ReNeuron Annual Report 2020

FY2020 Annual Report · ReNeuron

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ReNeuron Group plc
Annual Report and Accounts 2020

Developing stem
cell technologies to
improve patients’ lives

Leading the
development of vital
stem cell therapies ...

Our vision is to improve patients’ lives through our
proprietary stem cell technologies.
As a leader in cell-based therapeutics, we develop allogeneic
stem cell technology platforms, stem cell derived exosomes
and induced pluripotent stem cells.

INSIDE OUR REPORT

Introduction
A year of progress
Financial Highlights
Group at a glance
Chairman’s statement

Strategic Report
Our marketplace
Our business model
Our competitive advantages
Our process for developing life-
changing therapies
Our progress towards improving
patients’ lives
Chief Executive Officer’s review of
performance
Financial review
Directors’ duties
Sustainability
Risks and uncertainties

02
03
04
06

08
12
13

24
27
28
29
30

Governance
Board of directors
Senior management
Directors’ report
Corporate governance
Audit committee report
Directors’ remuneration report

Financial Statements
Independent auditors’ report
Group statement of comprehensive
income
Group and Parent Company
statements of financial position
Group and Parent Company
statements of changes in equity
Group and Parent Company
statements of cash flows
Notes to the financial statements

34
36
38
40
46
48

64
65

Annual general meeting
Notice of annual general meeting
Explanatory notes to the business of
the annual general meeting

Other Information
Advisers
Shareholder information
Glossary of scientific terms

95
95
96

... improving patients’

lives

hRPCs for
retinal
diseases

Exosome
nanomedicine
platform

iPSCs:
expanding our
therapeutic
platform

CTX stem cell
therapy
for stroke

Our hRPC technology is
in a Phase 1/2a trial in
retinitis pigmentosa

Our exosomes are a
potential drug delivery
vehicle

Our iPSCs can potentially
expand our therapeutic
platform

Our CTX cells have shown
clinical potential in stroke
disability

• Retinitis pigmentosa (RP)
is a degenerative eye
disease.

• It is an inherited medical

condition.

• Patients usually lose night
vision in teenage years.

• Side vision is lost in

middle age and central
vision in later years.

• Currently, there is no

treatment for most types
of RP.

• There are many

conditions that are
difficult to treat because
enough active drug is
unable to reach its target.

• Our exosomes could
provide that delivery
system to enable drugs
to more effectively treat
these conditions.

• Our nanosomes are also
potential therapeutics.

• New data show that our
CTX stem cell line can
be reprogrammed into
induced pluripotent
stem cells (iPSCs) and
differentiated into other
cell types.

• New cell lines can be
rapidly created as cell
therapy candidates or
exosomes, targeting a
broad range of diseases.

• There are 80 million stroke

survivors worldwide.

• Out of this, 50 million

patients are permanently
disabled.

• Patients are dependent on
social care for the rest of
their lives.

• There are currently no
treatments for stroke
disability after the early
phase.

Many patients suffer from medical conditions where their
needs are unmet, impacting on the quality of their lives.

Our stem cell technologies have the potential to improve
the lives of patients with unmet medical needs.

ReNeuron Annual Report for the year ended 31 March 2020IntroductionA year of progress
towards improving
patients’ lives

Our progress to date

hRPC stem cell therapy
candidate for retinal diseases

Exosome nanomedicine platform

Positive interim efficacy data
from patients treated in the
Phase 2a segment of the
ongoing Phase 1/2 study were
announced in October 2019.

Subsequent long-term efficacy
data from the study continue
to show a meaningful clinical
effect from the therapy at all
time points post-treatment.

Clinical trial protocol
amendment approved by the
FDA and MHRA to expand
the Phase 1/2a study.

Application approval received
from the MHRA to open
a site in Oxford, UK with
Professor Robert MacLaren, a
world-renowned leader in the
treatment of retinal diseases,
as Principal Investigator.

Expansion of intellectual
property estate via the grant
of a number of key patents
covering our exosome
technology platform. Patents
were granted in China, Korea,
Japan and Europe.

Grant-funded collaboration
initiated with European
Cancer Stem Cell Research
Institute to develop novel
systems to enable the delivery

of therapeutic nucleic acids
across the blood brain barrier
using our exosomes.

In April and June 2020,
we announced separate
commercial collaboration
agreements to explore the
potential of our exosomes to
deliver therapeutic agents to
the brain.

Read more about our progress with
hRPC stem cell therapy on pages 16 to 17

Read more about our progress with
Exosomes on pages 18 to 19

What’s coming up

hRPC stem cell therapy
candidate for retinal diseases

The Group expects to
commence treating patients
shortly in both the US and
the UK under the revised
approved study protocol,
subject to a continued
easing of COVID-19 related
restrictions at the relevant
clinical sites.

On this basis, the Company
expects to present further
data from the expanded
Phase 1/2a clinical trial during
the next twelve months and
expects to have sufficient data
from the study to enable it to
seek approval in the second
half of 2021 to commence a
single pivotal clinical study
with its hRPC cell therapy
candidate in RP.

Exosome nanomedicine
platform

Targeting our exosome
technology programme
towards value-generating
business partnerships in which
exosomes may be exploited
as a potential third-party drug
delivery vehicle.

The group is developing an
exosome displaying proteins
characteristic of the SARS-
CoV-2 coronavirus with the
objective of the exosome
being used to deliver a
vaccine against COVID-19.

ReNeuron Annual Report for the year ended 31 March 2020IntroductionFinancial Highlights

Loss for the
period of

£11.4m

(2019: £14.3m)

Cash used in
operating activities

£14.3m

(2019: £11.9m)

Cash, cash
equivalents and
bank deposits

£12.6m

(2019: £26.4m)

Our progress to date

iPSCs: expanding our
therapeutic platform

CTX stem cell therapy candidate
for stroke disability

Business
development

New data presented,
supporting use of iPSCs to
develop new immortalised
cell lines as potential
therapeutic agents for
subsequent licensing to
third parties.

