EVGEN PHARMA PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2022
LEADING THE
DEVELOPMENT OF
SULFORAPHANE-BASED
MEDICINES
OVERVIEW
WHAT WE DO
WE ARE LEADING THE
CLINICAL DEVELOPMENT
OF SULFORAPHANE-BASED
MEDICINES; OUR FOCUS IS ON
THE TREATMENT OF CANCER
AND INFLAMMATORY
DISEASES.
OVERVIEW
FINANCIAL STATEMENTS
01 Highlights of the Year
32 Independent Auditors’ Report
02 Evgen Pharma at a Glance
36 Consolidated Statement
03 Our Strategy and Business Model
of Comprehensive Income
04 Our Progress
STRATEGIC REPORT
08 Chairman’s Statement
37 Consolidated and Company
Statements of Financial Position
38 Consolidated Statement
of Changes in Equity
09 Chief Executive’s Review
39 Company Statement
of Performance
of Changes in Equity
13 Key Performance Indicators
40 Consolidated and Company
14 Financial Review
Statements of Cash Flows
14 S172 Companies Act Statement
41 Notes to the Financial Statements
15 Principal Risks and Uncertainties
ADDITIONAL INFORMATION
GOVERNANCE
IBC Addresses and Advisers
18 Board of Directors
20 Directors’ Report
22 Corporate Governance Report
24 Remuneration Committee Report
28 Audit Committee Report
29 Statement of Directors’
Responsibilities
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Evgen Pharma plc
2022 Annual Report & Financial Statements
OVERVIEW
HIGHLIGHTS OF THE YEAR
SFX-01
IN METASTATIC BREAST
CANCER
• Investigation of where SFX-01 sits in post
CDK4/6 resistance setting
• Promising in-vitro pre-clinical data suggests
opportunity in this setting
• New and extended collaboration with University
of Manchester to generate comprehensive data
set for next clinical trial
SFX-01
IN GLIOBLASTOMA
• Orphan Drug Designation granted by FDA
giving exclusivity and tax advantages
• Publication of pre-clinical data by
University of L’Aquila
• Further supportive pre-clinical data
generated by University of Auckland
Phase Ib/IIa trial to commence towards
end of 2022
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SFX-01
HUMAN VOLUNTEER STUDY
• Study to assess dose range and biomarker
responses of new SFX-01 formulation
• Design of Phase I/Ib trial well advanced
and on track to commence in Q4 2022
SFX-01
IN OTHER INDICATIONS
• Academic collaborators to investigate
utility in colorectal and rare juvenile cancers
• STAR COVID-19 study discontinued;
additional patient safety data generated
PRODUCTION
DEVELOPMENT
• Production scale up of SFX-01 active
pharmaceutical ingredient achieved
• Design and manufacture of new tablet
formulation complete
• Improved form of SFX-01 created
and patent pending
FINANCIAL
HIGHLIGHTS
• Post tax loss of £2.7m (2021: loss of £2.7m)
• Cash outflow from operations of £2.6m
(2021: outflow of £2.9m)
• Cash and short-term investments and cash
on deposit at 31 March 2022 of £9.0m
(31 March 2021: £11.6m)
2022 Annual Report & Financial Statements
Evgen Pharma plc
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OVERVIEW
EVGEN PHARMA
AT A GLANCE
WHO WE ARE
OUR TECHNOLOGY
Evgen Pharma’s patented Sulforadex® technology synthesises
sulforaphane into a well-tolerated, stable pharmaceutical
ingredient, unlocking its medical and commercial potential.
We are a clinical-stage, UK-based, global leader
in the development of sulforaphane-based therapeutics.
Sulforaphane has shown potential in the treatment
of a number of cancers and other diseases.
We are the only company with a pharmaceutical grade
sulforaphane molecule in clinical development. Our lead
drug, SFX-01, exploits sulforaphane’s activity in three separate
biochemical pathways; inhibition of STAT3 and SHP2, of
importance in cancers, and up-regulation of Nrf2, a pathway
of significance in a number of different diseases. SFX-01 has
been shown to be unusually well tolerated in patients in the
field of oncology.
WHAT WE DO
OUR MISSION
We collaborate with academics and biopharma companies
from around the world to identify the most attractive targets
for potential treatment with our sulforaphane-based drugs.
Our business model is to develop our drugs up to Phase II
proof of concept clinical trials, and then license to larger
pharmaceutical companies able to commercialise them.
We focus on the application of SFX-01 in cancers and
anti-inflammatory diseases where there is strong clinical
need and attractive commercial opportunity, and execute
early clinical research.
In addition to our internal disease focus we will consider
opportunistic partnerships and out-licensing in other areas
where we are convinced of the scientific and commercial
rationale.
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2022 Annual Report & Financial Statements
OVERVIEW
OUR STRATEGY AND
BUSINESS MODEL
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Exploiting our leading,
patented technology
in sulforaphane science
OUR
OBJECTIVES
To improve disease outcomes
and generate attractive returns
for our shareholders
through:
Broadening our pipeline
through acquisition/licensing
of sulforaphane analogues
and other molecules
complementary to our
programmes
Developing our lead molecule,
SFX-01, in selected cancers and
inflammatory disease to deliver
phase II proof of concept data,
and then out-license
Supporting academic and
commercial partners who have
a compelling scientific rationale
for studying sulforaphane in
cancer indications or in other
diseases and markets beyond
our development programmes
Early partnering of non-core
indications with suitable
licensees
SFX-01 will continue to be provided to academic groups for
pre-clinical evaluation in selected disease models. Evgen will have
the right to access the pre-clinical and clinical data generated by
academic partners on fair commercial terms to advance its clinical
and commercial development. Since the principal funding for these
trials will be obtained by the investigator/ institution they have
limited impact on our cash reserves.
We believe this strategy offers the best route to enhance
shareholder value and the opportunity for all stakeholders
to benefit from the undoubted potential of SFX-01 and our
broader technology platform.
2022 Annual Report & Financial Statements
Evgen Pharma plc
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OVERVIEW
OUR PROGRESS
CLINICAL PROGRESS
In September 2021 the FDA granted Orphan Drug status
to SFX-01 in malignant glioma. This is an important benefit
as it provides extended intellectual property protection
and potential tax benefits on in-market profits.
The design of the Phase Ib trial in human volunteers (HV),
due to begin in Q4 2022, has been finalised and supporting
clinical research organisations contracted. We expect to
announce the results over the first half of 2023.
The Phase I/IIa trial in brain cancer has been designed and,
after detailed discussions with potential investigators, clinical
trial sites selected. It is likely to commence shortly after the HV
study if successful, it will pave the way for an early registration
study (i.e. one that would support grant of a marketing license).
The ARDS/Covid 19 trial did not yield a positive outcome but
with an additional 65 patients treated, the trial provided further
evidence that SFX-01 has a significantly more benign side
effect profile than many other developmental or marketed
cancer medications
MANUFACTURE AND
FORMULATION
We have modified and simplified the small-scale process for
making the active molecule in SFX-01 (the “API”) to a scalable
process suitable for in-market supply. We have created and
patented a new form of the API and acquired considerable
production know-how.
In place of a hand-filled capsule with a variable drug release
profile we have developed a stable tablet formulation of the
finished drug ('drug product'), with consistent drug release
properties. By ensuring release of the drug in the optimal part
of the digestive system we are likely to see an improvement in
the already advantageous side-effect characteristics of SFX-01
and potentially improved efficacy.
We are currently producing sufficient API, drug product
and placebo tablets to support multiple clinical trials.
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2022 Annual Report & Financial Statements
OVERVIEW
OUR PROGRESS
CONTINUED
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OUT-LICENSING
JuvLife, the dietary products and functional foods division
of Juvenescence Ltd, has been making good progress with
the development of a naturally-sourced sulforaphane
nutritional health supplement, stabilised using our Sulforadex®
technology. We have supported this development with our
expertise in sulforaphane science and chemistry.
Juvenescence is planning a market launch around the end
of 2023 which will yield milestones of more than $1.5m at
that point with further sales-related milestones and royalties
to follow.
PRE-CLINICAL
COLLABORATIONS
Evgen benefits from the support of a number of academic
and clinical collaborators that are interested in the potential
of sulforaphane and SFX-01.
The University of Auckland has published in-vitro data with
SFX-01 which corroborates the original data set from University
L’Aquila and will feed into the planning for the Phase Ib/IIa trial
scheduled to start in late 2022. In these experiments, SFX-01
demonstrated inhibition of glioblastoma cell growth.
We have recently expanded our collaboration with the
Manchester Breast Centre at the University of Manchester's
School of Medical Sciences. The latest programme is to identify
whether we can reverse or act independently in tumours
resistant to CDK4/6 inhibitors - the current standard of care -
and therefore establish a clinical rationale and out-licensing
proposition to support later stage clinical trials which build on
the efficacy data already seen in our STEM metastatic breast
cancer trial.
We have signed a further agreement with the University
of Seville and other associated organisations to assess
additional sulforaphane analogues that might complement
our existing compounds.
OUR PIPELINE
Discovery
Pre-clinical POC
Phase 1
Phase 2
Phase 3
Breast Cancer
Glioblastoma
Haematological Malignancies
Analogues
2022 Annual Report & Financial Statements
Evgen Pharma plc
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STRATEGIC REPORT
GLIOMA IS THE MOST
COMMON FORM OF
BRAIN TUMOUR
AFFECTING AROUND
FIVE PER 100,000 PEOPLE.
Strong preclinical data has been generated in a new solid tumour
indication, glioblastoma (GBM), with further preclinical work
underway and designs for a Phase Ib/IIa trial being assessed.
Glioma is the most common form of brain tumour affecting around
five per 100,000 people. The more severe, grade IV classification,
glioblastoma, is a very serious form of brain tumour representing 45%
of all cases and has a poor prognosis with median survival of around
14 months. The five-year survival of the severe grades is 5%.
Image:
Glioblastoma brain cancer
cells under microscope.
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2022 Annual Report & Financial Statements
STRATEGIC REPORT
STRATEGIC
REPORT
08 Chairman’s Statement
09 Chief Executive’s Review of Performance
13 Key Performance Indicators
14 Financial Review
14 S172 Companies Act Statement
15 Principal Risks and Uncertainties
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STRATEGIC REPORT
CHAIRMAN’S
STATEMENT
In the last year we have
had a strong focus on
achieving the objectives
we set out following our
2021 fundraise.
In the last year we have had a strong focus on achieving the
objectives we set out following our 2021 fundraise. In particular
on manufacturing and formulation and clinical trials
preparation. This groundwork sets the stage for very visible
progress in our development programmes in the current year.
We have continued to concentrate our resources on specific
diseases and developing these to proof of concept for onward
out-licensing. This has allowed us to focus on the opportunities
we believe are appropriate to our size, capabilities and
resources. Equally, and because of the breadth of opportunities
in sulforaphane science, we have enabled academic and
biopharma companies to access our technology in other areas
where there is a compelling rationale, at minimal expenditure
to Evgen.
We have been prudent in the management of our finances,
with a cash balance as at the end of the year of £9.0m (2020:
£11.6m). The fundraise in March 2021, which generated gross
proceeds of £11m, has enabled us to strengthen our
management team and undertake a number of activities that
would otherwise have constrained our development. We have
made much progress, and some aims, for example the
manufacturing technology transfer and glioblastoma pre-
clinical validation, have been completed.
Our partnership with JuvLife, the dietary products and
functional foods division of Juvenescence Ltd, is an additional
application of our Sulforadex® technology in a field we would
not otherwise be able to exploit. JuvLife has a well-qualified
and experienced team that has made good progress during
the last year. With a US market launch planned for around the
end of 2023, this monetisation of our sulforaphane technology
and expertise will provide valuable revenues and risk mitigation
for shareholders, as well as validation of our strategy.
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2022 Annual Report & Financial Statements
Our senior team was completed with the appointments of
Dr Helen Kuhlman as Chief Business Officer and Dr Glen Clack
as Chief Medical Officer. This has resulted in a significantly
more active business development activity, giving us a higher
profile amongst potential partners. It has also brought
considerable clinical trial expertise, both internally and via key
opinion leaders, and thus allowed us to design our clinical trials
to give the best chance of success.
At the end of the year we had sufficient cash resources to fund
us through the potential value enhancement points from both
completion of current pre-clinical projects and, in particular,
clinical data from both the Phase I/Ib volunteer and phase
Ib/IIa glioblastoma trials. We are also going to be seeking to
extend our business partnerships around our technology and
development pipeline. We look forward to reporting further
achievements that add value for our shareholders in the
current year.
Barry Clare
Chairman
07 June 2022
STRATEGIC REPORT
CHIEF EXECUTIVE’S
REVIEW OF
PERFORMANCE
We have achieved a number
of key clinical and operational
achievements that will lead to
the commencement of two
clinical trials by the end of
the calendar year.
In the past year we have concentrated on the projects and
programmes for which we raised funds in March 2021, as a
result, it has been a busy year for the Company. In particular,
we have focused on pre-clinical projects, technology transfer
and scale-up of manufacturing, and preparations for two
clinical trials – a phase I volunteer study and a glioblastoma
efficacy study. The manufacturing programme was initiated
shortly after the funding was closed and has since been
completed. The pre-clinical programmes have been
progressed with some concluded, and we are in the late
stages of preparation for the two clinical trials. More detail
of this progress is described below.
Looking forward, the glioblastoma trial will follow on shortly
after the human volunteer study commences. The goal is
to generate sufficiently compelling efficacy data that a large
partner licenses the programme and progresses it into a
registration study(ies). Equally, the pre-clinical work in mBC
is designed to attract a partner to support the next clinical
development in this indication. At the same time, we will
continue seeking new partnerships and collaborations.
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CLINICAL STAGE PROGRAMMES
Metastatic breast cancer (“mBC”)
Breast cancer remains the biggest cause of cancer deaths
in women worldwide, and ER+ve/HER2-ve breast cancer
accounts for circa two thirds of all such cancers. The drugs
used increasingly in first line treatment of ER+ve/HER2-ve
mBC patients, being CDK4/6 inhibitors, which were first
approved for general use in the US in 2017 now have global
sales in excess of $5 billion per annum.
Evgen has generated encouraging data with SFX-01 in mBC
in a Phase II clinical trial. Since the commencement of this trial,
the class of drugs known as CDK4/6 inhibitors have
increasingly been adopted in these patients. Evgen is
broadening the investigation into how SFX-01, in combination
with other treatments, can improve outcomes for patients
with HR+ breast tumours that have become resistant to this
relatively new class of agents. This includes research into STAT3
and pSTAT3, a protein that controls transcription of information
from DNA to messenger RNA; and SHP2, a non-receptor
protein tyrosine phosphatase that is associated with many
cancers including breast cancer.
