H E M O G E N Y X P H A R M A C E U T I C A L S P L C
A N N U A L R E P O R T & F I N A N C I A L S TAT E M E N T S
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Company Information
Chairman’s Statement
Board of Directors and Senior Management
Strategic Report
Directors’ Report
Governance Report
Directors’ Remuneration Report
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements
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4
10
13
20
27
34
41
48
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C O M P A N Y I N F O R M A T I O N
Directors
Dr Vladislav Sandler (Chief Executive Officer)
Professor Sir Marc Feldmann (Chairman)
Alexis Sandler (Non-Executive Director)
Peter Redmond (Non-Executive Director)
Principal Bankers
Metro Bank plc
One Southampton Row
London
WC1B 5HA
Registrar
Computershare Investor Services plc
The Pavilions
Bridgewater Road
Bristol
BS13 8AE
Company Secretary
Andrew Wright
Registered Office
5 Fleet Place
London
EC4M 7RD
Registered Number
08401609 (England and Wales)
Broker
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London
W1S 2PP
Independent Auditor
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
UK Solicitors
Osborne Clarke LLP
One London Wall
London
EC2Y 5EB
US Solicitors
Rubin & Rudman LLP
50 Rowes Wharf
Boston
Massachusetts 0211
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019
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Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
C H A I R M A N ’ S S T A T E M E N T
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
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C H A I R M A N ’ S S T A T E M E N T
exceptional properties are now being used in a number of
applications in collaboration with major pharmaceutical
companies, such as the continuing work with Johnson &
Johnson in relation to Lupus.
As a result of our use of the mice to model Lupus, we
made further discoveries about their properties. These
findings led us to understand that our mice can be used
to model an even wider range of autoimmune diseases,
as well as to develop treatments for diseases caused by
viral infections. In 2019, we began our efforts to leverage
our mouse technology for these purposes, and in view of
the recent crisis arising from the COVID-19 pandemic we
have now initiated work in a number of areas related to
COVID-19, as we recently announced.
Our remarkable progress in all of these areas has been
accomplished on budget and with the assistance of our
major biopharmaceutical collaborators, our strong and
highly qualified advisory board, and not least by our
exceptional team of in-house scientists.
I propose to go into more detail about the various
components of our product pipeline below.
Background
Hemogenyx is developing two primary sets of products
for the multi-billion bone marrow/hematopoietic stem
cell transplant market. They are:
• A set of treatments for blood malignancies that
includes CDX bi-specific antibody and CAR-T therapy.
Both CDX and CAR-T are product candidates that
could eliminate relapsed and/or refractory ("R/R")
acute myeloid leukaemia ("AML"), acute lymphoblastic
leukaemia ("ALL"), and myelodysplastic syndrome
("MDS") – forms of blood cancer – as well as certain
other blood malignancies, and replace chemotherapy
and radiation as a means of pre-transplant conditioning.
• A cell therapy group of products – cell therapies
that address the problem of blood stem cell donor
availability and issues around relapse or cell rejection
after transplantation. These products use Human
Postnatal Hemogenic Endothelial Cells ("Hu-PHECs")
as a source of generating cancer-free, patient-
matched blood stem cells for transplantation into the
patient.
I am very pleased to report a highly productive period
of scientific and commercial progress in the year ended
31 December 2019. It has been a remarkable year for
Hemogenyx in many respects, with strong progress on
several fronts.
Our lead product, the CDX bi-specific antibody, was
originally designed to provide a safer way to condition
patients suffering from blood diseases for bone marrow
transplants. As shareholders will be aware, however, the
CDX bi-specific antibody has been found to have wider
potential applications, including the treatment itself of
blood diseases, in particular acute myeloid leukaemia
(AML), the most dangerous form of leukaemia. Working
with a major global pharmaceutical group, we have
made considerable progress in the development of
the antibody. We have also developed a new product
candidate based on CAR-T, further diversifying and de-
risking our product portfolio. This product is designed
to be used in the treatment of AML and other blood
diseases, as well as in transplant conditioning. Together
with these new scientific breakthroughs, we have also
been working to take our Hu-PHEC cell therapy product
candidate forward.
At the same time, we have made significant advances
in the use of our advanced humanised mice. We
originally developed these mice as a tool to test our CDX
antibodies. As shareholders will know, however, these
mice have proved to be of value in their own right. Their
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C H A I R M A N ’ S S T A T E M E N T
The products address a large and growing need and
will be sold into a market that is already substantial. If
successfully commercialised, Hemogenyx’s products
could enable a much wider range of patients to be
treated than is presently the case as the products should
be applicable to patients who are unfit for or, through the
lack of suitable cell donors, unable to receive blood stem
cell transplants at present.
Additionally, the Advanced Hematopoietic Chimera
("AHC"), the Company’s proprietary humanised mouse
model originally developed to improve the testing of
the Company's own products in vivo, is generating
wide interest across the bio-pharmaceutical industry as
a platform for disease modelling and drug discovery,
particularly its newly developed form, the Advanced
peripheral blood Hematopoietic Chimera
("ApbHC")
which may also have a vital role to play in the rapid
development and/or isolation of human antibodies
against previously unknown pathogens such as the novel
coronavirus, more broadly refred to as bioprotection/
biodefence applications.
I would like to take this opportunity to summarise the
substantial progress made during 2019. A number of
advances have been made in several strategic areas,
continuing to strengthen the Company’s intellectual
property, portfolio of product candidates and commercial
prospects.
CDX Antibodies
The Company made advances in 2019 with research into
the use of its CDX antibody as a potential treatment for
subsets of AML, ALL and MDS. The antibody was shown
to be effective in animal studies against AML-derived
cells using the Company’s proprietary humanised mice,
following successful test tube studies of the ability of
CDX to target and eliminate ALL cells. These potential
additional applications of the CDX product candidate
could provide life-saving treatments against several
forms of blood cancer which remain resistant to current
modes of treatment. The use of CDX as a therapy
against blood malignancies is beyond the application of
CDX purely as a conditioning product for bone marrow
transplantation anticipated when the Company listed in
2017.
In July 2019, the Company filed a new patent application
for CDX in relation to conditioning patients for bone
marrow transplantation and treatments for blood cancers
such as AML and ALL. An additional composition of
matter patent application is expected to be filed upon
the completion of the current development agreement
with a global international pharmaceutical company
("GlobalCo"; the identity of GlobalCo must remain
confidential at its request). The Company therefore
continues to strengthen its intellectual property portfolio
and protections.
The work with GlobalCo on the Company’s CDX
antibody as a clinical candidate, first announced on 14
May 2018, entered its final phase in 2019. The Company
and GlobalCo continue to develop CDX towards clinical
readiness. GlobalCo has progressed manufacturability
assessment and
the antibody.
Hemogenyx and GlobalCo remain optimistic as to the
outcome of these tests based on results to date.
follow-up
tests of
The collaboration agreement, originally scheduled to
complete in late April 2020, is being extended by a short
period due to the impact on GlobalCo’s operations of
the novel coronavirus, following which Hemogenyx will
either license the antibody to GlobalCo or will in-license
GlobalCo’s improvements to it on favourable terms.
In the latter part of 2018 and through 2019, the Company
set to work with its monoclonal antibodies to develop
a Chimeric Antigen Receptor T-cell ("CAR-T") product
candidate as an alternative potential treatment for blood
laboratory results announced
disorders. The
in January and February 2020 are described in the
subsequent events section below.
initial
further
Humanised Mice
Immugenyx, LLC ("Immugenyx"), the Company’s wholly
owned subsidiary, developed a
improved
version of its humanised mice, termed the Advanced
peripheral blood Hematopoietic Chimera ("ApbHC") that
presents several advantages over other mouse models.
The ApbHC was initially developed as a research and
development tool for the investigation of mature blood
cell populations such as human T-cells, B-cells and
antibody-producing plasma cells. A major advantage
of the ApbHC is the absence of Graft versus Host
Disease ("GvHD"), a disease that complicates and often
renders impossible the efficient use of peripheral blood
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C H A I R M A N ’ S S T A T E M E N T
mononuclear cells in transplanted mice, shortening their
lifespan and suitability for testing.
The ApbHC has a broad range of applications.
Hemogenyx has demonstrated that the ApbHC can
potentially be used for testing multi-specific antibodies,
including its own bi-specific CDX antibody for the
elimination of AML and the conditioning of patients for
bone marrow transplantation. ApbHC may also be used
for the development and testing of new cell therapies
involving immune cell reprogramming, such as CAR-T.
Immugenyx has further demonstrated that the ApbHC
can potentially be used for the modelling of autoimmune
diseases, such as Systemic Lupus Erythematosus (aka
Lupus), with a goal of developing fundamentally new
treatments for those diseases. The Directors also believe
that the ApbHC could potentially be used as a tool for the
rapid development and/or isolation of human antibodies
against previously unknown viruses such as the novel
coronavirus or other natural or engineered human-
specific pathogens, referred to in biodefence circles as
"Disease X".
As with the original Advanced Hematopoietic Chimera,
the Company believes that the ApbHC will be of
considerable interest to other drug developers and
interest shown to date is promising.
Immugenyx entered into a research agreement with the
above-mentioned GlobalCo to develop the ApbHC as a
tool for drug development and testing, as announced on
23 October 2019. If the first phase of research produces
successful results, Hemogenyx anticipates that further
research will be commissioned, as has been the case
with other trials using the Company’s humanised mice.
According to the agreement, Immugenyx will grant
to GlobalCo a worldwide, non-exclusive, royalty-free
licence to any know-how and any patent(s) and patent
application(s) arising from the agreement to use solely
for its own research and product development purposes.
Immugenyx will also grant to GlobalCo an option to an
exclusive licence of any patents or patent applications
arising from the Agreement. The terms of the exclusive
licence will be negotiated in good faith and on reasonable
commercial terms at the time GlobalCo exercises its
option.
Immugenyx has already completed or entered into
humanised mouse related projects with a number
of other large pharmaceutical companies, including
the previously announced agreement with Janssen
Research & Development, LLC ("Janssen"), to build a
model of human systemic lupus erythematosus ("SLE",
also known as Lupus), an autoimmune disease. The
Company is developing independently a cell-based
approach to treat Lupus. In parallel, it is engaged in
seeking novel druggable targets using its proprietary
discovery platform that combines an AHC-based human
Lupus model and single cell sequencing.
These agreements confirm the value of the new type of
humanised mice within the pharmaceutical community
and give the Company an immediate revenue stream
which the Company believes can be developed and
promoted considerably more widely.
its
Hu-PHEC Stem Cell Therapy
The Company reviewed and extended
licence
agreement with Cornell University, the patent-holder
of the Hu-PHEC technology posited and discovered by
Hemogenyx’s Co-Founder and CEO Dr Vladislav Sandler
while working at Cornell. The restated agreement
confirms Hemogenyx’s exclusive, worldwide sub-
licensable licence to the patent.
is
("Hemogenyx-Cell")
Hemogenyx-Cell SPRL
the
Company’s wholly owned subsidiary, established in
Belgium in April 2019 to develop Hu-PHEC for the
direct treatment of leukaemia and other blood diseases.
Hemogenyx-Cell has been considering plans with a
number of potential Belgian-based partners, including
Orgenesis, Inc. – the provider of funding to Hemogenyx-
Cell and also to Immugenyx in a separate agreement
through convertible loans – regarding key building
blocks for the path through development towards clinical
trials of Hu-PHEC, including the establishment of a cell
bank.
Discussions continue, both on the Hu-PHEC project and
on other initiatives, with the potential partners, who are
highly respected names in complementary fields.
Post Period End Updates
Following the end of the period under review, the
Company has continued to make progress in a number
of areas and can highlight to shareholders the following
developments:
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C H A I R M A N ’ S S T A T E M E N T
A patent application entitled Post-Natal Hemogenic
Endothelial Cells and their isolation and use was
approved by the United States Patent and Trademark
Office and issued on 25 February 2020 as Patent
Number 10,570,373. The European Patent Office issued
a decision notice in April 2020 that it will grant a patent
bearing the same title as Patent Number 3068875. The
patent issuance will take effect on the date on which the
European Patent Bulletin mentions the grant, scheduled
for 13 May 2020. The patent applications were filed in
2014 and are the subject of Hemogenyx’s aforementioned
licence first granted in 2015 and restated in 2019.
The Company continued to draw on the cash provided
by convertible loan facilities from Orgenesis Inc. for a
maximum of US$2,000,000. As at 31 December 2019 a
total of US$1,500,000 of the total facilities available had
been drawn down, and the remaining $500,000 was
drawn down in February 2020.
On 30 January 2020 the Company announced that it
had raised £648,200 before expenses through a placing
and subscription of 36,011,116 ordinary shares at a price
of 1.8p per share. The funds are being used to continue
the development and in vivo testing of the Company’s
Chimeric Antigen Receptor (CAR) programmed T cells,
for the further development and commercialisation of
the Company’s ApbHC and models and treatments
for diseases, and to provide additional working capital
for the Company to progress its core CDX antibody
collaboration and to support its various partnerships with
other major pharmaceutical companies.
In January and February 2020 the Company announced
breakthroughs, first in test tube tests and subsequently
in animal studies, in the promising field of CAR-T therapy.
Hemogenyx has successfully constructed and tested
CAR programmed T cells, termed HEMO-CAR-T, as a
potential alternative treatment for AML. HEMO-CAR was
constructed using Hemogenyx’s proprietary humanised
monoclonal antibody, against a target on the surface of
AML cells. The Company has demonstrated that HEMO-
CAR was able to programme human T cells (i.e. convert
them into HEMO-CAR-T cells) to identify and destroy
human AML derived cells.
Following the successful completion of these tests,
Hemogenyx is undertaking further engineering of HEMO-
CAR to enhance their safety. The Company is introducing
and testing a safety switch designed to control the level
of activity of HEMO-CAR-T cells, with the aim of creating
a "tuneable and controllable drug". The purpose of these
efforts is to dramatically improve the safety and potential
versatility of HEMO-CAR-T cells for the treatment of AML
and/or conditioning of bone marrow transplants, as well
as a number of additional potential indications.
COVID-19
In late April 2020, the Company began applying its
groundbreaking research and technologies to develop
treatments for COVID-19, the disease caused by the
SARS-CoV-2 virus. Hemogenyx is using the exceptional
characteristics of its ApbHC mice to discover human
neutralising antibodies that could fight the virus. The study
aims to demonstrate how Hemogenyx’s technology can
be deployed rapidly in emergencies in order to discover
human neutralising antibodies against a host of viral
pathogens, including what infectious disease experts in
the bioprotection and biodefense sectors call "Disease
X", meaning as-yet unknown viruses that may represent
a similar or greater threat than the one presented by
COVID-19.
Concurrently, Hemogenyx has initiated a pilot study
to understand why some individuals who are infected
with SARS-CoV-2 are asymptomatic, some exhibit mild
symptoms, and some become very sick and even die.
Such understanding could prove essential for both
the development of new treatments for COVID-19 and
managing the current risk of infection. Should the study
prove to be successful, Hemogenyx will aim to develop
and commercialise a test that would prospectively
identify people with potentially high/low risk of severe
illness caused by the virus.
Financial Results
During the year the Group made a loss of £1,453,144
(2018: £1,544,324 restated loss).
Scientific Advisory Board & Board Update
I have chaired the Scientific Advisory Board since
September 2017 and have worked with the Company
to widen its expertise and to bring in advisers that can
specifically help given the stage to which the Company’s
product development has advanced.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 C H A I R M A N ’ S S T A T E M E N T
Our Scientific Advisory Board, under my Chairmanship,
brings together a number of experienced experts with
extensive biotech and large pharma drug development
experience and their calibre is a reflection of the potential
opportunity that our therapies present.
There were no changes to the composition of the
Board during 2019, giving the Company a period of
stability in which its talented scientific staff were able
to demonstrate their extraordinary capacity to advance
the Company’s science and commercial relationships on
limited financial resources.
The Board has continued to demonstrate its confidence
in the ongoing success of the business throughout the
period under review and post-period end. I have elected
to receive most of my remuneration in share options and
collectively we remain confident that the Company’s
shares should deliver significant shareholder return over
the long term.
9
Conclusion
The Company has made progress in further widening its
suite of products (e.g. its new ApbHC form of humanised
mice and its CAR-T product candidate) and their potential
applications (e.g. the use of ApbHC for biodefence
purposes and the use of CDX antibodies to treat ALL
and MDS) and in cultivating important partnerships and
financing.
further contributions
2019 marked substantial
to
the diversification and de-risking of the Company’s
prospects and additional steps in opening up yet more
disease markets. The period saw increased recognition
of the excellence of the Company’s scientific team, and
laid further foundations for the realisation of substantial
shareholder value as the Company moves ever closer to
entering a product candidate to clinical trials.
My fellow Directors and I are greatly encouraged by
the Company’s work and on-going conversations with
key industry partners on several fronts, and believe that
the next 12 months will mark a key inflection point in its
growth and maturity.
Prof Sir Marc Feldmann AC, FRS
MB BS, PhD, FRCP, FRCPath, FAA, F Med Sci
Chairman
30 April 2020
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B O A R D O F D I R E C T O R S
A N D S E N I O R M A N A G E M E N T
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
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B O A R D O F D I R E C T O R S A N D S E N I O R M A N A G E M E N T
Professor Sir Marc Feldmann – Non-Executive Director
& Chairman – appointed 9 April 2018
Honours, and was honoured in Australia with the
knighthood equivalent, the Companion of the Order of
Australia.
Professor Sir Marc Feldmann is a pre-eminent medically
trained immunologist at the University of Oxford where
he was Head of the Kennedy Institute of Rheumatology
until 2014 and now Emeritus Professor. He trained in
medicine at Melbourne University and then earned a
Ph.D. in Immunology at the Walter & Eliza Hall Institute
with Sir Gus Nossal, before working in London at
the Imperial Cancer Research Fund. Sir Marc's main
research interests are immunoregulation, understanding
mechanisms of autoimmunity and the role of cytokines
in disease, and working out how to fill unmet medical
needs.
for
His work in London led to the generation of a new
the mechanism of autoimmunity,
hypothesis
linking upregulated antigen presentation and cytokine
expression. Testing this hypothesis led to the discovery,
with colleague Sir Ravinder Maini, of the pivotal role of
TNFα (Tumour Necrosis Factor alpha) in the pathogenesis
of rheumatoid arthritis. This major discovery has
revolutionised therapy not only of rheumatoid arthritis but
other chronic inflammatory diseases (e.g. inflammatory
bowel disease, psoriasis, and ankylosing spondylitis), and
helped change the perception of monoclonal antibodies
from niche products to mainstream therapeutics. Anti-
TNF therapeutics are the current leading drug class with
2016 sales exceeding US$36 billion.
This has led to much scientific recognition, for example
election to the Royal Society and Academy of Medical
Sciences in London, the National Academy of Sciences
USA and the Australian Academy of Science, and multiple
major International prizes including the Crafoord Prize
of the Royal Swedish Academy of Sciences, the Albert
Lasker Clinical Research Award (NY), the Ernst Schering
Prize, the Paul Janssen Award for Biomedical Research,
and the Canada-Gairdner Award. He was also the first
recipient in biology or medicine of the EU/European
Patent Office Inventor of the Year Award in the Lifetime
Achievement category. In addition, Sir Marc has advised
more than 20 of the largest pharmaceutical and biotech
companies in the world and has mentored some of the
most successful scientists, many of whom have become
senior figures in the commercial pharmaceutical world.
Sir Marc was knighted in the 2010 Queen's Birthday
Sir Marc has been at the forefront of promoting effective
scientific-medical-pharmaceutical interactions. He has
built up a huge network of friends and collaborators who
meet regularly in Oxford and who will help Hemogenyx
to grow and enter clinical trials.