Read more about our
progress with iPSCs on
pages 20 to 21

During the period we
continued to progress the
clinical development of our
CTX cell therapy candidate for
stroke disability.

Positive data from PISCES II
Phase 2a clinical trial of CTX in
stroke disability was published
in a peer reviewed journal.

Patient recruitment in the US
based PISCES III Phase 2b
study was put on hold due to
COVID-19 related restrictions,
will remain suspended in the
US for the foreseeable future;
clinical trial sites will be kept
open and patients already

treated will be followed up
over time in line with the
clinical trial protocol.

Exclusive licensing partner
in China, Shanghai Fosun
Pharmaceutical Industrial
Development Co., Ltd.
(“Fosun Pharma”), continues
to pursue development
of CTX cell therapy in the
licensed territory (Greater
China including Hong Kong,
Macao and Taiwan).

Clinical trial applications have
recently been filed by Fosun
Pharma to open clinical sites
in the licensed territory.

Read more about our progress with
CTX stem cell therapy on pages 22 to 23

What’s coming up

iPSCs: expanding our
therapeutic platform

CTX stem cell therapy
candidate for stroke disability

The Group’s iPSC platform
enables the derivation of
different stem cell populations
that can be utilised for the
production of exosomes with
specific tissue targeting, or as
new cell-based therapeutic
candidates, thus providing
further scope for a wide
range of industry-based
partnerships.

Clinical sites to be opened, by
Fosun Pharma, in the licensed
territory to build on the clinical
data generated in the US.

The CTX cell therapy
candidate will be made
available for licensing in stroke
disability outside China and
will also be made available for
licensing in other indications
such as Huntington’s disease.

For scientific terms see the glossary on pages 96 to 97

Signing of an exclusive out-
licence agreement with Fosun
Pharma to commercialise
hRPC and CTX programmes
in the People’s Republic of
China (“Greater China”).

Fosun Pharma is a leading
healthcare group in China with
extensive healthcare business
interests worldwide.

We received £6.0m (before
withholding tax) on signing
and will receive up to £6.0m
in near-term operational
milestones and up to £8.0m
in future regulatory milestone
payments as well as post-
launch profit threshold
milestone payments and
tiered royalties on sales.

Business
development

Discussions will continue with
other commercial third parties
regarding potential out-licence
deals across all therapies.

We will continue to work closely
with Fosun Pharma as it pursues
the development, manufacture
and commercialisation of our
cell therapy programmes in
Greater China, with the CTX
programme for stroke disability
being the initial focus of
activities.

ReNeuron Annual Report for the year ended 31 March 2020IntroductionIntroduction
Introduction

Group at a glance

Our stem cell-based therapies ...

Our hRPC stem cell therapy could change the lives of patients
suffering from retinitis pigmentosa (RP) and also has potential
utility in other eye diseases.

hRPCs

What are hRPCs?
Human retinal progenitor cells
(hRPCs) are an allogeneic,
cryopreserved cell-based therapy
for treatment of retinal diseases.

What can they do?
hRPCs have demonstrated
the ability to differentiate into
functional photoreceptors and
integrate into retinal layers in
pre-clinical models; integration
may also enable durable trophic
support.

How it is used
Our therapy is initially targeting
the inherited retinal degenerative
disease, retinitis pigmentosa, by
implantation of hRPCs into the
retina.

Exosome
platform

iPSCs

Our exosomes could change the lives of patients where
current treatment options are limited.

What are exosomes?
These are nano-sized packages of
information released by our neural
stem cells.

What can they do?
Therapeutic agents can be
loaded onto our exosomes and
potentially be used to treat a host
of medical conditions.

How it is used
Our exosomes can be delivered
either locally or systemically
depending upon the desired final
destination.

Our iPSCs could expand our therapeutic portfolio, targeting
a broad range of diseases.

What are iPSCs?
Induced pluripotent stem cells
(iPSCs) are reprogrammed
proprietary neural stem cells that
are in an embryonic-like state.

What can they do?
iPSCs can be made to develop
into any other type of stem cell.

What this means
iPSCs can be utilised as new cell-
based therapeutic candidates or
for the production of exosomes
with specific tissue targeting.

Our CTX stem cell therapy could change the lives of
patients suffering from stroke disability.

CTX cells

What are CTX stem cells?
Allogeneic, cryopreserved,
immortalised neural stem cells for
treatment of stroke disability.

What can they do?
CTX stem cells have the ability to
differentiate into a repertoire of
specific nerve and nerve support
cells, as well as provide support
for already present cells.

How it is used
Our cell therapy is directly
injected into the brain near to the
area damaged by the stroke.

04
04

ReNeuron Annual Report for the year ended 31 March 2020
ReNeuron Annual Report for the year ended 31 March 2020

... could improve the lives of patients

Key facts

patents worldwide
covering cell-based
therapies and exosome
technology

key grant-funded
collaborations with
research institutes
globally

Key facts about retinitis pigmentosa

RP is an inherited, degenerative eye
disease that results in the loss of
peripheral vision followed by the loss of
central vision(1).

The end result is blindness. One in 3,000
to 4,000 people are affected by RP(1).

Our therapy could potentially benefit
patients suffering from this rare disease.

Read more about the marketplace
for our hRPC stem cell therapy on
page 09

Key facts about exosomes

Our studies have identified the potential
of our exosome candidate as a drug
delivery vehicle.

One of the key advantages of our
exosomes is that they can cross the blood
brain barrier.

We are focusing on the use of our
exosome technology as a novel drug
delivery vehicle.

