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ReNeuron Group plc, 10 Nugent Road,
Surrey Research Park,
Guildford GU2 7AF, UK
[t] +44 (0) 1483 302560
[f] +44 (0) 1483 534864
[e] info@reneuron.com
www.reneuron.com
A N N U A L R E P O R T & A C C O U N T S 2 0 1 3
ReNeuron in Summary
We are a leading, clinical-stage stem cell business. Our primary
objective is the development of novel stem cell therapies
targeting areas of significant unmet or poorly met medical
need.
OUR PRODUCTS AND
TECHNOLOGIES
We have used our unique stem cell technologies to develop
cell-based therapies for significant disease conditions where the
cells can be readily administered “off-the-shelf” to any eligible
patient without the need for additional drug treatments. Our
lead therapeutic candidate is our ReN001 stem cell therapy for
the treatment of patients left disabled by the effects of a stroke.
This treatment is currently in clinical development. We are also
developing stem cell therapies for other conditions such as
critical limb ischaemia, a serious and common side effect of
diabetes, and blindness-causing diseases of the retina. We have
also developed a range of stem cell lines for non-therapeutic
applications – our ReNcell® products for use in academic and
commercial research. Our ReNcell®CX and ReNcell®VM neural
cell lines are marketed worldwide under license by USA-based
Merck Millipore.
OUR STRATEGY
Our aim is to develop best-in-class stem cell therapies in our
particular areas of therapeutic focus. Our principal strategy is
to gain early clinical validation for our cell therapy programmes
via well-designed clinical trials in well-regulated territories.
Ultimately, we expect to realise value for our technologies and
therapeutic programmes via out-license or sale to commercial
development partners at the appropriate points in their
development.
ReNeuron Annual Report & Accounts 2013
Contents
Highlights
Chairman’s and Chief Executive Officer’s Joint
Statement
Business Review
Directors and advisers
Board of Directors
Directors’ report for the year ended 31 March 2013
Independent auditors’ report to the members of
ReNeuron Group plc
Group Statement of Comprehensive Income for the
year ended 31 March 2013
Group and Parent Company Statements of Financial
Position as at 31 March 2013
Group and Parent Company Statements of Changes
in Equity for the year ended 31 March 2013
Group and Parent Company Statements of Cash
Flows for the year ended 31 March 2013
Notes to the financial statements for the year ended
31 March 2013
Glossary of scientific terms
Notice of Annual General Meeting
1
2
5
7
8
10
22
23
24
25
27
28
53
55
Highlights
• ReN001 stem cell therapy candidate for stroke:
— Dosing complete in Phase I clinical trial
— Encouraging Phase
I
interim data presented at
European Stroke Conference
— Phase II clinical trial expected to commence in UK later
this year
•
ReN009 stem cell therapy candidate for critical limb
ischaemia:
•
•
Share Placing announced to raise £25.35 million, before
expenses, fully funding core therapeutic programmes
through key Phase II clinical trials over next three years
Further grant package totalling £7.8 million from Welsh
Government
— Grant funding will enable establishment of cell
manufacturing and development facility in South
Wales over next two years, for late stage clinical and
commercial product requirements
— Regulatory and ethical approvals received for Phase I
clinical trial – study expected to commence in UK later
this year
• Non-dilutive grants and contributions in kind totalling £2.5
million awarded during the period from UK Government,
via Technology Strategy Board and Cell Therapy Catapult
•
ReN003 stem cell therapy candidate for retinitis pigmentosa:
•
— Further positive pre-clinical efficacy data generated and
late pre-clinical development programme underway
— Phase I/II clinical trial application planned for mid-2014
in US and UK
Loss for the period of £6.3 million (2012: £6.2 million); cash
outflow from operating activities of £6.0 million (2012:
£5.8 million); cash and cash equivalents at 31 March 2013
of £3.5 million (2012: £4.0 million)
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Annual Report & Accounts 2013 ReNeuron | 1
Chairman’s and Chief Executive Officer’s Joint Statement
Review of Operations
Therapeutic programmes
During the financial year, we made good progress with our
ReN001 stem cell candidate for stroke disability. Interim data
from the first nine patients treated in the PISCES Phase I clinical
trial with ReN001 were presented by the clinical team from
Glasgow’s Southern General Hospital at the 22nd European
Stroke Conference in London in May of this year. There were
no cell-related or immunological adverse events reported in any
of the patients treated and sustained reductions in neurological
impairment and spasticity were observed in most patients
compared with their stable pre-treatment baseline performance.
Since the above data were collated, the remaining patients in
the PISCES study have been treated and are all now through
their short term follow-up period, with no cell-related or
immunological adverse events reported.
During the period, we cleared all points arising from the regulatory
review of our proposed UK multi-site Phase II clinical trial to
examine the efficacy of ReN001 in disabled stroke patients. This
Phase II study has been adopted by the NHS National Institute
for Health Research Stroke Research Network (SRN), enabling us
to work closely with the SRN to optimise performance against
defined targets regarding site set-up, patient recruitment and
monitoring activities across the various sites participating in the
study. The SRN has also adopted a separate non-interventional
protocol to allow for the pre-screening of potentially eligible
patients for the Phase II study at the sites concerned. This
separate protocol will enable such patients to be identified in
good time while still in acute stroke care at the hospital.
As planned, we are now preparing a data package including
three month follow-up data on the final dose cohort in the
PISCES study in order to obtain final regulatory and ethical
approvals for the Phase II clinical trial with ReN001. Assuming
approvals are granted, we expect to commence recruitment
into the Phase II study later this year.
During the period, we received regulatory and ethical approvals
to commence a Phase I clinical trial in the UK with our ReN009
stem cell therapy programme targeting the major unmet
medical need, critical limb ischaemia (CLI). CLI represents the
second major disease target after stroke for our lead CTX stem
cell line and is based on a number of pre-clinical studies showing
dose-dependent positive effects of the CTX cells in restoring
microvasculature and blood flow to the limb extremities in animal
models of lower limb ischaemia. Our ReN009 therapy therefore
offers the potential for an allogeneic (non-donor specific) and
cost-effective cell-based treatment for CLI patients with the aim
of restoring sufficient blood flow in the affected lower limb
2 | ReNeuron Annual Report & Accounts 2013
to avoid amputation and the severe health consequences that
typically result from such an amputation.
The Phase I clinical trial will be undertaken through NHS Tayside
at Ninewells Hospital and Medical School, Dundee, Scotland.
In this dose escalation safety study, the ReN009 cells will be
administered via straightforward intramuscular injection into
the affected lower limb of nine patients with peripheral arterial
disease. Approval may be sought in due course for a further
clinical site in Germany to participate in the study.
During the period, we were awarded a Late Stage Biomedical
Catalyst grant of £0.4 million from the Technology Strategy
Board, the UK Government’s innovation agency, to be
deployed towards the cost of the ReN009 Phase I study. We
expect recruitment and dosing of patients in the clinical trial to
commence later this year. The straightforward nature of both
the ReN009 treatment and the design of the Phase I clinical
trial is expected to lead to progression into a larger placebo-
controlled Phase II efficacy study during the second half of
2014, assuming the Phase I primary safety end-point is met.
Our ReN003 programme, based on our human retinal progenitor
(hRPC) cells, also made good progress during the period, initially
targeting the blindness-causing disease, retinitis pigmentosa. A
late pre-clinical testing programme has now commenced with
the ReN003 therapy, in collaboration with academic partners
in both the US and at the UCL Institute of Ophthalmology in
London. During the period, our US academic collaborators
generated further pre-clinical efficacy data demonstrating that
the hRPC cells are able to enhance visual acuity in a standard
rodent model of blindness caused by the loss of photoreceptors
in the retina.
During the period, we were awarded a further Early Stage
Biomedical Catalyst grant of £0.8 million from the Technology
Strategy Board to be deployed towards the cost of the late pre-
clinical development of the ReN003 programme through to the
clinic. We are currently developing the protocol for an initial
Phase I/II clinical trial with our ReN003 therapy in the UK and
US, in retinitis pigmentosa patients. We have commenced our
interactions with the US FDA regarding pre-filing regulatory
advice on this programme, with a view to filing for regulatory
approvals for the initial clinical study in the middle part of 2014.
Other activities
During the period, two important new papers regarding our
lead CTX stem cell line were published in the leading peer-
reviewed scientific journals, Cell Transplantation and PLOS ONE.
The papers describe further non-clinical studies undertaken by
ReNeuron researchers and our academic collaborators at King’s
College London, demonstrating the mechanisms by which the
CTX cells may promote repair in a stroke-damaged brain.
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Earlier this month, the influential House of Lords Select
Committee on Science and Technology published its findings
and recommendations arising from an inquiry to identify
potential barriers to the development and commercialisation of
regenerative medicine therapies in the UK. ReNeuron gave both
written and oral evidence to the Committee and the Company
is widely referred to in the Committee’s published report. As
one of the UK’s foremost players in the field, we hope and
expect the Company to benefit from the recommendations in
the report if they are fully implemented.
Transformational funding
During the period, and thereafter, we have been successful
in transforming the financial position and future prospects of
the Company. On 22 July 2013 we announced a £33 million
financing package for the Company, composed of a Placing
to raise £25.35 million, before expenses, and a £7.8 million
grant package from the Welsh Government to establish a cell
manufacturing and development facility in South Wales for
late stage clinical and commercial product requirements. The
Company will move its principal operations to this facility as it is
phased in over the next two years.
The above financing provides funding for the business over
the next three years and will enable us to take all of our core
therapeutic programmes through key Phase II trials and to
consequent value inflection through commercial development
deals or a broader strategic transaction. It will also enable us to
secure manufacturing capability, and margin, as our therapeutic
candidates move closer to market.
We have previously stated our intention to make greater use
of non-dilutive grants and similar funding sources that have
become available over the last eighteen months. We have
succeeded in this aim, having secured in excess of £10 million
of such commitments in this calendar year alone, including
the Welsh Government grant package announced today. As
mentioned above, we were also awarded two separate grants,
totalling £1.2 million, from the UK Biomedical Catalyst during
the period to pursue the further development of our ReN009
and ReN003 stem cell therapy candidates. Further, during the
period, we were the first UK cell therapy business to enter
into a collaboration with the newly established Cell Therapy
Catapult, one of a number of innovation centres established by
the UK Government, through the Technology Strategy Board,
to accelerate the UK’s commercial capability in strategically
important technology areas. The collaboration will focus on
the development and optimisation of the processes required to
scale up manufacture of our CTX cell line, as well as improving
potency assays for the CTX cells, based on the characteristics
of the cells and their potential mechanisms of action. The
Catapult will contribute £1.3 million into the collaboration, to
be provided in the form of expert knowledge, plus state-of-the-
art laboratories, equipment and services.
The grant awarding bodies mentioned above, together with
the specialist life science equity investors participating in
the equity financing announced today, have subjected our
programmes to considerable due diligence and expert peer
review in arriving at their investment decisions. We therefore
regard these investments into our business as representing a
strong independent endorsement of our world-class stem cell
development capabilities and our progress to date.
Summary of results
In the year to 31 March 2013, revenues were £17,000 (2012:
£40,000), representing royalty income from the Group’s non-
therapeutic licensing activities.
Net operating expenses in the year were £7.1 million (2012: £6.9
million). Research and development expenditure reduced in the
year to £4.8 million (2012: £4.9 million), reflecting lower clinical
and manufacturing development costs. General and administrative
costs in the year increased to £2.3 million (2012: £2.1 million),
primarily as a result of an increase in professional fees.
Interest received reduced in the year to £30,000 (2012: £40,000)
as a result of lower average levels of cash deposits held over the
period.
The Group accrued a research and development tax credit of
£0.7m during the year (2012: £0.6m), the higher claim reflecting
the removal of the PAYE/NI cap in the financial year.
As a result of the above income statement movements, the
post-tax loss for the year increased to £6.3 million (2012: £6.2
million). The basic and diluted loss per share reduced to 0.8p per
share (2012: 1.0p loss), reflecting a combination of an increased
loss and the full year effect of the increase in ordinary shares
in issue following the completion of the placing in April 2012.
Cash used in operating activities increased in the year to £6.0
million (2012: £5.8 million), due to a combination of a higher
loss before tax and an adverse working capital position. During
the year, the Company raised £6.1 million, before expenses, by
means of a Placing and Open Offer to shareholders.
As a result of the above cash flow movements in the year, the
Group had cash and cash equivalents totalling £3.5 million
as at 31 March 2013 (2012: £4.0 million). Subsequent to the
financial year end, and as mentioned above, the Company
has announced that it expects to raise £25.35 million, before
expenses, by means of a Placing to shareholders, together with
a £7.8m grant package from the Welsh Government to establish
a cell manufacturing and development facility in South Wales
over the next two years. Following completion of the Placing,
Annual Report & Accounts 2013 ReNeuron | 3
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Chairman’s and Chief Executive Officer’s Joint Statement continued
the directors expect that the Group’s financial resources will be
sufficient to support operations until the third quarter of 2016.
Consequently, the going concern basis has been adopted in the
preparation of these financial statements.
Summary and outlook
Our therapeutic programmes have made considerable progress
during the period under review. The Phase I clinical trial of our
stem cell therapy candidate for stroke has yielded encouraging
data and a Phase II study is planned to commence shortly, as is
a Phase I study with our therapeutic candidate for critical limb
ischaemia. We expect our stem cell therapy candidate for the
blindness-causing disease, retinitis pigmentosa, to enter the
clinic next year.
We have well-defined clinical development plans for these
therapeutic programmes and process development plans to
both enhance and take full control over the manufacture of
our stem cell therapy candidates as they get closer to market.
Crucially, the business is now fully funded to pursue these plans
through to value inflection and commercial deals over the next
three years and we look forward to reporting further progress
towards that end.
On page 55 of this report is the notice of the 2013 Annual
General Meeting (the AGM) to be held at 10:00 am on
13 September 2013. A short explanation of the resolutions to
be proposed at the AGM is set out on page 58. The directors
recommend that you vote in favour of the resolutions to be
proposed at the AGM, as they intend to do in respect of their
own beneficial holdings of ordinary shares. At the end of this
document is a form of proxy for use in connection with the
AGM which, if you wish to vote by way of proxy at the meeting,
should be completed and returned to the Company’s registrars
in accordance with the instructions set out therein so as to be
received not less than 48 hours prior to the AGM.
Bryan Morton
Chairman
9 August 2013
Michael Hunt
Chief Executive Officer
4 | ReNeuron Annual Report & Accounts 2013
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Business Review
ReN001: stem cell therapy for ischaemic
stroke
Overview
Ischaemic stroke accounts for about 80% of strokes and results
from the interruption of arterial blood flow to a focal area of the
brain which causes neuronal death in the affected core region
due to deprivation of oxygen and glucose.
Our ReN001 therapy consists of a neural stem cell line,
designated CTX, which has been generated using our
proprietary cell expansion and cell selection technologies and
then taken through a full manufacturing scale-up and quality-
testing process. As such, ReN001 is a standardised, clinical and
commercial-grade cell therapy product capable of treating all
eligible patients presenting.
The ReN001 cells that are being used in clinical development
are taken from the existing manufactured cell banks that will
form the basis of the eventual marketed product. There will
therefore be no need to re-derive and test new ReN001 cell lines
for subsequent clinical trials or for the market – all such cells
can simply be expanded from the existing banked and tested
product.
Market size
Approximately 150,000 people suffer a stroke in the UK each
year and approximately 800,000 in the US. The vast majority of
these strokes are ischaemic in nature and approximately one
half of all stroke survivors are left with permanent disabilities as
a result of the damage caused to brain tissue arising from the
stroke.
In cost terms, the annual healthcare costs of caring for disabled
stroke patients is estimated to be in excess of £5 billion in the
UK, with stroke patients occupying 25% of long-term hospital
beds. In the US, the equivalent costs are estimated to be in
excess of US$70 billion.
Progress to date
Our ReN001 therapy is currently in clinical development in a
Phase I clinical trial entitled PISCES (Pilot Investigation of Stem
Cells in Stroke). This is the world’s first fully regulated clinical
trial of a neural stem cell therapy for disabled stroke patients.
The primary aim is to test the safety and tolerability of the
treatment in ascending cell doses in patients with moderate to
severe functional neurological impairments resulting from their
stroke. The secondary aim is to evaluate efficacy measures for
the design of future clinical trials, including imaging measures
as well as a number of tests of sensory, motor and cognitive
functions.
