Contents
Chairman’s Report
Financial Review
Strategic Report
Business Overview and Prospects
Business Strategy and Objectives
Product Pipeline
Key objectives and performance
Principal Risks and Uncertainties
Forward-Looking Statements
Board of Directors
Scientific Collaborators
Officers and Professional Advisers
Corporate Governance Report
Directors’ Report
Statement of Directors’ Responsibilities
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Financial Position
Company Statement of Changes in Equity
Company Statement of Cash Flows
Notes to the Consolidated Financial Statements
Glossary of Technical Terms
Page
2 – 7
8 – 9
10 – 26
11
13
15 – 20
21
22 – 25
26
27 – 30
31 – 32
34
35 – 38
39 – 42
43
44 – 49
50
51
52
53
54
55
56
57
58 – 86
87
ImmuPharma plc Report and Consolidated Financial Statements December 2022
1
Chairman’s Report
2
2
ImmuPharma plc Report and Consolidated Financial Statements December 2022
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Annual Review
Chairman’s Report
2022 was a year of further transition for ImmuPharma
as we continued to focus on progressing our late-stage
pipeline assets as well as dealing with some complex
regulatory processes, in conjunction with our partner
Avion Pharmaceuticals (“Avion”) and in discussions with
the US Food and Drug Administration (“FDA”).
In 2022, ImmuPharma continued its primary focus on
progressing our late-stage program, Lupuzor™ (P140),
in conjunction with our US partner, Avion. During the
second half of 2021, ImmuPharma started preparations for
the commencement of a clinical pharmacokinetic (“PK”)
study, as guided by the US Food and Drug Administration
(“FDA”). The PK study was successfully completed in
April 2022 with guidance from the FDA in respect to
progressing Lupuzor’s clinical program, announced in
early 2023. This confirmed that in conjunction with Avion,
we have agreed that the optimum route forward for
Lupuzor™ is for a dose ranging Phase 2/3 adaptive study.
Our current target is to commence this trial in H2 2023.
The PK study findings also contributed to
progressing an additional autoimmune clinical
program for a new disease indication, CIDP
(Chronic Idiopathic Demyelinating Polyneuropathy).
In June 2022, our share capital structure was reorganised
and in August 2022, we concluded a successful fundraising
of £2.04m (gross). ImmuPharma continued to explore
opportunities with other potential commercial partners
ex-US for P140 in lupus. Global partnerships are also being
sought for P140 in CIDP and anti-infective assets from the
Company’s R&D pipeline.
Lupuzor™/P140 – opportunity and next steps
There are an estimated five million people suffering
from lupus in the US, Europe and Japan (Source: Lupus
Foundation of America). The prevalence in China may be
3-4 times that seen in the US. Current ‘standard of care’
treatments, including steroids and immunosuppressants,
can potentially have either serious side effects for patients
or limited efficacy, with over 60 per cent of patients not
adequately treated.
ImmuPharma believes Lupuzor™/P140 has the potential
to be a novel specific drug therapy for the treatment of
Lupus by specifically modulating the immune system
and halting disease progression in most lupus patients.
It has a unique mechanism of action and is not an
immunosuppressant like other drugs. Lupuzor™/P140
normalises the over-activity of T-cells which are involved in
the immune response leading to lupus disease. Lupuzor™
taken over the long term may have the potential to
prevent the progression of lupus rather than just treating
its symptoms, with the rest of the immune system retaining
the ability to work normally.
A new major opportunity for P140 is CIDP, a rare
acquired autoimmune disorder of peripheral
nerves. It is a neurological disorder characterized by
progressive weakness and impaired sensory function
in the legs and arms. CIDP is a potential orphan drug
indication which would provide patent life extension of
7 years post-approval.
The Board is confident that there is a route to
market for P140 in lupus and CIDP including further
corporate collaborations.
Lupuzor™ and Avion Pharmaceuticals |
Background
On 28 November 2019, ImmuPharma and Avion
signed an exclusive Trademark, License and
Development Agreement for Lupuzor™/P140, with
Avion agreeing to fund a new international Phase 3
trial and commercialising Lupuzor™/P140 in the US.
The agreement also provides Avion an option on any
other P140 indications. Since then, there have been two
guidance meetings with the FDA on the lupus program.
At the first meeting the FDA requested ImmuPharma
complete a clinical PK study of P140. Following
successful completion of the PK study in 2022 the FDA
guided on a new dosing regimen which has been built
into a new Phase 2/3 adaptive clinical trial design.
ImmuPharma and its US partner Avion co-developed
and successfully completed a clinical PK study of P140
which was announced on 13 April 2022. The study was
a Phase 1, open-label, single dose pharmacokinetic
study of P140 after subcutaneous and intravenous
administration in healthy male volunteers. Patients
received a single subcutaneous injection of 200μg
or 800μg P140 or a single intravenous injection of
800μg P140. There was a clear time and dose-related
PK profile, which is detectable in the blood of human
volunteers and applicable for all potential clinical dosing
regimens of P140. In-line with all human dosing to date,
P140 was safe and well tolerated across all doses and
in all subjects.
In the first half of 2022 ImmuPharma provided progress
updates to the market in respect to guidance meetings
between the FDA and Avion. This concluded with the FDA
providing a detailed response in September 2022 to Avion
with significant guidance on next steps for the clinical
programme. This included advice on the dosing regime.
In addition, the FDA also provided further significant
improvement guidance on the study protocol.
In February 2023, ImmuPharma confirmed that, with its
partner Avion, they had agreed on an adaptive Phase 2/3
study for Lupuzor™ in Systemic Lupus Erythematosus
(“SLE”) patients. This is a one-protocol pivotal study
which allows exploration of a dose-range in the Phase 2
ImmuPharma plc Report and Consolidated Financial Statements December 2022
3
Annual Review
Chairman’s Report (continued)
part of the study, followed by seamless progression into
the Phase 3 part of the study at the chosen dose. The
overall timelines for the Lupus clinical program are shorter
as one avoids the need for stopping and starting two
independent trials, regulatory checks, ethics approvals and
site set-ups. It is also expected to be less costly overall.
There is also an opportunity, through an interim analysis
in the Phase 3 part of the study, to stop the study earlier if
an efficacy signal is reached after a certain percentage of
patients have been treated.
This new study design incorporates guidance from the
FDA which advised exploration of higher dose levels than
have been used in the clinical program to date. A clean
safety profile has already been established at higher doses.
In April 2023, ImmuPharma confirmed that the FDA had a
set date of 7 June 2023 for a type C meeting to consider
the new Phase 2/3 study protocol, for which the target
commencement date will be in H2 2023.
CIDP / P140
For P140 in CIDP we announced in April 2023 that we
had received confirmation from the FDA for a pre-
Investigational New Drug meeting date of 16 May 2023, to
consider a Phase 2/3 adaptive trial study protocol.
This will be the first pivotal stage clinical study of P140 in
patients with CIDP: a rare neurological disease with high
medical need.
A new Investigational New Drug (“IND”) submission
is required, as this will be the first time that P140 is to
be studied in humans for the indication of CIDP. An
application for Orphan Drug status will be submitted
following the pre-IND meeting.
The CIDP market is expected to reach global sales of US$2.7bn
by 2029 (source: Data Bridge Market Research, Dec 2022).
Potential Distribution Agreement with Avion
As announced in November 2022, we have agreed to
explore the opportunity of a mutually beneficial route to
allow ImmuPharma to introduce certain Avion products
into the European market. If this is successful, this would
generate top-line product sales revenue for the first time
in ImmuPharma’s history and contribute net positive cash
flow to the Company.
We in turn have identified an established European
partner who could provide the infrastructure to market
and distribute the products.
Lupus ABC Consortium
The FDA’s Center for Drug Evaluation and Research has
partnered with the Lupus Research Alliance (LRA) to
launch the Lupus Accelerating Breakthroughs Consortium
(Lupus ABC), a first-of-its-kind public-private partnership
focused on addressing challenges impacting lupus clinical
trial success.
Lupus ABC will convene people living with lupus, medical
societies, industry, academic clinical researchers and
scientists, FDA, and other federal agencies to address
scientific hurdles that are beyond the capacity of any
single entity. By connecting those with lived experience
with all parties involved in lupus treatment research, CDER
hopes to advance the development of urgently needed
treatments for lupus.
This can only be extremely good news for Lupus patients
worldwide, including ImmuPharma, our partners and our
peers, in bringing new safe Lupus drugs to the market,
sooner rather than later.
4
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Annual Review
Chairman’s Report (continued)
Centre National de la Recherche Scientifique
(CNRS)
ImmuPharma continues to have important collaboration
arrangements with the Centre National de la Recherche
Scientifique (“CNRS”), the French National Council
for Scientific Research and the largest basic research
organisation in Europe. This is where Lupuzor™ /
P140 platform was invented by Prof. Sylviane Muller,
Emeritus Research Director at the CNRS. Through this
partnership, the CNRS will be entitled to receive from
ImmuPharma, low double-digit royalty payments of
funds received by ImmuPharma from Avion through the
Licence and Development Agreement and through further
commercialisation deals for territories outside of the US.
Pipeline Overview
There is a depth of scientific knowledge and innovation
within the R&D team in Bordeaux which is focusing on those
product developments (see below) which offer the highest
probability of both scientific and commercial success.
Management continues to concentrate on identifying and
concluding commercial collaborations and licensing deals
across the product portfolio.
Our therapeutic focus is on two core areas; Autoimmunity/
Inflammation and Anti-infection. We also look for valuable
deals for non-core assets as evidenced by a collaborative
deal, signed in March 2023, with Orano on ImmuPharma’s
peptide technology as a vector for cancer radiotherapy.
The initial collaboration is for 12 months and a small
undisclosed upfront payment was paid to ImmuPharma.
Autoimmunity & Inflammation
P140’s mode of action is relevant to many autoimmune
and inflammatory diseases which provides a number
of opportunities for ImmuPharma and its partners to
explore in the near future. The therapeutic potential of
P140 goes beyond just Lupus, with Chronic Inflammatory
Demyelinating Polyneuropathy ("CIDP") being the
next step. P140’s application across numerous disease
states stems from the research partnership between the
Company and Prof. Sylviane Muller, inventor of P140
and Emeritus Research Director CNRS, France. Key
highlights within the progression of the P140 platform are
summarized below:
• P140 – Lupuzor™ successfully completed PK study
in 2022. A Phase 2/3 adaptive study is planned to
commence in H2 2023. This is a one protocol pivotal
study which allows exploration of a dose range in the
Phase 2 part of the protocol.
• P140 – CIDP a rare autoimmune disorder of peripheral
nerves. CIDP is a potential orphan drug indication
which would provide patent life extension of 7 years
post-approval. A Phase 2/3 adaptive trial is targeted
with IND/FDA guidance and orphan drug designation
application underway.
• P140 – Second generation. Our pre-clinical team in
Bordeaux, ‘ImmuPharma Biotech’ has commenced
work to develop a pharmacologically improved version
of P140, a second-generation product that aims to
further strengthen the IP position and provide therapies
with different improved administration modalities, yet
still maintaining P140 as the active moiety.
• P140 – Other indications. Further clinical applications
based on further preclinical investigation include
asthma, Sjogrens syndrome, renal inflammation in
diabetes, periodontitis and gout.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
5
Annual Review
Chairman’s Report (continued)
Anti-Infection
The innovative peptide technology at ImmuPharma
Biotech has been a huge success and very recently has
given rise to a number of novel development programs,
out of which we have identified two core programs, in
pre-clinical development; BioAMB and BioCin, which we
believe have the best commercial opportunity and speed
to market. Despite the preclinical stage, these programs
are based on existing drugs that have been used for
decades so the PK, efficacy and safety of those drugs is
well understood. They will also be patent protected.
• BioAMB, a novel peptide-based drug that offers
a potential improvement on the limiting side
effects and poor administration regime of current
Amphotericin-B (“AMB”) formulations. AMB is
one of a last line of agents against serious and
life-threatening fungal infections caused by the
aspergillus family of fungi.
• BioCin, a novel peptide-based drug based on an
existing potent antibacterial, vancomycin, used in high
medical need cases and in many cases the last line of
defense. BioCin has the potential to offer improved
safety and administration benefits.
Interest in Incanthera Plc
As at 31 December 2022, ImmuPharma had a 12.97%
interest in Oncology specialist, Incanthera plc, which
trades on Aquis Stock Exchange (“AQSE”) under the
ticker (TIDM:INC).
ImmuPharma also has 7,272,740 warrants options in
Incanthera at an exercise price of 9.5p pence, being the
price at which new shares were issued in the Placing
accompanying Incanthera’s listing in 2020.
As announced in Incanthera’s interim report in
December 2022, the Company continues to concentrate
upon furthering discussions to capitalise on the potential
for various applications of its skincare portfolio for
commercial success.
As a major shareholder, ImmuPharma remains supportive
of Incanthera.
Capital restructure
At the Annual General Meeting on 28 June 2022, the
shareholders approved the subdivision of the Company’s
ordinary share capital, whereby each existing Ordinary
Share with a nominal value of 10p was subdivided into
1 new Ordinary Share of 1p and 1 Deferred Share of 9p.
The Deferred Shares have no significant rights attached
to them and carry no right to vote or to participate in
distribution of surplus assets and are not admitted to
trading on the AIM market of the London Stock Exchange
plc. The Deferred Shares effectively carry no value.
Capital subscription
On 03 August 2022 ImmuPharma announced a
subscription and placing to raise c£1.1m through the
issue of 21,018,182 new ordinary shares of 1 pence each
in ImmuPharma at a price of 5p per ordinary share ("Issue
Price"). This was followed on 11 August 2022 by the
completion of the associated Broker Option, which raised
£0.95m through the issue of 19,000,000 new ordinary
shares of 1p each in the Company at a price of 5p per
ordinary share.
The monies raised included a £1.0m subscription for
20,000,000 new ordinary shares with Lanstead Capital
Investors LP (“Lanstead"), at an Issue Price of 5 pence per
share, together with a related Sharing Agreement.
6
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Annual Review
Chairman’s Report (continued)
The £1.0 million gross proceeds of the Lanstead subscription
was followed by the Sharing Agreement with Lanstead for
100% of these shares with a reference price of 6.67p per
share (“Benchmark Price”). The Sharing Agreement is for a
24 month period and the Company will receive 24 monthly
settlements, as measured against the Benchmark Price.
The actual consideration is variable depending upon
ImmuPharma's share price and provides the opportunity for
ImmuPharma to benefit from a positive future share price
performance or conversely to receive less proceeds if there
is negative future share price performance.
The Company also agreed to issue Lanstead 1,400,000
ordinary shares in connection with entering into the Sharing
Agreement (“Value Payment Shares”).
The Company also issued 200,000 new Ordinary Shares
(“Fee Shares”) at an issue price of 5 pence per share to
SPARK Advisory Partners Ltd in lieu of fees.
The Issue Price of 5 pence represented a 21.38% percent
discount to the closing mid-market price (of 6.36p) of the
Ordinary Shares on 02 August 2022, the latest business date
prior to the Subscription and Placing.
Warrants
The Company agreed to issue Lanstead 30,000,000
warrants in return for Lanstead foregoing the entitlement
to increase the benchmark price in 2021 sharing
agreement from 14.666p to 22p. The warrants are
exercisable for 10 years at an exercise price of 5.5 pence.
The Company also issued 2,500,000 and 500,000 warrants
to Stanford Capital Partners “SCP” and SI Capital in lieu
of fees. The warrants are exercisable for 10 years at an
exercise price of 5 pence.
During 2022, L1 Capital Global Opportunities Master Fund
("L1") exercised Options over 6,000,000 new ordinary
shares of 1p each ("Ordinary Shares") at an exercise price
of 5p per share, for a consideration of £300,000.
Current Activities and Outlook
As a Board, we remain focused on bringing our two key
late stage clinical assets, Lupuzor™ and CIDP closer to the
market. We now have a clinical roadmap for Lupuzor™ and
remain on track with our target to commence the Phase
2/3 adaptive trial in H2 2023, with potentially CIDP moving
into clinical studies in parallel. This illustrates the potential
franchise we have within our P140 autoimmune platform.
We will also continue to concentrate on further
commercial and partnering opportunities. In conjunction
with the above objectives, we continue to take prudent
measures on managing our cost base.
In closing, we would like to thank our shareholders for
their support as well as our staff, corporate and scientific
advisers and our partners including CNRS and Avion.
Tim McCarthy
Chairman & CEO
10th May 2023
ImmuPharma plc Report and Consolidated Financial Statements December 2022
7
Financial Review
8
8
ImmuPharma plc Report and Consolidated Financial Statements December 2022
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Annual Review
Financial Review
The financial results of the ImmuPharma Group in this report
cover the year ended 31 December 2022. The Group’s
principal activity is that of research and development of
novel drugs to treat serious medical conditions.
Income Statement and Statement of
Comprehensive Income
The operating loss for the year ended 31 December
2022 was £3.0 million, down from £6.6 million for the year
ended 31 December 2021. The research and development
expenditure was £2.0 million, down from £3.7 million in
2021. The decrease is a direct result of the corporate
reorganisation in the prior year. Administrative expenses
were £0.8 million (2021: £1.0 million). The operating loss
for the prior year included exceptional costs of £1.4 million
in respect of corporate reorganisation, including the
departures of Board members (including Dr Robert
Zimmer and Dimitri Dimitriou) and respective settlement
agreements. No such costs have taken place during the
year ended 31 December 2022.
Finance income has increased from £1k in 2021 to £29k in
2022. Finance costs amounted to £1.5 million, down from
£2.4 million in 2021, caused largely by the comparative fair
value calculations on the Lanstead derivative financial asset
and fair value loss on issue of warrants of £219k (2021: £nil).
The loss after tax for the year was £3.8 million, a decrease
from £8.2 million in 2021.
The amounts recognised directly in the Statement of
Comprehensive Income include the total fair value loss
of £0.7 million (2021: fair value loss of £1.0 million) which
comprises the following components: fair value loss on
shares held in Incanthera plc of £520k (2021: fair value loss
of £584k) and fair value loss on Incanthera’s warrants of
£206k (2021: fair value loss of £418k). Total comprehensive
loss for the year was £4.5 million, a decrease from
£9.2 million in 2021.
Statement of Financial Position
The Group cash and cash equivalents at 31 December
2022 amounted to £0.7 million (2021: £1.6 million) with
the decrease caused by the operating losses including
research and development expenditure related to PK
study offset by cash inflows from financing activities.
Trade and other payables decreased to £1.5 million (2021:
£1.6 million) and was largely due to PK study related
expenditure. The total value of the financial asset equated
to £0.7 million, comprising of shares in Incanthera of
£0.7 million (2021: £1.2 million) and warrants in Incanthera
of £0.001 million (2021: £0.2 million). At 31 December
2022 the Lanstead derivative financial asset amounted
to £0.3 million (2021: £0.9 million). The decrease was a
result of the fair value calculation performed at year end,
reflecting the decrease in ImmuPharma’s share price,
further details can be seen in note 14.
Results
The Group recorded a loss for the year of £3.8 million
(2021: £8.2 million). Basic and diluted loss per share was
1.26p (2021: 3.25p). In accordance with the Group’s loss
making position, no dividend is proposed.
Capital restructure
At the Annual General Meeting on 28 June 2022, the
shareholders approved the subdivision of the Company’s
ordinary share capital, whereby each existing Ordinary
Share with a nominal value of 10p was subdivided into
1 new Ordinary Share of 1p and 1 Deferred Share of 9p.
The Deferred Shares have no significant rights attached
to them and carry no right to vote or to participate in
distribution of surplus assets and are not admitted to
trading on the AIM market of the London Stock Exchange
plc. The Deferred Shares effectively carry no value.
Total Voting Rights & Warrants
The Company had a total of 618,388,048 ordinary
shares in issue at 31 December 2022. the Company's
issued share capital now comprises, 333,403,115
Ordinary Shares with one voting right each and
284,984,933 deferred shares with no rights to vote.
Total warrants outstanding equal: 151,450,908.
Treasury Policy
The policy continues to be that surplus funds of the
Group are held in interest-bearing bank accounts on
short or medium maturities, until commitments to future
expenditure are made, when adequate funds are released
to enable future expenditure to be incurred. The Group’s
Treasury Policy and controls are straightforward and
approved by the Board.
