Oncimmune Holdings Plc
For the year ended 31 May 2018
Nottingham
Clinical Sciences Building, City Hospital
Hucknall Road, Nottingham, NG5 1PB
United Kingdom
London
184 Shepherds Bush Road
London, W6 7NL
United Kingdom
Kansas
8960 Commerce Drive, Building #6
De Soto, KS 66018
United States
Shanghai
c/o Gene Tech Company Ltd.
No. 505, Ziyue Rd, Zizhu, National High-Tech Zone
Shanghai 200241
P.R. China
United Kingdom
Email: contact@oncimmune.co.uk
Phone: +44 (0)115 82 31869
United States
Email: clientservices@oncimmune.com
Phone: +1 913 583 9000
Contents
1
2
3
4
Overview
Highlights
Business Overview
Board of Directors
Strategic Report
Chairman and Chief Executive’s Review
Chief Financial Officer’s Review
Principal Risks and Uncertainties and Key Performance Indicators
Directors' Report
Directors’ Report
Statement of Directors’ Responsibilities
Consolidated Financial Statements
Independent Auditors’ Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
5
Parent Company Financial Statements
Company Statement of Financial Position
Company Statement of Changes in Equity
Notes to the Company Financial Statements
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03
10
14
20
21
23
28
29
35
36
37
38
40
63
64
65
Financial Highlights
£5m raised
from new and existing investors
£10m
equity investment from Genostics
£240k
Revenue for the year (2017: £215k)
£5.56m
Operating expenses before share based
charges and exceptional items (2017: £4.88m)
£6.34m
Net loss for the year (2017: £5.0m)
£12.95m
Cash balance at the period end (2017: £5.1m)
Overview
Financial Highlights
1
1
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Overview
Corporate and Operational Highlights
Corporate and Operational Highlights
(including post-period end)
EarlyCDT® commercial progress
• Exclusive
licence agreement signed with Genostics Company Limited
("Genostics") for the distribution, manufacturing and future development of all
products related to the EarlyCDT platform in China
• New distribution agreements signed for EarlyCDT®—Lung test making a total
of 15 agreements with total minimum sales commitments of £29.5m over their
initial periods
• EarlyCDT®—Liver test for hepatocellular cancer launched in May 2018 in the US
• Continued progress on long term plan of supporting its distributors deliver
high quality sales for EarlyCDT®—Lung in the US
R&D and Trials
• NHS ECLS trial continued to monitor its cohort of over 12,000 patients for
occurrence of lung cancer. Final results expected in early 2019
• Data published in the Journal of Cancer Therapy and in PloS One in support of
the role of EarlyCDT—Lung in the management of indeterminate pulmonary
nodules
Board and Management
• Dr. Adam Hill, MB PhD, was appointed as new Chief Executive Officer having
been appointed to the board as Chief Medical Officer and Strategy Officer in
April 2018
• Geoffrey Hamilton-Fairley appointed to new role as Vice Chairman of the Board
• Appointment of Dr. Cheung To and Dr. Annalisa Jenkins to the Board as Non-
Executive Directors
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Oncimmune is a leader in the development, manufacture and commercialisation
of personalised immunodiagnostics for the screening, detection and care of
cancer. Changing how clinicians, researchers and patients view, diagnose
and treat cancer, our technology detects evidence of the body’s natural
response to cancer, enabling detection 4 years or more before standard clinical
diagnosis. Our tests facilitate clinical decision-making and are complementary
to diagnostic technologies, making them valuable additions to established and
new care pathways. We partner with leading developers and distributors to
make our technology available globally.
Oncimmune was founded in 2002 and launched its platform technology in
2009, followed by its first commercial tests, EarlyCDT—Lung and EarlyCDT—
Liver. To date, over 155,000 tests have been performed for patients worldwide
and EarlyCDT—Lung is being used in the largest-ever randomised trial for the
early detection of lung cancer using biomarkers, the National Health Service
(NHS) ECLS study of 12,210 high-risk smokers in Scotland. Oncimmune is
headquartered in Nottingham, UK with a CLIA lab in Kansas, US and offices
in London, UK and Shanghai, China. The Company joined the Alternative
Investment Market (AIM) of the London Stock Exchange in May 2016 under the
ticker ONC.L
Overview
Our Science and Platform Technology
Our Science and
Platform Technology
Our platform technology
• The Oncimmune® platform is based on a cancer-detection methodology
that combines autoantibody detection science with robust antibody capture
technology
• Our patent-protected immunogenic protein library is composed of 175 distinct
tumour antigens (and 435 variants)
• This library is deployed commercially as multi-analyte panels using ELISA
techniques to carry out tests for specific indications (cancers)
•
In addition to the existing EarlyCDT product portfolio, our biomarker-based
methodology has high-potential applicability across the cancer care continuum,
particularly in assisting clinical intervention decisions, therapy choice and drug
development.
Core Scientific Principle
Normal Cell
Tumour Cell
Normal host protein
Abnormal ‘tumour associated’ antigen
Autoantibodies specific for TAA
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Overview
Current and Future Tests
1
Current and Future Tests
Over 155,000 commercial tests sold to date,
currently being sold in 15 countries around the world
EarlyCDT—Lung
EarlyCDT—Liver
for screening use (outside the US)
for indeterminate lesions
for pulmonary nodule risk assessment
- as a complement to ultrasound
- as a complement to CT scanning
for screening use (in Asia)
Potential future EarlyCDT indications:
our pipeline covers 60% percent of all new cancer cases,
which contribute to 66% of deaths attributed to cancer worldwide
EarlyCDT—Colorectal
EarlyCDT—Gastro-Oesophageal EarlyCDT—Pancreas
1.85m
1.61m
At 8.5%, Pancreatic Cancer
new cases in 2018
new cases in 2018
has the lowest 5yr survival rate
(3rd highest incidence
by cancer type)
(4th highest incidence
by cancer type)
of any cancer
EarlyCDT—Breast
EarlyCDT—Ovary
EarlyCDT—Prostate
2.09m
new cases in 2018
47.4%
5yr survival
1.28m
new cases in 2018
(2nd highest incidence
by cancer type and most
common cancer in women)
(19.5% lower than overall
cancer survival rate)
(2nd highest incidence
by cancer type)
set to grow by 80% by 2040
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Overview
Business Overview
Scientific, Operational &
Commercial Objectives
Scientific
• Continue to build scientific leadership in early cancer detection
• Drive ongoing clinical validation of the EarlyCDT product portfolio
• Work with NHS Scotland to conclude, review and distribute the ECLS clinical study
• Develop commercial tests for other solid tumour cancers
• Support studies and evidence-gathering for existing and new partnerships
Operational
• Deliver EarlyCDT—Lung Kits efficiently and on time to existing and new
distribution partners
• Launch EarlyCDT—Liver Kit in 2019
• Develop partnership execution capabilities
Commercial
• Drive sales momentum of EarlyCDT—Lung across the Americas, Europe and Asia
• Work towards registration of EarlyCDT—Liver in Europe and Asia
• Work with partners to build the case for new commercial propositions
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Overview
Forward Strategy
1
Forward Strategy
Measurement
Decision
Actuation
Development
& Innovation
People &
Culture
Partnerships
7
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EarlyCDT
Continue to develop and commercialise single cancer panels for early detection
Profile
Example
Motivation
Content
Integrate EarlyCDT into
a 3rd party ecosystem to
access an established
customer base
• Incorporate immunogenic
• Partner with a diagnostic
• No additional development
protein library and panels
into a third-party ecosystem
software solution provider
with a large installed base
of EarlyCDT—Lung required
• Creates a new distribution
• The ecosystem might be,
for example, a testing
of hospitals
• Integrate EarlyCDT—Lung
equipment or EMR software
into clinical decision
installed base
support tools
channel
• Content is a natural
adjacency to the core
testing business
Combined
Diagnostics
Work with other groups
to develop test including
our markers
• Combine EarlyCDT—Lung (or
• Develop a breast
another indication) with the
diagnostic tools of another
provider
cancer-specific panel and
combine it with the tools of
a mammography imaging
• Principle is that combined
diagnostics could deliver
greater insight than the
individual constituent tools
supplier
• Improve the performance
of both case selection and
diagnosis
• The right partnership could
deliver an industry-leading
diagnostic framework for a
particular cancer
• Enhancement of partner’s
diagnostic capability could
enhance its market share
with Oncimmune sharing in
the upside
Risk
Stratification
Partner to deliver
discrete or non-specific
cancer risk stratification
as a service
Complementary
Diagnostics
Patient stratification
tool to improve therapy
selection
• Assist an insurer (or
reinsurer) to either reduce
claims cost and/or change
pricing structures by
stratifying insured risk
• Incorporate EarlyCDT into
the insurance onboarding
process (possibly for
high-risk individuals only in
the first instance)
• Develop panels against
specific immunoncology
biomarkers (such as PDL1
and CTLA4) rather than a
specific indication
• Improve therapy selection
and identify cost-effective
interventions
• Apply EarlyCDT(—Lung) to
• Commercial benefit to
enhance the risk models of
repricing risk and managing
major life insurer with an
additional input parameter
at the point of onboarding
or as an annual adjustment
to the risk profile
down claims is significant
given costs of cancer
treatment
• Additional R&D would be
required, however, to tailor
panel performance to the
population at risk
• Work with a ‘Big Pharma’
• Value to be realised by Big
partner operating in
immunotherapy
• Develop a panel to enhance
performance of (e.g.) PDL1
(currently predicts only a
25% response to
immunotherapy)
Pharma in building the
evidence for 1st or 2nd
line-therapy for their assets
cannot be underestimated
• Stratification of response is
critical to the future
positioning and economics
of a therapeutic asset
Antigen
Targeting
Work with therapy
makers to identify and
tailor treatment to best
drug targets
• Tumour autoantibodies
(TAAs) present druggable
targets for therapeutic
intervention, e.g. therapy
phasing in early cancer
• Oncimmune’s
TAA-optimised panels are
particularly suitable given
high levels of specificity and
minimal cross-talk
• Use Oncimmune’s
immunogenic protein
library to support ‘Big
• Whilst speculative and early
stage, repeat validation of
the immunogenic protein
Pharma’ in the development
library developed by
of a polyclonal
Antibody-Drug Candidate
(ADC) for use in a specific
indication, or immune
profile
Oncimmune suggests that
the science is robust and
has considerable utility and
value in this use case
Overview
Forward Strategy
EarlyCDT
Continue to develop and commercialise single cancer panels for early detection
Profile
Example
Motivation
Content
Integrate EarlyCDT into
a 3rd party ecosystem to
access an established
customer base
• Incorporate immunogenic
protein library and panels
into a third-party ecosystem
• The ecosystem might be,
for example, a testing
equipment or EMR software
installed base
• Partner with a diagnostic
software solution provider
with a large installed base
of hospitals
• Integrate EarlyCDT—Lung
into clinical decision
support tools
• No additional development
of EarlyCDT—Lung required
• Creates a new distribution
channel
• Content is a natural
adjacency to the core
testing business
Combined
Diagnostics
Work with other groups
to develop test including
our markers
• Combine EarlyCDT—Lung (or
another indication) with the
diagnostic tools of another
provider
• Principle is that combined
diagnostics could deliver
greater insight than the
individual constituent tools
• Develop a breast
cancer-specific panel and
combine it with the tools of
a mammography imaging
supplier
• Improve the performance
of both case selection and
diagnosis
Risk
Stratification
Partner to deliver
discrete or non-specific
cancer risk stratification
as a service
• Assist an insurer (or
reinsurer) to either reduce
claims cost and/or change
pricing structures by
stratifying insured risk
• Incorporate EarlyCDT into
the insurance onboarding
process (possibly for
high-risk individuals only in
the first instance)
• Apply EarlyCDT(—Lung) to
enhance the risk models of
major life insurer with an
additional input parameter
at the point of onboarding
or as an annual adjustment
to the risk profile
Complementary
Diagnostics
Patient stratification
tool to improve therapy
selection
• Develop panels against
specific immunoncology
biomarkers (such as PDL1
and CTLA4) rather than a
specific indication
• Improve therapy selection
and identify cost-effective
interventions
• Work with a ‘Big Pharma’
partner operating in
immunotherapy
• Develop a panel to enhance
performance of (e.g.) PDL1
(currently predicts only a
25% response to
immunotherapy)
Antigen
Targeting
Work with therapy
makers to identify and
tailor treatment to best
drug targets
• Tumour autoantibodies
• Use Oncimmune’s
(TAAs) present druggable
targets for therapeutic
intervention, e.g. therapy
phasing in early cancer
• Oncimmune’s
TAA-optimised panels are
particularly suitable given
high levels of specificity and
minimal cross-talk
immunogenic protein
library to support ‘Big
Pharma’ in the development
of a polyclonal
Antibody-Drug Candidate
(ADC) for use in a specific
indication, or immune
profile
• The right partnership could
deliver an industry-leading
diagnostic framework for a
particular cancer
• Enhancement of partner’s
diagnostic capability could
enhance its market share
with Oncimmune sharing in
the upside
• Commercial benefit to
repricing risk and managing
down claims is significant
given costs of cancer
treatment
• Additional R&D would be
required, however, to tailor
panel performance to the
population at risk
• Value to be realised by Big
Pharma in building the
evidence for 1st or 2nd
line-therapy for their assets
cannot be underestimated
• Stratification of response is
critical to the future
positioning and economics
of a therapeutic asset
• Whilst speculative and early
stage, repeat validation of
the immunogenic protein
library developed by
Oncimmune suggests that
the science is robust and
has considerable utility and
value in this use case
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8
Measurement
Decision
Actuation
Development
& Innovation
People &
Culture
Partnerships
Overview
Q&A with new Chief Executive Dr. Adam Hill
1
Q&A with new Chief Executive
Dr. Adam Hill
What were your reasons for joining the
Company?
Throughout my clinical training, the requirement
for a simple and affordable test to detect the
earliest signs of cancer in order to improve survival
was always clear; late diagnosis has significantly
worse outcomes, and can often cost substantially
more to manage.
The role of the immune response in identifying
early mutant, or aberrant cells, has long been
understood, and so harnessing the body’s humoral
response – the autoantibodies which recognise
cancer cells - is ideal for this task. However, the
challenge has always been in synthesising the
proteins which can ‘capture’ autoantibodies at
scale, used to produce diagnostic panels with
reproducible performance.
It is this problem that Oncimmune has solved. The
growing family of EarlyCDT products, developed
from its proprietary immunogenic protein library,
have been demonstrated time and again to have
In addition, with early experience of our lead
product in the market, a well-developed and
proprietary innovation engine at the core of our
competitive positioning, and a critical mass of
evidence to support valuable product claims
addressing clinical unmet needs, I am confident in
this foundation for faster value creation.
What are your immediate priorities?
I have three clear objectives over the remainder
of the financial year. Firstly, to provide the
organisation with
the
focus and
leadership
that it needs to execute our current and future
commitments. Secondly, I will be working with
the team to ensure that we are maximising the
latent value of our immunogenic protein platform
technology. And finally, I am focused on laying
the groundwork so that seminal results – such as
with our imminent ECLS read out – have the right
platform for distribution to maximise the reach and
impact of our science.
reproducible performance, presenting
robust
What is your vision for the future?