All patients in the trial have now been treated. To date, there
have been no cell-related or immunological adverse events
reported in any of the patients. Furthermore, sustained
reductions in neurological impairment and spasticity have been
observed in most patients compared with their stable pre-
treatment baseline performance.
We are now preparing a data package including three month
follow-up data on the final dose cohort in the PISCES study in
order to obtain final regulatory and ethical approvals for a Phase
II clinical trial with ReN001. Assuming approvals are granted, we
expect to commence recruitment into the Phase II study later in
2013.
ReN009 – stem cell therapy for critical
limb ischaemia (CLI)
Overview
Critical limb ischaemia is the severe ‘end stage’ manifestation of
peripheral arterial disease (PAD) and is a common side-effect of
diabetes, as well as strokes and obesity. It is caused by chronic
lack of blood supply to the leg due to obstruction of blood flow
in the peripheral arteries. The condition is characterised by pain
at rest and lesions of the leg. There are no effective therapies
and as many as 50% of CLI patients currently have no treatment
option other than limb amputation.
Market size
There are approximately 160,000 amputations as a result of PAD
in the US every year, and the estimated costs per patient are
>US$90,000 over 2 years and >US$0.5 million over a patient’s
lifetime. Available data shows that, in 2008, the total cost of
inpatient treatment specifically for PAD in the USA was $14.3
billion, of which 71% related to the treatment of CLI.
Progress to date
Following a number of pre-clinical studies showing the
dose-dependent positive effects of our CTX cells in restoring
microvasculature and blood flow to the limb extremities in
animal models of lower limb ischaemia, We have has received
regulatory and ethical approvals to commence a Phase I clinical
trial in the UK which will be undertaken through NHS Tayside at
Ninewells Hospital and Medical School, Dundee.
In this dose escalation safety study, the ReN009 cells will be
administered via straightforward intramuscular injection into
the affected lower limb of nine patients with PAD.
Recruitment and dosing of patients in the trial is expected to
commence later in 2013. The straightforward nature of both the
ReN009 treatment and the design of the Phase I clinical trial is
Annual Report & Accounts 2013 ReNeuron | 5
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Progress to date
Data presented to date demonstrate that our hRPCs differentiate
into cells expressing the appropriate cell surface markers for
photoreceptors, the cells lost in RP patients. The data also
demonstrate that in rodent models of retinal degeneration,
transplanted hRPCs migrate into the outer nuclear layer of the
host retina and enhance visual acuity.
We have been awarded an £0.8 million Early Stage Biomedical
Catalyst grant which will fund the late pre-clinical development
of ReN003 through to the clinic. This work is being undertaken
in collaboration with the world-renowned UCL Institute of
Ophthalmology and complements our existing long-standing
collaboration on this programme with the Schepens Eye
Research Institute.
We are currently developing the protocol for an initial Phase I/
II clinical trial with our ReN003 therapy in the UK and US, in
retinitis pigmentosa patients. We intend to file for regulatory
approvals for this clinical study in the middle part of 2014.
Business Review continued
expected to lead to progression into a larger placebo-controlled
Phase II efficacy study during the second half of 2014, assuming
the Phase I primary safety end-point is met.
We have been awarded a Late Stage Biomedical Catalyst grant
of £0.4m to be deployed towards the cost of the approved
ReN009 Phase I study.
ReN003 – stem cell therapy for retinitis
pigmentosa (RP)
Overview
Retinitis pigmentosa is a group of inherited diseases of the
retina that all lead to a gradual and progressive reduction in
vision caused by the death of photoreceptor cells. It is the most
common inherited cause of blindness in people between the
ages of 20 and 60. The age at which symptoms start is variable
and the rate of deterioration of vision also varies from person
to person. RP is typically diagnosed in adolescents and young
adults and most sufferers will be legally blind by the age of 40.
Through our collaboration with the Schepens Eye Research
Institute at Harvard Medical School, we have developed the
ability to scale human retinal progenitor cells (hRPCs) for
therapeutic use. Using this technology we have established
GMP-compliant hRPC cell banks to provide future hRPC drug
product.
There are no treatments currently available for RP, and two of
the few approaches in development only target a small sub-
population of the RP patient population with specific genetic
mutations. Our ReN003 programme is expected to be applicable
to the broad, heterogeneous RP patient population. The hRPC
platform also represents an alternative and potentially highly
advantageous cell therapy approach to other degenerative
conditions of the retina, such as AMD and diabetic retinopathy,
where the unmet medical need also remains high.
Market size
RP affects approximately 1 in 3,000 to 4,000 people, with
an estimated 1.5 million patients worldwide, including more
than 100,000 patients in the United States and approximately
180,000 patients in the EU.
6 | ReNeuron Annual Report & Accounts 2013
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Directors and advisers
Directors
Bryan Morton, Non-executive Chairman
Michael Hunt, Chief Executive Officer
Dr John Sinden, Chief Scientific Officer
John Berriman, Non-executive Director
Simon Cartmell, Non-executive Director
Dr Tim Corn, Non-executive Director
Mark Docherty, Non-executive Director
Professor Sir Chris Evans, Non-executive Director
(appointed 9 August 2013)
Dr Paul Harper, Non-executive Director
Company Secretary and
registered office
Patrick Huggins
10 Nugent Road
Surrey Research Park
Guildford
Surrey GU2 7AF
Principal banker
Barclays Bank plc
PO Box 326
28 Chesterton Road
Cambridge
CB4 3UT
Patent agents
Gill, Jennings & Every
Broadgate House
7 Eldon Street
London
EC2M 7LH
Nominated Adviser
Cenkos Securities plc
6-8 Tokenhouse Yard
London
EC2R 7AS
Financial PR Consultants
Buchanan
45 Moorfields
London
EC2Y 9AE
Registrars
Computershare Services plc
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Solicitors
Covington & Burling LLP
265 Strand
London
WC2R 1BH
Independent Auditors
PricewaterhouseCoopers LLP
Chartered Accountants and
Statutory Auditors
9 Greyfriars Road
Reading
Berkshire
RG1 1JG
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Annual Report & Accounts 2013 ReNeuron | 7
Board of Directors
Bryan Morton BSc, MBA, Non-executive Chairman
Bryan Morton was appointed to the Board in October 2008 and appointed as Chairman in August 2011. He is Chief Executive
Officer of EUSA Pharma International, a division of Jazz Pharmaceuticals, and was formally Chief Executive Officer of EUSA
Pharma Inc., a Company he founded in 2006, until its acquisition by Jazz in 2012. He is a non-executive Chairman of Aircraft
Medical and Energist Ltd and is a member of the Pilgrim Software global advisory board. He began his pharmaceutical career
in sales and has held positions in medical information, marketing, sales management, business development and general
management during a 30 year career in the healthcare industry, largely with Merck and Co. Inc. and Bristol Myers Squibb.
In 2003, he founded Zeneus Pharma, which was sold to Cephalon Inc. in late 2005 for US$360 million. He has a BSc in
Pharmacology from Aberdeen University and a MBA from Durham University. Aged 57.
Michael Hunt BSc ACA, Chief Executive Officer
Michael Hunt was appointed Chief Executive Officer in July 2005. Prior to ReNeuron, he spent six years at Biocompatibles
International plc (sold to BTG plc) where he held a number of senior financial and general management positions. His early
industrial career was spent at Bunzl plc. He is a founding member and co-chair of the European Alliance for Advanced Therapies
and sits on the BioIndustry Association’s Cell Therapy and Regenerative Medicine Advisory Committee and its Finance and
Tax Advisory Committee. He is a past Senior Industry Group member of the UK Government’s Office for Life Sciences, and a
past member of the TSB’s Cell Therapy Catapult Interim Advisory Group. He read economics at University College London and
qualified as a chartered accountant with Ernst & Young. Aged 50.
Dr. John Sinden BA MA Ph.D., Chief Scientific Officer
Dr. Sinden is a scientific co-founder of ReNeuron. Prior to joining ReNeuron as Chief Scientific Officer in October 1998, he
was Reader in Neurobiology of Behaviour at the Institute of Psychiatry at Kings College London. He graduated in Psychology
from the University of Sydney and completed a Ph.D. in Neuroscience from the University of Paris at the College de France. He
subsequently held post-doctoral appointments at Oxford University and the Institute of Psychiatry prior to joining the permanent
staff of the Institute in 1987. Dr. Sinden holds Fellowships of the Royal Society of Medicine and the Society of Biology, is a
member of the Society for Neuroscience and the International Society for Cellular Therapies. He sits on the Industry Committee
of the International Society for Stem Cell Research, the Scientific Advisory Board of the Minda de Gunzburg Center for Ocular
Regeneration, Schepens Eye Research Institute at Harvard Medical School, and the Expert Working Group on Cell and Gene
Therapies for the Bioindustry Organization BioSafe Committee. Aged 62.
John Berriman BSc MSc, Non-executive Director
John Berriman was appointed to the Board in July 2011. He is the Chairman of Heptares Therapeutics Ltd, Autifony Ltd and
past Chairman (now deputy Chairman) of Algeta ASA (listed on the Oslo stock exchange). He is also a non-executive director
of Cytos AG (listed on the SIX Swiss exchange). Until its sale to Amgen in the spring of 2012 he was a director of Micromet Inc.
(listed on NASDAQ). Previously he was a director of Abingworth Management, an international healthcare venture capital firm,
where he was involved in founding, financing and serving as a director of several biotechnology companies in Europe and the
USA – many of which obtained listings on public stock exchanges. Prior to that, he spent 14 years with Celltech Group plc and
was a member of its Board when it listed on the London Stock Exchange in 1994. He has a degree in Chemical Engineering from
the University of Cambridge and an MBA from the London Business School. In addition to the positions mentioned above, he
has in the last five years been a non-executive director of Pronota BV and Ablynx NV. Aged 65.
8 | ReNeuron Annual Report & Accounts 2013
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Board of Directors
Simon Cartmell BSc Msc, Non-executive Director
Simon Cartmell was appointed to the Board in July 2011. He was, until June 2010, Chief Executive Officer of ApaTech Ltd,
which he built into a world leader in orthobiologics. Its sale to Baxter International Inc was completed in March 2010. Prior
to ApaTech he was Chief Executive Officer of Celltech Pharmaceuticals and a director of Celltech Group plc before which he
was Chief Operating Officer of Vanguard Medica plc. His early career was spent at Glaxo plc in multiple senior UK and global
commercial strategy, product development, supply chain, marketing, sales and business development roles. He is a Medical
Microbiology graduate from Manchester University and an alumnus of the London Business School Sloan Fellowship Programme.
He is currently Chief Executive Officer of Calon Cardio-Technologies Ltd and has non-executive or advisory roles as a Venture
Partner with Imperial Innovations plc, as a non-executive director of Phase4 Ventures, as an adviser to Mercia Fund Management
Ltd and as an advisor to several emerging life science and medical technology companies in the UK and internationally. Aged 53.
Dr Tim Corn, MSc FFPM FRCPsych, Non-executive Director
Dr Tim Corn was appointed to the Board in June 2012. He is Chief Medical Officer at EUSA Pharma International, a division
of Jazz Pharmaceuticals, and was formally Chief Medical Officer at EUSA Pharma Inc., until its acquisition by Jazz in 2012, and
Chief Medical Officer at Zeneus Pharma, which was acquired by Cephalon Inc in 2006. In addition, he serves as Chair of the
Board of Trustees of the Neuro Foundation, and Non-executive Director on the Board of Circassia Limited. Dr. Corn qualified in
medicine at King’s College Hospital, London after gaining a Master’s degree in biochemistry from Imperial College. He became
consultant and senior lecturer in neuropsychiatry at the Institute of Psychiatry, London and is author of more than forty scientific
publications. Dr. Corn has held senior clinical and regulatory positions at GlaxoWellcome, MSD Research Laboratories, Athena
Neuroscience and Elan as well as in the UK regulatory agency. He has played a key role in twenty regulatory approvals in USA
and Europe for products in the fields of neurology and oncology, the most recent being the approval by FDA of the BLA for
Erwinaze™. He was elected Fellow of the Faculty of Pharmaceutical Medicine in 1996 and of the Royal College of Psychiatrists
in 1998. Aged 62.
Mark Docherty BEng FCA, Non-executive Director
Mark Docherty was appointed to the Board in March 2003. He is Finance and Corporate Director of FKD Therapies Oy, a Finnish
based gene therapy company whose lead product for bladder cancer is in clinical development. He is Director of Finvector
Vision Therapies Limited, a specialist gene therapy manufacturer and Chief Financial Officer of Wölbern Private Equity GmbH, a
specialist private equity house. He was a founding director of Merlin Biosciences Limited (now Excalibur Fund Managers Limited)
and was actively involved in the structuring and financing of many of the Merlin portfolio companies including ReNeuron.
Previously, he was a Manager in the Corporate Finance Group of Arthur Andersen. He is a chartered accountant and holds a BEng
in Mechanical Engineering from Sheffield University. He is also a non-executive director of CBT Development Limited. Aged 49.
Professor Sir Chris Evans OBE, Non-executive Director
Professor Sir Chris Evans OBE was appointed to the Board in August 2013. Sir Chris is the Founder and Chairman of Excalibur
Group, and is a highly successful scientist and entrepreneur, having built over 50 medical companies and created over $5bn of
value for investors with $3bn of cash exits. He is the Founder of Chiroscience, Celsis, Biovex, Merlin, Vectura & and Piramed.
He has also raised $2bn for cancer research projects. More recently, he has established Arthurian Life Sciences Ltd to provide
management services to the Wales Life Sciences Investment Fund, a £100million fund and a key part of the Welsh Government’s
Life Sciences initiative. Aged 55.
Dr Paul Harper BSc Ph.D., Non-executive Director
Dr Paul Harper was appointed to the Board in August 2005. He is a graduate of Leeds University (Microbiology/Virology). He
initially pursued a career in drug discovery and development with Glaxo Group Research as Head of Antimicrobial Chemotherapy,
Johnson & Johnson Limited as Director of Research & Development and with Unipath plc. This was followed by work in a number
of start-up companies and SMEs as Chief Executive Officer or adviser. These included, as Chief Executive Officer, preparing
Cambridge Antibody Technology Ltd for flotation on the London Stock Exchange and founding Provensis Limited to develop a
drug device product. Currently Chairman of Physiomics plc, Sareum Holdings plc and three other private biotechnology/devices
businesses. Aged 67.
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Annual Report & Accounts 2013 ReNeuron | 9
Directors’ report
for the year ended 31 March 2013
The directors present their report and the audited consolidated
financial statements of the company for the year ended 31 March
2013.
Principal activities, risks, business review
and future prospects
A review of the business and its prospects is contained within
the Chairman’s and Chief Executive Officer’s joint statement and
the business review that follows it. The principal activities of the
Group are the research, development and commercial exploitation
of stem cell technologies for therapeutic and non-therapeutic
applications. These activities are carried out by the company and
its subsidiaries.
In common with other small biotechnology companies, the Group
is subject to a number of risks and uncertainties, which include:
•
•
•
•
•
•
•
•
•
the early stage of development of the business;
the safety and effectiveness of its technologies;
its history of operating losses;
availability and terms of capital needed for the business;
its ability to receive regulatory approvals;
the uncertainty that clinical trials will succeed or lead to
commercially viable products;
competition from other companies and market acceptance
of its products;
its reliance on consultants, contractors and personnel at third-
party research institutions;
intellectual property infringement claims by others and the
ability to protect its intellectual property;
•
the ability to attract and retain qualified personnel; and
• pricing pressures and actions by governmental health
administration authorities.
A number of specific committees exist in the Group which meet
regularly to review progress and agree actions encompassing
research activities, development programmes, and wider business
and commercial issues. Through these committees, and through
formal Board meetings, the directors are able to continuously
monitor, evaluate and mitigate the potential impact of the
principal risks facing the Group as it develops.
Clinical and regulatory risk
There are significant inherent risks in developing stem cell therapies
for commercialisation due to the long and complex development
process. Any therapy which we wish to offer commercially to
the public must be put through extensive research, pre-clinical
and clinical development all of which takes several years and
is extremely costly. We may fail to successfully develop a drug
candidate because of:
•
•
•
•
the failure of the drug in pre-clinical studies;
the inability of clinical trials to demonstrate the drug is safe
and effective in humans;
the failure to find a collaborator to take the drug candidate
into expensive later stage studies; and
the failure to manufacture the drug substance in sufficient
quantities and at commercially acceptable prices.
In addition, the complexity and multijurisdictional nature of the
regulatory processes could result in either delays in achieving
regulatory approval or non-approval. If a product is approved,
the regulators may impose additional requirements, for example,
restrictions on the therapy’s indicated uses or the levels of
reimbursement receivable, that could impact on its commercial
viability. Once approved, the product and its manufacture will
continue to be reviewed by the regulators and may be withdrawn
or restricted in the future.