In particular, we are expanding our work with Professor Rob
Clarke at the Manchester Breast Centre with in-vitro pre-
clinical work to assess the impact of SFX-01 in CDK4/6 inhibitor
resistance models. An increasing body of in-vitro data from
these models shows that SFX-01 may suppress tumour growth
and metastasis in patients who have become resistant to
CDK4/6 inhibitors. Encouragingly, SFX-01 reduces the viability
and mammosphere colony formation of palbociclib-resistant
tumour cell lines in-vitro.
In addition, this extended collaboration will include in-vivo
models to provide the optimum support for clinical trial design
and/or licensing in patients with ER+ve/HER2-ve breast cancer,
where CDK4/6 inhibitors such as palbociclib are showing
weakening effectiveness. Evgen anticipates data from both
in-vitro and in-vivo work later in the year.
2022 Annual Report & Financial Statements
Evgen Pharma plc
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STRATEGIC REPORT
CHIEF EXECUTIVE’S
REVIEW OF
PERFORMANCE
CONTINUED
CLINICAL STAGE PROGRAMMES
CONTINUED
Glioma/glioblastoma
Our brain cancer programme progressed strongly in the last
year. Glioma is the most common form of brain tumour
affecting around 5 per 100,000 people. The more severe, grade
IV classification, glioblastoma, is a very serious form of malignant
brain tumour representing 45% of all cases and has a poor
prognosis with median survival of around 14 months. The five-
year survival of the severe grades is 5%. The therapeutic options
for glioma are limited to surgery, radiotherapy and the one
drug widely available, temozolomide. There is a clear unmet
need for more treatments for use in conjunction
with the current standard of care.
A collaboration with Dr Claudio Festuccia and colleagues at
the Universities of L’Aquila, Rome and Rieti, Italy has generated
highly positive data for SFX-01 in pre-clinical models of glioma
and glioblastoma. Using standard in-vitro and in-vivo
pre-clinical models as well as orthotopic models, where glioma
cells are implanted in brain tissue representing a more disease-
relevant model, both tumour shrinkage and significantly
extended survival times were demonstrated for SFX-01.
Furthermore, SFX-01 was also found to potentiate (i.e.
substantially increase) the therapeutic effect of radiotherapy in
these models. The first of two papers relating to this has been
published in a peer-reviewed journal and a second paper is
being finalised for submission. (Colapietro et al,
Pharmaceuticals, 2021, 14, 1082).
Further pre-clinical work conducted by Dr Euphemia Leung
and Prof Bruce Baguley of the University of Auckland, New
Zealand in GBM cells has been published in the pre-print
journal BioRxIV (Leung, Wright and Baguley, 2021). This in-vitro
data describes the effect of SFX-01 in GBM cells and 3D
spheroids from several patients in New Zealand, together with
the more commonly used commercially available cell lines.
3D spheroids are aggregations of tumour cells that more
closely reflect the structure of tumours in patients. In these
in-vitro experiments, SFX-01 demonstrated inhibition of
glioblastoma cell growth, supporting the results from the
work of Dr Festuccia.
In September 2021, we received the grant of Orphan Drug
Designation from the FDA in the US for Malignant Glioma,
affording the programme additional data protection and
other financial incentives.
We are now at a late stage in designing a Phase Ib/IIa clinical
study and liaising with potential trial sites in the UK and across
Europe. The trial is planned to commence in Q4 2022 and will
follow on shortly after the human volunteer study commences.
It is designed as a phase Ib/IIa, randomised, double-blind,
placebo-controlled trial with sequential modules that enable
the trial to be adapted as clinical data is generated. Initially
c.20 patients will be recruited; depending on results this may
increase by up to a further 70 patients to achieve proof of
concept in both methylated and unmethylated glioblastoma
patients. The goal is to generate sufficiently compelling
efficacy data to attract a partner to license the programme
and progress it into a registration study. Data from this trial
will be released during 2023.
Other clinical trials
An important use of proceeds from the fundraise completed
in March 2021 was to conduct a Phase I/Ib study in healthy
volunteers of our new SFX-01 formulation. The trial will be a
placebo-controlled, dose-escalating, randomised trial that
will assess the pharmacokinetic (how a drug is absorbed and
circulates in the body), and pharmacodynamic (how a drug
engages with our target molecules) properties of the new
form and formulation.
The overall design of the trial is now complete, a Clinical
Research Organisation has been contracted to recruit subjects
and conduct the trial, and a dialogue with the MHRA has
commenced. The intention is to start the trial in Q4 this year
as soon as the new tablet formulation of SFX-01 has been
finalised and manufactured in sufficient quantities. We expect
to announce the results during the first half of 2023.
As part of the UK’s initiative to fight the global COVID-19
pandemic, Evgen, Dundee University and NHS Tayside worked
together to assess SFX-01 in patients with respiratory distress
due to COVID-19 and other infective agents. The trial was
stopped when an analysis of the interim data did not show
sufficient efficacy; with hindsight, it is probable that the
patients enrolled had progressed too far and were too ill to
respond. However, the costs of the trial were limited because
they were mostly covered by the grant income, and as a
positive, the trial added 65 additional patients to our database
of safety and tolerability of SFX-01. Overall, we are proud that
we were part of the COVID-19 effort.
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2022 Annual Report & Financial Statements
STRATEGIC REPORT
CHIEF EXECUTIVE’S
REVIEW OF
PERFORMANCE
CONTINUED
PRE-CLINICAL PROGRAMMES
We continue to support academic research to broaden the
potential range of applications for SFX-01 and increase our
mechanistic understanding in these different disease areas.
Haematological malignancies
Pre-clinical data has demonstrated that SFX-01 is effective in
in-vitro models of certain blood cancers including Juvenile
Myelomonocytic Leukaemia (JMML) and Acute
Myelomonocytic Leukaemia (AML).
JMML is a very rare form of blood cancer that predominantly
affects young children. It is an aggressive and difficult to treat
disease and currently the only effective treatment for most
patients is allogeneic haematopoietic stem cell transplantation
(HSCT).
In a study at the MRC Weatherall Institute, University of Oxford,
the effect of SFX-01 on cells from tissue donated by patients
with JMML through the UK Paediatric MDS/JMML programme
was investigated. The data demonstrated significant reduction
of cell proliferation and increased apoptosis (cell death) of
JMML stem cells in the presence of SFX-01, compared to
normal controls. The study also showed that SFX-01
significantly impacted cell proliferation and increased
cytotoxicity in GDM-1 cells, an AML cell line.
Whilst this preliminary data is from a small sample size,
the effect is statistically significant in reducing cell proliferation
and increasing apoptosis. A preclinical and clinical strategy for
a development programme of SFX-01 in blood cancers such
as JMML and AML is being assessed.
Other cancers
We have agreed to support two academic groups that
have requested provision of SFX-01 for use in cancer models
of interest to them:
• A group at the University of Rome, Department of
Radiology and Radiotherapy wishes to investigate SFX-01
as a radio sensitising agent for the treatment of
Rhabdomyosarcoma, a rare juvenile cancer. This follows
the data generated at the University of L’Aquila showing
an enhanced effect from radiotherapy in GBM models
with administration of SFX-01. The data generated could
support the use of SFX-01 in radiotherapy more generally.
• A group at the University of Michigan wishes to investigate
SFX-01 for anti-inflammatory and anti-tumour activity in
two mouse models of colon cancer, as well as human
organoid models of familial adenomatous polyposis and
colorectal cancer.
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2022 Annual Report & Financial Statements
Evgen Pharma plc
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STRATEGIC REPORT
CHIEF EXECUTIVE’S
REVIEW OF
PERFORMANCE
CONTINUED
Outlicensing
With the expansion of the management team, we have
substantially increased our business development activities,
including attendances at a number of relevant conferences
and an ongoing dialogue with industry over potential in-
licensing and out-licensing transactions.
Our first commercial out-licensing deal was signed with
Juvenescence in September 2020. This was for a license to our
Sulforadex® sulforaphane stabilisation technology in a number
of non-pharmaceutical applications. JuvLife, the dietary
products and functional foods division of Juvenescence Ltd,
has since been making good progress with the development
of a naturally-sourced sulforaphane nutritional health
supplement, stabilised using our Sulforadex® technology.
In particular, it has identified a source of sulforaphane and
completed small scale batches of the complexed product
in a commercial facility. The scale-up process is now underway
to enable safety studies to commence.
We have supported this development with our expertise in
sulforaphane science and chemistry. Juvenescence is planning
a market launch around the end of 2023 which will yield
milestones of more than $1.5m at that point, with further sales-
related milestones and royalties to follow.
This agreement monetises one element of Evgen’s sulforaphane
technology platform within a timescale considerably shorter
than that typical of pharmaceutical development. It contains
provisions which ensure a clear differentiation between potential
nutritional health products and pharmaceutical products,
including limitations on daily dose.
We will continue to seek such partnerships and collaborations
around both core and non-core assets, including our
Sulforadex® technology.
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2022 Annual Report & Financial Statements
Manufacturing programme
A further use of proceeds from the March 2021 funding was
to transfer our production from a small facility in the US, where
the Sulforadex® IP was created, to a global pharmaceutical
manufacturer with the know-how and experience to scale-up
the production process from prototype to in-market. This has
been achieved to the point where a recent manufacturing run
achieved almost a 10x higher yield, in a process which has been
simplified and is significantly more cost-effective. In addition,
we have replaced the hand-filled capsules used previously
with an enteric-coated tablet formulation which can also be
produced at scale. Unlike the capsules, the tablets have a
coating which releases sulforaphane to a targeted part of the
intestine. This is expected to improve the pharmacokinetics
of SFX-01 and to minimise any gastro-intestinal side effects.
Furthermore, a new composition of matter filing has been
made which, if successful, would add a further 20 years of
patent life to the key patent family.
We are currently producing sufficient API, drug product
and placebo tablets to support multiple clinical trials.
People
During the year we have strengthened our senior
management team in two key roles: Dr Glen Clack has joined
as Chief Medical Officer and Dr Helen Kuhnman as Chief
Business Officer. Both are highly experienced in their fields
and we now have the senior level expertise we need to execute
our plans and programmes.
Outlook
Since the 2021 fundraise we have achieved a number of key
clinical and operational achievements that will lead to the
commencement of two clinical trials by the end of the
calendar year, with the generation of data during 2023.
Potentially we will also have pre-clinical data sets to support
further our breast cancer programme and that point to trials
in other indications. Our partner Juvenescence is progressing
well towards market launch around the end of 2023 and this
will provide commercial revenues to defray a material part
of our cost base. In the meantime, we will be advancing
preclinical studies and our business development strategy.
I would like to thank our shareholders for their continued
support and to the team for their efforts in driving the strategy
forward. We believe the next 12 months will be extremely busy
and that we will build further value.
Dr Huw Jones
Chief Executive Officer
07 June 2022
STRATEGIC REPORT
KEY PERFORMANCE
INDICATORS
Key Performance Indicators include a range of financial and other measures (such as clinical trial progress). Details about
the progress of our development programmes (non-financial measures) are included elsewhere in this Strategic Report,
and below are the other indicators (financial measures) considered pertinent to the business.
£9.0M
Cash position
short-term investments
and cash held on deposit:
(2021: £11.6m)
£2.6M
Net cash inflow
from operating activities
(before monies placed on
fixed term deposits)
(2021 : £2.9m)
£3.2M
Operating loss
(2021: £3.2m)
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2022
2021
£9.0m
2022
(£2.6m)
2022
£11.6m
2021
(£2.9m)
2021
2020 £4.1m
2020
(£2.6m)
2020
£3.2m
£3.2m
£3.2m
Year-end cash, short-term
investments and cash held on deposit
The decrease in year-end cash reflects
working capital, manufacturing,
pre-clinical and clinical expenditures
less receipt of the R&D tax credit
(£0.53m). There was no fundraising
activity in the year.
Net cash outflow from operating
activities (before monies placed on
fixed term deposits)
The net cash outflow reflects corporate
costs and the costs incurred in
manufacturing scale-up, pre-clinical
and clinical expenditures.
Operating loss
The operating loss reflects pre-clinical
and clinical activity in the year and
related product manufacturing costs.
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STRATEGIC REPORT
FINANCIAL REVIEW
S172 COMPANIES ACT
STATEMENT
The financial performance for the year ended
31 March 2022 was in line with expectations.
Losses
The total loss for the year was £2.7m (31 March 2021: £2.7m)
including a charge for share-based compensation of £0.1m
(2021 credit: £0.1m). Operating expenses excluding share-based
compensation were lower than in 2021 at £3.0m (2021: £3.5m)
reflecting completion of toxicology in the prior year and
reduced manufacturing technology transfer costs, offset in
part by an increase in payroll costs with the recruitment of
additional senior staff and preparatory work for the
forthcoming clinical trials.
Research and development (R&D) expenditure
Our external spend on R&D expenditure was £1.4m,
a reduction of £0.6m (31 March 2021: £2.0m) on the prior year.
This reflects the completion of the toxicology and technology
transfer costs noted above, and we expect R&D costs to
increase in the current year with manufacture of SFX-01 for the
planned clinical trials and the costs associated with such trials.
Share-based compensation
Accounting standards require a charge to be made against
the grant of share options and recognised in the Consolidated
Statement of Comprehensive Income. Where such options
lapse ahead of their vesting date the relevant charges are
written back. As a consequence of certain option lapses there
was an overall charge for the year in relation to share-based
payments of £0.1m (2021 credit: £0.11m), which has no impact
on cash flows.
Headcount
Average headcount of the Group for the year was 9 (2021: 8).
Taxation
The Group has elected to claim research and development tax
credits under the small or medium enterprise research and
development scheme of £0.44m (2021: £0.54m).
Share capital
No issues of shares were made during the year. At 31 March
2022 and 31 March 2021 there were 274,888,117 shares of 0.25p
each in issue.
Cash flows and financial position
The cash position (including short term deposits) at
31 March 2022 decreased to £9.0m (31 March 2021: £11.6m)
reflecting R&D and corporate costs, less £0.53m received
from R&D tax credits.
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The Directors acknowledge their duty under section 172
of the Companies Act 2006 and consider that they have,
both individually and collectively, acted in the way that,
in good faith, would be most likely to promote the success
of the Company for the benefit of all shareholders. In doing
so, the Directors have regard (amongst other matters) to:
• 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 relations
with suppliers, customers and others
• The impact of the Company’s operations
on the community and the environment
• The Company’s reputation for high standards
of business conduct
• The need to act fairly as between members
of the Company.