I believe in the role our biomarker platform
technology can play
in supporting clinical
decisions across
the care continuum,
from
case selection and early detection through to
patient stratification to complement existing
and emerging therapies. Through partnership in
what is a fragmented healthcare and life sciences
market, I am confident we will beat cancer, one
test at a time.
supporting evidence in clinical decision making;
EarlyCDT—Lung, as our lead asset, has been
tried and tested in multiple regions with excellent
results.
But early detection is only the tip of the iceberg; the
utility of profiling an immune response to cancer
across the care continuum has only recently
been recognised. This potential, the latent value
inherent within the Oncimmune platform, and the
opportunity to have significant clinical impact all
led me to jump at the chance to join Oncimmune.
What are your first impressions?
I initially joined Oncimmune as Chief Medical
& Strategy Officer, and immediately had the
opportunity to work with our science teams
in the UK and USA. Not only was I impressed
with the quality of the product, the depth of its
underpinning science, but also the professionalism
of our scientists, many of whom have been with the
company over a decade. As we look to build strong
and enduring partnerships with those able to co-
develop solutions and co-market our technology,
I believe the strength and breadth of our science
base lays the foundation for success.
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Overview
Board of Directors
Board of Directors
Meinhard Folkert Schmidt
Non-Executive Chairman
the Royal College of Surgeons of England, and
professional engineering qualification from the
Mr. Schmidt is an executive and entrepreneur
Institution of Mechanical Engineers.
with more
than 25 years of
international
experience in the healthcare, diagnostics and
medical devices industries. Between 1998 and
2008 he was at Roche Diagnostics where he
Andrew Millet
Chief Financial Officer
held various global senior leadership roles in
Andrew is a Chartered Accountant and registered
Diabetes Care, Laboratory- and PoC-Diagnostics.
auditor. Andrew qualified as a chartered accountant
From 2008 till 2011 he worked as an executive
with Stoy Hayward (now BDO), following which he
and CEO at Straumann
Institute/Switzerland,
gained an MBA from Henley Management College.
responsible for the world-wide “Digitalization” of
Andrew has spent many years at executive level
the Dental industry. He is currently active as an
involved with the growth and success of early stage
Independent Healthcare Professional providing
technology businesses. Andrew is a director of
active board engagement as Chairman a/o NED
Wisteria Chartered Accountants, a firm he founded
in public and private MedTech and LifeScience
in 2002 and he has, since 2003, been involved in a
companies; consulting to top management teams
variety of capacities with Oncimmune including as
to improve industrialization, commercialization
accountant, company secretary and shareholder.
and digitalisation processes; consulting investors
Andrew is also a director of PinkNews Media Group
(Private Equity/Venture Capital) on identification
and a Governor of The Mill Hill School Foundation.
of new investment and acquisition targets in the
global healthcare industries. He held positions in
Germany, Netherlands, USA, Canada, UK, Sweden,
Ireland and Switzerland and is currently active as
Timothy Brian Bunting
Non-Executive Director
Chairman, Board Director and Adviser at several
Tim joined Balderton Capital (UK) LLP as a General
companies in Europe, Asia and USA.
Partner in 2007. He was previously a partner
Dr. Adam Mark Hill
Chief Executive Officier
of Goldman Sachs where he spent 18 years. At
Goldman Sachs, Tim held various roles including
Global Head of Equity Capital Markets (2002 to
2005) and Vice-Chairman of Goldman Sachs
Dr. Adam M Hill MB PhD is a dual-qualified Clinician
International (2005 to 2006). Tim is also a Trustee
and Mechanical Engineer with a career built at
of the Rainbow Trust Children's Charity ; the Paul
the interface of industry, academia and health
Hamlyn Foundation and the Royal Opera House.
systems. Over the last 2 decades he has trained in
Tim is a graduate of the University of Cambridge.
surgery in the British Army; founded a successful
applied research centre at
Imperial College
London; provided growth strategy and investment
advice to global life science companies on behalf
Geoffrey Neil Hamilton-Fairley
Non-Executive Vice Chairman
of the British Government; led the global medical
Mr. Hamilton-Fairley has an entrepreneurial
function of a multinational, publicly-listed health
career that started
in 1982 when Geoffrey
IT company; and pivoted a Formula One team
founded a number of companies in the media
into a developer of health technology. Currently,
sector backed by The Abingdon Management
Adam is both a Visiting Professor in Global Health
Company Limited (Abingdon). In 1988, he joined
Innovation at Imperial College London, and sits on
the board of Abingdon as CEO to manage the
the Value Creation Committee of Imperial College
Company’s portfolio of media and technology
Health Partners, and is Non Executive Director to
investments, and subsequently became sole
Myrecovery.ai.
owner having acquired Abingdon
from
its
institutional shareholders. Abingdon had a number
Adam graduated from Imperial College London
of quoted and unquoted investments. In 1998 he
as a Medical Doctor whilst also earning a PhD in
launched Premium TV (PTV) securing a contractual
Engineering, attending Imperial College Business
joint venture with Eurosport to create “British
School and the Royal Military Academy Sandhurst.
Eurosport”. Later that year PTV was acquired by
He received his postgraduate clinical training from
NTL (now Virgin Media). As CEO of PTV Geoffrey
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Overview
Board of Directors
1
developed the largest integrated broadband and
Inc.,
iOX Therapeutics Limited, Thrombolytic
internet sports broadcasting platform in the world
Strategies
Incorporated, PhESi, Oncimmune,
at that time. Over the past ten years Geoffrey has
Cocoon Biotech
Inc.
(Non Executive Chair),
developed Oncimmune Limited, serving as its
Cellmedica (Non-Executive Chair), Vium,
Inc.
Executive Chairman, CEO and now Vice Chairman.
(Executive Chair), and Silence Therapeutics (Non-
Geoffrey is also a senior research fellow at the
Executive Chair). She also is a committee member
International Prevention Research Institute. His
of the Science Board to the U.S. Food & Drug
personal commitment to cancer detection can be
Administration (FDA), and serves on the board
traced to his father, the first medical oncologist in
of the Center for Talent Innovation in the U.K. Dr.
the United Kingdom.
Julian Clement Hirst
Independent Non-Executive Director
Julian
is a seasoned finance executive with
experience across a broad range of corporate
finance transactions
including equity private
Jenkins graduated with a degree in medicine from
St. Bartholomew’s Hospital in the University of
London and subsequently trained in cardiovascular
medicine in the U.K. National Health Service.
Dr. Carsten Schroeder
Independent Non-Executive Director
placements, initial public offerings, public debt
Dr. Schroeder has 25 years of senior leadership
and equity issues, mergers and acquisitions, trade
experience in the life sciences industry covering
sales, strategic partnerships and restructurings.
pharmaceuticals, medical device and in vitro
Julian is currently the Corporate Finance Director of
diagnostic. Since 2014 he has been President of
Immunocore Limited, a leading UK biotechnology
the Diagnostic Division at Grifols, S.A. where he is
company specialising in immuno-oncology. On
responsible for global commercial operations and
a part-time basis, he is also the Joint Head of
overall strategy, including leading its growth and
Technikos, a partnership which manages stakes in
innovation in Transfusion Medicine and Clincial
biomedical engineering spin-out companies from
Diagnostic. Prior to that, and before its acquisition
Oxford University. Prior to this, Julian held senior
by Grifols, Carsten was President of Novartis
corporate finance positions spanning a period
Diagnostics. Carsten joined Novartis Diagnostics in
of over 25 years at several of the leading global
2010 as Vice President of Commercial Operations
investment banks including UBS Warburg, Morgan
for the EMEA region where he oversaw expansion
Stanley and Lehman Brothers.
into new markets. During his time at Novartis
Dr. Annalisa Jenkins
Senior Independent Non-Executive Director
he was a member of the Vaccines & Diagnostic
Division Executive Committee and served as
Site Head for its Emeryville campus in California.
Carsten has also held executive positions with
Dr. Annalisa Jenkins is a life sciences thought
Boston Scientific, Mallinckrodt (now Covidien)
leader with over 20 years of biopharmaceutical
and Boehringer Ingelheim. Mr. Schroeder holds an
industry experience. Prior to joining PlaqueTec
MBA from the European School of Management in
as CEO in November 2017, Dr. Jenkins served as
Paris (ESCP) and a Bachelor of Arts in Economics
president and CEO of Dimension Therapeutics, a
from the University of Cologne in Germany.
leading gene therapy company that was acquired
by Ultragenyx in November 2017. Prior leadership
roles have included the head of global research
and development and executive vice president
Richard Simon Sharp
Non-Executive Director
global development and medical at Merck Serono,
Richard graduated from Oxford University and
and several senior positions at Bristol Myers-
began his professional career in 1978 working
Squibb over 15 years – including serving as senior
for JPMorgan in UK Banking, then in Investment
vice president and head of global medical affairs.
Banking and Derivatives. In 1985, Richard joined
Earlier in her career, Dr. Jenkins was a medical
Goldman Sachs in London and variously served as
officer in the British Royal Navy during the Gulf
Head of Capital Markets, Head of UK investment
Conflict, achieving the rank of surgeon lieutenant
Banking and Head of European Private Equity
commander. Dr. Jenkins is a board member of
and Mezzanine Investing. Richard left Goldman
several growing companies, including Ardelyx,
in 2007 to found and run DII Capital LLP. Richard
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11
Overview
Board of Directors
has been separately a trustee of the Royal Marsden
Capital Fund and a trustee of the Institute of
Andrew Unitt
Independent Non-Executive Director
Cancer Research. In the summer of 2013, Richard
Andrew was Chief Financial Officer at the
became an External Appointee of HM Treasury
University of Nottingham, a major shareholder in
on the Financial Policy Committee of the Bank of
Oncimmune, until July 2016. Prior to working in
England which is responsible for Macro-Prudential
higher education at the university, Andrew was a
Supervision in the UK.
Dr. Cheung To
Non-Executive Director
finance director for 20 years in a wide range of
industries. His more recent background includes 11
years at Boots plc, where he was Finance Director
for 4 years of Boots Healthcare International, its
over the counter medicines business. He has also
Dr. Cheung To is an entrepreneur with over 25
held a number of non executive directorships in
years’ of extensive experience in biotechnology
the NHS and private sector.
research and
instinctive knowledge of
the
development of
the world’s, and China’s,
biotechnology markets. He co-founded and is
Chairman of Gene Group Co. Ltd., a group that
now includes several major companies including:
Gene Co. Ltd., one of the largest professional
service and distribution provider for the medical,
life
science, pharmaceutical
and biotech
research sectors in China; Ecotek Co. Ltd., a
professional services company to the agricultural
and environmental research sectors in China;
Genetech (Shanghai) Co. Ltd., a business focused
on R&D, manufacturing, marketing & distribution
of molecular and cellular diagnostic products in
the fields of pathology, oncology, heamatology
and molecular genetics; Ebiotrade.com, a Biotech
portal and e-commerce provider; and Baygene Co.
Ltd., a company focused on R&D, manufacturing
and distribution of life-science research products.
Dr. Cheung To obtained his Ph.D from the
University of Hong Kong, Medical Faculty, Dept.
of Biochemistry in 1996, and he was awarded one
of the experts in the prestige China’s National
“Recruitment Program of Global Experts” (known
as “the Thousand Talents Program”) in 2010,
in recognition of his contribution towards the
industries and society.
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Strategic Report
Subtitle
2
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13
Chairman and Chief Executive’s Review
Strategic Report
Chairman and Chief Executive’s Review
Oncimmune has pursued the goal to be a leader
might benefit from a specific therapy, and those
in early cancer detection since inception and,
that might not.
in so doing, enhances the clinical outcomes
of cancer patients. The benefits of early
Underpinning this growth is a phased approach
detection of cancer are both clear and well
to product development and launch with Board
understood: early stage cancer diagnosis leads
oversight which ensures the delivery of long
to significantly improved five-year survival over
term growth is underpinned by a clear set
late stage cancer diagnosis.
of economic values aimed at protecting the
Company from unnecessary risk and securing its
In May 2016, the Company completed an IPO
long-term future.
on AIM. At that time, the Company laid out its
strategy to deliver both its mission and value
to shareholders. On behalf of the Board, we are
Business Update
pleased to present the third Annual Report &
Accounts since IPO for the year ended 31 May
2018, and to provide a progress update on the
plan detailed at the time of admission to AIM.
We continue to be well positioned to deliver
on that plan and on the wider potential of our
autoantibody-based platform.
Strategy and Business Model
At IPO, the directors believed the Group had
reached a point of inflexion having proven and
protected the EarlyCDT platform technology for
the early detection of cancer and demonstrated
clinical utility and commercial sales of its lead
product. The next phase of growth for the
Group was the execution of its commercial plans
through a three-year growth strategy.
The Group has focused on exploiting the
the EarlyCDT
platform technology for multiple cancers across
commercial opportunity
for
the continuum of care; from early detection, to
risk assessment for intervention, to stratification
of patients for therapy. The business model is
two-fold; to deliver EarlyCDT testing as a service
through the Group’s CLIA-approved laboratory
in De Soto, Kansas, and to sell EarlyCDT units
for other laboratories to provide their own
testing service. The different marketing channels
attracted distinctly different unit economics.
The Company has continued to deliver on its
commercialisation plans during the year. After
completing recruitment of senior staff to support
the delivery of commercialisation plans in the US,
Europe and Asia last year, the Company has seen
the increase in revenue anticipated as a result
of its phased roll-out across 15 geographies,
securing in excess of £29.5m in minimum
commitments over the next five years.
The Company has made good progress in R&D
with the launch of the EarlyCDT—Liver panel
as a Laboratory Delivered Test (LDT) in the US,
proving the viability of the EarlyCDT platform
technology to discover, validate and launch
a number of solid cancer biomarker panels,
and further demonstrating the potential of the
Company to execute on its portfolio revenue
proposition with multiple products, generating
revenues in different regions and with different
partners. Furthermore,
the Company has
invested in early research to provide evidence
that the EarlyCDT platform technology can
be used to stratify patients into those likely to
respond to specific therapy regimens.
In Q3, the Company completed a £10m fund-
raise with a strategic
investor, Genostics
Company Ltd, which provides access to the
China market.
The initial phase of growth for the Group was
focused on completing the development of
the EarlyCDT—Lung Kit to increase sales and
open up additional markets, as well as broaden
Oncimmune’s product offering with EarlyCDT—
Liver. The Group has also focused on developing
stratification panels to identify patients who
EarlyCDT Platform Technology
In the US, the Company has continued with
the previously outlined plan of supporting its
distributors in order to deliver high quality, and
long-term, sales. The Company has continued
relationships with distributors for EarlyCDT—
Lung in the US throughout the 2017/2018
Annual Report 2018
/ Oncimmune�
14
Strategic Report
Chairman and Chief Executive’s Review
2
financial year, supplementing this with the addition
these new markets. The first of which are now being
of Valentech in Brazil and Columbia, providing reach
secured so that sales can begin to build.
into South America. The company has secured
agreements for EarlyCDT—Lung with several Private
Payer Organizations (PPO’s) covering 140m US
The Company anticipates signing further distribution
contracts in Asia and Europe during 2018/2019,
insured members. The company has also recently
with a number of these arrangements also likely to
signed a non-exclusive distribution agreement for
include guaranteed minimum payments that add to
the sale of tests covering Argentina, Uruguay and the
confidence in our chosen distributors and enhance
Dominican Republic.
revenue forecasting.