Read more about the marketplace for
our Exosomes on page 10

Key facts about iPSCs

There is a potential to expand our
therapeutic portfolio by developing
further therapeutic candidates for
subsequent out-licensing.

There is a potential to produce exosomes
with the ability to target specific tissues
within the body.

Our iPSCs research platform provides
further scope for a wide range of industry
partnerships.

Read more about the marketplace for
our iPSCs on page 10

Key facts about stroke disability

Around 800,000 strokes happen in the US
each year(2).

Stroke mortality rate has decreased by
33% since 1996 suggesting that more
people survive and are left suffering(3).

More people than ever might be able to
benefit from our potentially life-changing
therapy to reduce their disability, and
dependence on others.

Read more about the marketplace
for our CTX stem cell therapy on
page 11

For scientific terms see the
glossary on pages 96 to 97

(1) RP Fighting Blindness

(2) Centers for Disease Control and Prevention

(3) National Institutes of Health

ReNeuron Annual Report for the year ended 31 March 2020IntroductionChairman’s statement

We look forward
to reporting further
Phase 2a data
from the ongoing
study with our
hRPC cell therapy
candidate for retinitis
pigmentosa over the
next 12 months.

John Berriman
Non-executive Chairman

12 August 2020

Read more on our hRPC stem
cell therapy on pages 16 to 17

Read more on our exosomes
and iPSCs on pages 18 to 21

The year ended 31 March 2020 was a year of significant
progress in both clinical and strategic development, providing
growing confidence in the short and long term potential of
the Company’s programmes.

I am pleased to introduce the Group’s
results for the year ended 31 March 2020.
It was a year of significant progress in both
our clinical and strategic development,
providing growing confidence in the short
and long term potential of the Company’s
programmes.

We are increasingly encouraged by the
positive interim data and duration of
therapeutic response from the Phase 2a
patients treated in the ongoing US Phase
1/2 clinical trial with our hRPC cell therapy
candidate for retinitis pigmentosa. We are
also pleased to have received regulatory
approval from both the FDA and MHRA to
expand the ongoing Phase 2a part of the
study to treat patients with RP at a higher
dose level, at clinical sites in both the US
and the UK. We look forward to reporting
further Phase 2a data from the study over
the next 12 months.

We have successfully refocused our
exosome technology programme towards
value-generating business partnerships, in
which our exosomes are being exploited
as a potential novel vector for delivering
third parties’ biological drugs. This
refocusing has culminated in the signing
of two collaboration agreements post
year-end with major pharmaceutical/
biotechnology companies to explore the
potential of our neural stem cell derived
exosomes to deliver therapeutic agents
to the brain. During the period, we also
presented new data supporting the use
of the Group iPSCs (induced pluripotent
stem cells) to derive new immortalised cell

lines as potential therapeutic agents for
subsequent licensing to third parties.

We recently announced a strategic
decision to focus the Group’s resources
on our retinal disease programme
and our exosome and iPSC research
platforms. Consequently, our stroke
disability programme will continue
through regional partnerships. In April
2019, we were delighted to sign an
exclusive licence agreement with
Shanghai Fosun Pharmaceutical Industrial
Development Co., Ltd. (“Fosun Pharma”)
for the development, manufacture and
commercialisation of both our CTX and
hRPC cell therapy programmes in the
People’s Republic of China. Fosun Pharma
is a leading healthcare group in China with
extensive healthcare business interests
worldwide. Clinical trial applications have
recently been filed by Fosun Pharma to
open clinical sites in the licensed territory
to build on the Phase 2b clinical data
already generated with the CTX cell
therapy candidate for stroke disability in
the US.

In addition to making our CTX cell
therapy candidate available for licensing
in stroke disability outside China, we
further announced that the candidate is
available for licensing in other indications.
In support of this licensing strategy, we
were pleased to have recently published
positive data from the PISCES II Phase 2a
clinical trial of CTX in stroke disability in
the Journal of Neurology, Neurosurgery,
and Psychiatry.

ReNeuron Annual Report for the year ended 31 March 2020IntroductionReNeuron has a
clear focus to deliver
value-generating
data across its
programmes over
the next twelve
months.
John Berriman
Non-executive Chairman

Additionally, we recently announced the
publication of new positive non-clinical
data relating to our CTX cell therapy
candidate in Huntington’s disease.

During the ongoing COVID-19 pandemic,
the safety of employees, suppliers,
clinical trial participants and all other
people with whom the Group interacts
has been of over-riding importance to
us. The Group continues to comply with
governmental advice and requirements
across its operations in the UK and US,
without significant impact on our priority
internal research projects. In response to
COVID-19, we also initiated a research
programme focused on the potential
utility of our proprietary exosomes
as a delivery vehicle for SARS-CoV-2
coronavirus vaccines.

ReNeuron now has a clear focus on
delivering value-generating data across its
programmes over the next twelve months.
Consistent with this new sharper focus
and as a consequence of long-serving
Non-executive Directors indicating their
intention to retire from the Board (having
served for nine years and thereby become
non-independent under the QCA code of
corporate governance), the non-executive
membership of the Board will be
progressively reconfigured, reducing the
number of Non-executive Directors from
six to four. This rationalised Board has the
expertise necessary to support the Group’s
new emphasis on retinal diseases and
commercial partnerships. I shall therefore
not be seeking re-election at the coming

AGM (along with my colleague Simon
Cartmell) and Dr Claudia D’Augusta is
also stepping down. The company is
now stronger and more diversified than
when I joined nine years ago and I am
particularly pleased to be leaving it in the
able hands of my successor chairman, Dr
Tim Corn. Furthermore in recognition of
the significant shareholding of Obotritia
Capital KGaA and their ongoing support
for the Company we have approved in
principle their request to nominate a
non-executive director for election to
the Board.