Dr Vladislav Sandler – Chief Executive Officer –
appointed 4 October 2017
Dr Vladislav Sandler is the Co-Founder and CEO of
Hemogenyx and a research Assistant Professor at the
State University of New York (SUNY) Downstate. Dr
Sandler is a widely published stem cell scientist with
decades of experience in scientific research. In particular,
Dr Sandler has extensive experience developing novel
methods of direct reprogramming of somatic cells into
functional and engraftable hematopoietic stem cells,
as well as developing novel sources of pluri- and multi-
potent cells.
Dr Sandler has conducted his research in Russia, Israel,
Canada and the United States, including at the Children's
Hospital at Harvard Medical School, the Salk Institute
for Biological Sciences, Harvard University and Albert
Einstein College of Medicine, among others. He also
led a team of scientists at Advanced Cell Technologies,
Inc. and was most recently on the faculty of Weill Cornell
Medical College. While at Cornell, Dr Sandler made the
significant discovery that the cells that give rise to blood
stem cells during mammalian development continue
to exist after birth, and he developed the method of
isolation of these cells from humans. As a result of this
important work, Dr Sandler was awarded the inaugural
Daedalus Fund Award for Innovation at Cornell. He went
on to found Hemogenyx in order to further pursue this
significant scientific discovery and his dedication to the
translation of science into clinical practice.
Dr Sandler has published numerous peer-reviewed
papers and has received a number of awards and
fellowships
for his scientific research. Dr Sandler
received his PhD from the University of British Columbia.
He is a member of the International Society for Stem Cell
Research.
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Alexis Sandler – Non-Executive Director
appointed 4 October 2017
Peter Redmond – Non- Executive Director
appointed 29 July 2015
Peter Redmond is a corporate financier with some 30
years’ experience in corporate finance and venture
capital. He has acted on and assisted a wide range of
companies to attain a listing over many years, on the
Unlisted Securities Market, the Full List and AIM, whether
by IPO or in many cases via reversals, across a wide range
of sectors, ranging from technology through financial
services to natural resources and, in recent years has
done so as a director of the companies concerned. He
has been active over many years in corporate rescues
and reconstructions on AIM and in reverse transactions
into a range of investing companies. He was a founder
director of Cleeve Capital plc (now Satellite Solutions
plc) and Mithril Capital plc (now BeHeard Group plc),
both of which were admitted to the Standard List of the
London Stock Exchange, and took a leading role in the
reconstruction and refinancing of AIM-quoted Kennedy
Investments plc and 3Legs Resources plc (now SalvaRx
plc). Peter is Chairman of AIM-quoted Pires Investments
plc and URA Holdings plc.
Alexis M. Sandler is the co-founder of Hemogenyx, for
which she has served as the Chief Operating Officer. Ms
Sandler is an attorney specialising in intellectual property,
with almost 15 years of experience representing a range
companies and institutions. Ms Sandler is especially
skilled at handling diverse interests in day-to-day matters
of organisations, multi-party agreements and long-term
strategic planning.
Ms Sandler began her legal practice in Los Angeles
at Hogan & Hartson LLP (now Hogan Lovells), where
she specialised in entertainment and media law and
intellectual property. She then worked for several years
at Katten Muchin Rosenman LLP representing studios,
production companies, television networks and other
major media companies in all aspects of entertainment,
media and intellectual property law. For three years, Ms
Sandler worked as the Director of Business and Legal
Affairs for a division of the Fox Entertainment Group, during
which time she was named one of Southern California’s
Best Young Lawyers by Los Angeles magazine. While
at Fox, Ms Sandler successfully negotiated hundreds of
major distribution agreements, in addition to advising the
company on important corporate and other legal matters.
Ms Sandler went on to become the General Counsel at
a Smithsonian affiliate museum in New York City. Ms
Sandler is currently the Associate General Counsel for a
major New York City cultural institution. She also serves
as the Secretary of the Board of Directors for MoMA PS1,
the contemporary art space.
Ms Sandler received her AB from Harvard University and
her JD from the UCLA School of Law and is a member of
the State Bar of New York and the State Bar of California.
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D I R E C T O R S ’ S T R A T E G I C R E P O R T
F O R T H E Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
The Directors present
their Strategic Report of
Hemogenyx Pharmaceuticals plc for the year ended 31
December 2019.
the issue of convertible loans. The Group received other
income of £213,126 (2018 - £91,357) from collaborations
with partners.
Introduction
This Strategic Report comprises a number of sections,
namely: the Group’s objectives, the Group’s strategy and
business model, a review of the Group’s business using
key performance indicators, and the principal risks and
uncertainties facing the business.
Cash flow and cash position
Cash used in operations totalled £1,199,873 (31 December
2018: £1,352,727).
As at 31 December 2019, the Group had a cash balance
of £498,679 (31 December 2018: £1,762,428).
Objectives
The Group’s objective is to develop breakthrough
therapies for the treatment of blood and autoimmune
diseases.
Strategy and Business Model
The Group’s long-term strategy is to create a suite of
products to address current problems associated with
bone marrow, or hematopoietic stem cell, transplants.
The latter represents an important part of the solution
to treating blood-related diseases, with the opportunity
to improve outcomes through reduced blood stem
cell transplant rejection and relapse, and if successful
potentially provides long-term cures for these diseases.
The Group’s business model aims to advance its therapies
through clinical proof-of-concept, taking them towards a
final stage of development. A goal is the licensing of one
or more of its therapies to partners in return for potential
upfront payments, research funding support, success
milestone and royalty payments.
Operational Review and Outlook
The operational review and outlook are set out in the
Chairman’s Statement.
Key Performance Indicators
The Directors have identified the KPIs below that they
feel are the most vital measurements for the Group to
monitor given its current stage of development. KPIs are
monitored on an annual basis to ensure that the remain
the most important and relevant measure of performance
and progress.
Cash management
In addition to the revenues from collaborations with
partners mentioned above, the Group continued to draw
on the cash provided by the convertible loan facilities
from Orgenesis Inc. for a maximum of US$2,000,000. As
at 31 December 2019 a total of US$1,500,000 (£1,144,167)
of the total facilities available had been drawn down, and
the remaining US$500,000 was drawn down in February
2020, following the period end. The cash position at
31 December 2019 was £498,679 (31 December 2018:
£1,762,428).
The Group carefully plans expenditure with rolling cash
flow forecasts and tight financial control. The Group takes
a collaborative cost sharing approach with business
partners and avoids long-term commitments as far as
possible.
Financial Review
The Group incurred a loss for the year to 31 December
2019 of £1,453,144 (31 December 2018 – loss of £1,544,324
restated).
In the year to 31 December 2019 the loss mainly arose
from operational expenses pursuing
the Group’s
objectives listed above as well as salaries, consulting and
professional fees, and general administration expenses.
These expenses have been met from the proceeds of
Intellectual property
The Group will focus on developing a new conditioning
treatment and cell
for HSC/BM
transplantation. The Group, or its licensors, has applied
for patents to protect its proprietary technology and future
products, which are in varying stages of development.
therapy product
The success of the Group will depend largely on the
Group’s ability to implement successful drug development
programmes, obtain the required regulatory approvals (in
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 15
D I R E C T O R S ’ S T R A T E G I C R E P O R T
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various territories), protect and exploit its own intellectual
property and know-how, and the intellectual property
and know-how licensed to it, and to generate a cash flow
in accordance with the strategy of the Group. Intellectual
property is protected by the Group through taking a pro-
active approach to filing patents over its products and
technologies, as well as the diligent maintenance and
protection of such patents and licenses.
The Group patent portfolio currently includes:
CDX bi-specific antibodies
The patent application relating to CDX bi-specific
antibodies was filed by Hemogenyx LLC in the USA on
4 April 2016 ("CDX Patent"). The invention summarised
in the patent application is a method of eliminating
hematopoietic stem cells/hematopoietic progenitors
("HSC"/"HP") in a patient using bi-specific antibodies
specifically binding
to a protein predominantly
expressed on the surface of HSC/HP and to a protein
uniquely expressed on a surface of immune cells. The
bound bi-specific antibodies redirect immune cells to
eliminate HSC/HP. The invention relates to the required
conditioning of a patient prior to a BM/HSC transplant.
In this respect, the invention serves two main purposes:
•
it provides adequate immunosuppression of the
patient and clears sufficient niche space in the
bone marrow for the transplant of HSC. This allows
transplanted cells to engraft in the recipient; and
•
it could potentially help to eradicate the source of
malignancy.
The provisional patent application is converted to a PCT
application and broadened to cover the composition
of matter (in this case, novel sequences of antibodies).
On April 4 2017, a PCT (Patent Cooperation Treaty)
application was filed by Hemogenyx which includes
additional claims that extend the CDX Patent set out in
the provisional patent application. These claims protect
specific sequences of several high-quality clones
discovered and validated by the Group. The claim
extension transforms the original "method" provisional
patent application into a "composition of matter" PCT
application.
In July 2019 the Group filed an additional composition of
matter patent application in relation to newly-discovered
monoclonal antibodies against a
target protein
expressed on the surface of hematopoietic stem cells/
hematopoietic progenitors and a number of leukaemias,
such as AML. It also covers a method of application of
the Group’s bi-specific CDX antibodies for conditioning
patients for bone marrow transplantation.
Hu-PHEC cell therapy
The patent relating to Hu-PHEC was filed by Cornell
University ("Cornell Patent") in several jurisdictions on 13
November 2014. The patent was approved and issued
in the United States of America on 25 February 2020
and will be published by the European Patent Office
on 13 May 2020. The invention summarises a method
of isolation and identification of post-natal hemogenic
endothelial cells, as well as the provision of substantially
purified populations of post-natal hemogenic endothelial
cells, compositions of post-natal endothelial cells and
methods to utilise post-natal hemogenic endothelial cells
to regenerate the hematopoietic system in a patient.
Advanced Hematopoietic Chimeras
The provisional patent application relating to the Group’s
proprietary humanised mouse model, the Advanced
Hematopoietic Chimera, is an application filed by Dr
Sandler and Dr Rita Simone in the USA on 20 February
2018 ("AHC Patent"). The invention summarised in the
patent application is mice whose hematopoietic system
is at least 40% humanised and methods for preparing the
same. The patent was assigned to the Group’s subsidiary
Immugenyx LLC on 24 May 2018. In June 2019 the Group
announced that Immugenyx LLC has further refined
its work to develop the Advanced peripheral blood
Hematopoietic Chimera ("ApbHC") as a research and
development tool. The major advantage of the ApbHC
compared to other humanised mouse models known to
the Group is the absence of Graft versus Host Disease,
a disease that complicates and often renders impossible
the efficient use of peripheral blood mononuclear cells in
transplanted mice. The ApbHC can potentially be used
for testing multi-specific antibodies, including its own bi-
specific CDX antibody, as well as for the development
and testing of new cell therapies involving immune cell
programming such as CAR-T. ApbHC can also potentially
be used for the modeling of autoimmune diseases, such
as Systemic Lupus Erythematosus (aka Lupus), with a
goal of developing fundamentally new treatments for
those diseases. Furthermore, ApbHC could potentially
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 16
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be used as a tool for the rapid development and/
or isolation of human antibodies against previously
unknown human-specific pathogens
(bioprotection/
biodefence applications), known in biosecurity circles as
"Disease X," such as the novel coronavirus.
Organisation as a whole
Executive management team
Board
Men Women
7
2
3
4
-
1
Product development
The Group develops therapies to transform bone
marrow and blood stem cell transplant procedures.
These therapies aim to replace the need for existing
methods of preparation of patients for transplantation,
such as chemotherapy and radiation treatments, and at
the same time address the problem of finding matching
stem cell donors whilst reducing the risk of blood stem
cell rejection after transplantation.
The Group’s two key products, CDX antibodies and
in preclinical
Hu-PHEC cell therapy, are currently
development, along with a CAR-T therapy candidate also
based on the Group’s antibodies. In addition, the Group’s
AHC product is currently the subject of collaborations
with other pharmaceutical companies to evaluate AHCs’
effectiveness as platforms for disease modelling and
drug discovery.
The Directors monitor product development through
results. The CDX product has been
pre-clinical
successfully evaluated
the Group’s proprietary
in
humanised mouse model, achieving its proof of concept.
Furthermore, we have achieved a notable demonstration
of CDX’s activity versus AML cells in vitro and in vivo. If
successful, the Company may be able to use the CDX
product to eliminate R/R AML in patients who qualify
for bone marrow transplantation. The Company is also
investigating the possibility of using its CDX antibodies
in combination with other treatments for AML to increase
their effectiveness.
Diversity
Hemogenyx is committed to workplace diversity which
includes but is not limited to gender, age, ethnicity and
cultural background.
Hemogenyx’s Diversity Policy defines initiatives which
assist the Company in maintaining and improving the
diversity of its workforce. The table below highlights the
proportion of women engaged by the Group:
Board of Advisors
The Group engages the services of a Board of Advisors
who are highly experienced
the clinical
development of treatments and regulatory processes to
commercialisation.
in both
Dr Alexander Tarakhovsky M.D., Ph.D.
SCIENTIFIC ADVISOR
• Professor and Head of Laboratories at The Rockefeller
University
• An expert and
recognised
thought
leader
in
immunology and epigenetics
Dr H. Michael Shepard, Ph.D.
SCIENTIFIC ADVISOR
• Led the discovery and development of many successful
cancer treatments including Herceptin/trastuzumab -
annual sales exceed $6.5 billion worldwide
• Received Harvard Medical School's prestigious
Warren Alpert Prize in recognition of contributions to
the field of cancer treatment research
• Founded NewBiotics, Inc., acquired by Kiadis Pharma
• Founded BioLogix, acquired by Symphogen
Dr Koen van Besien M.D.
CLINICAL ADVISOR
• Professor of Medicine and Director of the Stem Cell
Transplant Program at NYP-Weill Cornell College of
Medicine
• Developed novel methods of transplantation for those
patients who lack matching donors
• >200 publications in peer reviewed journals
• Editor in Chief of the journal Leukemia and Lymphoma
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
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Corporate Responsibility
We have defined the scope of our Group’s responsible
business practices as falling within the following key
focus areas:
• Health and Safety – ensuring the safety and well-
being of our staff
• Environment – managing our environmental impact
areas of waste, energy and water
• Employees – supporting our people to develop and
flourish within the business
• Community – positive interaction with the communities
in which we operate
• Ethical Standards – operating to the highest ethical
standards
We remain committed to ensuring these activities
become embedded in how we operate and contribute
towards the success of our business. This includes not
only identifying and managing business risk but exploring
opportunities to add value to the business.
Greenhouse Gas Emissions
Given the nature of its activities, there is limited scope
for the Group to have a major impact on environmental
matters. Nevertheless, the Directors are mindful of
their responsibilities in this regard and strive to seek
improvements may be made;
opportunities where
these are generally concentrated in areas of energy
conservation, recycling and waste control.
Principal Risks and Uncertainties
The Group operates in an uncertain environment and
is subject to a number of risk factors. The Directors
have carried out a robust assessment of the principal
risks facing the Group, including those that threaten
its business model, future performance, solvency or
liquidity. They consider the following risk factors are of
particular relevance to the Group’s activities and to any
investment in the Group. It should be noted that the list
is not exhaustive and that other risk factors not presently
known or currently deemed immaterial may apply.
The risk factors are summarised below:
Risks relating to the Group’s business strategy
The Group’s business is relatively undeveloped
The operations of Hemogenyx are at a relatively early
stage and, to date, no commercial sales of its products
have been made. The ability of the Group to achieve
commercialisation is dependent on a number of factors,
many of which are outside of the Group’s control.
Examples of factors outside of the Group’s control are
the impact of Brexit, capital market conditions, FDA
approval and competition.
Business strategy of the Group
The development of clinical products for new medical
treatments is inherently uncertain, with high failure
rates in clinical studies for both early and late stage
development products and such clinical studies can be
expensive, time-consuming and complicated and there
is no certainty as to the outcome of such studies. Even
once clinical studies have been successfully carried
out, later phase trials may not successfully replicate or
improve on such outcomes.
Staffing and key personnel
The Group is reliant on a number of the key personnel,
in particular Dr Vladislav Sandler who is the founder
of Hemogenyx (refer to Corporate Governance Report
for further detail). Whilst the Group has endeavoured
to ensure that it has contractual arrangements which
include non-compete restrictions in place with such
persons to lessen the risk of them ceasing to be involved
with the Group, in the event that the Group was to lose
the services of such individuals, its results could be
adversely affected.
Costs of commercialisation
The ability of the Group to bring its products to first
commercial sale will be dependent in part on the overall
costs of manufacturing and the costs involved could be
significant and there is no guarantee that the sale prices
achievable for its products will be viable and sustainable.
18
D I R E C T O R S ’ S T R A T E G I C R E P O R T
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Clinical studies and timelines risk
Hemogenyx is currently progressing its CDX, CAR-T
and Hu-PHEC product candidates through preclinical
development. Although encouraging results have been
achieved so far, there can be no certainty that these
results can be reproduced in clinical trials. The monies
raised in the Placings and Subscriptions, as well as
the Orgenesis convertible loan made to Hemogenyx-
Cell SPRL, are intended to support those preclinical
development activities.
The development of clinical products for new medical
treatments is inherently uncertain, with high failure
rates in clinical studies for both early- and late-stage
development products. Furthermore, such clinical studies
(Phase 1, Phase 2a/2b, Phase 3) are typically expensive,
complex, can take considerable time to complete and
have uncertain outcomes.
Furthermore, as a result of adverse, undesirable,
unintended or inconclusive results from any testing or
clinical trials (which have yet to be designed), the future
progress, planning and potential treatment outcome of
the products and clinical programmes may be affected
and may potentially prevent or limit the commercial
use of one, many or all of the Company's products. In
addition, later phase clinical trials may fail to show the
desired safety and efficacy obtained in earlier studies,
and a successful completion of one stage of clinical
development of an
investigational clinical product
does not ensure that subsequent stages of clinical
development will be successful.
Failure can occur at any stage of clinical development and,
as a result, enforced delays to the clinical development
plan could delay or prevent commercialisation of
the Company's product candidates. Various factors
associated with the potential failure or delay in completing
a clinical programme include, but are not limited to:
• Delays in securing clinical investigators or clinical
study sites;
• Delays in securing any regulatory authority, hospital
ethics committee, or
institutional review board
approval or approvals necessary to commence a
clinical study;
• Delays or failure to recruit a sufficient number of
clinical study participants in accordance with the
clinical study protocol;
• Difficulty or inability to monitor subjects adequately
during or after treatment;
•
Inability to replicate in Phase 3 controlled studies
any safety and efficacy data obtained from controlled
Phase 2a/2b clinical studies;
• Difficulty or inability to secure clinical investigator
compliance to follow the approved clinical study
protocol; and
• Unexpected adverse events or any other safety or
related issues.
Research and development risk
The Group operates in the biotechnology and bio-
pharmaceutical development sectors and carries out
complex scientific research. If the research or preclinical
testing or clinical trials of any of Hemogenyx's product
candidates fail, meaning that these candidates will not
be licensed or marketed, this would result in a complete
absence of revenue from these failed candidates.
Positive results
from preclinical and early clinical
studies do not guarantee positive results from clinical
trials required to permit application for regulatory
approval. Furthermore, the Group may discontinue the
development of candidates if results are not positive
or unlikely to further its progress towards a meaningful
outcome or collaboration.
Intellectual property (IP) infringement
The Group may be subject to future litigation concerning
its own IP and the IP of others. Adverse judgements in
relation to its IP would likely have negative outcomes for
its results of operations.
Intellectual property (IP) control
The Group is partially reliant on an exclusive, world-wide
licence of a patent from Cornell University for its Hu-
PHEC line of business. The exclusivity and exploitable
territory for this licence depend on the Group meeting
various developmental milestones.