As set out in our interim results announcement issued
on 13 February 2018, our pilot distribution project with
a major US pulmonology sales force was completed
in February 2018, and the Company has been in
negotiation regarding the terms of a full distribution
In addition to the commercialisation of the Company’s
lead asset, EarlyCDT—Lung, the Company launched
EarlyCDT—Liver in May 2018 as an LDT in the US.
EarlyCDT—Liver will initially be available through
Oncimmune's existing distribution network in the
contract since this time. These discussions have
US, whilst the Company looks for further specialist
failed to reach a satisfactory conclusion and it has
distribution partners in the US and other global
been agreed that discussions will cease until a
markets who target hepatologists. It is intended that
firm timetable for agreement and implementation
the test builds traction whilst building evidence on
can be committed to by both parties. Whilst this
clinical utility.
is disappointing, this arrangement now unlocks
Oncimmune to focus more time on developing
The primary commercial focus for the liver test
discussions with other US pulmonary salesforces with
will be China and the Asia Pacific region where
the goal of reaching an agreement that fully realises
the value of EarlyCDT—Lung in this indication. The
Company remains cautious with regards to its near
hepatocellular cancer incidence is four times that
found in the US. It is anticipated that in these regions
the test will be used as a front-line screening test for
term revenue growth in the US; positioning of the
high-risk patients who have Hepatitis B or C. Work has
test is critical to long-term success, as is distribution
commenced with our Chinese partner to validate its
through partnership to achieve scale.
use as a screening test on a Chinese population, and
to gain CFDA clearance.
Outside of the US, the Company continues to
make good progress. The Company’s Asia Pacific
business has eight distribution agreements in place
for EarlyCDT—Lung Kits throughout the region,
supplementing those in Israel, South Korea, Taiwan
Research, development and trials
Based upon the early discovery work published at
the International Liver Cancer Association meeting
and Singapore with agreements in Brazil, Columbia,
in 2017, showing that a panel of 10 autoantibodies
Iran, India and China which provide over £26.7m in
could detect hepatocellular carcinoma (HCC) with
minimum payment guarantees over the next five years.
high sensitivity and specificity, our research and
In Europe, the Company has also announced further
distribution agreements for its EarlyCDT—Lung Kit
with agreements for Spain, Moldova and Turkey
development effort throughout the financial year has
been dominated by validation of EarlyCDT—Liver for
HCC. Liver cancer is the second most common cause
of death from cancer worldwide and is particularly
adding to the agreements in Denmark, Norway,
prevalent in Eastern and South-Eastern Asia with
Sweden and Poland completed in 2017/2018 with
China accounting for approximately 50% of cases
the aggregate minimum sales commitments of
globally. The prognosis for liver cancer is very poor and
approximately £2.8m.
there is a clear clinical need for improved diagnostic
testing; globally 700,000 new cases are diagnosed
A number of our partnered territories have required
each year and the annual death rate is in excess of
additional
regulatory clearances, beyond
the
600,000. The Company’s test has high specificity
product's CE Mark and ISO certification, which
at 97%, complementing current imaging detection
can take 12 months to obtain. Progress is being
methods as well as the stand-alone biomarker alpha
made towards obtaining the necessary product
fetoprotein (AFP) used in Asia.
registrations to allow wider commercialisation in
15
Oncimmune�
/ Annual Report 2018
Strategic Report
Chairman and Chief Executive’s Review
paper published by Massion and colleagues in 2016,
further data was published in the Journal of Cancer
Therapy in support of the role of EarlyCDT—Lung
in the management of indeterminate pulmonary
nodules.
Fundraising
Beyond EarlyCDT—Liver,
development programme has delivered early
research
and
the
progress on the development of a higher sensitivity
version of EarlyCDT—Lung (EarlyCDT®—Lung Plus)
that utilises some new and proprietary biomarkers.
EarlyCDT—Lung Plus aims to improve sensitivity in
the lung nodule setting, where differentiating benign
and malignant tumours is key. The addition of later
stage markers should add value ensuring we detect
In January, the Company announced it had signed a
as many cancers as possible without affecting the
framework agreement for an exclusive licence with
false positive rate. This test enhancement should
Genostics Company Limited for the distribution,
help drive adoption. This
improved version of
Oncimmune’s lead product has undergone beta
site testing and validation in the pathology labs at
manufacturing and
future development of all
products related to Oncimmune's EarlyCDT platform
for the People's Republic of China. As part of the
Leeds Teaching Hospitals NHS Trust. In addition,
framework agreement, Genostics Company Limited
blood collected by fingerstick has been proven to
be acceptable for testing on all existing EarlyCDT
platform products. This removes barriers to adoption
agreed to invest £10m in Oncimmune by way of
subscription for 6,410,256 new ordinary shares at
a price of £1.56 per ordinary share, a 49% premium
of the tests that the Company experienced due
to the share price. The agreement strengthened the
to unavailability of phlebotomy services or the
Company’s balance sheet to pursue its three year
reluctance of the patient to have venous blood
plan for commercial growth.
draw. Finally, feasibility has been demonstrated for
the development of EarlyCDT products on a new
multiplex platform. This platform provides increased
The Company also raised £5m (£4.78m net of
expenses) via a placement
in September and
analytical sensitivity while allowing all biomarkers to
November 2017, with the bulk of shares admitted in
be measured in a single reaction thereby saving on
October 2017.
reagent cos Data derived from the collaboration with
Scancell and supporting Oncimmune’s claims as a
companion diagnostics platform were presented at
Management and Board Changes
the Immuno-Oncology Summit in Boston.
In September 2018 the Company announced the
appointment of Dr. Adam Hill as new Chief Executive
From a clinical trial perspective, the NHS ECLS trial
Officer, having joined the Company as Chief Medical
continued to monitor its cohort of over 12,000
Officer and Chief Strategy Officer in April 2018. With
patients for occurrence of lung cancer. The follow-
this appointment, Geoffrey Hamilton-Fairley moved
up period ended in June 2018 and it is expected that
into a new role as Vice Chairman of the Board of
the major findings of the trial will be published early
in 2019. Meanwhile, results on effects of EarlyCDT—
Lung testing on patient emotional outcomes and
smoking behaviour were presented at the World
Directors. In January 2018, the Company further
strengthened its Board with the addition of Dr.
Annalisa Jenkins as Non-Executive Director and again
with the addition of Dr. Cheung To in September 2018.
conference on Lung Cancer in Yokohama, Japan. At
the same meeting, results of a collaboration between
Oncimmune, Abcodia and UCLS utilising samples
Stakeholder and Social Responsibility
from the UKCTOCS study were presented that
The Company recognises the value of strong
demonstrated, unequivocally, for the first time that
relationships with a range of different external and
autoantibodies can be used to detect lung cancer
internal stakeholders to maximise shareholder value.
earlier than current diagnostic methods. This study
These stakeholders have been mapped and the
clearly demonstrated a median cancer detection lead
Company understands their needs, interests and
time of four years. A paper describing modelling of the
health economic impact of EarlyCDT—Lung testing
of patients with pulmonary nodules was published
expectations.
Immunodiagnostics has significant potential to
in PLoS One and concluded that using the test for
impact health outcomes from a cancer diagnosis
this application was likely to be cost effective in the
and, as such, the Company recognises the societal
US healthcare system. Finally, following on from the
impact of its products in the geographies that it
Annual Report 2018
/ Oncimmune�
16
Strategic Report
Chairman and Chief Executive’s Review
2
operates. The Company is working on defining this
impact and measuring this societal impact; however,
like many in this industry, both the intended, and
unintended consequences of products in the market
are challenging to capture.
To date, the Company has obtained informal feedback
from its staff, suppliers, distributors, shareholders,
regulators and other stakeholders. Going forward
this feedback will be formalised and the Company
• Stratifying risk for underwriters of life and critical
illness risk by incorporating EarlyCDT—Lung, and
other products, to reduce claims cost,
• Partnering with pharmaceutical companies to
develop complementary diagnostics against
immuno-oncology biomarkers such as PDL1 to
improve therapy selection, or enhance therapy
targeting.
intends that this feedback will form an essential part
In the coming three years, Oncimmune intends to
of the control mechanism to direct the future strategy
continue delivering its core strategy, which is focused
and business model.
Strategy and Outlook
on early detection, including exploiting the potential
in screening following the upcoming results from the
NHS ECLS study. In addition to this, the Company
will seek to enhance revenues from clinical tests
Following the appointment of Dr. Adam Hill in March
by accelerating value creation through partnering
2018 as Chief Medical Officer and Chief Strategy
across a range of applications to generate scale and
Officer, the Board, with management support,
reach wider end markets.
have undertaken a review to identify and capitalise
on the wide range of opportunities presented by
Oncimmune’s
proprietary
autoantibody-based
In the core EarlyCDT business we expect to begin
to see additional registrations in partner territories
platform that are additional to continuing to build
scale and momentum in the core business.
during 2019. Achieving an appropriate value for the
US market opportunity for EarlyCDT—Lung is key to
the generating value for shareholders. As described
This review has confirmed the utility of Oncimmune’s
earlier, the inability to reach agreement with the
immunogenic protein library, the ability to rapidly
original distribution partner and the subsequent
develop in-vitro diagnostic panels to detect cancer
decision
to engage with additional potential
early, and the potential of this technology to have an
partners will affect the timing of revenue related
impact across the cancer care pathway – presenting
to such partnerships. As a result, the Company’s
multiple paths to value.
revenue expectations for the current financial year
are materially reduced by these events. The ECLS
In addition to maintaining focus on the core business
study results are also expected in the first half of
of developing and commercialising clinical tests
2019 following encouraging interim results. In 2019
for the early detection of single cancer types, the
we will also take the first steps in developing the
Board believes latent value can be unlocked from
aforementioned strategic partnerships.
Oncimmune’s platform through strategic partnerships
across a breadth of applications, and with a range of
Progress across these opportunities will, of course,
partner companies. These opportunities are designed
depend on the degree of adjacency to the core
to be capital light in nature, leveraging the investment
business but we aim to initiate revenue generation
in Oncimmune’s platform to date, whilst maximising
with at least one partner and be either study-design
optionality, and include:
ready or laying the groundwork for more substantial
studies with other partners towards the end of 2019.
•
Integrating Oncimmune’s tests into third-party
established ecosystems (established installed base
of testing equipment, for example, to gain access
to a new and proprietary distribution channel),
• Combining EarlyCDT products with another
provider’s diagnostic tools to improve clinical
decision making, and enhance market share (with
Dr. Adam Hill
Meinhard Schmidt
Chief Executive Officer Chairman
another in-vitro diagnostic, or diagnostic imaging
30 October 2018
modality, for example),
17
Oncimmune�
/ Annual Report 2018
“With the fundraise in early 2018
with Genostics Company Ltd,
providing access to the China
market, the foundations are
laid for our forward strategy."
Annual Report 2018
/ Oncimmune�
1818
Annual Report 2018 / Oncimmune� Strategic ReportSubtitle
Strategic Report
Subtitle
2
19
Oncimmune�
/ Annual Report 2018
Annual Report 2018
/ Oncimmune�
19
Strategic Report
Chief Financial Officer’s Review
Chief Financial Officer’s Review
Revenue in the year ended 31 May 2018 was £240k (2017: £215k). In the current year, this revenue
represented the sale of commercial tests that were performed from our own CLIA laboratory in
Kansas, US. The Group now has numerous revenue channels that it is focusing on, albeit these
revenue streams are at a very early stage:
• EarlyCDT—Lung central lung tests performed in the US
• EarlyCDT—Lung Kits sold to our distributors
• EarlyCDT—Liver central lung tests performed in the US
• Partnership diagnostic revenues
Operating expenses before share based charges and exceptional items in the year ended
31 May 2018 were £5.56m (2017: £4.88m). The increase of costs largely reflects the additional
employment costs incurred as the company has expanded its research and development
capabilities, commercial efforts and new starts to put in place additional management to cope
with this scaling up.
The loss before tax for the year was £6.34m (2017: £5.32m) and the net loss for the year was
£6.34m (2017: £5.0m).
£281k (2017: £415k) of research and development costs have been capitalised in the year.
The decision to capitalise these costs was made on the basis that these were the direct costs
relating to the work that went in to the development of the EarlyCDT—Liver test, which went
live during 2018.
The Company raised a further £5m (£4.78m net of expenses) via a placement in September and
November 2017 issuing 4.167 million shares. In February and March 2018, the Company raised
£10m equity investment as part of a license, distribution, manufacturing and future development
agreement for the Peoples’ Republic of China with Genostics Company Limited.
The cash balance at the end of the year was £12.953m (2017: £5.075m).
Financial Outlook
The Company’s cash position continues to be strong.
At present the company has contracted minimum revenues from distributors totalling over
£29.5m from 15 separate distributors across the world. The expectation is to enter into new
distribution agreements in new geographies in the future.
The cash burn continues to be managed very carefully. Focus continues to be on:
• Creating value through research and development
• Increasing the distribution channel and sales of EarlyCDT—Lung tests
• Increasing the distribution channel and sales of EarlyCDT—Liver tests
• Partnership diagnostic revenues
As such, the management are confident that its cash resources are sufficient for the
foreseeable future.
Andrew Millet
Chief Financial Officer
30 October 2018
Annual Report 2018
/ Oncimmune�
20
2
Strategic Report
Principal Risks and Uncertainties and Key Performance Indicators
Principal Risks and Uncertainties and Key
Performance Indicators
Reliance on the retention of key employees
The future success of the business is dependent on its senior management and key personnel and there is
always a challenge to maintain back-up support in respect of key roles or replace key staff should they leave
our organisation. The Group seeks to provide a positive work environment with opportunities for career growth
coupled with appropriate remuneration and share option incentives.
Research and development
The Group has had success developing leading edge science that produces life changing benefits. By its very
nature research and development can never be certain in terms of its cost, its impact, regulatory requirements,
and when it will be ready for commercialisation. The Group mitigates these inherent risks by employing
leading scientists, training, strict methodologies, and working with its Scientific Advisory Boards and
other stakeholders.
New markets
The Group has entered into a number of distribution agreements in new geographical markets and expects
to continue to do so, for the foreseeable future. These distribution agreements typically give the distributor
the exclusive rights of distribution of the EarlyCDT—Lung CLIA test and the Kit within certain geographical
boundaries for a period of time, in consideration for minimum order requirements. Failure from any one
distributor will not be material, however, failure from many distributors could be material, though. The group
will do what it can to support the distributors, as best it can, to optimise success.
Risks from competitors
The Group operates in a competitive market and faces competitors who may develop more advanced or
alternative tests for early detection of cancer. The group mitigates this through investing significantly in
research and development. The group also continues to invest heavily in patent protection across the world.
Legislation and regulatory change
Any change in legislation, and in particular the regulations relating to the testing of human blood or serum
as part of a diagnostic test of disease, may have an adverse effect on the Group’s operations and the returns
available on investment in the Group. The Group mitigates this as far as possible by ensuring a continuous
awareness of the legislative environment.
Foreign exchange
The Group conducts its operations principally in US Dollars and Sterling and is consequently subject to
currency risk due to fluctuations in exchange rates. As well as direct risk arising from transaction or translation
risks, foreign exchange movements may make products or materials more expensive which may adversely
affect the Group’s revenues and expenditure and as a result could have a material adverse effect on the Group’s
business, results of operations and financial condition. The Group continue to monitor potential foreign
exchange exposure.