Financial Strategy
The overall strategy is to maintain a tight control over
cash resources whilst enabling continued progress of the
Company’s development assets.
On behalf of the Board
Tim McCarthy
Director
10th May 2023
ImmuPharma plc Report and Consolidated Financial Statements December 2022
9
Strategic Report
1010
ImmuPharma plc Report and Consolidated Financial Statements December 2022
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Annual Review
Strategic Report
The Board of ImmuPharma present their Strategic Report
for the Group for the year ended 31 December 2022.
Vision and Values
ImmuPharma is an ethical organisation with the vision to
develop novel drugs to treat serious medical conditions,
delivering value to patients, medical professionals,
healthcare payers and our shareholders.
Business Overview and Prospects
ImmuPharma plc is a specialty biopharmaceutical
company that discovers and develops peptide-based
therapeutics, headquartered in London and listed on
the AIM of the London Stock Exchange (IMM). Its main
research operation is in Bordeaux, France. ImmuPharma
is dedicated to the development of novel drugs, largely
based on peptide therapeutics, to treat serious medical
conditions such as autoimmune diseases characterised by:
• high unmet medical need;
• low marketing costs; and
• relatively low development costs.
ImmuPharma has adopted an outsourcing model
where development activities are assigned to contract
research organisations (“CROs”), maintaining low costs.
ImmuPharma will manage the development of its own
assets up to commercialisation, but actively seeks
collaborative agreements with larger pharmaceutical
companies at earlier stages of the development proceeds.
ImmuPharma’s portfolio includes novel peptide
therapeutics within autoimmunity/inflammation and
anti-infectives. The lead program, Lupuzor™, is a
first-in class autophagy immunomodulator which is in
late-stage development for the treatment of lupus.
Preclinical analysis also suggests therapeutic activity for
many other autoimmune diseases that share the same
autophagy mechanism of action. ImmuPharma and Avion
Pharmaceuticals LLC (“Avion”) signed on 28 November
2019, an exclusive Licence and Development Agreement
and Trademark Agreement for Lupuzor™ to complete
clinical development and commercialise it in the
United States.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
11
Annual Review
Strategic Report (continued)
Collaboration with Centre National de la
Recherche Scientifique (CNRS)
ImmuPharma has important collaboration arrangements
with the Centre National de la Recherche Scientifique, the
French National Council for Scientific Research and the
largest basic research organisation in Europe.
As part of the collaboration arrangements, ImmuPharma
has entered into a research agreement with the CNRS
which relates to the therapeutic use of peptides and
peptide derivatives. ImmuPharma has been granted the
worldwide exclusive rights to exploit all discoveries made
pursuant to this agreement and will co-own the relevant
intellectual property with the CNRS.
The CNRS has granted additional exclusive worldwide
licences to ImmuPharma covering rights to discoveries
made prior to this agreement but related to it.
Applications for additional patents, to be jointly owned by
the CNRS and ImmuPharma, have already been and are
being filed. The CNRS is entitled to a share of the revenue
generated by ImmuPharma from the exploitation of the
CNRS’ licensed and co-owned rights.
12
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Annual Review
Strategic Report (continued)
Business Strategy and Objectives
ImmuPharma focuses on developing pioneering and
novel drugs in specialist therapeutic areas where there is a
distinct lack of existing treatments, avoiding primary care
(diseases treated by GPs) where many treatments exist.
This is consistent with the trends in the pharmaceutical
industry.
Since Immupharma’s foundation, our research strategy
has been to work closely with the largest fundamental
research organisation in Europe, the CNRS in France.
This collaboration enables us to access innovative research
with substantial embedded value at a relatively low cost,
and to work with many leading scientists and doctors.
Our market strategy is to develop drug candidates to
a point where further value can be added by licensing
our assets to partners (primarily major pharmaceutical
corporations) that are well placed to further develop
and/or commercialise them. Our corporate deal with
Avion Pharmaceuticals signed in 2019, encompassing
an exclusive Agreement for Lupuzor™, our lead drug
candidate for the treatment of lupus, to complete
development and commercialise in the US, is a successful
example of this strategy in action.
ImmuPharma’s principal business objective is to
enhance shareholder value through the development
and commercialisation of novel drugs. Its strategies for
achieving this objective include:
• pursuing a low-cost model of accessing world class
research through our collaboration with the CNRS in
France;
• selecting specialist therapeutic areas where there are
high unmet needs;
• managing the clinical development of novel drug
candidates;
• seeking collaborative agreements with partner
companies to further the development and
commercialisation of novel drug candidates; and
• maintaining a small corporate infrastructure to
minimise costs.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
13
Annual Review
Strategic Report (continued)
Pipeline Overview
ImmuPharma’s pipeline is focused on two core therapeutic
areas:
Each of these proprietary programs and respective drug
candidates are novel peptide therapeutics and represent
a novel approach to therapy.
• Autoimmunity & Inflammation
• Anti-Infectives
14
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Annual Review
Strategic Report (continued)
Product Pipeline
Autoimmunity and Inflammation
Lupuzor™
ImmuPharma’s lead product candidate, Lupuzor™ (P140)
targets systemic lupus erythematosus (SLE or ‘lupus’).
The current standard of care still consists of steroid and
anti-malarial therapies which many have side-effects and
poor response in many patients. Recently more targeted
monoclonal therapies are GlaxoSmithKline’s Benlysta and
more recently, AstraZeneca’s Saphnelo. There still exists
a high unmet medical need for a drug that has a strong
efficacy and safety profile.
Lupus is a chronic, life-threatening autoimmune,
inflammatory disease with a pattern of flares and
remission. Lupus can affect multiple organs such as
skin, joints, kidneys, blood cells, heart and lungs.
The symptoms are varied and not always specific to
one disease, making diagnosis difficult with patients
presenting to several different specialists (mainly
dermatologists, rheumatologists, and nephrologists).
Awareness of the disease has steadily increased in recent
years and should continue to do so due to well-organised
patient groups and increased research and development
activity into new treatments. New diagnostic tools are
now in place and are increasingly used by physicians,
which coupled with greater awareness, should lead to an
increase in diagnosis rates. Targeting patients most likely
to respond to P140 therapy will help more patients get
access to P140 therapy.
There are an estimated five million people suffering
from lupus in the US, Europe and Japan (source: Lupus
Foundation of America). The prevalence in China may be
3-4 times that seen in the US. Current ‘standard of care’
treatments, including steroids and immunosuppressants,
can potentially have either serious side effects for patients
or limited effectiveness, with over 60% of patients not
adequately treated. GlaxoSmithKline’s Benlysta is the first
lupus drug approved in over 50 years and paves the path
to market for Lupuzor™. Lupuzor™ would be entering a
market with the potential for multi-billion sales. Benlysta
and Saphnelo currently command global annualised sales
of over $1billion despite any limitations associated with
using these drugs.
Lupuzor™ was licensed to US Cephalon Pharmaceuticals
in February 2009. ImmuPharma received upfront
payments totalling US$45 million, with a US$500 million
cash milestone payment structure plus royalties on future
sales. In late 2011, following the acquisition of Cephalon
by Teva Pharmaceuticals, ImmuPharma regained all
product rights to Lupuzor™. On 28 November 2019,
ImmuPharma and Avion Pharmaceuticals signed an
exclusive trademark, licence, and development agreement
for Lupuzor™ to fund a new optimised international
Phase 3 trial for Lupuzor™ and commercialising
Lupuzor™/P140 in the US.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
15
Annual Review
Strategic Report (continued)
Product Pipeline (continued)
The agreement with Avion provides milestone payments
and tiered double-digit royalties to ImmuPharma. Avion
also have an an option on any other P140 indications.
Since the agreement there have been two guidance
meetings with the FDA on the lupus program. At the first
meeting the FDA requested ImmuPharma complete a
clinical PK study of P140. Following successful completion
of the PK study in 2022 the FDA guided on a new dosing
regimen which has been built into a new Phase 2/3
adaptive clinical trial design.
Lupuzor™ has the potential to be a first-in-class and
first-line drug therapy for the treatment of lupus by
specifically modulating the immune system and halting
disease progression. Professor Sylviane Muller, previous
Chair of Therapeutic Immunology at the CNRS and
inventor of Lupuzor™, has published work demonstrating
Lupuzor™ has a unique mechanism of action in
modulating the activity of CD4 T cells which are involved
in the cell-mediated immune response which leads to
the lupus disease whilst allowing the rest of the immune
system to work normally.
Lupuzor™ previously completed Phase IIb and Phase III
clinical trials. The Phase III trial was carried out under a
Special Protocol Assessment (SPA) from the US Food and
Drug Administration (FDA) to conduct Phase III trials with
Fast Track Designation. In 2015, ImmuPharma signed
an agreement with Simbec-Orion to complete a pivotal
Phase III clinical study of Lupuzor™. Simbec-Orion is a
full service international Clinical Research Organisation
(CRO) specialising in rare and orphan conditions and has
previous direct experience of lupus trials.
The Phase III trial was an international, double-blind,
randomised, placebo-controlled trial. A total of
202 patients received 200μg P140 or placebo once every
month by subcutaneous injection. The study completed
in January 2018 and top line results announced in April
2018. Although the study missed the overall primary
endpoint, post-hoc analysis provided further insight to
the design of a new clinical study with greater ability to
show benefit in patients while maintaining good safety
and tolerability.
ImmuPharma’s US partnership with Avion was established
at the end of 2019, which then enabled the process of
developing an appropriate late-stage clinical plan for
P140 in lupus. Since then, there have been two guidance
meetings with the FDA on the lupus program. At the first
meeting the FDA requested ImmuPharma complete a
clinical PK study of P140.
16
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Annual Review
Strategic Report (continued)
Product Pipeline (continued)
During the second half of 2021, ImmuPharma started
preparations for the commencement of a clinical
pharmacokinetic (“PK”) study, as guided by the FDA in the
first Type-C meeting in 2020. The PK study was successfully
completed in April 2022 with guidance from the FDA
in respect to progressing Lupuzor’s clinical program
being announced to shareholders in early September
2022. Following successful completion of the PK study in
2022 the second FDA Type-C meeting guided on a new
dosing regimen which has been built into a new Phase 2/3
adaptive clinical trial design.
The findings of the P140 PK study also greatly contributed
to finalising our clinical protocol for a new disease
indication CIDP (Chronic Idiopathic Demyelinating
Polyneuropathy).
P140 - Chronic Inflammatory Demyelinating
Polyneuropathy (“CIDP”)
Professor Sylviane Muller’s preclinical work and
publications also suggest that P140 may provide
therapeutic benefit in CIDP*. CIDP is a rare acquired
autoimmune disorder of peripheral nerve, described
by the National Institute of Neurological Disorders and
Stroke (NINDS) as a neurological disorder characterized
by progressive weakness and impaired sensory function
in the legs and arms. Prevalence estimates suggest
from 30,000-50,000 CIDP cases across US/Europe.
The European Academy of Neurology/ Peripheral
Nerve Society (EAN/PNS) diagnosis guideline second
update in 2021 notes that CIDP is the most common
immune-mediated neuropathy.
CIDP can occur in both genders at any age, it is more
common in young men than women. The initial symptoms
are tingling or numbness (beginning in the toes and
fingers), weakness of the arms and legs, loss of deep
tendon reflexes (areflexia), fatigue, and abnormal
sensations. CIDP is closely related to Guillain-Barre
syndrome, and it is considered the chronic counterpart
of that acute disease. Complications of CIDP include
permanent decrease or loss of sensation in areas of the
body and permanent weakness or paralysis in areas of the
body. These symptoms may result in impaired lower and
upper limb function. Common deficits encountered in
patients with CIDP include gait instability and the need for
gait assistive devices include cane, walker or wheelchair.
Upper limb manifestations may include impairment with
day-to-day activities such as manipulating buttons or
zippers or using dinner cutlery. Other symptoms may
include pain, tremor and fatigue; each of which adds to
the disability of patients independent of loss of motor and
sensory control. While most disability from CIDP is thought
to be disease related, one must also consider disability
related to medication used to treat the disorder. For many
patients the burden of treatment (side effects, cost, time,
loss of autonomy) can be substantial.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
17
Annual Review
Strategic Report (continued)
Product Pipeline (continued)
There is a substantial personal and pharmacoenconomic
burden of CIDP. The goals of CIDP treatment are to arrest
the attack on the myelin sheath of nerves and to reduce
symptoms, improve functional ability, prevent relapse,
and maintain long-term remission. Immunoglobulins (Igs),
corticosteroids, and plasma exchange are considered as
first-line therapy.
In the US intravenous immunoglobulin (IVIG) is considered
first line treatment. Multiple IVIG products including
Panziga® (Pfizer), Gamunex (Grifols) and Privigen
(CSL Behring) have been approved for treatment of
adults with CIDP to improve neuromuscular disability and
impairment. The mechanism by which IVIG improves CIDP
is not clearly understood, but likely involves competing
with or removing pathogenic auto-antibodies, thereby
preventing myelin and nerve injury. Within a setting void
of inflammatory nerve attack, nerves may auto-heal, and
their function can be restored. In cases where nerve injury
is severe or very chronic repair is an unrealistic objective,
and the focus turns to preventing the disease from
getting worse.
Other than IVIG, corticosteroids and plasma exchange
are evidence-based proven effective CIDP treatment
options. Plasma exchange is limited by the short durability
of treatment effect, need for frequent exchanges, and
tolerability as a chronic treatment. The many side effects
of corticosteroids are well known. While these can be
managed in the short term, as a long-term therapy
corticosteroid generally impose too much collateral
damage on patients to be considered a routine viable
treatment option. In all patients, which treatment is given
depends on comorbidities and contraindications, tried,
and failed prior treatment attempts, and disease severity.
With more aggressive treatment comes more potential for
adverse outcomes, but that risk may be justified if disease
disability is substantial. In the mildest cases in which
symptoms do not impact functionality the disease may be
managed with supportive care alone
ImmuPharma has completed the protocol for a pivotal
adaptive Phase 2/3 clinical trial to be submitted for an IND
application and application for orphan drug designation
in 2023. Orphan drug designation would provide 7 years’
marketing exclusivity post-approval.
ImmuPharma is working closely with Professor Jerome de
Seze, a Professor in Neurology and PhD in Immunology
and Head of the Neuroimmunological department
of Strasbourg hospital. He is a recognised specialist
in CIDP and will be the principal investigator for our
forthcoming CIDP trial and has been involved in
many CIDP trials. Professor Sylviane Muller, who has a
longstanding relationship with Professor de Seze and his
work within CIDP, will provide any necessary support for
this programme.
18
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Annual Review
Strategic Report (continued)
Product Pipeline (continued)
This CIDP clinical study has much shorter treatment
duration timelines than lupus meaning that this clinical
trial could potentially complete ahead of the Lupuzor™
Phase 2/3 trial in lupus.
The CIDP programme is gaining a lot of interest in the
Biopharmaceuticals industry given the orphan drug
status, high medical need in a neurology therapy area,
and limited therapeutic options which do not have any
underlying disease-modifying benefits. The sales potential
for P140 in CIDP is forecast to be over $750 million
annually by 2031. The Company is in active discussions
with potential commercial partners on this programme.
*Results were published in 2018 in the ’Journal of
Autoimmunity 92 (2018) 114–125’ entitled: “An autophagy-
targeting peptide to treat chronic inflammatory
demyelinating polyneuropathies”.
P140 – Other indications
As part of the ongoing research into P140, a number of
new indications have been revealed. They all share the
same common cause at the mechanistic level of the cell.
Pre-clinical studies have now confirmed P140 activity in
asthma (acute and chronic), gout, irritable bowel disease
and periodontitis. There is still significant unmet medical
need in all these diseases states.
P140 – Second generation
ImmuPharma, has commenced work to develop an
improved version of P140, a second generation product
that aims to further strengthen the IP position and deliver
active P140 with improved dosing regimens. This also
provides the benefit of extending the product life cycle
of P140 and the ability to study P140 (the active moiety) in
additional disease indications.
Anti-Infectives
Anti-infectives was chosen as a core therapy focus because
of the ever-looming threat of new and resistant organisms,
with few significant new products or even classes having
been discovered or developed now for many years.
Our proprietary peptide technology lends itself well to
taking established products and greatly improving their
pharmacology.
The World Health Organisation has stated that resistance
to antibiotics is one of the biggest threats to global health,
costs and mortality. Pandemic disease events could cost
the global economy over $6 trillion in the 21st century
(National Academy of Medicine: 2016).
It is worth to note that clinical trials within anti-infectives
therapy area are generally much shorter than for chronic
diseases, so this is an attractive therapy area for speed to
market and lower cost of trials.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
19
Annual Review
Strategic Report (continued)
Product Pipeline (continued)
BioAMB
BioAMB is our most advanced anti-infective candidate.
It is an improved form of amphotericin-B (“AMB”), a
well-established systemic antifungal drug. It is usually
reserved for third line therapy due to the severe side
effects associated with most AMB formulations. The
toxicity associated with AMB, especially nephrotoxicity,
has always been a key challenge for this group of drugs.
Pre-clinical studies on BioAMB have so far demonstrated
both efficacy and none of the usual toxicity side effects
associated with existing AMB formulations. Sales of
AMB formulations in 2021 were $540 million. However,
BioAMB’s target product profile will aim for a larger
market where the azole class of drugs are used first line
(e.g. voriconazole). We are targeting improvements in
drug administration and safety whilst maintaining the high
efficacy of amphotericin-B against fungal pathogens.
BioCin
BioCin is an improved form of vancomycin, a systemic
antibacterial which is highly effective against Methicillin
Resistant Staphylococcus Aureus (MRSA) and orally
against Clostridium Difficile infections. However,
vancomycin is not absorbed from the gut and so requires
administration by infusion which is needs to be monitored
for efficacy/safety and represents an expensive regimen
for patients and their healthcare providers. We have
identified where we can improve a number of aspects of
the drug’s pharmacology with BioCin in order to improve
ease of administration whilst optimising the efficacy/safety
profile compared to standard vancomycin therapy.
Key Performance Indicators
ImmuPharma is a drug discovery and development
group. In keeping with organisations at a similar stage of
development in the pharmaceutical and biotechnology
sector, ImmuPharma’s main activity involves incurring
research and development expenditure. The overall
strategy is to maintain a tight control over cash resources
whilst enabling controlled development of the potential
product portfolio.
Going Concern
The Company and Group do not generate any material
cash revenues as its pipeline products are currently at
research and development stage and therefore rely on
external finance in order to fund its operation.
The directors have prepared cashflow forecasts covering
a period of more than 12 months from the date of the
approval of these financial statements. These forecasts
include a number of cash inflows to the Company and
Group including the variable cash receipts under the
Lanstead Sharing Agreement and expected receipts from
licence and collaborations agreements. No new equity
fundraising has been assumed. Certain directors of the
company continue to defer salaries and the forecasts
assume that this will continue over the forecast period.
Some of the cash inflows have a level of uncertainty in
respect of timing of receipt and absolute quantum which
have been modelled through sensitivity analysis. These
uncertainties are such that potential actions, to further
reduce the cost base of operations, may not be sufficient
to mitigate all reasonably possible downsides.
Based on the above, the directors believe it remains
appropriate to prepare the financial statements on a going
concern basis. However, these circumstances represent a
material uncertainty that may cast significant doubt upon
the company’s ability to continue as a going concern and,
therefore to continue realising its assets and discharging
its liabilities in the normal course of business. The financial
statements do not include any adjustments that would
result from the basis of preparation being inappropriate.
20
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Annual Review
Strategic Report (continued)
Key objectives and performance
Objective
Key progress during the period
Successfully find a suitable partner(s) for
and/or sufficient funding for the clinical
development of Lupuzor™
• In April 2022, ImmuPharma announced the successful completion of the
Lupuzor™PK study.
• In September 2022, FDA provided guidance on next steps for the clinical
program. This included advice on the dosing regime. In addition, the FDA
also provided further significant guidance on the study protocol to improve
the regulatory outcome.