Environmental and other regulatory requirements
The event of a breach with any environmental or
regulatory requirements may give rise to reputational,
financial or other sanctions against the Group, and
therefore the Board considers these risks seriously and
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
1919
to closure, and work continues with prudent hygiene and
distancing measures in place including limited work in the
laboratory on rota and work from home. The Company is
allowing for extended delivery times for some supplies,
and for slower progress with collaboration partners.
The Board and UK management continue to operate
remotely, as usual. At present the Company believes that
there should be no significant material disruption to its
work, but the Board continues to monitor these risks and
the Company’s business continuity plans.
Approved by the Board on 29 April 2019
Dr Vladislav Sandler
CEO
designs, maintains and reviews its policies and processes
so as to mitigate or avoid these risks. Whilst the Board
has a good record of compliance, there is no assurance
that the Group’s activities will always be compliant.
Financing
The Group’s ability to develop its product through to
commercial sale will depend upon the Group’s ability
to obtain financing primarily through a further raising
of new equity capital. Although the Group has been
successful in raising new equity capital, there can be no
guarantee that it will be able to do so in the future. The
Group may not be successful in procuring the requisite
funds on terms which are acceptable to it (or at all) and,
if such funding is unavailable, would raise questions
over its ability to further develop its products through
to commercialisation. Further, Shareholders’ holdings
of Ordinary Shares may be materially diluted if debt
financing is not available.
conditions,
Market conditions
including general economic
Market
conditions and their effect on exchange rates, interest
rates and inflations rates, may impact the ultimate value
of the Group regardless of its operating performance. The
Group also faces competition from other organisations,
some of which may have greater resources or be more
established in a particular territory. The Board considers
and reviews all market conditions to try and mitigate any
risks that may arise from these.
Political and country risk – UK departure from the EU
The Company is quoted in the United Kingdom (UK) and
operates in the UK and European Union (EU), in addition
to other territories. The Company may be subject to
the impact of the UK leaving the EU. As a result, given
the ongoing uncertainty surrounding the situation, the
Company is monitoring matters and seeking advice as to
how to mitigate the risks arising.
Pandemic and business disruption risk
The Company may be affected by disruptions to its
operations in one or more locations, particularly for the
foreseeable future in light of responses to the novel
coronavirus or other potential pandemics. At the time
of writing, the Company’s New York operations are
classed as an essential business and so are not subject
20
Hemogenyx Pharmaceuticals plc
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21
D I R E C T O R S ’ R E P O R T
F O R T H E Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
The Directors present their report with the audited
financial statements of the Group for the year ended 31
December 2019.
The Company’s Ordinary Shares were admitted to listing
on the London Stock Exchange under the name Silver
Falcon plc, on the Official List pursuant to Chapters 14
of the Listing Rules, which sets out the requirements for
Standard Listings, on 9 November 2015.
On 4 October 2017 the Company’s shareholders voted
in favour of acquiring the biotechnology company
Hemogenyx Pharmaceuticals Limited, with shares being
readmitted to trading on 5 October 2017 under the name
Hemogenyx Pharmaceuticals plc.
Principal Activity
The Group’s principal activity is the discovery, development
and commercialisation of novel therapies and treatments
for blood diseases such as leukemia and lymphoma.
The company's leading technologies aim to change
the way in which bone marrow/hematopoietic stem cell
("BM"/"HSC") transplants are performed and improve
their efficacy. Hemogenyx’s distinct and complementary
products include immunotherapy product candidates for
the treatment of AML and other blood malignancies and
patient conditioning – the CDX bi-specific antibody and
CAR-T therapy, and a cell therapy product for BM/HSC
transplantation – the Hu-PHEC. Each of these products
holds the potential to revolutionise the way BM/HSC
transplants are being performed or diseases of the blood
are treated, offering solutions that mitigate the dangers
and limitations associated with the current standard of
care.
The Group has three companies that are located outside
of the UK. The principal laboratory of the Group is
located in Brooklyn, New York, USA. The Group has also
established additional operations in Liège, Belgium.
Results and Dividends
The Consolidated Statement of Comprehensive Loss
set out on page 44 shows a loss for the year amounting
to £1,453,144 (2018: loss of £1,544,324 restated). The
Directors do not propose a dividend in respect of the
year ended 31 December 2019 (31 December 2018: nil).
Directors and Directors’ Interests
The Directors who held office during the year were as
follows:
Professor Sir Marc Feldmann
Dr Vladislav Sandler
Dr Robin Campbell
Alexis Sandler
Peter Redmond
Date Appointed
Date Resigned
9 April 2018
4 October 2017
-
-
4 October 2017
5 January 2019
4 October 2017
29 July 2015
-
-
The Directors of the Company who held office at 31 December 2018 had the following beneficial interests in the
Ordinary shares of the Company at 31 December 2018 according to the register of directors’ interests:
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 22
D I R E C T O R S ’ R E P O R T
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Director
Professor Sir Marc Feldmann
Peter Redmond*
Dr Vladislav Sandler
Alexis Sandler
At 31 December 209
At 31 December 2019
-
5,040,714
41,544,677
-
5,040,714
40,451,210
75,090,685
75,090,685
* Peter Redmond holds the majority of these shares through Catalyst Corporate Consultants Ltd of which he is the sole
shareholder.
At the date of this report, the only change to the Directors’ beneficial interest in the Ordinary shares of the Company
as disclosed in the table above is that Peter Redmond’s interest has increased to 5,596,270 shares by virtue of his
participation in the Subscription and Placing of January 2020.
According to the Register of Directors’ Interests, no rights to subscribe for shares in or debentures of Group companies
were granted to any of the Directors or their immediate families, or exercised by them, during the financial year except
as indicated below (see note 20 for detail on option plans):
OPTIONS
Date of
grant
Number of
options at
start of year
Options
granted
or acquired
during year
Options
lapsed
during year
Number of
options at
end of year
Dr Robin Campbell
Professor Sir Marc Feldmann
4 Oct 2017
3,560,429
3,560,429
9 Apr 2018
18,002,568
18,002,568
-
-
-
-
3,560,429
3,560,429
-
-
-
-
18,002,568
18,002,568
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 23
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WARRANTS
Date of
grant
Number of
warrants at
start of year
Warrants
granted or
acquired
during year
Warrants
lapsed
during year
Number of
warrants at
end of year
Dr Vladislav Sandler
Peter Redmond
4 Oct 2017
214,286
214,286
4 Oct 2017
1,942,857
1,942,857
-
-
-
-
214,286
214,286
1,942,857
1,942,857
-
-
-
-
Qualifying Third Party Indemnity Provision
At the date of this report, the Company has a third-party indemnity policy in place for all Directors.
Substantial Shareholders
As at 31 December 2019, the total number of issued Ordinary Shares with voting rights in the Company was 361,242,853
(now: 397,253,969). The Company has been notified of the following interests of 3 per cent or more in its issued share
capital as at the date of approval of this report.
Party Name
Alexis Sandler
Vladislav Sandler
Craig Auringer
HSBC Client Holdings Nominee (UK) Limited
Samantha Bauer
Optiva Securities Limited*
Ron Valk
Lawshare Nominees Limited
Mark Hawtin
Number of Ordinary
Shares
% of
Share Capital
75,090,685
41,544,677
31,407,913
20,125,759
17,996,487
18,506,211
17,131,193
13,397,733
13,268,570
18.9
10.5
7.9
5.1
4.5
4.7
4.3
3.4
3.3
* Optiva Securities Limited holds these shares through JIM Nominees Limited.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 24
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Annual Report & Financial Statements for the Year Ended 31 December 2019
D I R E C T O R S ’ R E P O R T
F O R T H E Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Relationship Agreement
In accordance with Listing Rule 9.8.4(14)R, the Company
has set out below a statement describing the relationship
agreement entered into by the Company with its principal
shareholder.
On 8 September 2017, the Company entered into a
Relationship Agreement with Dr Vladislav Sandler and
Alexis Sandler (the “Controlling Parties”), which came
into force at the Company’s re-admission. The principal
purpose of the Relationship Agreement is to ensure that
the Company is capable at all times of carrying on its
business independently of the Controlling Parties.
If the Company ceases to be admitted to the Main
Market of the London Stock Exchange, or the Controlling
Parties (together with their associates) cease to hold 20
per cent or more of the voting rights over the Company’s
shares the Relationship Agreement shall terminate save
for certain specified provisions.
The Relationship Agreement provides that the Controlling
Parties undertake to use all reasonable endeavours to
procure that they and their associates shall:
• conduct all transactions with the Company on an arm’s
length basis and on a normal commercial basis;
• not take any action that would have the effect of
preventing the Company from complying with its
obligations under the Listing Rules or the corporate
governance principles adopted by the Group;
• not propose or procure the proposal of a shareholder
resolution which is intended to, or appears to be
intended to, circumvent the proper application of the
Listing Rules; and
• not take any actions which is intended to, or appears
to be intended to, breach or circumvent the proper
application of the Relationship Agreement, the Listing
Rules or the corporate governance principles adopted
by the Group.
The Directors believe that the terms of the Relationship
its
Agreement enable the Company to carry on
business independently from the Controlling Parties
and their affiliates and ensure that all transactions and
relationships between the Company and the Controlling
Parties are, and will be, at arm’s length and on a normal
commercial basis. The Company has and, in so far as it is
aware, the Controlling Parties and their associates have,
complied with the independence provisions set out in the
Relationship Agreement from the date of the agreement,
through the relevant period under review. The ordinary
shares owned by the Controlling Parties rank pari passu
with the other ordinary shares in all respects.
Share Capital
Details of the issued share capital, together with details
of the movement in issued share capital during the year,
are shown in note 18 to the financial statements.
Financial Instruments
Details of the use of the Company’s financial risk
management objectives and policies as well as exposure
to financial risk are contained in the Accounting policies
and note 25 of the financial statements.
Future Developments and Events Subsequent to the
Year End
Further details of the Group’s future developments and
events subsequent to the year end are set out in the
Chairman’s Statement and Strategic Report.
Corporate Governance
The Corporate Governance report forms part of the
Directors’ Report and is disclosed on pages 27-33.
Going Concern
The Company’s business activities, together with facts
likely to affect its future operations and financial and
liquidity positions are set out in the Chairman’s Statement
and Directors’ Strategic Report. In addition, note 25
to the financial statements discloses the Company’s
capital risk management policy and note 2 details further
considerations made by the Directors in respect of going
concern, including an assessment of the possible impact
on the Company arising from COVID-19.
The Directors, having made due and careful enquiry, are
of the opinion that the Company has or will have access
to sufficient funding in order to execute its operations
over the next 12 months. The Directors therefore have
made an informed judgment, at the time of approving
the financial statements, that there is a reasonable
expectation that the Company has adequate resources
to continue in operational existence for the foreseeable
future. As a result, the Directors have adopted the going
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
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D I R E C T O R S ’ R E P O R T
F O R T H E Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
concern basis of accounting in the preparation of the
annual financial statements.
basis unless it is inappropriate to presume that the
Company will continue in business.
Political Donations
The Group made no political donations during the year
(2018: £nil).
Charitable Donations
There were no charitable donations made by the Group
in the current or prior year.
Auditors
The auditors, PKF Littlejohn LLP, have expressed their
willingness to continue in office and a resolution to
reappoint them will be proposed at the Annual General
Meeting.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law
the Directors have elected to prepare the financial
statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European
Union.
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
Company and of the profit or loss of the Company for
that year.
In preparing these financial statements, the Directors are
required to:
• Select suitable accounting policies and then apply
them consistently;
• Make judgments and accounting estimates that are
reasonable and prudent;
• State whether applicable IFRSs as adopted by the
European Union have been followed, subject to any
material departures disclosed and explained in the
financial statements; and
• Prepare the financial statements on the going concern
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Group and parent company’s transactions
and disclose with reasonable accuracy at any time the
financial position of the Group and parent company and
enable them to ensure that the financial statements
and the Directors’ remuneration report comply with the
Companies Act 2006. They are also responsible for
safeguarding the assets of the Group and parent company
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities. They are
also responsible to make a statement that they consider
that the annual report and accounts, taken as a whole,
is fair, balanced, and understandable and provides the
information necessary for the shareholders to assess the
Group and parent company’s position and performance,
business model and strategy.
The Directors are responsible for the maintenance
and integrity of the corporate and financial information
included on the Company’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of the financial statements may differ from
legislation in other jurisdictions.
Directors’ Responsibility Statement Pursuant to
Disclosure and Transparency Rules
Each of the Directors, whose names and functions
are listed on page 1, confirm that, to the best of their
knowledge and belief:
• the financial statements prepared in accordance with
IFRS as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position
and loss of the Group and parent company; and
• the Annual Report and financial statements, including
the Business review, includes a fair review of the
development and performance of
the business
and the position of the Group and parent company,
together with a description of the principal risks and
uncertainties that they face.
26
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
D I R E C T O R S ’ R E P O R T
F O R T H E Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant
audit information of which the Company’s auditors are
unaware, and each Director has taken all the steps that
he ought to have taken as a Director in order to make
himself aware of any relevant audit information and to
establish that the Company’s auditors are aware of that
information.
Approved by the Board on 29 April 2019
Dr Vladislav Sandler
CEO
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
2727
G O V E R N A N C E R E P O R T
28
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
G O V E R N A N C E R E P O R T
Introduction
The Company recognises the importance of, and is
committed to, high standards of Corporate Governance.
The Company has voluntarily applied the main and
supporting principles set out in the UK Code of
Corporate Governance published by the Financial
Reporting Council in 2018 ("the Code"). The Code has
been followed to the extent practicable for a company
of its size and nature. The Code can be found at frc.org.
uk/our-work/publications/Corporate-Governance. The
ways in which the Company has applied the Code are
explained below:
• The Code requires that a smaller company should have
at least two Independent Non-Executive Directors.
As at 31 December 2019 the Board consisted of an
Executive Director and three Non-Executive Directors.
The Non-Executive Directors are interested in either
ordinary shares in the Company, options over ordinary
shares in the Company, or both, and cannot therefore
be considered fully independent under the Code.
The remuneration of the Non-Executive Directors
includes options and this is contrary to best practice,
and thus the Company is not in full compliance.
However, the Directors consider the present structure
and arrangements to be adequate given the size
and stage of development of the Company, and all
are considered to be independent in character and
judgement.
• Directors appointed by the Board are subject to
election by shareholders at the Annual General
Meeting of the Company following their appointment
and thereafter are subject to re- election in accordance
with the Company’s articles of association. The terms
and conditions of appointment of Non-Executive
Directors will be made available upon written request.
The Board has voluntarily adopted a code for Directors’
dealings based on the Model Code contained in the Listing
Rules of the UK Listing Authority that was previously
in force. The Board will be responsible for taking all
proper and reasonable steps to ensure compliance with
the code by the Directors. Compliance with the code
is being undertaken on a voluntary basis and the FCA
will not have the authority to (and will not) monitor the
Company’s voluntary compliance with it, nor to impose
sanctions in respect of any failure by the Company to so
comply. In addition, the Company will take all proper and
reasonable steps to ensure compliance by the Founders
with the Code for dealings in the Ordinary Shares.
The Company is small with a modest resource base. The
Company has a clear mandate to optimise the allocation
of limited resources to support its development plans. As
such, the Company strives to maintain a balance between
conservation of
limited resources and maintaining
robust corporate governance practices. As the Company
evolves, the Board is committed to enhancing the
Company’s corporate governance policies and practices
deemed appropriate for the size and maturity of the
organisation.
Set out below are the Company’s corporate governance
practices for the year ended 31 December 2019.
Committees
The Company has established audit, remuneration and
nomination committees.
Audit Committee
The Audit Committee has responsibility for, among other
things, the monitoring of the integrity of the financial
statements of the Company and its Enlarged Group and
the involvement of the Group's auditors in that process.
It focuses in particular on compliance with accounting
policies and ensuring that an effective system of external
audit and financial control is maintained, including
considering the scope of the annual audit and the extent
of the non-audit work undertaken by external auditors
and advising on the appointment of external auditors.
The ultimate responsibility for reviewing and approving
the annual report and accounts and the half-yearly
reports remains with the Board. The Audit Committee will
meet at least three times a year at the appropriate times
in the financial reporting and audit cycle.
The members of the Audit Committee are Peter
Redmond, who acts as chairman of the committee, and
Professor Sir Marc Feldmann.
The Group’s external auditor is PKF Littlejohn LLP who
has served as external auditor for five years. The role of
external auditor last went to tender in 2015. The Audit
Committee closely monitors the level of audit and non-
audit services that they provide to the Company and
Group.
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
29
G O V E R N A N C E R E P O R T
Having assessed the performance, objectivity and independence of the auditors, the Committee will be recommending
the reappointment of PKF Littlejohn LLP as auditors to the Company at the 2020 Annual General Meeting.
During the year to 31 December 2019 the Audit Committee considered the following key issues in relation to the
Financial Statements:
Issue
Action
Accounting policies
The Committee reviewed and discussed the significant accounting policies with
management and the external auditor and reached the conclusion that each policy
was appropriate to the Group.
Carrying value of investment
in Hemogenyx LLC
The Committee reviewed the impairment assessment report prepared by
management and agreed that given the reasonable expectation that the Group
will achieve its milestone targets over the next 18 months that no impairment to the
value of the investment in Hemogenyx LLC was required as at 31 December 2019.
Going Concern review
The Committee considered the ability of the Group to operate as a Going Concern
considering cash flow forecast for the next 12 months and milestone achievements.
It was determined by the Committee that it was reasonable to expect that the
Group has or will have access to sufficient funding in order to achieve its 12-month
milestone targets and that it was appropriate for the Financial Statements to be
prepared on a going concern basis.
Review of audit and non-audit
services and fees
The external auditor is not engaged by the Group to carry out any non-audit work
in respect of which it might, in the future, be required to express an audit opinion.
The Committee reviewed the fees charged for the provision of audit and non-audit
services and determined that they were in line with fees charged to companies of
similar size and stage of development.
The Committee considered and was satisfied the external auditor’s assessment of
its own independence.
30
G O V E R N A N C E R E P O R T
Remuneration Committee
The remuneration committee reviews the performance
of the Executive Directors and makes recommendations
to the Board on matters relating to their remuneration
and terms of employment. The committee also makes
recommendations to the Board on proposals for the
granting of share awards and other equity incentives
pursuant to any share award scheme or equity incentive
scheme in operation from time to time. The Remuneration
Committee will meet at least twice a year.
The members of the Remuneration Committee are Peter
Redmond, who acts as chairman of the committee, and
Alexis Sandler.
Nomination Committee
The Nomination Committee is responsible for considering
and making recommendations to the Board in respect
of appointments to the Board, the Board committees
and the chairmanship of the Board committees. It is
also responsible for keeping the structure, size and
composition of the Board under regular review, and for
making recommendations to the Board with regard to
any changes necessary, taking into account the skills
and expertise that will be needed on the Board in the
future. The Nomination Committee meets at least once
a year.
The members of the Nomination Committee are Peter
Redmond, who acts as chairman of the committee,
Professor Sir Marc Feldmann, and Alexis Sandler.
Leadership
The Company is headed by an effective Board which is
collectively responsible for the long-term success of the
Company.
The role of the Board: the Board sets the Company’s
strategy, ensuring that the necessary resources are
in place to achieve the agreed strategic priorities, and
reviews management and financial performance. It is
accountable to shareholders for the creation and delivery
of strong, sustainable financial performance and long-
term shareholder value. To achieve this, the Board directs
and monitors the Company’s affairs within a framework of
controls which enable risk to be assessed and managed
effectively. The Board also has responsibility for setting
the Company’s core values and standards of business
conduct and for ensuring that these, together with the
Company’s obligations to its stakeholders, are widely
understood throughout the Company. The Board has a
formal schedule of matters reserved which is provided
later in this report.
