67%) of the Company’s issued share capital as at
close of business on 5 June 2024), 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
2025 (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).
73
e-therapeutics plc Annual Report 2024
Special business continued
7. That, subject to the passing of resolution 6, the
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
6(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 6(a), and otherwise than pursuant to
paragraph (a) of this resolution, up to an aggregate
nominal amount of £194,778.49 (being one-third
(approximately 33.33%) of the Company’s issued
share capital as at close of business on 5 June 2024)
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 2025 (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).
Recommendation
Your Board believes that the resolutions to be proposed as
ordinary and special business at the 2024 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 12 July 2024.
The right to attend and vote at the 2024 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 12 July 2024 (or, if the
2024 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 2024 Annual
General Meeting) is entitled to attend and vote at the 2024
Annual General Meeting.
By order of the Board
Timothy Bretherton
Company Secretary
5 June 2024
Registered office
4 Kingdom Street
Paddington
London
W2 6BD
NOTICE OF ANNUAL GENERAL MEETING CONTINUED
74
e-therapeutics plc Annual Report 2024
Other information
Explanatory notes to the
resolutions
The notes on the following pages explain the resolutions to
be proposed at the 2024 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 16 July 2024.
Resolutions 1 to 6 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 7 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 2024 Annual
General Meeting are for the financial year ended 31 January
2024, and the Company proposes a resolution on its financial
statements and reports.
Resolution 2 and 3 – 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, Trevor Jones, who has been a
Director since 28 October 2015, and was last re-elected by
shareholders in June 2021, will again stand for re-election by
shareholders. Additionally, David Prior, who was appointed
by the Company since the last General Meeting will stand
for election as Non-Executive Chairman by shareholders.
Their biographies appear on page 30 of the Annual Report
and Accounts for the year ended 31 January 2024.
The Board is satisfied that Trevor Jones and David Prior will
contribute effectively and demonstrate commitment to
their roles as Non-Executive Director and Non-Executive
Chairman respectively. Accordingly, the Board unanimously
recommends the election of Trevor Jones and David Prior.
Resolutions 4 and 5 – Reappointment of Auditor and
Auditor’s remuneration
Resolutions 4 and 5 propose the reappointment of Crowe
U.K. LLP as the Company’s Auditor for the year ending 31
January 2025 and the authorisation of the Directors to agree
the Auditor’s remuneration. The Directors will delegate this
authority to the Audit Committee.
Resolution 6 – 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 6 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 £194,778.49; and (b) in connection with a rights
issue, up to an aggregate nominal amount (reduced by
allotments under part (a) of the resolution) of £389,556.99.
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 5 June 2024, 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 2025.
Your Directors have no present intention of issuing shares
pursuant to this authority. As at the date of this notice the
Company holds no treasury shares.
Resolution 7 – 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 7 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 £194,759.02
(being approximately 33.33% of the Company’s issued
ordinary share capital as at close of business on 5 June 2024,
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 2025.
EXPLANATORY NOTES TO THE RESOLUTIONS
75
e-therapeutics plc Annual Report 2024
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.
Entitlement to vote
1.
The right to attend and vote at the 2024 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 12 July 2024 (or, if the 2024 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 2024 Annual
General Meeting) is entitled to attend and vote at the
2024 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 2024 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.
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.
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
form not later than 12:30 on 12 July 2024 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.
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 12 July 2024. 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
9.
The results of the voting at the 2024 Annual General
Meeting will be published on our website,
www.etherapeutics. co.uk, as soon as
reasonably practicable.
EXPLANATORY NOTES TO THE RESOLUTIONS CONTINUED
76
e-therapeutics plc Annual Report 2024
Other information
Inspection of documents
10. 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.
Corporate representatives
11.
A shareholder of the Company which is a corporation
may authorise a person or persons to act as its
representative(s) at the 2024 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
12. 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 2024 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.
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.
13. As at close of business on 5 June 2024, being the last
practicable day prior to the publication of this notice,
the Company’s issued share capital comprised
584,335,487 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
584,335,487.
Members’ requests under Section 527 of the Act
14. Under Section 527 of the Act members meeting the
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 2024 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 2024 Annual General Meeting includes
any statement that the Company has been required
under Section 527 of the Act to publish on a website.
Website
15. 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.
77
e-therapeutics plc Annual Report 2024
Advisors
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
78
e-therapeutics plc Annual Report 2024
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