In particular given the size of Evgen:
Business reputation
The Group operates in a highly regulated sector and the Board
is committed to maintaining the highest standards of conduct
and corporate governance. Further details are set out in the
Corporate Governance Report on page 22.
Consequences of long-term decisions
The Board is responsible for decisions made for the long-term
success of the Group and the implementation of strategic,
operational and risk management decisions. Further
information on business strategy and developments during
the year are set out on pages 3 and 9-12.
Employee engagement
As a very small company in terms of staff, Board members
have multiple points of contact with staff; through Board
meeting feedback, participation in weekly management
meetings involving all staff, and ad hoc interactions in
relation to specific matters.
These forums provide staff with an opportunity to give their
views which can then be taken into account in making
decisions likely to affect their interests.
Specific matters of concern to them as employees are dealt
with in management meetings and by email. Corporate
developments and Company performance are discussed
weekly in management meetings.
All staff are eligible for the Group’s share option scheme and
this encourages involvement in the Company’s performance.
Stakeholder Engagement
The Group has a small number of major suppliers and
consultants that support its delivery of strategy and corporate
goals. The selection of, relationships with, and execution of,
contracted work by these parties is considered at least weekly
by the Executive Directors and at each Board meeting by all
Directors. Where appropriate, the Chairman and/ or non-
executive directors participate in engagement with these
parties, and where appropriate, Board members are involved
in meetings with such parties.
Community and Environment
The Board does not believe that the Group has a significant
impact on the communities and environment in which it
operates. The Board recognises that the Group has a duty
to minimise harm to the environment and to contribute as
far as possible to the local community in which it operates.
STRATEGIC REPORT
PRINCIPAL RISKS AND
UNCERTAINTIES
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Evgen is a biopharmaceutical company and, in common with other companies operating in the sector, is subject to a number
of risks. The principal risks and uncertainties identified by the Group for the year ending 31 March 2022 are set out below.
Risk Description
COVID-19 pandemic The Board is monitoring the impact of COVID-19 on the Group and its staff closely. To date,
the impact on our staff and programmes has been limited to some delays in pre-clinical
programmes because our scientific partners have had access to their laboratories restricted.
Continuation of the pandemic for further sustained periods may affect:
• Our ability to conduct and conclude partnering discussions
• Our ability to initiate and execute new clinical trials, whether sponsored by Evgen
• Completion of the current pre-clinical, clinical and production programmes
or Clinical Investigators
to agreed timelines.
Development The Group is at a relatively early stage of development and may not be successful in its efforts
to develop approved or marketable products. Technical risk is present at each stage of the
development process which is a highly regulated environment which presents technical and
operational risk. There can be no guarantee that the Group will be able to, or that it will be
commercially advantageous for the Group to, develop its Intellectual Property through
entering into licensing deals with pharmaceutical companies.
Commercial The biotechnology and pharmaceutical industries are very competitive. The Group’s competitors
include major multinational pharmaceutical companies, biotechnology companies and research
institutions. Many of its competitors have substantially greater financial, technical and other
resources. The Group’s competitors may succeed in developing, acquiring or licensing drug
product candidates that are more effective or less costly than those the Group is developing,
or may develop, and this may have a material adverse impact on the Group.
Regulatory The Group’s operations are subject to laws, regulatory approvals, and certain government
directives, recommendations and guidelines. There can be no assurance that future legislation
will not impose further government regulation which may adversely affect the business or
financial condition of the Group.
Intellectual property (IP) The Group’s success depends in part on its ability to obtain and maintain patent protection
for its technology and potential products in the United States, Europe and other countries.
If the Group is unable to obtain and maintain patent protection for its technology and potential
products, or if the scope of patent protection is not sufficiently broad, competitors could develop
and commercialise similar technology and products, which could materially affect the Group’s
ability to successfully commercialise its technology and potential products. The Group is exposed
to additional IP risks, including infringement of IP rights, involvement in lawsuits and the
inability to protect the confidentiality of its trade secrets which could have an adverse effect
on the success of the Group.
Financial The Group has a limited operating history, has incurred significant losses since its inception
and does not have any approved or revenue generating products. The Group expects to incur
losses for the foreseeable future, and there is no certainty that the business will generate a profit.
The Group may not be able to raise additional funds that will be required to support its product
development programs or commercialisation efforts, and any additional funds that are raised
may cause dilution to existing shareholders.
Operational The Group’s future development and prospects depend to a material extent on the experience,
performance and continued service of its senior management team including the Directors.
The Directors believe the senior management team is appropriately structured for the Group’s
size and stage of development and is not overly dependent on any one individual. The Group
has entered into contractual arrangements with these individuals with the aim of securing
the services of each of them. Retention of these services or the identification of suitable
replacements cannot be guaranteed. The loss of the service of any of the Directors or senior
management and the cost of recruiting replacements may have a material adverse effect
on the Group and its commercial and financial performance.
This report was approved by the Board of Directors on 07 June 2022 and signed on behalf of the Board of Directors by:
Dr Huw Jones
Chief Executive Officer
07 June 2022
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GOVERNANCE
PAGE TITLE
BREAST CANCER IS
THE LARGEST CAUSE
OF CANCER DEATHS IN
WOMEN WORLDWIDE.
In around 75% of breast cancers, the hormone oestrogen
plays a key part in tumour growth.
Evgen has generated encouraging data with SFX-01
in mBC in a Phase II clinical trial.
Image:
The crystalline form of SFX-01 as
captured by a scanning electron
microscope.
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GOVERNANCE
PAGE TITLE
GOVERNANCE
18 Board of Directors
20 Directors’ Report
22 Corporate Governance Report
24 Remuneration Committee Report
28 Audit Committee Report
29 Statement of Directors’ Responsibilities
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GOVERNANCE
BOARD OF DIRECTORS
BARRY CLARE
Chairman
DR HUW JONES
Chief Executive Officer
RICHARD MOULSON
Chief Financial Officer
Barry has over 30 years’ experience in
the healthcare sector. He was a former
main board director of the Boots
Company Plc, and CEO of Boots
Healthcare International. He is deputy
chairman of Manchester University NHS
Foundation Trust, the largest in England.
He established his own company Clarat
Healthcare LLP, and has engineered
several private equity backed healthcare
transactions and established several
early stage healthcare companies with
private and venture capital funding.
Huw has over 30 years’ experience
of leadership roles in public and private
R&D-based companies within the
biotechnology and pharmaceutical
sector, with a particular focus on pre-
clinical and clinical drug development,
dilutive and non-dilutive financing and
business development. He is Chairman
of Chronos Therapeutics Ltd, Non-
Executive Director of IxaKa Ltd (formerly
Rexgenero) and Strategic Advisor to
Gen2 Neuroscience Ltd. Huw holds a
PhD in pharmacology from the
University of Birmingham, UK.
Richard is a qualified chartered
accountant with over 25 years’ post-
qualification experience working as
a chief financial officer for UK quoted
and private equity and venture capital
owned companies. Richard trained with
Coopers & Lybrand and spent 10 years
with Deutsche Morgan Grenfell
in corporate finance working on
fundraisings, IPOs and M&A transactions
in the UK and internationally. He has
considerable life science experience in
companies including Intercytex Group
Plc, ReNeuron Group plc and Cobra
Therapeutics.
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GOVERNANCE
BOARD OF DIRECTORS
CONTINUED
DR SUSAN FODEN
Non-Executive Director and Senior
Independent Director
Susan has broad experience in executive
and non-executive roles at both public
and private companies and at funding
organisations. She was previously Senior
Independent Director and Chair of the
Remuneration Committee at Vectura
plc, Non-Executive Director of BTG plc
(through to their acquisition by Boston
Scientific) and is a former Chair of
BerGenBio AS. She is currently Chair
of Neurocentrx, a Non-Executive director
of QBiotics and is a member of the
Investment Committee for CD3, the joint
drug discovery initiative between the
University of Leuven & the European
Investment Fund (EIF). She studied
biochemistry at the University of Oxford,
obtaining an MA and a DPhil.
DR ALAN BARGE
Non-Executive Director
SUSAN CLEMENT-DAVIES
Non-Executive Director
Alan is a Venture Partner at Delin
Ventures and is the former chief medical
officer of Singapore-based ASLAN
Pharmaceuticals PTE. Up until 2011,
he was vice-president and head of
oncology & infection at AstraZeneca,
a role in which he was responsible for
the overall strategy in oncology and
infection from drug discovery to proof-
of-concept. He was also chairman of
AstraZeneca’s Therapy Area Portfolio
Team and accountable for the design
and delivery of all projects, including
budgetary oversight. Prior to his career
at AstraZeneca, Alan was European and
global medical director for Amgen Inc.
Susan is an experienced life sciences
financier with over 25 years of capital
markets and investment banking
experience, including Managing
Director of Equity Capital Markets at
Citigroup/Salomon Smith Barney and
most recently at Torreya Partners.
Susan is currently Non-Executive
Director of MiNA Therapeutics,
Non-Executive Director and Chair of the
Audit Committee of Scancell Holdings
PLC, Non-Executive Director of
Exploristics, Advisor to Oxford Science
Enterprises and Member of the CW+
NHS Hospital Innovation Advisory Board.
Susan has a BSc in Economics from
University College London and a MSc
in Economics.
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Research and Development
The Group is continuing to research products
in its chosen area.
Employee involvement
Employee involvement in the overall performance of the
Group is encouraged through both formal and informal
meetings which deal with a range of matters including the
Group’s financial performance, development progress and
health and safety. Copies of the Annual Report and Interim
Report are made available to all employees.
Political donations
The Group made no political donations in the current
or prior year.
Authority to issue shares
At the Annual General Meeting on 21 July 2022 authority
will be sought from shareholders to allow the Directors
to allot relevant securities up to an aggregate nominal value
of £229,073 representing one-third of the issued share capital,
and to allot for cash equity securities having a nominal value
not exceeding in aggregate £137,444 (being 20% of the issued
share capital).
Substantial shareholdings
At 07 June 2022, the Company had received notification from
the following financial institutions of their and their clients’
interest in the following disclosable holdings, which represent
3% or more of the voting rights of the issued share capital of
the Company:
Number of % of issued
Major Shareholders shares held share capital
JR Kight 33,100,000 12.0%
AXA Framlington Investment
Management Limited 23,848,884 8.7%
Octopus Investments 21,875,000 8.0%
North West Funds (Biomedical) LP 16,186,446 5.9%
Seneca Investment Managers 14,932,071 5.4%
Chelverton Asset Management 12,500,000 4.5%
RAB Capital 8,750,000 3.2%
Newlands Capital 8,314,815 3.0%
GOVERNANCE
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 MARCH 2022
Financial Statements
The Directors of Evgen Pharma plc (registered in England
and Wales: 09246681) present their report together with the
audited consolidated financial statements and the Company
financial statements for the year ended 31 March 2022.
Directors
The Directors of the Company who served during the year
and up to the date of this report, unless otherwise indicated,
are as follows:
Capacity
Huw Jones Chief Executive Officer
Appointed 1 October 2021
Barry Clare Chairman
Appointed 2 October 2014
Richard Moulson Chief Financial Officer
Appointed 17 January 2017
Susan Foden Non-Executive and Senior
Independent Director
Appointed 21 November 2014
Alan Barge Non-Executive Director
Appointed 21 October 2015
Susan Clement-Davies Non-Executive Director
Appointed 1 November 2018
Biographical details of Evgen’s Directors are shown
on pages 18-19.
The Group maintained Directors’ and Officers’ liability
insurance cover throughout the year and the prior year.
Principal activities of the Group
Details of current and future trading as well as the principal
risks and uncertainties are included in the Strategic Report
on pages 8-5.
Business Review and Key Performance Indicators
The review of the business, future trading and key
performance indicators are covered in the Strategic Report
on pages 8-15.
Financial results and dividends
The Group’s results for the year ended 31 March 2022 are
presented on page 36. The Group’s net loss after tax for the
year was £2.7m (2021: £2.7m). No dividends have been paid in
this or the prior year and there have been no significant post
balance sheet events. Details of financial instruments are set
out in Note 18.
Directors’ interests in share options
Details of Directors’ interests in shares, share options
and service contracts are shown in the Directors’
Remuneration Report.
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GOVERNANCE
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 MARCH 2022
CONTINUED
Going concern
At 31 March 2022, the Group had cash and cash equivalents,
including short-term investments and cash on deposit,
of £9.0 million.
Independent Auditors
RSM UK Audit LLP have expressed their willingness
to continue in office as auditors for the year. A resolution
to reappoint them will be presented at the forthcoming AGM.
Annual General Meeting
The notice convening and giving details of the 2022 AGM
of the Company at Alderley Park, Congleton Road,
Nether Alderley, Cheshire, SK10 4TG on 21 July 2022 has been
sent to shareholders. If the laws and the UK Government’s
guidance regarding the COVID-19 pandemic which are current
on 21 July 2022 include the enforcement of social distancing
and restrict indoor meetings, shareholders will not be
permitted to attend the AGM and this will be held as a
closed meeting as in 2021.
In the event that disruption to the 2022 AGM becomes
unavoidable, we will announce any changes to the AGM as
soon as practicably possible through the Company’s website.
Approved by the Board of Directors and signed on behalf
of the Board.
Barry Clare
Chairman
07 June 2022
The Directors have prepared detailed financial forecasts and
cash flows looking beyond 12 months from the date of the
approval of these financial statements. In developing these
forecasts, the Directors have made assumptions based upon
their view of the current and future economic conditions that
will prevail over the forecast period.
The Directors estimate that the cash held by the Group
together with known receivables will be sufficient to support
the current level of activities to the fourth quarter of 2023.
They have therefore prepared the financial statements
on a going concern basis.
Strategic Report
The information required by schedule 7 of the Large and Medium-
sized Companies and Groups (Accounts and Reports) Regulations
2008 has been included in the separate Strategic Report in
accordance with section 414C (11) of the Companies Act 2006
(Strategic Report and Directors’ Reports) Regulations 2013.
Disclosure of information to auditor
In the case of each of the persons who are Directors
of the Company at the date when this report is approved:
• so far as each of the Directors is aware, there is no relevant
audit information (as defined in the Companies Act 2006)
of which the Company’s auditor so far as each of the
Directors is aware, there is no relevant audit information
(as defined in the Companies Act 2006) of which the
Company’s auditor are unaware; and
• each of the Directors has taken all steps that he/she ought
to have taken as a Director to make himself/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.