Develop potential product portfolio
• Collaboration with CNRS, new broad agreement is under way to explore P140
platform opportunities created by Professor Sylviane Muller.
• Collaboration with Imperial College London on innovative peptide assets.
Maintain strong cash position
• Consolidated cash balance at 31 December 2022 was £0.7 million.
• Shares subscriptions and placement of £2.0 million (gross), inclusive of
“Lanstead Sharing Agreement” of £1m over 24 months.
• Continued tight financial control to ensure effective overall expenditure.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
21
Annual Review
Strategic Report (continued)
Directors’ duties in relation to s172 Companies Act 2006
The directors consider that they have acted in the way
they believe, in good faith, to promote the success of the
Company for the benefit of its members as a whole and, in
doing so, have regard (amongst other matters) to:
• the likely consequences of any decisions in the
long-term,
• the interests of the Company’s employees,
• the need to foster the Company’s business
relationships with suppliers, customers and others,
• the impact of the Company’s operations on the
community and environment,
• the desirability of the Company maintaining a
reputation for high standards of business conduct, and
• the need to act fairly between the shareholders of the
Company.
Long term value
The aim of all business resources allocation is to
create a long-term value, being a development and
commercialisation of novel drugs. For further details,
please see pages 11-15.
Our people
Being a small group with only on average 13 employees,
there is a high level of visibility between Board and
employees. For further details, please see page 23-24.
Business relationships
The Board is aware of the importance of maintaining good
relationships with its key suppliers whilst safeguarding its
resources. For further details, please see pages 32-33 for
stakeholder engagement.
Community and environment
The Board seeks to support as many interactions with
the research and development community as possible
through regular meetings and continuous collaborations.
For further details, please see pages 32-33 for stakeholder
engagement.
Business Conduct
The Board seeks to maintain a reputation for high
standards of business conduct. For further details, please
see pages 26-30 for corporate governance.
Shareholders
Shareholder communication is conducted regularly via
press releases, Proactive Investor platform, annual and
interim reports, AGM. For further details, please see
pages 32-33 for stakeholder engagement.
Principal Risks and Uncertainties
ImmuPharma operates within a complex business
environment and an industry that is fundamentally driven
by regulatory processes. A robust understanding of the
risks and uncertainties involved in a pharmaceutical drug
development business is fundamental to ImmuPharma’s
success. The Board regularly considers these principal risks
and uncertainties and reviews its strategies for minimising
any adverse impact to the Company or its investors.
The principal risks and uncertainties have been grouped
into three categories: pharmaceutical environment,
financial and operational. The table below does not
illustrate the list of all risks faced by ImmuPharma.
22
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Annual Review
Strategic Report (continued)
Principal Risks and Uncertainties (continued)
Pharmaceutical Environment Risks
Drug Development
Mitigating factors
Change in year
If the clinical trials of any of ImmuPharma’s drug candidates
fail, that drug candidate will not be marketed, which would
result in a complete absence of revenue from the failed
product. The drug development process and achievement of
regulatory approvals is complex and uncertain. Because of the
cost and duration of clinical trials, the directors may decide to
discontinue development of drug candidates that are either
unlikely to show good results in the trials or unlikely to help
advance a product to the point of a meaningful collaboration.
Positive results from pre-clinical studies and early clinical trials
do not ensure positive results in clinical trials designed to
permit application for regulatory approval.
ImmuPharma’s management team
have many years of experience in
drug development and a robust
understanding of the clinical trial
design process. This experience
should help ensure that such
risks are minimised. In addition,
ImmuPharma has established
scientific advisors and an advisory
board in the case of LupuzorTM,
P140 for lupus and CIDP and
BioAMB for systemic aspergillosis.
Failure to Protect Products
Mitigating factors
Change in year
Since its inception, ImmuPharma
has developed a significant patent
portfolio. By utilising reputable
external advisers, the Company
mitigates the risk of patent
infringement.
The commercial success of ImmuPharma depends upon its
ability to obtain patent protection for its products globally.
No assurance is given that ImmuPharma will develop products
that are patentable, or that patents will be sufficiently broad
in their scope to provide protection for ImmuPharma’s
intellectual property rights and exclude competitors with
similar technology. Competitors may obtain patents that may
relate to products competitive with those of ImmuPharma.
If this is the case then ImmuPharma may have to obtain
appropriate licences under these patents or cease and/or alter
certain activities or processes, or develop or obtain alternative
technology. There can be no assurance that, if any licences are
required, ImmuPharma will be able to obtain any of them on
commercially favourable terms, if at all.
Regulatory Framework
Mitigating factors
Change in year
Changes in government regulations or enforcement policies
could impose more stringent requirements on ImmuPharma,
compliance with which could adversely affect its business.
Failure to comply with applicable regulatory requirements
could result in enforcement action, including withdrawal of
marketing authorisation, injunction, seizure of products and
liability for civil and/or criminal penalties.
It is essential that ImmuPharma
complies with all regulatory
requirements and it continually
monitors regulatory developments
to ensure that any issues are
factored into decision making
and projected timelines. External
advice is sought after for new
legislation or where resources are
not available internally.
Environmental Hazards
Mitigating factors
Change in year
ImmuPharma and its third party contractors are subject to laws,
regulations and policies relating to environmental protection,
disposal of hazardous or potentially hazardous substances,
healthy and safe working conditions, manufacturing practices
and fire hazard control. There can be no assurance that
ImmuPharma or its collaborators will not be required to
incur significant costs to comply with future laws, regulations
and policies relating to these or similar matters. The risk of
accidental contamination or injury from certain materials
cannot be eliminated. In the event of such an accident,
ImmuPharma could be held liable for any damage that results
and any such liability could exceed its resources.
ImmuPharma works with reputable
third party organisations that
provide assurance regarding their
working practices and conditions.
In addition, the Group maintains
corporate insurance to mitigate
this risk.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
23
Annual Review
Strategic Report (continued)
Principal Risks and Uncertainties (continued)
Financial Risks
Availibility of Finance
As ImmuPharma is not yet at the stage of generating profit, it
relies on external funding to develop its programs. It could be
several years, if ever, before ImmuPharma receives royalties from
any future licence agreements or revenues directly from product
sales. If ImmuPharma fails to obtain additional financing, it may
be unable to complete the development and commercialisation
of its drug candidates or continue its research and development
programmes.
Mitigating factors
Change in year
The Board remains focused
on ensuring it has sufficient
capital funds to progress its
product portfolio. In August
2022 ImmuPharma secured
the fundraising of £2.04m
(before expenses). It also
has a good oversight on all
major cash expenditures,
including budgeting, internal
cash forecasting and quarterly
reporting.
Operational Risks
Reliance on Third Parties
Mitigating factors
Change in year
ImmuPharma relies heavily upon other parties (including CROs)
for many key stages of its drug development programmes,
including execution of some pre-clinical studies and later-stage
development for its compounds and drug candidates,
management of its clinical trials, management of its regulatory
function, and manufacturing, sales, marketing and distribution
of its drug candidates. Underperformance by any of these other
parties could adversely impact the Company’s ability to operate
effectively.
During 2022, respectable CROs
have been engaged for three of
the main Company’s programs.
Their performance was monitored
closely by weekly updates on
progress status.
Reliance on Key Personnel
Mitigating factors
Change in year
ImmuPharma is dependent on the principal members of its
management and scientific staff. Recruiting and retaining
qualified personnel, consultants and advisers will be important
to its success. There can be no assurance that ImmuPharma
will be able to recruit the new staff or retain its personnel on
acceptable terms given the competition for such personnel
from competing businesses. The loss of service of any of
ImmuPharma’s personnel could impede the achievement of its
objectives.
The Board actively considers
succession planning for its
key roles.
The Company offers share
option scheme to its employees
alongside with training and
development opportunities.
The Group’s virtual organisation
structure has also made
an attractive employment
proposition.
Competition
Mitigating factors
Change in year
ImmuPharma’s competitors include amongst others, major
pharmaceutical, biotechnology and healthcare companies with
substantially greater resources than those of the Group. There
is no assurance that competitors will not succeed in developing
products that are more effective or economical than those
being developed by ImmuPharma.
Furthermore, there is no guarantee that the drug candidates
being developed by ImmuPharma have either a better safety
profile, dosing profile and/or efficacy profile than products that
are already marketed by its competitors and this may adversely
affect the sales of any new products.
The Group remains aware of the
continually evolving competitive
landscape of the therapeutic areas
in which it operates. It’s expected
that the level of competitive risk
will continue to be significant.
This awareness is factored into its
decision making for its pipeline
programs.
24
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Annual Review
Strategic Report (continued)
Principal Risks and Uncertainties (continued)
Covid-19
Mitigating factors
Change in year
Delays in the timing of any action by the regulators: MHRA,
FDA, including the delays of its review process.
Delays or difficulties in enrolling patients in our clinical trials.
The Group actively assesses
its contingency planning for
the delays of regulatory review
process. The group keeps a close
dialogue with regulators, so it
can have an early visibility of any
potential delays.
The Group proactively seek to
address this issue by ensuring the
careful selection of CROs. The
CROs chosen are appropriately
selected in terms of reputation,
level of expertise complexity of
the study and ability for regular
operational monitoring and
updates. The CROs management
of potential pandemic disruption
(i.e. remote monitoring, video
consultations etc.) is also a factor
in determining the final choice.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
25
Annual Review
Strategic Report (continued)
Forward-Looking Statements
This document contains certain statements that are not
historical facts and may be forward-looking statements
that are subject to a variety of risks and uncertainties.
There are a number of important factors that could cause
actual results to differ materially from those projected or
suggested in any forward-looking statement made herein.
These factors include, but are not limited to:
(i) ImmuPharma’s and/or ImmuPharma’s partners’
ability to successfully complete product research
and development, including pre-clinical and clinical
studies and commercialisation; (ii) ImmuPharma’s
and/or ImmuPharma’s partners’ ability to obtain
required governmental approvals, including product
and patent approvals, the impact of pharmaceutical
industry regulation, the difficulty of predicting FDA and
other regulatory authority approvals, the regulatory
environment and changes in the health policies and
structure of various countries; (iii) the acceptance and
demand for new pharmaceutical products and new
discovery-enabling technologies such as the use of cells
and (iv) ImmuPharma’s ability to attract and/or maintain
manufacturing, sales, distribution and marketing partners;
and (v) ImmuPharma’s and/or ImmuPharma’s partners’
ability to develop and commercialise products before its
competitors and the impact of competitive products and
pricing, the availability and pricing of ingredients used
in the manufacture of products, uncertainties regarding
market acceptance of innovative products newly launched,
currently being sold or in development. In addition,
significant fluctuations in financial results may occur as a
result of the timing of milestone payments and the timing
of costs and expenses related to ImmuPharma’s research
and development programme.
Without limiting the generality of the foregoing, no
assurance is given as to when ImmuPharma’s products
will be launched or licensed, or whether that launch or
licensing will be commercially successful, and words
such as “may”, “will”, “to”, “expect”, “plan”, “believe”,
“anticipate”, “intend”, “could”, “would”, “estimate” or
“continue” or the negative or other variations thereof
or comparable terminology is intended to identify
forward-looking statements.
If one or more of these risks or uncertainties materialises,
or if underlying assumptions prove incorrect, the
Group’s actual results may vary materially from those
expected, estimated or projected. Given these risks and
uncertainties, potential investors should not place any
reliance on forward-looking statements.
Neither the directors nor the Company undertake any
obligation to update forward-looking statements or risk
factors other than as required by AIM or by applicable law,
whether as a result of new information, future events or
otherwise.
Tim McCarthy
Signed on behalf of the Board of ImmuPharma Plc
10th May 2023
26
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Board of Directors
ImmuPharma plc Report and Consolidated Financial Statements December 2022
27
Lisa Baderoon
Non-Executive Director and Head of Investor Relations
Lisa joined the Board in July 2021. She has spent over
25 years working within the City of London being involved
with a diverse portfolio of clients from a variety of sectors
but with a leaning towards emerging, high growth
businesses advising both private and public companies
on their financial and corporate strategies aligned to
stakeholder and investor interests, as well as a strong
acumen in media communication. During this time, she has
been involved in a multitude of client transactions spanning
private fund raisings, Initial Public Offerings (IPOs),
secondary high profile capital raisings and mergers and
acquisitions both in the UK and internationally.
Annual Review
Board of Directors
Tim McCarthy, FCCA, MBA
Chairman and Chief Executive Officer
Tim was appointed as CEO in July 2021. He has over
40 years’ international experience in high growth biotech,
healthcare and technology companies. He is also Chairman
of Incanthera plc and 4basebio plc. Mr McCarthy has
previously been Chief Executive Officer and Finance
Director of a number of UK listed public and private
companies, including Alizyme plc and Peptide Therapeutics
Group plc, and has a core understanding of AIM and its
regulatory processes. Co-founding a number of healthcare
and biotechnology companies, Mr McCarthy has raised
substantial amounts of equity capital and also advised and
worked at Board level for a diverse range of companies
internationally, in areas such as business strategy, mergers &
acquisitions, due diligence and licensing.
Dr Tim Franklin, PhD, MBA
Chief Operating Officer
Tim joined the Board in July 2021. He has 30 years’
experience in the biopharmaceutical industry. He worked in
clinical research, sales and marketing, and global strategic
marketing for Warner Lambert, Wellcome and SmithKline
Beecham. He later moved to the capital markets where he
became a top-ranked pharmaceuticals analyst at Dresdner
Kleinwort investment bank. He applied his experience to
stock selection in hedge funds and advised several small
biotechnology companies on corporate and commercial
strategy and access to capital. He holds a BSc in Medicinal
Chemistry and a PhD in Pharmacology from Loughborough
University and an MBA from Warwick Business School.
Dr Sanjeev Pandya, MBA
Senior Non-Executive Director
Sanjeev joined the Board in July 2021. He has over 25 years
of healthcare and international management experience.
He was formerly CEO of Advanced Oncotherapy Plc, a
specialist cancer radiotherapy business listed on AIM.
During his leadership, he raised over $100m and developed
and secured partnerships in the USA, EU, China, Singapore,
India, Australia, Asia and South America. Formerly, he had
a number of leadership roles in several global clinical trials
at Pfizer and was head of Europe Regulatory and Medical
at Reckitt Benckiser. Sanjeev trained and worked as an
orthopedic surgeon in the NHS and various Third World
countries. He has a medical degree from Trinity College,
Cambridge and an MBA from INSEAD.
28
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Board of Directors (continued)
ImmuPharma plc Report and Consolidated Financial Statements December 2022
29
Annual Review
Board of Directors (continued)
Company Secretary
Ewa Flynn, FCCA
Chief Financial Officer
Ewa held several lead financial positions in various listed
and private companies, including online retailers, notably
within the Amazon Group. Ewa has been an ACCA qualified
Chartered Accountant since 2015 and holds an M.A. in
International Relations from Jagiellonian University in
Kracow. Ewa stepped down from her role in October 2022.
Ward Williams Limited (“Ward Williams”)
Chief Financial Officer
On 7 October 2022 ImmuPharma appointed Ward Williams
as a Company Secretary. Ward Williams is a accountancy
practice who have been servicing the accounting services
of ImmuPharma for a number of years. Their team consists
of Chartered Accountants, all of whom have experience
dealing with quoted and private companies operating in a
variety of sectors and jurisdictions.
30
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Scientific Collaborators
ImmuPharma plc Report and Consolidated Financial Statements December 2022
31
Annual Review
Scientific Collaborators
Prof Sylviane Muller, Phd
Co-founder of ImmuPharma France SA
Professor Muller is Professor at the Institute of Advanced
Studies of the Strasbourg University where she holds the
chair in Therapeutic immunology; Emeritus Research
Director at the CNRS; former Director of the CNRS Unit
Immunopathology and therapeutic chemistry (2001-2017)
and former Director of the CNRS Institute of Molecular and
Cellular Biology (2016-2017). She is the current Director of
the Drug discovery Center for cancer and inflammation
Medalis awarded 'Laboratory of Excellence’ (2011-2020;
with 200 persons) and future Director of the Strasbourg
Institute for drug development and discovery (2021-2028;
250 persons). She received several awards (CNRS Silver
Medal, CNRS Innovation Award, Léon Velluz Prize from
the French Academy of Sciences, finalist of the 2017
European Inventor Award). In 2020, she became an elected
member of the European Academy of Sciences. Most
recently, in September 2021 she was awarded the highly
prestigious Legion d’honneur Award. Her expertise in
peptide immunochemistry, combined with insights into
the molecular and cellular pathways behind autoimmune
disease, led to the discovery of Lupuzor™. Professor
Muller has filed over 30 patents and published more than
385 papers and reviews.
32
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
ImmuPharma plc Report and Consolidated Financial Statements December 2022
33
Financial and Corporate Information
Officers and Professional Advisers
Directors
Mr Tim McCarthy – Chairman and Chief Executive Officer
Dr Tim Franklin – Chief Operating Officer
Dr Sanjeev Pandya – Senior Non-Executive Director
Lisa Baderoon – Head of Investor Relations and
Non-Executive Director
Secretary
Ward Williams Limited
Investor Relations
Lisa Baderoon
Registered Office
One Bartholomew Close
London EC1A 7BL
Nominated Adviser
SPARK Advisory Partners Limited
5 St John’s Lane
London EC1M 4BH
Joint Broker
Stanford Capital Partners Limited
5-7 Cranwood Street
London EC1V 9EE
Joint Broker
SI Capital
46 Bridge Street
Godalming
Surrey GU7 1HL
Auditors
CLA Evelyn Partners Limited
Chartered Accountants
45 Gresham St
London EC2V 7BG
Solicitors
BDB Pitmans
One Bartholomew Close
London EC1A 7BL
Principal Bankers
Royal Bank of Scotland plc
62/63 Threadneedle Street
London EC2R 8LA
Registrars
Computershare Investor Services Plc
PO Box 82,
The Pavilions
Bridgwater Road,
Bristol BS99 7NH
34
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Corporate Governance Report
The Group’s directors recognise the importance of sound
corporate governance. As such the Board has adopted the
Quoted Companies Alliance Corporate Governance Code
(“the QCA Code”).
Tim McCarthy, Chairman and Chief Executive Officer, has
assumed responsibility for ensuring that the Group has
appropriate corporate governance standards and that
these standards are applied throughout the Group.
The Board, through its adoption of the QCA Code, believes
in the value of putting the necessary systems and processes
in place to support the medium to long-term delivery of the
Company’s strategic objectives. The Board is aware of the
importance of communicating these strategic objectives
to stakeholders and in reporting performance in a manner
that encourages constructive dialogue to support the
production of sustainable value in the long term. The Board
recognise their role in setting the strategic direction of
the business as well as in establishing the organisation’s
risk appetite. This is supported with a strong belief in
appropriate accountability and performance measures.
Further, the Board is cognisant of the key role it plays in
setting the tone and culture of the entire Group.
The Board currently consists of 4 directors, 2 of which are
executive and 2 are non-executive.
The Board has considered each of the 10 principles
contained within the QCA Code and where the Group
does not fully comply with each principle an explanation is
provided as to why it does not currently do so.
In addition, the Company has implemented a code of
conduct for dealing in the shares of the Company by
directors and employees (see Principle 9, pages 29-30 for
more information).
Principle 1 – Establish a strategy and
business model which promote long-term
value for shareholders
ImmuPharma is an ethical organisation with the vision to
develop novel drugs to treat serious medical conditions,
delivering value to patients, medical professionals,
healthcare payers and its shareholders.
ImmuPharma’s principal business objective is to
enhance shareholder value through the development
and commercialisation of novel drugs. Its strategies for
achieving this objective include:
• Pursuing a low-cost model of accessing world class
research through collaboration with the CNRS
in France;
• Selecting specialist therapeutic areas where there are
high unmet needs;
• Managing clinical development of novel drug candidates;
• Seeking collaborative agreements with partner
companies to further the development and
commercialisation of novel drug candidates; and
• Maintaining a small corporate infrastructure to
minimise costs.
Key activities and discussions in 2022, in relation to
strategy and performance were revolving around product
pipeline (see Strategic Report on pages 11-15 for more
information), Lupuzor regulatory progress, including the
PK study (see Chairman’s report on pages 2-3 for further
details) and capital subscriptions (see Chairman’s report
on page 5 for more information).