Competition and intellectual property
Intellectual property protection remains fundamental to our
strategy of developing novel drug candidates. Our ability to stop
others making a drug, using it or selling the invention or proprietary
rights by obtaining and maintaining protection is critical to our
success. We manage a portfolio of patents and patent applications
which underpin our research and development programmes. We
invest significantly in maintaining and protecting this intellectual
property to reduce the risks over the validity and enforceability of
our patents. However, the patent position is always uncertain and
often involves complex legal issues. Therefore, there is a risk that
intellectual property may become invalid and/or expire before, or
soon after, commercialisation of a drug product and we may be
blocked by other companies’ patents and intellectual property.
Manufacturing risk
Our ability to successfully scale-up production processes through
outsourced manufacturers to viable clinical trial or commercial levels
is vital to the commercial viability of any product. Availability of
10 | ReNeuron Annual Report & Accounts 2013
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09/08/2013 17:21
raw materials is extremely important to ensure that manufacturing
campaigns are performed on schedule and therefore dual
sourcing is used where possible. Product manufacture is subject to
continual regulatory control and products must be manufactured
in accordance with good manufacturing practice. Any changes
to the approved process may require further regulatory approval
which may incur substantial cost and delays. These potential
issues could adversely impact on the results from operations and
our cash liquidity.
Financial risks
The financial risks faced by the Group include interest rate risk,
foreign currency risk, liquidity risk and risk associated with cash
held on deposit with financial institutions. The Board reviews and
agrees policies for managing each of these risks. The Group’s main
objectives in using financial instruments are the maximisation of
returns from funds held on deposit, balanced with the need to
safeguard the assets of the business. The Group does not enter
into forward currency contracts. Due to the nature of the Group’s
activities, the directors do not currently consider it necessary to use
derivative financial instruments to hedge the Group’s exposure to
fluctuations in interest rates as these exposures are not considered
significant. However, the Group does hold currency in US dollars
to cover US dollar expenses. A summary of the Group’s financial
instruments is set out in note 21 to the financial statements.
Key Performance Indicators
The ongoing performance of the Group is managed and monitored
using a number of key performance indicators, both financial and
qualitative. In terms of financial performance, the Group does
not currently generate profits and utilises cash for its operational
activities. The forecasting and monitoring of the Group’s cash
resources is therefore critical in terms of the efficient allocation of
those resources and in predicting future cash requirements. A key
Directors and directors’ interests
feature of the Group’s internal management reporting systems
is therefore the emphasis placed on operational cash spend
by category and against forecast, which is monitored at both
Management Committee and Board level on a monthly basis. The
Group’s net cash outflow from operating activities for the year
ended 31 March 2013 was £6,022,000 (2012: £5,786,000). Cash
flow forecasts are adjusted on a regular basis to take account of
changing circumstances in the business. In this way, the Group’s
forward cash requirements can be predicted with a high degree of
accuracy. In terms of the Group’s wider performance, each going
concern risk, research or development programme is managed by
a project manager who reports progress against key qualitative
milestones on a monthly basis to the Management Committee.
The more detailed aspects of these programmes are also discussed
and monitored through separate Project Review or Development
Committees. Research and development programmes are planned
and executed against identified milestones, and together these
programmes constitute the Group’s product pipeline.
Presentation of financial statements
The Group accounts include the financial statements of the
Company and its subsidiary undertakings, made up to 31 March
2013.
Results and dividends
The results for the year are given in the Group Statement of
Comprehensive Income set out on page 23. The directors do not
recommend the payment of a dividend (2012: £nil).
Research and development
During the year the Group incurred research and development
costs of £4,786,000 (2012: £4,865,000) all charged to the
Statement of Comprehensive Income.
The directors who held office during the year, and up to the signing of the financial statements, unless otherwise stated, are listed
below:
Bryan Morton, Non–executive Chairman
Michael Hunt, Chief Executive Officer
Dr John Sinden, Chief Scientific Officer
John Berriman, Non–executive Director
Simon Cartmell, Non–executive Director
Dr Tim Corn, Non-executive Director (appointed 26 June 2012)
Mark Docherty, Non–executive Director
Professor Sir Chris Evans, Non-executive Director (appointed 9 August 2013)
Dr Paul Harper, Non–executive Director
Professor Trevor Jones, Non-executive Director (resigned 26 June 2012)
c108492_book.indb 11
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Annual Report & Accounts 2013 ReNeuron | 11
Directors’ report continued
for the year ended 31 March 2013
Directors’ emoluments
Michael Hunt
Dr John Sinden
Bryan Morton
John Berriman
Simon Cartmell
Dr Tim Corn
Mark Docherty
Dr Paul Harper
Professor Trevor Jones
Total
Salaries
and fees
£’000
Bonuses
£’000
Benefits
in kind
£’000
2013
Total
£’000
Pension
contributions
£’000
2012
Total
£’000
Pension
contributions
£’000
185
172
32
27
27
19
17
23
8
510
51
47
–
–
–
–
–
–
–
98
2
3
–
–
–
–
–
–
–
5
238
222
32
27
27
19
17
23
8
613
17
16
–
–
–
–
–
–
–
33
221
206
29
19
19
–
16
21
23
554
17
16
–
–
–
–
–
–
–
33
Benefits in kind are private medical insurance and professional subscription payments.
Directors’ emoluments include the following amounts payable to third parties:
£17,496 (2012: £16,248) payable to XKE Capital Llp in respect of directors’ fees for Mark Docherty, and £22,500 (2012: £21,048)
payable to Dr Paul Harper, trading as BioMedicon Systems Pvt. Limited, in respect of directors’ fees.
The directors held the following interests in the shares of the Company:
Michael Hunt
Dr John Sinden
Bryan Morton
John Berriman
Simon Cartmell
Dr Tim Corn
Dr Paul Harper
Mark Docherty
Professor Trevor Jones
Ordinary shares of 1p each
Ordinary shares of 1p each
Ordinary shares of 1p each
Ordinary shares of 1p each
Ordinary shares of 1p each
Ordinary shares of 1p each
Ordinary shares of 1p each
Ordinary shares of 1p each
Ordinary shares of 1p each
2013
2012
Number
Number
453,023
328,023
1,611,902
1,486,902
215,909
125,000
187,500
–
251,709
344,854
227,109
90,909
–
–
–
201,709
219,854
202,109
On the 3 April 2012, the Company announced that it had raised net proceeds of £5.6 million by means of a Placing through the issue
of 134,037,500 ordinary shares of 1p each at 4p per share.
In addition, investors in the Placing were issued Warrants to subscribe for Ordinary Shares, with each Warrant entitling the holder to
subscribe for Ordinary Shares at a price of 6 pence per Ordinary Share. Warrants are exercisable within 2 years of the date of issue.
12 | ReNeuron Annual Report & Accounts 2013
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09/08/2013 17:21
Following completion of the placing and at the financial year end the directors held the following interests in warrants of the Company:
Michael Hunt
Dr John Sinden
Bryan Morton
John Berriman
Simon Cartmell
Dr Paul Harper
Mark Docherty
Professor Trevor Jones
The directors held the following interests in options over shares of the Company:
2013
Number
125,000
125,000
125,000
125,000
187,500
50,000
125,000
25,000
2012
Number
–
–
–
–
–
–
–
–
Michael Hunt
Options –
approved
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options – Deferred Bonus
Plan
approved
Options – Long Term
Incentive Plan
unapproved
Options – Long Term
Incentive Plan
unapproved
Options – Long Term
Incentive Plan
unapproved
Options – Long Term
Incentive Plan
unapproved
At
1 April
2012
Number
*Adjusted
during
the year
Number
772,989
33,381
931,465
40,225
1,893,837
81,784
472,916
20,443
472,916
20,443
824,713
35,615
824,713
35,615
Note
1
1
2
2
2
3
3
5
6
7
8
1,442,887
1,772,728
2,071,066
2,916,667
10
–
Granted
during
the year
Number
–
–
–
–
–
–
–
–
–
–
–
At
31 March
2013
Number
806,370
971,690
*Exercise
Price
5.06p
5.06p
1,975,621
12.65p
493,359
5.07p
493,359
7.6p
860,328
12.2p
860,328
21.79p
1,442,887
1.0p
1,772,728
1.0p
2,071,066
1.0p
2,916,667
1.0p
** Exercise
Period
August 2005
– July 2014
August 2006
– July 2014
August 2008
– August 2015
August 2009
– August 2016
August 2010
– August 2016
August 2010
– August 2017
August 2010
– August 2017
August 2011
– August 2020
August 2012
– August 2019
August 2013
– August 2020
August 2014
– August 2021
3,181,818
3,181,818
1.0p
September 2015
– September 2022
–
–
–
–
–
14,396,897
267,506
3,181,818
17,846,221
Annual Report & Accounts 2013 ReNeuron | 13
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09/08/2013 17:21
Directors’ report continued
for the year ended 31 March 2013
John Sinden
Options –
approved
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options – Deferred Bonus
Plan
approved
Options – Long Term
Incentive Plan
unapproved
Options – Long Term
Incentive Plan
unapproved
Options – Long Term
Incentive Plan
unapproved
Options – Long Term
Incentive Plan
unapproved
At
1 April
2012
Number
*Adjusted
during
the year
Number
772,989
33,381
925,178
39,953
1,893,837
81,784
472,916
20,423
472,916
20,423
824,713
35,615
824,713
35,615
Note
1
1
2
2
2
3
3
5
6
7
8
1,564,642
1,713,637
1,918,782
2,336,389
10
–
Granted
during
the year
Number
–
–
–
–
–
–
–
–
–
–
–
At
31 March
2013
Number
806,370
965,131
*Exercise
Price
5.06p
5.06p
1,975,621
12.65p
493,339
5.07p
493,339
7.6p
860,328
12.2p
860,328
21.79p
1,564,642
1.0p
1,713,637
1.0p
1,918,782
1.0p
2,336,389
1.0p
** Exercise
Period
August 2005
– July 2014
August 2006
– July 2014
August 2008
– August 2015
August 2009
– August 2016
August 2010
– August 2016
August 2010
– August 2017
August 2010
– August 2017
August 2011
– August 2020
August 2012
– August 2019
August 2013
– August 2020
August 2014
– August 2021
2,450,758
2,450,758
1.0p
September 2015
– September 2022
–
–
–
–
–
13,720,712
267,194
2,450,758
16,438,664
14 | ReNeuron Annual Report & Accounts 2013
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09/08/2013 17:21
Bryan Morton
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options –
Unapproved
John Berriman
Options –
unapproved
Options –
unapproved
Simon Cartmell
Options –
unapproved
Options –
unapproved
Note
4
4
9
11
Note
9
11
Note
9
11
At
1 April
2012
Number
*Adjusted
during
the year
Number
217,298
9,384
266,297
11,500
400,000
17,274
Granted
during
the year
Number
–
–
–
At
31 March
2013
Number
226,682
277,797
417,274
–
–
500,000
500,000
883,595
38,158
500,000
1,421,753
*Exercise
Price
** Exercise
Period
4.85p
4.43p
4.31p
3.3p
August 2012
– August 2019
August 2013
– August 2020
August 2014
– August 2021
August 2015
– August 2022
At
1 April
2012
Number
*Adjusted
during
the year
Number
Granted
during
the year
Number
At
31 March
2013
Number
*Exercise
Price
** Exercise
Period
400,000
17,274
–
417,274
4.31p
–
–
500,000
500,000
3.3p
August 2014
– August 2021
August 2015
– August 2022
400,000
17,274
500,000
917,274
At
1 April
2012
Number
*Adjusted
during
the year
Number
Granted
during
the year
Number
At
31 March
2013
Number
*Exercise
Price
** Exercise
Period
400,000
17,274
–
417,274
4.31p
–
–
500,000
500,000
3.3p
August 2014
– August 2021
August 2015
– August 2022
400,000
17,274
500,000
917,274
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Annual Report & Accounts 2013 ReNeuron | 15
Directors’ report continued
for the year ended 31 March 2013
Dr Paul Harper
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options –
unapproved
Mark Docherty
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options –
unapproved
Options –
unapproved
At
1 April
2012
Number
94,692
94,583
*Adjusted
during
the year
Number
4,089
4,084
247,414
10,684
217,298
9,384
266,297
11,500
400,000
17,274
Note
2
2
3
4
4
9
Granted
during
the year
Number
At
31 March
2013
Number
*Exercise
Price
** Exercise
Period
98,781
12.65p
–
–
–
–
–
–
98,668
258,098
226,682
277,797
417,274
5.07p
12.2p
4.85p
4.43p
4.31p
3.3p
August 2008
– August 2015
August 2009
– August 2016
August 2010
– August 2017
August 2012
– August 2019
August 2013
– August 2020
August 2014
– August 2021
August 2015
– August 2022
11
–
–
500,000
500,000
1,320,284
57,016
500,000
1,877,300
At
1 April
2012
Number
*Adjusted
during
the year
Number
247,414
10,684
217,298
9,384
266,297
14,500
400,000
17,274
Granted
during
the year
Number
–
–
–
–
At
31 March
2013
Number
258,098
226,682
277,797
417,274
Note
3
4
4
9
11
–
–
500,000
500,000
1,131,009
48,842
500,000
1,679,851
*Exercise
Price
** Exercise
Period
12.2p
4.85p
4.43p
4.31p
3.3p
August 2010
–August 2017
August 2012
– August 2019
August 2013
– August 2020
August 2014
– August 2021
August 2015
– August 2022
16 | ReNeuron Annual Report & Accounts 2013
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Professor Trevor Jones
Options –
Unapproved
Options –
Unapproved
Options –
Unapproved
Options –
Unapproved
Options –
Unapproved
Options –
Unapproved
Options –
Unapproved
Note
1
2
2
3
4
4
9
At
1 April
2012
Number
189,384
94,692
94,583
8,178
4,089
4,085
247,414
10,684
217,298
9,384
266,297
11,500
400,000
17,274
1,509,668
65,194
*Adjusted
during
the year
Number
Granted
during
the year
Number
At
31 March
2013
Number
*Exercise
Price
** Exercise
Period
–
–
–
–
–
–
–
–
197,562
5.06p
98,781
12.65p
5.07p
12.2p
4.85p
4.43p
4.31p
98,668
258,098
226,682
277,797
417,274
1,574,862
August 2005
– July 2014
August 2008
– August 2015
August 2009
– August 2016
August 2010
– August 2017
August 2012
– August 2019
August 2013
– August 2020
August 2014
– August 2021
Professor Trevor Jones retained his options following his resignation from the Board of Directors on 26 June 2012, by virtue of his continuing role as
Chairman of the Company’s Scientific and Strategic Advisory Group.
* The number of share options and exercise price for share options issued under notes 1, 2, 3 and 4 below were adjusted during the year in
accordance with the Rules of the Scheme to adjust for the variation in share capital since their issue.
** The exercise periods indicate the earliest dates by which options are exercisable subject to meeting the performance conditions disclosed below. As
at 31 March 2013 the performance conditions in notes 4, 6, 7, 8, 9, 10 and 11 had not been met. Performance conditions in relation to note 3 were
met in the prior year.
c108492_book.indb 17
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Annual Report & Accounts 2013 ReNeuron | 17
Directors’ report continued
for the year ended 31 March 2013
Note 1:
These options were issued in August 2005 following the Group’s
Admission to the AIM market. The new share options replaced
those previously held under an earlier share option scheme,
which have now lapsed. These options were issued through a
combination of an Inland Revenue approved EMI scheme and an
unapproved scheme and are exercisable from the date of grant,
as the relevant performance condition had been satisfied, being
the Admission of the Ordinary Shares in the Company.
Note 2:
These options were issued under the Group’s Share Option
Scheme. Subject to the satisfaction of a performance condition,
being the first patient administered with a ReNeuron cell therapy
in Phase I/II trials, the options are exercisable in whole or in part at
any time between the third anniversary and the tenth anniversary
of the date on which the option was granted. If not exercised by
the tenth anniversary of the date of grant, the option will lapse.
Note 3:
These options were issued under the Group’s Share Option
Scheme. Subject to the satisfaction of a performance condition,
being the successful completion of an initial clinical trial of a
ReNeuron cell therapy, the options are exercisable in whole or
in part at any time between the third anniversary and the tenth
anniversary of the date on which the option was granted. If not
exercised by the tenth anniversary of the date of grant, the option
will lapse.