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GOVERNANCE
CORPORATE
GOVERNANCE REPORT
The Board applies the Quoted Companies Alliance (“QCA”)
Corporate Governance Code (to the extent practical given the
Group’s size and stage of development). The Directors support
high standards of corporate governance and regard the QCA
Code as appropriate to its stage of development. Evgen’s
strategy and business model is set out in the Strategic Report
on page 3.
Details of the role and activities of the Audit and Remuneration
Committees are set out in subsequent sections of this report.
Full details of our Corporate Governance approach can
be found on our website: www.evgen.com.
Board Structure
The Board is responsible to shareholders for the proper
management of the Group. A statement of Directors’
responsibilities is set out on page 29.
The Chairman and Non-Executive Directors have a particular
responsibility to ensure that the strategies proposed by the
Executive Directors are fully considered. The Board currently
comprises a Chairman, two Executive Directors and three Non-
Executive Directors. The Board considers all the Non-Executive
Directors to be independent. The Chairman and Non-Executive
Directors receive a fee for their services. The Board holds
regular meetings and is responsible for formulating, reviewing
and approving the Group’s strategy, budgets and corporate
actions and overseeing the Group’s progress to its goals.
The Board collectively has considerable experience in scientific,
operational and financial development of biopharmaceutical
companies. The experience, personal qualities and skills of the
Directors are set out on pages 18-19. The Directors regularly
review the composition of the Board to ensure that it has the
necessary breadth and depth of skills to support the ongoing
development of the Group.
The Chairman and Non-Executive Directors maintain their
skillsets through a combination of other executive, non-
executive and advisory roles. In addition, knowledge is kept
up to date on key issues and developments pertaining to the
Group, and corporate governance matters, through updates
from the Executive Directors and various external advisers.
Board Committees
The Board has established Audit and Remuneration Committees
of the Board with formally delegated duties and responsibilities.
The membership and activity of these Committees is discussed
in more detail in their respective reports.
Group culture
The Board seeks to maintain the highest standards of integrity
and probity in the conduct of the Group’s operations.
These values are enshrined in the working practices adopted
by all employees in the Group and consistent with the Group’s
strategy; they reflect the high ethical and regulatory
compliance required of a biopharmaceutical business.
The small number of staff within the Group allows for an open
culture to be maintained with weekly communication to staff
regarding progress, and staff feedback is regularly sought.
Non-Executive Directors have frequent contact with various
staff members and are able to monitor culture accordingly.
The Group is committed to providing a safe environment for
its staff and all other parties for which the Group has a legal or
moral responsibility in this area. Health and Safety is a standing
agenda item at all Board meetings with any incidents reported
at these meetings.
Frequency of, and attendance at, meetings
During the year the Group held formal Board meetings,
Audit Committee meetings and Remuneration Committee
meetings with attendance at these meetings as follows:
Board Audit Remuneration
Committee Meetings Committee Committee
Huw Jones 8/8 N/A N/A
Barry Clare 8/8 N/A 3/3
Richard Moulson 8/8 N/A N/A
Susan Foden 8/8 3/3 3/3
Alan Barge 7/8 3/3 3/3
Susan Clement-Davies 8/8 3/3 2/2
Alan Barge, Sue Foden and Susan Clement-Davies are
considered to be independent Non-Executive Directors.
These Directors are required to work a minimum of two
days per month.
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GOVERNANCE
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GOVERNANCE REPORT
CONTINUED
Risk Management and Control
The Board is responsible for the systems of risk management
and internal control and for reviewing their effectiveness.
The internal controls are designed to manage rather than
eliminate risk and provide reasonable but not absolute
assurance against material misstatement or loss. Through the
activities of the Audit Committee, the effectiveness of these
internal controls is reviewed annually.
The Group operates in an inherently high risk and heavily
regulated sector and this is reflected in the principal risks
and uncertainties set out on pages 15.
The Group maintains a risk register to monitor the various
operating, financial, commercial and strategic risks faced
by the business. This is reviewed and discussed at each
monthly Board meeting.
A comprehensive budgeting process is completed once
a year and is reviewed and approved by the Board. The Group’s
results, compared with the budget, are reported to the Board
at each monthly Board meeting.
The Group maintains appropriate insurance cover in respect
of actions taken against the Directors because of their roles,
as well as against material loss or claims against the Group.
The insured values and type of cover are comprehensively
reviewed on a periodic basis.
The senior management team meet weekly to monitor
clinical progress and to consider new risks and opportunities
presented to the Group, communicating and advising the
Board as appropriate.
Corporate Social Responsibility
The Board recognises the growing awareness of social,
environmental and ethical matters and it endeavours to take
into account the interest of the Group’s stakeholders, including
its investors, employees, suppliers and business partners, when
operating the business.
Employment
The Board recognises its legal responsibility to ensure the well-
being, safety and welfare of its employees and maintain a safe
and healthy working environment for them and for its visitors.
Relations with shareholders
The Board recognises the importance of communication with
its shareholders to ensure that its strategy and performance
is understood and that it remains accountable to shareholders.
Our website has a section dedicated to investor matters and
provides useful information for the Company’s owners.
The Board as a whole is responsible for ensuring that a
satisfactory dialogue with shareholders takes place, while the
Chairman and CEO ensure that the views of the shareholders
are communicated to the Board as a whole. The Board ensures
that the Group’s strategic plans have been carefully reviewed
in terms of their ability to deliver long-term shareholders value.
Fully audited Annual Reports are published, and Interim
Results statements notified via Regulatory Information Service
announcements. All financial reports and statements are
available on the Company’s website.
Shareholders are welcome to attend the Group’s AGM,
at which they will have the opportunity to meet the Board.
All shareholders will have at least 21 days’ notice of the AGM
at which the Directors will be available to discuss aspects of the
Group’s performance and to receive questions. If the laws and
the UK Government’s guidance regarding the COVID-19
pandemic which are current on Thursday 21 July 2022 include
the enforcement of social distancing and restrict indoor
meetings, shareholders will not be permitted to attend the
AGM and this will be held as a closed meeting as in 2021.
In the event that disruption to the 2022 AGM becomes
unavoidable, we will announce any changes to the AGM as
soon as practicably possible through the Company’s website.
Board Performance
The Board has engaged an independent third party
organisation to manage a process for review of its
performance, that of its committees and individual Directors,
including the Chairman. The results of the evaluation process,
which is ongoing, will be analysed and reported back to the
Board for subsequent follow-up.
The Board may utilise the results of the evaluation process
when considering the adequacy of the composition of the
Board and for succession planning.
Appraisals are carried out annually with all Executive Directors.
Barry Clare
Chairman
07 June 2022
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GOVERNANCE
REMUNERATION COMMITTEE REPORT
The members of the Remuneration Committee are Susan Foden, Barry Clare and Susan Clement-Davies. Susan Foden
is the Chair of the Remuneration Committee. During the year Susan Clement-Davies joined the Committee and
Alan Barge stepped down.
The responsibilities of the Committee include the following:
• Determining and agreeing with the Board the remuneration policy for the Company.
• Determining remuneration structures through which the policy is implemented.
• Conducting an annual salary review and determining the actual annual remuneration for the Executive Directors.
• Reviewing the remuneration of the Chairman of the Board and recommending any changes thereto.
Our aim is to deliver a remuneration programme that rewards both achievement of short-term goals and fulfilment
of our longer-term objectives in realising the clinical and commercial potential of Sulforadex®.
The remuneration policy is the responsibility of the Remuneration Committee, a sub-committee of the Board. The Executive
Directors attend meetings by invitation but no Director is involved in discussions relating to their own remuneration.
We recognise the need to retain and motivate our Executive Directors and senior management team and the need to avoid
making remuneration decisions solely based on shorter-term volatility. Accordingly, we include two performance-based elements
in our remuneration programme; a short term annual bonus programme, with pay-out based on achievement against pre-set
personal and corporate goals for that year; and a long-term equity-based programme of share options, vesting after three years
for the most part subject to the achievement of substantial, longer-term strategic objectives.
Remuneration Policy for Executive Directors
The Remuneration Committee sets a remuneration policy that through competitive salaries and short-term incentives by way
of annual bonus aims to align remuneration with the attraction and retention of the best talent for the benefit of the Group,
and incentivises and retains key employees by way of a longer-term element of reward aligned with shareholder interest
and share price performance.
Since IPO Evgen has operated the following share plans:
• Evgen Deferred Bonus Plan (DBP)
• Evgen Long Term Incentive Plan (LTIP)
These plans are intended to maintain remuneration policy in line with market practice for an AIM listed company and ensure
alignment between the reward strategy and business strategy. The Committee will continue to review the remuneration policy
on a regular basis to ensure it remains fit for purpose for the Company, drives high levels of executive performance and remains
competitive in the market.
The remuneration of the Executive Directors during the year ended 31 March 2022 is set out below:
Basic salary
Basic salaries are reviewed annually, with reference to independent salary surveys based on a cohort of comparable AIM-listed
life science companies.
The purpose of the base salary is to:
• reflect market rates to support the recruitment and retention of key individuals;
• reflect the individual’s experience, role and contribution with the Group;
• ensure that the Executive Directors are fairly rewarded for carrying out their duties.
Short term incentives – Annual Bonus
Executive Directors participate in a contractual bonus scheme under which they are eligible to receive a maximum annual bonus
of 50% of salary. Other employees are entitled to bonus awards under the plan at lower percentages of salary. Annual bonus
entitlements are based on the achievement of pre-set Group corporate goals and personal performance targets.
Performance targets for the financial year ending 31 March 2022 were set by the Remuneration Committee and include Group
corporate and personal performance targets.
The Remuneration Committee considers that the targets support the business strategy, and that bonus arrangements represent
an important element of the performance-related pay for the Executive Directors.
A proportion of the bonus payable to the Executives may be paid in cash and a proportion may be paid in shares through
the Deferred Bonus Plan adopted by the Company at the time of IPO. The Committee determines on an annual basis the level
of deferral of the bonus payment into Company share awards in the form of nil cost options up to a maximum of 50% of the
bonus earned. DBP awards vest at the end of a three-year period from the relevant date of grant.
Benefits
Benefits in the form of pension contributions, private medical insurance and death in service insurance are provided
to Executive Directors.
24 Evgen Pharma plc
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GOVERNANCE
REMUNERATION COMMITTEE REPORT
CONTINUED
Long term incentives – Share Option Awards
Share Plans Operated Prior to Admission
Prior to Admission the Company granted share awards under stand-alone option agreements as well as operating
the following share plans:
• Evgen 2008 Share Option Scheme
• Evgen Limited Enterprise Management Incentive Plan
Further details of outstanding options under these arrangements are as set out on page 27.
Long Term Incentive Plan
On IPO in 2015 the Company adopted an LTIP that aligns the interest of Executive Directors with those of shareholders
and on an ongoing basis forms a significant part of performance-related pay.
The maximum annual individual limit under the terms of the LTIP is 100% of salary, although awards up to 150% of salary
may be awarded in exceptional circumstances. Share awards will normally vest over a three-year period subject to the
achievement of stretching performance targets.
Up to January 2019 vesting conditions were based solely on measures of absolute shareholder return. All awards made between
IPO and January 2019 have since lapsed in accordance with the terms of the LTIP, and potentially the July 2019 awards will also,
as the criteria for the vesting of granted options were not or are unlikely to be met.
In the opinion of the Remuneration Committee, whilst this outcome is a fair reflection of the share price performance since IPO this
does not fulfil the aims of the LTIP to retain and incentivise key staff nor allow them to build a meaningful stake in the Company.
Taking all this into consideration, the Remuneration Committee recommended that the reward structure and performance
criteria for LTIP awards made subsequent to the 2020 AGM be rebased, such that they offer a realistic chance of vesting.
Accordingly, and following advice from external experts, the Remuneration Committee adjusted the performance criteria
to a combination of relative shareholder return and achievement of corporate objectives (October 2020 grants), and in addition
an element of time-vesting (December 2021 grants). October 2020 grant vesting is subject to a total shareholder return measured
against an index of comparator companies (70%), and delivery of strategic corporate objectives (30%). For December 2021 grants,
vesting is subject to a similar total shareholder return metric (30%), delivery of strategic corporate objectives (40%) and time-
vesting 3 years from grant (30%). The aim of these changes is to continue to align management and shareholders whilst
providing more relevant measures of performance. They will be kept under review.
Pension
The Group pays pension contributions for Executive Directors and employees into personal pension schemes.
Executive Directors’ service contracts and termination provisions
The service contracts of Executive Directors are approved by the Board. The service contracts may be terminated
by either party giving 6 months’ notice to the other. The details are summarised below:
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Date of Contract Notice period
Huw Jones 1 October 2020 6 months
Richard Moulson 17 January 2017 6 months
Non-Executive Directors
Non-Executive Directors have entered into Letters of Appointment with the Company, with the Board determining the fees with
regard to market comparatives and similar businesses. The Non-Executive Directors do not participate in the Group’s pension or
bonus schemes. Awards under stand-alone option agreements may be made in special circumstances. Appointments are
terminable on one month’s notice by either party.
As set out below the Chairman and Non-Executive Directors were awarded non-LTIP options in 2020 as compensation
for additional duties undertaken pending appointment of the new CEO. The contractual terms for Non-Executive Directors
are reviewed by the Board annually. Current contracts are set out below:
Date of Appointment Initial term
Barry Clare 14 October 2015 1 months’ notice
Susan Foden 14 October 2015 Three years
Alan Barge 14 October 2015 Three years
Susan Clement-Davies 1 November 2018 Three years
Non-Executive Directors are typically expected to serve two three-year terms but may be invited by the Board to serve
for an additional period. Alan Barge and Susan Foden were invited by the Board to continue as Directors following completion
of their three-year terms.
2022 Annual Report & Financial Statements
Evgen Pharma plc
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GOVERNANCE
REMUNERATION COMMITTEE REPORT
CONTINUED
Directors’ remuneration during the year ended 31 March 2022
The Directors received the following remuneration during the year:
Total year Total year
ended ended
Salaries Taxable Pension 31 March Salaries Taxable Pension 31 March
and fees benefits Bonuses contributions 2022 and fees benefits Bonuses contributions 2021
£ £ £ £ £ £ £ £ £ £
Executive
Huw Jones 188,000 4,260 37,500 10,000 239,760 88,000 2,043 41,360 5,000 136,403
Richard Moulson* 82,890 6,594 15,732 — 105,216 76,975 5,286 25,023 — 107,284
Non-Executive
Barry Clare 45,810 — — — 45,810 45,810 — — — 45,810
Susan Foden 26,977 — — — 26,977 26,977 — — — 26,977
Alan Barge 22,905 — — — 22,905 22,905 — — — 22,905
Susan Clement-Davies 26,977 — — — 26,977 26,977 — — — 26,977
393,559 10,854 53,232 10,000 467,645 287,644 7,329 66,383 5,000 366,356
In the year to 31 March 2021 Stephen Franklin received total remuneration of £180,278; he resigned from Evgen in April 2020.