Finally on behalf of the Board I would
like to thank our employees for their
commitment and determination,
especially in the face of the COVID-19
pandemic. On behalf of all Directors and
employees I would also like to thank
our shareholders for their support as we
continue to strive to make ReNeuron a
great success.

On page 91 of this report is the Notice
of the 2020 annual general meeting
(AGM) to be held at 10.00 a.m. on
10 September 2020. A short explanation
of the resolutions to be proposed at the
AGM is set out on page 94. 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.

John Berriman
Non-executive Chairman

12 August 2020

ReNeuron Annual Report for the year ended 31 March 2020IntroductionStrategic Report

Our marketplace

Meeting market
needs with our
therapeutic
candidates

$0.5bn –
$1.6bn

Market potential for
RP therapy(1)

08
08

ReNeuron Annual Report for the year ended 31 March 2020
ReNeuron Annual Report for the year ended 31 March 2020

Retinal diseases

Market need:
No approved treatment for vast
majority of patients with retinitis
pigmentosa (RP).

Market characteristics:

RP is an inherited, degenerative
eye disease causing severe vision
impairment and often blindness.

There is currently no general cure and
limited treatment options for RP and
sufferers remain reliant on both health
and social care services.

Current treatments target specific genes
and therefore are only appropriate for
a limited number of the RP population
as there are over 100 gene defects
causing RP.

As with all forms of blindness, the
quality of the patient’s life is significantly
diminished.

Given that this condition is inherited it
can affect every part of the patient’s life;
from their career to decisions around
starting a family.

Other retinal diseases include Cone
Rod Dystrophy (CRD), which frequently
affects patients in childhood and has
no cure.

CRD is an inherited orphan disease that
affects roughly one in 40,000 people.

Our response

Our hRPC cell therapy
candidate offers a number
of potential advantages
over alternative
approaches to the
treatment of RP.

Our cell therapy candidate is
independent of the many specific
genetic defects that collectively define
RP as a disease, thereby allowing
a much broader potential patient
population to be eligible for the
treatment.

Our research suggests that hRPC
therapy may be able to slow or
even reverse the progression of RP
through its ability to differentiate
into components of the retina
and its ability to maintain existing
photoreceptors.

Our therapy is cryopreserved,
enabling on-demand shipment and
use at local surgeries and hospitals.

Our hRPC therapy doesn’t require
immunosuppressants. The cells are
injected directly to the site of retinal
degeneration, allowing a greater
chance of anatomic restoration of
photoreceptor function.

(1) Analysts’ estimates: Stifel

March 2018, N+1 Singer April 2017,
Edison May 2017.

Normal vision

Retinitis pigmentosa

ReNeuron Annual Report for the year ended 31 March 2020

ReNeuron Annual Report for the year ended 31 March 2020Our marketplace

Drug delivery
technologies
One of our primary objectives is the development
of exosomes as a delivery vehicle targeting areas
of significant unmet or poorly met medical need.
Exosomes have the potential to overcome the limitations of current
delivery technologies.

Advantages of exosomes:
A key advantage of exosomes is their low
immunogenicity, which means they do not
provoke immune responses in the body.
In comparison, delivery technologies such
as Lipid Nanoparticles (LNP), are known
for inducing a significant inflammatory
response.

Other delivery technologies (e.g. Lipid
Nanoparticles) are generally taken up by a
certain type of pathway in the body which
results in lysosomal destruction.

Exosomes however have the ability to
be taken up by a number of different
pathways, including cell fusion. If the
exosome fuses to the cell membrane, its
cargo will be directly released into the cell
to have its desired functional effect.

There is a potential for exosomes to
deliver medicine to specifically targeted
areas. In comparison to other delivery
technologies, such as GalNac conjugates,
which can only delivery siRNA to the liver.

Crossing the blood brain barrier
Very few therapies successful cross the
blood brain barrier (BBB), making central
nervous system disorders difficult to treat.

Why does it make it
difficult to treat?
If drugs do not cross the BBB easily,
systemic administration (I.V.) is ruled out.
Very high doses will need to be given to
an efficacious dose to the brain.

If I.V. is ruled out, then local administration
is an option, which is much more
complex, expensive and less accessible.
If higher doses are given I.V., the chance
of off-target effects (side effects) increases
significantly.

References: Vader et al. 2016 – Extracellular
vesicles for drug delivery;

Ha et al. 2016 – Exosomes as therapeutic drug
carriers and delivery across biological barriers.

New cell-based
therapeutic candidates

Human pluripotent stem cells offer
huge potential for the entire field of
regenerative medicine and cell therapy.
Their capacity for unlimited expansion
through self-renewal and ability to
differentiate into any cell type within the
body has the potential to produce an
inexhaustible source of different cell types
to treat a variety of indications.

A number of issues have so far impeded
the clinical development of pluripotent
stem cells.

More often than not, pluripotent stem
cells require differentiating to adult stem
cells or tissue progenitor prior to use as a
drug product. However these cell types
are extremely unstable and are difficult to
manufacture at scale.

Our response

Our exosomes can cross
the blood brain barrier.
We believe exosomes can
do this due to the neural
nature of their cell of
origin.

This neural stem cell line produces
exosomes with specific surface
markers that allow the exosomes to
cross the BBB and communicate with
other cells within the brain.

For scientific terms see the
glossary on pages 96 to 97

Our response

ReNeuron’s iPS cells however, have a
conditional immortalisation technology
inserted which requires no further
manipulation and increases the stability
of the subsequent therapeutic cell lines
for the rapid production of ‘off-the-
shelf’ stem cell therapies.