Principle 2 – Seek to understand and meet
shareholder needs and expectations
ImmuPharma strives to engage in active dialogue with
shareholders through regular communication including
investor events, participation in conferences, the
Company’s Annual General Meeting, any meetings that
are held throughout the year and one-on-one discussions.
Over the past 12 months, ImmuPharma’s shareholder
communications have included participation at investor
events, regular announcements regarding the Company’s
clinical trial progress, the Annual General Meeting and
numerous one-on-one meetings and interviews. These
meetings seek to foster a mutual understanding of
both the Company’s and shareholders’ objectives. Such
meetings are conducted in a format to protect price
sensitive information that has not already been made
generally available to all the Company’s shareholders.
Similar guidelines also apply to other communications
between the Company and other parties, such as financial
analysts, brokers and the media.
In addition, the Board is provided with market summary
reports which detail share price and share register
movements.
All members of the Board are scheduled to attend
the Annual General Meeting. Notice of the Meeting
is dispatched to shareholders at least 21 working days
before the Meeting. The information sent to shareholders
includes a summary of the business to be covered, with
a separate resolution prepared for each substantive
matter. When a vote is taken on a show of hands, the
level of proxies received for and against the resolution
and any abstentions are disclosed at the Meeting. The
results of votes lodged for and against each resolution are
announced to the London Stock Exchange and displayed
on the Company’s website. At the Meeting there will be
an opportunity, following the formal business, for informal
communications between shareholders and directors.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
35
Financial and Corporate Information
Corporate Governance Report (continued)
Principle 3 – Take into account wider
stakeholder and social responsibilities and
their implications for long-term success
The Board recognises the importance of its wider
stakeholders – employees, contractors, suppliers,
regulators and advisors – to its long-term success. The
Board has established expectations that these key
resources and relationships are valued and monitored. In
particular, the Company’s business model of outsourcing
clinical trials requires reliable dialogue with contractors
to ensure the success pursuit of long-term strategic
objectives. Furthermore, the Board actively seek to
engage regularly with our corporate advisers to ensure
proactive communication regarding the Company’s
activities. In doing so, the Company is able to take any
feedback into account and adjust its actions accordingly to
ensure it stays focused on long-term performance.
The Board recognises that the Company operates within
the wider pharmaceutical industry and strives to remain
alert to developments in a wider industry/society context.
See stakeholder engagement within Directors Report for
further details on the pages 32-33.
Principle 4 – Embed effective risk
management, considering both opportunities
and threats, throughout the organisation
ImmuPharma operates within a complex business
environment and an industry that is fundamentally
driven by regulatory processes. The Board has set out its
understanding of the principal risks and uncertainties in
its Strategic Report and regularly reviews its strategies
for minimising any adverse impact to the Company or
its investors.
Risk assessment is a priority for the Board. The major risks
to the business are laid out in detail in the Company’s
Strategic Report on pages 17-21. They concern mainly
the control and timely progress of clinical trials and
the obtaining of regulatory approval and profitable
agreements with other parties, with adequate financial
resources to achieve these objectives.
Where a material new risk or opportunity is identified, or
an existing risk escalates, the Board will communicate and
meet outside of the regular Board meetings to ensure the
required actions are taken and are effective.
Principle 5 – Maintain the board as a
well-functioning, balanced team led by
the Chairman
The Board members have a collective responsibility and
legal obligation to promote the interests of the company.
In the table below, details of the Board of Directors are
summarised:
Name
Tim McCarthy Chief
Title
Independent
Committee
Memberships
Audit
Executive
Officer and
Chairman
Chief
Operational
Officer
Tim Franklin
Sanjeev Pandya Senior
Non-
Executive
Director
Lisa Baderoon Head of
Investor
Relations
and Non-
Executive
Director
Audit
X
X
Audit,
Remuneration
Audit,
Remuneration
Brief biographies of each Director are set out on page 23.
The Company believes that the skills and experience
of each Director are of the appropriate mix to provide
effective governance and management of the business.
The Board was supported in its governance and finance
responsibilities by Ward Williams Limited, acting as Chief
Financial Officer (not a Director) and Company Secretary,
appointed as a Company Secretary in October 2022.
Following major changes in the Board structure in 2021,
Tim McCarthy was appointed as CEO, while maintaining
the position of Chairman. The Company has initiated
the process to identify a suitable person to take over as
Non-Executive Chair of the Company and during this
interim period Tim will continue as Chairman.
The Company also appointed its non-executive
directors, taken into consideration their independency
and shareholders’ interest. The appointed independent
directors have considerable relevant experience to
sufficiently question and hold the executive directors
to account.
Each Director is required to devote as much time as
required to carry out the roles and responsibilities
required.
36
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Corporate Governance Report (continued)
The Company has adopted the practice of requiring all
directors to be subject to re-election every three years.
The executive directors are employed under service
agreements requiring 12 months’ notice by either
party. Non-executive directors receive payments under
appointment letters, which are terminable by three
months’ notice by either party.
The Board meets regularly throughout the year with
all decisions concerning the direction and control of
the business made by a quorum of the Board. As of
31 December 2022, the Board met 12 times with the
attendance records of the directors as follows:
Tim McCarthy, Chief Executive Officer and
Chairman – 12/12
Tim Franklin, Chief Operational Officer – 12/12
Sanjeev Pandya, Senior Non-Executive Director – 12/12
Lisa Baderoon, Head of Investor Relations and
Non-Executive Director – 12/12
Principle 6 – Ensure that between them the
directors have the necessary up-to-date
experience, skills and capabilities
The Board has extensive mixture of skills and experience,
which enable the delivery of Group’s strategy for the
shareholders over the medium to long-term. These include
scientific expertise, public market requirements, business
acumen and financial knowledge. Please refer to Director
biographies on page 23.
Principle 7 – Evaluate board performance
based on clear and relevant objectives,
seeking continuous improvement
Internal evaluation of the Board, the Audit Committee and
Remuneration Committee as well as individual directors
is undertaken on an informal basis at present. The review
takes the form of peer appraisal and discussions to
determine the overall effectiveness of individual directors
and the Board as a whole. Specific consideration will be
given to evaluating the continued independence of the
Group’s non-executive directors. Senior management
appointments are discussed at the Board Meetings
and are managed by the Chief Executive Officer and
Chief Operational Officer with additional support from
Non-Executive Directors where appropriate.
Principle 8 – Promote a corporate
culture that is based on ethical values
and behaviours
The Board recognises its role in establishing and monitoring
not only the strategic direction and risk appetite but also the
tone and culture of the organisation. As a pharmaceutical
drug development company, an ethical approach is essential.
As such, the Board places great importance on the serious
pursuit of therapeutic innovation and making effective use
of limited resources. It applies to the directors as well as all
group employees and consultants. It is a key belief of the
Company and helps to define its competitive advantage in
relation to its peers.
Upon joining the Company, employees have an induction
meeting in relation to the Company’s code of conduct
and ethics. This includes example behaviours that are
considered unacceptable by the Group.
Principle 9 – Maintain governance structures
and processes that are fit for purpose and
support good decision-making by the Board
The Board is responsible for long-term success of the
Company. There is a schedule of matters reserved for the
Board that guides the Board’s activities.
An Audit Committee and a Remuneration Committee
have been established with formally delegated duties
and responsibilities. As summarised under Principle 5
on page 28, the members of both committees are the
Non-Executive Directors.
Audit Committee
The Audit Committee, which determines the engagement
of the Company’s auditors and, in consultation with them,
the scope of their audit. The Audit Committee meets a
minimum of two times per year. The Audit Committee
receives and reviews reports from management and
the auditors relating to the interim and annual financial
statements and the accounting and internal control
systems in use by the Company. It has unrestricted access
to the auditors.
The Board and the Audit Committee review the need for
an internal audit function on an annual basis and currently
do not consider it necessary at this stage in the Company’s
development.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
37
Financial and Corporate Information
Corporate Governance Report (continued)
The directors acknowledge their responsibilities for the
Group’s system of internal financial controls. They have
during the year ended 31 December 2022, carried out a
review of internal financial controls, strengthening and
updating the Company and its subsidiaries internal control
policies. The Group’s financial reporting arrangements
are designed to provide the directors with reasonable
assurance that problems are identified on a timely basis
and dealt with appropriately.
In 2022 the Audit Committee has deliberated two times. At
these meetings the main point of discussion were annual
and interim financial statements and working capital, the
presentation of the annual report, audit report from CLA
Evelyn Partners Limited, the audit fees and audit plan,
updates on cash position, financial instruments and overall
function of the committee and its members.
Remuneration Committee
The Remuneration Committee reviews the scale and structure
of the executive directors’ remuneration and benefits and the
terms of their service contracts. The remuneration of the non-
executive directors is determined by the Board as a whole.
The Committee has formal terms of reference and meets
at least twice a year. It is the duty of the Committee, inter
alia, to determine and agree with the Board the framework
or broad policy for the remuneration of the Company’s
executive Board members. The remuneration packages are
designed to motivate and retain executive directors to ensure
the continuing development of the Company and to reward
them for enhancing value to shareholders.
In 2022 the Remuneration Committee met two times.
Amongst others items, it dealt with the continued temporary
voluntary reduction of the salaries and fees of the Board.
Nominations Committee
The directors consider that the Company is not currently
of a size to warrant the need for a separate nominations
committee and any decisions which would usually be taken
by the nomination committee will be taken by the Board
as a whole.
Share Dealing Code
The Company has adopted a Share Dealing Code given the
importance of having a clear and effective policy that sets out
the rules and procedures for share dealings by the directors
and other applicable employees.
Principle 10 – Communicate how the
company is governed and is performing by
maintaining a dialogue with shareholders and
other relevant stakeholders
The Board is committed to maintaining good communication
with its shareholders and in promoting effective dialogue
regarding the Company’s strategic objectives and
performance. Institutional shareholders and analysts have
the opportunity to discuss issues and provide feedback via
meetings with the Company. The Annual General Meeting
and any other General Meetings that are held throughout the
year are for shareholders to attend and question the directors
on the Company’s performance. The results of any general
meetings are released through LSE AIM RNS news as soon
as practically possible. The Annual Reports and notice of all
general meetings are available on the Group’s website.
The directors also periodically promote ImmuPharma’s
activities, following the publication of regulatory
announcements, through various media platforms such as
Proactive Investor, Investor Meets Company.
38
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Directors’ Report
Company Number: 03929567
The directors present their report and the audited financial statements of ImmuPharma plc (the “Company”, and
collectively with the subsidiary companies, the “Group”) for the year ended 31 December 2022.
Principal Activities
The principal activity of the Group and Company in the year under review was that of pharmaceutical research
and development.
Results and Dividends
The Consolidated Income Statement is set out on page 42.
The directors do not recommend the payment of a dividend.
Business Review, Research and Development and Future Developments
The Strategic Report includes a review of the business, as well as a commentary regarding research and development,
and future developments. The principal risks and uncertainties facing the Group are considered on pages 17 to 21.
Subsequent Events
There were no subsequent events.
Directors
The following directors of the Company have held office since 1 January 2022:
Tim McCarthy
Tim Franklin
Sanjeev Pandya
Lisa Baderoon
ImmuPharma plc Report and Consolidated Financial Statements December 2022
39
Financial and Corporate Information
Directors’ Report (continued)
Stakeholder engagement
The Board seeks to understand and consider the views of the Group’s key stakeholders in Board discussions and decision
making.
Key Stakeholders and concerns
Board Considerations
Key Outcomes
Employees
Our present and future employees
are key for the future success of the
business.
Executive directors update the
Board with details of employee
changes, concerns, and recruitment
prospects. An open, collaborative
working environment with attractive
remuneration packages aligns
employees’ with shareholders’ goals.
Shareholders
Our Shareholders have been
highly supportive. We are actively
encouraging retention of their
investment whilst trying to secure new
Shareholders and funding.
The Board is in regular communication
with its Shareholders via press
releases, Annual and Interim Report,
AGM. The Board receives updates
on the views of shareholders through
the feedbacks from brokers, other
advisors.
Business Partners
We have worked closely with our
suppliers to set up new commercial
and development agreements.
Research and Development
Community
The collaboration with the CNRS,
University of Bordeaux, Simbec Orion,
Imperial College and others is at the
heart of our business
The Board is aware of the importance
of maintaining good relationships
with key suppliers, remaining
trustworthy, while safeguarding the
Group’s assets. It receives regular
updates on main supply agreements
and maintain long-term mutually
beneficial co- operations.
The Board seeks to support as
many interactions with research and
development community as possible
through regular meetings (remote
and in person) and continuous
collaborations.
Environment
The Group is conscious of the need
to protect the environment
ImmuPharma’s operations are
relatively low in their impact on the
environment. The Board is committed
to reduce further the environmental
footprint.
40
ImmuPharma plc Report and Consolidated Financial Statements December 2022
• Continuing to focus on open
culture creation, which motivates
all employees.
• All our employees participate in
share-based incentives.
• Training and development
opportunities.
The Company meets (virtually
or in person) periodically with its
Shareholders. Summary of these
events are below:
• AGM, June 2022 (AGM conducted
via live broadcast with Q&A
embedded into “Investor Meets
Company” platform).
• Investor conferences; -EBD
Biotech Showcase, San Francisco
USA, January 2022
• Interviews: audio, print and TV
with Proactive Investor (December
2022), and “Investor Meet
Company”.
New supplier agreements with
material threshold need to be
approved by the Board. Payment to
suppliers of over £10k need to be
approved by two Directors.
The Board supported the research
and development community in
France and United Kingdom. In 2021
the Company made donations to
CNRS to support its P140 platform.
Most notably, in November 2021
ImmuPharma signed a 2-year
collaboration agreement with
Imperial College.
Employees have continued to keep
domestic and international travel to
a minimum, using digital technology
enabled conferencing instead.
Financial and Corporate Information
Directors’ Report (continued)
Key Stakeholders and concerns
Board Considerations
Reputation
Maintaining a strong reputation and
acting within laws and regulations
impacts the Group’s relationships with
all stakeholders
Policies and procedures approved
by the Board are concentrated on
maintaining the strong reputation
of the Group within its employees,
Shareholders, suppliers, regulators
and other key stakeholders.
Key Outcomes
ImmuPharma continuously monitors
and assesses all regulatory
developments to ensure that any
issues are being addressed in
decision making.
Directors Remuneration
The following amounts were payable to the directors of ImmuPharma plc across the Group in relation to the year ended
31 December 2022:
Director
Robert Zimmer
Dimitri Dimitriou
Tim McCarthy
Tim Franklin
Franco di Muzio
Stephane Mery
Sanjeev Pandya
Lisa Baderoon
Total
Total
remuneration
2022
£
Total
remuneration
2021
£
Salary/Fees
£
-
-
106,500
92,500
-
-
54,000
48,000
301,000
-
-
106,500
92,500
-
-
54,000
132,000
385,000
370,708
582,631
287,333
105,660
52,285
59,583
22,915
20,369
1,501,484
The executive directors Tim McCarthy and Tim Franklin waived a proportion of their salaries during the year equal to
£188k and £160k respectively.
The Company does not operate a health plan or company car plan. There were no bonus payments to directors in 2022.
For further information, please refer to Note 22.
The following share options were outstanding to the directors of ImmuPharma plc as at 31 December 2022 (see note 20
for more detail):
Options
granted
2 June
2016
Options
granted
30 March
2017
Options
granted
12 July
2017
Options
granted
24 November
2017
Options
granted
25 November
2020
Options
granted
22 December
2022
Share
options
outstanding
2022
Share
options
outstanding
2021
Director
Tim McCarthy 500,000
-
Tim Franklin
Lisa Baderoon 100,000
-
-
250,000
1,000,000
-
-
1,500,000
-
375,000
1,500,000
1,500,000
375,000
3,600,000
3,150,000
-
8,100,000
4,650,000
1,100,000
4,500,000
1,500,000
1,100,000
Total
600,000
250,000
1,000,000
1,875,000
3,375,000
6,750,000
13,850,000
7,100,000
ImmuPharma plc Report and Consolidated Financial Statements December 2022
41
Financial and Corporate Information
Directors’ Report (continued)
Third Party Indemnity Provision for Directors
Qualifying third party indemnity provision for the benefit for the directors was in force during the financial year and as at
the date this report is approved.
Financial Instruments and Financial Risk Management
Information regarding the use of financial instruments and the approach to financial risk management is detailed in notes
1 and 2 of the financial statements.
Disclosure of information to the Auditors
In the case of each person who was a director at the time this report was approved they have:
• taken all the necessary steps to make themselves aware of any information relevant to the audit and to establish that
the auditors are aware of that information; and
• so far as they are aware, there is no relevant audit information of which the auditors have not been made aware.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies
Act 2006.
Auditors
A resolution to reappoint the auditors, CLA Evelyn Partners Limited, will be proposed at the next Annual General Meeting.
On behalf of the Board
Tim McCarthy
Director
10th May 2023
42
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Statement of Directors' Responsibilities
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the
directors have elected to prepare the group and parent company financial statements in accordance with UK-adopted
international accounting standards. 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 Group and of the
profit or loss of the Group for that period. 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 that the financial statements comply with UK-adopted international accounting standards subject to any
material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company
will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and
the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are also responsible for ensuring that they meet their responsibilities under the AIM Rules.
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 financial
statements may differ from legislation in other jurisdictions.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
43
Independent auditor’s report
To the members of ImmuPharma plc
Opinion
We have audited the financial statements of ImmuPharma plc (the ‘parent company’) and its subsidiaries (the ‘group’) for
the year ended 31 December 2022 which comprise the Consolidated Income Statement, the Consolidated Statement
of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the Consolidated and
Company Statements of Changes in Equity, the Consolidated and Company Statements of Cash Flows, and the notes
to the financial statements, including significant accounting policies. The financial reporting framework that has been
applied in their preparation is applicable law and UK-adopted international accounting standards.
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 2022 and of
the group’s loss for the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the group and parent company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter – Valuation of the parent company’s receivables and investments in subsidiaries
We draw attention to the disclosures made in note 13 to the financial statements concerning the carrying values of
investments in subsidiaries and to the disclosures made in note 15 to the financial statements concerning the carrying
value of the receivables due from group undertakings.
The carrying value of £41.1 million investments in subsidiaries and £14.2 million receivables due from group undertakings
is dependent on future pharmaceutical sales within the group, which are dependent on obtaining regulatory approval
and being taken to market, including their successful commercialisation.
The ultimate outcome of these matters cannot presently be determined, and the group and parent company financial
statements do not reflect any provision that may be required if the £41.1 million investments in subsidiaries and
£14.2 million receivables due from group undertakings cannot be recovered in full. Our opinion is not modified in respect
of these matters.
Our approach to the audit
The group has four reporting components. The parent company financial statements were audited by us.
Two out of the three components subject to audit were based in France and their audits were carried out by a
component auditor in France. We held a telephone meeting with the component auditor in France as part of planning
and discussed the component auditor’s risk assessments and directed their planned audit approach. In addition to this
meeting, we sent detailed instructions to the component audit teams and reviewed their key audit working papers.
For the remaining component that was not subject to a full audit, we performed analysis at a group level to re-examine
our assessment that there were no significant risks of material misstatement within it.
The three audited components covered 100% of group loss before tax and 100% of group net assets.
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.
44
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Independent auditor’s report
To the members of ImmuPharma plc (continued)
Key audit matter
Description of risk
Carrying value of the parent
company’s investment in subsidiaries
and receivables due from group
companies (note 13 and note 15)
The parent company has significant
balances relating to investments in
subsidiaries and receivables due from
group companies.
The investments are largely
represented by the ownership of
ImmuPharma (France) SA and Ureka
Pharma SAS and amounts owed by
those companies. The carrying value
of the investments in and receivables
due from those companies is
underpinned by the future financial
viability of those companies, and
therefore is a matter of significant
judgment.
How the matter was addressed in
the audit
We reviewed management’s assessment
of impairment of investments in
subsidiaries and the recoverability of
receivables due from group companies.
We challenged assumptions and
assertions made by management in their
assessment and considered whether the
presence of impairment indicators should
result in an impairment charge.