No Directors waived emoluments in the period ended 31 March 2022.
* Includes fees of £15,995 (2021: £19,225) paid to FD Consult Ltd, a related party as detailed in Note 19.
Directors’ shareholdings
The Directors, together with their beneficial interest in the shares of the Company are as follows:
At 31 March At 31 March
Ordinary shares of 0.25p each 2022 2021
Executive
Huw Jones 62,500 62,500
Richard Moulson 45,454 45,454
Non-Executive
Barry Clare* 1,023,441 1,023,441
Susan Foden 125,000 125,000
Alan Barge — —
Susan Clement-Davies — —
* Of the ordinary shares set out above Barry Clare is indirectly interested in 592,508 (2021: 592,508) ordinary shares
in the Company held by Clarat Partners LLP by virtue of being a member of Clarat Partners LLP.
Bonus
In recognition of the achievement of stretching corporate and personal objectives set at the beginning of the year, the Committee
determined to pay cash bonuses to the Executive Directors following pre-agreed maxima. In each case, bearing in mind overall
share price performance during the year, the Committee determined to use downward discretion in confirming individual bonus
awards and thus the actual bonus payments made were adjusted downwards. The resultant amounts are set out in the table above.
Benefits/Pensions
Details of payments in respect of benefits and pensions arrangements for the Executive Directors are set out in the table above.
26 Evgen Pharma plc
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GOVERNANCE
REMUNERATION COMMITTEE REPORT
CONTINUED
Directors’ Share Options
Share options may be granted under the LTIP as follows:
• An initial award to Executive Directors on joining the Company to support the recruitment and drive retention.
• An annual award to Executive Directors and other staff members to be made around the time of the AGM.
In relation to existing LTIP awards made in July 2019, vesting is on a straight-line basis by reference to TSR where 25% vest if TSR
is 10% from the date of grant and 100% vest if it is 20%; if TSR is less than 10% these options will lapse.
For awards made in October 2020, the quantum of options vesting at 3 years will be based on relative shareholder return against
a basket of comparable companies and achievement of specified corporate goals. The former will account for up to 70% of the
total with nil vesting at below median performance, 25% vesting at median and then on a straight-line basis up to 100% vesting
at upper quartile performance. Achievement of corporate goals will account for up to 30% of the total with the proviso that no
awards will vest unless at least median shareholder return is achieved. For December 2021 grants, vesting is subject to a similar
total shareholder return metric (30%), delivery of strategic corporate objectives (40%) and time-vesting 3 years from grant (30%).
In October 2020, on the recommendation of the Chairman and approval by the Executive Directors, nil cost options were
granted to the NEDs by way of unapproved option agreements as payment in kind for additional services provided during
the period when the Company was without a CEO. Following recommendation by the Remuneration Committee a similar
award was made to the Chairman of the Board. These options are subject to the same performance conditions governing
the LTIP awards as set out above.
Details of the awards together with outstanding options granted to the Executive Directors prior to Admission
are set out in the table below.
At Granted Lapsed Exercised Price Date from
Date of At 1 April during during during At 31 March per share which Expiry
Director Plan grant 2021 the period the period the period 2022 (pence) exercisable Date
Huw Jones LTIP* 5 Oct 2020 2,978,004 — — — 2,978,004 Nil 5 Oct 2023 5 Oct 2030
LTIP** 8 Dec 2021 — 1,670,886 — — 1,670,886 Nil 13 July 2024 13 July 2031
2,978,004 1,670,886 — — 4,648,890
Barry Clare Pre IPO 25 Nov 2011 272,000 — (272,000) — — 5.0000 31 Aug 2013 24 Nov 2021
Pre IPO 14 Aug 2013 224,800 — — — 224,800 10.6150 14 Aug 2015 13 Aug 2023
LTIP 21 Oct 2015 145,945 — — — 145,945 Nil 21 Oct 2015 20 Oct 2025
LTIP 21 Oct 2015 145,946 — — — 145,946 Nil 21 Oct 2016 20 Oct 2025
Non-LTIP 5 Oct 2020 380,711 — — — 380,711 Nil 5 Oct 2023 5 Oct 2030
Non-LTIP 20 July 2021 — 289,937 — — 289,937 Nil 20 July 2024 20 July 2031
1,169,402 289,937 (272,000) — 1,187,339
Richard Moulson LTIP 28 Jan 2019 155,682 — — — 155,682 Nil 28 Jan 2022 27 Jan 2029
LTIP 18 Jul 2019 202,608 — — — 202,608 Nil 18 Jul 2022 18 Jul 2029
LTIP 5 Oct 2020 337,817 — — — 337,817 Nil 5 Oct 2023 5 Oct 2030
LTIP** 8 Dec 2021 — 552,911 — 552,911 Nil 13 July 2024 13 July 2031
696,107 552,911 — — 1,249,018
Susan Foden Pre IPO 25 Nov 2011 136,000 — (136,000) — 5.0000 31 Aug 2013 24 Nov 2021
Non-LTIP 5 Oct 2020 112,098 — — — 112,098 Nil 5 Oct 2023 5 Oct 2030
248,098 — (136,000) — 112,098
Alan Barge Pre IPO 1 May 2012 272,000 — — — 272,000 5.0000 1 May 2014 1 May 2022
Non-LTIP 5 Oct 2020 95,178 — — — 95,178 Nil 5 Oct 2023 5 Oct 2030
367,178 — — — 367,178
Susan Clement-Davies Non-LTIP 5 Oct 2020 110,690 — — — 110,690 Nil 5 Oct 2023 5 Oct 2030
5,569,479 2,513,734 (408,000) — 7,675,213
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* Options over 1,489,002 awarded to Dr Jones will vest if, over the relevant performance period, the Board determine that his performance as Chief Executive Officer
has been satisfactory. Performance related to corporate objectives or relative shareholder return will not be considered for these options.
** Options were originally awarded on 13 July 2021, but cancelled and re-awarded on 8 December 2021 in order
to qualify for EMI relief. All terms, including exercise and expiry dates were unchanged.
Susan Foden
Remuneration Committee Chair
07 June 2022
2022 Annual Report & Financial Statements
Evgen Pharma plc
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GOVERNANCE
AUDIT COMMITTEE REPORT
During the year ended 31 March 2022, the Audit Committee
met three times. The Committee reviewed and approved
the financial statements for the year ended 31 March 2022,
the interim results for the six months to 30 September 2021
and the external auditor’s plan for the 2022 external audit.
The Audit Committee has satisfied itself that the external
auditor is independent. The Audit Committee has concluded
that the external audit process was effective, that the scope
of the audit was appropriate and that significant judgements
have been robustly challenged. No significant issues have
been reported by the auditor.
The Audit Committee does not believe it necessary
at this time to propose re-tendering of the audit contract.
A resolution for the reappointment of RSM as the statutory
auditor will be proposed at the forthcoming Annual General
Meeting. No formal recommendations other than the approval
of the Interim Statement and Annual Report and Accounts
have been made to the Board by the Audit Committee.
Susan Clement-Davies
Audit Committee Chair
07 June 2022
The Audit Committee is a subcommittee of the Board and
is responsible for ensuring effective governance over financial
reporting and internal controls. The Committee represents
the interests of the shareholders in relation to the integrity
of information and the effectiveness of audit processes in
place. The members of the Audit Committee are Susan
Clement-Davies (Chair), Susan Foden and Alan Barge.
The responsibilities of the Committee include the following
• Monitoring the integrity of the financial statements
of the Group
• Reviewing the accounting policies, accounting treatments
and disclosures in the financial statements
• Reviewing the Group’s internal financial controls and risk
management systems
• Overseeing the Group’s relationship with external auditors,
including making recommendations to the Board as to the
appointment or re-appointment of the external auditors,
reviewing their terms of engagement, and monitoring
the external auditors’ independence, objectivity and
effectiveness.
The Audit Committee normally meets at least three times a
year with time allowed for discussion without any members of
the executive team being present, to allow the external auditor
to raise any issues of concern. Audit Committee meetings may
be attended, by invitation, by the Chief Financial Officer and
other Directors and by the Group’s auditors.
The Committee has responsibility for, amongst other things,
planning and reviewing the Annual Report and Accounts and
Interim Statements involving, where appropriate, the external
auditors. The Committee also approves external auditors’ fees
and ensures the auditors’ independence as well as focusing
on compliance with legal requirements and accounting
standards. It is also responsible for ensuring that an effective
system of internal control is maintained. The ultimate
responsibility for reviewing and approving the annual financial
statements and interim statements remains with the Board.
28 Evgen Pharma plc
2022 Annual Report & Financial Statements
GOVERNANCE
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
The directors are responsible for preparing the Strategic
Report, the Directors’ Report and the financial statements
in accordance with applicable law and regulations.
In preparing each of the group and company financial
statements, the directors are required to:
a. select suitable accounting policies and then apply
Company law requires the directors to prepare group and
company financial statements for each financial year.
The directors have elected under company law and are
required by the AIM Rules of the London Stock Exchange
to prepare the group financial statements in accordance with
UK-adopted International Accounting Standards and have
elected under company law to prepare the company financial
statements in accordance with UK-adopted International
Accounting Standards and applicable law.
The group and company financial statements are required
by law and UK-adopted International Accounting Standards
to present fairly the financial position of the group and the
company and the financial performance of the group.
The Companies Act 2006 provides in relation to such financial
statements that references in the relevant part of that Act to
financial statements giving a true and fair view are references
to their achieving a fair presentation.
Under company law the directors must not approve
the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the group
and the company and of the profit or loss of the group for
that period.
them consistently;
b. make judgements and accounting estimates that
are reasonable and prudent;
c. state whether they have been prepared in accordance
with UK-adopted International Accounting Standards;
d. prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the group
and the company will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and
the company’s transactions and disclose with reasonable
accuracy at any time the financial position of the group and
the company and enable them to ensure that the financial
statements comply with the requirements of the Companies
Act 2006. They are also responsible for safeguarding the assets
of the group and 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
Evgen Pharma plc website.
Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
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FINANCIAL STATEMENTS
EVGEN IS FOCUSED
ON DEVELOPING
PRODUCTS TO TACKLE
DISEASES WHERE THERE
IS A HIGH UNMET NEED.
Pre-clinical data has demonstrated that SFX-01 is effective in in-vitro
models of certain blood cancers including Juvenile Myelomonocytic
Leukaemia (JMML) and Acute Myelomonocytic Leukaemia (AML).
JMML is a rare form of blood cancer that predominantly affects young
children. JMML is an aggressive and difficult to treat disease and
currently the only effective treatment for most patients is allogeneic
hematopoietic stem cell transplantation (HSCT).
Image:
Immunofluorescence of multiple
human tumour metastatic cells
growing in tissue culture for
research purposes.
30 Evgen Pharma plc
2022 Annual Report & Financial Statements
FINANCIAL STATEMENTS
FINANCIAL
STATEMENTS
32 Independent Auditors’ Report
36 Consolidated Statement of Comprehensive Income
37 Consolidated and Company Statements of Financial Position
38 Consolidated Statement of Changes in Equity
39 Company Statement of Changes in Equity
40 Consolidated and Company Statements of Cash Flows
41 Notes to the Financial Statements
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FINANCIAL STATEMENTS
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF EVGEN PHARMA PLC
Opinion
We have audited the financial statements of Evgen Pharma plc (the ‘parent company’) and its subsidiary (the ‘group’) for the
year ended 31 March 2022 which comprise the consolidated statement of comprehensive income, consolidated and company
statements of financial position, consolidated and company statement of changes in equity, consolidated and company
statements of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable law and UK-adopted International Accounting Standards and,
as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
as at 31 March 2022 and of the group’s loss for the year then ended;
• the group financial statements have been properly prepared in accordance with UK-adopted International
Accounting Standards;
• the parent company financial statements have been properly prepared in accordance with UK-adopted
International Accounting Standards and as applied in accordance with the Companies Act 2006; and
• the financial statements 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 group and parent 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.
Summary of our audit approach
Key audit matters
Materiality
Group and Parent Company
• None
Group
• Overall materiality: £158,000 (2021: £160,000)
• Performance materiality: £118,000 (2021: £120,000)
Parent Company
• Overall materiality: £140,000 (2021: £62,500)
• Performance materiality: £105,000 (2021: £46,800)
Scope
Our audit procedures covered 100% of total assets and 100% of loss before tax.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the group
and parent company financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on the overall audit
strategy, the allocation of resources in the audit and directing the efforts of the engagement team. These matters were addressed
in the context of our audit of the group and parent company financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
We have determined that there are no key audit matters to communicate in our report.
32 Evgen Pharma plc
2022 Annual Report & Financial Statements
FINANCIAL STATEMENTS
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF EVGEN PHARMA PLC
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing and extent
of our audit procedures. When evaluating whether the effects of misstatements, both individually and on the financial statements
as a whole, could reasonably influence the economic decisions of the users we take into account the qualitative nature and the
size of the misstatements. Based on our professional judgement, we determined materiality as follows:
Overall materiality
£158,000 (2021: £160,000)
£140,000 (2021: £62,500)
Group
Parent company
Basis for determining overall
materiality
Rationale for benchmark applied
5% of loss before tax
5% of loss before tax
Loss before tax chosen as net
expenditure is a key measure of activity
level
Loss before tax chosen as net
expenditure is a key measure of activity
level
Performance materiality
£118,000 (2021: £120,000)
£105,000 (2021: £46,800)
Basis for determining performance
materiality
Reporting of misstatements
to the Audit Committee
75% of overall materiality
75% of overall materiality
Misstatements in excess of £8,000 and
misstatements below that threshold
that, in our view, warranted reporting on
qualitative grounds.
Misstatements in excess of £7,000 and
misstatements below that threshold
that, in our view, warranted reporting on
qualitative grounds.
An overview of the scope of our audit
The group consists of 2 components, both of which are based in the UK.
The coverage achieved by our audit procedures was:
Number of Total Loss
components assets before tax
Full scope audit 2 100% 100%
Total 2 100% 100%
There were no audit procedures undertaken by component auditors.
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 group’s
and parent company’s ability to continue to adopt the going concern basis of accounting included:
• evaluating the integrity and accuracy of the cashflow forecasts prepared by management;
• assessing the appropriateness of assumptions and explanations provided by management to supporting information,
where available; and
• evaluating the accuracy and consistency of disclosures made in the financial statements in respect of principal risks
and going concern.