Board Meetings: the core activities of the Board are
carried out in scheduled meetings of the Board. These
meetings are timed to link to key events in the Company’s
corporate calendar and regular reviews of the business
are conducted. Additional meetings and conference
calls are arranged to consider matters which require
decisions outside the scheduled meetings. During the
year, the Board met on 8 occasions.
Outside the scheduled meetings of the Board, the
Directors maintain frequent contact with each other to
discuss any issues of concern they may have relating to
the Company or their areas of responsibility, and to keep
them fully briefed on the Company’s operations.
Matters reserved specifically for the Board: the Board
has a formal schedule of matters reserved that can only
be decided by the Board. The key matters reserved are
the consideration and approval of:
• The Company’s overall strategy;
• Financial statements and dividend policy;
• Management structure including succession planning,
appointments and remuneration; material acquisitions
and disposal, material contracts, major capital
expenditure projects and budgets;
• Capital structure, debt and equity financing and other
matters;
• Risk management and internal controls;
• The Company’s corporate governance and compliance
arrangements; and
• Corporate policies
Summary of the Board’s work in the year: during the year,
the Board considered all relevant matters within its remit,
but focused in particular on the development and risk
diversification of the Company.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 31
G O V E R N A N C E R E P O R T
Attendance at meetings
Number held and entitled to attend
Number attended
Dr Vladislav Sandler
Professor Sir Marc Feldmann
Dr Robin Campbell1
Alexis Sandler
Peter Redmond
1 Until resignation on 5 January 2019
The Board is pleased with the high level of attendance
and participation of Directors at Board and committee
meetings.
The Chairman sets the Board Agenda and ensures
adequate time for discussion.
Non-Executive Directors: the Non-Executive Directors
bring a broad range of business and commercial
experience to the Company and have a particular
to
challenge
responsibility
and
constructively
the Executive
the performance of
management (where appointed) and to monitor the
performance of the management team in the delivery of
the agreed objectives and targets.
independently
All directors with the exception of the CEO and Professor
Sir Marc Feldmann were appointed for an initial term
of 12 months. These terms were extended by mutual
agreement after satisfactory performance and re-
election by shareholders.
Other governance matters: all of the Directors are aware
that independent professional advice is available to each
Director in order to properly discharge their duties as a
Director. In addition, each Director and Board committee
has access to the advice of the Company Secretary.
The Company Secretary: the Company Secretary is
Andrew Wright. He is responsible for the Board complying
with UK procedures.
Effectiveness
For the period under review the Board comprised a
Chief Executive Officer, a Non-Executive Chairman, and
8
8
-
8
8
8
8
-
8
8
two independent Non-Executive Directors. Biographical
details of the Board members are set out on pages 10-12
of this report.
The Directors are of the view that the Board and its
committees consist of Directors with an appropriate
balance of skills, experience, independence and diverse
backgrounds to enable them to discharge their duties
and responsibilities effectively.
Independence: the Non-Executive Directors bring a
broad range of business and commercial experience
to the Company. The Board considers each of the Non-
Executive Directors to be independent in character and
judgement.
Appointments: the Board is responsible for reviewing
and the structure, size and composition of the Board and
making recommendations to the board with regards to
any required changes.
Commitments: all Directors have disclosed any significant
commitments to the Board and confirmed that they have
sufficient time to discharge their duties.
Induction: all new Directors received an induction as
soon as practical on joining the Board.
Conflict of interest: a Director has a duty to avoid a
situation in which he or she has, or can have, a direct or
indirect interest that conflicts, or possibly may conflict with
the interests of the Company. The Board had satisfied
itself that there is no compromise to the independence
of those Directors who have appointments on the
Boards of, or relationships with, companies outside the
Company. The Board requires Directors to declare all
appointments and other situations which could result in
a possible conflict of interest.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 32
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
G O V E R N A N C E R E P O R T
Accountability
The Board is committed to providing shareholders with
a clear assessment of the Company’s position and
prospects. This is achieved through this report and as
required other periodic financial and trading statements.
a greater understanding of and confidence amongst its
shareholders in the medium and longer term strategy
of the Group and in the Board’s ability to oversee its
implementation. It is the responsibility of the Board as a
whole to ensure that a satisfactory dialogue takes place.
Going concern: the Company’s business activities,
together with factors likely to affect its future operations,
financial position, and liquidity position are set out
in the Chairman’s Statement and the principle risks
and uncertainties sections of the Strategic Report. In
addition, the notes to financial statements discloses the
Company’s financial risk management practices with
respect to its capital structure, liquidity risk, interest rate
risk, credit risk, and other related matters.
The Directors, having made due and careful enquiry, are
of the opinion that the Company has adequate working
capital to execute its operations and has the ability to
access additional financing over the next 12 months. The
Directors, therefore, have made an informed judgement,
at the time of approving financial statements, that there
is a reasonable expectation that the Company has
adequate resources to continue in operational existence
for the foreseeable future. As a result, the Directors
have continued to adopt the going concern basis of
accounting in preparing the annual financial statements.
Internal controls: the Board of Directors reviews the
effectiveness of the Company’s system of internal controls
in line with the requirement of the Code. The internal
control system is designed to manage the risk of failure
to achieve its business objectives. This covers internal
financial and operational controls, compliances and risk
management. The Company has necessary procedures
in place for the year under review and up to the date of
approval of the Annual Report and financial statements.
The Directors acknowledge their responsibility for the
Company’s system of internal controls and for reviewing
its effectiveness. The Board confirms the need for
an ongoing process for identification, evaluation and
management of significant risks faced by the Company.
The Directors carry out a risk assessment before signing
up to any commitments.
Relations with stakeholders
The Company is committed to a continuous dialogue with
shareholders as it believes that this is essential to ensure
Section 172 of the Companies Act 2006 requires
Directors to take into consideration the interests of
stakeholders in their decision making. The Board is
committed to understanding and engaging with all key
stakeholder groups of the Company in order to maximise
value and promote long-term Company success in line
with our strategic objectives. The Board recognises its
duties under Section 172 and continuously has regard
to how the Company’s activities and decisions will
impact employees, those with which it has a business
relationship, the community and environment and its
reputation for high standards of business conduct. In
weighing all of the relevant factors, the Board, acting in
good faith and fairly between members, makes decisions
and takes actions that it considers will best lead to the
long-term success of the Company.
During the year, the Board assessed
its current
activities between the Board and its stakeholders,
which demonstrated that the Board actively engages
with its stakeholders and takes their various objectives
into consideration when making decisions. Specifically,
its
actions the Board has taken to engage with
stakeholders in 2019 include:
• Attended the 2019 AGM to answer questions and
receive additional feedback from investors;
• Arranged meetings with certain stakeholders to
provide
the Company’s
research and development activities and other
general corporate updates;
them with updates on
• Made presentations at conferences and published
recordings and slide decks on the Company’s research
and development;
• Evaluated the relationships with the Company’s various
collaborators through management and identified
ways to strengthen relationships and arrangements
with key collaborations; and
• Monitored company culture and engaged with
improve
to continuously
employees on efforts
company culture and morale.
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
3333
Viability statement
In accordance with the UK Corporate Governance
Code published
in July 2018, the Directors have
assessed the prospects of the Group and concluded
that it is appropriate to adopt the going concern basis
of accounting. The assessment of going concern is
disclosed in note 2.
The Board’s assessment of the Group’s current position
and principal risks are disclosed in the Directors’ Strategic
Report on pages 13-19.
Dr Vladislav Sandler
CEO
The Board believes
that appropriate steps and
considerations have been taken during the year so that
each Director has an understanding of the various key
stakeholders of the Company. The Board recognises its
responsibility to contemplate all such stakeholder needs
and concerns as part of its discussions, decision-making,
and in the course of taking actions, and will continue
to make stakeholder engagement a top priority in the
coming years
The Board’s primary shareholder contact is through Peter
Redmond, the Non-Executive Director responsible for
shareholder relations. The Chairman, the CEO and other
Directors, as appropriate, make themselves available for
contact with major shareholders and other stakeholders
in order to understand their issues and concerns.
The Company plans to use the AGM as an opportunity to
communicate with its shareholders. Notice of the AGM will
be issued shortly and at least 21 days before the date of
the meeting. To ensure compliance with the Governance
Code, the Board proposes separate resolutions for each
issue and proxy forms allow shareholders who are unable
to attend the AGM – as may be a particular issue this
year in light of travel and meeting restrictions resulting
from the COVID-19 pandemic – to vote for or against or
to withhold their vote on each resolution. The results of
all proxy voting will be published on the Group’s website
after the AGM. Shareholders who attend the AGM will
have the opportunity to ask questions, and the Company
will solicit questions from shareholders who are unable to
attend by email in advance of the AGM for consideration.
The Group’s web site at https://hemogenyx.com is the
primary source of information on the Group. The web site
includes an overview of the activities of the Group and all
recent Group announcements.
34
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T
D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T
35
Company are provided with appropriate incentives to
encourage enhanced performance and are, in a fair
and responsible manner, rewarded for their individual
contributions to the success of the Company;
• recommend and monitor the level and structure of
remuneration for senior management;
• when setting remuneration policy for directors, review
and have regard to the remuneration trends across the
Company, and review the on-going appropriateness
and relevance of the remuneration policy;
• obtain
reliable, up-to-date
information about
remuneration in other companies. To help it fulfil its
obligations the Committee shall have full authority to
appoint remuneration consultants and to commission
or purchase any reports, surveys or information which
it deems necessary, within any budgetary restraints
imposed by the Board;
• be exclusively
responsible
the
selection criteria, selecting, appointing and setting the
terms of reference for any remuneration consultants
who advise the Committee;
for establishing
• approve the design of, and determine targets for, any
performance related pay schemes operated by the
Company and approve the total annual payments
made under such schemes;
• review the design of all share incentive plans for
approval by the Board and shareholders. For any such
plans, determine each year whether awards will be
made, and if so, the overall amount of such awards,
the individual awards to executive directors, company
secretary and other designated senior executives and
the performance targets to be used;
• ensure that contractual terms on termination, and any
payments made, are fair to the individual, and the
Company, that failure is not rewarded and that the
duty to mitigate loss is fully recognised; and
• oversee any major changes in employee benefits
structures throughout the Company.
The Company has an established
remuneration
committee. The Committee reviews the scale and
structure of the Directors’ fees, taking into account the
interests of shareholders and the performance of the
Company and directors.
The items included in this report are audited unless
otherwise stated.
Statement of Hemogenyx Pharmaceutical plc’s Policy
on Directors’ Remuneration by the Chairman of the
Remuneration Committee
As Chairman of the Remuneration Committee I am
introduce our Directors’ Remuneration
pleased
Report. One of the Remuneration Committee’s aims is
to provide clear, transparent remuneration reporting for
our shareholders which adheres to the best practice
corporate governance principles that are required for
listed organisations.
to
The Directors’ Remuneration Policy, which is set out
on pages 36 to 40 of this report, will be submitted to
shareholders for approval at our Annual General Meeting.
A key focus of the Directors’ Remuneration Policy is
to align the interests of the Directors to the long-term
interests of the shareholders and aims to support a
high-performance culture with appropriate reward for
superior performance, without creating incentives that
will encourage excessive risk taking or unsustainable
company performance. This is underpinned through the
implementation and operation of incentive plans.
Key Activities of the Remuneration Committee
• The key activities of the Remuneration Committee are:
• to determine and agree with the Board the framework
or broad policy for the remuneration of the Company's
chairman, chief executive, the executive directors, the
company secretary and such other members of the
executive management as it is designated to consider;
•
in determining such policy, take into account all
factors which it deems necessary including relevant
legal and regulatory requirements, the provisions and
recommendations of the UK Corporate Governance
Code (the "Code") and associated guidance. The
objective of such policy shall be to ensure that
members of the executive management of the
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 36
D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T
Members
The Remuneration Committee comprises the following independent Non-Executive Directors:
Name
Peter Redmond
Alexis Sandler
Position
Chairman
Member
Date of appointment
5 October 2017
5 October 2017
Remuneration Components
The Company remunerates directors in line with best
market practice in the industry in which it operates. The
components of Director remuneration that are considered
by the Board for the remuneration of directors in future
years are likely to consist of:
• Base salaries
• Pension and other benefits
• Annual bonus
• Share incentive arrangements
The Executive Director has entered into a service
agreement with the Company and the Non-Executive
Directors have entered into letters of appointment with
the Company.
All such contracts impose certain restrictions as regards
the use of confidential information and intellectual
property and the Executive Director’s service contract
imposes restrictive covenants which apply following the
termination of the agreement.
In addition, Dr Vladislav Sandler has a separate contract
with Hemogenyx LLC effective 1 September 2017
appointing him as CEO and Chief Scientific Officer of
Hemogenyx LLC for a three-year term and setting out his
duties in relation to his day-to-day to work in connection
with Hemogenyx’s product candidates. Pursuant to this
contract, Dr Sandler receives $125,000 per annum and
four weeks’ holiday a year. Dr Sandler is also subject to
certain non-compete and non-interference covenants
in the event of its termination (subject to certain limited
exceptions). Dr Sandler also has a separate contract with
Immugenyx LLC effective from 1 January 2019 appointing
him as CEO and Chief Scientific Officer of Immugenyx LLC
for a three-year term and setting out his duties in relation
to his day-to-day work in connection with Immugenyx’s
development of its AHC. Pursuant to this contract, Dr
Sandler receives $60,000 and 10,000 ownership units
in Immugenyx LLC per annum. This contract has similar
non-compete and non-interference covenants in the
event of its termination.
Other Matters
The Company does not currently have any annual or
long-term incentive schemes or any other scheme
interests in place for any of the Directors.
The Company has established a workplace pension
scheme but it does not presently have any employees
qualifying under the auto-enrolment pension rules
who have not opted out of the scheme. It does not
currently pay pension amounts in relation to Directors’
remuneration. The Company has not paid out any excess
retirement benefits to any Directors or past Directors.
The Company has not paid any compensation to past
Directors.
Recruitment Policy
Base salary levels will take into account market data
for the relevant role, internal relativities, their individual
experience and their current base salary. Where an
individual is recruited at below market norms, they may
be re-aligned over time (e.g. two to three years), subject
to performance in the role. Benefits will generally be in
accordance with the approved policy.
For external and internal appointments, the Board may
agree that the Company will meet certain relocation and/
or incidental expenses as appropriate.
Payment for Loss of Office
The Committee will honour Executive Directors’
contractual entitlements. Service contracts do not
contain liquidated damages clauses. If a contract is to be
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 37
D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T
Service Agreements and Letters of Appointment
The Executive Director’s service agreement had an initial
term of two years and may subsequently be terminated
by the Company or the Executive Director by giving 6
months’ notice.
terminated, the Committee will determine such mitigation
as it considers fair and reasonable in each case. There is
no agreement between the Company and its Executive
Directors or employees, providing for compensation for
loss of office or employment that occurs because of a
takeover bid.
The Committee reserves the right to make additional
payments where such payments are made in good
faith in discharge of an existing legal obligation (or by
way of damages for breach of such an obligation); or by
way of settlement or compromise of any claim arising in
connection with the termination of an Executive Director’s
office or employment.
Name
Date of service
agreement
Notice period by
Company (months)
Notice period by
Director (months)
Dr Vladislav Sandler
4 October 2017
6
6
The Non-Executive Directors of the Company do not have service contracts but are appointed by letters of appointment.
Each Non-Executive Director’s term of office runs for an initial period of one year unless terminated earlier upon written
notice or upon their resignations.
The terms of the Non-Executive Directors’ appointments are subject to their re-election by the Company’s shareholders
at any Annual General Meeting at which the Non-Executive Directors stand for re-election.
The details of each Non-Executive Director’s current term are set out below:
Name
Alexis Sandler
Peter Redmond
Date of service
agreement
4 October 2017
4 October 2017
Professor Sir Marc Feldmann
9 April 2018
Current
term
(years)
Notice period
by Company
(months)
Notice period
by Director
(months)
Date of
resignation
1
1
3
3
3
3
3
3
3
-
-
-
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 38
D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T
Executive Directors’ Remuneration
The table below sets out the remuneration received by each Executive Director for the years ended 31 December 2019
and 2018. Dr Vladislav Sandler was the highest paid Director:
Executive Directors
Basic salary
2019
£’000
Pension
2019
£’000
Dr Vladislav Sandler
Total
145
145
4
4
Executive Directors
Basic salary
2018
£’000
Pension
2018
£’000
Dr Vladislav Sandler
Lawrence Pemble
Total
94
34
138
4
-
4
Share based
payments
2019
£’000
32
32
Other*
2019
£’000
-
-
Share based
payments
2018
£’000
Other*
2018
£’000
-
18
18
-
-
-
Total
2019
£’000
177
177
Total
2018
£’000
98
52
150
Non-Executive Directors’ Remuneration
The table below sets out the remuneration received by each Non-Executive Director during the years ended 31
December 2019 and 2018:
Basic salary
2019
£’000
Share based
payments
2019
£’000
Other*
2019
£’000
Dr Robin Campbell
Alexis Sandler
Peter Redmond
Professor Sir Marc Feldmann
Total
1
10
36
12
59
-
-
-
-
-
-
-
-
-
-
Total
2019
£’000
1
10
36
12
59
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T
Basic salary
2018
£’000
Share based
payments
Restated
2018
£’000
Other*
2018
£’000
Dr Robin Campbell
Alexis Sandler
Peter Redmond
Peter Redmond
Professor Sir Marc Feldmann
Total
45
9
36
3
9
102
19
-
-
-
90
109
-
-
-
-
-
-
39
Total
2018
£’000
64
9
36
3
99
211
Relative importance of spend on pay
The table below illustrates the year-on-year change in total remuneration compared to distributions to shareholders
and loss before tax for the financial years ended 31 December 2019 and 2018:
Distributions to
shareholders
£
Total
employee pay
£
Operational
cash outflow
£
Year ended 31 December 2019
Year ended 31 December 2018
Percentage change
-
-
n/a
691,992
813,807
(14.9)%
1,199,873
1,352,727
(11.3)%
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 40
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T
Historical share price performance comparison
The table below compares the share price performance (based on a notional investment of £100) of Hemogenyx
Pharmaceuticals plc against the FTSE SmallCap and FTSE Techmark Mediscience for the period November 2015 to
December 2019 calculated on a month end spot basis. The FTSE SmallCap has been chosen to provide a wider market
comparator constituting companies of an appropriate size and the FTSE Techmark Mediscience chosen due to sector
relevance:
Investment Performance Comparison
160.00
140.00
120.00
100.00
80.00
60.00
40.00
20.00
-
Nov 15
Apr 16
Sep 16
Feb 17
Jul 17
Dec 17
May 18
Oct 18
Mar 19
Aug 19
HEMO
FTSE small cap
FTSE Techmark Mediscience
Hemogenyx Pharmaceuticals plc was listed in November 2015 (under the name Silver Falcon plc) and therefore no
historical share price data exists prior to this period. There was also no data between December 2015 and October
2017 pending completion of a transaction. It is for these reasons that the historical investment performance is not
reflective of the current Group.
Consideration of shareholder views
The Board considers shareholder feedback received and guidance from shareholder bodies. This feedback, plus any
additional feedback received from time to time, is considered as part of the Company’s annual policy on remuneration.
Approved on behalf of the Board of Directors.