As part of our procedures we:
• Discussed with management
the underlying future planned
activities, including research and
development programmes, for
ImmuPharma (France) SA and
Ureka Pharma SAS.
• Considered the implications of
the level of market capitalisation
of the parent company for the
valuation of these balances.
• Reviewed the discounted
cash flow model for valuation
purposes. The assumptions
to which the model was most
sensitive were the discount rate,
growth rates, exchange rates, tax
rate and probability weighting of
successful product launches. As
part of this work we considered
management’s assumptions
with reference to historical data,
external data and third party
reports where applicable.
• Reviewed sensitivity analysis
performed by management on
key assumptions and performed
further sensitivity analysis on these
assumptions.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
45
Independent auditor’s report
To the members of ImmuPharma plc (continued)
Key audit matter
Warrants issued by the parent
company during the period (note 20)
Description of risk
During the year, the parent company
issued a total of 33 million warrants
to investors and service providers.
Judgement must be exercised
around the accounting entries
for these warrants, as well as the
value that these warrants should be
recognised at.
There is a risk that these warrants are
not accounted for correctly or that
the value recognised is materially
incorrect.
How the matter was addressed in
the audit
As part of our audit procedures, we:
• Reviewed management’s
assessment of the accounting
treatment for these warrants,
including review of the underlying
warrant agreements to consider
whether these should be equity or
liability accounted;
• Assessed the value attributed
to warrants issued, including
agreeing inputs to the valuations
to supporting documentation;
and
• Reviewed disclosures made in the
financial statements.
Our application of materiality
The materiality for the group financial statements as a whole (“group FS materiality”) was set at £316,000. This has
been determined with reference to the benchmark of the group’s gross expenditure, which we consider to be one of
the principal considerations for members of the company in assessing the group’s performance. Group FS materiality
represents 10% of the group’s gross expenditure presented on the face of the consolidated income statement.
The materiality for the parent company financial statements as a whole (“parent FS materiality”) was set at £205,400. This
has been determined with reference to the benchmark of the parent company’s total assets as it exists only as a holding
company for the group and carries on no trade in its own right. This has been capped at group performance materiality.
Performance materiality for the group financial statements was set at £205,400, being 65% of group FS materiality, for
purposes of assessing the risks of material misstatement and determining the nature, timing and extent of further audit
procedures. We have set it at this amount to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds group FS materiality. We judged this level to be appropriate based
on our understanding of the group and its financial statements, as updated by our risk assessment procedures and our
expectation regarding current period misstatements including considering experience from previous audits. It was set at
65% to reflect the fact that in our historical experience management are keen to process adjustments, of which there are
some, and there are some areas of judgement and estimation in the Group financial statements.
Performance materiality for the parent company financial statements was set at £133,510, being 65% of parent FS
materiality. It was set at 65% to reflect the fact that in our historical experience management are keen to process
adjustments, of which there are some, and there are some areas of judgement and estimation in the parent company
financial statements.
Material uncertainty related to going concern
We draw attention to note 1 of the financial statements which indicates there is a material uncertainty relating to the
group and parent company’s ability to continue as a going concern.
The group and company do not generate any material revenues as its pipeline products are currently at research and
development stage and therefore the group relies on external finance in order to fund its operations. The directors
have prepared cashflow forecasts covering a period of more than 12 months from the date of approval of these financial
statements. These forecasts indicate the group will have sufficient funds to meet its liabilities as they fall due.
However, these forecasts include a number of cash inflows to the company and group including the variable cash
receipts under the Lanstead Sharing Agreement and expected receipts from licence and collaborations agreements,
although no new equity fundraising has been assumed. Certain directors of the company continue to defer salaries
and the forecasts assume that this will continue over the forecast period. Some of the cash inflows have a level of
uncertainty in respect of timing of receipt and absolute quantum which have been modelled through sensitivity analysis.
46
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Independent auditor’s report
To the members of ImmuPharma plc (continued)
These uncertainties are such that potential actions to further reduce the cost base of operations may not be sufficient
to mitigate all reasonably possible downsides. As stated in note 1, these conditions indicate that a material uncertainty
exists that may cast significant doubt on the group’s and the parent company’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Notwithstanding the above, in auditing the financial statements we have concluded that the directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Our evaluation of the directors’ assessment of the group and parent company’s ability to continue to adopt the going
concern basis of accounting included:
• Review of the future cash flow forecast prepared by management and challenging the inputs and assumptions
included in the forecast. Where appropriate, we corroborated the inputs and assumptions to supporting information.
• Review of the current cash reserves and comparing these to the cash outflows forecast required over the next
12 months from the date of signing the annual report.
• Review of sensitivity analysis to assess the impact of changing key assumptions and performing additional stress
testing of the forecast.
• Review of management’s disclosure around going concern in the financial statements.
Other information
The other information comprises the information included in the Report and Consolidated Financial Statements other
than the financial statements and our auditor’s report thereon. The directors are responsible for the other information
contained within the Report and Consolidated Financial Statements. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether
this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained
in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
47
Independent auditor’s report
To the members of ImmuPharma plc (continued)
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 35, the directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud.
We obtained a general understanding of the parent company and group’s legal and regulatory framework through
enquiry of management concerning: their understanding of relevant laws and regulations; the policies and procedures
regarding compliance; and how they identify, evaluate and account for litigation claims. We also drew on our existing
understanding of the parent company and group’s industry and regulation and had a discussion at the planning stage
with the component auditors.
We understand that the parent company and group comply with the framework through:
• Outsourcing payroll and the accounting function to external experts.
• Subscribing to relevant updates from external experts and making changes to internal procedures and controls as
necessary.
• Engaging tax experts.
• The directors’ close involvement in the day-to-day running of the business, meaning that any litigation or claims
would come to their attention directly.
• The directors’ relevant knowledge and expertise of the pharmaceutical industry, and related laws and regulations.
48
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Independent auditor’s report
To the members of ImmuPharma plc (continued)
In the context of the audit, we considered those laws and regulations: which determine the form and content of the
financial statements; which are central to the parent company and group’s ability to conduct its business; and where
failure to comply could result in material penalties. We identified the following laws and regulations as being of
significance in the context of the parent company and group:
• The Companies Act 2006 and UK-adopted international accounting standards in respect of the preparation and
presentation of the financial statements;
• AIM regulations and Market Abuse Regulations;
• Health and safety and associated environmental regulation in respect of pre-clinical trials; and
• FDA and EMA regulations in respect of clinical trials.
We performed the following specific procedures to gain evidence about compliance with the significant laws and
regulations identified above:
• Made enquiries of management;
• Inspected correspondence with regulators;
• Reviewed board meeting minutes held during the year and post year-end; and
• Obtained written management representations regarding the adequacy of procedures in place.
The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility
of the parent company and group’s financial statements to material misstatement, including how fraud might occur. The
key area identified in this discussion was with regard to the manipulation of the financial statements through manual
journal entries.
These areas were communicated to the other members of the engagement team who were not present at
the discussion.
The procedures we carried out to gain evidence in the above areas included testing of manual journal entries,
selected based on specific risk assessments applied based on the group and parent company’s processes and controls
surrounding manual journal entries.
A further description of our responsibilities is available on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the parent 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 parent 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 parent company and the parent
company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Stephen Hale
Senior Statutory Auditor, for and on behalf of
CLA Evelyn Partners Limited
Statutory Auditor
Chartered Accountants
45 Gresham Street
London
EC2V 7BG
10 May 2023
ImmuPharma plc Report and Consolidated Financial Statements December 2022
49
Financial and Corporate Information
Consolidated Income Statement
for the year ended 31 December 2022
Continuing operations
Revenue
Research and development expenses
Exceptional items
Administrative expenses
Share based payment expense
Operating loss
Finance costs
Finance income
Loss before taxation
Tax
Loss for the year
Attributable to:
Equity holders of the parent company
Loss per ordinary share
Basic and diluted
Notes
1 & 3
5
5
6
7
8
9
Year
ended
31 December
2022
£
Year
ended
31 December
2021
£
-
(2,022,507)
-
(846,571)
(159,874)
118,350
(3,650,400)
(1,427,084)
(1,011,398)
(616,423)
(3,028,952)
(6,586,955)
(1,455,966)
(2,354,872)
28,585
1,107
(4,456,333)
648,902
(8,940,720)
766,815
(3,807,431)
(8,173,905)
(3,807,431)
(8,173,905)
(1.26)p
(3.25)p
50
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2022
Loss for the financial period
Other comprehensive income
Year
ended
31 December
2022
£
Year
ended
31 December
2021
£
(3,807,431)
(8,173,905)
Notes
Items that will not be reclassified subsequently to profit or loss:
Fair value loss on investment
Fair value loss on warrants owned
12
12
(519,977)
(206,279)
(584,355)
(418,068)
Total items that will not be reclassified subsequently to profit or loss
(726,256)
(1,002,423)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Total items that may be reclassified subsequently to profit or loss
Other comprehensive loss for the period
Total comprehensive loss for the period
79,104
79,104
(36,177)
(36,177)
(647,152)
(1,038,600)
(4,454,583)
(9,212,505)
ImmuPharma plc Report and Consolidated Financial Statements December 2022
51
Financial and Corporate Information
Consolidated Statement of Financial Position
as at 31 December 2022
Notes
31 December
2022
£
31 December
2021
£
Non-current assets
Intangible assets
Property, plant and equipment
Derivative financial asset
Financial assets
Total non-current assets
Current assets
Trade and other receivables
Derivative financial asset
Cash and cash equivalents
Current tax asset
Total current assets
Current liabilities
Financial liabilities - borrowings
Trade and other payables
Convertible loan notes
Total current liabilities
Net current assets
Net assets
EQUITY
Ordinary shares
Share premium
Merger reserve
Other reserves
Retained earnings
Total equity
10
11
14
12
15
14
16
17
18
17
19
473,892
389,716
82,563
689,579
1,635,750
723,583
252,258
667,813
695,297
2,338,951
477,553
352,996
405,489
1,415,835
2,651,873
427,199
508,167
1,649,374
761,188
3,345,928
(111)
(700)
(1,451,213)
(1,583,604)
-
-
(1,451,324)
(1,584,304)
887,627
1,761,624
2,523,377
4,413,497
28,982,676
28,788,377
106,148
5,761,496
28,498,494
27,237,329
106,148
5,153,159
(61,115,320)
(56,581,633)
2,523,377
4,413,497
The financial statements were approved by the Board of Directors and authorised for issue on 10th May 2023
They were signed on its behalf by:
Tim McCarthy
Director
Tim Franklin
Director
52
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Consolidated Statement of Changes in Equity
for the year ended 31 December 2022
Other
reserves -
Acquisition
reserve
£
Other
reserves -
Translation
reserve
£
Other
reserves -
Share
based
payment
reserve
£
Other
reserves -
Convertible
option
reserve
£
Other
reserves -
Warrant
reserve
£
Retained
earnings
£
Total
equity
£
Share
capital
£
Share
premium
£
Merger
reserve
£
At 1 January 2021
25,022,130 27,237,329 106,148 (3,541,203)
(1,308,480) 8,073,596
31,623
-
(45,966,347) 9,654,796
Loss for the financial
year
Exchange differences
on translation
of foreign operations
Transactions with
owners:
Share based payments
New issue of
equity capital
Costs of new issue
of equity capital
Fair value loss on
investments
Fair value loss on
share warrants
Settlement of
convertible loans
reserve
Issue of warrants
-
-
-
-
-
-
3,476,364
322,727
-
-
-
-
-
(322,727)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(36,177)
-
-
-
-
-
-
-
-
-
616,423
-
-
-
-
-
-
-
-
-
-
-
-
-
(31,623)
-
(8,173,905)
(8,173,905)
-
-
-
-
-
-
-
-
-
(36,177)
616,423
(1,349,000) 2,450,091
(121,581)
(444,308)
(584,355)
(584,355)
(418,068)
(418,068)
31,623
-
-
1,349,000
-
1,349,000
At 31 December 2021 28,498,494 27,237,329 106,148 (3,541,203)
(1,344,657) 8,690,019
- 1,349,000 (56,581,633) 4,413,497
Loss for the financial
year
Exchange differences
on translation of
foreign operations
Transactions with
owners:
Share based payments
New issue of equity
capital
Costs of new issue of
equity capital
Fair value loss on
investments
Fair value loss on share
warrants
Issue of warrants
-
-
-
-
-
-
484,182 1,866,727
-
-
-
-
(165,679)
-
-
(150,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
79,104
-
-
-
-
-
-
-
-
159,874
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,807,431)
(3,807,431)
-
-
-
-
-
-
-
-
-
-
79,104
159,874
2,350,909
(165,679)
(519,977)
(519,977)
(206,279)
(206,279)
369,359
-
219,359
At 31 December 2022 28,982,676 28,788,377 106,148 (3,541,203)
(1,265,553) 8,849,893
- 1,718,359 (61,115,320) 2,523,377
Equity holders of the
parent company
28,982,676 28,788,377 106,148 (3,541,203)
(1,265,553) 8,849,893
- 1,718,359 (61,115,320) 2,523,377
ImmuPharma plc Report and Consolidated Financial Statements December 2022
53
Financial and Corporate Information
Consolidated Statement of Cash Flows
for the year ended 31 December 2022
Cash flows from operating activities
Cash used in operations
Tax received
Interest paid
Net cash used in operating activities
Investing activities
Purchase of property, plant and equipment
Interest received
Net cash used in investing activities
Financing activities
Decrease in bank overdraft
Loan repayments
Settlements from Sharing Agreement
Gross proceeds from issue of new share capital
Share capital issue costs
Funds deferred per Sharing Agreement
Interest paid on convertible loan notes
Convertible loan notes repaid
Net cash generated from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effects of exchange rates on cash and cash equivalents
Cash and cash equivalents at end of year
(excluding overdraft)
Notes
21
6
7
16
16
Year
ended
31 December
2022
£
Year
ended
31 December
2021
£
(3,224,906)
(5,222,446)
879,877
(2,036)
392,217
(2,943)
(2,347,065)
(4,833,172)
(106,009)
28,585
(77,424)
-
-
362,500
2,350,909
(165,679)
(1,000,000)
-
-
1,547,730
(876,759)
1,649,374
(104,802)
(50,934)
651
(50,283)
(211)
(6,028)
328,495
3,550,000
(132,350)
(2,200,000)
(121,120)
(716,739)
702,047
(4,181,408)
5,862,057
(31,275)
667,813
1,649,374
54
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Company Statement of Financial Position
as at 31 December 2022
Non-current assets
Property, plant and equipment
Financial assets
Derivative financial asset
Trade and other receivables
Investment in subsidiaries
Total non-current assets
Current assets
Trade and other receivables
Derivative financial asset
Cash and cash equivalents
Current tax asset
Total current assets
Current liabilities
Trade and other payables
Total current liabilities
Net current assets
Net assets
EQUITY
Ordinary shares
Share premium
Merger reserve
Other reserves
Warrant reserve
Retained earnings
Total equity
Notes
31 December
2022
£
31 December
2021
£
11
12
14
15
13
15
14
16
18
19
8,427
689,579
82,563
14,177,448
41,141,463
13,682
1,415,835
405,489
12,249,280
41,111,393
56,099,480
55,195,679
106,387
252,258
542,712
-
144,283
508,167
1,524,730
343,246
901,357
2,520,426
(299,163)
(299,164)
(804,717)
(804,717)
602,194
1,715,709
56,701,674
56,911,388
28,982,676
28,788,377
19,093,750
8,849,893
1,718,359
28,498,494
27,237,329
19,093,750
8,690,019
1,349,000
(30,731,381)
(27,957,204)
56,701,674
56,911,388
The Company’s loss for the year ended 31 December 2022 was £2,047,921 (2021: loss of £7,129,729).
The financial statements were approved by the Board of Directors and authorised for issue on 10th May 2023.
They were signed on its behalf by:
Tim McCarthy
Director
Tim Franklin
Director
ImmuPharma plc Report and Consolidated Financial Statements December 2022
55
Financial and Corporate Information
Company Statement of Changes in Equity
for the year ended 31 December 2022
Other
reserves-
Share
based
payment
reserve
£
Share
capital
£
Share
premium
£
Merger
Reserve
£
Convertible
option
reserve
£
Warrant
reserve
£
Retained
earnings
£
Total
Equity
£
At 1 January 2021
25,022,130
27,237,329
19,093,750
8,073,596
31,623
-
-
-
-
-
-
(31,623)
-
-
-
-
-
-
-
-
(18,386,094) 61,072,334
(7,129,729)
(7,129,729)
-
616,423
(584,355)
(584,355)
(1,349,000)
2,450,091
(121,581)
(444,308)
(418,068)
(418,068)
31,623
-
-
-
-
-
-
-
-
-
-
-
1,349,000
-
1,349,000
1,349,000
(27,957,204) 56,911,388
-
-
-
-
-
-
(2,047,921)
(2,047,921)
-
159,874
(519,977)
(519,977)
-
-
2,350,909
(165,679)
(206,279)
(206,279)
369,359
-
219,359
1,718,359
(30,731,381) 56,701,674
Loss for the financial year
Transactions with owners:
Share based payments
Fair value loss on
investments
New issue of equity
capital
Costs of new issue of
equity capital
Fair value loss on
share warrants
Settlement of convertible
loan reserve
Issue of warrants
-
-
-
-
-
3,476,364
322,727
-
-
-
-
(322,727)
-
-
-
-
-
-
-
-
-
-
-
-
616,423
-
-
-
-
-
-
At 31 December 2021
28,498,494
27,237,329
19,093,750
8,690,019
Loss for the financial year
Transactions with owners:
Share based payments
Fair value loss on
investments
New issue of equity
capital
Costs of new issue of
equity capital
Fair value loss on share
warrants
Issue of warrants
-
-
-
-
-
484,182
1,866,727
-
-
-
(165,679)
-
(150,000)
-
-
-
-
-
-
-
-
159,874
-
-
-
-
-
At 31 December 2022
28,982,676
28,788,377
19,093,750
8,849,893
56
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Company Statement of Cash Flows
for the year ended 31 December 2022
Cash flows from operating activities
Cash used in operations
Tax received
Interest paid
Net cash used in operating activities
Investing activities
Purchase of property, plant and equipment
Finance income
Loans issued to subsidiary undertakings
Repayment of loans from subsidiary undertaking
Net cash used in investing activities
Financing activities
Settlements from Sharing Agreement
Gross proceeds from issue of new share capital
Share capital issue costs
Funds deferred per Sharing Agreement
Interest paid on convertible loan notes
Convertible loan notes repaid
Net cash generated from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effects of exchange rates on cash and cash equivalents
Cash and cash equivalents at end of year
16
16
Notes
21
Year ended
31 December
2022
£
Year ended
31 December
2021
£
(1,899,683)
(3,234,047)
573,511
(1,653)
-
(2,037)
(1,327,825)
(3,236,084)
-
907
(1,273,131)
98,515
(1,173,709)
362,500
2,350,909
(165,679)
(1,000,000)
-
-
1,547,730
(953,804)
1,524,730
(28,214)
542,712
(6,535)
648
(1,321,850)
-
(1,327,737)
328,495
3,550,000
(132,350)
(2,200,000)
(121,120)
(716,739)
708,286
(3,855,535)
5,375,364
4,901
1,524,730
ImmuPharma plc Report and Consolidated Financial Statements December 2022
57
Financial and Corporate Information
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
ImmuPharma plc (the “Company”) is a public limited company registered in England and Wales (company
number 03929567). The Company is limited by shares and the registered office of the Company is located at One
Bartholomew Close, EC1A 7BL, London. ImmuPharma plc and its subsidiaries focus on the research, development and
commercialisation of pioneering and novel drugs in specialist therapeutic areas within the pharmaceutical industry.
1
Accounting policies
The principal accounting policies are summarised below. They have all been applied consistently throughout the
financial years contained in these financial statements.
Basis of preparation
The financial statements have been prepared in accordance with UK-adopted international accounting standards.
The financial statements have been prepared under the historical cost convention and on a going concern basis.
Further commentary on the Group’s plan for the continuing funding of activities is provided in the Strategic
Report. The Company has taken advantage of the exemption provided under section 408 of the Companies Act
2006 not to publish its individual Income Statement and statement of comprehensive income and related notes.