Note 4:
These options were issued under the Group’s Share Option
Scheme. Subject to the satisfaction of a performance condition,
being the first patient administered with a ReNeuron cell therapy
in a second clinical trial, the options are exercisable in whole or
in part at any time between the third anniversary and the tenth
anniversary of the date on which the option was granted. If not
exercised by the tenth anniversary of the date of grant, the option
will lapse.
Note 5:
These options have been issued under the Group’s Share Option
Scheme. The options were awarded in accordance with the
Group’s Deferred Share-based Bonus Plan in respect of corporate
and personal objectives achieved in the financial year ended 31
March 2009 and as such all performance conditions have been
met. The options are exercisable in whole or in part at any time
between the second anniversary and the tenth anniversary of the
date on which the option was granted. If not exercised by the
tenth anniversary of the date of grant, the option will lapse.
Note 6:
These options have been issued under the Group’s Share
Option Scheme. These options were awarded in accordance
with the Group’s Long Term Incentive Plan and are subject to
the satisfaction of the performance conditions set out below.
Subject to achievement of these performance conditions, options
are exercisable in whole or in part at any time between the third
anniversary and the tenth anniversary of the date on which the
option was granted. If not exercised by the tenth anniversary of
the date of grant, the option will lapse.
Performance Conditions:
i)
ii)
iii)
iv)
The first patient is administered with a ReNeuron cell therapy
in a second clinical trial,
The Total Shareholder Return (TSR) of the Company must
exceed that of the AIM Healthcare Index in any given
three year period from date of grant. Where the TSR ranks
between median and upper quartile of the index over the
three-year period, the options will vest pro-rata between
25% and 100%. Where the TSR ranks below the median in
the performance period, no options will vest.
The business must have operated within its internal financial
budgets throughout the period to vesting.
The business must be a going concern (under the accepted
accounting definition) at the time of any exercise of an
option.
Note 7:
These options have been issued under the Group’s Share
Option Scheme. These options were awarded in accordance
with the Group’s Long Term Incentive Plan and are subject to
the satisfaction of the performance conditions set out below.
Subject to achievement of these performance conditions, options
are exercisable in whole or in part at any time between the third
anniversary and the tenth anniversary of the date on which the
option was granted. If not exercised by the tenth anniversary of
the date of grant, the option will lapse.
Performance Conditions:
i)
ii)
The first patient is administered with a ReNeuron cell therapy
in a second clinical trial,
The Total Shareholder Return (TSR) of the Company must
exceed that of the AIM Healthcare Index in any given
three year period from date of grant. Where the TSR ranks
between median and upper quartile of the index over the
three-year period, the options will vest pro-rata between
18 | ReNeuron Annual Report & Accounts 2013
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25% and 100%. Where the TSR ranks below the median in
the performance period, no options will vest.
iii)
iv)
The business must have operated within its internal financial
budgets throughout the period to vesting.
The business must be a going concern (under the accepted
accounting definition) at the time of any exercise of an
option.
Note 8:
These options have been issued under the Group’s Share
Option Scheme. These options were awarded in accordance
with the Group’s Long Term Incentive Plan and are subject to
the satisfaction of the performance conditions set out below.
Subject to achievement of these performance conditions, options
are exercisable in whole or in part at any time between the third
anniversary and the tenth anniversary of the date on which the
option was granted. If not exercised by the tenth anniversary of
the date of grant, the option will lapse.
Performance Conditions:
i)
ii)
iii)
iv)
The first patient is administered with a ReNeuron cell therapy
in a third clinical trial,
The Total Shareholder Return (TSR) of the Company must
exceed that of the AIM Healthcare Index in any given
three year period from date of grant. Where the TSR ranks
between median and upper quartile of the index over the
three-year period, the options will vest pro-rata between
25% and 100%. Where the TSR ranks below the median in
the performance period, no options will vest.
The business must have operated within its internal financial
budgets throughout the period to vesting.
The business must be a going concern (under the accepted
accounting definition) at the time of any exercise of an
option.
Note 9:
These options were issued under the Group’s Share Option
Scheme. Subject to the satisfaction of a performance condition,
being the first patient administered with a ReNeuron cell therapy
in a third clinical trial, the options are exercisable in whole or in
part at any time between the third anniversary and the tenth
anniversary of the date on which the option was granted. If not
exercised by the tenth anniversary of the date of grant, the option
will lapse.
Note 10:
These options have been issued under the Group’s Share
Option Scheme. These options were awarded in accordance
with the Group’s Long Term Incentive Plan and are subject to
the satisfaction of the performance conditions set out below.
Subject to achievement of these performance conditions, options
are exercisable in whole or in part at any time between the third
anniversary and the tenth anniversary of the date on which the
option was granted. If not exercised by the tenth anniversary of
the date of grant, the option will lapse.
Performance Conditions:
i)
ii)
iii)
iv)
The first patient is administered with a ReNeuron cell therapy
in a fourth clinical trial,
The Total Shareholder Return (TSR) of the Company must
exceed that of the AIM Healthcare Index in any given
three year period from date of grant. Where the TSR ranks
between median and upper quartile of the index over the
three-year period, the options will vest pro-rata between
25% and 100%. Where the TSR ranks below the median in
the performance period, no options will vest.
The business must have operated within its internal financial
budgets throughout the period to vesting.
The business must be a going concern (under the accepted
accounting definition) at the time of any exercise of an
option.
Note 11:
These options were issued under the Group’s Share Option
Scheme. Subject to the satisfaction of a performance condition,
being the first patient administered with a ReNeuron cell therapy
in a fourth clinical trial, the options are exercisable in whole or
in part at any time between the third anniversary and the tenth
anniversary of the date on which the option was granted. If not
exercised by the tenth anniversary of the date of grant, the option
will lapse.
Qualifying third party indemnity
Certain directors benefited from qualifying third party indemnity
provisions in place during the year and at the date of this report.
Policy and practice on payment of
creditors
It is the Group’s policy, in respect of all suppliers, to agree
payment terms in advance of the supply of goods and services
Annual Report & Accounts 2013 ReNeuron | 19
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Directors’ report continued
for the year ended 31 March 2013
and to adhere to those payment terms. Trade payables of the
Group at the year end as a proportion of amounts invoiced by
suppliers during the year represent 40 days (2012: 65 days).
Trade payables of the Company at the year end as a proportion of
amounts invoiced by suppliers during the year represent nil days
(2012: nil days).
Corporate Governance
As an AIM-listed Company, ReNeuron is not required to comply
with the UK Corporate Governance Code (2010), a set of
recommended corporate governance principles for UK public
companies issued by the Financial Reporting Council. However,
the directors support high standards of Corporate Governance
and have established a set of corporate governance principles
which they regard as appropriate for the stage of development
of the Group. For example, the Company has adopted a share
dealing code for directors and senior employees on substantially
the same terms as AIM’s model code on directors’ dealings in
company shares.
The Board has established an Audit Committee, Remuneration
Committee and Nominations Committee with formally delegated
duties and responsibilities. All of the non-executive directors are
members of these committees. John Berriman chairs the Audit
Committee, Simon Cartmell chairs the Remuneration Committee
and Bryan Morton chairs the Nominations Committee.
The Audit Committee normally meets twice a year and has
responsibility for, amongst other things, planning and reviewing
the annual report and accounts and interim statements and
involving, where appropriate,
the external auditors. The
Committee also approves external auditors’ fees and ensures the
auditors’ independence as well as focusing on compliance with
legal requirements and accounting standards.
It is also responsible for ensuring that an effective system of
internal controls is maintained. The ultimate responsibility for
reviewing and approving the annual financial statements and
interim statements remains with the Board.
The Remuneration Committee, which meets as required, but at
least once a year, has responsibility for making recommendations
to the Board on the compensation of senior executives and
determining, within agreed terms of reference, the specific
remuneration packages for each of the executive directors. It
also supervises the Share Option Scheme and sets performance
conditions which must be satisfied before options granted under
the Share Option Scheme can be exercised.
The Nominations Committee has responsibility for reviewing
the size and composition of the Board and appointment of
replacement and/or additional directors and making appropriate
recommendations to the Board.
Communications
The Group places a high priority on regular communications
with its various stakeholder groups, and aims to ensure that all
communications concerning the Group’s activities are clear, fair
and accurate. The Group maintains a regularly updated website,
where users can register to be alerted when announcements or
details of presentations and events are posted onto the website.
Beyond the Annual General Meeting, the Chief Executive Officer
and Chief Scientific Officer meet regularly with investors and
analysts to provide them with updates on the Group’s business
and to obtain feedback regarding the market’s expectations of
the Group.
Health and safety and the environment
The Group is committed to providing a safe environment for
its staff and all other parties for which the Group has a legal or
moral responsibility in this area. The Group operates a Health
and Safety Committee which meets monthly to monitor, review
and make decisions concerning health and safety matters. The
Group’s health and safety policies and procedures are enshrined
in the Group’s documented quality systems, which encompass all
aspects of the Group’s day-to-day operations.
The Group is aware of its corporate responsibilities concerning the
impact of its activities on the environment, and seeks to minimise
this impact wherever possible. Through the various procedures
and systems it operates, the Group ensures full compliance with
health and safety and environmental legislation relevant to its
activities.
BIA Code
The Group is a member of the Bioindustry Association (BIA), the
trade association for biotechnology companies in the UK. The
Group adheres to the BIA’s Best Practice Guideline on Financial &
Corporate Communications.
Directors’ responsibilities statement
The directors are responsible for preparing the Annual Report and
the financial statements in accordance with applicable law and
regulations.
20 | ReNeuron Annual Report & Accounts 2013
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Company law requires the directors to prepare financial statements
for each financial year. Under that law the directors have
prepared the Group and Parent Company financial statements
in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union. Under company law
the directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of
affairs of the Group and the Company and of the profit or loss of
the Group for that period. In preparing these financial statements,
the directors are required to:
•
select suitable accounting policies and then apply them
consistently;
• make
judgements and accounting estimates that are
reasonable and prudent;
•
state whether applicable IFRSs as adopted by the European
Union have been followed, subject to any material departures
disclosed and explained in the financial statements
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that company will
continue in business
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and the Group and enable
them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and the Group and hence for
taking reasonable steps for the prevention and detection of
fraud and other irregularities. The directors are responsible for
the maintenance and integrity of the Group website www.
reneuron.com. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Directors’ statement on disclosure of
information to auditors
In accordance with Section 418 of the Companies Act, in the case
of each of the persons who are directors at the time when the
report is approved, the following applies:
•
•
so far as each director is aware, there is no relevant audit
information of which the Company’s auditors are unaware;
and
each director has taken all the steps that he ought to have
taken as a director in order to make himself aware of any
audit information and to establish that the Company’s
auditors are aware of that information.
Independent Auditors
The auditors, PricewaterhouseCoopers LLP, have indicated their
willingness to continue in office and a resolution concerning their
re-appointment will be proposed at the Annual General Meeting.
Annual General Meeting
The Annual General Meeting of the Company will be held at the
offices of Covington & Burling LLP, 265 Strand, London, WC2R
1BH on 13 September 2013 at 10:00am. The notice of the 2013
Annual General Meeting is enclosed on page 55 of this document.
By order of the Board
Michael Hunt
Director
c108492_book.indb 21
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Annual Report & Accounts 2013 ReNeuron | 21
Independent auditors’ report to the members of
ReNeuron Group plc
We have audited the group and parent company financial
statements (the ‘‘financial statements’’) of ReNeuron Group plc
for the year ended 31 March 2013 which comprise the Group
Statement of Comprehensive Income, the Group and Parent
Company Statements of Financial Position, the Group and Parent
Company Statements of Changes in Equity, the Group and Parent
Company Statements of Cash flows and the related notes. The
financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union and, as
regards the parent company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
Respective responsibilities of directors
and auditors
As explained more fully in the Directors’ Responsibilities Statement
set out on pages 20 and 21, the directors are responsible for the
preparation of the financial statements and for being satisfied that
they give a true and fair view. Our responsibility is to audit and
express an opinion on the financial statements in accordance with
applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing
Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and
only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other
purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to
whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Scope of the audit of the financial
statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an
assessment of: whether the accounting policies are appropriate to
the group’s and parent company’s circumstances and have been
consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the directors; and
the overall presentation of the financial statements. In addition,
we read all the financial and non-financial information in the
annual report to identify material inconsistencies with the audited
financial statements. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for
our report.
22 | ReNeuron Annual Report & Accounts 2013
Opinion on financial statements
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state
of the group’s and of the parent company’s affairs as at 31
March 2013 and of the group’s loss and group’s and parent
company’s cash flows for the year then ended;
the group financial statements have been properly prepared
in accordance with IFRSs as adopted by the European Union;
the parent company financial statements have been
properly prepared in accordance with IFRSs as adopted by
the European Union and as applied in accordance with the
provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by
the Companies Act 2006
In our opinion the information given in the Directors’ Report for
the financial year for which the financial statements are prepared
is consistent with the financial statements.
Matters on which we are required to
report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if,
in our opinion:
•
•
•
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.
Sam Taylor (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Reading
9 August 2013
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09/08/2013 17:21
Group Statement of Comprehensive Income
for the year ended 31 March
Revenue
Research and development costs
General and administrative costs
Operating loss
Finance income
Finance costs
Loss before income tax
Taxation
Loss and total comprehensive loss for the year
Total loss and total comprehensive loss attributable to:
– Equity owners of the Company
Basic and diluted loss per ordinary share
Note
5
6
6
7
7
10
12
2013
£’000
17
(4,786)
(2,319)
(7,088)
30
(1)
(7,059)
714
(6,345)
(6,345)
(0.8p)
2012
£’000
40
(4,865)
(2,059)
(6,884)
40
(1)
(6,845)
616
(6,229)
(6,229)
(1.0p)
c108492_book.indb 23
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Annual Report & Accounts 2013 ReNeuron | 23
Group and Parent Company Statements of Financial Position
as at 31 March
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Investment in subsidiaries
Trade and other receivables
Current assets
Trade and other receivables
Corporation tax receivable
Cash and cash equivalents
Total assets
Equity
Equity attributable to owners of the company
Share capital
Share premium account
Capital redemption reserve
Merger reserve
Warrant reserve
Share-based credit reserve
Retained deficit
Total equity
Liabilities
Non-current liabilities
Provisions
Current liabilities
Trade and other payables
Financial liabilities: finance leases
Total liabilities
Total equity and liabilities
13
14
15
16
16
10
17
24
19
18
20
Group
2013
£’000
Note
2012
£’000
298
1,272
–
135
1,705
458
616
3,983
5,057
6,762
Company
2013
£’000
2012
£’000
–
–
48,006
–
48,006
1
–
2,877
2,878
–
–
41,837
–
41,837
2
–
3,748
3,750
50,884
45,587
213
1,272
–
135
1,620
341
714
3,547
4,602
6,222
7,748
32,972
8,964
2,223
149
2,000
(49,148)
6,234
28,885
8,964
2,223
108
1,623
(42,803)
7,748
32,972
8,964
1,858
149
2,000
(8,296)
4,908
5,234
45,395
150
150
1,163
1
1,164
1,314
6,222
125
125
1,394
9
1,403
1,528
6,762
–
–
5,489
–
5,489
5,489
6,234
28,885
8,964
1,858
108
1,623
(7,573)
40,099
–
–
5,488
–
5,488
5,488
50,884
45,587
The financial statements on pages 23 to 52, comprising the Group Statement of Comprehensive Income, the Group and Parent
Company Statements of Financial Position, the Group and Parent Company Statements of Changes in Equity and the Group and Parent
Company Statements of Cash Flows, and related notes, were approved by the Board of Directors on 9 August 2013 and were signed
on their behalf by:
Michael Hunt
Director
Company Registered Number 05474163
24 | ReNeuron Annual Report & Accounts 2013
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Group and Parent Company Statements of Changes in Equity
as at 31 March
Share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Merger
reserve
£’000
Warrant
reserve
£’000
Share-
based
credit
reserve
£’000
Retained
deficit
£’000
Total
Equity
£’000
6,199
28,811
8,964
2,223
108
1,271
(36,574)
11,002
35
–
–
74
–
–
–
–
–
–
–
–
–
–
–
–
352
–
–
109
352
–
(6,229)
(6,229)
6,234
28,885
8,964
2,223
108
1,623
(42,803)
5,234
1,514
–
–
–
4,543
(456)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
41
–
–
–
377
–
–
–
–
–
6,057
(456)
377
41
–
(6,345)
(6,345)
Group
As at 1 April 2011
Issue of new ordinary
shares
Share-based credit
Loss for the year and total
comprehensive loss
As at 31 March 2012
Issue of new ordinary
shares
Costs of share issue
Share-based credit
Issue of Warrants
Loss for the year and total
comprehensive loss
As at 31 March 2013
7,748
32,972
8,964
2,223
149
2,000
(49,107)
4,908
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09/08/2013 17:21
Annual Report & Accounts 2013 ReNeuron | 25
Group and Parent Company Statements of Changes in Equity
as at 31 March continued
Share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Merger
reserve
£’000
Warrant
reserve
£’000
Share–
based
credit
reserve
£’000
Retained
deficit
£’000
Total
Equity
£’000
6,199
28,811
8,964
1,858
108
1,271
(6,924)
40,287
35
–
–
–
74
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
230
122
–
–
–
109
230
122
–
(649)
(649)
6,234
28,885
8,964
1,858
108
1,623
(7,573)
40,099
1,514
–
–
4,543
(456)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
41
–
–
–
240
137
–
–
–
–
–
–
–
6,057
(456)
240
137
41
(723)
(723)
Company
As at 1 April 2011
Issue of new ordinary
shares
Share-based credit
Equity granted to
employees of subsidiary
Loss for the year and total
comprehensive loss
As at 31 March 2012
Issue of new ordinary
shares
Costs of share issue
Share-based credit
Equity granted to
employees of subsidiary
Issue of Warrants
Loss for the year and total
comprehensive loss
As at 31 March 2013
7,748
32,972
8,964
1,858
149
2,000
(8,296)
45,395
26 | ReNeuron Annual Report & Accounts 2013
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Group and Parent Company Statements of Cash Flows
for the year ended 31 March
Cash used in operations
Interest paid
Income tax credit received
Cash used in operating activities
Cash flows from investing activities
Capital expenditure
Loans provided to subsidiaries
Interest received
Net cash (used in)/generated from investing activities
Cash flows from financing activities
Finance lease principal payments
Proceeds from issuance of ordinary shares
Costs of share issue
Net cash generated from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the start of year
Cash and cash equivalents at the end of year
Note
27
Group
2013
£’000
(6,637)
(1)
616
(6,022)
2012
£’000
(6,276)
(1)
491
(5,786)
Company
2013
£’000
(468)
–
–
(468)
(37)
–
30
(7)
(8)
6,057
(456)
5,593
(436)
3,983
3,547
(30)
–
40
10
(9)
100
–
91
(5,685)
9,668
3,983
–
(6,032)
28
(6,004)
–
6,057
(456)
5,601
(871)
3,748
2,877
2012
£’000
(450)
–
–
(450)
–
(5,472)
39
(5,433)
–
100
–
100
(5,783)
9,531
3,748
c108492_book.indb 27
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Annual Report & Accounts 2013 ReNeuron | 27
Notes to the financial statements
for the year ended 31 March 2013 continued
1. General information
ReNeuron Group plc (“the Company”) and its subsidiaries (together “the Group”) research and develop therapies using stem cells. The
Company is a public limited company incorporated and domiciled in England with registered number 05474163 and its shares are listed
on the AIM market of the London Stock Exchange.