The Group maintains a Risk Register which is constantly monitored by the Executive directors; and
shared with the Board.
Key Performance Indicators
The Group measures its performance according to a wide range of key performance indicators. The main key
performance indicators for the Group are as follows and the Group’s performance against these indicators
have been discussed in the Chairman and Chief Executive’s report and the Chief Financial Officer’s report:
• Development milestones
• Management of cash resources
• Revenue and profit indicators
• Number of partnerships/distribution agreements
Andrew Millet
Chief Financial Officer
30 October 2018
21
Oncimmune�
/ Annual Report 2018
Strategic Report
Subtitle
“Unlocking latent value in
Oncimmune’s immunogenic
protein library over the next
three years, designed to layer
on revenue to our existing
clinical testing business,
will open up applications to
generate scale and reach
wider end markets across the
cancer care continuum.”
2
Strategic ReportSubtitle 3
Directors' Report
Directors' Report
Directors' Report
The Directors present their report and audited
The Company holds regular board meetings.
consolidated financial statements for the year
The Directors are responsible for formulating,
ended 31 May 2018.
Results and dividends
reviewing and approving the Company’s strategy,
budget and major items of capital expenditure. The
directors have established the AIM Compliance
Committee,
the Audit Committee and
the
The consolidated statement of comprehensive
Remuneration Committee with formally delegated
income is set out on page 19 and shows the loss for
rules and responsibilities.
the year. The loss for the year ended 31 May 2018
was £6.3m (2017: loss of £5.32m). No dividend will
The Chairman and Chief Executive together with
be paid in respect of the financial year.
the Remuneration Committee work throughout the
Corporate governance
year with external consultants assessing the skills
of the Board with a view of whether this produces
optimal value and benefit for all stakeholders.
The directors comply with the requirements of the
As such the board has been strengthened in key
UK Corporate Governance Code of the Quoted
functional areas since last year. The board are
Companies Alliance (QCA) to the extent that
also conscious of achieving a more balanced,
they consider it appropriate and having regard
representative and diverse board. This area will
to the Company’s size, board structure, stage of
continue to be monitored.
development and resources. A new code is in
place for accounting periods beginning on or after
The Board believe that good governance and
1 January 2019. The board has adopted most of new
a positive culture are crucial to the successful
code and will ensure that by the deadline the entire
delivery of our strategic objectives. Good
code is fully adopted. The Board considers that
standards of behaviour start with the Board and
all Non-Executive Directors exercise independent
we are committed to leading by example.
judgement. The Board currently consists of ten
directors, four of which are independent Non-
Ensuring that the Board are as effective as they
Executive Directors under the QCA guidelines.
can be, has been a priority and this will continue.
The Board expect members to bring with them the
The roles of Chairman and Chief Executive are
right behaviours and values to enable the Board to
held by separate directors with a clear division
operate in a positive and effective manner.
of responsibilities between them. The Chairman
has primary responsibility for leading the Board
Until now the Board have not specifically had
and ensuring its effectiveness. He sets the Board’s
a cultural agenda, however, informally it has
agenda and ensures that all directors can make an
sought to promote a culture that aligns itself
effective contribution. The Senior Non-Executive
with its strategy, stakeholder needs and good
director has the power to add items to the agenda
governance. The Board are committed to focus
of full board meetings. The Chief Executive has
on strengthening its culture as it sees this as a key
responsibility for all operational matters and
attribute of success.
the development and implementation of Group
strategy approved by the Board. The Company
During the year, the Chairman and Non-Executive
Secretary is responsible for advising the Board
directors have met with staff and visited our
through the Chairman on all corporate governance
laboratories which provided them an opportunity to
matters.
hear our colleagues’ views on a variety of matters.
These visits continue to play an invaluable part in
Where
indicated below
the Non-Executive
understanding how the culture is developing and
directors are independent in accordance with the
changing throughout the organisation.
Code.
Going forward the Board will be setting the agenda
to measure and monitor against criteria.
23
Oncimmune�
/ Annual Report 2018
Directors' Report
Directors' Report
Evaluation of the Board’s performance
Audit Committee
The Non-Executive directors have been meeting
The Audit Committee is comprised of Julian Hirst,
regularly
to discuss
the effectiveness and
Tim Bunting, Dr. Annalisa Jenkins and chaired by
performance of the Board, the Executive directors,
Andrew Unitt. The Audit Committee determine and
the Non-Executives, committees and individuals;
examine matters relating to the financial affairs of
as well as succession planning. Recently the Board
the Company including the terms of engagement
appointed a Senior Independent Non-Executive
of the Company’s auditors and, in consultation
Director who will chair these meetings.
with the auditors, the scope of the audit. It receives
It is the intention of the Company within the
Company’s auditors relating to the half yearly (if
current year to formalise this more and:
subject to audit) and annual accounts and the
and reviews reports from management and the
• Measure performance of the board,
committees and individuals against
criteria. The criteria will include:
• quality of board papers
• ability to debate
• suitable skills and experiences
• learning and development
• succession
• promoting a strong culture
accounting and internal control systems in use
throughout the Company. The Audit Committee
meet at least twice a year.
Remuneration Committee
The Remuneration Committee is comprised of
Andrew Unitt, Meinhard Schmidt, Dr. Carsten
Schroeder and chaired by Tim Bunting. The
Remuneration Committee
review and make
recommendations in respect of the Directors’
remuneration and benefits packages, including
share options and the terms of their appointment.
• listening to stakeholders and where
The
remuneration
committee
also make
appropriately taking action
recommendations to the Board concerning the
• The Company anticipate that the evaluation
procedure will improve in time.
The expectation
is
that
the Non-Executive
Directors will continue to regularly discuss the
effectiveness and performance of the Executive
allocation of share options to employees. The
Remuneration Committee meet at least once a
year and otherwise as and when necessary.
AIM Compliance Committee
directors regularly and during the year. In addition,
The AIM Compliance Committee comprise of
a formal review will occur at least once a year.
Meinhard Schmidt, Andrew Unitt and chaired by
Richard Sharp. The AIM Compliance Committee
ensures, inter alia, that procedures, resources
and controls are in place to ensure AIM Rules for
Companies compliance within the Company are
operating effectively from time to time. The AIM
Compliance Committee meet at least twice a year
and at such other times as the members of the
committee shall agree.
Annual Report 2018
/ Oncimmune�
24
Directors' Report
Directors' Report
3
Directors
The Directors of the Company who served during the year and up to the date of this report were:
Meinhard Folkert Schmidt
Non-Executive Chairman
(appointed 9 October 2015)
Dr. Adam Mark Hill
Chief Executive Officer
(appointed 9 April 2018)
Andrew Millet
Chief Financial Officer
(appointed 26 August 2016)
Timothy Brian Bunting
Non-Executive Director
(appointed 9 October 2015)
Geoffrey Neil Hamilton-Fairley Non-Executive Vice Chairman
(appointed 9 October 2015)
Julian Clement Hirst
Dr. Annalisa Mary Jenkins
Dr. Carsten Schroeder
Independent
Non-Executive Director
Senior Independent
Non-Executive Director
Independent
Non-Executive Director
(appointed 23 June 2016)
(appointed 9 January 2018)
(appointed 11 October 2016)
Richard Simon Sharp
Non-Executive Director
(appointed 9 October 2015)
Dr. Cheung To
Non-Executive Director
(appointed 28 September 2018)
Andrew Vaughan Unitt
Independent
Non-Executive Director
(appointed 9 October 2015)
Directors' interests
At 31 May 2018, the Directors and family had the following interests in the Company’s ordinary shares and
options to subscribe for shares:
Meinhard Folkert Schmidt
Dr. Adam Hill
Andrew Millet
31 May 2018
31 May 2017
Shares
Options
Shares
Options
-
-
420,370
396,825
-
-
120,370
-
134,954
122,593
134,954
92,593
Timothy Brian Bunting
2,806,717
-
2,806,717
-
Geoffrey Neil Hamilton-Fairley
3,238,070
798,148
3,238,070
798,148
Julian Clement Hirst
Dr. Annalisa Mary Jenkins
Dr. Carsten Schroeder
Richard Simon Sharp
Dr. Cheung To
Andrew Vaughan Unitt
-
-
-
4,515,302
6,410,256
-
-
-
-
-
-
-
-
-
-
4,515,302
-
-
-
-
-
-
-
-
25
Oncimmune�
/ Annual Report 2018
Directors' Report
Directors' Report
The company also issued warrants on 26 November 2015 to Geoffrey Hamilton-Fairley to subscribe for
762,500 Ordinary Shares at a subscription price of 1p per Ordinary Share and to Meinhard Schmidt to
subscribe for 226,250 Ordinary Shares at 1p. These warrants had not been exercised at the year end.
Genostics Company Ltd, a private company incorporated in The Peoples’ Republic of China, controlled
by Dr. Cheung To acquired 6,410,256 shares in the company.
Directors' remuneration
The remuneration paid to or receivable by each person from who served as a Director during the year to
31 May 2018 was as follows:
Salary/
Other
Bonus
Pension Benefits 31 May 2018
31 May 2017
fees
Total
Total
£000
£000
£000
£000
£000
£000
£000
Meinhard Schmidt
Dr. Adam Hill
(joined April 2018)
Andrew Millet
Timothy Brian Bunting
Geoffrey Neil
Hamilton-Fairley
Julian Clement Hirst
Dr. Annalisa Jenkins
(joined January 2018)
Dr. Carsten Schroeder
Richard Simon Sharp
Andrew Vaughan Unitt
69
36
100
-
200
36
15
-
-
18
-
-
-
-
100
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
3
-
5
-
-
-
-
-
Total
474
-
100
9
-
-
-
-
-
-
-
-
-
-
-
69
-
100
-
63
-
97
-
305
200
36
15
-
-
34
-
-
-
18
15
583
409
Annual Report 2018
/ Oncimmune�
26
Directors' Report
Directors' Report
3
Significant shareholdings
As at the 31 May 2018, the Company has been notified (or is otherwise aware) of the following interests
in 3% or more of the issued Ordinary Share capital of the Company:
No. of
Ordinary Shares
Percentage of
share capital
Balderton Capital III, LP 2
Genostics Company Limited **
Richard Simon Sharp *
Ruffer LLP
Geoffrey Neil Hamilton-Fairley *
Timothy Brian Bunting #*
Andrew Black
University of Nottingham
Professor John Robinson
Aviva Investors Global Services Limited
Fidelity Worldwide Investments
6,813,196
6,410,256
4,515,302
3,334,239
3,238,070
2,806,717
2,379,310
2,244,527
2,236,923
2,217,013
2,106,983
11.06
10.40
7.33
5.41
5.25
4.55
3.86
3.64
3.63
3.60
3.42
* Board directors
# Tim Bunting is a partner if Balderton Capital (UK) LLP the investment adviser to Balderton Capital Partners 111, LP
** Dr. Cheung To a director of Genostics Company Ltd joined the Board after the year end
Going concern
Having regard to the available cash resources, tight financial control, budgets and forecasts for 2019 and
beyond, the Directors have a reasonable expectation that the Group has adequate resources to continue
in operational existence for the foreseeable future. For this reason, they continue to adopt the going
concern basis in preparing the Group financial statements.
Risk management
Details of the Group’s financial risk management objectives and policies, and exposure to price risk,
credit risk and liquidity risk are set out in note 23.
27
Oncimmune�
/ Annual Report 2018
Directors' Report
Directors’ Responsibilities Statement
Directors’ Responsibilities
Statement
safeguard the assets of the Group and (ii) prevent
and detect fraud and other irregularities.
The Directors are responsible for preparing the
and
integrity of the corporate and financial
Annual Report and the financial statements in
information included on the Company's website.
accordance with applicable law and regulations.
Information published on the website is accessible
The Directors are responsible for the maintenance
Company law requires the Directors to prepare
Kingdom governing
the preparation
and
financial statements for each financial year. Under
dissemination of financial statements may differ
that law the Directors have elected to prepare
from legislation in other jurisdictions.
in many countries and legislation in the United
the Group consolidated financial statements in
accordance with International Financial Reporting
Standards as adopted by the European Union
Provision of information to the auditor
(IFRSs) and elected to prepare the parent company
The Directors confirm that:
financial statements under United Kingdom
Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable
laws
including FRS 101 Reduced Disclosure
• so far as each Director is aware, there is
no relevant audit information of which
the Company's auditor is unaware; and
Framework). Under company law the Directors
• the Directors have taken all the steps that
must not approve the financial statements unless
they ought to have taken as Directors in order
they are satisfied that they give a true and fair view
to make themselves aware of any relevant
of the state of affairs and of the profit or loss of
audit information and to establish that the
the Group and the parent company for that period.
Company auditor is aware of that information.
In preparing each of the Group and parent
Auditor
company financial statements, the Directors are
required to:
• select suitable accounting policies
and then apply them consistently;
• make judgements and accounting
estimates in the financial statements
that are reasonable and prudent;
• state whether applicable IFRSs or UK
Accounting Standards have been followed,
subject to any material departures
disclosed and explained; and
• prepare the financial statements on the
going concern basis unless it is inappropriate
to presume that the Group and the parent
company will continue in business.
The auditor, Grant Thornton UK LLP, has expressed
willingness to continue in office. In accordance
with section 489(4) of the Companies Act 2006, a
resolution to reappoint Grant Thornton UK LLP will
be proposed at the Annual General Meeting.
On behalf of the Board
Andrew Millet
Chief Financial Officer
30 October 2018
Company registration number:
The Directors are responsible for keeping adequate
09818395 (England and Wales)
accounting records that are sufficient to show and
explain the parent company’s transactions and
disclose with reasonable accuracy at any time
the financial position of the parent company and
the Group and enable them to ensure that the
financial statements comply with the Companies
Act 2006. They are also generally responsible for
taking steps as are reasonably open to them to (i)
Annual Report 2018
/ Oncimmune�
28
Consolidated Financial Statements
Independent Auditors’ Report
Independent Auditors’ Report
Company registration number: 09818395 (England and Wales)
Independent Auditor’s Opinion To The Members Of
Oncimmune Holdings Plc
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of Oncimmune Holdings plc (the ‘parent company’) and
its subsidiaries (the ‘group’) for the year ended 31 May 2018 which comprise the 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 and notes to the financial statements,
including a summary of significant accounting policies. The financial reporting framework that has
been applied in the preparation of the group financial statements is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting
framework that has been applied in the preparation of the parent company financial statements is
applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard
101 ‘Reduced Disclosures Framework’ (United Kingdom Generally Accepted Accounting Practice).
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 May 2018 and of the group’s loss for the year then ended;
• the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
4
• the parent company financial statements have been properly prepared in accordance
with United Kingdom Generally Accepted Accounting Practice; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of the
group and the 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.
Who we are reporting to
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of
Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to
the company’s members those matters we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
29
Oncimmune�
/ Annual Report 2018
Consolidated Financial Statements
Independent Auditors’ Report
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require
us to report to you where:
• the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is not appropriate; or
• the directors have not disclosed in the financial statements any identified material
uncertainties that may cast significant doubt about the group’s or the parent company’s
ability to continue to adopt the going concern basis of accounting for a period of at least
twelve months from the date when the financial statements are authorised for issue.