Going concern
The Company and Group do not generate any material cash revenues as its pipeline products are currently at
research and development stage and therefore rely on external finance in order to fund its operation.
The directors have prepared cashflow forecasts covering a period of more than 12 months from the date of the
approval of these financial statements. These forecasts include a number of cash inflows to the Company and
Group including the variable cash receipts under the Lanstead Sharing Agreement and expected receipts from
licence and collaborations agreements. No new equity fundraising has been assumed. Certain directors of the
company continue to defer salaries and the forecasts assume that this will continue over the forecast period.
Some of the cash inflows have a level of uncertainty in respect of timing of receipt and absolute quantum which
have been modelled through sensitivity analysis. These uncertainties are such that potential actions, to further
reduce the cost base of operations, may not be sufficient to mitigate all reasonably possible downsides.
Based on the above, the directors believe it remains appropriate to prepare the financial statements on a
going concern basis. However, these circumstances represent a material uncertainty that may cast significant
doubt upon the company’s ability to continue as a going concern and, therefore to continue realising its assets
and discharging its liabilities in the normal course of business. The financial statements do not include any
adjustments that would result from the basis of preparation being inappropriate.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with generally accepted accounting practice requires
management to make estimates and judgements that affect the reported amounts of assets and liabilities as
well as the disclosure of contingent assets and liabilities at the Statement of financial position date and the
reported amounts of revenues and expenses during the reporting year. 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.
Management have had to make judgements in the following areas:
• Financial instruments – fair value measurement
A number of assets and liabilities included in the Group’s financial statements require measurement at,
and/or disclosure of, fair value. The fair value measurement of the Group’s financial and non-financial
assets and liabilities utilises market observable inputs and data as far as possible. Inputs used in
determining fair value measurements are categorised into different levels based on how observable the
inputs used in the valuation technique utilised are (the ‘fair value hierarchy’):
- Level 1: Quoted prices in active markets for identical items (unadjusted)
- Level 2: Observable direct or indirect inputs other than Level 1 inputs
- Level 3: Unobservable inputs (i.e. not derived from market data).
58
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
1
Accounting policies (continued)
Critical accounting judgements and key sources of estimation uncertainty (continued)
The classification of an item into the above levels is based on the lowest level of the inputs used that
has a significant effect on the fair value measurement of the item. Transfers of items between levels are
recognised in the period they occur.
• Financial asset – Other investments
As at 31 December 2022, the Group and the Company held 12.97% of the issued share capital in
Incanthera plc. Incanthera plc investment is held at fair value through other comprehensive income. The
investment included above represents investments in quoted equity securities. Under IFRS 7 Financial
instruments: Disclosures and IFRS 13 Fair value measurement this is classified under the fair value hierarchy
as level 2, because the AQSE as previously defined is not considered sufficiently active to denote Level 1.
This strategic investment is classified as fair value through other comprehensive income. The fair value has
been assessed at 31 December 2022 and is based on the share price and holding at 31 December 2022 on
the ImmuPharma plc shareholding of Incanthera plc. There is judgement around calculating the fair value
of this investment. The value of ImmuPharma’s retained 9,903,349 shares amounted to £688,350 being the
fair value of the investment in Incanthera plc as of 31 December 2022. Fair value loss of £519,977 has been
recorded in Other Comprehensive Income.
• Derivative financial asset
The Group and the Company has placed shares with Lanstead and at the same time entered into
a Sharing Agreement. The amount receivable under the Sharing Agreement each month, over a
24 month period, will be dependent on the Company’s share price performance. The nature of
the Sharing Agreement with Lanstead requires the calculation of the fair value as at the end of the
accounting period and it is based on the estimation of the Company’s share price and discount rate.
Under IFRS 7 Financial instruments: Disclosures and IFRS 13 Fair value measurement, the value of the
derivative financial asset has been assessed under the Fair value hierarchy as a Level 2 input, as the
instrument is not quoted in an active market, but is linked to the quoted ImmuPharma share price.
Any change in the fair value of the derivative financial asset is reflected in the Income Statement.
The derivative was initially recognised at the date the Sharing Agreement was entered into and
was subsequently re-measured to its fair value at the reporting date. The resulting gain or loss was
recognised in finance income within profit and loss. As at 31 December 2022, the Company completed
a calculation of fair value of the derivative financial asset that resulted in a finance loss of £1,218,492.
The year end share price has been considered to be the best estimate for future share prices and has
been included within the net present value. At the reporting date, the derivative had a positive fair
value and therefore is recognised as a financial asset. The derivative is presented as both a current asset
and non current asset.
• Warrants financial asset
The Group and the Company has been issued warrants for 7,272,740 shares at 9.5p in Incanthera
Plc. These warrants represent a financial asset, measured at fair value through Other Comprehensive
Income. At the reporting date, warrants financial asset was revalued to its fair value amounted to £1,229.
Fair value loss of £206,279 has been recorded in Other Comprehensive Income.
The fair value was measured using the “Black – Scholes” valuation model, in which there were several
inputs, based on details specified in warrant agreement and estimations described further in Note 12.
IFRS 13 classifies those inputs as Level 2.
• Share options
The Group and the Company operates a share option incentive scheme. The fair value of options
granted is recognised as an expense in the income statement with a corresponding increase in
equity. The fair value is measured at grant date, spread over the period which the employees
become unconditionally entitled to the options. The fair value of the options is measured using the
“Black – Scholes” valuation model, in which there are several inputs, most of which are based on
available market information or details specified within the share options agreements.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
59
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
1
Accounting policies (continued)
Critical accounting judgements and key sources of estimation uncertainty (continued)
Management have applied estimates in the following areas:
• Investment in Subsidiaries
For the Company Statement of Financial Position, management has considered whether there has been
any impairment to the carrying value and has applied estimates including taking account of various
factors and available evidence in assessing the recoverable amounts in arriving at the conclusion.
At 31 December 2022, the Company’s investment in its subsidiaries, ImmuPharma (France) SA and
Ureka Pharma (SAS) was £30,455,191 and £10,686,272 respectively. The directors have assessed the
carrying value of the Company’s investment in subsidiaries, over a period of 10 years, taking into
account the various factors and available evidence as at that date and concluded that no impairment is
required against this investment at the year-end date.
• Amounts owed by group undertakings
For the Company Statement of Financial Position, management needs to consider whether these
balances are recoverable or an impairment is required and applies estimates including taking account
of various factors and available evidence in arriving at the conclusion.
At 31 December 2022, ImmuPharma Plc was due £10,509,899 and £3,667,549 from its subsidiaries
ImmuPharma (France) SA and Ureka Pharma (SAS) respectively. At that date, ImmuPharma (France) SA
and Ureka Pharma (SAS) had net liabilities of £10,841231 and £1,977,189 respectively and are not in a
position to repay this balance without realising value from their intangible assets.
Following the announcement of the results of the LupuzorTM clinical trial in April 2018 and Avion
agreement in November 2019, the directors have reviewed the future prospects of ImmuPharma
(France) SA and Ureka Pharma (SAS). Using the information which would have been available at
31 December 2022 and the directors believe that going forward, there is sufficient value in ImmuPharma
(France) SA’s and Ureka Pharma (SAS)’s underlying activities, such that they are confident that the
subsidiaries will generate sufficient cash to enable these balances to be repaid. As a result, no
impairment has been charged in 2022.
• Derivative Financial Asset – the nature of the Sharing Agreement with Lanstead requires the calculation
of the fair value at the end of the accounting period and it is based on the estimation of the Company’s
share price and discount rate.
Changes in accounting policies and disclosures
The following new and amended Standards and Interpretations effective for the financial year beginning
1 January 2022 have been adopted. The adoption of these standards has not had any material impact on the
disclosures or on the amounts reported in these financial statements.
• Conceptual Framework for Financial Reporting – Amendments to IFRS 3
• IAS 16 Property, Plant and Equipment – Proceeds before Intended Use
• Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets – Onerous Contracts –
Cost of Fulfilling a Contract
• Annual Improvements to IFRS Accounting Standards 2018-2020 Cycle
• IFRS 1 First-time Adoption of International Financial Reporting Standards
• IFRS 9 Financial Instruments Fees in the ’10 per cent’ tes for derecognition of financial liabilities
• IFRS 16 Leases
• IAS 41 Agriculture
60
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
1
Accounting policies (continued)
Changes in accounting policies and disclosures (continued)
New and amended Standards and Interpretations issued and effective for periods beginning on or after
1 January 2023
• Amendments to IFRS10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate
or Joint Venture
• Amendment to IAS 1: Classification of Liabilities as Current or Non-current
• Amendment to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction
• IAS 8: Definition of Accounting Estimates
• IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies
• IAS 41: Taxation in fair value measurements
• IFRS 17 (including the June 2020 and December 2021 Amendments to IFRS 17): Insurance Contracts
Basis of consolidation
Both the consolidated and the Company’s financial statements are for the year ended 31 December 2022 and
present comparative information for the year ended 31 December 2021. All intra-group transactions, balances,
income and expenditure are eliminated upon consolidation.
The Group’s financial statements incorporate the financial statements of ImmuPharma plc and other entities
controlled by the Company (‘the subsidiaries’). The control principle in IFRS 10 sets out the following three
elements of control: power over the investee; exposure, or rights, to variable returns from involvement with the
investee; and. the ability to use power over the investee to affect the amount of those returns. The financial
statements of these other entities cease to be included in the Group financial statements from the date that
control ceases.
Revenue
Grant income
Revenue is recognised under IAS 20 and relates to grants received by Ureka Pharma SAS. In respect of certain
grants, the proportion of the grant received recognised as revenue in the year is based upon the proportion of
the relevant project costs actually incurred as at the year-end, compared with the projected total costs over the
life of that project. For other grants, the amount of grant receivable is based upon the costs of specific research
staff and in respect of these grants, the amount recognised as revenue is matched to the cost incurred.
Foreign currency
Income statement
The presentational and functional currency of ImmuPharma plc is sterling (£). Transactions in foreign currency are
recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets
and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting date.
Any gains or losses arising on translation are taken to the Income Statement as finance income or costs.
Taxation
The tax expense or credit represents the sum of the tax currently payable and any deferred tax less tax credits
recognised in relation to research and development tax incentives.
The tax currently receivable is based on tax credits for the year. Taxable loss differs from net loss as reported in
the Income Statement as it excludes items of income or expense that are taxable or deductible in other years
and it further excludes items that are never taxable or deductible. The Company’s receivable for current tax is
calculated using tax rates that have been enacted or substantively enacted by the year-end date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit and is accounted for using the Statement of Financial Position liability method. Deferred tax assets
are recognised to the extent that it is probable that taxable profits will be available against which deductible
temporary differences can be utilised.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
61
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
1
Accounting policies (continued)
Taxation (continued)
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
No such assets are held at the year end.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less any provision for impairment.
Whenever events or changes in circumstances indicate that the carrying amount of an investment in a subsidiary
undertaking may not be recoverable the investment is reviewed for impairment. An investment’s carrying value is
written down to its estimated recoverable amount if that is less than the investment’s carrying amount.
Intangible assets
Research and development expenditure is charged to the Income Statement in the period in which it is incurred.
Development expenditure is capitalised when the criteria for recognising an asset are met, usually when a regulatory
filing has been made in a major market and approval is considered highly probable. Property, plant and equipment
used for research and development is capitalised and depreciated in accordance with the Group’s policy.
In process research and development acquired as part of a business combination is recognised separately from
goodwill where the associated project meets the definition of an intangible asset and its fair value can be measured
reliably. In process, research and development assets arising because of a business combination are amortised on a
straight-line basis over their useful lives from the point in time at which the asset is available for use.
Patents are stated at purchase cost and are amortised on a straight-line basis over their estimated useful lives of
15 years from the date of patent registration.
Property, plant and equipment
Tangible fixed assets are stated at cost, net of depreciation and provision for any impairment. Depreciation is
calculated to write off the cost of all tangible fixed assets to estimated residual value by equal annual instalments
over their expected useful lives as follows:
- Fixtures, fittings and equipment: 2 – 5 years
Impairment of tangible and intangible assets
At each year-end date, the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
An impairment loss is immediately recognised as an expense, in the Income Statement.
Share based payments
The Company issues equity-settled share based payments to their employees and third parties. These 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 is expensed on a straight-line 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 model has been adjusted,
based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural
considerations. For share options issued to suppliers, the value is measured using an estimate of the fair value of
the services.
Provisions
In respect of National Insurance contributions on share option gains, the Company provides in full for all vested
options and on a pro-rata basis over the vesting period for options that have not yet vested for the employer’s
National Insurance liability estimated to arise on the future exercise of the unapproved share options granted.
The amount of National Insurance payable will depend on the number of employees who remain with the
Company and exercise their options, the market price of the Company’s Ordinary shares at the time of exercise
and the prevailing National Insurance rate at that time.
62
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
1
Accounting policies (continued)
Warrants issued
The Company issues warrants to third party investors giving the counterparty a right to subscribe for a fixed
number of the entity’s shares for a fixed amount of cash. These are measured at fair value (excluding the effect of
non-market based vesting conditions) at the date of grant.
For warrants issued to suppliers in lieu of services, the value is measured using an estimate of the fair value
of the services.
For warrants issued in exchange for a change to the terms of another derivative instrument or agreement, the
value is measured using an estimate of the effect on the value of that other instrument.
Equity and Warrant Reserve
Share capital is determined using the nominal value of shares that have been issued.
The Share premium account includes any premiums received on the initial issuing of the share capital. Any
transaction costs associated with the issuing of shares are deducted from the Share premium account.
The Merger reserve represents the difference between the nominal value and the market value at the date of
issue of shares issued in connection with the acquisition by the Group of an interest in over 90% of the share
capital of another company.
The Acquisition reserve includes those adjustments arising on reverse acquisition of the Company by
ImmuPharma (UK) Limited.
Foreign currency differences arising on the retranslation of overseas subsidiaries are included in the
translation reserve.
Equity-settled share-based payments are credited to the share based payment reserve as a component of equity
until related options or warrants are exercised.
The warrants reserve will be transferred to share capital account upon the exercise of warrants. The balance of
warrants reserve in relation to the unexercised warrants at the expiry of the warrants period will be transferred to
retained earnings.
Retained earnings includes all current and prior period results as disclosed in the Income Statement.
Financial instruments
Financial assets and financial liabilities are recognised on the Statement of Financial Position when the Group
becomes a party to the contractual provisions of the instrument. An equity instrument is any contract that
evidences a residual interest in the assets of the group after deducting all of its liabilities and when issued by the
Group is recorded at the proceeds received, net of direct issue costs.
Warrants in respect of Incanthera shares is a derivative financial instrument, initially and subsequently measured at
fair value through other comprehensive income.
Investments other than investments in subsidiaries are classified as either held-for-trading or not at initial
recognition. Those investments and financial assets are initially measured at fair value less transaction costs and
are subsequently measured at fair value. At the year-end date all investments are classified as not held for trading.
An irrevocable election has been made to recognise changes in fair value in other Comprehensive Income.
Trade and other receivables are measured at initial recognition at fair value and are subsequently measured at
amortised cost using the effective interest method. A provision for impairment is established based on lifetime
expected credit losses. The amount of any provision is recognised in profit or loss.
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original
maturity of three months or less.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
63
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
1
2
Accounting policies (continued)
Financial instruments (continued)
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost,
using the effective interest rate method.
Non-interest bearing loans and overdrafts are initially recorded at fair value and are subsequently measured at
amortised cost using the effective interest rate method.
Derivative financial assets are initially measured at fair value less transaction costs and are subsequently measured
at fair value.
Financial risk management
The Group uses a limited number of financial instruments, cash, short-term deposits, overdrafts, and various
items such as trade receivables and payables, which arise directly from operations. The Group does not trade in
financial instruments.
Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, and interest rate
risk), credit risk, liquidity risk and cash flow interest rate risk. The Group’s overall risk management programme
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the
Group’s financial performance.
a) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to Sterling, the Euro, the Swiss Franc and the US Dollar. Foreign exchange risk
arises from future commercial transactions, recognised assets, liabilities, and net investments in foreign operations.
Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are
denominated in a currency that is not the entity’s functional currency.
The Group has certain investments in foreign operations, whose net assets are exposed to foreign exchange risks.
The Group did not enter into any arrangements to hedge this risk, as the directors did not consider this risk
significant. The directors will review this policy as appropriate in the future.
b) Credit risk
The Group has no significant concentrations of credit risk because the majority of the debtors are
government bodies.
c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and available funding through an
adequate amount of committed facilities. The Group ensures it has adequate cover through the availability of
funding and facilities.
d) Cash flow and interest rate
The Group finances its operations through a mix of equity finance and borrowings. Borrowings are both
non-interest bearing and interest bearing.
e) Equity price risk
The Group is exposed to equity price risk due to the possibility that the value of the Company’s shares will
fluctuate. This can affect the amount of any proceeds in any fundraise the Company might undertake. In
addition, any adverse share price change will negatively affect the amount of proceeds the Company will
receive under both current Lanstead “Sharing Agreements”.
f) Exposure to equity investments
The Group’s exposure to equity securities price risk arises from investments held by the Group and classified
in the Statement of Financial Position at fair value.
64
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
3
Segment information
- Group
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the
Group that are regularly reviewed by the chief operating decision maker to allocate resources to the segments
and to assess their performance. In accordance with IFRS 8, the chief operating decision maker has been
identified as the Board of Directors. They review the Group’s internal reporting in order to assess performance
and allocate resources. The Board of Directors consider that the business comprises a single activity, being the
development and commercialisation of pharmaceutical products. Therefore, the Group is organised into one
operating segment and there is one primary reporting segment. The segment information is the same as that set
out in the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated
Statement of Financial Position, Consolidated Statement of Changes in Equity and Consolidated Statement of
Cash Flows.
Revenue of £nil (2021: £68,107) originates in France and £nil (2021: £50,243) originates in Switzerland. Of the loss before
taxation, £1,403,295 (2021: £2,200,259) originates in France, with loss before taxation of £3,049,478 (2021: £6,669,868)
and loss of £3,560 (2021: £70,594) originating in the United Kingdom and Switzerland respectively.
Of the total non-current assets, £855,172 (2021: £816,861) originates in France and £780,577 (2021: £1,835,012)
from the United Kingdom.
4
Staff costs
The average monthly number of employees across the Group and the Company (including executive directors) was:
Drug research and development, and
commercial operations
Administration and management
The aggregate remuneration
comprised:
Wages and salaries
Social security costs
Pension costs
Share-based payment
Group
Year ended
31 December
2022
No.
Group
Year ended
31 December
2021
No.
Company
Year ended
31 December
2022
No.
Company
Year ended
31 December
2021
No.
11
2
13
9
5
14
2
1
3
2
2
4
Group
Year ended
31 December
2022
£
Group
Year ended
31 December
2021
£
Company
Year ended
31 December
2022
£
Company
Year ended
31 December
2021
£
687,788
251,202
1,444
159,868
2,253,406
353,637
2,636
616,423
1,100,302
3,226,102
385,615
53,481
1,444
129,799
570,339
1,580,441
115,082
2,636
568,157
2,266,316
ImmuPharma plc Report and Consolidated Financial Statements December 2022
65
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
4
Staff costs (continued)
Directors’ emoluments
The following disclosures are in respect of emoluments payable to the directors of ImmuPharma plc across the
Group and the Company:
Fees
Salaries and benefits
Group
Year ended
31 December
2022
£
Group
Year ended
31 December
2021
£
Company
Year ended
31 December
2022
£
Company
Year ended
31 December
2021
£
-
301,000
301,000
522,272
979,212
1,501,484
-
301,000
301,000
522,272
979,212
1,501,484
Please refer to information in the Directors’ Report on page 33 in respect for amounts paid to individual directors.
Refer to note 22 for details of amounts paid to related parties in lieu of directors’ fees and bonus payments.