Peter Redmond
Director & Remuneration Committee Chairman
30 April 2020
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
41
I N D E P E N D E N T A U D I T O R ’ S
R E P O R T T O T H E M E M B E R S O F
H E M O G E N Y X P H A R M A C E U T I C A L S P L C
42
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
I N D E P E N D E N T A U D I T O R ’ S R E P O R T T O T H E
M E M B E R S O F H E M O G E N Y X P H A R M A C E U T I C A L S P L C
Opinion
We have audited the financial statements of Hemogenyx
Pharmaceuticals Plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 December
2019 which comprise the Consolidated Statement of
Comprehensive Loss, the Group and Parent Company
Statements of Financial Position, the Group and Parent
Company Statements of Changes in Equity, the Group
and Parent Company Statements of Cash Flows and
notes to the financial statements, including a summary
of significant accounting policies. The financial reporting
framework that has been applied in their preparation
is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union
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 December 2019 and of the group’s and
parent company’s loss for the year then ended;
• the group financial statements have been properly
prepared in accordance with IFRSs as adopted by the
European Union;
• the parent company financial statements have been
properly prepared in accordance with IFRSs as
adopted by the European Union and as applied in
accordance with the provisions of the Companies Act
2006; and
• the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006; and, as regards the group financial
statements, Article 4 of the IAS Regulation.
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 public interest 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.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements,
which indicates that the Group will need additional equity
or non-dilutive funds in the medium term to support
its operations. They are in advanced negotiations with
several stakeholders and are confident of raising the
required funds to ensure they can settle their financial
obligations as they fall due. As stated in note 2, these
events or conditions, along with the other matters as set
forth in note 2, indicate that a material uncertainty exists
that may cast significant doubt on the company’s ability
to continue as a going concern.
Our opinion is not modified in respect of this matter.
Our application of materiality
For the purposes of determining whether the financial
statements are free from material misstatement, we
define materiality as the magnitude of misstatement
that makes it probable that the economic decisions of
a reasonably knowledgeable person, relying on the
financial statements, would be changed or influenced.
We also determine a level of performance materiality
which we use to assess the extent of testing needed to
reduce an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements
exceeds materiality for the financial statements as a
whole.
Materiality for the group financial statements was set at
£31,000 (2018: £31,000). This was calculated based on
2% of total expenses for the year. Using our professional
judgement, we have determined this to be the principal
benchmark within the financial statements as it will
be most relevant to stakeholders in assessing the
financial performance of the group in its early years of
development as the Group is not revenue generating.
Materiality for the parent company financial statements
was set at £25,000. This was calculated based on 2%
of total expenses. We have determined this to be the
principal benchmark of the parent company as it is not
revenue generating. Management target to restrict the
43
I N D E P E N D E N T A U D I T O R ’ S R E P O R T T O T H E
M E M B E R S O F H E M O G E N Y X P H A R M A C E U T I C A L S P L C
parent company expenditure to a minimum, in order to
utilise funds within the growth of the Group.
We also determine a level of performance materiality
which we use to assess the extent of testing needed
to reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial
statements as a whole. Performance materiality for
the group financial statements was set at £21,700 and
the parent company was set at £17,500, being 70%
of materiality for the financial statements as a whole
respectively.
Key audit matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in our
audit of the financial statements of the current period
and include the most significant assessed risks of
material misstatement (whether or not due to fraud) 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 financial statements as a whole, and in
forming our opinion thereon, and we do not provide a
separate opinion on these matters.
We agreed to report to those charged with governance all
corrected and uncorrected misstatements we identified
through our audit with a value in excess of £1,550 and for
the parent company a value in excess of £1,250. We also
agreed to report any other audit misstatements below
that threshold that we believe warranted reporting on
qualitative grounds.
An overview of the scope of our audit
The Group includes the listed parent company and the
US based subsidiaries. We tailored the scope of our audit
to ensure that we performed enough work to be able to
give an opinion on the financial statements as a whole,
taking into account the structure of the Group and the
Company, the accounting processes and controls, and
the industry in which they operate. All entities in the
Group were audited by a single engagement team. We
did not rely on the work of any component auditors.
As part of our planning we assessed the risk of material
misstatement including those that required significant
auditor consideration at the component and group level.
Procedures were then performed to address the risk
identified and for the most significant assessed risks of
material misstatement, the procedures performed are
outlined below in the key audit matters section of this
report.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 44
I N D E P E N D E N T A U D I T O R ’ S R E P O R T T O T H E
M E M B E R S O F H E M O G E N Y X P H A R M A C E U T I C A L S P L C
Key Audit Matter
How the scope of our audit responded to the key audit matter
Investments in Subsidiary
Investment - £8m (note 15)
Loan - £1.45m (note 14)
The investment in Hemogenyx LLC following
the reverse acquisition is the only material
asset and represents a significant portion
of the Parent Company’s total assets. The
Carrying value and recoverability of the
investment is ultimately dependent on the
value of the underlying assets of the Group.
We undertook several audit procedures which included:
• Agreeing the accounting entries from supporting documentation
and undertaking a review of the acquisition agreement and the
admission document issued to investors during the listing.
• Reviewing the directors’ assessment of the carrying value and
their conclusions thereof.
• Our review also included an assessment where we compared
the value of the subsidiary’s carrying value plus related party
receivables against the market capitalisation of the Group
as Hemogenyx Pharmaceuticals plc contains all the Group’s
operations.
• We also reviewed board minutes for any indications of changes
in investments held by the Parent Company and also agreed
ownership documents of all the subsidiaries in the Group.
We also reviewed the market capitalisation of the Group on the
London Stock Exchange at the date of this report as a guide and to
provide further assurance of its carrying value subsequent to the
year end.
Testing in respect of this Key Audit Matter was appropriately
covered by the above testing performed.
Carrying Value of Intangible Asset (note 13)
The carrying value of
Intangible Asset
recorded in the subsidiary’s books of £273k
is the other key risk area as these items will
ultimately result in the main source of income
for Group.
This asset mainly derives from an exclusive
licence agreement signed in January 2015,
where the Company purchased the patent
rights surrounding the two main products
it is working on for $347,500. The directors
concluded that no impairment was required
at this stage and amortisation will commence
once the two products are ready for marketing.
Our audit procedures included:
• Confirmation that the cost of intangibles is correctly recorded by
agreeing the price to the supporting documentation.
• Review of the directors’ assessment on the intangible assets
carrying value and challenging of the underlying assumptions.
• Review of the events after the year end for indicators of
impairment.
During our review of the events after the year end, we also noted
that the primary component of its intangible assets received patent
confirmation from the US Patent and Trademark Office and the
European Patent Office. This further supports the carrying value.
Testing in respect of this Key Audit Matter was appropriately
covered by the above testing performed.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 45
I N D E P E N D E N T A U D I T O R ’ S R E P O R T T O T H E
M E M B E R S O F H E M O G E N Y X P H A R M A C E U T I C A L S P L C
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. Our opinion on
the group and parent company 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.
In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears
to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we
are required to determine whether there is a material
misstatement in the financial statements or a material
misstatement of the other information. 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.
with the UK Corporate Governance Code containing
provisions specified for review by the auditor in
accordance with Listing Rule 9.8.10R(2) do not properly
disclose a departure from a relevant provision of the
UK Corporate Governance Code.
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion the part of the directors’ remuneration
report to be audited has been properly prepared in
accordance with 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.
We have nothing to report in this regard.
Matters on which we are required to report by
In this context, we also have nothing to report in
regard to our responsibility to specifically address the
following items in the other information and to report
as uncorrected material misstatements of the other
information where we conclude that those items meet
the following conditions:
• Fair, balanced and understandable set out on page
28 – the statement given by the directors that they
consider the annual report and financial statements
taken as a whole is fair, balanced and understandable
for
and provides
shareholders to assess the group’s performance,
business model and strategy, is materially inconsistent
with our knowledge obtained in the audit; or
information necessary
the
• Audit committee reporting set out on page 28 – the
section describing the work of the audit committee
does not appropriately address matters communicated
by us to the audit; or
• Directors’ statement of compliance with the UK
Corporate Governance Code set out on page 28 –
the parts of the directors’ statement required under
the Listing Rules relating to the company’s compliance
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 and the part
of the directors’ remuneration report to be audited
are not in agreement with the accounting records and
returns; or
• certain disclosures of directors’
specified by law are not made; or
remuneration
• we have not received all the
information and
explanations we require for our audit.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 46
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
I N D E P E N D E N T A U D I T O R ’ S R E P O R T T O T H E
M E M B E R S O F H E M O G E N Y X P H A R M A C E U T I C A L S P L C
Responsibilities of directors
As explained more fully in the statement of directors’
responsibilities, which is included in the directors’ report,
the directors are responsible for the preparation of the
group and parent company 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 group and parent company 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.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council’s website at:
https://www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Other matters which we are required to address
We were appointed by the directors on 2 March 2020
to audit the financial statements for the year ending
31 December 2019. Our total uninterrupted period of
engagement is 5 years, covering the periods ending 28
February 2015 to 31 December 2019.
The non-audit services prohibited by the FRC’s Ethical
Standard were not provided to the group or the parent
company and we remain independent of the group and
the parent company in conducting our audit.
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on
the financial statements from our sector experience and
through discussions with the directors. We considered
the extent of compliance with those laws and regulations
as part of our procedures on the related financial
statement items.
We communicated
laws and regulations
throughout our audit team and remained alert to any
indications of non-compliance throughout the audit.
identified
As with any audit, there remained a higher risk of non-
detection irregularities, as these may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal controls.
Our audit opinion is consistent with the additional report
to the audit committee.
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.
Zahir Khaki (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
30 April 2020
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
47
F I N A N C I A L S T A T E M E N T S F O R T H E
Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
48
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
C O N S O L I D A T E D S T A T E M E N T
O F C O M P R E H E N S I V E I N C O M E
Continuing Operations
Revenue
Administrative Expenses
Depreciation Expense
Operating Loss
Other Income
Finance Income
Finance Costs
Loss before Taxation
Income tax
Loss for the year
Loss attributable to:
- Owners of Hemogenyx Pharmaceuticals plc
- Non-controlling interests
Items that will be reclassified subsequently to
profit or loss:
Translation of foreign operations
Other Comprehensive income for the year
Note
Year Ended
31 December 2019
£
Year Ended 31
December 2018
Restated
£
6
12
7
10
-
-
1,589,407
94,726
1,630,222
51,805
(1,684,133)
(1,682,027)
213,126
14,191
(31,328)
91,357
4,374
(1,779)
(1,488,144)
(1,588,075)
35,000
43,751
(1,453,144)
(1,544,324)
(1,450,627)
(2,517)
(1,453,144)
(1,544,324)
-
(1,544,324)
16,176
16,176
51,031
51,031
Total comprehensive income for the year
(1,436,968)
(1,493,293)
Attributable to:
Owners of Hemogenyx Pharmaceuticals plc
Non-controlling interests
Total comprehensive loss for the year
Basic and diluted loss per share attributable to the equity
owners of the Company
11
(1,434,451)
(2,517)
(1,436,968)
(0.004)
(1,493,293)
-
(1,493,293)
(0.004)
The notes to the financial statements form an integral part of these financial statements.
C O N S O L I D A T E D S T A T E M E N T
O F F I N A N C I A L P O S I T I O N
Group
Note
Assets
Non-current assets
Property, plant and equipment
Right of use asset
Intangible asset
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and Liabilities
Equity attributable to shareholders
Paid-in Capital
Called up share capital
Share premium
Other reserves
Reverse asset acquisition reserve
Foreign currency translation reserve
Retained Earnings
Equity attributable to owners of the Company
Non-controlling interests
Total Equity
Liabilities
Non-current liabilities
Lease liabilities
Borrowings
Total non-current liabilities
Current liabilities
Trade and other payables
Total Liabilities
Total Current Liabilities
Total Liabilities
Total equity and liabilities
12
13
14
17
18
19
20
4
13
23
22
13
49
Year Ended
31 December 2019
£
Year Ended
31 December 2018
Restated
£
123,922
109,442
262,050
495,414
55,804
498,679
554,483
173,943
-
272,753
446,696
90,475
1,762,428
1,852,903
1,049,897
2,299,599
3,612,429
7,699,789
399,229
(6,157,894)
53,223
(5,953,294)
(346,518)
(2,517)
(349,035)
73,192
1,144,167
1,217,359
141,677
39,896
181,573
3,601,762
7,340,267
686,851
(6,157,894)
37,047
(4,548,867)
959,166
-
959,166
-
1,172,826
1,172,826
167,607
-
167,607
1,398,932
1,340,433
1,049,897
2,299,599
The notes to the financial statements form an integral part of these financial statements.
This report was approved by the Board and authorised for issue on 30 April 2020 and signed on its behalf by:
Dr Vladislav Sandler, CEO
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 50
C O M P A N Y S T A T E M E N T O F F I N A N C I A L P O S I T I O N
Company
Note
Year Ended
31 December 2019
£
Year Ended
31 December 2018
Restated
£
Assets
Non-current assets
Loan to subsidiaries
Investment in subsidiary
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and Liabilities
Equity attributable to shareholders
Paid-in Capital
Called up share capital
Share premium
Other reserves
Retained Earnings
Total Equity
Liabilities
Current liabilities
Trade and other payables
Total Current Liabilities
Total Liabilities
15
16
17
18
19
20
22
1,570,839
8,000,000
9,570,839
6,282
14,505
20,787
1,453,736
8,000,000
9,453,736
75,972
461,003
536,975
9,591,626
9,990,711
3,612,429
7,699,789
386,662
(2,205,815)
9,493,065
3,601,762
7,340,267
680,564
(1,765,967)
9,856,626
98,561
98,561
134,085
134,085
98,561
134,085
Total equity and liabilities
9,591,626
9,990,711
Hemogenyx Pharmaceuticals plc has used the exemption granted under s408 of the Companies Act 2006 that allows
for the non-disclosure of the Income Statement of the parent company. The after-tax loss attributable to Hemogenyx
Pharmaceuticals plc for the year ended 31 December 2019 was £486,048 (2018: £602,874 restated).
The notes to the financial statements form an integral part of these financial statements.
This report was approved by the Board and authorised for issue on 30 April 2019 and signed on its behalf by
Dr Vladislav Sandler, CEO
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 51
C O N S O L I D A T E D S T A T E M E N T
O F C H A N G E S I N E Q U I T Y
Group
Called
up Share
Capital
Share
Premium
Other
reserves
Reverse
acquisition
reserve
Foreign
currency
translation
reserve
Retained
earnings
Non-
Controlling
interests Total Equity
£
£
£
£
£
£
£
£
As at 1 January 2018
3,600,514 7,341,056
369,147
(6,157,894)
(13,984)
(3,006,982)
Loss in year
Other Comprehensive
Income
Total comprehensive
income for the year
Issue of shares –
exercise of warrants
Embedded derivate on
convertible note
Issue of options
Writeback of
options lapsed
Write-back of
warrants exercised
-
-
-
-
-
-
1,248
3,745
-
-
-
-
-
-
-
-
-
-
-
309,322
(2,439)
(4,534)
4,534
-
-
-
-
6,287
-
-
-
(1,544,324)
51,031
-
51,031
(1,544,324)
-
-
-
-
-
-
-
-
(2,439)
-
As at 31 December 2018
3,601,762 7,340,267
686,851
(6,157,894)
37,047
(4,548,867)
-
-
-
-
-
-
-
-
-
-
2,131,857
(1,544,324)
51,031
(1,493,293)
4,993
6,287
309,322
-
-
2,131,857
Loss in year
Other Comprehensive
Income
Total comprehensive
income for the year
-
-
-
-
-
-
Issue of shares
10,667
21,333
-
-
-
-
Embedded derivate
on convertible note
Issue of options
Writeback of
options lapsed
Write-back of
warrants lapsed
-
-
-
-
-
-
-
6,280
90,487
(46,200)
338,189
(338,189)
-
-
-
-
-
-
-
-
-
(1,450,627)
(2,517)
(1,453,144)
16,176
-
-
16,176
16,176
(1,450,627)
(2,517)
(1,436,968)
-
-
-
-
-
-
-
-
46,200
-
-
-
-
-
-
32,000
6,280
90,487
-
-
As at 31 December 2019 3,612,429 7,699,789
399,229 (6,157,894)
53,223 (5,953,294)
(2,517)
(349,035)
The notes to the financial statements form an integral part of these financial statements.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 52
C O M P A N Y S T A T E M E N T O F C H A N G E S I N E Q U I T Y
Company
Called up Share
Capital
Share Premium Other reserves
Retained
earnings/(loss)
Total Equity
As at 1 January 2018
3,600,514
7,341,056
369,147
(1,165,532)
10,145,185
£
£
£
£
£
As at 31 December 2018
3,601,762
7,340,267
680,564
(1,765,967)
9,856,626
Loss in year
Other Comprehensive Income
Total comprehensive income for
the year
Issue of shares – exercise of
warrants
Issue of options
Write-back of options lapsed
Write-back of warrants exercised
-
-
-
-
-
-
1,248
3,745
-
-
-
Loss in year
Other Comprehensive Income
Total comprehensive income for
the year
-
-
-
-
-
-
Issue of shares
10,667
21,333
-
-
-
-
-
-
-
309,322
(602,874)
(602,874)
-
-
(602,874)
(602,874)
-
-
4,993
309,322
(2,439)
2,439
(4,534)
4,534
-
-
-
-
-
-
-
90,487
(486,048)
(486,048)
-
-
(486048)
(486,048)
-
-
32,000
90,487
-
-
Issue of options
Write-back of options lapsed
Write-back of warrants lapsed
-
-
-
(46,200)
46,200
338,189
(338,189)
-
As at 31 December 2019
3,612,429
7,699,789
386,662
(2,205,815)
9,493,065
The notes to the financial statements form an integral part of these financial statements.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 53
C O N S O L I D A T E D S T A T E M E N T O F C A S H F L O W S
Group
Note
Year Ended
31 December 2019
£
Year Ended
31 December 2018
Restated
£
Cash flows generated from operating activities
Loss before income tax
Depreciation
Other Non-cash items interest/professional fees (shares issued)
Interest income
Interest expense
Reverse Acquisition Expense
Compensation settled in shares
Share based payments
Foreign exchange gain
(Decrease)/increase in trade and other payables
Decrease/(increase) in trade and other receivables
12
4
20
(1,453,144)
94,726
-
(14,191)
31,328
-
32,000
90,487
20,745
(17,880)
16,056
(1,544,324)
51,805
-
(4,374)
1,779
-
-
309,322
(49,000)
(98,670)
(19,266)
Net cash outflow used in operating activities
(1,199,873)
(1,352,728)
Cash flows generated from financing activities
Proceeds from issuance of equity securities
Proceeds from borrowings
Payment of lease liabilities
23
13
-
-
(39,393)
4,993
1,175,915
-
Net cash flow generated from financing activities
(39,393)
1,180,908
Cash flows generated from investing activities
Interest income
Interest paid
Purchase of property, plant & equipment
Net cash flow generated from investing activities
14,191
-
(11,918)
2,273
4,374
(6)
(24,589)
(20,221)
Net (decrease)/increase in cash and cash equivalent
(1,236,993)
(192,041)
Effect of exchange rates on cash
(26,756)
77,814
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
1,762,428
498,679
1,876,655
1,762,428
The notes to the financial statements form an integral part of these financial statements.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 54
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
C O M P A N Y S T A T E M E N T O F C A S H F L O W S
Company
Cash flows generated from operating activities
Loss before income tax
Other Non-cash items interest/professional fees (shares issued)
Foreign exchange (gain) loss
Interest income
Interest expense
Compensation settled in shares
Share based payments
(Decrease) in trade and other payables
Decrease/(increase) in trade and other receivables
20
Note
Year Ended
31 December 2019
£
Year Ended
31 December 2018
Restated
£
(486,048)
(602,874)
-
48,621
(76)
-
32,000
90,487
(35,524)
69,692
-
(105,351)
(1,267)
6
-
309,322
(129,514)
(9,959)
Net cash outflow used in operating activities
(280,848)
(539,637)
Cash flows generated from financing activities
Proceeds from issuance of equity securities
Net cash flow generated from financing activities
Cash flows generated from investing activities
Interest income
Interest paid
Loan to related parties
Net cash flow generated from investing activities
-
-
76
-
(151,914)
(151,838)
4.993
4.993
1,267
(6)
(802,951)
(801,690)
Net (Decrease)/increase in cash and cash equivalent
(432,686)
(1,336,334)
Effect of exchange rates on cash
(13,812)
49,000
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
461,003
14,505
1,748,337
461,003
The notes to the financial statements form an integral part of these financial statements.