ReNeuron Annual Report for the year ended 31 March 2020Strategic ReportStrategic Report
Strategic Report

Stroke disability

Our response

Market need:
Treatment options are limited, and
they are only available within 4.5 hours
of stroke onset.

Market characteristics:

Stroke is the single largest cause of adult
disability in the developed world.

Stroke disability significantly affects a
patient’s quality of life, and the treatment
and care of these patients is a burden on
health and social care as well as family
and caregivers.

There are currently no treatments for
stroke disability after the early phase.

US
Stroke is the leading cause of morbidity
and long-term disability in the US(2).

In the US, $34 billion is spent each year
on stroke disability (this includes health
care services, medications and lost
productivity)(3).

UK
In the UK, the NHS spends £3.4 billion
each year on stroke disability and the
social care spend is £5.2 billion annually(4).

China
Stroke has the highest single-disease
disability rate and is a financial and social
burden in China. From 1993 to 2003, the
average growth rate for the direct cost of
stroke care was 18.04% per year.

In 2010, the average cost per capita of
patients with a high risk of stroke was
estimated to be US$517.8 per year. This
heavy financial burden to the Chinese
healthcare system will likely increase in
the next 20 years because of the ageing
population(5).

(1) Analysts’ estimates: Stifel March 2018, N+1 Singer April 2017, Edison May 2017.
(2) Benjamin et al. (2017) Circulation 135, e146-e603.
(3) Centers for Disease Control and Prevention.
(4) Stroke Association.
(5) Chinese Stroke Association, World Stroke Organisation.

Swedish study

The graph on the right shows the results
from a 2017 Swedish study which
demonstrated that patient care cost can
be reduced in proportion to a reduction
in stroke disability. Our Phase 2b study
targets patients with a mRS score of 3 or
4 and will be looking for an improvement
of one or more points.

)

0
0
0

(

r
y
/
e
r
a
c

t
n
e
i
t
a
P

120

110

100

Our stroke therapy is the
first cell-based therapy
of its kind. Our CTX cell
therapy aims to treat
patients months or even
years after their stroke.

The Phase 2a clinical trial (PISCES
II) for our CTX cell therapy
demonstrated that it can reduce a
patient’s global disability post stroke
as assessed by mRS.

Our exclusive licensing partner
in Greater China, Fosun Pharma,
continues to pursue development of
our CTX cell therapy.

$3.4bn

spent each year in the UK
on stroke disability(1)

$34bn

spent each year in the US
on stroke disability(1)

mRS5

mRS4

mRS3

mRS0-2

Level of disability

ReNeuron Annual Report for the year ended 31 March 2020

Our business model

Key resources

Intellectual
We use proprietary
technology to produce our
life-changing therapies.

Physical
Our contract manufacturing
organisations are
instrumental in the
production of our
therapeutic
candidates.

Human
Our researchers and
academic collaborators have
industry-leading knowledge
and this drives the therapy
development process.

Financial
Funds are raised by
commercial partnerships, the
issues of shares and from
grant funding bodies. These
financial resources enable us
to advance the development
of our therapies.

Value chain

Develop best-in-class
cell-based therapies
for life-changing high-value
products.

Gain clinical validation for
our therapeutic programmes, via
robust clinical trials in well regulated
territories.

Realise value for our technologies
and therapeutic programmes, via
direct sales or substantial licence
deals.

hRPCs

Exosomes

iPSCs

CTX cells

Our relationships

We are developing good
relationships with inherited
retinal disease specialists, who
administer the hRPC therapy to
study participants.

We are developing strong
relationships with academic
and clinical key opinion leaders
in the area of neurology to
oncology and beyond.

This will support the clinical
development to advance this
potential therapy to patients
with inherited retinal disease.

Our licence agreement with
Fosun Pharma for China also
includes our hRPC therapy
programme.

We also have relationships with
commercial organisations who
we will be collaborating with
as we broaden our therapeutic
pipeline.

We have established
relationships with
pharmaceutical companies
to explore the use of our
exosomes as a novel drug
delivery vehicle.

We are working on a
collaboration which focuses
on loading gene silencing
sequences into exosomes.

We continue to develop strong
relationships with academic
leaders in all areas of cell
therapy to understand where
the technology will have the
biggest impact.

As part of the clinical trials
for the CTX cell therapy
for stroke disability, we
develop strong relationships
with the neurologists and
rehabilitation doctors who
care for the patients and
the neurosurgeons who will
administer the therapy.

Our exclusive licensing
partner in China, Fosun
Pharma, continues to pursue
development of our CTX cell
therapy for stroke disability.

Our relationships with
academic institutions and other
pharmaceutical companies
enables us to explore the use
of our CTX sell therapy to
treat other indications such as
Huntington’s disease.

ReNeuron Annual Report for the year ended 31 March 2020Strategic ReportStrategic Report

Our competitive advantages

We are positioned
for success ...

1
2
3

With our proprietary technologies

• Our patent estate consists of over 40
patents worldwide covering our cell-
based therapies, exosome and iPSCs
technologies.

• A highly efficient, patented process is

used to produce hRPCs on a large scale.

• Our CTX drug product is a proprietary

are immunologically different from cell
donor.)

• Our high-yielding human neural stem cell
derived exosomes have proven ability
to be loaded with siRNA, miRNA and
proteins, and are able to cross the Blood
Brain Barrier.

allogeneic cell therapy produced by our
well-established, scalable manufacturing
process. (Allogeneic: recipients of cells

• Our iPSC platform technology engineers
CTX neural stem cells into other forms of
stem cell.

With our flexible cryopreservation process

• Our hRPCs and CTX cells can be

cryopreserved, which provides flexibility
in terms of scheduling patient treatment.

• Our cryopreservation process allows us
to develop the therapies and transport
them globally.

• This makes our product similar
to conventional ‘off-the-shelf’
pharmaceuticals/biologics.