2. Accounting policies and basis of preparation
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been
consistently applied to all of the financial years presented for both the Group and the Company. The accounting policies relate to the
Group unless otherwise stated.
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by
the European Union, the interpretations of International Financial Reporting Interpretations Committee (IFRIC) and the Companies Act
2006 applicable to companies reporting under IFRS.
These financial statements have been prepared on a historical cost basis.
Basis of consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings, made up to 31
March 2013.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is
measured, as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange,
plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest.
The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as
goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised
directly in the Statement of Comprehensive Income.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses
are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
The Group elected not to apply IFRS 3 ‘Business combinations’ retrospectively to business combinations which took place prior to 1 April
2006 that have been accounted for by the merger accounting method.
Significant accounting judgements, estimates and assumptions
The key areas that require management to make difficult, subjective or complex judgements about matters that are inherently uncertain
are:
a) Going concern
The financial statements have been prepared on a going concern basis, which assumes that sufficient funds will be available for the
Company and Group to continue in operational existence for the foreseeable future. More details are set out in note 3.
Impairment of non-financial assets
b)
The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Other non-
financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable. These indicators
include the progress towards and outcome of clinical trials and the Group’s funding position. More details are set out in note 14.
28 | ReNeuron Annual Report & Accounts 2013
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2. Accounting policies and basis of preparation (continued)
Foreign currency translation
The consolidated financial statements are presented in Pounds Sterling (‘£’), which is the Company’s functional and presentational
currency. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of
Comprehensive Income in the year in which they occur.
Assets and liabilities of the Company’s US subsidiary are translated to Sterling at the year-end exchange rate. Redundant assets at the
US subsidiary’s former laboratories have been written down to a book value of zero and have no impact on present or future exchange
differences. Following the closure of the Company’s US subsidiary, ReNeuron Inc, its functional currency has changed to sterling.
ReNeuron Inc was dormant in the year and had no transactions.
Revenue
Revenue represents income received from royalties and licensing income arising from collaborations with third parties on receipt of
cash.
Research and development expenditure
Expenditure on product development is capitalised as an intangible asset and amortised over the expected useful life of the product
concerned. Capitalisation commences from the point at which technical feasibility and commercial viability of the product can be
demonstrated and the Group is satisfied that it is probable that future economic benefits will result from the product once completed.
No such costs have been capitalised to date, given the early stage of the Company’s intellectual property.
Expenditure on research and development activities that do not meet the above criteria, including ongoing costs associated with
acquired intellectual property rights and intellectual property rights generated internally by the Group, is charged to the Statement of
Comprehensive Income as incurred.
Exceptional items
Exceptional items are those material items, which by virtue of their size or incidence, are presented separately in the Statement of
Comprehensive Income to enable a full understanding of the Group’s financial performance.
Pension benefits
The Group operates a defined contribution pension scheme. Contributions payable for the year are charged to the Statement of
Comprehensive Income. Differences between contributions payable in the year and contributions actually paid are shown as either
accruals or prepayments in the Statement of Financial Position. The Group has no further payment obligations once the contributions
have been paid.
Leases
Leasing arrangements which transfer to the Group substantially all the benefits and risks of ownership of assets are treated as finance
leases, as if the asset had been purchased outright. The assets are included within the relevant category of property, plant and
equipment and the capital elements of the leasing commitments are shown as obligations under finance leases. Assets held under
finance leases are depreciated over the lower of their useful live and the terms of the lease. The interest element of the lease rental is
included in the Group Statement of Comprehensive Income.
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Annual Report & Accounts 2013 ReNeuron | 29
Notes to the financial statements
for the year ended 31 March 2013 continued
2. Accounting policies and basis of preparation (continued)
Leases (continued)
All other leases are considered operating leases, the costs of which are charged to the Group Statement of Comprehensive Income on
a straight-line basis over the lease term. Benefits such as rent-free periods, and amounts received or receivable as incentives to take on
operating leases, are spread on a straight-line basis over the lease term.
Government and other grants
Revenue grants are credited to other operating income within the Group’s Statement of Comprehensive Income on a case-by-case
basis, assessed by the level of expenditure incurred on the specific grant project, when it is reasonably certain that amounts will not
need to be repaid.
Share-based payments
The Group has applied the requirements of IFRS 2 “Share-based payment”. In accordance with the transitional provisions, IFRS 2 has
been applied to all grants of equity-settled awards after 7 November 2002 that were unvested at 1 April 2006.
The Group operates a number of equity-settled, share-based compensation plans. The fair value of share-based payments under such
schemes is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest
and adjusted for the effect of market-based vesting conditions. Vesting periods are estimated to be two years for options issued under
the deferred bonus and four years for other schemes.
The fair value calculation of share-based payments requires several assumptions and estimates. The details are disclosed in Note 26 and
are calculated using the Black-Scholes model. Such assumptions could change and could affect the amount recorded. At each balance
sheet date, the Group reviews its estimate of the number of options that are expected to vest and recognises any revision to original
estimates in the Statement of Comprehensive Income, with a corresponding adjustment to equity.
For equity-settled share based payments where employees of subsidiary undertakings are rewarded with shares issued by the Parent
Company, a capital contribution is recorded in the subsidiary, with a corresponding increase in the investment in the Parent Company.
Warrants
Where warrants have been issued together with ordinary shares, the proportion of the proceeds received that relates to the warrants
is determined by reference to the relative market values of the warrants. The proportion of the proceeds that relates to the warrants is
credited to a warrant reserve within shareholders’ funds.
Where warrants have been issued as recompense for services supplied these are considered equity settled share-based payments and
are accounted for in accordance with IFRS 2. The fair value of warrants, calculated using the Black-Scholes model, is charged to the
Statement of Comprehensive Income over the period the services are received and a corresponding credit is made to the warrant
reserve.
Intangible assets
Intangible assets, relating to intellectual property rights acquired through licensing or assigning patents and know-how are carried at
historical cost less accumulated amortisation and any provision for impairment, where the useful life of the asset is finite and the asset
is likely to generate economic benefits exceeding costs. Where a finite useful life of the acquired intangible asset cannot be determined,
the asset is not subject to amortisation but is tested for impairment annually or more frequently whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. There is no identifiable useful life of the asset at this time. No
amortisation other than historical impairment has been charged to date, as the products underpinned by the intellectual property rights
are not yet available for commercial use.
30 | ReNeuron Annual Report & Accounts 2013
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2. Accounting policies and basis of preparation (continued)
Property, plant and equipment
Property, plant and equipment are stated at cost, net of depreciation and any provision for impairment. Cost includes the original
purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is
calculated so as to write off the cost less their estimated residual values, on a straight-line basis over the expected useful economic lives
of the assets concerned. The principal annual periods used for this purpose are:
Leasehold improvements
Plant and equipment
Computer equipment
Investments
Term of the lease
3-8 years
3-5 years
Investments are shown at cost less any provision for impairment.
Current income tax
The credit for current income tax is based on the results for the year, adjusted for items which are non-assessable or disallowed. It is
calculated using tax rates that have been enacted or substantially enacted at the financial year end.
Deferred tax
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. However, deferred tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss. Deferred tax is determined using tax rates and laws that have been enacted or substantially
enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability
is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, 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.
Cash and cash equivalents
Cash and cash equivalents in the cash flow statement and the Statements of Financial Position include cash in hand and deposits held
on call with banks with original maturities of three months or less.
Capital redemption reserve
S733 Companies Act 2006 provides that where shares of a company are redeemed or purchased wholly out of the Company’s profits,
or by a fresh issue, the amount by which the Company’s issued share capital is diminished on cancellation of the shares shall be
transferred to a reserve called the ‘capital redemption reserve’. It also provides that the reduction of the Company’s share capital shall
be treated as if the capital redemption reserve were paid-up capital of the Company.
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Annual Report & Accounts 2013 ReNeuron | 31
Notes to the financial statements
for the year ended 31 March 2013 continued
2. Accounting policies and basis of preparation (continued)
Provisions
Provisions are recognised when the Group has an obligation as a result of past events, for which it is probable that an outflow of
resources will be required to settle the obligation and the amount can be reliably estimated.
Contractual milestone payments
The Group is expected to incur future contractual milestone payments linked to the future development of its therapeutic programmes.
These costs will be recognised as and when a contractual milestone has been achieved.
Accounting developments
The following new standards, new interpretations and amendments to standards and interpretations are mandatory for the first time
for the financial year ending 31 March 2013, but are not currently relevant for the Group:
Amendment to IFRS 7, Financial Instruments: Transfers of financial assets (effective 1 July 2011). The standard is not applicable to the
Group as the amendment requires additional disclosures for those entities that sell, factor, securitise, lend or otherwise transfer financial
assets to other parties.
Amendment to IFRS 1 on hyperinflation and fixed dates (effective 1 January 2013). The standard is not applicable to the Group as the
amendment relates to first time adoption of IFRS and the Group is not impacted by involvement in any hyper-inflationary territories.
Amendment to IAS 12, “Income taxes” on deferred taxation (effective 1 January 2013). The standard is not applicable to the Group as
the amendment relates to the treatment of deferred taxation on investment properties.
The following new standards, new interpretations and amendments to standards and interpretations have been issued but are not
effective for the financial year ending 31 March 2013 and have not been adopted early:
Amendment to IAS 1, “Presentation of financial statements” on OCI (effective 1 July 2012). The amendment aims to improve the
consistency and clarity of the presentation of items of other comprehensive income (OCI). The standard is not applicable to the Group.
IFRS 13, “Fair Value measurement” (effective 1 January 2013). The standard aims to improve consistency and reduce complexity by
providing a precise definition of fair values and a single source of fair value measurement and disclosure requirements to use across
IFRSs; the standard is not applicable to the Group.
IAS 19 (revised 2011), “Employee benefits” (effective 1 January 2013). The standard is not applicable to the Group as there is no
defined benefit pension scheme.
Amendment to IFRS 1 on hyperinflation and fixed dates (effective 1 January 2013). The standard is not applicable to the Group as it is
not a first time adopter of IFRS.
Amendment to IFRS 1, “First time adoption” on government grants (effective 1 January 2013). The standard is not applicable to the
Group as it is not a first time adopter of IFRS.
Amendment to IFRS 7, on Financial instruments assets and liabilities offsetting (effective 1 January 2013). The standard relates to the
disclosure of the impact of off-setting financial assets and liabilities on the balance sheet. The standard is not applicable to the Group.
Annual improvements 2011 (effective 1 January 2013). The standard is not applicable to the Group.
IFRIC 20 “Stripping costs in the production phase of a surface mine” (effective 1 January 2013). The standard is not applicable to the
Group.
32 | ReNeuron Annual Report & Accounts 2013
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3. Going concern
ReNeuron’s lead therapeutic candidate for stroke is in clinical development and it has other therapeutic candidates in pre-clinical
development. The Group is expected to incur significant further costs as it continues to develop its therapies and technologies through
clinical development.
Subsequent to the financial year end the Company announced on 22 July 2013 that it had raised £25.35 million, before expenses, by
means of a Placing to shareholders, together with a £7.8m grant package from the Welsh Government to establish a cell manufacturing
and development facility in South Wales over the next two years. Following completion of the Placing, the directors expect that the
Group’s financial resources will be sufficient to support operations until the third quarter of 2016. Consequently, the going concern
basis has been adopted in the preparation of these financial statements.
4. Segment analysis
The Group has identified the Chief Executive Officer as the Chief Operating Decision Maker (CODM). The CODM manages the business
as one segment, the development of cell-based therapies. Since this is the only reporting segment, no further information is included.
The information used internally by the CODM is the same as that disclosed in the financial statements.
5. Revenue
Revenue represents income received from royalties and licensing income arising from collaborations with third parties. The Group’s
revenue derives wholly from assets in the United Kingdom. Analysed by location of customer, all revenue is derived from the United
States of America.
6. Expenses by nature
Loss before tax is stated after charging:
Research and development costs:
Employee benefits (note 9)
Depreciation of property, plant and equipment (note 13)
Other expenses
Total research and development costs
General and administrative costs:
Employee benefits (note 9)
Legal and professional fees
Depreciation of property, plant and equipment (note 13)
Operating lease charges:
– land and buildings
Dilapidations provision
Other expenses
Total general and administrative costs
Total research and development costs and general and administrative costs
During the year the Group obtained services from the Group’s auditor and its associates as detailed below:
2013
£’000
1,657
103
3,026
4,786
890
383
19
241
25
761
2,319
7,105
2012
£’000
1,091
133
3,641
4,865
812
305
17
243
25
657
2,059
6,924
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Annual Report & Accounts 2013 ReNeuron | 33
Notes to the financial statements
for the year ended 31 March 2013 continued
6. Expenses by nature (continued)
Services provided by the Group’s auditor
Fees payable to the Company’s auditor for the audit
of the Parent Company and consolidated financial statements
Fees payable to the Company’s auditor
and its associates for other services:
– The audit of the Company’s subsidiaries pursuant to legislation
– Tax compliance services
Total
7. Net interest received/(paid)
Interest receivable on short-term bank deposits
Finance lease interest
Net interest receivable
8. Directors’ emoluments
Group
2013
£’000
2012
£’000
17
20
–
37
15
20
–
35
2013
£’000
2012
£’000
30
(1)
29
40
(1)
39
The directors are the key management personnel for the Group. Only the directors have authority and responsibility for planning,
directing and controlling the activities of the Group, and are thus the only people considered to be key management per IAS 24.