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
55
N O T E S T O T H E
F I N A N C I A L S T A T E M E N T S
56
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
the discovery, development
1. General information
The Group’s business is preclinical-stage biotechnology
focused on
and
innovative treatments relating
commercialisation of
to bone marrow/hematopoietic (blood-forming) stem
cell (BM/HSC) transplants for blood diseases, including
leukaemia, lymphoma and bone marrow failure. The
products under development are designed to address
a range of problems that occur with current standard of
care treatments.
The Company’s registered office is located at 5 Fleet
Place, London EC4M 7RD, and it is listed on the London
Stock Exchange.
The Company’s registered office is located at 5 Fleet
Place, London EC4M 7RD, and it is listed on the London
Stock Exchange.
2. Summary of significant accounting policies
The principal accounting policies applied
the
preparation of these financial statements are set out
below. These policies have been consistently applied to
all the years presented, unless otherwise stated.
in
Basis of preparation
in
The financial statements have been prepared
accordance with
International Financial Reporting
Standards (“IFRS”) and IFRS Interpretations Committee
(IFRS IC) interpretations as adopted for use by the
European Union, and the Companies Act 2006. The
financial statements have been prepared under the
historical cost convention.
Basis of consolidation
The consolidated financial statements comprise the
financial statements of Hemogenyx Pharmaceuticals
plc and its subsidiaries as at 31 December 2019. The
financial statements of the subsidiaries are prepared for
the same reporting period as the parent company, using
consistent accounting policies.
intra-group balances, transactions,
income and
All
expenses and profits and losses resulting from intra-
group transactions that are recognised in assets, are
eliminated in full.
Subsidiaries are fully consolidated from the date of
acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date
that such control ceases. Control is triggered by the
acquisition of the majority or all of the share capital of
subsidiaries. Please refer to note 4 for information on the
consolidation of Hemogenyx LLC.
Hemogenyx Pharmaceuticals plc has used the exemption
grated under s408 of the Companies Act 2006 that
allows for the non-disclosure of the Income Statement
of the parent company. The after-tax loss attributable to
Hemogenyx Pharmaceuticals plc for the year ended 31
December 2019 was £458,113 (2018: £553,476 restated).
Research and development expenditure
i. Research and development
Expenditure on research activities, undertaken with
the prospect of gaining new scientific or technical
knowledge and understanding, is expensed in profit or
loss as incurred. Development activities involve a plan
or design for the production of new or substantially
improved products and processes. Development
expenditures are capitalised only if development costs
can be measured reliably, the product or process is
technically and commercially feasible, future economic
benefits are probable, and the Company intends to, and
has sufficient resources to, complete development and
to use or sell the asset. No development costs have
been capitalised to date.
ii. Clinical trial expenses
Clinical trial expenses are a component of the Company's
research and development costs. These expenses
include fees paid to contract research organisations,
clinical sites, and other organisations who conduct
development activities on the Company's behalf. The
amount of clinical trial expenses recognised in a period
related to clinical agreements are based on estimates of
the work performed using an accrual basis of accounting.
These estimates incorporate factors such as patient
enrolment, services provided, contractual terms, and
prior experience with similar contracts.
iii. Government grants
Government grants relate to financial grants from
governments, public authorities, and similar
local,
national or international bodies. These are recognised
when there is a reasonable assurance that the Company
57
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
will comply with the conditions attaching to them, and
that the grant will be received. Government grants
relating to research and development are off-set against
the relevant costs.
Internally generated IP costs are written off as incurred
except where IAS 38 criteria, as described in research
and development above, would require such costs to be
capitalised.
Intangibles
Research and development
is written off as
Research expenditure
incurred.
Development costs are capitalised only if the expenditure
can be measured reliably, the product or process is
technically and commercially feasible, future economic
benefits are probable, the Group intends to and has
sufficient resources to complete development and to
use or sell the asset, and it is able to measure reliably the
expenditure attributable to the intangible asset during its
development.
The Group’s view is that capitalised assets have a finite
useful life and to that extent they should be amortised
over their respective unexpired periods with provision
made for impairment when required. Assets capitalised
are not amortised until the associated product is available
for use or sale. Amortisation is calculated using the
straight-line method to allocate the costs of development
over the estimated useful economic lives. Estimated
useful economic life is assessed by reference to the
remaining patent life and may be adjusted after taking
into consideration product and market characteristics
such as fundamental building blocks and product life
cycle specific to the category of expenditure.
Intellectual property (IP)
IP assets (comprising patents, know-how, copyright and
licences) acquired by the Group as a result of a business
combination are initially recognised at fair value or as a
purchase at cost and are capitalised.
The following rates are used:
Computer equipment
Laboratory equipment
The Group’s view is that capitalised IP assets have a finite
useful life and to that extent they should be amortised
over their respective unexpired periods with provision
made for impairment when required. Capitalised IP
assets are not amortised until the Group is generating
an economic return from the underlying asset and as
such no amortisation has been incurred to date as the
products to which they relate are not ready to be sold
on the open market. When the trials are completed and
the products attain the necessary accreditation and
clearance from the regulators, the Group will assess
the estimated useful economic like and the IP will be
amortised using the straight-line method over their
estimated useful economic lives.
Fixed assets
All property, plant and equipment are stated at historical
cost less accumulated depreciation or impairment value.
Cost includes the original purchase price and expenditure
that is directly attributable to the acquisition of the items
to bring the asset to its working condition. Depreciation
is provided at rates calculated to write off the cost less
estimated residual value of each asset over its expected
useful economic life. Assets held under finance leases, if
any, are depreciated over their expected useful economic
life on the same basis as owned assets, or where shorter,
the lease term. Assets are reviewed for impairment when
events or changes in circumstances indicate that the
carrying amount may not be recoverable.
33%
20% - 50%
Straight-line
Straight-line
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 58
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Impairment of non-financial assets
The Group is required to review, at least annually,
whether there are indications (events or changes in
circumstances) that non-financial assets have suffered
impairment and that the carrying amount may exceed
the recoverable amount. If there are indications of
impairment then an impairment review is undertaken. An
impairment charge is recognised within operating costs
for the amount by which the carrying amount exceeds
its recoverable amount. The recoverable amount is the
higher of the asset’s fair value less costs to sell and
the value-in-use. In the event that an intangible asset
will no longer be used, for example, when a patent is
abandoned, the balance of unamortised expenditure is
written off.
Impairment reviews require the estimation of the
recoverable amount based on value-in-use calculations.
Non-financial assets relate typically to investments in
related parties and in-process development and patents,
and require broader assumptions than for developed
technology. Key assumptions taken into consideration
relate to technological, market and financial risks
and include the chance of product launch taking into
account the stage of development of the asset, the
scale of milestone and royalty payments, overall market
opportunities, market size and competitor activity,
revenue projections, estimated useful lives of assets
(such as patents), contractual relationships and discount
rates to determine present values of cash flows.
Investments
Equity investments in subsidiaries are held at cost, less
any provision for impairment. As there is no quoted
price in an active market, fair value cannot be reliably
measured.
Going concern
requires
The preparation of financial statements
an assessment on the validity of the going concern
assumption.
The Directors have given particular thought to the
impact on the Group that may result from the novel
coronavirus and any other potential pandemics that may
arise. The Group’s New York operations are classed as
an essential business and are not subject to closure,
and so work continues with prudent hygiene and
distancing measures in place including limited work in
the laboratory on rota and work from home. The Group is
allowing for extended delivery times for some supplies,
and for slower progress with collaboration partners.
The Board and UK management continue to operate
remotely, as usual. At present the Group believes that
there should be no material disruption to its work, but the
Board continues to monitor these risks and the Group’s
business continuity plans.
The Directors have reviewed projections for a period
of at least 12 months from the date of approval of the
financial statements. The financial statements have
been prepared on the going concern basis. The Group’s
forecasts and projections, taking account of reasonably
possible changes in trading performance, show that the
Group will require further funding in the medium term.
The Group faces a degree of uncertainty at present as a
result of impact from the novel coronavirus, including its
ability to access further funding. Any actions relating to
fundraising are currently delayed pending the outcome
of discussions with collaboration partners and until the
financial markets return to more regular patterns of
activity. The Directors note that the Group has always
been successful with past fundraisings and continue to
believe strongly in the Group’s products and the value
of its intellectual property. They therefore believe that
the Group has or will have access to sufficient funding in
order to execute its operations over the next 12 months.
Therefore the Directors consider the going concern
basis appropriate.
Trade and other receivables and payables
Trade and other receivables are amounts due from
customers for merchandise sold or services performed in
the ordinary course of business. If collection is expected
in one year or less (or in the normal operating cycle of
the business if longer), they are classified as current
assets. If not, they are presented as non-current assets.
Trade and other receivables are recognised initially at
fair value, and subsequently measured at amortised cost
using the effective interest method, less provision for
impairment.
Other
liabilities measured at amortised cost are
obligations to pay for goods or services that have
been acquired in the ordinary course of business from
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 59
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
suppliers. The liabilities are classified as current liabilities
if payment is due within one year or less (or in the normal
operating cycle of the business if longer. If not, they are
presented as non-current liabilities.
The liabilities are recognised initially at fair value, and
subsequently measured at amortised cost using the
effective interest method.
Foreign currencies
Functional and presentation currency
The Company’s presentation currency is the British Pound
Sterling (“£”). The functional currency for the Company,
being the currency of the primary economic environment
in which the Company operates, is the British Pound
Sterling. The individual financial statements of each of
the Company’s wholly owned subsidiaries are prepared
in the currency of the primary economic environment in
which it operates (its functional currency).
The financial statements of Hemogenyx LLC, Immugenyx
LLC and Hemogenyx-Cell SPRL have been translated
in to Pound Sterling in accordance with IAS 21 The
Effects of Changes in Foreign Exchange Rates. This
standard requires that assets and liabilities be translated
using the exchange rate at period end, and income,
expenses and cash flow items are translated using the
rate that approximates the exchange rates at the dates
of the transactions (i.e. the average rate for the period).
The foreign exchange differences on translation of
Hemogenyx LLC, Immugenyx LLC and Hemogenyx-Cell
SPRL are recognised in other comprehensive income
(loss).
Foreign currency transactions
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing
on the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of
such transactions and from the translation at period-
end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in
profit and loss.
Share capital
Ordinary Shares are classified as equity. Equity
instruments issued by the Hemogenyx Group are
recorded at the proceeds received, net of direct issue
costs.
Cash
Cash consists of cash bank deposit balances.
Share-based payments
The Group has applied the requirements of IFRS 2 Share-
based Payment for all grants of equity instruments.
The Group operates an equity-settled share option plan
to certain shareholders. The fair value of the service
received in exchange for the grant of options and warrants
is recognised as an expense. Equity-settled share based
payments are measured at fair value (excluding the
effect of non-market based vesting conditions) at the
date of grant. The fair value determined at the grant date
of equity-settled share-based payment is expensed on a
graded vesting basis over the vesting period, based on
the Group's estimate of shares that will eventually vest
and adjusted for the effect of non-market based vesting
conditions.
Fair value is measured by use of the Black-Scholes
model. The expected life used in the models has been
adjusted, based on management's best estimate, for the
effects of non-transferability, exercise restrictions, and
behavioural considerations.
In addition, the Group issues equity-settled share-based
payments to the directors and senior management
(“Employee Share Options”) and to corporate finance
advisers for assistance in raising private equity and to
its Scientific Advisory Board members (“Non-employee
Share Options”). Equity-settled share-based payments
are measured at fair value at the date of grant for
Employee Share Options and the date of service for
Non-employee Share Options. The fair value determined
at the grant date or service date, as applicable, of the
equity-settled share-based payments is expensed, with
a corresponding credit to equity, on a straight-line basis
over the vesting period, based on the Group’s estimate
of shares that will eventually vest. At each subsequent
reporting date, the Group calculates the estimated
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 60
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
cumulative charge for each award having regard to any
change in the number of options that are expected to
vest and the expired portion of the vesting period. The
change in this cumulative charge since the last reporting
date is expensed with a corresponding credit being made
to equity. Once an option vests, no further adjustment is
made to the aggregate amount expensed.
The fair value is calculated using the Black Scholes
method for both Employee and Non-employee Share
Options as management views the Black Scholes method
as providing the most reliable measure of valuation. The
expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of
non-transferability exercise restrictions and behavioural
considerations. The market price used in the model is
the issue price of Company shares at the last placement
of shares immediately preceding the calculation date.
The fair values calculated are inherently subjective and
uncertain due to the assumptions made and the limitation
of the calculations used.
Prior year adjustment
Due to an oversight the value of options issued in October
2017 and April 2018 was calculated in accordance with
the Black Scholes method of options valuation using
a 2 year expected life whereas the expected lives of
the options should have been 5 years and 3 years
respectively. The options have been recalculated using
the correct expected lives.
As a result the loss for 2018 was understated by £66,792.
There was no impact on the cash flow statement and the
changes to the Statement of Financial Position were in
the Equity section only. Further details are disclosed in
note 26.
Taxation
Current tax
The charge for current taxation is based on the results
for the year as adjusted for items that are non-assessable
or disallowed. It is calculated using rates that have
been enacted, or substantially enacted, by the balance
sheet date. Current income tax assets and liabilities are
measured at the amount expected to be recovered from
or paid to the relevant taxation authorities.
Deferred tax
Deferred income tax is recognised on all temporary
differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial
statements, with the following exceptions:
• where the temporary difference arises from the initial
recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and, at
the time of the transaction, affects neither accounting
nor taxable profit or loss;
•
in respect of taxable temporary differences associated
with investment in subsidiaries, associates and joint
ventures, where the timing of the reversal of the
temporary differences can be controlled and it is
probable that the temporary differences will not
reverse in the foreseeable future; and
• deferred income tax assets are recognised only to
the extent that it is probable that taxable profit will
be available against which the deductible temporary
differences, carried forward tax credits or tax losses
can be utilised.
Deferred income tax assets and liabilities are measured
on an undiscounted basis at the tax rates that are
expected to apply when the related asset is realised or
liability is settled, based on tax rates and laws enacted
or substantively enacted at the statement of financial
position date.
The carrying amount of deferred income tax assets is
reviewed at each statement of financial position date.
Deferred income tax assets and liabilities are offset, only
if a legally enforcement right exists to set off current tax
assets against current tax liabilities, the deferred income
taxes related to the same taxation authority and that
authority permits the Company to make a single net
payment.
Income tax is charged or credited directly to equity if it
relates to items that are credited or charged to equity.
Otherwise income tax is recognised in the statement of
comprehensive income.
Financial Assets and Liabilities
Financial assets and liabilities are recognised in the
Company’s statement of financial position when the
Company becomes a party to the contractual provisions
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 61
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
of the instrument. The Company currently does not use
derivative financial instruments to manage or hedge
financial exposures or liabilities.
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted
in an active market. They are included in current assets,
except for maturities greater than 12 months after the
end of the reporting period. These are classified as non-
current assets. The Company’s loans and receivables
comprise Trade and Other Receivables and Cash and
Cash Equivalents in the Statement of Financial Position.
Impairment of Financial Assets
The Company and Group assesses at each reporting
date whether a financial asset is impaired and will
recognise the impairment loss immediately through the
consolidated statement of comprehensive loss.
Interest Bearing Loans and Borrowings
Borrowings are initially recognised at the fair value
less directly attributable
of consideration received
transaction costs. After initial recognition, borrowings
are subsequently measured at amortised cost using the
effective interest rate method. Where borrowings are
provided by shareholders at an interest rate discounted
to market rates, the difference on initial fair value is taken
to equity as a capital contribution.
Where the Group has entered into a hybrid instrument
whereby there is a debt instrument and an embedded
derivative financial liability, the fair value of the debt
instrument less the fair value of the derivative financial
liability is equal to loan recognised on initial measurement.
IFRS 15, Revenue from Contracts with Customers
IFRS 15 establishes principles for reporting useful
information to users of financial statements about the
nature, amount, timing, and uncertainty of revenue
and cash flows arising from an entity’s contracts with
customers. The standard is effective for annual periods
beginning on or after 1 January 2018, and supersedes:
IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13
Customer Loyalty Programmes, IFRIC 15 Agreements
for the Construction of Real Estate, IFRIC 18 Transfers
of Assets from Customers, and SIC-31 Revenue—Barter
Transactions Involving Advertising Services. The standard
establishes a five-step principle-based approach for
revenue recognition and is based on the concept of
recognising an amount that reflects the consideration for
performance obligations only when they are satisfied,
and the control of goods or services is transferred.
The majority of the Group’s revenue is derived from fees
related to collaboration agreements.
Management reviewed contracts where the Group
received consideration in order to determine whether
or not they should be accounted for in accordance
with IFRS 15. To date, Hemogenyx has entered into few
transactions that meet the scope of IFRS 15. Instead,
most income has been generated through collaboration
agreements and grants with counterparties that do not
meet the definition of a customer, and therefore the
contracts fall outside the scope of IFRS 15 and have been
accounted for in accordance with IAS 20.
Income is recognised at either a point-in-time or over
time, depending on the nature of the services and
existence of acceptance clauses.
Segmental reporting
The Group’s operations are located in New York, USA
and, in Liège, Belgium with the head office located in
the United Kingdom. The main assets of the Group, cash
and cash equivalents, are held in the United Kingdom,
Belgium and the United States. The Board ensures that
adequate amounts are transferred internally to allow
all companies to carry out their operational on a timely
basis.
The Group currently has one reportable segment – a
biotechnology company focused on the discovery,
development and commercialisation of
innovative
to bone marrow/hematopoietic
treatments relating
(blood-forming) stem cell (BM/HSC) transplants for blood
disease.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 62
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New Accounting Standards and Interpretations issued
and applied in the Financial Statements
IFRS 16, Leases
IFRS 16 replaces the current guidance in IAS 17 – ‘Leases’.
Under IAS 17, lessees were required to make a distinction
between a finance lease (on balance sheet) and an
operating lease (off balance sheet). IFRS 16 requires
lessees to recognise a lease liability reflecting future
lease payments and a ‘right-of-use asset’ for virtually all
lease contracts.
IFRS 16 includes an optional exemption for certain short-
term leases and leases of low-value assets; however, this
exemption can only be applied by lessees. For lessors,
the accounting remains substantially unchanged. IFRS
16 provides updated guidance on the definition of a
lease (as well as the guidance on the combination and
separation of contracts); under IFRS 16, a contract is,
or contains, a lease if the contract conveys the right to
control the use of an identified asset for a period of time
in exchange for consideration.
The standard is effective for periods commencing on
or after 1 January 2019 and has been endorsed by the
EU. Under the provisions of the standard most leases
including the majority of those previously classified as
operating leases, will be brought onto the statement
of financial position, as both a right-of-use asset and a
largely offsetting lease liability. The right-of-use asset
and lease liability are both based on the present value
of lease payments due over the term of the lease,
with the asset being depreciated in accordance with
IAS 16 'Property, Plant and Equipment' and the liability
increased for the accretion of interest and reduced by
lease payments.
IFRS 16 Leases has been applied for the first time in
preparing the annual report and financial statements.
Note 13 sets out the key impacts on the Consolidated
Statement of Comprehensive Loss and the Consolidated
Statement of Financial Position of the adoption of the
new standard.