Overview of our audit approach
• Overall materiality: £316,000 which represents 5% of the group's preliminary loss before
taxation;
• Key audit matters were identified as;
• Risk of impairment of intellectual property in the group and
• Risk of impairment of intragroup loans in the parent company
We performed full scope audit procedures at Oncimmune Holdings plc, and the two subsidiary
undertakings.
Key audit matters
The graph below depicts the audit risks identified and their relative significance based on the extent of
the financial statement impact and the extent of management judgement.
Low
Extent of management judgement
High
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) that we identified. These matters included those
that 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.
Annual Report 2018
/ Oncimmune�
30
Consolidated Financial Statements
Independent Auditors’ Report
Group
Key Audit Matter
Impairment of intellectual property
There is a risk that intellectual property may be impaired given the group’s financial performance.
Management’s assessment of the recoverability of the intellectual property incorporated significant
judgements and assumptions, such as rate of discount, timing, extent and probability of future cash flows.
We therefore identified the impairment of intellectual property as a significant risk, which was one of
the most significant assessed risks of material misstatement.
How the matter was addressed in the audit
Our audit work included, but was not restricted to:
• consideration of the appropriateness of the methodology applied by management in their
assessment of the recoverable amount of intellectual property by comparing it to the group’s
accounting policy and our understanding of the business;
• obtaining management’s calculation of recoverable amounts of intellectual property and evaluating
the information therein including performing arithmetic checks for accuracy;
• understanding key assumptions made in the model and challenging these through consideration of
the impact of alternative assumptions and comparison against results of prior years; and
• assessing the accounting policy shown in note 2 and the related disclosures in note 11 to check they
are in accordance with the financial reporting framework.
Key observations
Our testing did not identify material misstatements in the recoverable amounts of intellectual property.
4
Parent
Key Audit Matter
Impairment of intragroup loans
There is a risk that intragroup loans may not be recoverable as a result of subsidiary companies
incurring losses.
Management’s assessment of the recoverability of intragroup loans incorporated significant
judgements and assumptions, such as timing, extent and probability of future cash flows.
We therefore identified the impairment of intragroup loans as significant risk which was one of the
most significant assessed risks of material misstatement.
How the matter was addressed in the audit
Our audit work included, but was not restricted to:
• consideration of the appropriateness of the methodology applied by management in their
assessment of the recoverable amount of intragroup loans by comparing it to the group’s accounting
policy and our understanding of the business;
• obtaining and challenging management’s assessment of the recoverable amounts of intragroup
loans including checking the impairment provisions and net asset values of components that have
group debt;
• checking that intragroup loans have been reconciled and that there are no material differences in
intragroup confirmations;
• assessing the accounting policy shown in note 2 and the related disclosures in note 5 of the parent
company financial statements to check they are in accordance with the financial reporting framework.
Key observations
Our testing did not identify material misstatements in the recoverable amounts of intragroup loans.
31
Oncimmune�
/ Annual Report 2018
Consolidated Financial Statements
Independent Auditors’ Report
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable
that the economic decisions of a reasonably knowledgeable person would be changed or influenced.
We use materiality in determining the nature, timing and extent of our audit work and in evaluating the
results of that work.
Materiality was determined as follows:
Materiality measure
Group
Parent
Financial statements as a
£316,000 which is 5% of group’s
£75,000 which
is 5% of the
whole
preliminary
loss before tax. This
company’s preliminary loss before
benchmark
is
considered
the
tax. This benchmark is considered
most appropriate as this is a key
the most appropriate as this is a
performance indicator of the group.
key performance indicator of the
parent company.
Materiality
for
the current year
is higher than the level that we
Materiality for the current year
determined for the year ended 31
is higher than the level that we
May 2017 to reflect an increase in the
determined for the year ended 31
group’s loss before tax.
May 2017 to reflect an increase in
the parent company’s loss before
tax.
Performance materiality
75% of financial statement materiality. 75% of
financial
statement
used to drive the extent
of our testing
materiality.
Specific materiality
We also determine a lower level of
We also determine a
lower
specific materiality for certain areas
level of specific materiality for
such as directors’ remuneration and
certain areas such as directors’
related party transactions.
remuneration and related party
transactions.
Communication
of
£16,000 and misstatements below
£4,000 and misstatements below
misstatements
to
the
that threshold that,
in our view,
that threshold that, in our view,
audit committee
warrant
reporting on qualitative
warrant reporting on qualitative
grounds.
grounds.
The graph below illustrates how performance materiality interacts with our overall materiality and the
tolerance for potential uncorrected misstatements.
Group And Parent Company - Overall Materiality
Key
Tolerance for potential uncorrected mistatements
Performance materiality
25%
Annual Report 2018
/ Oncimmune�
32
Consolidated Financial Statements
Independent Auditors’ Report
An overview of the scope of our audit
Our audit approach was a risk-based approach founded on a thorough understanding of the business
and its operations. We took into account the size and risk profile of the group and each component, any
changes in the business and other factors when determining the level of work to be performed at each
entity, which in particular included the following considerations:
• the group comprises of three components, Oncimmune Holdings plc, Oncimmune Limited and
Oncimmune LLC (based in the USA), all assessed to be significant components based on the
materiality of their contributions to the group loss before taxation;
• we undertook substantive testing on significant transactions, balances and disclosures, the extent
of which was based on various factors such as our overall assessment of risks, knowledge of the
business and overall assessment of the control environment. Our audit approach is consistent with
that for the prior year;
• 100% of revenues and assets were included within the population we tested through full-scope audit
procedures; and
• we performed a site visit to the Oncimmune LLC premises in the USA.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report, other than the information on pages 19 to 49 of the financial statements
and our auditor’s report thereon. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial statements or a material misstatement of
the other information. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Our opinion on other matters prescribed by the Companies Act 2006 is unmodified
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 under the Companies Act 2006
In the light of the knowledge and understanding of the group and the parent company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report
or the directors’ report.
4
33
Oncimmune�
/ Annual Report 2018
Consolidated Financial Statements
Independent Auditors’ Report
Matters on which we are required to report by exception
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 for the financial statements
As explained more fully in the directors’ responsibilities statement on page 12, 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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
Giles Mullins
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Milton Keynes
30 October 2018
Annual Report 2018
/ Oncimmune�
34
Consolidated Financial Statements
Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehensive
Income
Year to
31 May 2018
Year to
31 May 2017
Revenue
Cost of sales
Gross loss
Administrative expenses
Research and development expenses
Share based payment charges
Operating loss
Finance income
Finance expense
Loss before income tax
Income tax
Loss for the financial year
Notes
4
5
8
8
9
£’000
Total
240
(917)
(677)
(4,759)
(800)
(138)
(5,697)
(6,374)
48
(16)
(6,342)
-
(6,342)
£’000
Total
215
(532)
(317)
(3,857)
(1,025)
(74)
(4,956)
(5,273)
26
(69)
(5,316)
293
(5,023)
Other comprehensive income
4
Items that may be subsequently reclassified to
profit or loss, net of tax
Currency translation differences
(23)
222
Loss after tax and total comprehensive income
for the year attributable to equity holders
Basic and diluted loss per share
22
(6,365)
(11.41p)
(4,801)
(9.84p)
The accompanying notes form an integral part of these consolidated financial statements.
35
Oncimmune�
/ Annual Report 2018
Consolidated Statement of Financial Position
Consolidated Financial Statements
Consolidated Statement of Financial Position
31 May 2018
31 May 2017
Notes
£’000
£’000
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
EQUITY AND LIABILITIES
Equity
Capital and reserves attributable to the equity
holders
Share capital
Share premium
Other reserves
Merger reserve
Foreign currency translation reserve
Own shares
Retained earnings
Total equity
Non-current liabilities
Other Loans
Current liabilities
Trade and other payables
Other statutory liabilities
Other loans
Total liabilities
Total equity and liabilities
11
10
13
12
14
18
16
15
16
671
201
872
295
291
12,953
13,539
14,411
616
30,952
2,325
30,787
146
(1,926)
(49,338)
13,562
-
-
808
41
-
849
849
14,411
518
230
748
323
261
5,075
5,659
6,407
510
16,273
2,187
30,787
169
(1,926)
(42,996)
5,004
-
-
847
54
502
1,403
1,403
6,407
The accompanying notes form an integral part of the consolidated financial statements.
The financial statements were approved by the board on 30 October 2018.
Andrew Millet
Director
Annual Report 2018
/ Oncimmune�
36
Consolidated Financial Statements
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity
Share
capital
Share
premium
Other
reserves
Merger
reserve
Foreign
currency
translation
reserve
Own
Shares
Retained
earnings
£'000
£'000
£'000
£'000
£'000
£'000
£'000
As at 1 June 2016
510
16,273
2,113
30,787
(53)
(1,926)
(37,973)
Total
£'000
9,731
Loss for the year
Other comprehensive
income:
Currency translation
differences
Total comprehensive
income
Transactions with owners:
Share option charge
-
-
-
-
-
-
-
-
-
-
-
74
-
-
-
-
-
222
222
-
-
-
-
-
(5,023)
(5,023)
-
222
(5,023)
(4,801)
-
74
As at 31 May 2017
510
16,273
2,187
30,787
169
(1,926)
(42,996)
5,004
4
Loss for the year
Other comprehensive
income:
Currency translation
differences
Total comprehensive
income
Transactions with owners:
Shares issued during the
year
-
-
-
-
-
-
106
14,679
-
-
-
-
Share option charge
-
-
138
-
-
-
-
-
-
(23)
(23)
-
-
-
-
-
-
-
(6,342)
(6,342)
-
(23)
(6,342)
(6,365)
-
-
14,785
138
As at 31 May 2018
616
30,952
2,325
30,787
146
(1,926)
(49,338)
13,562
The accompanying notes form an integral part of the consolidated financial statements.
37
Oncimmune�
/ Annual Report 2018
Consolidated Statement of Cash Flows
Consolidated Financial Statements
Consolidated Statement of Cash Flows
Cash flows from operating activities
Loss after income tax
Adjusted by:
Depreciation and amortisation
Share based payment charge
Interest received
Interest expense
Inventory
Trade and other receivables
Trade and other payables
Taxes credit
Exchange movement
Cash used by operations
Interest paid
Interest received
Income tax received
Notes
Year to
31 May
2018
£’000
Year to
31 May
2017
£’000
(6,342)
(5,023)
180
138
(48)
16
28
(30)
(52)
-
(23)
91
74
26
(69)
(135)
177
315
(293)
222
(6,133)
(4,615)
(16)
48
-
69
(26)
293
Net cash used by operating activities
(6,101)
(4,279)
Cash flows from investing activities
Purchase of property, plant and equipment
Development expenditure capitalised
Net cash used in investing activities
Cash flows from financing activities
Proceeds from share issue
Repayment of long term borrowings
Net cash(used in)/generated from financing activities
Movement in cash attributable to foreign exchange
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
14
The accompanying notes form an integral part of the consolidated financial statements.
(31)
(281)
(312)
14,785
(502)
14,283
8
7,878
5,075
12,953
(7)
(415)
(422)
-
(388)
(388)
(33)
(5,089)
10,197
5,075
Annual Report 2018
/ Oncimmune�
38
Notes to the Consolidated Financial Statements
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
1. General information
Oncimmune Holdings Plc (the ‘Company’) is a limited company incorporated and domiciled in England and Wales. The
registered office of the company is Clinical Sciences Building, City Hospital, Hucknall Road, Nottingham, NG5 1PB. The
registered company number is 09818395.
The Group’s principal activity is that of cancer diagnosis.
The Directors of Oncimmune Holdings Plc are responsible for the financial information and contents of the
financial information.
2. Accounting policies
The principal accounting policies applied in the preparation of the consolidated financial information are set out below.
These policies have been consistently applied to all years presented, unless otherwise stated.
Basis of preparation
The Group has prepared its consolidated financial statements in accordance with International Financial Reporting
Standards ("IFRSs") as adopted in the European Union, IFRIC Interpretations and the Companies Act 2006 applicable to
companies reporting under IFRS.
The Company was incorporated on 9 October 2015 and was re-registered as a public limited company on 14 December
2015. On 23 November 2015, a group re-organisation was completed, by means of a share for share exchange, as result
of which the newly incorporated company, Oncimmune Holdings Plc, became the parent company of the Group.
The companies involved in the above share for share exchange have not previously been presented in the consolidated
financial statements of a single legal entity. However, the underlying business was ultimately controlled and managed
by the same parties before and after the share for share exchange and that control was not transitory. The transactions
outlined above, therefore, meet the definition of a common control transaction in accordance with IFRS 3
Business Combinations.
IFRS does not provide any specific guidance on accounting for common control transactions and IFRS 3 excludes
common control transactions from its scope; therefore the Directors have selected an accounting policy in accordance
with paragraphs 10-12 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. The consolidated entity
meets the definition of a group reconstruction under FRS 102 19,27 and has therefore been accounted for under the
principals of merger accounting as outlined in FRS 102, paragraphs 19.29 – 19.33, merger accounting. The consolidated
financial statements have therefore been prepared as if Oncimmune Limited and its subsidiaries had been held by
Oncimmune Holdings Plc from inception and therefore the results and position of Oncimmune Limited have been
reflected in the comparatives.
The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The
areas involving a high degree of judgement or complexity, or areas where assumptions and estimates are significant to
the consolidated financial statements, are disclosed in note 3.
Going concern
The consolidated financial statements have been prepared on a going concern basis and under the historical cost convention.
After considering the year end cash position, making appropriate enquiries and reviewing budgets and profit and cash flow
forecasts for the foreseeable future (and in any event for a period of at least 12 months from the approval date of these
financial statements), the Directors have formed a judgement at the time of approving the financial statements that there
is a reasonable expectation that the Group has sufficient resources to continue in operational existence for the foreseeable
future. For this reason the Directors consider the adoption of the going concern basis in preparing the Consolidated financial
Annual Report 2018
/ Oncimmune�
40
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
statements is appropriate. The future prospects of the business has been further detailed in the Strategic Report.
The consolidated financial statements presented in sterling and has been rounded to the nearest thousand (£’000).
Standards, amendments and interpretations to existing standards
Standards, amendments and interpretations to existing standards that are not yet effective and have not been early
adopted by the Group in these financial statements.
At the date of authorisation of the financial statements, certain new standards, amendments and interpretations to existing
standards have been published but are not yet effective. The Group has not early adopted any of these pronouncements.
The new standards, amendments and interpretations that are expected to be relevant to the Group’s financial statements
in the future are as follows:
Standard/interpretation
Content
Applicable for financial years
beginning on/after
IFRS 9
IFRS 15
IFRS 16
IFRS 1
IFRS 2
IFRS 4
IAS 28
IAS 39
IAS 40
IFRIC 22
IFRS 9
IFRIC 23
4
Amendments to IAS 28
Financial Instruments
1 January 2018*
Revenue from Contracts with Customers
1 January 2018*
Leases
First time adoption (amendments)
Share based payments (amendments)
Insurance contracts (amendments)
Investments in Associates and Joint Ventures
(amendments)
Financial Instruments: Recognition and
measurement (amendments)
Investment Property (amendments)
Foreign Currency transactions and advance
consideration (amendments)
1 January 2019*
1 January 2018*
1 January 2018*
1 January 2018*
1 January 2018*
1 January 2018*
1 January 2018*
1 January 2019*
Prepayment Features with Negative
Compensation (amendments)
1 January 2019
Uncertainty over Income Tax Treatments
1 January 2019
Long-term Interest in Associates and Joint
Ventures
1 January 2019
Amendments to IAS 19
Plan Amendment, Curtailment or Settlement
1 January 2019
Amendment to References to Conceptual Framework in IFRS Standards
IFRS 17
Insurance Contracts
1 January 2020
1 January 2021
Amendment to IFRS 10 and IAS 28
Sale or Contribution of Assets between an
Investor and its Associate or joint Venture
Deferred until further notice
Annual Improvements to IFRS Standards 2014 – 2016 Cycle
• Amendments to IFRS 1 First-time Adoption of IFRS
• Amendments to IAS 28 Investment in Associate and Joint Venture
1 January 2018
1 January 2018
Annual Improvements to IFRS Standards 2015 – 2017 Cycle – Various standards
1 January 2019
• Amendment to IFRS 3
• Amendment to IFRS 11
• Amendment to IAS 12
• Amendment to IAS 23
*Not yet adopted by the EU.