The emoluments of the highest paid
director, amounts included above are:
Salaries and benefits
Group
Year ended
31 December
2022
£
Group
Year ended
31 December
2021
£
Company
Year ended
31 December
2022
£
Company
Year ended
31 December
2021
£
106,500
106,500
582,631
582,631
106,500
106,500
582,631
582,631
Key management are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity. In the opinion of the Board, the key management of the Group and the Company comprises the
Executive and Non-executive Directors of ImmuPharma plc. Information regarding their emoluments is set out below.
The following disclosures are in respect of employee benefits, including National Insurance, payable to the
directors of ImmuPharma plc across the Group and the Company and are stated in accordance with IFRS:
Group
Year ended
31 December
2022
£
Group
Year ended
31 December
2021
£
Company
Year ended
31 December
2022
£
Company
Year ended
31 December
2021
£
301,000
1,501,484
301,000
1,501,484
129,799
430,799
161,426
1,662,910
129,799
430,799
161,426
1,662,910
Short-term employee benefits
(salaries and benefits)
Share based payments
Directors’ emoluments
66
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
5
Operating loss
- Group
Operating loss is stated after charging:
Share based payments charge
Exceptional items
Depreciation of property, plant and equipment
- owned
Amortisation of intangible assets
- patents
Services provided by Company auditors:
- Audit services
- Other services relating to tax compliance services
- Audit services – interim review
Audit services provided by other auditors
Year ended
31 December
2022
£
159,869
-
85,049
32,514
95,000
8,420
5,000
21,563
Year ended
31 December
2021
£
616,423
1,427,084
81,995
32,124
77,700
-
16,000
34,314
The exceptional items of £nil (2021: £1.4m) relate to termination benefit packages paid out in the prior year to
departing Directors, their service companies and related parties (£1.3m), as well as legal fees in relation to these
termination fees (£62k).
6
Finance costs
- Group
Interest payable on loans and overdraft
Interest payable on convertible loan notes
Loss on foreign exchange
Year ended
31 December
2022
£
2,036
-
16,079
Year ended
31 December
2021
£
2,943
121,120
-
Loss on derivative financial asset (note 14)
1,218,492
2,148,972
Loss on revaluation of convertible loan notes
Warrants issue costs
7
Finance income
- Group
Bank interest receivable
Gain on foreign exchange
Other income
-
219,359
1,455,966
81,837
-
2,354,872
Year ended
31 December
2022
£
Year ended
31 December
2021
£
907
-
27,678
28,585
651
456
-
1,107
ImmuPharma plc Report and Consolidated Financial Statements December 2022
67
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
8
Taxation
- Group
Current tax:
Corporation tax
Total current tax credit for the year
Year ended
31 December
2022
£
Year ended
31 December
2021
£
(648,902)
(648,902)
(766,814)
(766,814)
The difference between the total current tax shown above and the amount calculated by applying the standard
rate of UK corporation tax to the loss before tax is as follows:
Loss before taxation
Tax on loss (at the average rate 19%)
(2021: 19%)
Effects of:
Expenses not allowable for tax purposes
Depreciation in excess of capital allowances
Rate differences
Research and development tax credit
Current year losses carried forward
Current tax credit for year
Year ended
31 December
2022
£
Year ended
31 December
2021
£
(4,456,333)
(8,940,720)
(846,703)
(1,698,737)
1,753
21,750
676
(648,902)
822,524
(648,902)
2,395
86,757
13,413
(766,814)
1,596,172
(766,814)
As at 31 December 2022, the Group has unused tax losses of £49,025,230 (2021: £48,202,705) available for offset
against future profits in the jurisdiction in which the loss arises. No deferred tax asset has been recognised due to
the unpredictability of future profit streams in the relevant jurisdictions.
9
Loss per share
- Group
Year ended
31 December
2022
£
Year ended
31 December
2021
£
Loss
Loss for the purposes of basic loss per share being net loss after
tax attributable to equity shareholders
(3,807,431)
(8,173,905)
Number of shares
Weighted average number of ordinary shares for the purposes of
basic earnings per share
Basic loss per share
Diluted loss per share
302,912,903
251,164,361
(1.26)p
(1.26)p
(3.25)p
(3.25)p
The Group has granted share options in respect of equity shares to be issued, the details of which are disclosed in note 20.
There is no difference between basic loss per share and diluted loss per share as the share options and warrants
are anti-dilutive.
68
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
10
Intangible assets
- Group
Cost
At 1 January 2021
Exchange rate movements
At 1 January 2022
Exchange rate movements
At 31 December 2022
Amortisation
At 1 January 2021
Exchange rate movements
Charge for the period
At 1 January 2022
Exchange rate movements
Charge for the period
At 31 December 2022
Net book amount
At 31 December 2022
At 31 December 2021
Research and
development
£
404,095
-
404,095
-
404,095
-
-
-
-
-
-
-
404,095
404,095
Patents
£
486,234
(35,625)
450,609
25,764
476,373
406,287
(61,260)
32,124
377,151
(3,089)
32,514
406,576
69,797
73,458
Total
£
890,329
(35,625)
854,704
25,764
880,468
406,287
(61,260)
32,124
377,151
(3,089)
32,514
406,576
473,892
477,553
Research and development costs relate to in-progress research and development acquired as part of business
combinations in earlier years.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
69
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
11
Property, plant and equipment
- Group
Cost
At 1 January 2021
Exchange rate movements
Additions
At 1 January 2022
Exchange rate movements
Additions
Disposals
At 31 December 2022
Depreciation
At 1 January 2021
Exchange rate movements
Charge for the period
At 1 January 2022
Exchange rate movements
Charge for the period
Depreciation eliminated on disposal
At 31 December 2022
Net book amount
At 31 December 2022
At 31 December 2021
Fixtures, fittings
and equipment
£
1,122,573
(74,613)
50,934
1,098,894
56,436
106,009
(1,174)
1,260,165
710,967
(47,066)
81,995
745,898
39,735
85,049
(235)
870,445
389,716
352,996
70
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
11
Property, plant and equipment (continued)
- Company
Cost
At 1 January 2021
Additions
At 1 January 2022
Additions
Disposals
At 31 December 2022
Depreciation
At 1 January 2021
Charge for the period
At 1 January 2022
Charge for the period
Depreciation eliminated on disposals
At 31 December 2022
Net book amount
At 31 December 2022
At 31 December 2021
Fixtures, fittings
and equipment
£
67,664
6,535
74,199
-
(1,178)
73,021
56,057
4,460
60,517
4,312
(235)
64,594
8,427
13,682
ImmuPharma plc Report and Consolidated Financial Statements December 2022
71
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
12
Financial assets
- Group and Company
Valuation
At 31 December 2021
Additions
Fair value movement
At 31 December 2022
Shares in
listed entity
£
Warrants in
listed entity
£
Total
£
1,208,327
207,508
1,415,835
-
-
-
(519,977)
(206,279)
(726,256)
688,350
1,229
689,579
As of 31 December 2022 ImmuPharma held 9,903,349 shares in Incanthera plc, representing a 12.97% position in
the share capital of Incanthera plc.
Under IFRS 7 Financial instruments: Disclosures and IFRS 13 Fair value measurement investment in shares of listed
entity is classified under the fair value hierarchy as level 2. The fair value of ImmuPharma’s 9,903,349 shares held in
Incanthera Plc equated to £688,350 as at 31 December 2022 (2021: £1,208,327), which has resulted in a fair value
loss of £519,977 recognised through other comprehensive income.
Warrants in Incanthera Plc
ImmuPharma had been issued warrants for 7,272,740 shares at 9.5p per share of Incanthera plc. These warrants
represent a financial asset, measured at fair value through Other Comprehensive Income, with a fair value loss
of £206,279 for the year. At 31 December 2022, the fair value amounting to £1,229 was calculated using the
“Black – Scholes” valuation model, in which there were several inputs, based on the contractual details and
estimations. The inputs below have been taken into account in 2022:
- Expected volatility of share price – 26.50% (2021: 11%)
- Risk free rate – 3.619% (2021: 0.821%)
- Market value of share price at issue year end 6.95p (2021: 12.20p)
72
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
13
Investment in subsidiaries
- Company
Cost and fair value
At 31 December 2021
Additions
At 31 December 2022
Shares in
subsidiary
undertakings
£
41,111,393
30,070
41,141,463
Details of the Company’s subsidiaries as at 31 December 2022 are as follows:
Name of company
ImmuPharma (France) SA
Holding
Ordinary
% voting rights
and shares held
100
ImmuPharma AG
Ordinary
100
Ureka Pharma SAS (formerly
Ureka SARL)
Ordinary
100
Nature of business &
country of incorporation
Pharmaceutical research
and development –
France
Pharmaceutical research
and development –
Switzerland
Pharmaceutical research
and development –
France
Registered Office
Address
5, rue du Rhône
F-68100 Mulhouse
France
Poststrasse 10
CH-6060
Sarnen OW
Switzerland
Bâtiment 13, 2 Rue
Robert Escarpit
33600 Pessac
France
Investments are recorded at cost, which is the fair value of the consideration paid.
The Company assessed the fair value of its Investment in Subsidiaries as at 31 December 2022 and has concluded
that there has been no impairment to their value and that the carrying value remains as stated above. In order to
reach this conclusion, the directors considered several points. Central to this assessment was a discounted cash
flow analysis of the Group’s lead program that supported this conclusion. Key assumptions included the discount
rate, growth rate, exchange rate, tax rate as well as probability weighting. These assumptions were tested for
sensitivity, which supported the conclusion of no impairment. Sensitivity analysis of the key assumptions showed
that an adverse 10% change to any of these factors did not change this conclusion.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
73
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
14 Derivative financial asset
Group
31 December
2022
£
Group
31 December
2021
£
Company
31 December
2022
£
Company
31 December
2021
£
Balance brought forward
Value of derivative at inception
Settlements received
913,656
1,000,000
(360,343)
1,191,123
2,200,000
(328,495)
913,656
1,000,000
(360,343)
1,191,123
2,200,000
(328,495)
Loss recognised through income statement
(1,218,492)
(2,148,972)
(1,218,492)
(2,148,972)
334,821
913,656
334,821
913,656
Due within one year
Due after one year
At 31 December
31 December
2022
£
31 December
2021
£
252,258
82,563
334,821
508,167
405,489
913,656
As part of the placement completed in March 2020, the Company issued 13,000,000 new ordinary shares to
Lanstead Capital Investors L.P. (“Lanstead”) at a price of 10p per share for an aggregate subscription price of
£1.3m before expenses. In December 2021, the Company issued 20,000,000 new ordinary shares to Lanstead at a
price of 11p per share to raise £2.2m before expenses. In the placement completed in August 2022, the Company
issued 20,000,000 new ordinary shares to Lanstead at a price of 5p per share to raise £1m gross. All Subscriptions
proceeds were pledged under the Sharing Agreement, under which Lanstead made and will continue to make,
subject to the terms and conditions of that Sharing Agreement, monthly settlements to the Company that are
subject to adjustment upwards or downwards depending on the Company’s share price performance.
In December 2021 and August 2022 the Company also issued 1,400,000 new ordinary shares consecutively to
Lanstead as value payments in connection with the Share Subscriptions and the Sharing Agreements. Monthly
settlements under the Sharing Agreement from March 2020 completed in June 2022. The settlements from
remaining agreements (December 2021 and August 2022) will continue until 2024, completing in March 2024 and
August 2024 respectively.
At the end of the accounting period the amount receivable has been adjusted to fair value based upon the share
price of the Company at that date. Any change in the fair value of the derivative financial asset is reflected in the
income statement. As at 31 December 2022, the Company completed a calculation of fair value of the derivative
financial asset that resulted in a finance loss of £1,218,492 which was recorded in the income statement. The
restatement to fair value will be calculated at the end of each accounting period during the course of the Sharing
Agreement and will vary according to the Company’s share price performance.
74
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
15
Trade and other receivables
Current
Trade debtors
Other debtors
Prepayments
Non-current
Amounts owed by group undertakings
Group
31 December
2022
£
Group
31 December
2021
£
Company
31 December
2022
£
Company
31 December
2021
£
166,320
483,081
74,182
723,583
-
373,253
53,946
427,199
-
32,202
74,185
-
90,338
53,945
106,387
144,283
Group
31 December
2022
£
Group
31 December
2021
£
Company
31 December
2022
£
Company
31 December
2021
£
-
-
-
-
14,177,448
12,249,280
14,177,448
12,249,280
The Group’s credit risk is primarily attributable to its other debtors. The Company’s credit risk is primarily
attributable to the intercompany loan balances due from French subsidiaries. Based on prior experience and an
assessment of the current economic environment, the directors did not consider any provision for irrecoverable
amounts was required and consider that the carrying value of these assets approximates to their fair value.
The Company’s receivables due from Group undertakings are intercompany loan balances due from its French
subsidiaries. As of 31 December 2022, the directors believe that there has been no impairment to these values.
The Company considers that the amounts included in receivables due from group undertakings will prove
recoverable. However, the timing of and the ultimate repayment of these amounts will depend primarily on the
growth of revenues for the relevant group companies. Amounts owed by group undertakings of £14,177,448
(2021: £12,249,280) are included in non-current assets. These are unsecured, interest free, and have no fixed date
of repayment.
The total carrying amount of financial assets for the Group is £2,206,915 (2021: £4,406,064), consisting of trade and
other receivables of £723,583 (2021: £427,199), investment in Incanthera Plc £506,685 (2021: £1,415,835), derivative
financial asset £308,834 (2021: £913,656) and cash and cash equivalents of £667,813 (2021: £1,649,374).
The total carrying amount of financial assets for the Company is £15,642,062 (2021: £16,250,785), consisting of
trade and other receivables of £14,283,831 (2021: £12,393,563), investment in shares in Incanthera Plc £688,351
(2021: £1,208,327), investment in warrants in Incanthera Plc £1,229 (2021: £207,508), derivative financial asset
£334,821 (2021: £913,656) and cash and cash equivalents of £542,712 (2021: £1,524,730).
ImmuPharma plc Report and Consolidated Financial Statements December 2022
75
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
16 Cash and cash equivalents
Group
31 December
2022
£
Group
31 December
2021
£
Company
31 December
2022
£
Company
31 December
2021
£
Cash and cash equivalents
667,813
1,649,374
542,712
1,524,730
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original
maturity of three months or less at varying rates of interest over the period between 0.0% and 0.5%.
The directors consider that the carrying value of these assets approximates to their fair value.
The credit risk on liquid funds is limited because the counterparty is a bank with a high credit rating.
Included within the above is £50,000 held separately in a Royal Bank of Scotland bank account in respect of a
charge held over cash balances with reference to the Company’s credit card facility.
17
Financial liabilities – borrowings
- Group
Total borrowings within one year comprises:
Bank overdraft
Other loans
18
Trade and other payables
31 December
2022
£
31 December
2021
£
111
-
111
105
595
700
Group
31 December
2022
£
Group
31 December
2021
£
Company
31 December
2022
£
Company
31 December
2021
£
Trade payables
Other taxes and social security
Accruals and other creditors
1,071,140
180,122
199,951
268,927
158,781
1,155,896
102,991
645,936
-
196,173
299,164
-
158,781
804,717
1,451,213
1,583,604
The directors consider that the carrying amount of trade and other payables approximates to their fair value.
76
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
19
Share capital
At 31 December 2022, the Company had no limit on its authorised share capital.
Allotted, called up and fully paid
2022 No.
2021 No.
2022 £
2021 £
At start of year:
Ordinary shares of £0.10 each
Ordinary shares of £0.01 each
Deferred shares of £0.09 each
Movements during year:
250,221,297
25,022,130
284,984,933
284,984,933
2,849,849
25,648,644
Shares issued on 23 December 2021
34,763,636
3,476,364
Shares issued on 16 August 2022
Shares issued on 30 August 2022
Shares issued on 5 September 2022
Shares issued on 13 September 2022
42,418,182
1,000,000
2,000,000
3,000,000
424,182
10,000
20,000
30,000
At end of year
618,388,048
284,984,933
28,982,675
28,498,494
During the financial year, the Company issued in total 48,418,182 new ordinary shares of £0.01 each.
Details of new shares issued during the financial year 2022 are summarised as follows:
On 28 June 2022 the existing ordinary shares of 10 each were subdivided into an ordinary share of 1p value and a
deferred share of 9p value. The authorised share capital of the Company remained the same despite the creation
of 284,969,866 ordinary shares.
On 16 August 2022 the Company issued 21,400,000 new ordinary shares with nominal amount of £214,000, with
share premium of £800,000 and £14,000 deducted from reserves in relation to value payment shares, as explained
below. The gross proceeds amounted to £1,000,000 and were deferred under the Sharing Agreement. Share
issues costs of £35,000 have been deducted from reserves.
On 16 August 2022 the Company issued 1,818,182 new ordinary shares with nominal amount of £18,182 and gross
proceeds of £90,909 with share premium of £72,727.
On 16 August 2022 the Company issued 19,000,000 new ordinary shares with nominal amount of £190,000
and £760,000 share premium and gross proceeds of £950,000, with £46,125 of share issue costs deducted
from reserves.
On 16 August 2022 the Company issued 200,000 new ordinary shares with nominal amount of £2,000 and gross
proceeds of £10,000 with share premium of £8,000.
On 30 August 2022 L1 Capital Global Opportunities Master Fund (“L1”) exercised warrant options for 1,000,000
new ordinary shares with nominal amount of £10,000 and gross proceeds of £50,000 with share premium
of £40,000.
On 5 September 2022 L1 Capital Global Opportunities Master Fund (“L1”) exercised warrant options for
2,000,000 new ordinary shares with nominal amount of £20,000 and gross proceeds of £100,000 with share
premium of £80,000.
On 13 September 2022 L1 Capital Global Opportunities Master Fund (“L1”) exercised warrant options for
3,000,000 new ordinary shares with nominal amount of £30,000 and gross proceeds of £150,000 with share
premium of £120,000.
The total costs incurred in relation to the issue of new equity capital amounted to £165,679 which was debited
against share premium.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
77
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
20
Share based payments
Equity-settled and warrants
The Company adopted a new share option plan in March 2017 to replace the previous scheme, which had expired.
Details of the share options and warrants outstanding during the period are as follows:
Weighted
average
exercise
price (£)
of share
options
Number
of share
options
Weighted
average
exercise
price (£) of
warrants
options
Total number
of options
(Share
options and
Warrants
options)
Number of
warrants
options
Outstanding as at 31 December 2021
17,112,500
0.58
93,682,604
0.11
110,795,104
Expired during 2022
Lapsed during 2022
Granted during 2022
-
-
-
-
-
-
6,750,000
0.08
57,768,304
Outstanding as at 31 December 2022
23,862,500
0.33
151,450,908
Exercisable as at 31 December 2021
12,412,500
Granted and exercisable during 2022
6,750,000
0.52
0.08
93,682,604
57,768,304
Lapsed during 2022
-
-
-
-
0.09
0.10
0.11
0.09
-
-
-
64,518,304
175,313,408
106,095,104
64,518,304
-
Exercisable as at 31 December 2022
19,162,500
0.30
151,450,908
0.10
170,613,408
The options and warrants outstanding as at 31 December 2022 had a weighted average remaining contractual life
of 9 years.
Warrants issued in 2022 had a contractual life of 10 years.
The options and warrants outstanding as at 31 December 2022 had exercise prices between £0.05 and £1.530
(2021: £0.10 and £1.530).
Equity-settled share option scheme
The total value of options granted during 2017, 2020 and 2022 was calculated using the Economic Research
Institute’s Black-Scholes pricing model. The inputs into the pricing model were as follows:
Option grant date
30 March
2017
13 July
2017
24 November
2017
1 December
2017
25 November
2020
22 December
2022
22 December
2022
Option value
£833,000 £400,950
£3,928,838
£707,760
£913,958
Share price at grant date £0.5025 £0.5675
Exercise price
£0.5025 £0.5675
Volatility
Vesting period
Expected life
47%
47%
3 years
3 years
7 years
7 years
Expected dividend yield
0%
0%
£0.9862
£0.9862
51%
3 years
7 years
0%
£1.5300
£1.5300
52%
3 years
7 years
0%
£0.129
£0.20
144%
3 years
7 years
0%
£42,317
£0.0189
£0.11
143%
3 years
7 years
0%
£35,122
£0.0189
£0.05
143%
3 years
7 years
0%
Risk free interest rate
0.382% 0.382%
0.382%
0.382%
-0.024%
0.032%
0.032%
Expected volatility was determined by calculating the historical volatility of the Company’s share price to the
date of the grant over a 3 year period. Expected life was determined by examining the exercise history of the
Company’s option holders. No market-based conditions were used as inputs into the pricing model.