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 group’s or the parent company’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.
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FINANCIAL STATEMENTS
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF EVGEN PHARMA PLC
Other information
The other information comprises the information included in the annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the annual report. 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 course of 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the 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 Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their 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 in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the parent company 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 directors
As explained more fully in the directors’ responsibilities statement set out on page 29, 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 group’s and the parent 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 group or the parent 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.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient
appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination
of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of
non-compliance with other laws and regulations that may have a material effect on the financial statements, and to
respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial
statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement
due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected
fraud identified during the audit.
34 Evgen Pharma plc
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FINANCIAL STATEMENTS
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF EVGEN PHARMA PLC
The extent to which the audit was considered capable of detecting irregularities, including fraud continued
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that
the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and
detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit
engagement team:
• obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework
that the group and parent company operate in and how the group and parent company are complying with the legal
and regulatory framework;
• inquired of management, and those charged with governance, about their own identification and assessment of the risks
of irregularities, including any known actual, suspected or alleged instances of fraud;
• discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment
of how and where the financial statements may be susceptible to fraud
The most significant laws and regulations were determined as follows:
Legislation / Regulation Additional audit procedures performed by the Group audit
engagement team included:
UK-adopted IAS;
Companies Act 2006; and
AIM listing rules
Review of the financial statement disclosures and testing to supporting
documentation; and
Completion of disclosure checklists to identify areas of non-compliance.
Tax compliance regulations
Inspection of external tax advisor’s provision and workings.
The areas that we identified as being susceptible to material misstatement due to fraud were:
Risk Audit procedures performed by the audit engagement team:
Management override of controls
Testing the appropriateness of journal entries and other adjustments;
Assessing whether the judgements made in making accounting estimates
are indicative of a potential bias; and
Evaluating the business rationale of any significant transactions that are unusual
or outside the normal course of business.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at: http://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.
Alan Aitchison (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
Third Floor, Centenary house
69 Wellington Street
Glasgow
G2 6HG
07 June 2022
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FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
Year ended Year ended
31 March 31 March
2022 2021
Notes £’000 £’000
Revenue — 194
Operating expenses
Operating expenses 3 (3,047) (3,519)
Share-based compensation 6 (146) 112
Total operating expenses 3 (3,193) (3,407)
Operating loss 3 (3,193) (3,213)
Finance income 4 24 —
Loss on ordinary activities before taxation (3,169) (3,213)
Taxation 7 439 539
Loss and total comprehensive expense attributable
to equity holders of the parent for the year (2,730) (2,674)
Loss per share attributable to equity holders of the parent (pence) 8
Basic loss per share (0.99) (1.82)
Diluted loss per share (0.99) (1.82)
36 Evgen Pharma plc
2022 Annual Report & Financial Statements
FINANCIAL STATEMENTS
CONSOLIDATED AND COMPANY
STATEMENTS OF FINANCIAL POSITION
AS AT 31 MARCH 2022
Group Company
As at As at As at As at
31 March 31 March 31 March 31 March
2022 2021 2022 2021
Notes £’000 £’000 £’000 £’000
ASSETS
Non-current assets
Property, plant and equipment 9 5 5 3 2
Intangible assets 10 53 66 — —
Investments in subsidiary undertaking 11 — — 73 73
Total non-current assets 58 71 76 75
Current assets
Trade and other receivables 12 125 235 10,487 10,513
Current tax receivable 425 519 361 21
Short-term investments and cash on deposit 13 4,520 6,000 4,520 6,000
Cash and cash equivalents 13 4,510 5,593 3,812 5,122
Total current assets 9,580 12,347 19,180 21,656
Total assets 9,638 12,418 19,256 21,731
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables 14 411 607 369 562
Total current liabilities 411 607 369 562
Equity
Ordinary shares 15 687 687 687 687
Share premium 15 27,870 27,870 27,870 27,870
Merger reserve 15 2,067 2,067 — —
Share-based compensation 15 490 359 490 359
Retained deficit 15 (21,887) (19,172) (10,160) (7,747)
Total equity attributable to equity holders of the parent 9,227 11,811 18,887 21,169
Total liabilities and equity 9,638 12,418 19,256 21,731
No Statement of Comprehensive Income is presented in these financial statements for the parent company as provided
by Section 408 of the Companies Act 2006. The loss for the financial year dealt with in the financial statements of the parent
company was £2,428k (2021: £1,212k).
The financial statements on pages 36-56 were approved by the Board of Directors and authorised for issue on 07 June 2022
and were signed on its behalf by:
Barry Clare
Chairman
07 June 2022
Evgen Pharma plc,
Registered number: 09246681
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FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
Ordinary Share Merger Share-based Retained
shares premium reserve compensation deficit Total
£’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 March 2020 331 17,831 2,067 1,890 (17,915) 4,204
Total comprehensive expense for the period — — — — (2,674) (2,674)
Transactions with owners
Share issue – cash 344 9,938 — — — 10,282
Share issue – options exercised 12 101 — (2) — 111
Share issue – lapsed options — — — (1,417) 1,417 —
Share-based compensation – share options — — — (112) — (112)
Total transactions with owners 356 10,039 — (1,531) 1,417 10,281
Balance at 31 March 2021 687 27,870 2,067 359 (19,172) 11,811
Total comprehensive expense for the period — — — — (2,730) (2,730)
Transactions with owners
Share issue – lapsed options — — — (15) 15 —
Share-based compensation – share options — — — 146 — 146
Total transactions with owners — — — 131 15 146
Balance at 31 March 2022 687 27,870 2,067 490 (21,887) 9,227
38 Evgen Pharma plc
2022 Annual Report & Financial Statements
FINANCIAL STATEMENTS
COMPANY STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
Ordinary Share Share-based Retained
shares premium compensation deficit Total
£’000 £’000 £’000 £’000 £’000
Balance at 31 March 2020 331 17,831 1,274 (7,336) 12,100
Total comprehensive expense for the period — — — (1,212) (1,212)
Transactions with owners
Share issue – cash 344 9,938 — — 10,282
Share issue – options exercised 12 101 (2) — 111
Share issue – lapsed options — — (801) 801 —
Share-based compensation – share options — — (112) — (112)
Total transactions with owners 356 10,039 (915) 801 10,281
Balance at 31 March 2021 687 27,870 359 (7,747) 21,169
Total comprehensive expense for the period — — — (2,428) (2,428)
Transactions with owners
Share issue – lapsed options — — (15) 15 —
Share-based compensation – share options — — 146 — 146
Total transactions with owners — — 131 15 146
Balance at 31 March 2022 687 27,870 490 (10,160) 18,887
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FINANCIAL STATEMENTS
CONSOLIDATED AND COMPANY
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022
Group Company
As at As at As at As at
31 March 31 March 31 March 31 March
2022 2021 2022 2021
£’000 £’000 £’000 £’000
Cash flows from operating activities
Loss before taxation (3,169) (3,213) (2,803) (1,251)
Interest (income) / expense (24) — (24) —
Depreciation and amortisation 16 18 2 —
Share-based compensation 146 (112) 146 (112)
(3,031) (3,307) (2,679) (1,363)
Changes in working capital
Decrease / (increase) in trade and other receivables 110 (39) 26 (2,150)
(Decrease)/ increase in trade and other payables (196) (46) (193) 167
Cash used in operations (86) (85) (167) (1,983)
Taxation received 533 466 35 76
Net cash used in operating activities (2,584) (2,926) (2,811) (3,270)
Cash flows (used in)/generated from investing activities
Monies received from / (placed on) fixed-term deposit 1,480 (6,000) 1,480 (6,000)
Interest income / (expense) 24 — 24 —
Acquisition of tangible fixed assets (3) (5) (3) (2)
Net cash (used in)/generated from investing activities 1,501 (6,005) 1,501 (6,002)
Cash flows from financing activities
Proceeds from issue of shares — 11,110 — 11,110
Issue costs — (717) — (717)
Net cash generated from financing activities — 10,393 — 10,393
Movements in cash and cash equivalents in the period (1,083) 1,462 (1,310) 1,121
Cash and cash equivalents at start of period 5,593 4,131 5,122 4,001
Cash and cash equivalents at end of period 4,510 5,593 3,812 5,122
40 Evgen Pharma plc
2022 Annual Report & Financial Statements
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Evgen Pharma plc (‘the Company’) is a public limited company incorporated in England & Wales and whose shares are traded on
the AIM market of the London Stock Exchange under the symbol EVG. The address of its registered office is Alderley Park, Congleton
Road, Nether Alderley, Cheshire, United Kingdom, SK10 4TG. The principal activity of the Company is clinical stage drug development.
2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION
Basis of preparation
The financial statements for the year have been prepared in accordance with applicable law and UK adopted international
accounting standards and, as regards the parent company financial statements, as applied in accordance with the provisions
of the Companies Act 2006.
The consolidated financial statements have been prepared under the historical cost convention.
The consolidated financial statements are presented in Sterling (£) and rounded to the nearest £’000. This is the predominant
functional currency of the Group, and is the currency of the primary economic environment in which it operates. Foreign
transactions are accounted for in accordance with the policies set out below.
Basis of consolidation
The financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control
is achieved when the Company has the power over the investee; is exposed, or has rights, to variable return from its involvement
with the investee; and, has the ability to use its power to affect its returns. The Company reassesses whether it controls an investee
if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company
loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the period are included
in the Consolidated Statement of Comprehensive Income from the date the Company gains control until the date when
the Company ceases to control the subsidiary.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line
with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members
of the Group are eliminated on consolidation.
Going concern
At 31 March 2022, the Group had cash and cash equivalents, including short-term investments and cash on deposit, of £9.0 million.
The Directors have prepared detailed financial forecasts and cash flows looking beyond 12 months from the date of the approval
of these financial statements. In developing these forecasts, the Directors have made assumptions based upon their view of the
current and future economic conditions that will prevail over the forecast period.
The Directors estimate that the cash held by the Group together with known receivables will be sufficient to support the current
level of activities to the fourth quarter of 2023. They have therefore prepared the financial statements on a going concern basis.
Currencies
Functional and presentational currency
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions or at an average rate for a period if the rates do not fluctuate significantly. Foreign exchange gains and
losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. The presentational
currency of the Group is GBP.
Intangible assets
Intangible assets with finite useful lives that are acquired externally are carried at cost less accumulated amortisation
and impairment losses.
Amortisation is recognised on a straight-line basis over their estimated useful lives as below. The estimated useful life
and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate
being accounted for on a prospective basis.
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An impairment review is performed annually.
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Evgen Pharma plc
41
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION CONTINUED
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. Cost includes the
original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.
Plant, fixtures and fittings – 4 years reducing balance.
IT Equipment – 3 years straight line.
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 Consolidated Statement of Comprehensive Income.
At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Revenue
Revenue is measured at the fair value of the consideration received or receivable. Revenue from right-to-use licences
is recognised at the point in time that the performance condition is satisfied.
Finance income
Finance income comprises interest income on funds invested. Interest income is recognised as interest accrues using
the effective interest rate method.
Research and development expenditure
All research and development costs, whether funded by third parties under licence and development agreements or not,
are included within operating expenses and classified as such. Research and development costs relating to clinical trials are
recognised over the period of the clinical trial based on information provided by clinical research organisations. All other
expenditure on research and development is recognised as the work is completed.
All ongoing development expenditure is currently expensed in the period in which it is incurred. Due to the regulatory and other
uncertainties inherent in the development of the Group’s programmes, the criteria for development costs to be recognised as an
asset, as prescribed by IAS 38, ‘Intangible assets’, are not met until the product has been submitted for regulatory approval, such
approval has been received and it is probable that future economic benefits will flow to the Group. The Group does not currently
have any such internal development costs that qualify for capitalisation as intangible assets.
Income tax
The tax expense or credit represents the sum of the tax currently payable or recoverable and the movement in deferred tax assets
and liabilities.
(a) Current income tax
Current tax, including R&D tax credits, is based on taxable income for the period and any adjustment to tax from previous periods.
Taxable income differs from net income in the Consolidated Statement of Comprehensive Income because it excludes items of
income or expense that are taxable or deductible in other periods or that are never taxable or deductible. The calculation uses the
latest tax rates for the period that have been enacted or substantively enacted by the dates of the Consolidated Statement of
Financial Position.
(b) Deferred tax
Deferred tax is calculated at the latest tax rates that have been substantially enacted by the reporting date that are expected
to apply when settled. It is charged or credited in the Consolidated Statement of Comprehensive Income, except when it relates
to items credited or charged directly to equity, in which case it is also dealt with in equity.
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 income, and is accounted for
using the liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable income will be available against which the asset can be utilised. Such assets are reduced to
the extent that it is no longer probable that the asset can be utilised.
Deferred tax assets and liabilities are offset when there is a legal right to offset current tax assets and liabilities and when the
deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities where there is an intention to settle the balances on a net basis.
Deferred tax assets are not recognised due to uncertainty concerning crystallisation.
42 Evgen Pharma plc
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FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION CONTINUED
Pension costs
The Group makes contributions to the private pension schemes of Directors and employees. These are expensed as incurred
in the Statement of Comprehensive Income.
Share-based compensation
The Group issues share-based payments to certain employees and Directors. Equity-settled share-based payments are measured
at fair value at the date of grant and expensed on a straight-line basis over the vesting period, along with a corresponding increase
in equity.
At each reporting date, the Group 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 any revision is recognised in the Consolidated Statement
of Comprehensive Income, with a corresponding adjustment to equity reserves.
The fair value of share options and warrants are determined using a Black-Scholes model, taking into consideration the best
estimate of the expected life of the option or warrant and the estimated number of shares that will eventually vest.
Most awards are made to employees of the Company. Awards granted to the employees of the subsidiary company are expensed
in the Company’s financial statements at fair value on the grant date, with a corresponding increase in Company’s equity.
Operating segments
The Directors consider that there are no identifiable business segments that are subject to risks and returns different to the core
business. The information reported to the Directors, for the purposes of resource allocation and assessment of performance is
based wholly on the overall activities of the Group. The Group has therefore determined that it has only one reportable segment
under IFRS 8.
The results and assets for this segment can be determined by reference to the Consolidated Statement of Comprehensive Income
and Consolidated Statement of Financial Position.
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s Consolidated Statement of Financial Position when the
Group becomes party to the contractual provisions of the instrument. Financial assets are de-recognised when the contractual
rights to the cash flows from the financial asset expire or when the contractual rights to those assets are transferred. Financial
liabilities are de-recognised when the obligation specified in the contract is discharged, cancelled or expired.