New Accounting Standards and Interpretations in
issue but not applied in the Financial Statements
i. New standards, amendments and Interpretations
in issue but not yet effective or not (and in some cases
have not yet been adopted by the EU):
The standards and interpretations that are issued, but not
yet effective, up to the date of issuance of the financial
statements are listed below. The Company intend to
adopt these standards, if applicable, when they become
effective. These are summarised below:
Amendments to References to the Conceptual Framework
in IFRS Standards: Included are revised definitions
of an asset and a liability as well as new guidance on
measurement and derecognition, presentation and
disclosure. [Issued 29 March 2018, applies to accounting
periods beginning on or after 1 January 2020, subject to
EU endorsement].
Amendment to IFRS 3: Business Combinations: The
amendments clarify that to be considered a business,
an acquired set of activities and assets must include,
at a minimum, an input and a substantive process that
together significantly contribute to the ability to create
outputs. The definition removes the reference to an
ability to reduce costs, and the assessment of whether
market participants are capable of replacing any missing
inputs or processes and continuing to produce outputs.
An optional concentration test that permits a simplified
assessment of whether an acquired set of activities and
assets is not a business has been included as part of
the amendments. [Issued 22 October 2018, applies
to accounting periods beginning on or after 1 January
2020, subject to EU endorsement].
Amendments to IAS 1 and IAS 8: Definition of Material:
The amendments clarify the definition of material and
how it should be applied. The amendments ensure that
the definition of material is consistent across all IFRS
Standards. [Issued 31 October 2018, applies to accounting
periods beginning on or after 1 January 2020, subject to
EU endorsement].
The Group has not early adopted any of the above
standards and the directors are assessing the impact on
future financial statements.
There are no other IFRS or IFRIC interpretations that
are not yet effective that would be expected to have a
material impact on the Group.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019
63
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
3. Significant accounting judgements, estimates and
assumptions
The preparation of the financial statements in conformity
with International Financial Reporting Standards requires
the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the
process of applying the Company’s accounting policies.
Estimates and judgements are continually evaluated,
and are based on historical experience and other
factors, including expectations of future events that are
believed to be reasonable under the circumstances. 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
discussed below.
The principal areas in which judgement is applied are as
follows:
Fair value disclosure
The embedded derivative elements of the convertible
notes are measured using a risk-based pricing model.
For more information in relation to the fair value
measurement of this derivative please refer to note 23.
Valuation of stock options
Management uses the Black Scholes model to value the
share options. The model requires use of assumptions
regarding volatility, risk free interest rate and a calculation
of the value of the option at the time of the grant. Please
see note 20 for details.
is an
Intangible assets impairment
When there
indicator of a significant and
permanent reduction in the value of intangible assets,
an impairment review is carried out. The impairment
analysis is principally based on estimated discounted
future cash flows. The determination of the assumptions
is subjective and requires the exercise of considerable
judgement. Any changes in key assumptions about
the outcome of research and development activity,
probability of technical and regulatory success, amount
and timing of projected future cash flow or changes in
market conditions could materially affect whether an
impairment exists.
4. Reverse acquisition and LSE listing
On 4 October 2017, the Company acquired the entire
issued share capital of Hemogenyx LLC, a private
company incorporated in the United States, by way of a
share for share exchange.
Although the transaction resulted in Hemogenyx LLC
becoming a wholly owned subsidiary of the Company,
the transaction constitutes a reverse acquisition in as
much as the shareholders of Hemogenyx LLC own a
substantial majority of the outstanding ordinary shares of
the Company and 2 out of 4 (5 as of 31 December 2018)
members of the Board of Directors of the Company are
Hemogenyx LLC shareholders and management.
In substance, the shareholders of Hemogenyx LLC
acquired a controlling interest in the Company and
the transaction has therefore been accounted for as
a reverse acquisition. As the Company previously
discontinued its investment activities and was engaged
in acquiring Hemogenyx LLC and raising equity financing
to provide the required funding for the operations of the
acquisition and re-listing on the main market of the LSE,
it did not meet the definition of a business according
to the definition in IFRS 3. Accordingly, this reverse
acquisition does not constitute a business combination
and was accounted for in accordance with IFRS 2 Share-
based payment and IFRIC guidance, with the difference
between the equity value given up by the Hemogenyx
LLC shareholders and the share of the fair value of net
assets gained by the Hemogenyx LLC shareholders
charged to the statement of comprehensive income as
the cost of acquiring a main market LSE quoted listing.
Following the completion of the transaction the Company
changed its name to Hemogenyx Pharmaceuticals plc.
In accordance with reverse acquisition accounting
principles,
these consolidated financial statements
represent a continuation of the consolidated financial
statements of Hemogenyx LLC and include:
a. The assets and liabilities of Hemogenyx LLC at their
pre-acquisition carrying amounts and the results for
both periods; and
b. The assets and liabilities of the Company as at 31
December 2017 and its results from 5 October 2017
to 31 December 2017.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 64
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
On 4 October 2017, the Company issued 228,571,428
shares for all 21,923,076 shares of Hemogenyx LLC.
The fair value of net assets of Silver Falcon plc was as
follows:
On 4 October 2017, the quoted share price of Hemogenyx
Pharmaceuticals plc was £0.035 and therefore this
valued the investment in Hemogenyx LLC at £8,000,000.
Because the legal subsidiary, Hemogenyx LLC, was
treated as the accounting acquirer and the legal Parent
Company, Hemogenyx Pharmaceuticals plc, formerly
known as Silver Falcon plc, was treated as the accounting
subsidiary, the fair value of the shares deemed to have
been issued by Hemogenyx LLC was calculated at
£2,341,500 based on an assessment of the purchase
in Hemogenyx
consideration
Pharmaceuticals plc.
for a 100% holding
Cash and cash equivalents
Other assets
Liabilities
Net assets
£
1,098,640
60,641
(448,800)
710,480
The difference between the deemed cost and the fair
value of the net assets acquired of £1,631,020 has
been expensed in accordance with IFRS 2, Share
based payments, reflecting the economic cost to the
Hemogenyx LLC shareholders of acquiring a quoted
entity.
Year Ended 31
December 2019
Year Ended 31
December 2018
Year Ended 31
December 2017
As at start of year
Pre-acquisition losses of
Hemogenyx Pharmaceuticals plc1
Hemogenyx LLC issued
capital at acquisition2
Investment in Hemogenyx LLC3
Reverse acquisition expense4
£
(6,157,894)
£
(6,157,894)
-
-
-
-
-
-
-
-
As at end of year
(6,157,894)
(6,157,894)
£
-
(799,763)
1,010,849
(8,000,000)
1,631,020
(6,157,894)
The movements on the Reverse acquisition reserve are as follows:
1. These consolidated financial statements present the legal capital structure of the Company. However, under
reverse acquisition accounting rules, the Company was not acquired until 4 October 2017 and therefore the entry
above is required to eliminate the initial retained losses of the Company.
2. Hemogenyx LLC had issued share capital of equivalent to £1,010,849 as at 4 October 2017. As these financial
statements present the capital structure of the parent entity, the issue of equity by Hemogenyx LLC has been
recorded in this reserve.
3. The Company issued 228,571,428 shares at £0.35 each, totalling £8,000,000 for the entire issued capital of
Hemogenyx LLC. The above entry is required to eliminate the balance sheet impact of this transaction.
4. The reverse acquisition accounting is described in detail in note 4. The entry above represents the difference
between the value of the equity issued by the Company, and the deemed consideration given by Hemogenyx LLC
to acquire the Company.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 65
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
5. Segment Information
The Group has one reportable segment, the development of breakthrough therapies for the treatment of blood
diseases, and administrative functions in the United Kingdom.
The following tables present expenditure and certain asset information regarding the Group’s geographical segments
for the year ended 31 December 2019:
Year Ended 31 December 2019
Year Ended 31 December 2018
Revenue
SEGMENT ASSETS
United Kingdom
• Non-current
• Current
United States
• Non-current
• Current
Belgium
• Non-current
• Current
Total
• Non-current
• Current
CAPITAL EXPENDITURE
United Kingdom
United States
Belgium
£
-
20,787
495,414
513,729
-
19,967
495,414
554,483
-
11,918
-
11,918
£
-
536,976
446,696
1,315,927
-
-
446,696
1,852,903
-
24,589
-
24,589
Capital expenditure consists of the purchase of property, plant and equipment.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 66
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
6. Expenses by nature
Group
Group
Year Ended 31 December 2019
Year Ended 31 December 2018
Restated
Laboratory expenses
Consumable equipment and supplies
Contractors & consultants
Travel
Staff Costs
Insurance
Other
Operating lease expense
Legal and professional fees
Foreign exchange loss / (gain)
Total Administrative Expenses
£
21,246
400,571
47,666
33,505
691,992
50,499
74,815
-
256,091
13,021
1,589,407
£
57,653
290,613
40,350
14,632
813,807
50,926
19,804
45,283
291,899
5,255
1,630,222
7. Other income
Other income of £213,126 during the year to 31 December 2019 (2018: £91,357) relates to funds received from a third
party under a research collaboration programme.
8. Employees
Wages and salaries
Social security
Share based payments
Pension contributions
Group
Group
Company
Company
Year Ended
31 December 2019
Year Ended
31 December 2018
Restated
Year Ended
31 December 2019
Year Ended
31 December 2018
Restated
£
547,127
40,667
90,487
13,711
691,992
£
470,580
23,279
£
118,251
-
£
145,142
-
309,322
90,487
309,322
10,626
813,807
-
-
208,738
454,464
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 67
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Average number of people (including Executive Directors) employed:
Group
Group
Company
Company
Year Ended
31 December 2019
Year Ended
31 December 2018
Year Ended
31 December 2018
Year Ended
31 December 2019
5
2
7
5
2
7
-
2
2
-
2
2
Research & development
Administration
9. Auditor’s remuneration
Fees payable to the Company auditor:
Audit of the financial statements of the Group
and Company
10. Income tax
Current Tax:
Corporation tax on loss for the year
New York City Biotech tax credit – prior years
Deferred Tax
Tax on loss on ordinary activities
Company
Company
Year Ended 31 December 2019 Year Ended 31 December 2018
£
£
45,000
45,000
36,500
36,500
Company
Company
Year Ended 31 December 2019
Year Ended 31 December 2018
Restated
£
-
35,000
-
35,000
£
-
43,751
-
43,751
Loss on ordinary activities before tax
(1,453,144)
(1,588,075)
Analysis of charge in the year:
Loss on ordinary activities multiplied by
weighted average tax rate for the group of
26.16% (2018: 30.46%)
Disallowed items
Timing differences
Tax losses carried forward
Current Tax charge
(380,142)
23,137
-
(357,005)
-
(483,727)
99,265
-
(384,462)
-
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 68
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Weighted average tax rate is calculated by reference to the tax rates effective in each of the jurisdictions. The tax rates
effective at 31 December 2019 are 19%, 27.5% and 29.58% in the UK, the USA and Belgium respectively.
The Group has accumulated tax losses arising in the UK of approximately £880,391 (Dec 2018: restated £713,000) that
should be available, under current legislation, to be carried forward against future profits. No deferred tax asset has
been recognised against these losses. The Group has tax losses carried forward in the US of £1,450,000 available
under current rules until 2037. No deferred tax asset has been recognised against these losses.
11. Earnings per share
The calculation of the basic and fully diluted earnings per share is calculated by dividing the loss for the year from
continuing operations attributable to equity owners of the Group of £(1,450,626) (2018 Restated: £(1,544,324)) by the
weighted average number of ordinary shares in issue during the year of 360,719,748 (2018: 360,125,230).
Dilutive loss per Ordinary Share equals basic loss per Ordinary Share as, due to the losses incurred in 2019 and 2018,
there is no dilutive effect from the subsisting share options.
12. Property, plant and equipment
Group
Cost
31 December 2017
Additions
Foreign exchange movement
31 December 2018
Additions
Foreign exchange movement
31 December 2019
Accumulated depreciation and impairment losses
31 December 2017
Depreciation
Foreign exchange movement
31 December 2018
Depreciation
Foreign exchange movement
31 December 2019
Carrying amounts
31 December 2017
31 December 2018
31 December 2019
Property, plant
& equipment
Computer
equipment
£
235,698
24,589
14,590
274,877
6,355
(11,118)
270,114
44,120
51,805
5,009
100,934
55,464
(6,062)
150,336
191,578
173,943
119,778
£
-
-
-
-
5,563
(184)
5,379
-
-
-
-
1,284
(49)
1,235
-
-
4,144
Total
£
235,698
24,589
14,590
274,877
11,918
(11,302)
275,493
44,120
51,805
5,009
100,934
56,748
(6,111)
151,571
191,578
173,943
123,922
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 69
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
13. Leases
The Group has adopted IFRS 16 using the modified retrospective approach with the effect of applying this standard at
the date of initial recognition of 1 January 2019. Consequently comparatives have not been restated.
As a lessee, the Group has previously classified leases as operating or finance leases based on whether the lease
transferred significantly all of the risks and rewards incidental to the ownership of the underlying asset. Under IFRS
16, the Group recognises right-of-use assets and lease liabilities for all leases on its balance sheet. Each of the two US
subsidiaries has an agreement for the lease of laboratory facilities to which IFRS 16 has been applied.
The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position are as follows:
Group & Company
Balance on transition
Additions
Depreciation
Interest
Lease payments
Foreign exchange movements
Carrying value at 31 December 2019
Right of
use asset
Lease
liability
Income
statement
£
-
145,923
(37,978)
-
-
1,497
109,442
£
-
(145,923)
-
(6,830)
39,393
272
£
-
-
(37,978)
(6,830)
-
-
(113,088)
(44,808)
14. Intangible assets
On 15 January 2015, the Company entered into an Exclusive License Agreement with Cornell University to grant to
the Company patent rights to patent PCT/US14/65469 entitled Post-Natal Hematopoietic Endothelial Cells and Their
Isolation and Use and rights to any product or method deriving therefrom.
The Company paid Cornell University $347,500, consisting of cash payments of $22,500 and a convertible promissory
note in the amount of $325,000.
Cost
31 December 2017
Exchange movements
31 December 2018
Exchange movements
31 December 2019
Intellectual Property
£
257,525
15,228
272,753
(10,703)
262,050
The carrying value of intangible assets is reviewed for indications of impairment whenever events or changes in
circumstances indicate that the carrying value may exceed the recoverable amount. The products to which they relate
are not ready to be sold on the open market. When the trials are completed and the products attain the necessary
accreditation and clearance from the regulators, the Group will assess the estimated useful economic like and the IP will
be amortised using the straight-line method over their estimated useful economic lives. The directors are of the view
that no impairment is required as the test results to date have been very positive and these products are now being
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 70
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
moved on the clinical trial phase. Accordingly, the directors continue to believe that the products will eventually attain
the necessary accreditation and clearance from the regulators and so no impairment has been considered necessary.
Amortisation will be charged to operating costs in the Statement of Comprehensive Income when the Group achieves
product sales.
15. Loan to subsidiary
Loan to Hemogenyx LLC
Company
Year Ended 31 December 2019
Company
Year Ended 31 December 2018
£
1,570,839
1,570,839
£
1,453,736
1,453,736
Hemogenyx Pharmaceuticals plc has made cumulative loans to Hemogenyx LLC of US$2,096,915 (£1,570,839) as at 31
December 2019 (Dec 2018 US$1,896,915; £1,453,736). The loans are interest free and will be repaid when Hemogenyx
LLC’s operational cash flow allows. Management has undertaken an impairment assessment of the loan as at 31
December 2019 and has determined that that there was no impairment required. The interest rate and impairment
assessment are reviewed on an annual basis.
16. Investment in subsidiary
Name
Address of the
registered office
Nature
of business
Proportion of
ordinary shares held
directly by parent (%)
Proportion of ordinary
shares held ultimately
by parent (%)
Hemogenyx UK
Limited
5 Fleet Place, London, UK
EC4M 7RD
Holding Company
100
-
Hemogenyx LLC 9 East Lookerman Street,
Suite 3A, Dover, Kent,
Delaware, USA, 19901
Immugenyx LLC c/o Corporation Service
Company
251 Little Falls Drive,
Wilmington, Delaware,
USA, 19808
Biomedical sciences
-
100
Biomedical sciences
-
97.85%
Hemogenyx-Cell
SPRL
Avenue du Parc Industriel
89, 4041 Milmort, Belgique
Biomedical sciences
-
100
The remaining shares in Immugenyx LLC are held by Dr Vladislav Sandler and by an employee, Carina Sirochinsky,
as part of their compensation under their respective roles as CEO and Director of Operations. Hemogenyx LLC owns
500,000 shares in Immugenyx LLC, and Dr Sandler and Ms Sirochinsky receive 10,000 and 1,000 shares respectively
for each year of employment from January 2019.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 71
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
17. Trade and other receivables
Group
Group
Company
Company
Year Ended 31
December 2019
Year Ended 31
December 2018
Year Ended 31
December 2019
Year Ended 31
December 2018
£
£
£
£
VAT receivable
2,237
64,361
2,237
64,361
Trade & other receivables
Prepayments
Total trade and other
receivables
30,075
23,492
-
26,114
55,804
90,475
-
4,045
6,282
-
11,612
75,973
There are no material differences between the fair value of trade and other receivables and their carrying value at the
year end.
Number of shares
360,051,358
124,826
360,176,184
1,066,667
361,242,853
No receivables were past due or impaired at the year end.
18. Called up share capital
Company
As at 31 December 2017
Issue of shares for exercise of warrants 29 May 2018
As at 31 December 2018
Issue of shares 28 June 2019
As at 31 December 2019
19. Share premium
Group & Company
As at 31 December 2017
Issue of shares for exercise of warrants 29 May 2018
Value of warrants issued in connection with share placements
As at 31 December 2018
Issue of shares 28 June 2019
Writeback of value of placement warrants lapsed
As at 31 December 2019
£
3,600,514
1,248
3,601,762
10,667
3,612,429
£
7,341,056
3,745
(4,534)
7,340,267
21,333
338,189
7,699,789
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 72
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
20. Other reserves
Group
As at start of year
Charge for the year – employees
Fair value of warrants issued in connection with share placement
Fair value of warrants lapsed
Fair value of options lapsed
Convertible Note embedded derivative
As at end of year
Company
As at start of year
Charge for the year - employees
Fair value of warrants issued in connection with share placement
Fair value of warrants lapsed
Fair value of options lapsed
As at end of year
Year Ended
31 December 2019
Year Ended
31 December 2018
Restated
£
686,851
90,487
-
(338,189)
(46,200)
6,280
399,229
£
369,147
309,322
4,534
-
(2,439)
6,287
686,851
Year Ended
31 December 2019
Year Ended
31 December 2018
Restated
£
680,564
90,487
-
(338,189)
(46,200)
386,662
£
369,147
309,322
4,534
-
(2,439)
680,564
The expense recognised for employee and non-employee services during the year is shown in the following table:
Group and Company
Expense arising from equity-settled share-based
payment transactions
Total expense arising from share-based payment transactions
Year Ended
31 December 2019
Year Ended
31 December 2018
Restated
£
90,487
90,487
£
309,322
309,322
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 73
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Employee Plan
Under the Employee Plan (“EMP”) share options are
granted to directors and employees at the complete
discretion of the Company. The fair value of the options
is determined by the Company at the date of the grant.
Options granted vest in tranches on each of the following
events/dates:
i. Admission to the LSE (“Admission”);
ii. On the date falling six (6) months after Admission;
iii. On the date falling twelve
Admission; and
iv. On the date falling twenty-four (24) months after
Admission
(12) months after
On the provision that the option holder remains an
employee of the Group.
Options granted to all other option holders from 4
January 2018 onwards vest in equal tranches of 12.5%
every three months from the date of grant, until fully
vested.