Aggregate emoluments:
Emoluments in respect of qualifying services
Pension contributions
Highest paid director:
Emoluments in respect of qualifying services
Pension contributions
2013
£’000
613
33
646
2013
£’000
238
17
255
2012
£’000
554
33
587
2012
£’000
221
17
238
Two directors (2012: two) had retirement benefits accruing to them under defined contribution pension schemes in respect of qualifying
services.
None of the directors exercised share options during the year (2012: none).
34 | ReNeuron Annual Report & Accounts 2013
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8. Directors’ emoluments (continued)
Directors’ emoluments include the following amounts payable to third parties:
£17,496 (2012: £16,248) payable to XKE Capital Ltd in respect of directors’ fees for Mark Docherty, and £22,500 (2012: £21,048)
payable to Dr Paul Harper, trading as BioMedicon, in respect of directors’ fees.
Directors’ emoluments including share-based payments
Salaries and other short-term employee benefits
Pension contributions
Share-based payments
2013
£’000
613
33
240
886
2012
£’000
556
33
230
819
9. Employee information
The average monthly number of persons (including executive directors) employed by the Group during the year was:
By activity:
Research and development
Administration
Group
Staff costs:
Wages and salaries
Social security costs
Share-based payment charge
Pension costs (see note 23)
The Company had no employees during the year.
2013
Number
2012
Number
18
5
23
2013
£’000
1,866
206
377
98
2,547
15
4
19
2012
£’000
1,295
160
352
96
1,903
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Annual Report & Accounts 2013 ReNeuron | 35
Notes to the financial statements
for the year ended 31 March 2013 continued
10. Tax credit on loss on ordinary activities
United Kingdom research and development tax credit at 11% (2012: 12.5%)
Current year
2013
£’000
714
714
2012
£’000
616
616
No corporation tax liability arises on the results for the year due to the loss incurred. No deferred tax asset has been identified, as there
are currently no foreseeable profits.
A reduction in the main rate of corporation tax to 24% from 1 April 2012 was announced in the March 2012 UK Budget on 21 March
2012. A further reduction in the UK corporation tax rate to 23% was substantively enacted in July 2012 and was effective from 1 April
2013. These changes were substantively enacted by the balance sheet date and, therefore, are included in these financial statements.
In addition to the changes in rates of Corporation tax disclosed above further changes to the UK Corporation tax rates were introduced
as part of the Finance Bill 2013 on 2 July 2013. These include reductions to the main rate to reduce the rate to 21% from 1 April 2014
and to 20% from 1 April 2015. This rate reduction had not been substantively enacted by the balance sheet date and, therefore, is not
included in these financial statements.
At 31 March 2013 the company had tax losses of approximately £47 million (2012: £41 million) available to carry forward against
profits in future periods. The deferred tax asset in relation to these losses has not been recognised and therefore the effect of the
proposed changes is not material (see note 22).
Loss before income tax
Loss before income tax multiplied by the UK small profits rate of tax for small companies of 20% (2012:
21%)
Effects of:
– difference between depreciation and capital allowances
– expenses not deductible for tax purposes
– losses not recognised
– other short term timing differences
2013
£’000
2012
£’000
(7,059)
(6,845)
(1,412)
(1,437)
(43)
27
638
76
(714)
(56)
(170)
1,035
12
(616)
11. Loss for the financial year
As permitted by Section 408 of the Companies Act 2006, the Parent Company’s Statement of Comprehensive Income for the current
year has not been presented in these financial statements. The Parent Company’s loss and total comprehensive loss for the financial
year was £723,000 (2012: £649,000).
12. Basic and diluted loss per ordinary share
The basic and diluted loss per share is calculated by dividing the loss for the financial year of £6,345,000 (2012: £6,229,000) by
748,685,036 shares (2012: 619,946,923 shares), being the weighted average number of Ordinary 1p shares in issue during the year.
Potential ordinary shares are not treated as dilutive as the entity is loss making.
36 | ReNeuron Annual Report & Accounts 2013
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13. Property, plant and equipment
Cost:
At 1 April 2011
Additions
At 31 March 2012
Accumulated depreciation
At 1 April 2011
Charge for the year
At 31 March 2012
Net book amount:
At 31 March 2012
Cost:
At 1 April 2012
Additions
At 31 March 2013
Accumulated depreciation
At 1 April 2012
Charge for the year
At 31 March 2013
Net book amount:
At 31 March 2013
Leasehold
improvements
£’000
Plant and
equipment
£’000
Computer
equipment
£’000
1,635
–
1,635
1,306
120
1,426
209
1,635
–
1,635
1,426
88
1,514
121
842
25
867
776
17
793
74
867
26
893
793
18
811
82
104
5
109
81
13
93
15
109
11
120
94
16
110
10
Total
£’000
2,581
30
2,611
2,163
150
2,313
298
2,611
37
2,648
2,313
122
2,435
213
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Annual Report & Accounts 2013 ReNeuron | 37
Notes to the financial statements
for the year ended 31 March 2013 continued
13. Property, plant and equipment (continued)
The figures stated above include assets held under finance leases as follows:
Cost
At 31 March 2011
Additions
At 31 March 2012
Accumulated depreciation
At 31 March 2011
Charge for the year
At 31 March 2012
Cost
At 31 March 2012
Additions
At 31 March 2013
Accumulated depreciation
At 31 March 2012
Charge for the year
At 31 March 2013
Net book amount
At 31 March 2013
The Company had no property, plant or equipment at 31 March 2013 (2012: £nil).
Plant and
equipment
£’000
64
–
64
31
8
39
64
–
64
39
7
46
18
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14. Intangible assets
Cost
At 1 April 2011 and at 31 March 2012
Accumulated amortisation and impairment
At 1 April 2011 and at 31 March 2012
Net book amount
At 31 March 2012
Cost
At 1 April 2012 and at 31 March 2013
Accumulated amortisation and impairment
At 1 April 2012 and at 31 March 2013
Net book amount
At 31 March 2013
Intellectual
property
rights not
amortised
£’000
Licence
fees
£’000
Total
£’000
1,884
5,824
7,708
1,884
4,552
6,436
–
1,272
1,272
1,884
5,824
7,708
1,884
4,552
6,436
–
1,272
1,272
Based on the nature of the intangible assets held by the Group it is not appropriate to perform a discounted cash flow calculation to
consider its carrying value. The directors have instead used fair value less costs to sell.
Intangible assets relate to intellectual property rights acquired through licensing or assigning patents and know-how and are carried
at historic cost less accumulated amortisation, where the useful life of the asset is finite and the asset is likely to generate economic
benefits exceeding costs. Where a finite useful life of the acquired intangible asset cannot be determined, the asset is not subject to
amortisation but is tested annually for impairment.
Based on the nature of the intangible assets held by the Group being early in their development, the directors have reviewed the
intangible assets for impairment individually, as set out below by considering the fair value less costs to sell. The key assumption used
when concluding that an impairment is not required is the market capitalisation value of the business.
As at 31 March 2013, the Group balance sheet intangible assets of £1.27m relate to in-licensed intellectual property including key
patents concerning the use of neural stem cells in certain therapeutic areas targeted by the Group. These cells are currently in use in
both the clinical and pre-clinical programmes undertaken by the Group. In the event that any one of the Group’s therapies proved to
be commercially successful, the value of the Group’s intangible assets would be significantly higher than the current carrying value. As
such, the directors see no reason to reduce the carrying value of this intellectual property.
The Company holds no intangible assets.
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Annual Report & Accounts 2013 ReNeuron | 39
Notes to the financial statements
for the year ended 31 March 2013 continued
15. Investments in subsidiaries
Investments in subsidiary companies:
Company
Net Book amount
At start of the year
Investment in subsidiary
Capital contribution arising from IFRS 2 charge
Net book amount at 31 March
2013
£’000
41,837
6,032
137
48,006
2012
£’000
36,242
5,472
123
41,837
The Directors review at each year end the carrying value of the fixed asset investments in the principle subsidiaries. In light of the recent
fundraising the Directors are comfortable that the value remains higher than the carrying value as shown above.
For equity-settled share based payments where employees of subsidiary undertakings are rewarded with shares issued by the Parent
Company, a capital contribution is recorded in the subsidiary, with a corresponding increase in the investment in the Parent Company.
There has been no impairment to investments in subsidiaries in the year.
The Company’s investments comprise interests in Group undertakings, details of which are shown below:
Name of undertaking
Country of incorporation
Description of shares held
Proportion of nominal value of
shares held by the Company
Nature of business
Loss for the year £’000
Net assets / (liabilities) £’000
ReNeuron
Holdings
Limited
England
and Wales
£0.10
Ordinary
Shares
100%
Holding
(34)
905
ReNeuron
Limited
England
and Wales
£0.001
ordinary
shares
£0.10 A
ordinary
shares
ReNeuron
(UK)
Limited
England
and Wales
£0.10
ordinary
shares
ReNeuron
Inc.
Delaware
USA
$0.001
Common
Stock
100%
100%
100%
100%
Pharma
(5,556)
(55,646)
Holding
Dormant
(34)
(nil)
17,520
(3,729)
ReNeuron Limited, ReNeuron Holdings Limited and ReNeuron, Inc., are held directly by ReNeuron Group plc. ReNeuron (UK) Limited is
held directly by ReNeuron Holdings Limited.
The principal activity of ReNeuron Holdings Limited was to act as holding company for ReNeuron Limited prior to the reconstruction of
the Group in 2007. ReNeuron Limited is the only trading company in the Group. ReNeuron, Inc. ceased trading on 30 September 2008.
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16. Trade and other receivables
Current:
Other receivables
Prepayments and accrued income
Non-current:
Lease deposit – repayable in 2015, at current value
Total trade and other receivables
17. Cash and cash equivalents
Cash at bank and in hand
18. Trade and other payables
Trade payables
Other taxation and social security
Accruals
Amounts owed to Group undertakings
Group
2013
£’000
2012
£’000
Company
2013
£’000
2012
£’000
112
229
341
135
476
121
337
458
135
593
1
–
1
–
1
2
–
2
–
2
Group
2013
£’000
3,547
2012
£’000
3,983
Company
2013
£’000
2,877
2012
£’000
3,748
Group
2013
£’000
487
52
624
–
2012
£’000
956
44
394
–
Company
2013
£’000
3
–
–
5,486
5,489
2012
£’000
4
–
–
5,484
5,488
Total payables falling due within one year
1,163
1,394
Amounts owed to Group undertakings are not interest bearing and have no fixed repayment date. There are no fixed repayment
terms in respect of the amounts owed to Group undertakings, which represent the funding of ongoing research and development
requirements.
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Annual Report & Accounts 2013 ReNeuron | 41
Notes to the financial statements
for the year ended 31 March 2013 continued
19. Provisions
Balance as at 1 April
Charged to the Statement of Comprehensive income
Balance as at 31 March
Group
2013
£’000
125
25
150
2012
£’000
100
25
125
The Company had no provisions at 31 March 2013 (2012: nil). Provisions are in respect of building dilapidations. The provision is
expected to be utilised on expiry of the lease in 2015.
20. Financial liabilities
Future minimum payments under finance leases are as follows:
Within one year
In more than one year but not more than five years
Total gross payments
Less finance charges included above
Present value of payments
The Company had no financial liabilities at 31 March 2013 (2012: £nil).
21. Financial instruments
Group
2013
£’000
2012
£’000
1
–
1
–
1
11
–
11
(2)
9
The financial risks faced by the Group include interest rate risk, foreign currency risk, liquidity risk and risk associated with cash held on
deposit with financial institutions.
The Group’s main objective in managing its financial instruments, is to seek to maximise the returns from funds held on deposit
balanced with the need to safeguard the assets of the business. The Group does not enter into forward currency contracts.
Due to the nature of the Group’s activities, the directors do not currently consider it necessary to use derivative financial instruments to
hedge the Group’s exposure to fluctuations in interest rates as these exposures are not considered significant.
Cash and short-term investments fluctuate considerably depending on the timing of fund-raising activities. All cash balances and
short-term investments are held at leading banking institutions (Barclays Bank in the UK and Barclays Global Investors in Ireland). Cash
balances held at 31 March 2013 include £0.08m (2012: £0.02m) held in US dollars to mitigate against potential adverse currency
movements in respect of the Group’s forthcoming US Dollar denominated liabilities.
At 31 March 2013 and 31 March 2012, none of the receivables were aged over three months. No receivables were impaired. Non-
current receivables are not discounted as the impact of discounting would not be material.
All of the Group’s receivables are denominated in Pounds Sterling. The fair values of the receivables are equivalent to the current book
values.
The Group’s payables are denominated in Pounds Sterling. The fair values of the payables are equivalent to the current book values.
42 | ReNeuron Annual Report & Accounts 2013
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21. Financial instruments (continued)
Ageing risk profile of the Group’s financial liabilities
The Group’s financial liabilities consist of:
Finance leases – due in one year or less
Other payables
The Company had no financial liabilities at 31 March 2013 (2012: £nil).
Company risk profile of the Group’s cash and cash equivalents
Currency
Sterling
United States Dollar
Euro
Group
2013
£’000
1
1,163
1,164
2012
£’000
9
1,394
1,403
2013
2012
Cash at
bank and
in hand
£’000
3,460
84
3
Cash at
bank and
in hand
£’000
3,959
21
3
Total
£’000
3,460
84
3
Total
£’000
3,959
21
3
The Group maintains cash and bank balances in Pounds Sterling for UK based operating currencies. Following the closure of ReNeuron
Inc., US Dollar balances previously held in the US were transferred to the UK. None of the US Dollar balances are interest earning. In
the current and prior years, cash balances are held in current and deposit accounts at floating interest rates based on LIBOR. Foreign
exchange and interest rate movements would have a trivial impact on the financial assets and liabilities.
Fair values of financial assets and financial liabilities
The following table provides a comparison by category of the carrying amounts and the fair value of the Group’s financial assets and
liabilities at 31 March 2013. Fair value is the amount at which a financial instrument could be exchanged in an arm’s length transaction
between informed and willing parties, other than a forced or liquidation sale and excludes accrued interest.
Primary financial instruments held or issued to finance the Group’s operations:
Cash at bank and in hand
Receivables: non-current
Receivables: current
Payables
2013
2012
Book value
£’000
Fair value
£’000
Book value
£’000
Fair value
£’000
3,547
3,547
3,983
3,983
135
112
135
112
135
120
135
120
1,163
1,163
1,274
1,274
Book values and fair values are the same because there is immediate access to the asset.
Annual Report & Accounts 2013 ReNeuron | 43
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Notes to the financial statements
for the year ended 31 March 2013 continued
21. Financial instruments (continued)
Currency risk profile
The Group’s functional currency is Pounds Sterling, and the majority of its expenditure is denominated in that currency.
The only assets and liabilities denominated in currencies other than Pounds Sterling relate to currency accounts held in the UK for bill
payment, and the short term assets and liabilities denominated in Euros and US Dollars held by the Group.
Capital management
The Group’s key objective in managing its capital is to safeguard its ability to continue as a going concern. The Group also strives to
optimise the balance of cash spend between research and development and general and administrative expenses and, in so doing,
maximise progress achieved for all pipeline products.
22. Deferred taxation
The analysis of the potential deferred tax assets of the Group is as follows:
Tax effect of timing differences because of:
Excess of depreciation over capital allowances
Short term timing differences not recognised
Losses carried forward
Amount
not
recognised
2013
£’000
Amount
not
recognised
2012
£’000
(47)
533
9,408
9,894
263
105
9,505
9,873
No corporation tax liability arises on the results for the year due to the loss incurred. No deferred tax asset has been recognised, as there
are currently no foreseeable profits.
The analysis of the deferred tax assets of the Company is as follows:
Tax effect of timing differences because of:
Losses carried forward
23. Pension scheme obligations
Amount
not
recognised
2013
£’000
Amount
Not
recognised
2012
£’000
426
426
346
346
The Group operates defined contribution pension schemes for UK employees and directors. The assets of the schemes are held in
separate funds and are administered independently of the Group. The total pension cost during the year was £98,000 (2012: £96,000).
There were no prepaid or accrued contributions to the scheme at the year-end (2012: nil).
44 | ReNeuron Annual Report & Accounts 2013
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24. Share Capital
Authorised
Unlimited (2012: Unlimited)
Issued and fully paid
774,827,700 ordinary shares of 1p each (2012: 623,403,084 of 1p each)
2013
£’000
2012
£’000
Unlimited
Unlimited
7,748
6,234
From 1 October 2009, the Companies Act 2006 abolished the requirement for a company to have an authorised share capital. The
Company’s articles were amended to effect this by special resolution on 12 March 2010.