41
Oncimmune�
/ Annual Report 2018
1 January 2019
1 January 2019
1 January 2019
1 January 2019
Consolidated Financial Statements
Notes to the Consolidated Financial Statement
The effective dates stated above are those given in the original IASB/IFRIC standards and interpretations. As the Group prepares
its financial statements in accordance with IFRS as adopted by the European Union (EU), the application of new standards and
interpretations will be subject to their having been endorsed for use in the EU via the EU endorsement mechanism.
IFRS 15
IFRS 15 Revenue from contracts with customers deals with revenue recognition and establishes principles for reporting
useful information to users of financial statements. The standard replaces IAS 18 Revenue and IAS 11 Construction
contracts and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2018
and earlier application is permitted subject to EU endorsement.
The impact that IFRS 15 will have on the financial statements is yet to be quantified. The group are in the process of
completing this assessment and at this stage are unable to conclude on the impact on the accounts. The Group has
different contractual arrangements with each of its clients which requires a detailed review in order to assess the changes
the Group will need to make to its revenue recognition policies once the standard is implemented.
Revenue
The amount shown as revenue in the statement of comprehensive income comprises royalties received and receivable
and, in addition, amounts received and receivable in respect of the provision of medical testing services, in the US and
other markets, including the UK.
Revenue is recognised at the fair value of the consideration received or receivable and excludes intra-group sales, value
added tax and trade discounts.
Revenue is recognised when the amount can be reliably measured and it is probable that future economic benefits
associated with the transaction will flow to the entity.
Royalty income is recognised when the tests to which the royalty licences relate are completed by third parties. Amounts
receivable in respect of the provision of medical testing services are recognised when these services are delivered.
Research and development
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Development expenditure, where it meets certain criteria (given below), is capitalised and amortised on a straight-
line basis over its useful life which is currently five years. Asset lives are subject to regular review and an impairment
exercise carried out at least once a year. Where no internally-generated intangible asset can be recognised, development
expenditure is written-off in the period in which it is incurred.
An intangible asset arising from development is recognised if, and only if, the group can demonstrate the following:
• the technical feasibility of completing the intangible asset so that it will be available for use or sale;
• the intention to complete the intangible asset and use or sell it;
• the ability to sell or use the intangible asset
• how the intangible asset will generate probable future economic benefits. Among other things, the group can
demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to
be used internally, the usefulness of the intangible asset.
• the availability of adequate technical, financial and other resources to complete the development and to use of sell
the intangible asset.
• the ability to measure reliabily the expenditure attributable to the intangible asset during its development.
Annual Report 2018
/ Oncimmune�
42
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The Group has reviewed research and development expenditure, to determine whether any of that spend could qualify
as development expenditure which satisfies the requirements for capitalisation set out above. As a result, £281,240 (2017:
£415,000) of development expenditure has been capitalised.
Property, plant and equipment
Property, plant and equipment is stated at historic cost, including expenditure that is directly attributable to the acquired
item, less accumulated depreciation and impairment losses.
Depreciation is calculated on a straight line basis over the deemed useful life of an asset and is applied to the cost less
any residual value. The asset classes are depreciated on a straight line basis over the following periods:
Laboratory equipment
Office equipment
Computer equipment
3 – 7 years
3 – 7 years
3 – 4 years
The carrying value of the property, plant and equipment is compared to the higher of value in use and the fair value less
costs to sell. If the carrying value exceeds the higher of the value in use and fair value less the costs to sell the asset then
the asset is impaired and its value reduced by recognising an impairment in profit or loss.
Impairment testing of non-current assets
4
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some
are tested at cash-generating unit level. Those intangible assets not yet available for use and goodwill are tested for
impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's or cash-generating unit's carrying amount exceeds
its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to
sell, and value in use based on an internal discounted cash flow evaluation. All assets are subsequently reassessed for
indications that an impairment loss previously recognised may no longer exist.
Inventories
Inventory is carried at the lower of cost or net realisable value after making due allowance for obsolete and slow
moving stock. Net realisable value is calculated based on the revenue from sale in the normal course of business less
any costs to sell.
43
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Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Leased assets
In accordance with IAS 17 Leases, the economic ownership of a leased asset is transferred to the lessee if the lessee bears
substantially all the risks and rewards related to the ownership of the leased asset. The related asset is then recognised
at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the minimum lease
payments plus incidental payments, if any.
All other leases are treated as operating leases. Payments on operating lease agreements are recognised as an
expense on a straight-line basis. Associated costs, such as maintenance and insurance, are expensed as incurred.
Lease incentives received are recognised in the consolidated statement of comprehensive income on a straight-line
basis over the lease term.
Taxation
Income tax on the profit or loss for the year comprises current and deferred tax.
Current tax is the expected tax payable on the taxable income for the year, using current rates, and any adjustments to
the tax payable in respect of previous years. In so far as group companies are entitled to UK tax credits on qualifying
research and development expenditure, such amounts are recognised when received.
Deferred taxation is provided on all temporary differences between the carrying amount of the assets and liabilities in
the financial statements and the tax base. Deferred tax assets are recognised only to the extent that it is probable that
future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets and
liabilities are not discounted. Deferred tax is determined using the tax rates that have been enacted or substantially
enacted by the balance sheet date, and are expected to apply when the deferred tax liability is settled or the deferred
tax asset is realised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries except where the timing of the
reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not
reverse in the foreseeable future.
Tax is recognised in profit or loss, except where it relates to items recognised directly in equity, in which case it is
recognised in equity.
Annual Report 2018
/ Oncimmune�
44
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Share based compensation
Equity-settled share-based payments are recognised as an expense in profit or loss, based on the fair value of the option
at the date of grant. Such costs are spread over the vesting period, adjusted for the best available estimate of the
number of share options expected to vest, with a corresponding credit to equity, net of deferred tax where applicable.
Such adjustments are only made in respect of non-market performance vesting conditions. No adjustment is made to
the expense recognised in prior periods if fewer share options ultimately are exercised than originally estimated. Vesting
conditions relate to continuing employment.
On the re-organisation in November 2015 the existing Oncimmune Limited schemes were rolled over into the 2015
Oncimmune Holdings Plc scheme with Oncimmune Holdings Plc taking on the obligation for the exercise of the options.
Modification accounting was performed resulting in the incremental fair value at the date of the modification being
calculated. The incremental fair value is the excess of the fair value of the award immediately after the modification
over the fair value immediately before the modificiation. Where the was an incremental fair value this was charged
over the remainder of the vesting period, together with the original charge relating to the grant date of the original
reward. Recognition of a cost of investment in Oncimmune Holdings Plc and a corresponding reserve in respect of the
fair value of the options rolled over was considered, however no investment was recognised as the amount was not
considered material.
Where the granting of share options has coincided with the issue of shares, for cash, to third party investors, the fair value
of such options is based on the issue price for those shares which is considered to be an arm's length value.
Employee benefit trust
Assets, other than shares, held by the Oncimmune Limited's Employee Benefit Trust (EBT) are included in the group's
balance sheet under the appropriate heading. Shares in the company held by the EBT are disclosed as a deduction
4
from shareholder's funds and dividend income is excluded in arriving at profit before tax and deducted from aggregate
dividends paid and proposed. Reflecting the substance of these arrangements any amounts which the trustees of the
EBT may resolve, pursuant to their discretionary powers, to pay to any beneficiaries of the EBT are charged to the profit
or loss account only when paid, subject to statutory deductions.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the main decision-
making body of the Group, which collectively comprises the Executive Directors. The Executive Directors are responsible
for allocating the resources and assessing the performance of the operating segments.
Exceptional items
Exceptional items are treated as such if the matters are non-recurring, material and fall outside of the operating activities
of the Group.
Government grants
Government grants receivable are recognised on receipts of cash. Related expenditure is recognised as it occurs.
45
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/ Annual Report 2018
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Financial instruments
Financial instruments are assigned to their different categories by management on initial recognition, depending on the
contractual arrangements.
Financial assets
The Group’s financial assets fall within the heading of ‘Loans and receivables’. Loans and receivables comprise trade and
certain other receivables as well as cash and cash equivalents.
Loan and receivables are recognised when the Group becomes a party to the contractual provisions of the instrument
and are recognised at fair value and subsequently measured at amortised cost using the effective interest method less
any provision for impairment, based on the receivable ageing, previous experience with the debtor and known market
intelligence. Any change in their value is recognised in the statement of comprehensive income.
Derecognition of financial assets occurs when the rights to receive cash flows from the investments expire or are
transferred and substantially all of the risks and rewards of ownership have been transferred. An assessment for
impairment is undertaken at least at each balance sheet date whether or not there is objective evidence that a financial
asset or a group of financial assets is impaired.
Financial liabilities
The Group’s financial liabilities comprise borrowings and trade and other payables.
Financial liabilities are initially recognised at the fair value of the consideration received net of issue costs. After initial
recognition borrowings are measured at amortised cost using the effective interest method. All interest-related charges
are included in the statement of comprehensive income line item “finance expense”. Financial liabilities are derecognised
when the obligation to settle the amount is removed.
Warrants to purchase shares
Warrants to purchase shares that do not meet the definition of equity instruments are accounted for as derivative
liabilities. The valuation is performed at inception and at each subsequent reporting with movements recognised in the
profit or loss.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call, together with other short term highly liquid
investments which are not subject to significant changes in value and have original maturities of less than three months.
Equity
Equity comprises the following:
• Share capital: the nominal value of equity shares.
• Share premium: includes any premium received on the sale of shares. Any transaction costs associated with the
issuing of shares are deducted from share premium, net of any income tax benefits.
• Own shares and other reserves
• Profit and loss account: retained profits
• Foreign currency translation reserve: differences arising from translation of investments in overseas subsidiaries
• Merger reserve: The merger reserve represents the difference between the parent company’s cost of investment and a
subsidiary's share capital and share premium. The merger reserve in these accounts has arisen from a group reconstruction
upon the incorporation and listing of the parent company that was accounted for as a common control transaction.
Common control transactions are accounted for using merger accounting rather than the acquisition method.
Annual Report 2018
/ Oncimmune�
46
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Foreign currencies
Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the
statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange
ruling at the date of the transaction. Exchange differences are taken into account in arriving at the operating profit. The
functional currency of the group and parent company is £’000.
The financial statements of foreign subsidiaries are translated at the rate of exchange ruling at the statement of financial
position date. The exchange differences arising from the retranslation of the opening net investment in subsidiaries
are taken directly to reserves. Where exchange differences result from the translation of foreign currency borrowings
raised to acquire foreign assets (including equity investments) they are taken to reserves and offset against differences
arising from the translation of those assets. All other exchange differences are dealt with through the statement of
comprehensive income.
3. Accounting estimates and judgements
The preparation of financial statements under IFRS requires the Group to make estimates and judgements that affect
the application of policies and reported amounts. Estimates and judgements are based on historical experience and
other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates.
The estimates and judgements which have a significant risk of causing a material adjustment to the carrying amount of
assets and liabilities are discussed below:
• Useful lives of depreciable assets
Management reviews the useful lives of depreciable assets at each reporting date. At the reporting date management
assesses that the useful lives represent the expected utility of the assets to the Group. Actual results, however, may
vary due to unforeseen events.
4
•
Inventory provision
Inventory provisions are based on an estimate of the realisable value of the inventory items.
•
Impairment
An impairment loss is recognised for the amount by which the asset's or cash generating unit's carrying amount
exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash
flows from each cash-generating unit and determines a suitable discount rate in order to calculate the present value
of those cash flows. In the process of measuring expected future cash flows management makes assumptions about
future operating results. These assumptions relate to future events and circumstances. In most cases, determining the
applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment
to asset-specific risk factors.
• Capitalisation of development costs
Development expenditure, where it meets certain criteria per IAS 38 Intangible Assets, is capitalised and amortised
on a straight-line basis over its useful life. Asset lives are subject to regular review and an impairment exercise carried
out at least once a year. Where no internally-generated intangible asset can be recognised, development expenditure
is written-off in the period in which it is incurred. Development expenditure is only recognised when all of the criteria
set out in IAS 38 are met. Management applies judgement in making this assessment and in determining attributable
costs for each project.
• Deferred tax
Judgement has been applied in respect of the non recognition of deferred tax on losses as detailed in note 9 on the
basis of uncertainty over the timing of future reversal.
47
Oncimmune�
/ Annual Report 2018
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
4. Segmental information
Management has determined the operating segments based on the reports reviewed by the strategic decision maker
comprising the Board of Executive Directors. The segmental information is split on the basis of geographical analysis
however, management report only the contents of the statement of comprehensive income and therefore no statement
of financial position information is provided on a segmental basis in the following tables:
Revenue
Class of business
Distribution of testing products
Royalties
Total revenues
Geographical analysis by destination
United Kingdom
North America
Rest of the world
Total revenues
Geographical analysis by origin
United Kingdom
North America
Rest of the world
Total revenues
31 May 2018
31 May 2017
£’000
£’000
240
-
240
104
136
-
240
-
240
-
240
215
-
215
80
135
-
215
-
215
-
215
Annual Report 2018
/ Oncimmune�
48
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Operating segments
As at 31 May 2018
Revenue
Cost of sales
Gross margin
Operating loss
Net finance and other
costs
Loss before tax
Taxation
As at 31 May 2017
Revenue
Cost of sales
Gross margin
Operating loss
Net finance and other
costs
Loss before tax
Taxation
4
UK
£’000
104
(258)
(154)
(3,167)
UK
£’000
80
(247)
(167)
(3,279)
USA
£’000
136
(659)
(523)
(1,744)
USA
£’000
135
(284)
(149)
(1,171)
Holdings
Consolidated
£’000
-
-
-
(1,463)
£’000
240
(917)
(677)
(6,374)
32
(6,342)
-
(6,342)
Holdings
Consolidated
£’000
-
-
-
(823)
£’000
215
(531)
(316)
(5,273)
(43)
(5,316)
293
(5,023)
Assets are not reported by business segment to the Chief Operating Decision Maker.
Information about major customers
In the year to 31 May 2018, the group had two customers who contributed more than 10% of group revenue individually.
These two customers contributed approximately 60% of group revenue.