With our efficient development pipeline

• Our therapy development pipeline spans
the pre-clinical and clinical development
process.

• We have seen positive top-line efficacy
data presented from Phase 2a patients
in ongoing US Phase 1/2a clinical trial in
retinitis pigmentosa. The ongoing Phase
2a study is to be expanded to allow
for subsequent potential single pivotal
clinical study and shorter route to market.

• There are significant clinical validation
milestones due in the next 18 months
in our ongoing clinical trial in retinitis
pigmentosa.

• The exosomes we are harnessing for use
are a by-product of our CTX cells and are
derived from a GMP compliant process.
They can be produced at an industrial
scale without affecting the quality and
consistency of the final product. They
have potential as both a drug load/
delivery vehicle and as a therapeutic.

• Our iPSC platform has potential for

new targeted cell therapeutics and for
exosomes based on non neural stem
cells.

ReNeuron Annual Report for the year ended 31 March 2020

Strategic Report

Our process for developing life-changing therapies

The clinical trial process

Pre-clinical trials

Clinical trials

Review and approval

Pre-clinical studies (in vitro and in vivo)
are conducted to assess feasibility,
efficacy and safety of any potential
drug product prior to it being tested
in humans.

Once a therapy has been deemed
safe and effective, it is submitted for
approval to regulatory bodies. These
bodies review the available evidence
and approve it if the benefits appear
to outweigh the risks.

Phase 1
We carefully assess the safety of a
biologically active substance in a small,
select group of subjects.

Phase 2
We evaluate the efficacy and safety
of our therapy in selected groups of
patients.

We further evaluate the efficacy and
safety of our therapy in patients in a
controlled, rigorous trial.

Phase 3
Once our therapy has shown
preliminary efficacy and safety (in Phase
1 and Phase 2) we carry out larger-scale
clinical trials.

Development Pipeline

Programme

Indication

Pre-clinical

Phase 1

Phase 2

Next Milestones

hRPC

Retinitis
Pigmentosa

CTX cells

Stroke
Disability

Exosomes
platform

Neurodegeneration,
Oncology, Vaccines
(e.g. COVID-19)

iPSC
platform

Oncology, Diabetes

Further data read-outs from
expanded UK/US Phase 2a
study in 2020 and 2021

Future clinical development
with Fosun and other potential
partnerships

Proof of concept data from
pharma/biotech research
collaborations

Validation of technology and
publication of pre-clinical
proof-of-concept data in 2020

ReNeuron Annual Report for the year ended 31 March 2020Strategic Report

Progress in the last 12 months

hRPCs

Positive interim efficacy data from patients
treated in the Phase 2a segment of the
ongoing Phase 1/2 study were announced.

A total of 22 patients have now been
treated in the Phase 1/2a study and a good
safety profile has been established.

Subsequent long-term efficacy data from
the study continue to show a meaningful
clinical effect from the therapy at all time
points post-treatment.

Read more on page 22

ReNeuron Annual Report for the year ended 31 March 2020

Strategic Report

Our progress towards improving patients’ lives

hRPCs for
retinal therapy

Pre-clinical data

Initial Phase 1 element of combined Phase 1/2a trial

• This study was a single centre,

• We successfully developed a

• A rodent model of retinal degeneration
was used to study the effects of our
hRPC therapy.

• These hRPCs were injected subretinally
(just beneath the photoreceptor layer of
the retina).

open-label, dose escalation trial to
assess the safety of hRPCs in patients
with established retinitis pigmentosa.

• Three different doses of hRPCs were

tested.

• The results from this study

• Patients received a single, subretinal

demonstrated that these cells can treat
retinal degeneration.

injection of one dose and were followed
up for one year.

They are able to . . .

1 Preserve retinal structure and function.

2 Differentiate into components of the

retina.

• It was determined that subretinal

injections of hRPCs at the three doses
tested were safe and well tolerated.

cryopreserved formulation of our hRPC
stem cell therapy.

• This enables cells to be frozen for

shipping/storage and be easily thawed
at the point of clinical use.

• The success of this stage means that we
were able to progress into the Phase 2a
element of the combined Phase 1/2a
study.

Figure 1 Long-term efficacy data from the phase 2a portion of the study.

Months
post-treatment

Mean change from
baseline in visual acuity
in treated eye*

Mean change from
baseline in visual acuity
in untreated eye*

Difference in mean
change between treated eye
and untreated eye*

+7.9 letters (n=9)

+0.2 letters (n=9)

+7.7 letters (n=9)

+8.0 letters (n=9)

+1.2 letters (n=9)

+6.8 letters (n=9)

+10.8 letters (n=9)

+4.4 letters (n=9)

+6.4 letters (n=9)

+9.6 letters (n=9)

+3.4 letters (n=9)

+6.2 letters (n=9)

+7.1 letters (n=8)

+1.2 letters (n=8)

+5.9 letters (n=8)

+11.9 letters (n=5)

+4.3 letters (n=5)

+7.6 letters (n=5)

+17.0 letters (n=1)

+1.0 letters (n=1)

+16.0 letters (n=1)

* Data as announced 29 June 2020, excluding one patient who experienced surgical complications and whose vision has not recovered to at least the baseline level of vision

in the treated eye.

ReNeuron Annual Report for the year ended 31 March 2020

Strategic Report

What does this mean for
future development?

Milestones in the next
two years

Regulatory approval has recently been
received from both the FDA and MHRA
for the expanded Phase 2a study in
RP patients. We expect to commence
treating patients shortly in both the US
and the UK under the revised approved
study protocol, subject to a continued
easing of COVID-19 related restrictions
at the relevant clinical sites. On this basis,
we expect to present further data from the
expanded Phase 2a clinical trial during the
next twelve months and expect to have
sufficient data from the study to enable
us to seek approval in the second half
of 2021 to commence a single pivotal
clinical study with our hRPC cell therapy
candidate in RP.