The total value of options granted during 2020 was calculated as above at £913,958. Of this amount, £25,388 has
been charged in the financial statements for the year ended 31 December 2020.
78
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
20
Share based payments (continued)
Equity-settled share option scheme (continued)
For the year ended 31 December 2021, the Company has charged £616,427 for the value of share options in
relation to grant from 2020. Out of this amount £311,774 was related to an accelerated charge in respect of
leaving employees (including directors).
For the year ended 31 December 2022, the Company has charged £159,868 for the value of share options in
relation to grant from 2020 and 2022. The remaining balance of £189,713 will be charged over the next 3 financial
years ending 31 December 2025.
The total value of options granted during 2017 was calculated as above at £5,870,548. The total of this amount
has been already charged in the financial statements in prior years and there is no remaining amount to be
charged in the year ending 31 December 2022. (2021: £nil).
The total value of all other options granted in previous years has been fully charged in the financial statements in
prior years.
Exercise price
No of warrants
Expected life
Warrants
Warrant holder/grant date
01/04/20 Stanford Capital
10/06/20 L1 Capital
10/06/20 Lind Capital
02/09/20 SI Capital Limited
02/09/20 Stanford Capital
23/12/21 Alora Pharmaceuticals, LLC
23/12/21 Lanstead Capital Investors LP
23/12/21 Chelverton Asset Management
£0.10
£0.05
£0.05
£0.11
£0.11
£0.11
£0.11
£0.11
16/08/22 Lanstead Capital Investors LP
£0.055
16/08/22 Stanford Capital
16/08/22 Stanford Capital
16/08/22 SI Capital Limited
£0.05
£0.05
£0.05
915,205
28,204,279
22,204,279
1,213,920
1,213,920
21,818,182
40,000,000
2,727,273
30,000,000
2,000,000
500,000
500,000
10 years
3 years
3 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
The above warrants have been granted in connection to the funding raised in 2020, 2021 and 2022.
The warrants granted in 2020 have been valued based on estimated cost of service and it was calculated at
£173,000. The warrants granted in 2021 were measured at fair value at the date of grant and were calculated at
£1,349,000. The warrants granted in 2022 have been measured both using an estimate of fair value of services and
where issued to Lanstead in exchange for not changing the benchmark of the previous sharing agreement, at the
estimated change in value of that instrument that would otherwise have occurred. These have been calculated at
£369,359.
The warrants issued to L1 Capital and Lind Capital in 2020 were initially at an exercise price of £0.11. Following
the share issue during 2022, the exercise price was changed to £0.05p and the number of warrants to each party
increased proportionately from 12,870,127 to 28,204,279, some of which have since been exercised.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
79
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
21 Cash used in operations
Group
31 December
2022
£
Group
31 December
2021
£
Company
31 December
2022
£
Company
31 December
2021
£
Operating loss
(3,028,952)
(6,586,955)
(1,567,079)
(4,260,273)
Depreciation and amortisation
Loss on sale of fixed assets
Share-based payments
(Increase)/decrease in trade and other
receivables
(Decrease)/increase in trade and other
payables
(Gain)/loss on foreign exchange
117,563
939
159,874
114,119
-
4,312
939
4,459
-
616,423
129,799
568,157
(296,384)
(265,201)
37,900
(22,880)
(132,392)
(45,554)
896,798
2,370
(505,554)
-
483,767
(7,277)
Cash used in operations
(3,224,906)
(5,222,446)
(1,899,683)
(3,234,047)
22 Related party transactions
a) Group
D Dimitriou received part of his remuneration through a consultancy company owned by him, Dragon Finance
AG. During the year ImmuPharma AG was charged £nil (2021: £258,738) for the provision of management services
by Dragon Finance AG. During the prior year, until his resignation in July 2021, D Dimitriou was a director of
ImmuPharma (France) SA and ImmuPharma plc. All amounts received by D Dimitriou via Dragon Finance AG are
incorporated in the remuneration table in the Directors Report on page 34.
Until the CEO appointment in July 2021, T McCarthy received £151,667 for the provision of Chairman’s fees
through a service company owned by him, Unnamed Ltd. No such fees have been paid for the year ended 31
December 2022. The comparative amounts received by T McCarthy via Unnamed Ltd are incorporated in the
remuneration table in the Directors’ Report on page 33. T McCarthy is also Chairman on Incanthera Ltd. As of 31
December 2022 ImmuPharma held 9,903,349 shares in Incanthera plc, representing a 12.97% position in the share
capital of Incanthera plc.
During the year, ImmuPharma plc was charged £84,000 (2021: £84,000) for the provision of consultancy services by
Just B Communications Limited, a company owned by L Baderoon.
During the year, an amount of £nil (2021: £124,297) was paid to the wife of Dr R Zimmer in respect of services
provided to ImmuPharma plc, ImmuPharma (France) SA and Ureka Pharma SAS. During the year ImmuPharma AG
was charged £nil (2021: £590,938) for the provision of consultancy services by Luca and Associates AG, a company
which Dr R Zimmer is connected to. Of the amount of £590,938, £514,390 related to payments made to terminate
the arrangement in the prior year. An amount of £nil (2021: £55,196) was also paid to the daughter of Dr R Zimmer
in respect of services provided to ImmuPharma (France) and Ureka Pharma SAS.
b) Company
During the year ended 31 December 2022, management charges of £nil (2021: £304,480) were rendered by
ImmuPharma plc to ImmuPharma (France) SA. This amount was due to the Company at 31 December 2022. The
Company also loaned the sum of £344,839 (2021: £328,039) to ImmuPharma (France) SA during the year ended 31
December 2022. The total balance due to the Company from ImmuPharma (France) SA at 31 December 2022 was
£10,509,899 (2021: £9,601,086).
80
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2022
22 Related party transactions (continued)
b) Company (continued)
During the year ended 31 December 2022, management charges of £97,983 (2021: £76,120) were rendered
by ImmuPharma plc to Ureka Pharma SAS. This amount was due to the Company at the 31 December 2022.
The Company also loaned the sum of £830,309 (2021: £526,695) to Ureka Pharma SAS during the year ended
31 December 2022. The total balance due to the Company from Ureka Pharma SAS at 31 December 2022 was
£3,667,549 (2021: 2,559,263).
During the year ended 31 December 2022, management charges of £nil (2021: £86,448) were rendered by
ImmuPharma plc to ImmuPharma AG. The total balance due to the Company from Immupharma AG at 31
December 2022 was £nil (2021: £88,932).
23
Financial instruments
The Group’s financial instruments comprise of cash and cash equivalents, investment in Incanthera plc, derivative
financial asset, borrowings and items such as trade payables, which arise directly from its operations. The main
purpose of these financial instruments is to provide finance for the Group’s operations.
The Group’s operations expose it to a variety of financial risks including liquidity risk, interest rate risk, equity
price risk and foreign exchange rate risk. Given the size of the Group, the directors have not delegated the
responsibility of monitoring financial risk management to a sub-committee of the Board. The Company’s finance
department implements the policies set by the Board of Directors.
The principal financial instruments used by the Group from which financial instrument risk arises are as follows:-
Trade and other receivables
Shares in listed entity
Warrants in listed entity
Derivative financial asset
Cash and cash equivalents
Total financial assets
Financial liabilities – borrowings due within 1 year
Trade and other payables
Total financial liabilities
Year ended
31 December
2022
£
Year ended
31 December
2021
£
723,583
688,350
1,229
334,821
667,813
2,415,796
111
1,451,213
1,451,324
373,253
1,208,327
207,508
913,656
1,649,374
4,352,118
700
1,583,604
1,584,304
ImmuPharma plc Report and Consolidated Financial Statements December 2022
81
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2021
23
Financial instruments (continued)
Liquidity risk
Group
The Group actively maintains a mixture of long term and short-term debt finance that is designed to ensure it has
sufficient available funds for operations and planned expansions. The Group monitors its levels of working capital
to ensure that it can meet its debt repayments as they fall due.
The following table shows the contractual maturities of the Group’s financial liabilities, all of which are measured
at amortised cost:
At 31 December 2022
6 months or less
6 – 12 months
1 – 2 years
2 – 5 years
Total contractual cash flows
Carrying amount of financial liabilities measured at
amortised cost
At 31 December 2021
6 months or less
6 – 12 months
1 – 2 years
2 – 5 years
Total contractual cash flows
Carrying amount of financial liabilities measured at
amortised cost
Trade and
other payables
£
Borrowings
£
Total
£
1,451,213
111
1,451,324
-
-
-
1,451,213
1,451,213
-
-
-
111
111
-
-
-
1,451,324
1,451,324
Trade and
other payables
£
Borrowings
£
Total
£
1,583,604
700
1,584,304
-
-
-
1,583,604
1,583,604
-
-
-
700
700
-
-
-
1,584,304
1,584,304
Company
The Company’s financial liabilities comprise trade and other payables with a carrying amount equal to gross
cash flows payable of £116,278 (2021: £645,936), accrued purchases with a carrying amount of £182,885 (2021:
£110,698), all of which are payable within 6-12 months.
Interest rate risk
Group
The Group has both interest bearing assets and interest bearing liabilities. Interest bearing assets comprise cash
and cash equivalents denominated in Sterling, the Euro, the Swiss Franc and the US Dollar which earn interest at a
variable rate. The directors will revisit the appropriateness of this policy should the Group’s operations change in
size or nature.
During the year, the Group’s cash and cash equivalents earned interest at a variable rate between 0.0% and 0.5%
(2021: 0.0% and 0.5%).
As at 31 December 2022, if LIBOR had increased by 0.5% with all other variables held constant, the post-tax loss
and equity would have been higher by £3,819 (2021: £18,728). Conversely, if LIBOR had fallen by 0.5% with all
other variables held constant, the post-tax loss and equity would have been lower by £3,819 (2021: £18,728).
82
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2021
23
Financial instruments (continued)
Interest rate risk (continued)
Group (continued)
Details of the terms of the Group’s borrowings are disclosed in note 17.
The Group also has non-interest bearing borrowings, which are carried at amortised cost, and therefore the risk
is the change in the fair value of the borrowings. Changes in the market interest rates of these liabilities do not
affect loss or equity and therefore no sensitivity analysis is required under IFRS 7.
Company
The Company has both interest bearing assets and interest bearing liabilities. Interest bearing assets comprise of
cash and cash equivalents denominated in Sterling, which earn interest at a variable rate.
During the year, the Company’s cash and cash equivalents earned interest at a variable rate between 0.0% and
0.5% (2021: 0.0% and 0.5%).
As at 31 December 2022, if LIBOR had increased by 0.5% with all other variables held constant, the post-tax loss
would have been lower and equity would have been higher by £3,348 (2021: £16,739). Conversely, if LIBOR had
fallen by 0.5% with all other variables held constant, the post-tax loss would have been higher and equity would
have been lower by £3,348 (2021: £16,739).
Foreign exchange rate risk
Group
The Group is exposed to foreign exchange rate risk as a result of having cash balances in Euros, Swiss Francs and
US Dollars. During the year, the Group did not enter into any arrangements to hedge this risk, as the directors
did not consider the exposure significant given the short-term nature of the balances. The Group will review this
policy as appropriate in the future.
As at 31 December 2022, if the Euro had weakened 10% against Sterling with all other variables held constant,
the post-tax profit and equity would have been lower by £14,523 (2021: £8,730). Conversely, if the Euro had
strengthened 10% against Sterling with all other variables held constant, the post-tax profit and equity would
have been higher by £14,523 (2021: £8,730).
As at 31 December 2022, if the US Dollar had weakened 10% against Sterling with all other variables held
constant, the post-tax profit and equity would have been lower by £13 (2021: £100). Conversely, if the US Dollar
had strengthened 10% against Sterling with all other variables held constant, the post-tax profit and equity would
have been higher by £13 (2021: £100).
As at 31 December 2022, if the Swiss Franc had weakened 10% against Sterling with all other variables held
constant, the post-tax profit and equity would have been lower by £1,032 (2021: £5,800). Conversely, if the Swiss
Franc had strengthened 10% against Sterling with all other variables held constant, the post-tax profit and equity
would have been higher by £1,032 (2021: £5,800).
Company
The Company is exposed to foreign exchange rate risk through the payment of non-Sterling amounts,
intercompany balances in Euros and Swiss Francs and as a result of having cash balances in Euros and US Dollars.
The Company’s convertible loan notes are also held in US Dollars. During the year, the Company did not enter
into any arrangements to hedge this risk, as the directors did not consider the exposure significant. The Company
will review this policy as appropriate in the future.
As at 31 December 2022, if the Euro had weakened 10% against Sterling with all other variables held constant,
the post-tax profit and equity would have been lower by £4,423 (2021: £2,600). Conversely, if the Euro had
strengthened 10% against Sterling with all other variables held constant, the post-tax profit and equity would
have been higher by £4,423 (2021: £2,600).
ImmuPharma plc Report and Consolidated Financial Statements December 2022
83
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2021
23
Financial instruments (continued)
Foreign exchange rate risk (continued)
Company (continued)
As at 31 December 2022, if the US Dollar had weakened 10% against Sterling with all other variables held
constant, the post-tax profit and equity would have been lower by £13 (2021: £100). Conversely, if the US Dollar
had strengthened 10% against Sterling with all other variables held constant, the post-tax profit and equity would
have been higher £13 (2021: £100).
Equity price risk
Group and Company
The Group holds the investment in shares in Incanthera plc, trading on AQSE, described in further detail in Note
12. The Group and Company are exposed to equity price risk as the sale of any Incanthera plc shares will fluctuate
depending on the future share price. If ImmuPharma sold its shares in Incanthera for 10% less than the Incanthera
plc share price at year end, this would indicate a reduction in investment value of £68,823 which would increase
the Group’s and Company’s loss by £68,823. If ImmuPharma sold its shares for 10% more than the Incanthera’s
share price at year end, this would indicate an increase in fair value of £68,823 which would decrease the Group’s
and Company’s loss by £68,823.
The Group has also entered into a derivative transaction during the year 2022, details of which can be found at
note 14. The risk associated with this transaction is the variable consideration receivable, which depends on the
Company’s share price. During the year, the Group did not enter into any arrangements to hedge this risk, as the
directors did not consider the exposure significant given the short term nature of the balance. The Group will
review this policy as appropriate in the future.
If the Company’s share price had weakened 10% with all other variables held constant, the post-tax loss would
have been higher and equity would have been lower by £35,761. Conversely, if the Company’s share price had
strengthened by 10% with all other variables held constant, the post-tax loss would have been lower and equity
would have been higher by £35,761.
The following is a comparison by category of the carrying amounts and fair values of the Group’s financial assets
and liabilities at 31 December 2022. Set out below the table is a summary of the methods and assumptions used
for each category of instrument.
Trade and other receivables at
amortised cost
Derivative financial asset
Shares in listed entity
Warrants in listed entity
Carrying
amount
2022
£
723,583
334,821
688,350
1,229
Fair
Value
2022
£
723,583
334,821
688,350
1,229
Financial liabilities at amortised cost
1,451,213
1,451,213
Carrying
amount
2021
£
427,199
913,656
1,208,327
207,508
1,583,604
Fair
Value
2021
£
427,199
913,656
1,208,327
207,508
1,583,604
3,199,196
3,199,196
4,340,294
4,340,294
84
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2021
23
Financial instruments (continued)
Equity price risk (continued)
Trade and other receivables at amortised cost
The fair value approximates to the carrying amount because of the short maturity of these instruments.
Derivative financial asset
The asset is recorded at fair value and is calculated based on ImmuPharma’s share price at the year end.
Financial liabilities at amortised cost
The fair value approximates to the carrying amount because the majority are associated with variable-rate interest
payments that are re-aligned to market rates at intervals of less than one year.
Shares in listed entity
The balances are recorded at fair value and are determined by using published price quotations in the
AQSE market.
Warrants in listed entity
The balances are recorded at fair value and are determined by using a Black-Scholes valuation model.
Fair value measurement
The Group measures the fair value of its financial assets and liabilities in the Statement of Financial Position in
accordance with the fair value hierarchy. The hierarchy groups financial assets and liabilities into three levels
based on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair
value hierarchy has the following levels:
Level 1 fair value measurements are those derived from unadjusted quoted prices in active markets for identical
assets and liabilities;
Level 2 fair value measurements are those derived from inputs, other than quoted prices included within level 1,
that are observable either directly (i.e. as prices) or indirectly (i.e. derived from prices);
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.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
85
Financial and Corporate Information
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 December 2021
23
Financial instruments (continued)
Equity price risk (continued)
Fair value measurement (continued)
The following table presents the Group’s financial assets that are measured at fair value at 31 December 2022:
Shares in listed entity
Warrants in listed entity
Derivative financial asset
As at 31 December 2022
Level 1
£
-
-
-
Level 2
£
688,350
1,229
334,821
1,024,400
Level 3
£
-
-
-
Total
£
688,350
1,229
334,821
1,024,400
Summary of financial assets held at level 2 fair value:
As at 1 January 2022
Additions
Revaluation at fair value
As at 31 December 2022
Warrants in
listed entity
£
Shares in
listed entity
£
Total
£
207,508
1,208,327
1,415,835
-
-
-
(206,279)
(519,977)
(726,256)
1,229
688,350
689,579
The fair value has been assessed at 31 December 2022 and is based on the ImmuPharma Plc shareholding of
12.97% of Incanthera plc.
Fair value brought forward
Fair value at inception
Payments received under Sharing Agreement
Net losses recognised in Income Statement
As at 31 December 2022
Derivative financial asset
£
913,656
1,000,000
(360,343)
(1,218,492)
334,821
The consideration receivable is variable depending on the Company’s share price and the derivative financial
asset is revalued through the Income Statement with reference to the Company’s closing share price. The
valuation methodology and inputs are detailed in note 14.
Capital Risk
Group and Company
The Group and Company considers its capital under management to be its cash and cash equivalents and
share capital and reserves. The Group and Company’s overall objective in managing its capital is to support
the strategic objectives of the business: the development of potential new drugs. Decisions regarding the
management of capital are taken by the Board in conjunction with regular strategic planning and budget reviews.
86
ImmuPharma plc Report and Consolidated Financial Statements December 2022
Financial and Corporate Information
Glossary of Technical Terms
‘biomarkers’
measurable biological responses used as predictors of clinical effects.
‘CRO’
‘drug-like’
‘Lupus’
‘PDCT’
‘peptide’
‘Pharma’
‘Phase 0’
‘Phase 1’
‘Phase 2’
‘Phase 3’
contract research organisation.
having the potential to become a drug product candidate due to its physical and
chemical characteristics.
an autoimmune inflammatory disease of unknown etiology.
peptide to drug converting technology.
a molecule comprised of a series of amino acids (or a small subpart of a protein).
abbreviation for “Pharmaceutical”; sometimes in the industry “pharma” also denotes
a pharmaceutical company.
the stage of development of a drug candidate before the first administration to man,
during which all mandatory data required by regulatory bodies such as the FDA or the
EMEA is generated and filed.
the stage of development of a drug candidate during which it is administered to man
(usually healthy volunteers) for the first time. Phase I studies are designed to assess
primarily the safety and tolerability of the drug candidate and gather information on
its ADME. This phase is also used whenever possible to evaluate surrogate markers
which are indicative of the clinical efficacy of the drug candidate.
the stage of development of a drug candidate during which therapeutic studies are
conducted in limited numbers of patients using data generated in Phase I studies to
determine dose regimen and primary efficacy, and to examine therapeutic outcomes
and monitor safety in patients.
the stage of development of a drug candidate during which it is tested in large
scale pivotal trials on, typically, between 200 to 4000 patients to demonstrate
overall efficacy, tolerability and safety with a dose regimen as determined in Phase
II. The drug candidate must generally prove to be statistically better than placebo
or the current best therapy in terms of efficacy, safety or quality of life.
ImmuPharma plc Report and Consolidated Financial Statements December 2022
87