49
49
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/ Annual Report 2018
5. Loss before income tax
Loss before taxation has been arrived at after charging:
Depreciation of owned property, plant and equipment
Amortisation of intangible assets
Research and development
Share based payment expense
Employee costs (Note 7)
Operating lease rentals
Other operating leases
Audit and non-audit services:
Fee payable to the company's auditor:
Fee for the audit of the parent company
Fees payable to the Company’s auditor for other services:
The audit of the Company’s subsidiaries pursuant to legislation
Tax compliance services
Tax advisory services
Audit related assurance services
All other assurance services
6. Remuneration of key personnel
The Group consider that the Directors are the key personnel:
Share based payments expense
Salary, fees, bonuses and other short term emoluments
Social security costs
Details of Director’s remuneration are disclosed in the Directors’ report.
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
May 2018
May 2017
£’000
£’000
52
128
800
138
3,094
63
28
1,025
74
2,202
225
116
20
25
6
4
-
-
15
24
6
6
4
1
May 2018
May 2017
£’000
£’000
138
731
82
951
74
409
44
527
Annual Report 2018
/ Oncimmune�
50
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
7. Employees
The average number of employees (including Directors) during the period was as follows:
Directors
Lab staff
Sales and administration
The cost of employees (including directors) during the period was made up as follows:
Wages and salaries
Social security costs
Pension cost
Share based payments
8. Net finance costs
4
Finance revenue
Finance costs
May 2018
May 2017
11
31
10
52
10
33
4
47
May 2018
May 2017
£’000
2,659
257
40
138
£’000
2,021
106
1
74
3,094
2,202
May 2018
May 2017
£’000
£’000
48
(16)
32
26
(69)
(43)
51
Oncimmune�
/ Annual Report 2018
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
May 2018
May 2017
£’000
£’000
-
-
-
-
(293)
-
(293)
(293)
9. Income tax credit
Current tax:
UK corporation tax credit at rates: 2018 – 19 % 2017 -19.83%
Prior period adjustment
Tax recoverable for the period
Factors affecting current tax charge:
The tax assessed on the profit for the period is different to the standard rate of corporation tax in the UK. The differences
are explained below:
Loss before income tax
Loss for the year multiplied by the standard rate of corporation tax
Expenses not deductible for tax purposes
Adjustment in respect of prior periods
Income not assessable for tax
Tax uplift in R&D expenditure
Losses surrendered for R&D claims
Losses carried forward
May 2018
May 2017
£’000
(6,342)
£’000
(5,316)
(1,205)
(1,054)
54
-
-
(220)
194
1,177
-
6
-
-
(295)
228
822
(293)
The group has unrelieved UK tax losses of £15,212,000 (2017: £12,247,000) and unrelieved overseas tax losses of
£19,789,000 (2017: £17,917,000). Deferred tax of £5,950,000 has not been provided given the uncertainty over the timing
of a future reversal. At year end management have not recognised research and deferred tax credit as there is uncertainty
over the timing and amount that will be received from the taxation authorities.
Annual Report 2018
/ Oncimmune�
52
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
10. Property, plant and equipment
Cost
At 31 May 2017
Additions
Foreign exchange movement
At 31 May 2018
Depreciation
At 31 May 2017
Charge for the year
Foreign exchange movement
At 31 May 2018
Net book values
At 31 May 2018
At 31 May 2017
Laboratory
Equipment
Computer
Equipment
Office
Equipment
Total
£’000
£’000
£’000
£’000
1,018
31
(11)
1,038
795
50
(3)
842
196
223
25
-
-
25
18
2
-
20
5
7
30
-
-
30
30
-
-
30
-
-
1,073
31
(11)
1,093
843
52
(3)
892
201
230
4
There were no assets held under finance leases during 2018 or 2017. The amount of depreciation expense charged to the
statement of comprehensive income in respect of such assets was £nil in 2018 and 2017.
53
Oncimmune�
/ Annual Report 2018
11. Intangible Assets
Cost
At 31 May 2017
Additions
Disposals
At 31 May 2018
Depreciation
At 31 May 2017
Charge for the year
At 31 May 2018
Net book values
At 31 May 2018
At 31 May 2017
All intangible assets are from internal development.
12. Trade and other receivables
Trade receivables
Other debtors
Prepayments and accrued income
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Intangible Assets
£’000
558
281
-
839
40
128
168
671
518
May 2018
May 2018
£’000
£’000
162
89
40
291
50
191
20
261
At 31 May 2018 trade receivables were stated net of provisions of £nil (2017 - £nil). The remaining balances were considered
recoverable on normal trade terms. There is no material difference between the fair value and the varying value of these
assets. The maximum credit risk exposure at the reporting date equated to the fair value of trade receivables as stated
net of provisions. Standard payment terms are 30 days net.
13. Inventories
Diagnostic testing materials
May 2018
May 2017
£’000
£’000
295
295
323
323
Inventory is stated net of a £193,000 provision (2017: £501,000). During the year inventory with a gross value and
impairment provision of £308,000 was written off in full due to obsolescence.
Annual Report 2018
/ Oncimmune�
54
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
14. Cash and cash equivalents
Cash balances at the end of each year are as follows:
Cash and cash equivalents per statement of financial position
Cash per statement of cash flows
15. Trade and other payables
Trade payables
Other creditors
Accruals and deferred income
16. Borrowing
May 2018
May 2017
£’000
12,953
12,953
£’000
5,075
5,075
May 2018
May 2017
£’000
£’000
402
181
225
808
590
122
135
847
The Group uses bank overdrafts, bank and other loans to finance acquisitions; the following balances remain outstanding
as shown:
4
Current
Other loans
May 2018
May 2017
£’000
£’000
-
-
502
502
The Company had taken out a venture loan facility originally of €1,862,649 (approximately £1.5m), from Harbert European
Speciality Lending Company Limited ('Harbert'), repayable in equal instalment over the period to 31 January 2018 at an
interest rate of 10%, plus a further 3% to be paid with the final instalment. The facility was secured by a fixed and floating
charge over the company's assets and undertaking. As at the year end £nil was falling due within one year and £nil was
falling due after one year (2017: £502,281 and £nil respectively). The loan was repaid in full during the financial year.
17. Lease commitments
At the end of each period the Group had total minimum annual payment commitments under non-cancellable operating
lease agreements as set out below:
Land and buildings
Operating leases which expire:
Within one year
In two to five years
In over five years
55
Oncimmune�
/ Annual Report 2018
May 2018
May 2017
£’000
£’000
257
234
-
491
21
-
-
21
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
18. Share capital
Authorised:
May 2018
May 2017
Shares
£
Shares
£
Ordinary shares of £0.01 each
64,102,560
641,025
57,115,594
Allotted, called up and fully paid:
Ordinary shares of £0.01 each
-
641,025
61,626,327
616,263
51,024,404
61,626,327
616,263
51,024,404
571,155
571,155
510,244
510,244
19. Share based payments
The Group has granted options to certain directors and employees in respect of Ordinary shares
The Group has the following share options schemes in place:
The 2005 Share Option Scheme
The 2005 Share Option Scheme has the following principal terms:
• the scheme is limited to eligible persons, being employees, officers, SAB members and consultants of the Group;
• the scheme provides for options to be granted to eligible persons to subscribe for ordinary shares of 0.01p each in the
capital of Oncimmune Holdings Plc;
• the scheme was limited to options over 14,500 ordinary shares in Oncimmune Limited (now 725,000 options over
Ordinary shares of Oncimmune Holdings Plc), all of which have been granted and options may be issued under the
Enterprise Management Incentive (EMI) rules or as unapproved options;
• no option may be exercised later than the tenth anniversary of the date of grant, extended to 20 years for certain
option holders;
• each option issued under the scheme had a vesting period commencing for employees, officers and consultants on
the first anniversary of the date of the grant and expiring on the fourth anniversary of the date of grant and for SAB
members commencing on the second anniversary and expiring on the fourth anniversary of the date of grant;
• options issued under the scheme are non-transferable;
• vested options must be exercised (i) within 24 months of an option holder's death; (ii) within 3 months of an option
holder ceasing to hold office for reasons of disability, redundancy or retirement (unless otherwise agreed by the
Directors); and (iii) within 6 months of an option holder’s resignation (if an employee, officer or consultant of the
Operating Group) and within 24 months of an option holder’s resignation (if an SAB member), or in each case the
options shall lapse
•
If an option holder shall leave the Operating Group for any reason, options granted to that option holder shall only be
exercisable in the Directors' discretion;
• on 'takeover' of Oncimmune Holdings Plc where a general offer is made to acquire the whole of the issued share
capital of Oncimmune Holdings Plc (or any class of share capital of Oncimmune Holdings Plc), the acquiring company
may make a 'rollover' offer to the option holders, which the option holders shall be deemed to accept, such that their
options shall rollover into options in the acquiring company upon the same terms; and
• Oncimmune Holdings Plc may at any time add to or vary the scheme rules provided that this does not affect the
liabilities of any option holder.
Annual Report 2018
/ Oncimmune�
56
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The 2007 Share Option Scheme
The 2007 Share Option Scheme is on the same principal terms as the 2005 Share Option Scheme save that:
• the scheme was limited to an additional 25,029 (increased to 68,056 options over ordinary shares in Oncimmune
Limited and which rolled over 3,402,800 options over Ordinary Shares), of which 23,511 options over ordinary shares
in Oncimmune Limited (rolled over into 1,175,550 options over Ordinary Shares of Oncimmune Holdings Plc) have
been granted;
• the vesting period for all options issued under the scheme commenced on the first anniversary of the date of grant
and expired on the third anniversary of the date of grant, and;
• vested options must be exercised (i) within 12 months of an option holders death; (ii) within 3 months of an option
holder ceasing to hold office for reasons of disability, redundancy or retirement (unless otherwise agreed by the
Directors) and (iii) on or before an option holders resignation, or in each case the options shall lapse.
In November 2015, the two existing option schemes were rolled over into the 2015 Oncimmune Holdings Scheme on the
terms set out above.
Options in grant
Weighted average exercise price
Weighted average life remaining in years
*Share options issued by Oncimmune Limited
May 2018
May 2017
Number of
options
Number of
options*
4,391,765
3,650,550
£0.86
£0.77
6
5
The fair value of options granted by the Company has been arrived at using the Black-Scholes model. The assumptions
4
inherent in the use of this model are as follows:
Volatility
Dividend yield
Risk free rate
Discount factors
May 2018
May 2017
20%
0%
3%
10%
20%
0%
3%
10%
• The option life is assumed to be at the end of the allowed period
• Historical staff turnover is taken into account when determining the proportion of granted options that are likely to
vest by the end of the period
• Following the application of the vesting probability assumptions, there are no further vesting conditions other than
remaining in employment with the Company during the vesting period
• No variables change during the life of the option (e.g. dividend yield)
• Volatility has been estimated as there is no history of the Company’s share price.
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Consolidated Financial Statements
Notes to the Consolidated Financial Statements
At the period end each year the Group had the following options at the weighted average exercise prices (WAEP) shown:
Expiry date
Outstanding at 1 June (2017, 2016)
Granted
Lapsed
Modified
Exercised
WAEP
0.83
May 2017
Number
1,825,550
-
1,825,000
WAEP
0.77
-
May 2018
Number
3,650,550
913,531
(147,315)
(25,000)
Outstanding at 31 May(2018, 2017)
0.86
4,391,765
0.77
3,650,550
Weighted average remaining contractual life in
years
6
5
The options are subject to the rules of 2016 Share Option plan (an amalgamation of the Company’s 2005 and 2007
Share option Plans).
The Group recognised total expenses in respect of the option schemes above of £138,065 (2017: £74,435) related to
equity-settled share based payment transactions during the year.
Warrants
The group has warrants outstanding as follows, over the £0.01 Ordinary Shares:
Expiry date
Outstanding at 1 June 2016:
Directors
Harberts European Growth Fund
Zeus Capital
Granted in the year
Outstanding at 31 May 2017:
Grant date
Number
Subscription
price
November
2015
May 2016
May 2016
988,750
£0.01
282,515
£0.66368
1,041,314
£1.30
Nil
2,322,579
20. Related party transactions
During the year ended 31 May 2018, the University of Nottingham - a shareholder, and Wisteria - where the CFO is a
director, provided services to the group as shown below. University of Nottingham provided facilities and services to
enable the Company to undertake research whilst Wisteria provided bookkeeping services.
Costs incurred
Outstanding at year end
Wisteria
University of Nottingham
May 2018
May 2017
May 2018
May 2017
£’000
£’000
£’000
£’000
39
4
44
8
163
64
174
39
Also, at year end £806 (2017: £243), £4,805 (2017: £6,703) and £1,241 (2017: £9,035) was outstanding to Andrea Murray,
Andrew Millet and Geoffrey Hamilton-Fairley respectively.
Annual Report 2018
/ Oncimmune�
58
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
21. Categories of financial instruments
Current financial assets
Loans and receivables
Cash and cash equivalents
Total financial assets
Non-financial assets
Total
Non-current financial liabilities
At amortised cost - borrowings
Current financial liabilities
At amortised cost - borrowings
At amortised cost - payables
Total current financial liabilities
Non financial liabilities
Total current liabilities
22. Loss per share
May 2018
May 2017
£’000
£’000
291
12,953
13,244
-
13,244
-
-
849
849
-
849
261
5,075
5,336
-
5,336
-
502
901
1,403
-
1,403
The basic per share is calculated by dividing the loss attributable to the owners of Oncimmune Holdings Plc by the
weighted average number of ordinary shares in issue during the year. Diluted earnings per share has not been calculated
4
as the entity is loss making.
Earnings
May 2018
May 2017
Loss on ordinary activities for the purposes of basic and fully diluted loss per share
(£'000)
(6,342)
(5,023)
Loss on ordinary activities for the purposes of basic and fully diluted loss per share
(£'000) (before highlighted items)
-
-
Number of shares
Weighted average number of shares for calculating basic and fully diluted earnings
per share
55,558,178
51,024,404
Loss per share
Basic and fully diluted loss per share
Basic and fully diluted loss per share (before exceptional items)
11.41p
11.41p
9.84p
9.84p
59
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Consolidated Financial Statements
Notes to the Consolidated Financial Statements
23. Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (interest rate risk), credit risk and liquidity risk.
Market risk - Foreign exchange risk
As disclosed in note 4 in the years to 31 May 2018 and 31 May 2017 over 43% of the Group's income by destination was
into the North American market and denominated in US dollars. The Group's income stream is exposed to fluctuations in
the US dollar exchange rate against Sterling.
Market risk - Interest rate risk
The Group carries borrowings in the form of other loans as all borrowings are on fixed interest terms, the directors
consider that no risk arises in respect of future cash flows.
Market risk - Price risk
The Group is not exposed to either commodity or equity securities price risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
the Group. In order to minimise this risk the Group endeavours only to deal with companies which are demonstrably
creditworthy. In addition, a significant proportion of revenue results from cash transactions. The aggregate financial
exposure is continuously monitored. The maximum exposure to credit risk is the value of the outstanding amount
of trade receivables. The management do not consider that there is any concentration of risk within either trade or
other receivables.
Annual Report 2018
/ Oncimmune�
60
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Liquidity risk
The Group currently holds cash balances to provide funding for normal trading activity. The Group also has access to
both short term and long term borrowings . Trade and other payables are monitored as part of normal management
routine.