At this point, other indications will be
assessed alongside retinitis pigmentosa,
such as cone rod dystrophy.

Initial Phase 2a element of combined Phase 1/2a study

• In June 2020, further long-term data
from the study have been gathered
from patients at six, nine, twelve and
now, for the first patient treated,
eighteen months follow-up. The
Company is pleased to report that the
latest data continue to demonstrate
the efficacy of the therapy, with a
clinically meaningful benefit being
observed at all time-points. These
results are particularly encouraging
as RP is characterised by inexorable
progression to blindness, with no
therapy currently available for the vast
majority of patients.

• The degree of efficacy varies between
patients, with mean results in a group
of subjects who had a successful
surgical procedure, set out in Figure 1.

• An application approval has been

received from the MHRA to expand
the ongoing trial to a UK site.

Figure 2

• We progressed into the Phase 2a

element of the combined Phase 1/2a
study.

• We were able to expand our

assessment of efficacy into RP patients
that have a greater baseline level of
visual acuity (clarity of vision).

• All three of the first cohort of subjects

in the Phase 2a part of the study
reported a rapid and significant
improvement in vision, on average
equivalent to reading an additional
three lines of five letters on the Early
Treatment Diabetic Retinopathy Study
(ETDRS) eye chart, the standardised
eye chart used in clinical trials to
measure visual acuity, as seen in
Figure 2.

• Later cohorts comprised patients

with a greater baseline level of visual
acuity than those treated earlier in the
study to assess preliminary efficacy in
patient groups with differing levels of
remaining vision.

• A total of 22 patients have now
been treated in the Phase 1/2a
study and a good safety profile has
been established, with no patients
experiencing product-related serious
adverse events and two patients
experiencing surgical procedure-
related loss of vision (one of whom has
now recovered their vision and is back
to at least baseline at one year post
treatment).

• In February 2020, interim efficacy data
from the study continued to show a
meaningful clinical effect from the
therapy at all time points out to 12
months post-treatment.

ReNeuron Annual Report for the year ended 31 March 2020

Strategic Report

Our progress towards improving patients’ lives

Exosomes as a novel drug
delivery vehicle

What does this mean for
future development?

• We will continue to develop our
exosomes as a novel vector for
delivering third- party biological drugs.

• We intend to pursue opportunities to
capitalise on the significant scientific
and life sciences industry interest in
exosomes. We will do this by forming
further value-generating business
partnerships covering this exosome
technology.

Potential as a novel drug
delivery vehicle

Scalability

• We have tested the production of

exosomes through our grant-funded
collaboration between University
College London and the Cell and Gene
Therapy Catapult.

• The data demonstrated the feasibility
of scaling up the production of our
exosomes utilising state-of-the-art
bioreactor systems.

• This represents a significant advance

towards an industrial scale production
process without affecting the quality and
consistency of the final product.

• As part of the collaboration agreement

to use exosomes to deliver gene
silencing sequences, ReNeuron will be
paid by the pharmaceutical company
for manufacturing and loading the
exosomes in the initial phase of the
collaboration.

• Our studies have identified the potential
of our exosome technology platform as
both a novel therapeutic candidate and
as a drug delivery vehicle. Our focus has
been on the potential of our exosomes
as a drug delivery vehicle.

• In April 2020, we signed a collaboration

agreement with an experienced
pharmaceutical company to explore the
potential use of exosomes to deliver
novel therapeutics. The collaboration
will focus on the use of exosomes for
the delivery of gene silencing sequences
created by the pharmaceutical company.

• In June 2020, we signed a research
evaluation agreement with a major
US biotechnology company. This
collaboration will focus on the use of
our exosomes for the delivery of the US
biotechnology company’s neuroscience
therapeutic candidates.

• We are developing an exosome

displaying proteins characteristic of
the SARS-CoV-2 coronavirus with the
objective of the exosome being used to
deliver a vaccine against COVID-19.

ReNeuron Annual Report for the year ended 31 March 2020

Strategic Report

We are progressing
in the development
of our exosomes
platform, focusing
on its use as a novel
vector for delivering
third party drugs.

Exosomes explained

Exosomes as a therapeutic delivery vehicle

What are exosomes?
The exosomes released by our CTX cells
are nano-sized packages of signalling
molecules.

Therapeutic agents can be attached to
exosomes as cargo. Exosomes have the
ability to deliver this cargo to specifically
targeted cells in the body.

Advantages of exosomes
as a delivery vehicle

• Natural carrier of nucleic acids and
proteins, amenable for loading
complex, hard-to-deliver therapeutic
agents.

• Ease of bioengineering.

• Low immunogenicity.

• Intrinsically durable.

Advantages of ReNeuron’s
exosome technology

• Stable, consistent, high-yield.

• Proven ability to load miRNA and

proteins.

• There is a potential for exosomes to

work as a therapeutic in gene therapy.

• Able to cross the blood brain barrier.

• Could be engineered to target

particular tissues.

Exosome

MHC I

MVB Biogenesis

Protein*

Receptors

Exosomes

Membrane
trafﬁcking

Loaded Cargo*

Lipid
Rafts

miRNA*

Tetraspanins

Adhesion &
Targeting
Molecules

There are two ways that cargo can be delivered, through:

Delivery by
cell fusion

Delivery by
endocytosis

Target
cell

Non-target
cell

Target
cell

Non-target
cell

ReNeuron Annual Report for the year ended 31 March 2020

Strategic Report

Our progress towards improving patients’ lives

iPSCs: expanding our
therapeutic platform

A step towards developing further therapies in key areas of unmet need

Engineering CTX neural stem cells

What does this mean for future development?