Trade and other receivables
Trade and other receivables that do not contain a significant financing component are initially recognised at fair value and
subsequently held at amortised cost less provision for impairment. Impairment is calculated on a 12 month/lifetime expected
credit loss model.
Recoverability of intercompany receivables
Amounts owed by subsidiary undertaking represent loans made to the Company’s main subsidiary on an interest-free basis.
No repayment terms have been mandated.
In accordance with IFRS 9 Financial Instruments, as the subsidiary undertaking cannot repay the loan at the reporting date,
the Company has made an assessment of expected credit losses. Having considered multiple scenarios on the manner, timing,
quantum and probability of recovery of the receivables a lifetime expected credit loss (ECL) of £1,370,000 (2021: £1,370,000) has
been provided.
The calculation of the allowance for lifetime expected credit losses requires a significant degree of estimation and judgement,
in particular determining the probability weighted likely outcome for each scenario considered. The Directors assessment of ECL
included repayment through future cash flows over time (which are inherently difficult to forecast for the Company at its current
stage of development) and also the amount that could be realised through an immediate sale of the subsidiary undertaking.
The Directors’ assessment of repayment through future cash flows contained several scenarios, including ones where the loan
was not recovered in full.
The carrying value of amounts owed by subsidiary undertakings at 31 March 2022 was £10,375,941 (2021: £10,359,000)
and is disclosed in note 12 to the financial statements.
Cash, cash equivalents and short-term investments
Cash and cash equivalents consist of cash on hand and demand deposits. Short-term investments and cash on deposit
comprise deposits with maturities of more than three months, but no greater than 12 months.
Trade and other payables
Trade and other payables are not interest-bearing and are stated at nominal value.
2022 Annual Report & Financial Statements
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FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION CONTINUED
Classification as debt or equity
Debt and equity instruments issued by the Group are classified as either financial liabilities or as equity in accordance
with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Investments in subsidiaries
Investments in subsidiaries are shown at cost less any provision for impairment.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all its liabilities.
Equity instruments issued by the Group are recognised as the proceeds received, net of direct issue costs.
Fair value estimation
The carrying value less impairment provision of trade and other receivables and trade and other payables are assumed to
approximate their fair values because of the short-term nature of such assets and the effect of discounting liabilities is negligible.
Significant management judgement in applying accounting policies and estimation uncertainty
When preparing the financial statements, the Directors make estimates and assumptions about the recognition and
measurement of assets, liabilities, income and expenses.
Management judgement
Recognition of research and development expenditure is seen as requiring a higher degree of judgement. The Group recognises this
expenditure in line with the management’s best estimation of the stage of completion of each research and development project.
Estimation uncertainty
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are:
Intercompany receivable
Receivables from the subsidiary represents an interest free amount advanced to group companies with no fixed repayment
dates, being amounts due from Evgen Limited advanced to support the Group’s research expenditure. In accordance with
IFRS 9 ‘Financial Instruments’, where the counterparty would not be able to repay the loan if demanded at the reporting date,
the Company has made an assessment of expected credit losses.
R&D tax credit
The R&D tax credit figure of £0.44m included in the accounts is a management estimate which is subject
to amendment by HMRC.
Share-based payment charge
During the years ended 31 March 2022 and 31 March 2021, the Group issued a number of share options to certain employees.
A Black-Scholes model was used to calculate the appropriate charge for these periods. The use of this model to calculate a charge
involves using a number of estimates and judgements to establish the appropriate inputs to be entered into the model, covering
areas such as the use of an appropriate risk-free rate and dividend rate, exercise restrictions and behavioural considerations.
A significant element of judgement is therefore involved in the calculation of the charge. The total charge recognised in the
year to 31 March 2022 was £146,125 (year to 31 March 2021: credit of £111,664).
Accounting developments
Where applicable, the Group and Company have adopted the following accounting standards, amendments or interpretations
effective from the 1 January 2021. The Group and Company have not adopted any new or amended standards early. The impact
of these standards is not considered material for the current financial year.
Effective Date
Interest Rate Benchmark Reform – Phase 2 1 January 2021
COVID-19-Related Rent Concessions beyond 30 June 2021 1 April 2021
IFRS issued but not yet effective
At the date of issue of these financial statements, the following accounting standards, amendments or interpretations, which
have not been applied, were in issue but not yet effective. The Directors do not anticipate adoption of the standards listed below
will have a material impact on the financial statements or they consider the implementation too uncertain to speculate on the
impact on the accounts at this point in time.
Effective Date
First-time Adoption of International Financial Reporting Standards—Subsidiary as a First-time Adopter 1 January 2022
Financial Instruments—Fees in the ‘10 per cent’ Test for Derecognition of Financial Liabilities 1 January 2022
Onerous Contracts—Cost of Fulfilling a Contract (Amendments to IAS 37) 1 January 2022
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) 1 January 2022
Reference to the Conceptual Framework (Amendments to IFRS 3) 1 January 2022
44 Evgen Pharma plc
2022 Annual Report & Financial Statements
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
3. OPERATING LOSS
An analysis of the Group’s operating loss has been arrived at after charging
Year ended Year ended
31 March 31 March
2022 2021
£’000 £’000
Research and development expenses:
Amortisation of licences 13 16
Other research and development 1,446 2,011
Staff costs (including share-based compensation) – Note 6 1,153 716
Establishment and general:
Depreciation of property, plant and equipment 3 2
Operating lease cost – land and buildings 12 18
Foreign exchange loss 2 9
Other administrative expenses 564 635
Total operating expenses 3,193 3,407
The Group has one reportable segment, namely the development of pharmaceutical products all within the United Kingdom.
4. FINANCE INCOME
Year ended Year ended
31 March 31 March
2022 2021
£’000 £’000
Bank interest receivable 24 —
Total finance income 24 —
5. AUDITOR’S REMUNERATION
The analysis of the auditor’s remuneration is as follows:
Year ended Year ended
31 March 31 March
2022 2021
£’000 £’000
Fees payable to the Group’s auditors for the audit of:
The consolidated and Company annual accounts 17 17
The subsidiary’s annual accounts 17 16
Total audit fees 34 33
Audit related services 4 4
Total audit related fees 4 4
Other services — 2
Total non-audit fees — 2
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FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
6. EMPLOYEES AND DIRECTORS
The average monthly number of persons (including Executive Directors) employed by the Group was
Group Company
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2022 2021 2022 2021
Number Number Number Number
Management 4 3 4 3
Administration 1 1 — —
Development 1 1 — —
Non-Executive 3 3 3 3
Average total persons employed 9 8 7 6
As at 31 March 2022 the Group had 11 employees (31 March 2021: 8)
Staff costs in respect of these employees were:
Group Company
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2022 2021 2022 2021
£’000 £’000 £’000 £’000
Wages and salaries 863 721 687 532
Employers National Insurance 100 86 77 63
Employers pension costs 44 21 31 7
Total payrolled employee costs 1,007 828 795 602
Share-based compensation 146 (112) 146 (112)
Total employee costs 1,153 716 941 490
The Group makes contributions to the private pension schemes of Directors and employees. The CEO received payments
into a private pension scheme for the period of his employment (2021: two).
The total remuneration of the highest paid Director excluding grants of share options was £239,760 (31 March 2021: £180,278).
The Directors have the authority and responsibility for planning, directing and controlling, directly or indirectly, the activities
of the Group and they therefore comprise key management personnel as defined by IAS 24.
Aggregate emoluments of Directors:
Group and Company
Year ended Year ended
31 March 31 March
2022 2021
£’000 £’000
Salaries and other short-term employee benefits 458 539
Employers National Insurance 57 64
Pension contributions 10 8
Options vesting under share option schemes — —
Total remuneration including vesting of share options 524 611
Directors’ emoluments include amounts payable to third parties as described in Note 19.
7. TAXATION
Year ended Year ended
31 March 31 March
2022 2021
£’000 £’000
Current tax
Current period – UK corporation tax — —
R&D tax credit 425 519
Adjustments in respect of prior periods 14 20
Net tax credit 439 539
46 Evgen Pharma plc
2022 Annual Report & Financial Statements
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
7. TAXATION CONTINUED
The tax charge for each period can be reconciled to the loss per consolidated statement of comprehensive income as follows:
Year ended Year ended
31 March 31 March
2022 2021
£’000 £’000
Loss on ordinary activities before taxation (3,169) (3,213)
Loss before tax at the effective rate of corporation tax in the United Kingdom of 19% (2021: 19%) (602) (610)
Effects of:
Losses not recognised 602 610
R&D tax credit (425) (519)
Adjustments in respect of prior periods 14 20
Tax credit for the year (439) (539)
The enacted UK corporation tax rate of 25% forms the basis for the deferred tax calculation (2021: 19%).
At 31 March 2022, the Group had tax losses available for carry forward of approximately £21.9m (31 March 2021: £20.1m).
The Group has not recognised deferred tax assets relating to these losses of £5.5m (2021: £3.7m).
At 31 March 2022, the Company had tax losses available for carry forward of approximately £12.4m (31 March 2021: £10.8m).
The Company has not recognised deferred tax assets relating to these losses of £3.1m (2021: £2.0m).
These assets are not recognised due to the uncertainty in the timing of crystallisation.
8. LOSS PER SHARE
Basic loss per share is calculated by dividing the loss for the period attributable to equity holders by the weighted average
number of ordinary shares outstanding during the year.
As at 31 March 2022 the Group had 10,587,665 (2021: 6,402,754) share options outstanding which are potentially dilutive.
The calculation of the Group’s basic and diluted loss per share is based on the following data:
Year ended Year ended
31 March 31 March
2022 2021
£’000 £’000
Loss for the year attributable to equity holders (2,730) (2,674)
Year ended Year ended
31 March 31 March
2022 2021
Number Number
Weighted average number of ordinary shares for basic loss per share 274,888,117 147,019,536
Effects of dilution:
Share options — —
Weighted average number of ordinary shares adjusted for the effects of dilution 274,888,117 147,019,536
Year ended Year ended
31 March 31 March
2022 2021
Pence Pence
Loss per share – basic and diluted (0.99) (1.82)
The weighted average numbers of ordinary shares for the years ended 31 March 2021 and 2022 used for calculating the diluted
loss per share are identical to those for the basic loss per share. This is because the outstanding share options would have the
effect of reducing the loss per ordinary share and would therefore not be dilutive under the terms of International Accounting
Standard (‘‘IAS’’) No 33.
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FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
9. PROPERTY, PLANT AND EQUIPMENT
Group Plant, fixtures IT
& fittings equipment Total
£’000 £’000 £’000
Cost
At 31 March 2020 2 23 25
Additions — 5 5
At 31 March 2021 2 28 30
Additions — 3 3
Disposals — (22) (22)
At 31 March 2022 2 9 11
Accumulated Depreciation
At 31 March 2020 2 21 23
Charge for the period — 2 2
Disposals — — —
At 31 March 2021 2 23 25
Charge for the period — 3 3
Disposals — (22) (22)
At 31 March 2022 2 4 6
Net Book Value
At 31 March 2020 — 2 2
At 31 March 2021 — 5 5
At 31 March 2022 — 5 5
Company Plant, fixtures IT
& fittings Equipment Total
£’000 £’000 £’000
Cost
At 31 March 2020 — — —
Additions — 2 2
At 31 March 2021 — 2 2
Additions — 3 3
Disposals — — —
At 31 March 2022 — 5 5
Accumulated Depreciation
At 31 March 2020 — — —
Charge for the period — — —
Disposals — — —
At 31 March 2021 — — —
Charge for the period — 2 2
Disposals — — —
At 31 March 2022 — 2 2
Net Book Value
At 31 March 2020 — — —
At 31 March 2021 — 2 2
At 31 March 2022 — 3 3
Depreciation is charged to operating expenses.
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FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
10. INTANGIBLE ASSETS
Group Licences
Cost £’000
At 31 March 2020, 31 March 2021 and 31 March 2022 168
Amortisation
At 31 March 2020 86
Charge for the period 16
At 31 March 2021 102
Charge for the period 13
At 31 March 2022 115
Net Book Value
At 31 March 2020 82
At 31 March 2021 66
At 31 March 2022 53
Intangible assets constitute licenses to intellectual property. The remaining amortisation periods are between
7 months and 14 years.
Amortisation is charged to operating expenses. The Group reviewed the amortisation period and the amortisation
method for the intangible assets at the end of the reporting period and considered them appropriate.
The Group continually monitors events and changes in circumstances that could indicate that the intangible assets
may be impaired.
As at 31 March 2022, the Company had no intangible assets (31 March 2021: £nil).
11. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
The consolidated financial statements of the Group as at 31 March 2022 include:
Company Investments in
subsidiary
undertaking
£’000
Cost and Net book value
At 31 March 2020, 31 March 2021 and 31 March 2022 73
The registered office of Alderley Park, Congleton Road, Nether Alderley, Cheshire, United Kingdom, SK10 4TG.
The cost for the investment in the subsidiary for both financial years was £73,000 with no impairments.
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FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
12. TRADE AND OTHER RECEIVABLES
Group Company
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2022 2021 2022 2021
£’000 £’000 £’000 £’000
Amounts receivable within one year
Other receivables 13 16 — —
Other taxation and social security 45 117 44 115
Prepayments 67 102 67 39
Amounts due from subsidiary undertakings — — 10,376 10,359
Trade and other receivables 125 235 10,487 10,513
The Directors believe that the carrying value of trade and other receivables represents their fair value. In determining the
recoverability of trade and other receivables the Group considers any change in the credit quality of the receivable from the
date credit was granted up to the reporting date. For details on the Group’s credit risk management policies, refer to Note 18.
The carrying amounts of the Group’s receivables are all denominated in Pounds Sterling.
No classes within external trade and other external receivables contain assets which are considered to be impaired. The maximum
exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not
hold any collateral as security.
The amounts owed by subsidiary undertakings include a loan to Evgen Limited for £10,376k (2021: £10,359k). There is no interest
payable on this loan and no fixed repayment date. The Parent Company has confirmed that it does not intend to seek repayment
of the loan balance for at least twelve months from the date of these financial statements. The intercompany loan has been
impaired by £1,370k (2021: £1,370k) under IFRS 9 as set out in note 2.
13. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
Group Company
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2022 2021 2022 2021
£’000 £’000 £’000 £’000
Short-term investments and cash on deposit 4,520 6,000 4,520 6,000
Cash at bank and in hand 4,510 5,593 3,812 5,122
Total 9,030 11,593 8,332 11,122
Under IAS 7 Statement of Cash Flows, cash held on long-term deposits (being deposits with maturity of greater than three
months and no more than twelve months) that cannot readily be converted into cash has been classified as a short-term
investment. The maturity on this investment was less than twelve months at the reporting date.
At 31 March 2022 no cash or cash equivalents were held on deposit in either the Group or the Company (31 March 2021: nil).
The Directors consider that the carrying value of cash and cash equivalents and short-term investments approximates their
fair value. For details on the Group’s credit risk management refer to note 18.
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FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
14. TRADE AND OTHER PAYABLES
Group Company
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2022 2021 2022 2021
£’000 £’000 £’000 £’000
Amounts falling due within one year
Trade payables 66 408 64 408
Other taxation and social security 24 26 18 22
Other payables 4 1 3 —
Accrued expenses 317 172 284 132
Trade and other payables 411 607 369 562
Trade and other payables principally consist of amounts outstanding for trade purchases and ongoing costs. They are non-interest
bearing and are normally settled on 30 to 45 day terms. The Directors consider that the carrying value of trade and other payables
approximates to their fair value. All trade and other payables are denominated in Sterling. The Group has financial risk
management policies in place to ensure that all payables are paid within the credit timeframe and no interest has been charged
by any suppliers as a result of late payment of invoices during the period. There are no material contingent liabilities or
commitments and no guarantees have been entered into.
15. ISSUED CAPITAL AND RESERVES
Ordinary shares
Group and Company
Share Share
Capital Premium Total
Ordinary shares of 0.25p each Number £’000 £’000 £’000
As at 31 March 2021 & 31 March 2022 274,888,117 687 27,870 28,557
There were no new shares issued in the year ending 31 March 2022.
The ordinary shares rank pari passu in all respects in relation to dividends and repayment of capital and have equal voting rights
with one vote per share. There are no restrictions on the transferability of the shares.
The Group and Company do not have an authorised share capital as provided by the Companies Act 2006.
Other reserves
The share premium reserve represents the difference between the net proceeds of equity issues and the nominal share capital
of the shares issued.
The merger reserves at 31 March 2022 and 2021 arose from the acquisition of Evgen’s sole subsidiary, Evgen Ltd, in 2014 which
is accounted for using the merger method of accounting.
The share-based compensation reserve reflects the aggregate fair value of equity-settled share-based payment transactions.
Reserves classified as retained deficit represent accumulated losses. None of the reserves are distributable.
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FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
16. SHARE-BASED PAYMENTS
Certain Directors and employees of the Group hold options to subscribe for shares in the Group under share option schemes.
The number of shares subject to options, the periods in which they were granted and the period in which they may be exercised
are given below.
The Group operates one active share option scheme (31 March 2021: one), in addition share options have been granted under
standalone unapproved share option agreements. Options are currently granted for £nil consideration and are exercisable
at a price determined on the date of the grant.
At 31 March 2022 the Company had 10,587,665 (2021: 6,402,754) unissued ordinary shares of £0.0025 under the Company’s
share option schemes, details of which are as follows:
Option Date
price from which
Grant date Number (pence) exercisable Expiry date
01-May-12 272,000 0.0500 01-May-14 01-May-22
14-Aug-13 224,800 0.1062 14-Aug-15 14-Aug-23
21-Oct-15 291,891 — 21-Oct-15 21-Oct-25
28-Jan-19 351,957 — 28-Jan-22 28-Jan-29
18-Jul-19 153,262 — 18-Jul-22 18-Jul-29
18-Jul-19 202,608 — 18-Jul-22 18-Jul-29
06-Oct-20 4,498,236 — 06-Oct-22 06-Oct-30
13-Jul-21 289,937 — 13-Jul-24 13-Jul-31
08-Dec-21 4,302,974 — 13-Jul-24 13-Jul-31
Total 10,587,665
Movements on share options during the year were as follows:
Date
Exercise At 1 April Lapsed/ At 31 March from which
price 2021 Granted Exercised cancelled 2022 exercisable Expiry date
0.0500 408,000 — — (408,000) — 31-Aug-13 25-Nov-21
0.0500 272,000 — — — 272,000 01-May-14 01-May-22
0.1062 224,800 — — — 224,800 14-Aug-15 14-Aug-23
Nil 291,891 — — — 291,891 21-Oct-15 21-Oct-25
Nil 351,957 — — — 351,957 28-Jan-22 28-Jan-29
Nil 355,870 — — — 355,870 18-Jul-22 18-Jul-29
Nil 4,498,236 — — — 4,498,236 06-Oct-22 06-Oct-30
Nil — 4,743,291 — (4,453,354) 289,937 13-Jul-24 13-Jul-31
Nil — 4,302,974 — — 4,302,974 13-Jul-24 13-Jul-31
Total 6,402,754 9,046,265 — (4,861,354) 10,587,665
As at the year end, the reconciliation of share option scheme movements is as follows:
As at 31 March 2022 As at 31 March 2021
Outstanding at start of the year 6,402,754 0.9037 9,531,368 1.8249
Granted 9,046,265 — 4,498,236 —
Exercised — — (4,751,178) 2.3420
Lapsed/cancelled (4,861,354) 0.4196 (2,875,672) —
Outstanding at end of year 10,587,665 0.3538 6,402,754 0.9037
Exercisable at end of year 1,140,648 3.2843 1,196,691 4.8352
Options are only exercisable for cash. Options vest 3 years from grant subject to the achievement of shareholder return,
and for more recent grants, corporate performance targets. Options which do not vest lapse.
The Group has accounted for the charge arising from the issue of share options as below:
The total charge recognised for the year ended 31 March 2022 is £146,125 (2021: credit of £111,664). The fair values of the options
granted have been estimated using a Black Scholes model. Assumptions used were an option life of 5 years, a risk-free rate of
0.1 per cent, a volatility of 60 per cent. and no dividend yield. The expected volatility is assessed by reference to historic volatility
and on the advice of the Company’s brokers.
The weighted average remaining contractual life of share options outstanding at the end of the year was 8.25 years (2021: 7.96 years).
The weighted average fair value of options granted as of the grant date was £0.09 (2021: £0.23).
The weighted average share price used in the Black Scholes model was £0.10 (2021: £0.25).
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FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
17. LEASE ARRANGEMENTS
Year ended Year ended
31 March 31 March
2022 2021
£’000 £’000
Minimum lease payments under leases recognised as an expense in the period 11 18
The total cash outflow for leases in the year ended 31 March 2022 was £10,967 (2021: £16,650).
Lease payments represent rentals payable by the Group for its serviced office space. As at 31 March 2022 and 31 March 2021
all leases were one month rolling contracts. On 18 May 2022 the Group renewed the lease agreement for a fixed 12 months
period with minimum lease payments under non-cancellable lease of £12k.
18. FINANCIAL RISK MANAGEMENT
The main risks arising from the Group’s financial instruments are cash flow and liquidity, credit risk and foreign currency risk.
The Group’s financial instruments comprise cash and various items such as trade receivables and trade payables, which arise
directly from its operations.
Cash flow and liquidity risk
Management monitors the level of cash on a regular basis to ensure that the Group has sufficient funds to meet its commitments
when due. The table below analyses the Group and Company’s financial assets and liabilities by category:
Group Company
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2022 2021 2022 2021
Financial Financial Financial Financial
assets at assets at assets at assets at
amortised amortised amortised amortised
cost cost cost cost
£’000 £’000 £’000 £’000
Assets as per statement of financial position
Other receivables 13 16 — —
Amounts due from subsidiary undertakings — — 10,376 10,359
Short-term investments and cash on deposit 4,520 6,000 4,520 6,000
Cash and cash equivalents 4,510 5,593 3,812 5,122
Total 9,043 11,609 18,708 21,481
Group Company
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2022 2021 2022 2021
Financial Financial Financial Financial
liabilities at liabilities at liabilities at liabilities at
amortised amortised amortised amortised
cost cost cost cost
£’000 £’000 £’000 £’000
Liabilities as per statement of financial position
Trade payables 66 408 64 408
Other creditors and accruals 321 173 287 132
Total 387 581 351 540
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FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
18. FINANCIAL RISK MANAGEMENT CONTINUED
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group’s financial assets are cash and cash equivalents and trade and other receivables. The carrying value of these assets
represent the Group’s maximum exposure to credit risk in relation to financial assets.
The Group’s policy is to minimise the risks associated with cash and cash equivalents by placing these deposits with institutions
with a recognised high credit rating.
The Group potentially has credit risk on its trade receivables. The amounts presented in the balance sheet are net of allowances
for doubtful receivables, estimated by the Group’s management based on prior experience and their assessment of the current
economic environment. An allowance for impairment is made where there is an identified loss event, which, based on previous
experience, is evidence of a reduction in the recoverability of the cash flows. Currently the Group has limited sales and therefore
trade receivables.
The Group gives careful consideration to which organisations it uses for banking in order to minimise credit risk. The Group holds
cash and deposits with two large banks in the UK, institutions with an A1 and A / positive credit ratings (long term, as assessed by
Moody’s). The amounts of cash and deposits held with these banks at the reporting date can be seen in the financial assets table
above. Split of cash and cash equivalents between UK Sterling and other currencies is provided in to Financial Currency Risk note
below.
There was no significant external concentration of credit risk at the reporting date.
The carrying amount of financial assets recorded in the Consolidated Statement of Financial Position, net of any allowances
for losses, represents the Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained.
Details of the allowance for impairment losses on financial assets are set out in note 12.
An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence
of a reduction in the recoverability of the cash flows. The Directors consider the above measures to be sufficient to control the
credit risk exposure. No collateral is held by the Group as security in relation to its financial assets.
Interest rate risk
As the Group has no significant borrowings, the risk is limited to the reduction of interest received on cash surpluses held
at bank. The Group’s deposit accounts all receive a fixed rate of interest and therefore the exposure to interest rate movements
is immaterial.
Maturity profile
As all financial assets and financial liabilities are expected to mature within the next twelve months thus aged analysis
of these has not been presented.
54 Evgen Pharma plc
2022 Annual Report & Financial Statements
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
18. FINANCIAL RISK MANAGEMENT CONTINUED
Foreign currency risk
The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s use of suppliers operating
overseas, primarily invoicing in Euro and US dollars. The Group’s exposure to foreign currency changes for all other currencies is
not material and therefore no sensitivity analysis is disclosed.
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the year-end
are shown below:
2022
GBP EUR USD Total
Group £’000 £’000 £’000 £’000
Assets and liabilities as per statement of financial position
Short-term investments and cash on deposit 4,520 — — 4,520
Cash and cash equivalents 4,510 — — 4,510
Trade receivables — — — —
Trade payables (61) (5) — (66)
Total 8,969 (5) — 8,964
2021
GBP EUR USD Total
Group £’000 £’000 £’000 £’000
Assets and liabilities as per statement of financial position
Short-term investments and cash on deposit 6,000 — — 6,000
Cash and cash equivalents 5,542 — 51 5,593
Trade receivables — — — —
Trade payables (400) (8) — (408)
Total 11,142 (8) 51 11,185
Given the immaterial net asset balances in foreign currency and limited procurement from overseas suppliers, the exposure
to a change in exchange rates is small and therefore no sensitivity analysis is disclosed.
At present the Group does not make use of financial instruments to minimise any foreign exchange gains or losses
so any fluctuations in foreign exchange movements may have an adverse impact on the results from operating activities.
Fair value of financial assets and liabilities
There is no material difference between the fair value and the carrying values of the financial instruments because of the short
maturity period of these financial instruments and their intrinsic size and risk.
Capital risk management
The Group considers capital to be shareholders’ equity as shown in the consolidated statement of financial position,
as the Group is primarily funded by equity finance. The Group is not yet in a position to pay a dividend.
The Group’s objective when managing capital is to maintain adequate financial flexibility to preserve its ability to meet financial
obligations, both current and long term. The capital structure of the Group is managed and adjusted to reflect changes in
economic conditions. The Group funds its expenditures on commitments from existing cash and cash equivalent balances,
primarily received from issuances of shareholders’ equity. There are no externally imposed capital requirements. Financing
decisions are made based on forecasts of the expected timing and level of capital and operating expenditure required to meet
the Group’s commitments and development plans.
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FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
19. RELATED PARTY TRANSACTIONS
Group
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this note.
Key management compensation is disclosed in Note 6 of the consolidated financial statements. Directors’ emoluments
are disclosed in the Remuneration Committee Report.
During the year ended 31 March 2022, the Group purchased consultancy services totalling £15,995 (year ended 31 March 2021:
£19,225) from FD Consult Ltd, a company controlled by Richard Moulson. The amount owed to FD Consult Ltd at 31 March 2022
was £nil (31 March 2021: £nil).
During the year the Group purchased services from OBN, a company for which Huw Jones acts as a non-executive director,
totalling £1,282 (2021: £180). The amount owed to OBN at 31 March 2022 was £nil (31 March 2021: £nil).
Company
The Company is responsible for financing and setting Group strategy. The Company’s subsidiary carried out the Group’s
development strategy and managed the Group’s intellectual property. The Company provides interest free and unsecured
funding to its subsidiary with no fixed date of repayment. Details of intercompany balances can be found in Note 12.
Ultimate controlling party
The Directors consider there is no ultimate controlling party.
56 Evgen Pharma plc
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ADDITIONAL INFORMATION
ADDRESSES AND ADVISERS
EVGEN PHARMA PLC
Registered office:
Evgen Pharma plc
Alderley Park
Congleton Road
Nether Alderley
SK10 4TG
Website: www.evgen.com
Registered number: 09246681
Domiciled in the United Kingdom
Registered in England and Wales
STATUTORY AUDITORS
RSM UK Audit LLP
Third Floor, Centenary House
69 Wellington Street
Glasgow
G2 6HG
NOMINATED ADVISER AND BROKER
finnCap Ltd
One Bartholomew Close
London
England
EC1A 7BL
REGISTRAR
SLC Registrars (a division of EQ)
P.O. Box 5222
Lancing
BN99 9FG
LEGAL ADVISERS
Pinsent Masons LLP
30 Crown Place
London
EC2A 4ES
FINANCIAL PUBLIC RELATIONS
Instinctif Partners
65 Gresham Street
London
EC2V 7EQ
Designed and produced by effektiv
+44 (0)20 7459 4266 / www.effektiv.co.uk
EVGEN PHARMA PLC
Registered office:
Alderley Park, Congleton Road
Nether Alderley, SK10 4TG
Website: www.evgen.com
Registered number: 09246681
Domiciled in the United Kingdom
Registered in England and Wales