On 27 April 2012 the Company announced that it had raised gross proceeds of approximately £5.4 million by means of a Placing
through the issue of 134,037,500 Placing Shares at 4p per share and a further £0.7m through the issue of 17,387,116 Open Offer
Shares at 4p per share. Following completion of the Placing and Open Offer the total number of ordinary shares of 1p each in ReNeuron
is issue was 774,827,700,
On 22 July 2013 the Company announced that it had raised gross proceeds of approximately £25.35 million by means of a Placing
through the issue of 1,014,000,000 Placing Shares at 2.5p per share. Following completion of the Placing the total number of ordinary
shares of 1p each in ReNeuron in issue was 1,788,827,700.
25. Warrants
In conjunction with the April 2012 Placing, investors were issued Warrants to subscribe for Ordinary Shares, with each Warrant entitling
the holder to subscribe for Ordinary Shares at a price of 6 pence per Ordinary Share. A total of 134,037,500 Warrants were issued, one
for each Placing share subscribed for. Warrants are exercisable within 2 years of the date of issue.
There were no services transferred in exchange for the majority of the warrants, and as such their value was included in the subscription
price and no fair value charge should be applied to these items, except for the warrants issued to Cenkos Securities plc in exchange
for brokerage services. Cenkos Securities plc were issued 4,125,000 warrants and these have been accounted for under IFRS 2, using a
Black-Scholes model to calculate a fair value for each warrant. The calculated fair value from the model is 0.98p, which has produced
a charge of £40,563 that has been expensed in operating expenses in full in the year.
Warrant instrument with Novavest Growth Fund Limited
Novavest Growth Fund Limited has the right to subscribe for 58,239 ReNeuron Limited ordinary shares at a price of £17.16 per ordinary
share. Pursuant to a put/call agreement dated 6 November 2000, on exercise of such warrant, shares acquired by Novavest in ReNeuron
Limited will be exchanged for 582,390 ordinary shares of ReNeuron (UK) Limited. The Company intends in due course to enter into an
agreement with Novavest whereby if the warrant is exercised, the ReNeuron Limited shares acquired by Novavest are exchanged directly
for 582,390 ordinary shares of the Company.
26. Share options
The Group operates Share Option Schemes for directors and employees of group companies and specific consultants. Options have
been issued through a combination of an Inland Revenue approved EMI scheme and unapproved schemes. During the year, the number
of options and associated exercise prices for those options issued in August 2005, August 2006, August 2007, August 2009 and
August 2010 were adjusted in accordance with the Rules of the Scheme for the dilution of option values as a result of the variation in
share capital since their issue.
The award of share options to executive directors and selected senior management of the Group are now made in accordance with
the Group’s Deferred Share-based Bonus Plan and Long Term Incentive Plan, constituting the total share-based remuneration for these
individuals.
Annual Report & Accounts 2013 ReNeuron | 45
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Notes to the financial statements
for the year ended 31 March 2013 continued
26. Share options (continued)
Total options existing over ordinary 1p shares in companies in the Group as at 31 March 2013 are summarised below:
Date of
Grant
August 2005
August 2005
August 2005
August 2006
August 2006
August 2007
August 2007
August 2009
August 2009
August 2009
August 2010
August 2010
August 2010
August 2011
August 2011
September 2012
September 2012
Number
of shares
at 1 April 2012
*Adjusted
during
the year
467,172
4,071,750
4,923,976
1,957,872
945,832
3,579,254
1,649,426
2,412,005
2,236,933
3,486,365
2,577,752
1,723,185
5,777,665
4,300,000
8,468,611
–
–
20,174
175,836
212,638
84,550
40,845
154,569
71,230
104,160
–
–
111,318
–
–
185,692
–
–
–
Granted
during
the year
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7,005,000
7,708,030
Lapsed
during
the year
As at
31st March
2013
Note
Exercise
Price
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(466,667)
–
–
487,346
4,247,586
5,136,614
2,042,422
986,677
3,733,823
1,720,656
2,516,165
2,236,933
3,486,365
2,689,070
1,723,185
5,777,665
4,485,692
8,001,944
7,005,000
7,708,030
1
1
2
2
2
3
3
4
5
6
3
5
7
8
9
10
11
5.06p
5.06p
12.65p
5.07p
7.6p
12.2p
21.79p
4.85p
1.0p
1.0p
4.43p
1.0p
1.0p
4.31p
1.0p
3.3p
1.0p
**Date
from which
exercisable
August 2005
August 2005
August 2008
August 2009
August 2009
August 2010
August 2010
August 2012
August 2011
August 2012
August 2013
August 2012
August 2013
August 2014
August 2014
September 2015
September 2015
Date of
expiry
July 2014
July 2014
August 2015
August 2016
August 2016
August 2017
August 2017
August 2019
August 2019
August 2019
August 2020
August 2020
August 2020
August 2021
August 2021
September 2022
September 2022
Total
48,577,798
1,161,012 14,713,030
(466,667) 63,985,173
* The number of share options and exercise price for share options issued under notes 1, 2, 3, 4 and 8 below were adjusted during the year in
accordance with the Rules of the Scheme to reflect the dilution of option values as a result of the variation in share capital since their issue.
** The exercise periods indicate the earliest dates for which the options are exercisable subject to meeting the performance conditions disclosed
below. As at 31 March 2013 the performance conditions in notes 4, 6, 7, 8, 9, 10 and 11 had not been met. Performance conditions in relation to
Note 3 were met in the current year.
Note 1:
These options were issued in August 2005 following the Group’s Admission to the AIM market. The new share options replaced those
previously held under an earlier share option scheme, which have now lapsed. These options were issued through a combination
of an Inland Revenue approved EMI scheme and an unapproved scheme and are exercisable from the date of grant, as the relevant
performance condition had been satisfied, being the Admission of the Ordinary Shares in the Company.
Note 2:
These options were issued under the Group’s Share Option Scheme. Subject to the satisfaction of a performance condition, being the
first patient administered with a ReNeuron cell therapy in Phase I/II trials, the options are exercisable in whole or in part at any time
between the third anniversary and the tenth anniversary of the date on which the option was granted. If not exercised by the tenth
anniversary of the date of grant, the option will lapse.
Note 3:
These options were issued under the Group’s Share Option Scheme. Subject to the satisfaction of a performance condition, being the
successful completion of an initial clinical trial of a ReNeuron cell therapy, the options are exercisable in whole or in part at any time
between the third anniversary and the tenth anniversary of the date on which the option was granted. If not exercised by the tenth
anniversary of the date of grant, the option will lapse.
46 | ReNeuron Annual Report & Accounts 2013
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26. Share options (continued)
Note 4:
These options were issued under the Group’s Share Option Scheme. Subject to the satisfaction of a performance condition, being the
first patient administered with a ReNeuron cell therapy in a second clinical trial, the options are exercisable in whole or in part at any
time between the third anniversary and the tenth anniversary of the date on which the option was granted. If not exercised by the tenth
anniversary of the date of grant, the option will lapse.
Note 5:
These options have been issued under the Group’s Share Option Scheme. The options were awarded in accordance with the Group’s
Deferred Share-based Bonus Plan in respect of corporate and personal objectives achieved in the financial year ending 31 March 2009
and as such carry no further performance conditions. The options are exercisable in whole or in part at any time between the second
anniversary and the tenth anniversary of the date on which the option was granted. If not exercised by the tenth anniversary of the
date of grant, the option will lapse.
Note 6:
These options have been issued under the Group’s Share Option Scheme. These options were awarded in accordance with the Group’s
Long Term Incentive Plan and are subject to the satisfaction of the performance conditions set out below. Subject to achievement of
these performance conditions, options are exercisable in whole or in part at any time between the third anniversary and the tenth
anniversary of the date on which the option was granted. If not exercised by the tenth anniversary of the date of grant, the option will
lapse.
Performance Conditions:
i)
ii)
The first patient is administered with a ReNeuron cell therapy in a second clinical trial,
The Total Shareholder Return (TSR) of the Company must exceed that of the FTSE All-Share Pharmaceutical and Biotechnology
Index in any given three year period from date of grant. Where the TSR ranks between median and upper quartile of the index
over the three-year period, the options will vest pro-rata between 25% and 100%. Where the TSR ranks below the median in the
performance period, no options will vest.
iii) The business must have operated within its internal financial budgets throughout the period to vesting.
iv)
The business must be a going concern (under the accepted accounting definition) at the time of any exercise of an option.
Note 7:
These options have been issued under the Group’s Share Option Scheme. These options were awarded in accordance with the Group’s
Long Term Incentive Plan and are subject to the satisfaction of the performance conditions set out below. Subject to achievement of
these performance conditions, options are exercisable in whole or in part at any time between the third anniversary and the tenth
anniversary of the date on which the option was granted. If not exercised by the tenth anniversary of the date of grant, the option will
lapse.
Performance Conditions:
i)
ii)
The first patient is administered with a ReNeuron cell therapy in a second clinical trial,
The Total Shareholder Return (TSR) of the Company must exceed that of the AIM Healthcare Index in any given three year period
from date of grant. Where the TSR ranks between median and upper quartile of the index over the three-year period, the options
will vest pro-rata between 25% and 100%. Where the TSR ranks below the median in the performance period, no options will
vest.
iii) The business must have operated within its internal financial budgets throughout the period to vesting.
iv) The business must be a going concern (under the accepted accounting definition) at the time of any exercise of an option.
Annual Report & Accounts 2013 ReNeuron | 47
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Notes to the financial statements
for the year ended 31 March 2013 continued
26. Share options (continued)
Note 8:
These options were issued under the Group’s Share Option Scheme. Subject to the satisfaction of a performance condition, being the
first patient administered with a ReNeuron cell therapy in a third clinical trial, the options are exercisable in whole or in part at any time
between the third anniversary and the tenth anniversary of the date on which the option was granted. If not exercised by the tenth
anniversary of the date of grant, the option will lapse.
Note 9:
These options have been issued under the Group’s Share Option Scheme. These options were awarded in accordance with the Group’s
Long Term Incentive Plan and are subject to the satisfaction of the performance conditions set out below. Subject to achievement of
these performance conditions, options are exercisable in whole or in part at any time between the third anniversary and the tenth
anniversary of the date on which the option was granted. If not exercised by the tenth anniversary of the date of grant, the option will
lapse.
Performance Conditions:
i)
ii)
The first patient is administered with a ReNeuron cell therapy in a third clinical trial,
The Total Shareholder Return (TSR) of the Company must exceed that of the AIM Healthcare Index in any given three year period
from date of grant. Where the TSR ranks between median and upper quartile of the index over the three-year period, the options
will vest pro-rata between 25% and 100%. Where the TSR ranks below the median in the performance period, no options will
vest.
iii)
The business must have operated within its internal financial budgets throughout the period to vesting.
iv)
The business must be a going concern (under the accepted accounting definition) at the time of any exercise of an option.
Note 10:
These options were issued under the Group’s Share Option Scheme. Subject to the satisfaction of a performance condition, being the
first patient administered with a ReNeuron cell therapy in a fourth clinical trial, the options are exercisable in whole or in part at any
time between the third anniversary and the tenth anniversary of the date on which the option was granted. If not exercised by the tenth
anniversary of the date of grant, the option will lapse.
Note 11:
These options have been issued under the Group’s Share Option Scheme. These options were awarded in accordance with the Group’s
Long Term Incentive Plan and are subject to the satisfaction of the performance conditions set out below. Subject to achievement of
these performance conditions, options are exercisable in whole or in part at any time between the third anniversary and the tenth
anniversary of the date on which the option was granted. If not exercised by the tenth anniversary of the date of grant, the option will
lapse.
Performance Conditions:
i)
ii)
The first patient is administered with a ReNeuron cell therapy in a fourth clinical trial,
The Total Shareholder Return (TSR) of the Company must exceed that of the AIM Healthcare Index in any given three year period
from date of grant. Where the TSR ranks between median and upper quartile of the index over the three-year period, the options
will vest pro-rata between 25% and 100%. Where the TSR ranks below the median in the performance period, no options will
vest.
iii) The business must have operated within its internal financial budgets throughout the period to vesting.
iv) The business must be a going concern (under the accepted accounting definition) at the time of any exercise of an option.
48 | ReNeuron Annual Report & Accounts 2013
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26. Share options (continued)
Fair value charge
As stated previously, the Group has prepared fair value charges for options covered by notes 2 to 11 above. The calculations have been
estimated based on the Black-Scholes model. Key data and assumptions used are:
Date of Grant
August 2009
August 2009
August 2010
August 2010
August 2011
August 2011
September 2012
September 2012
Exercise
price
Pence
Share price
at date
of grant
Pence
Risk free
rate
%
Assumed
time to
exercise
Years
Assumed
volatility
%
Fair value
per option
Pence
4.850
1.000
4.430
1.000
4.310
1.000
3.300
1.000
5.750
5.750
4.925
4.925
4.500
4.500
3.300
3.300
4.29
4.29
3.08
3.08
2.41
2.41
1.65
1.65
5
5
5
5
5
5
5
5
125.3
125.3
112.9
112.9
104.6
104.6
98.7
98.7
4.930
5.450
3.980
4.560
3.470
4.080
3.510
4.020
The risk free rate is taken from the average yields on government gilt edged stock. Volatility for August 2005 options was taken from
analysis of peer groups, whereas volatilities for later options were taken from actual data following flotation. No assumption of dividend
yield has been included. An attrition rate of 10% pa has been used in applying these values over an assumed vesting period of 4 years.
A reconciliation of option movements over the year to 31 March 2013 is shown below:
Outstanding at 1 April
Adjusted
Granted
Lapsed
Outstanding at 31 March
Exercisable at 31 March
The share price on 31 March 2013 was 3.0 pence (2012: 5.0p).
2013
2012
Weighted
average
exercise
price
Pence
5.30
8.32
2.10
1.00
4.46
9.30
Number of
options
‘000
48,578
1,161
14,713
(467)
63,985
20,592
Number of
options
‘000
34,427
1,382
12,769
–
48,578
14,604
Weighted
average
exercise
price
Pence
6.70
9.50
2.20
–
5.30
7.50
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Annual Report & Accounts 2013 ReNeuron | 49
Notes to the financial statements
for the year ended 31 March 2013 continued
26. Share options (continued)
The pattern of exercise price and life is shown below:
Range of
Exercise
Prices
1p
Up to 10p
10p to 20p
20p to 30p
Total
2013
2012
Weighted
average
exercise
price
Number
of
options
Weighted average
remaining life (years)
Expected Contractual
1p
4.4p
12.5p
21.8p
28,934,122
24,459,958
8,870,437
1,720,656
63,985,173
3.42
2.89
3.26
4.42
8.05
6.63
3.26
4.42
Weighted
average
exercise
price
1p
5.1p
13.0p
22.7p
Number
of
options
Weighted average
remaining life (years)
Expected Contractual
21,692,759
16,732,383
8,503,230
1,649,426
48,577,798
3.60
1.62
1.47
2.35
8.90
6.38
4.47
5.35
27. Cash used in operations
Loss before income tax
Adjustment for:
Interest received
Interest payable
Depreciation of property, plant and equipment
Provisions movement
Share-based payment charges
Fees payable in ordinary shares
Changes in working capital
Receivables
Payables
Cash used in operations
Group
Company
Year ended
31 March
2013
£’000
Year ended
31 March
2012
£’000
Year ended
31 March
2013
£’000
Year ended
31 March
2012
£’000
(7,059)
(6,845)
(723)
(649)
(30)
1
122
25
418
–
116
(231)
(40)
1
150
25
352
9
(100)
172
(28)
–
–
–
281
–
1
1
(39)
–
–
–
230
9
3
(4)
(6,637)
(6,276)
(468)
(450)
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28. Operating lease commitments – minimum lease payments
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Not later than one year
Later than one year and not later than five years
Total lease commitments
Group
2013
Land and
buildings
£’000
2012
Land and
buildings
£’000
243
241
484
243
484
727
The operating lease commitment is in respect of the lease of the Group’s offices and laboratories. The Company had no financial
commitments at 31 March 2013 (2012: £nil).
Contractual milestone payments
The Group is expected to incur future contractual milestone payments linked to the future development of its therapeutic programmes.
These costs will be recognised as and when a contractual milestone has been achieved.
29. Contingent liabilities
The Group had no contingent liabilities as at 31 March 2013.
30. Related party disclosures
Transactions with Biomedicon
Dr Paul Harper, trading as Biomedicon, recharged directors’ fees of £22,500 (2012: £21,042) in respect of services provided by him.