The fair value of the options is determined using the Black
Scholes method as stated in note 2. The contractual life
of each option granted is between two and five years.
There are no cash settlement alternatives.
Options are settled when the Company receives a notice
of exercise and cash proceeds from the option holder
equal to the aggregate exercise price of the options
being exercised.
Employees, including directors*
Members of the Scientific Advisory Board
Total
Non-Employee Plan
Under the Non-Employee Plan (“NEMP”) share options
are granted to non-employees at the complete discretion
of the Company. The exercise price of the options is
determined by the Company at the date of the grant. The
options vest at the date of the grant.
The fair value of the options is determined using the
Black Scholes method as stated in note 2 and not the
value of services provided as this is deemed the most
appropriate method of valuation. In all cases non-
employee option holders received cash remuneration
in consideration for services rendered in accordance
with agreed letters of engagement. The contractual life
of each option granted ranges from two to five years.
There are no cash settlement alternatives. Volatility was
determined by calculating the volatility for three similar
listed companies and applying the average of the four
volatilities calculated.
Options are settled when the Company receives a notice
of exercise and cash proceeds from the option holder
equal to the aggregate exercise price of the options
being exercised.
A schedule of options granted is below:
Number options
21,206,951
11,146,751
32,353,702
* Details of options held by individual directors are disclosed in the Directors’ Report.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 74
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Group & Company
2019
Number
2019
WAEP2 pence
2017
Number
2017
WAEP3 pence
Outstanding at the beginning
of the year
Granted during the year
Lapsed during the year
Cancelled during the year
36,071,741
712,085
(6,230,750)
-
Outstanding at end of year
30,553,076
Exercisable at end of year
22,428,934
3.5
24,566,957
3.5
3.5
-
3.5
3.5
19,426,737
(2,581,310)
(5,340,643)
36,071,741
16,339,066
3.5
3.5
3.5
3.5
3.5
3.5
The weighted average remaining contractual life for the share options outstanding as at 31 December 2019 is 2.84
years (2018: 1.25). The weighted average fair value of options granted during the year was 0.007 pence (2018: 0.01).
The weighted average fair value of options cancelled or lapsed during the year was 0.018 pence (2018: 0.008). The
exercise price for options outstanding at the end of the year was 3.5 pence (2018: 3.5).
The following table lists the inputs to the models used for the two plans for the years ended 31 December 2019 and 31
December 2018:
Expected volatility %
Risk-free interest rate %
Expected life of options (years)
WAEP - pence
Expected dividend yield
Model used
Jan-2019
(EMP)
52.12
0.956
5
3.5
-
Black Scholes
Group & Company
Nov 2018
(EMP)
Apr 2018
(EMP)
Jan 2018
(EMP)
Oct2017
(EMP)
Expected volatility %
Risk-free interest rate %
Expected life of options
(years)
WAEP - pence
Expected dividend yield
44.06
0.818
5
3.5
-
45.32
0.918
3
3.5
-
46.88
0.577
5
3.5
-
63.82
0.472
5
3.5
-
Model used
Black Scholes
Black Scholes
Black Scholes
Black Scholes
2/3 Weighted average exercise price
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 75
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Warrants
The share placement that completed on 4 October 2017 with the issue of 57,142,857 shares at £0.035 carried 1 for 2
warrants for qualifying shareholders over 62,021,429 new ordinary shares at £0.04 per share. In order to qualify for
these warrants the shareholder must have retained the shares for a period of 60 days after admission.
The warrants expired on 4 October 2019.
The following table lists the inputs to the models used for the plan for the year ended 31 December 2018:
Expected volatility %
Risk-free interest rate %
Expected life of options (years)
WAEP - pence
Expected dividend yield
Model used
(NEMP)
39.56
0.472
2
4.0
-
Black Scholes
21. Capital and reserves
The nature and purpose of equity and reserves are as follows:
Share capital comprises the nominal value of the ordinary issued share capital of the Company.
Share premium represents consideration less nominal value of issued shares and costs directly attributable to the issue
of new shares.
Other reserves represents the value of options in connection with share-based payments, warrants connected with
share placements issued by the Company, and the value of the deemed embedded derivative connected with the
Convertible Note liability in accordance with IAS39.
Reverse asset acquisition reserve is the reserve created in accordance with the acquisition of Hemogenyx LLC on 5
October 2017 in accordance with IFRS 2.
Foreign currency translation reserve is used to recognise the exchange differences arising on translation of the assets
and liabilities of foreign branches and subsidiaries with functional currencies other than Pounds Sterling, as well as the
revaluation of intercompany loans.
Retained earnings represent the cumulative retained losses of the Company at the reporting date.
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 76
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
22. Trade and other payables
Group
Group
Company
Company
Year Ended 31
December 2019
Year Ended 31
December 2018
Year Ended 31
December 2019
Year Ended 31
December 2018
£
61,407
80,270
£
£
£
91,373
34,561
66,727
76,234
64,000
67,358
141,677
167,607
98,561
134,085
141,677
-
167,607
-
98,561
-
134,085
-
Trade and other payables
Accruals and deferred income
Total
Current liabilities
Non-current liabilities
23. Borrowings
The borrowings are comprised of borrowings and convertible notes. As of 1 January 2018 the Group adopted IFRS 9,
and as a result, where the instruments contained liability classified embedded derivatives, an election was taken to fair
value the entire financial instrument through profit and loss rather than split out the embedded derivative. The notes
payable consists of the following:
Group & Company
Non-current
Borrowings
Balance at 1 January
Drawdowns
Interest expense
Value of embedded derivative transferred to Other Reserves
Foreign exchange movement
Balance at 31 December 2019
Convertible Notes
Balance at 1 January
Drawdowns
Interest expense
Value of embedded derivative transferred to Other Reserves
Foreign exchange movement
Balance at 31 December 2019
Total Borrowings at 31 December 2019
Year Ended 31
December 2019
Year Ended 31
December 2018
£
583,269
-
12,743
(6,280)
(18,104)
571,628
589,557
-
11,755
(6,040)
(22,733)
572,539
1,144,167
£
-
587,245
882
(6,287)
1,429
583,269
-
588,670
882
-
5
589,557
1,172,826
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 77
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
A summary of the debt facilities is as follows:
liabilities and deferred payment.
During 2018 Orgenesis entered in to two debt facility
agreements with the Group, one each with Hemogenyx
LLC and Immugenyx LLC. On 7 November 2018 the
Group entered in to a loan agreement with Orgenesis
Inc., an organisation with which the Group has an
existing collaboration agreement. The loan amount was
for not less than US$1,000,000 with the proceeds of
the loan to be used solely for the development of the
cell therapy technology in accordance with the plan
of the collaboration agreement. As at reporting date
drawdowns totalling US$750,000 (£587,245) had been
made with Hemogenyx LLC receiving the funds. The
loan carries an interest rate of 2% and has a term of three
years. Orgenesis has the option to convert both principal
and accrued interest in to equity in Hemogenyx-Cell
at any time prior to maturity. Hemogenyx-Cell SPRL
(“Hemo-Cell”) is a wholly owned Belgian entity and was
incorporated in April 2019 at which point this loan facility
was treated as a borrowing in accordance with the
provisions of IAS39.
through
On 7 November 2018 the Group entered in to a loan
its wholly owned subsidiary
agreement
Immugenyx LLC, with Orgenesis Inc., an organisation
with which the Group has an existing collaboration
agreement. The loan amount was for not less than
US$1,000,000 with the proceeds of the loan to be used
solely for the development of the cell therapy technology
in accordance with the plan of the collaboration
agreement. As at reporting date drawdowns totalling
US$750,000 (£588,670) had been made. The loan
carries an interest rate of 2% and has a term of three
years. Orgenesis has the option to convert both principal
and accrued interest in to equity in Immugenyx LLC at
any time prior to maturity.
24. Related party disclosures
There were no related party disclosures other than
Directors’ remuneration as disclosed in the Remuneration
Report section of the Directors’ Report. There are no key
management personnel other than the Directors and the
Company Secretary.
25. Financial instruments
The Group’s financial instruments consist of cash,
amounts receivable, accounts payable and accrued
Fair value of financial assets and liabilities
Fair values have been determined for measurement
and/or disclosure purposes based on the following
methods. When applicable, further information about the
assumptions made in determining fair values is disclosed
in the notes specific to that asset or liability.
The carrying amount for cash, accounts receivable,
and accounts payable and accrued liabilities on the
statement of financial position approximate their fair
value because of the limited term of these instruments.
The fair value of deferred payment approximates its fair
value. The investment is carried at cost as it is not traded
on an active market.
Fair value hierarchy
Financial instruments that are measured subsequent
to initial recognition at fair value are grouped in Levels
1 to 3 based on the degree to which the fair value is
observable:
• Level 1 fair value measurements are those derived
from quoted prices (unadjusted) in active markets for
identical assets or liabilities; and
• Level 2 fair value measurements are those derived
from inputs other than quoted prices included within
level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived
from prices); and
• Level 3 fair value measurements are those derived
from valuation techniques that include inputs for the
asset or liability that are not based on observable
market data (unobservable inputs).
The Group did not have any financial instruments in
Level 1, 2 and 3.
Financial risk management objectives and policies
The Company has exposure to the following risks from
its use of financial instruments:
•
•
•
Credit risk
Liquidity and funding risk
Market risk
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 78
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
The following table sets out the categories of financial instruments held by the Company as at the year ended 31
December 2019 and period ended 31 December 2018:
Group
Group
Company
Company
Year Ended
31 December 2019
Year Ended
31 December 2018
Year Ended
31 December 2019
Year Ended
31 December 2018
£
£
£
£
32,312
64,361
2,237
64,361
Assets
Trade and other receivables,
except prepayments
Cash and cash equivalents
498,679
1,762,428
14,505
461,003
Right of use assets
109,442
-
-
-
640,433
1,826,789
16,742
525,364
Liabilities
Trade and other payables
Lease liabilities
Borrowings
(61,407)
(113,088)
(1,144,167)
(1,318,662)
(167,607)
(34,561)
(134,085)
-
(1,172,826)
(1,340,433)
-
-
-
-
(34,561)
(134,085)
Group
1 January 2019 Cash flows
Non-cash changes
31 December 2019
Share
repayment
Foreign
exchange
movements
Interest
charge
Long-term
borrowings
Short-term
borrowings
1,172,826
-
Total
1,172,826
-
-
-
-
-
-
(53,157)
24,498
1,144,167
-
-
-
(53,157)
24,498
1,144,167
Group
1 January 2018 Cash flows
Non-cash changes
31 December 2018
Share
repayment
Foreign
exchange
movements
Interest
charge
Long-term
borrowings
Short-term
borrowings
Total
-
-
-
1,175,915
-
1,175,915
-
-
-
(4,853)
1,764
1,172,826
-
-
-
(4,853)
1,764
1,172,826
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 79
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
a) Credit risk
The Group had receivables of £28,279 owing from
customers (31 December 2018: £nil). All bank deposits
are held with Financial Institutions with a minimum credit
rating of AAA.
b) Liquidity and funding risk
The Group regularly reviews its major funding positions
to ensure that it has adequate financial resources
in meeting its financial obligations. The Group takes
liquidity risk into consideration when deciding its sources
of funds. The principle liquidity risk facing the business
is the risk of going concern which has been discussed
in note 2.
c) Market risk
Interest rate risk
Interest rate risk is the risk that the value of financial
instruments will fluctuate due to changes in market
interest rates. The Group's income and operating cash
flows are substantially independent of changes in
market interest rates as the Group has no significant
interest-bearing assets. The borrowings issued at fixed
rates expose the Group to fair value interest rate risk.
The Company's management monitors the interest rate
fluctuations on a continuous basis and acts accordingly.
The Company has floating rate financial assets in the
form of deposit accounts with major banking institutions;
however, it is not currently subjected to any other interest
rate risk.
Based on cash balances as above as at the statement of
financial position date, a rise in interest rates of 1% would
not have a material impact on the profit and loss of the
Company and such is not disclosed.
The interest rates on the Convertible Notes are fixed
and hence a rise in interest rates of 1% would not have a
material impact on the profit and loss of the Group and
such is not disclosed.
In relation to sensitivity analysis, there was no material
difference to disclosures made on financial assets and
liabilities.
At the reporting date the interest rate profile of interest-
bearing financial instruments was:
Group
Group
Company
Company
Year Ended 31
December 2019
Year Ended 31
December 2018
Year Ended 31
December 2019
Year Ended 31
December 2018
£
£
£
£
Financial Assets
Cash and cash equivalents
498,679
1,762,428
14,505
461,003
Financial Liabilities
Borrowings
(1,144,167)
(1,172,826)
-
-
Foreign currency risk
The Group operates internationally and has monetary
assets and liabilities in currencies other than the
functional currency of the operating company involved.
The Group seeks to manage its exposure to this risk by
ensuring that where possible, the majority of expenditure
and cash of individual subsidiaries within the Group are
denominated in the same currency as the functional
currency of that subsidiary.
The Group has not entered into any derivative instruments
to manage foreign exchange fluctuations.
The following table shows a currency of net monetary
assets and liabilities by functional currency of the
underlying companies for the years ended 31 December
2019 and 31 December 2018:
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019
80
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
31 December 2019
Functional Currency
Currency of net monetary
assets/(liabilities)
Pound Sterling
£
US Dollars
£
-
(679,961)
-
13,354
1,151
-
14,505
(679,961)
Euro
£
-
(571,628)
19,967
(551,661)
Pound Sterling
US Dollars
US Dollars
Total
31 December 2018
Functional Currency
Currency of net monetary
assets/(liabilities)
Pound Sterling
£
US Dollars
£
Pound Sterling
US Dollars
US Dollars
Total
109,654
351,348
-
461,002
-
26,184
-
26,184
Euro
£
-
-
-
-
Total
£
13,354
(1,250,438)
19,967
(1,217,117)
Total
£
109,654
377,532
-
487,186
Capital risk management
The Group defines capital as the total equity of the
Company. The Group’s objectives when managing
capital are to safeguard the Group’s ability to continue
as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost
of capital.
In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new
shares or sell assets to reduce debt.
Fair value of financial assets and liabilities
There are no material differences between the fair value
of the Group’s financial assets and liabilities and their
carrying values in the financial statements.
26. Prior year restatement
Due to an oversight the value of options issued in October
2017 and April 2018 was calculated in accordance
with the Black Scholes method of options valuation
using a 2 year expected life where the expected lives
of the options should have been 5 years and 3 years
respectively. The options have been recalculated using
the correct expected lives.
As a result the loss for 2018 was understated by £66,792.
There was no impact on the cash flow statement and the
changes to the Statement of Financial Position were in
the Equity section only.
The effect of this change on the trading result for the
year ended 31st December 2018 is shown below.
Consolidated Statement of Comprehensive Loss:
Administrative expenses increased by £66,792
Loss for the year attributable to equity owners increase
by £66,792
Statement of Changes in Equity Group and Company:
Total comprehensive loss for the year to 31 December
2018 increased by £66,792
Other reserves increased by £66,792
Retained losses at 31 December increased by £66,792
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 81
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Statement of Financial Position Consolidated and
Company:
Other reserves increased by £66,792
Retained losses at 31 December increased by £66,792
A third statement of financial position as at the beginning
of the preceding period has not been presented in
accordance with IAS paragraph 40(a) as the amount
relating to the preceding period is immaterial.
27. Commitments
Licence
Milestone and royalty payments that may become due
under the licence agreement are dependent on, among
other factors, clinical trials, regulatory approvals and
ultimately the successful development of a new drug, the
outcome and timing of which are uncertain.
certain development,
The Group’s minimum future payments contingent
regulatory
upon meeting
total £780,484
and commercialisation milestones
($1,035,000) plus £377,045
($500,000) on receipt
of marketing approval from each additional market
excluding the United States of America and the European
Union. Upon commencement of commercial production,
the Group will pay a royalty between 2 to 5% on all net
sales. In addition, the Group pays an annual licence
maintenance fee of up to £56,557 ($75,000) until the
commercial sales are achieved.
28. Ultimate controlling party
The Directors have determined that there is no controlling
party as no individual shareholder holds a controlling
interest in the Company.
29. Subsequent events
A patent application entitled Post-Natal Hemogenic
Endothelial Cells and their isolation and use was
approved by the United States Patent and Trademark
Office and issued on 25 February 2020 as Patent
Number 10,570,373. The European Patent Office issued
a decision notice in April 2020 that it will grant a patent
bearing the same title as Patent Number 3068875. The
patent issuance will take effect on the date on which the
European Patent Bulletin mentions the grant, scheduled
for 13 May 2020. The patent applications were filed in
2014 and are the subject of Hemogenyx’s aforementioned
licence first granted in 2015 and restated in 2019.
The Company continued to draw on the cash provided
by convertible loan facilities from Orgenesis Inc. for a
maximum of US$2,000,000. As at 31 December 2019 a
total of US$1,500,000 of the total facilities available had
been drawn down, and the remaining $500,000 was
drawn down in February 2020.
On 30 January 2020 the Company announced that it
had raised £648,200 before expenses through a placing
and subscription of 36,011,116 ordinary shares at a price
of 1.8p per share. The funds are being used to continue
the development and in vivo testing of the Company’s
Chimeric Antigen Receptor (CAR) programmed T cells,
for the further development and commercialisation of
the Company’s ApbHC and models and treatments
for diseases, and to provide additional working capital
for the Company to progress its core CDX antibody
collaboration and to support its various partnerships with
other major pharmaceutical companies.
In January and February the Company announced
breakthroughs, first in test tube tests and subsequently
in animal studies, in the promising field of CAR-T therapy.
Hemogenyx has successfully constructed and tested
CAR programmed T cells, termed HEMO-CAR-T, as a
potential alternative treatment for AML. HEMO-CAR was
constructed using Hemogenyx’s proprietary humanised
monoclonal antibody, against a target on the surface of
AML cells. The Company has demonstrated that HEMO-
CAR was able to programme human T cells (i.e. convert
them into HEMO-CAR-T cells) to identify and destroy
human AML derived cells. Following the successful
completion of these tests, Hemogenyx is undertaking
further engineering of HEMO-CAR to enhance their
safety.
In late April 2020, the Company began applying its
groundbreaking research and technologies to develop
treatments for COVID-19, the disease caused by the
SARS-CoV-2 virus. Hemogenyx is using the exceptional
characteristics of its ApbHC mice to discover human
neutralising antibodies that could fight the virus. The study
aims to demonstrate how Hemogenyx’s technology can
be deployed rapidly in emergencies in order to discover
human neutralising antibodies against a host of viral
pathogens, including what infectious disease experts in
Hemogenyx Pharmaceuticals plcAnnual Report & Financial Statements for the Year Ended 31 December 2019 82
Hemogenyx Pharmaceuticals plc
Annual Report & Financial Statements for the Year Ended 31 December 2019
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
the bioprotection and biodefense sectors call “Disease
X”, meaning as-yet unknown viruses that may represent
a similar or greater threat than the one presented by
COVID-19.
Concurrently, Hemogenyx has initiated a pilot study
to understand why some individuals who are infected
with SARS-CoV-2 are asymptomatic, some exhibit mild
symptoms, and some become very sick and even die.
Such understanding could prove essential for both
the development of new treatments for COVID-19 and
managing the current risk of infection. Should the study
prove to be successful, Hemogenyx will aim to develop
and commercialise a test that would prospectively
identify people with potentially high/low risk of severe
illness caused by the virus.
30. Copies of the annual report
Copies of the annual report will be available on the
Company’s website at https://hemogenyx.com and from
the Company’s registered office, 5 Fleet Place London
EC4M 7RD.
H E M O G E N Y X P H A R M A C E U T I C A L S P L C
W W W . H E M O G E N Y X . C O M