Borrowings and other liabilities mature according to the following schedule:
2018
Trade payables
Other taxation and social security
Other creditors
Accruals and deferred income
2017
Trade payables
Other taxation and social security
Other creditors
Accruals and deferred income
Other loans
Within 1 year
One to five
years
£’000
£’000
402
41
181
225
-
-
-
-
Within 1 year
One to five
years
£’000
£’000
590
57
122
135
502
-
-
-
-
-
4
Capital risk management
The Group' s capital management objectives are:
• to ensure the Group's ability to continue as a going concern; and
• to provide an adequate return to shareholders
• by pricing products and services commensurate with the level of risk.
The Group monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on
the face of the statement of financial position.
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Consolidated financial statements
Subtitle
May 2018
May 2017
£’000
13,562
12,953
26,515
-
-
£’000
5,064
5,075
10,139
502
502
Total equity
Cash and cash equivalents
Capital
Total financing
Borrowings
Overall financing
Capital to overall financing ratio
N/A
2,019.7%
24. Events after the balance sheet date
There were no events after the balance sheet date.
25. Subsidiaries consolidated
The subsidiaries included in the consolidated financial statements of the Group are detailed below. No subsidiary
undertakings have been excluded from the consolidation.
Company
Country of incorporation
Class of share capital
held
Oncimmune Limited
United Kingdom
Ordinary
Oncimmune (USA) LLC
United States of America
Ordinary
Holding
Direct
Indirect
%
100
%
100
26. Ultimate controlling party
There is no ultimate controlling party of the Company.
Annual Report 2018
/ Oncimmune�
62
Parent Company Financial Statements
Company Statement of Financial Position | For The Year Ended 31 May 2018
Company Statement of Financial Position
For The Year Ended 31 May 2018
Fixed Assets
Investment
Current assets
Cash
Debtors
Creditors: amounts falling due within one year
Net current assets
Total assets less current liabilities
Capital and reserves
Called up share capital
Share premium account
Profit and loss reserve
Other reserves
Shareholders’ funds
Notes
3
4
5
6
7
31 May
2018
£’000
31 May
2017
£’000
348
348
4,364
23,636
28,000
393
27,607
27,955
616
30,952
(4,764)
1,151
27,955
25
14,298
14,323
184
14,139
14,487
510
16,273
(3,309)
1,013
14,487
In accordance with the exemptions permitted by section 408 of the Companies Act 2006, the profit and loss account of
the parent company has not been presented. The parent company loss for the year ended 31 May 2018 was £1,455,000
(2017: £823,000).
The accompanying notes on pages 65 to 70 form an integral part of the company financial statements.
The parent company financial statements were approved by the board on 30 October 2018.
Andrew Millet
Director
5
5
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Parent Company Financial Statements
Company Statement of Changes in Equity | For The Year Ended 31 May 2018
Company Statement of Changes in Equity
For The Year Ended 31 May 2018
As at 1 June 2016
Loss for the year
Total comprehensive income
Transactions with owners:
Share option charge
As at 31 May 2017
Loss for the year
Total comprehensive income
Transactions with owners:
Shares issued during the
year
Share option charge
As at 31 May 2018
Share
Share
capital
premium
£'000
510
£'000
16,273
-
-
-
-
-
-
510
16,273
106
-
616
14,679
-
30,952
Other
reserves
Retained
earnings
£'000
939
-
-
74
1,013
-
138
1,151
£'000
(2,486)
(823)
(823)
-
(3,309)
(1,455)
(1,455)
-
-
(4,764)
Total
£'000
15,236
(823)
(823)
74
14,487
(1,455)
(1,455)
14,785
138
27,955
The accompanying notes on pages 65 to 70 form an integral part of the company financial statements.
Annual Report 2018
/ Oncimmune�
64
Parent Company Financial Statements
Notes to the Company Financial Statements
Notes to the Company Financial Statements
1. Accounting policies
The principal accounting policies applied in the preparation of the Company's financial statements are set out below.
Statement of compliance
The separate financial statements of the Company are presented in accordance with Financial Reporting Standard 101 –
‘The Reduced Disclosure Framework’. They have been prepared under the historical cost convention.
Adoption of FRS 101
The Company financial statements were prepared in accordance with United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosure Framework. There were no
material amendments for all periods presented on the adoption of FRS 101, following the transition from IFRS to FRS 101.
Disclosure exemptions adopted
In preparing these financial statements the Company has taken advantage of all disclosure exemptions available under
FRS 101. Therefore these financial statements do not include:
• The requirements of IFRS 7 Financial Instruments: Disclosures, as equivalent disclosures are included in the
consolidated financial statements of the group in which the entity is consolidated
• The requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in
respect of:
• paragraph 73 of IAS 16 Property, Plant and Equipment;
• paragraph 118 of IAS 38 Intangible Assets;
• The requirements of paragraphs 10(d) and 111 (statement of cash flows), 134 to 136 (managing capital), and 16
(statement of compliance with IFRS) of IAS 1 Presentation of Financial Statements.
• The requirements of IAS 7 Statement of Cash Flows and related notes.
• The requirements of paragraph 17 of IAS 24 Related Party Disclosures.
• The requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two
or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such
a member.
5
• The requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairment of
Assets, provided that equivalent disclosures are included in the consolidated financial statements of the group in
which the entity is consolidated.
• The requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share Based Payments, provided that equivalent
disclosures are included in the consolidated financial statements of the group in which the entity is consolidated.
The effects of future accounting standards not adopted.
The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The
areas involving a high degree of judgement or complexity, or areas where assumptions and estimates are significant to
the consolidated financial statements, are disclosed in note 2.
The financial statements of the Company have been prepared on a going concern basis and under the historical cost
convention. The financial statements are presented in sterling and have been rounded to the nearest thousand (£’000).
65
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Parent Company Financial Statements
Notes to the Company Financial Statements
Investments
Investments in subsidiaries are valued at cost less impairment.
Impairment testing of non-current assets
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some
are tested at cash-generating unit level. All other individual assets or cash-generating units are tested for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's or cash-generating unit's carrying amount exceeds
its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to
sell, and value in use based on an internal discounted cash flow evaluation. All assets are subsequently reassessed for
indications that an impairment loss previously recognised may no longer exist.
Taxation
Income tax on the profit or loss for the year comprises current and deferred tax.
Current tax is the expected tax payable on the taxable income for the year, using current rates, and any adjustments to
the tax payable in respect of previous years. In so far as group companies are entitled to UK tax credits on qualifying
research and development expenditure, such amounts are recognised when received.
Deferred taxation is provided on all temporary differences between the carrying amount of the assets and liabilities in the
financial statements and the tax base. Deferred tax assets are recognised only to the extent that it is probable that future
taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets and liabilities
are not discounted. Deferred tax is determined using the tax rates that have been enacted or substantially enacted by the
balance sheet date, and are expected to apply when the deferred tax liability is settled or the deferred tax asset is realised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries except where the timing of the
reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not
reverse in the foreseeable future.
Tax is recognised in the statement of comprehensive income, except where it relates to items recognised directly in
equity, in which case it is recognised in equity.
Annual Report 2018
/ Oncimmune�
66
Parent Company Financial Statements
Notes to the Company Financial Statements
Share based compensation
Equity-settled share-based payments are recognised as an expense in profit or loss, based on the fair value of the option
at the date of grant. Such costs are spread over the vesting period, adjusted for the best available estimate of the
number of share options expected to vest, with a corresponding credit to equity, net of deferred tax where applicable.
Such adjustments are only made in respect of non-market performance vesting conditions. No adjustment is made to
the expense recognised in prior periods if fewer share options ultimately are exercised than originally estimated. Vesting
conditions relate to continuing employment.
On the re-organisation in November 2015 the existing Oncimmune Limited schemes were rolled over into the 2015
Oncimmune Holdings Plc scheme with Oncimmune Holdings Plc taking on the obligation for the exercise of the options.
Modification accounting was performed resulting in the incremental fair value at the date of the modification being
calculated. The incremental fair value is the excess of the fair value of the award immediately after the modification over the
fair value immediately before the modification. Where the was an incremental fair value this was charged over the remainder
of the vesting period, together with the original charge relating to the grant date of the original reward. Recognition of a
cost of investment in Oncimmune Holdings Plc and a corresponding reserve in respect of the fair value of the options rolled
over was considered, however no investment was recognised as the amount was not considered material.
Where the granting of share options has coincided with the issue of shares, for cash, to third party investors, the fair value
of such options is based on the issue price for those shares which is considered to be an arm's length value.
Financial instruments
Financial instruments are assigned to their different categories by management on initial recognition, depending on the
contractual arrangements.
Financial assets
The Company’s financial assets fall within the heading of ‘Loans and receivables’. Loans and receivables comprise trade
and certain other receivables as well as cash and cash equivalents.
Loan and receivables are recognised when the Group becomes a party to the contractual provisions of the instrument
and are recognised at fair value and subsequently measured at amortised cost using the effective interest method less
any provision for impairment, based on the receivable ageing, previous experience with the debtor and known market
intelligence. Any change in their value is recognised in the statement of comprehensive income.
Derecognition of financial assets occurs when the rights to receive cash flows from the investments expire or are
transferred and substantially all of the risks and rewards of ownership have been transferred. An assessment for
impairment is undertaken at least at each balance sheet date whether or not there is objective evidence that a financial
asset or a group of financial assets is impaired.
5
Financial liabilities
The Company’s financial liabilities comprise borrowings, a convertible loan and trade and other payables.
Financial liabilities are initially recognised at the fair value of the consideration received net of issue costs. After initial
recognition borrowings are measured at amortised cost using the effective interest method. All interest-related charges
are included in the statement of comprehensive income line item “finance expense”. Financial liabilities are derecognised
when the obligation to settle the amount is removed.
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Parent Company Financial Statements
Notes to the Company Financial Statements
Convertible loan notes
Convertible loan notes where the conversion option does not meet the definition of equity are accounted for as financial
liabilities. The instruments are split between:
• the "host" debt instrument being a non-convertible debt. The host contract is recognised at fair value and subsequently
measured at amortised cost using the effective interest rate;
• an embedded derivative representing the conversion feature.
The valuation of the embedded derivative is performed at inception of the loan and at the end of each reporting period.
The residual value is then allocated to the host debt instrument.
Warrants to purchase shares
Warrants to purchase shares that do not meet the definition of equity instruments are accounted for as derivative liabilities.
The valuation is performed at inception and at each subsequent reporting with movements recognised in profit or loss.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call, together with other short term highly liquid
investments which are not subject to significant changes in value and have original maturities of less than three months.
Equity
Equity comprises the following:
• Share capital: the nominal value of equity shares.
• Share premium: includes any premium received on the sale of shares. Any transaction costs associated with the
issuing of shares are deducted from share premium, net of any income tax benefits.
• Other reserves – accumulated share based payment expense
• Profit and loss account: retained profits
The company has applied S612 merger relief by treating the cost of investment arising from the reorganisation as equal to
the nominal value of shares issued (thus disregarding any premium arising).
2. Accounting estimates and judgements
The preparation of financial statements under IFRS requires the Company to make estimates and judgements that affect
the application of policies and reported amounts. Estimates and judgements are based on historical experience and other
factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results
may differ from these estimates.
The key estimate and judgements which have a significant risk of causing a material adjustment to the carrying amount of
assets and liabilities is discussed below:
Impairment
An impairment loss is recognised for the amount by which the asset's or cash generating unit's carrying amount exceeds its
recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each
cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows.
In the process of measuring expected future cash flows management makes assumptions about future operating results.
These assumptions relate to future events and circumstances. In most cases, determining the applicable discount rate
involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.
Annual Report 2018
/ Oncimmune�
68
Parent Company Financial Statements
Notes to the Company Financial Statements
3. Investments
At 31 May 2017
Additions
At 31 May 2018
Investments in
subsidiary
£’000
348
-
348
Details of subsidiary undertakings as at 31 May 2018 are as follows:
Company
Country of incorporation
Class of share capital
held
Oncimmune Limited
United Kingdom
Ordinary
Oncimmune (USA) LLC
United States of America
Ordinary
Holding
Direct
Indirect
%
100
%
100
4. Cash and cash equivalents
Cash
5. Trade and other receivables
Loan to subsidiary undertakings
Other debtors
5
May 2018
May 2017
£’000
4,364
4,364
£’000
25
25
May 2018
May 2017
£’000
23,551
85
23,636
£’000
14,192
106
14,298
At 31 May 2018 receivables were stated net of provisions of £nil. There is no material difference between the fair value
and the varying value of these assets. The maximum credit risk exposure at the reporting date equated to the fair value
of trade receivables as stated net of provisions.
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Parent Company Financial Statements
Notes to the Company Financial Statements
May 2018
May 2017
£’000
111
111
87
8
76
393
£’000
106
37
33
8
-
184
May 2018
May 2017
Shares
£
Shares
£
64,102,560
-
641,025
641,025
57,115,594
57,115,594
61,626,327
61,626,327
616,263
51,024,404
616,263
51,024,404
571,115
571,115
510,244
510,244
6. Trade and other payables
Trade payables
Amounts owed to group undertakings
Other creditors
Accruals
Current tax
7. Share capital
Authorised:
Ordinary shares of £0.01 each
Allotted, called up and fully paid:
Ordinary shares of £0.01 each
8. Employee remuneration
Share based payments expense
Salary, fees, bonuses and other short term emoluments
Social security costs
May 2018
May 2017
£’000
£’000
138
693
9
840
74
436
44
554
Annual Report 2018
/ Oncimmune�
70
Company Information
Company registration number
09818395
Registered office
Clinical Sciences Building
City Hospital
Hucknall Road
Nottingham
NG5 1PB
Website
www.oncimmune.com
Directors
Meinhard Folkert Schmidt
Non-Executive Chairman
Dr. Adam Mark Hill
Chief Executive Officer
Andrew Millet
Chief Financial Office
Timothy Brian Bunting
Non-Executive Director
Geoffrey Neil Hamilton-Fairley
Non-Executive Vice Chairman
Julian Clement Hirst
Non-Executive Director
Dr. Annalisa Mary Jenkins
Non-Executive Director
Dr. Carsten Schroeder
Non-Executive Director
Richard Simon Sharp
Non-Executive Director
Dr. Cheung To
Non-Executive Director
Andrew Vaughan Unitt
Non-Executive Director
Secretary
Andrew Millet
Nominated Adviser and Broker
Zeus Capital Limited
10 Old Burlington Street
London
W1S 3AG
Joint Brokers
Berenberg
60 Threadneedle Street
London EC2R 8HP
Bryan Garnier & Co
Beaufort House, 15 St Botolph Street
London EC3A 7BB
Zeus Capital Limited
10 Old Burlington Street
London
W1S 3AG
Legal adviser
Peachey & Co LLP
95 Aldwych
London
WC2B 4JF
Auditor
Grant Thornton UK LLP
Chartered Accountants
Statutory Auditor
Victoria House, 4th Floor
199 Avebury Boulevard
Milton Keynes
MK9 1AU
Financial PR
Consilium Strategic Communications
41 Lothbury
London
EC2R 7HG
Registrars
Link Asset Services
65 Gresham Street
London
EC2V 7NQ
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Oncimmune Holdings Plc
Company registration number
09818395
Phone
+44 (0)115 8231869
Email
contact@oncimmune.co.uk
Registered Address
Clinical Sciences Building, City Hospital
Hucknall Road, Nottingham, NG5 1PB
Fax
+44 (0)115 8231958
Website
www.oncimmune.co.uk