Transactions with Angel Biotechnology plc
During the year the Company contracted cell manufacturing services of £427,000 (2012: £747,000) from Angel Biotechnology plc, of
whom Dr Paul Harper was a director.
Transactions with XKE Capital Limited
XKE Capital Ltd recharged directors’ fees of £17,496 (2012: £16,042) in respect of directors’ fees provided by Mark Docherty.
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Annual Report & Accounts 2013 ReNeuron | 51
Notes to the financial statements
for the year ended 31 March 2013 continued
30. Related party disclosures (continued)
Parent Company and subsidiaries
The Parent Company is responsible for financing and setting Group strategy. ReNeuron Limited carries out the Group strategy, employs
all the UK staff including the directors, and owns and manages all of the Group’s intellectual property. The proceeds of the issue of
shares by the Parent Company are passed when required to ReNeuron Limited as a loan, and ReNeuron Limited makes payments,
including the expenses of the Parent Company.
Company: transactions with subsidiaries:
Purchases and Staff:
Parent company expenses paid by subsidiary
Transactions involving Parent Company shares:
Share options
Cash management:
Loans to subsidiary
Company: Year end balance of loan
Loan to subsidiary
31. Post Balance Sheet event
2013
£’000
468
137
6,032
2013
£’000
2012
£’000
456
122
5,472
2012
£’000
40,036
34,004
Subsequent to the financial year end the Company announced on 22 July 2013 that it has raised £25.35 million, before expenses, by
means of a Placing to shareholders, together with a £7.8m grant package from the Welsh Government to establish a cell manufacturing
and development facility in South Wales. The Company will move its principal operations to this facility as it is phased in over the
next two years. The necessary Shareholder resolutions to approve the Placing were passed at a General Meeting of the Company on
7 August 2013.
52 | ReNeuron Annual Report & Accounts 2013
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Glossary of scientific terms
Age related macular degeneration
A medical condition which usually affects older adults that results
in a loss of vision in the centre of the visual field because of
damage to the retina.
Neural stem cells
Cells within the brain which can both make more of themselves
and also mature into neurons, oligodenrocytes and glia (supporting
cells).
Cell banking
A process for the controlled preparation of a cell therapy product,
resulting in a large number of vials of frozen cells.
Neurodegenerative
A varied assortment of CNS disorders characterised by gradual
and progressive loss of neural tissue.
Cell line
Cells that can be sustained or grown in a laboratory culture
medium. Cell lines may comprise a family of cells isolated from
a single tissue or organ or may be clonally derived from a single
ancestor cell.
Cell therapy
A process by which healthy cells are introduced into a tissue or
an organ to reconstruct or promote regeneration in order to treat
disease.
Critical Limb Ischaemia
Critical limb ischaemia is the end-stage of peripheral arterial
disease, where a progressive decrease in blood flow to limbs can
lead to gangrene and amputation.
Diabetes
A disease characterised by absolute or relative insulin insufficiency
and high blood sugar.
Diabetic retinopathy
Damage to the retina caused by complications of diabetes, which
can eventually lead to blindness.
Differentiation
The maturation of a stem cell into a functional cell.
Indication
The use for which a drug or therapy is intended.
Ischaemic stroke
The most common type of stroke (over 80% of cases) which
happens when a clot blocks an artery that carries blood to the
brain.
Neurons
A nervous system cell able to conduct electrical impulses.
Peripheral arterial disease
A condition in which reduced blood supply to the limbs causes
cramping, chronic pain, and in extreme cases loss of limb.
Phase I clinical trial
The assessment of the safety of a biologically active substance in
patients or healthy volunteers.
Phase II clinical trial
A clinical trial designed to evaluate the efficacy of a treatment or
drug for the condition it is intended to treat.
Phase III clinical trial
A large scale clinical trial of a treatment or drug that in Phase I and
Phase II has been shown to be both efficacious and safe.
Regenerative medicine
A newer approach in medicine aimed at restoring function to
damaged body organs and tissues.
Retinal disease
A general term which describes any damages to the light sensing
membrane in the eye that can affect vision.
Retinitis pigmentosa
The name given to a group of inherited diseases of the retina that
all lead to a gradual progressive reduction in vision.
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Annual Report & Accounts 2013 ReNeuron | 53
Glossary of scientific terms continued
Stem cell
A cell that is both able to reproduce itself and, depending on its
stage of development, to generate all or certain other cell types
within the body or within the organ from which it is derived.
Stroke
Damage to a group of nerve cells in the brain due to interrupted
blood flow, caused by a blood clot or blood vessel bursting.
Depending on the area of the brain that is damaged, a stroke can
cause coma, paralysis, speech problems and dementia.
54 | ReNeuron Annual Report & Accounts 2013
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Notice of Annual General Meeting
RENEURON GROUP PLC
(incorporated and registered in England and Wales with registered no. 5474163)
(the “Company”)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that, the Annual General Meeting of the Company will be held at the offices of Covington & Burling LLP,
265 Strand, London WC2R 1BH on 13 September 2013 at 10.00 a.m. to consider, and if thought fit, pass the following resolutions,
of which Resolutions 1 to 6 will be proposed as ordinary resolutions and Resolutions 7 and 8 will be proposed as special resolutions.
ORDINARY BUSINESS
1.
To receive and adopt the Company’s Annual Report and Accounts for the financial year ended 31 March 2013 and the Directors’
Report, and the Independent Auditors’ Report on those accounts.
2.
3.
4.
5.
To reappoint as a Director, Mark Docherty, who is retiring by rotation in accordance with Article 122 of the Company’s Articles of
Association and who, being eligible, is offering himself for reappointment.
To reappoint as a Director, Simon Cartmell, who is retiring by rotation in accordance with Article 122 of the Company’s Articles of
Association and who, being eligible, is offering himself for reappointment.
To reappoint as a Director, Professor Sir Chris Evans, who having been appointed since the previous annual general meeting is
retiring in accordance with Article 114 of the Company’s Articles of Association and who, being eligible, is offering himself for
reappointment.
To reappoint PricewaterhouseCoopers LLP as auditors of the Company from the conclusion of this Annual General Meeting until
the conclusion of the next annual general meeting of the Company at which accounts are laid and to authorise the Directors to
determine the remuneration of the auditors.
SPECIAL BUSINESS
6.
That the Directors of the Company be and are hereby generally and unconditionally authorised, pursuant to section 551 of the
Companies Act 2006 (the “2006 Act”) to:
(a)
allot ordinary shares and to grant rights to subscribe for or to convert any security into ordinary shares, in the Company (all of
which shares and rights are hereafter referred to as “Relevant Securities”) representing up to £5,962,758.99 in nominal value
in aggregate of shares; and
(b) allot Relevant Securities (other than pursuant to paragraph (a) above) representing up to £5,962,758.99 in nominal value
in aggregate of shares in connection with a rights issue, open offer, scrip dividend, scheme or other pre-emptive offer to
holders of ordinary shares where such issue, offer, dividend, scheme or other allotment is proportionate (as nearly as may
be) to the respective number of ordinary shares held by them on a fixed record date (but subject to such exclusions or other
arrangements as the Directors may deem necessary or expedient to deal with legal or practical problems under the laws of
any overseas territory, the requirements of any regulatory body or any stock exchange in any territory, in relation to fractional
entitlements, or any other matter which the Directors consider merits any such exclusion or other arrangements),
provided that in each case such authority shall expire (unless previously renewed, varied or revoked by the Company in general
meeting) 15 months after the date of the passing of this resolution or at the conclusion of the next annual general meeting of the
Company following the passing of this resolution, whichever occurs first, save that the Company may before such expiry, variation
or revocation make an offer or agreement which would or might require such relevant securities to be allotted after such expiry,
variation or revocation and the Directors may allot relevant securities pursuant to such an offer or agreement as if the authority
conferred hereby had not expired or been varied or revoked.
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Annual Report & Accounts 2013 ReNeuron | 55
Notice of Annual General Meeting continued
7.
That the Directors are hereby empowered pursuant to section 570 of the 2006 Act:
(a)
subject to and conditionally upon the passing of Resolution 6 to allot equity securities (as defined by section 560 of the 2006
Act) for cash pursuant to the authority conferred by Resolution 6 as if section 561 of the 2006 Act did not apply to such
allotment; and
(b) to sell ordinary shares if, immediately before such sale, such shares are held as treasury shares (within the meaning of section
724 of the 2006 Act) as if section 561 of the 2006 Act did not apply to such sale,
provided that such powers:
(1) shall be limited to:
(i)
(ii)
the allotment of equity securities (or sale of ordinary shares) representing up to £5,962,758.99 in nominal value in
aggregate of shares pursuant to the authority conferred by paragraph (b) of Resolution 6;
the allotment of equity securities (or sale of ordinary shares) representing up to £1,788,827.70 in nominal value in
aggregate of shares in connection with the grant of options (or other rights to acquire ordinary shares) in accordance with
the rules of the Company’s share options schemes (as varied from time to time) or otherwise to employees, consultants
and/or Directors of the Company and/or any of its subsidiaries; and
(iii) the allotment of equity securities (or sale of ordinary shares), otherwise than pursuant to sub-paragraphs (i) and (ii)
(inclusive) above, representing up to £1,788,827.70 in nominal value in aggregate of shares; and
(2) shall, expire 15 months after the passing of this resolution or at the conclusion of the next annual general meeting of the
Company following the passing of this resolution, whichever occurs first, but so that the Company may before such expiry,
revocation or variation make an offer or agreement which would or might require equity securities to be allotted (or ordinary
shares to be sold) after such expiry, revocation or variation and the Directors may allot equity securities (or sell ordinary shares)
in pursuance of such offer or agreement as if such powers had not expired or been revoked or varied.
8.
That existing Article 98.1 of the Company’s Articles of Association, be and is hereby amended with immediate effect, by the
insertion at the end of the last line of such Article 98.1, after the words “and an appointment of proxy which is not deposited,
delivered or received in a manner so permitted shall be invalid” of the following further words: “, provided always that the Board
may at its discretion determine that in calculating the periods mentioned in this Article 98.1, that no account shall be taken of any
part of a day that is not a working day”.
9 August 2013
By Order of the Board
Patrick Huggins
Company Secretary
Registered office
10 Nugent Road
Surrey Research Park
Guildford
Surrey GU2 7AF
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NOTES
(1)
In this Notice “ordinary shares” shall mean ordinary shares in the capital of the company, having a nominal value of 1 pence per share.
(2)
(3)
(4)
(5)
(6)
A shareholder entitled to attend and vote at the meeting is also entitled to appoint one or more proxies to attend, speak and vote on a show of
hands and on a poll instead of him or her. A proxy need not be a member of the Company. Where a shareholder appoints more than one proxy,
each proxy must be appointed in respect of different shares comprised in his or her shareholding which must be identified on the proxy form. Each
such proxy will have the right to vote on a poll in respect of the number of votes attaching to the number of shares in respect of which the proxy
has been appointed. Where more than one joint shareholder purports to appoint a proxy in respect of the same shares, only the appointment by
the most senior shareholder will be accepted as determined by the order in which their names appear in the Company’s register of members. If you
wish your proxy to speak at the meeting, you should appoint a proxy other than the chairman of the meeting and give your instructions to that
proxy.
A corporation which is a shareholder may appoint one or more corporate representatives who have one vote each on a show of hands and
otherwise may exercise on behalf of the shareholder all of its powers as a shareholder provided that they do not do so in different ways in respect
of the same shares.
To be effective, an instrument appointing a proxy and any authority under which it is executed (or a notarially certified copy of such authority) must
be deposited at the offices of Computershare Investor Services plc, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, at not later than 10.00 a.m.
on 11 September 2013 except that should the meeting be adjourned, such deposit may be made not later than 48 hours before the time of
the adjourned meeting. A Form of Proxy is enclosed with this notice. Shareholders who intend to appoint more than one proxy may photocopy
the Form of Proxy prior to completion. Alternatively, additional Forms of Proxy may be obtained by contacting Computershare Investor Services
plc on 0870 707 1272. The Forms of Proxy should be returned in the same envelope and each should indicate that it is one of more than one
appointments being made. Completion and return of the Form of Proxy will not preclude shareholders from attending and voting in person at the
meeting.
A “Vote Withheld” option has been included on the Form of Proxy. The legal effect of choosing the “Vote Withheld” option on any resolution is
that the shareholder concerned will be treated as not having voted on the relevant resolution. The number of votes in respect of which there are
abstentions will however be counted and recorded, but disregarded in calculating the number of votes for or against each resolution.
In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those shareholders registered
in the register of members of the Company as at the close of business on the day which is two days before the day of the meeting shall be entitled
to attend, or vote (whether in person or by proxy) at the meeting in respect of the number of shares registered in their names at the relevant time.
Changes after the relevant time will be disregarded in determining the rights of any person to attend or vote at the meeting.
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Annual Report & Accounts 2013 ReNeuron | 57
Explanatory Notes to the business of the
Annual General Meeting
Resolution 1 - The Company’s Annual Report and Accounts for the financial year ended on 31 March 2013 and the Directors’ Report
and the Independent Auditors’ Report on those accounts will be presented to shareholders for approval.
Resolutions 2 and 3 - In accordance with Article 122 of the Company’s Articles of Association, which requires that at every annual
general meeting of the Company at least one third of the Directors for the time being retire from office by rotation, having so retired
by rotation in accordance with Article 122, each of the following Directors is standing for reappointment by the shareholders at the
Annual General Meeting:
•
•
Mark Docherty, who is a non-executive Director of the Company; and
Simon Cartmell, who is a non-executive Director of the Company.
Resolution 4 - In accordance with Article 114 of the Company’s Articles of Association, every Director who has been appointed since
the last annual general meeting of the Company is required to retire from office. Professor Sir Chris Evans, having been appointed as a
non-executive Director since the last annual general meeting therefore retires and, being eligible, offers himself for reappointment by
the shareholders at the Annual General Meeting.
Resolution 5 - At every annual general meeting at which accounts are presented to shareholders, the Company is required to appoint
an auditor to serve until the next such annual general meeting. PricewaterhouseCoopers LLP have confirmed that they are willing
to continue as the Company’s auditors for the next financial year. The Company’s shareholders are asked to reappoint them and to
authorise the Director’s to determine their remuneration, which will, in accordance with the Company’s practice concerning good
corporate governance, be subject to the recommendation of the Audit Committee.
Resolution 6 - This resolution seeks to authorise the Directors to allot shares, subject to the normal pre-emption rights reserved to
shareholders contained in the 2006 Act. Previously the Association of British Insurers (“ABI”) recommended that a company seek an
annual authority to allot up to a third of their issued share capital; however the ABI has issued further guidelines permitting a company
to seek authority to allot an additional third of the issued share capital provided such additional third is reserved for fully pre-emptive
rights issues. Sub-paragraph (b) of Resolution 6 seeks to reflect the spirit of the change in the ABI’s recommendation, though covers a
broader range of offers, issues and allotments.
Resolution 7 - Pursuant to section 561 of the 2006 Act existing shareholders of the Company have a right of pre-emption in relation
to future issues of shares. Sub-paragraph (1)(i) of Resolution 7 allows the disapplication of pre-emption rights to allow the issue of
shares to existing shareholders, for example, by way of a rights issue or open offer. The limit imposed in respect of the grant of options
pursuant to sub-paragraph 1(ii) of Resolution 7 represents 10 per cent. of the issued share capital of the Company. The limit imposed in
respect of the general disapplication pursuant to sub-paragraph 1(iii) of Resolution 7 represents 10 per cent. of the issued share capital
of the Company. The Directors consider it important that they have the authorities set out in sub-paragraphs (1)(ii) and (1)(iii), which
would allow them to grant options and issue shares to incentivise employees, Directors and consultants and to issue shares generally
for other purposes.
Resolution 8 - The time limits for the appointment or termination of a proxy appointment have been altered by the 2006 Act. Section
327 of the 2006 Act provides that any part of a day that is not a working day may be excluded from counting towards the period of
time, not exceeding 48 hours, for receipt by the Company of Forms of Proxy in advance of a general meeting. The amendment to Article
98.1 of the Company’s Articles of Association is to incorporate this change into the Company’s Articles of Association.
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Shareholders Notes
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Shareholders Notes
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ReNeuron Group plc, 10 Nugent Road,
Surrey Research Park,
Guildford GU2 7AF, UK
[t] +44 (0) 1483 302560
[f] +44 (0) 1483 534864
[e] info@reneuron.com
www.reneuron.com
A N N U A L R E P O R T & A C C O U N T S 2 0 1 3