• New data shows that our CTX neural
stem cell line can be reprogrammed
into induced pluripotent stem cells
(iPSCs) and differentiated into other cell
types.

• In essence, this means that the CTX

neural stem cells can be reprogrammed
back to being embryonic like cells that
can be engineered into any other type
of stem cell.

What is pluripotency?
• Pluripotent stem cells are cells that have
the capacity to self-renew by dividing
and to develop into the three primary
germ cell layers of the early embryo and
therefore into all cells of the adult body.

• The new data demonstrate that CTX
cells could be used to produce new
conditionally immortalised allogeneic
cell lines from any of the three primary
germ cell layers which form during
embryonic development. See below.

• Potential new cell lines can be efficiently

created as cell therapy candidates
targeting a broad range of diseases. A
number of different cell lines are currently
being developed.

• As a result, there is a potential to expand
our therapeutic portfolio by developing
further therapeutic candidates for
subsequent out-licensing.

• There is a potential to produce exosomes
with the ability to target specific tissues
within the body.

• The maintenance of the immortalisation
technology within these new cell lines
may allow for the scaled production of
‘off-the-shelf’ allogeneic stem cells.

For scientific terms see the
glossary on pages 96 to 97

Induced pluripotent stem cells (iPSCs) explained

Three primary
germ cell layers

Reprogramming

CTX Cells

CTX-derived
iSPCs

Development

Differentiation

Mesoderm

Endoderm

Ectoderm

ReNeuron Annual Report for the year ended 31 March 2020

Strategic Report

There is potential
to expand our
therapeutic portfolio
by developing
further therapeutic
candidates for
subsequent
out-licensing.

Different cell lineages
can be generated

New conditionally
immortalised allogeneic
(i.e. non-donor-specific)
cell lines produced)

Potential for
therapeutic agents
used to treat diseases of
unmet medical need

Scalability

Our
immortalisation
technology is retained
which enables the efficient
production of clinical-grade
cell therapy candidates
for subsequent licensing
to third parties

ReNeuron Annual Report for the year ended 31 March 2020

Strategic Report

Our progress towards improving patients’ lives

CTX cells for
stroke disability

Pre-clinical data

Clinical trials: Phase 1 study

Clinical trials: Phase 2a study

• In this study, we included 23 disabled,

stable stroke patients, who were
between 2 and 13 months post-stroke.

• This study was a single arm, open-
label trial using the highest dose
tested in Phase 1. This trial was “single
arm” because all the patients were
administered the same dose.

• CTX cells (20 million cells) were directly
injected into the putamen, and patients
were followed up for 12 months post-
implantation.

• No cell-related safety issues were

identified.

• The Modified Rankin Scale (or mRS,

a globally used measure of functional
disability and dependence in stroke
sufferers) was used as a secondary end-
point for this study.

• As shown by the figure to the left, 7

out of 20 (35%) patients demonstrated
a clinically meaningful improvement
at 12 months post-implantation. An
even higher response rate (6/12; 50%)
was observed in pre-specified patients
who had some residual upper limb
movement at time of treatment.

• A well-established rodent model of

stroke was used to study the effects of
our CTX cell therapy.

• The CTX cells were directly injected into

the brain.

• Our results were particularly positive

given that restricted blood supply to the
brain, following a stroke, results in nerve
cell death.

• The effects of our CTX cell therapy

included the formation of new blood
vessels, new nerve cells and new
connections between nerve cells.

• In this study, we included 11 stable,
disabled stroke patients who were
between six months and five years
post-stroke.

• This study was a single centre, open-
label, ascending dose trial to assess
safety.

• The CTX cells were directly injected into
the putamen (an area of the brain), and
patients were followed up for over two
years post-implantation.

• It was determined that these CTX cell

injections at the doses tested were safe
and well tolerated.

Modified Rankin Scale (mRS)
0 No symptoms at all

1 No significant disability despite symptoms

2 Slight disability; unable to carry out all previous

activities, but able to look after own affairs without
assistance

3 Moderate disability; requiring some help, but able

to walk without assistance

4 Moderately severe disability; unable to walk and
attend to own bodily needs without assistance

5 Severe disability; bedridden, incontinent and
requiring constant nursing care and attention

After 12 months

)
S
R
m

(
e
a
c
S
n
k
n
a
R
d
e
ﬁ
d
o
M

ReNeuron Annual Report for the year ended 31 March 2020

Strategic Report

What does this mean for
future development?

Future milestones

• The CTX cell therapy candidate will

continue through regional partnerships.
Our exclusive licensing partner in
China, Fosun Pharma, will develop the
Company’s CTX cell therapy candidate
for stroke disability in the licensed
territory (Greater China) where we have
the potential to benefit from future
operational and regulatory milestones
under this out-license agreement.

• Clinical trial applications have recently
been filed by Fosun Pharma to open
clinical sites in the licensed territory
to build on the clinical data already
generated in the US.

• In May 2020, we announced the

publication of new positive non-clinical
data relating to our CTX cell therapy
candidate in Huntington’s disease (HD).
The CTX cell therapy candidate will be
available for licensing in HD and other
indications.

Clinical trials: Phase 2b study

• Patient dosing commenced in the study

PISCES III, a randomised, placebo-
controlled clinical trial in 110 patients.

• We are seeking a one point or more

improvement in the mRS scoring, at six
months post surgery, in CTX-treated
patients that have a mRS score of 3 or 4
at baseline.

• The study is being conducted in up
to 40 sites, of which 12 surgical sites
and 22 assessment sites have been
activated.

• The protocol was amended which,
amongst other changes, increases
the number of patients to receive
CTX therapy as opposed to
placebo, with the size of the Phase
2b study increasing from 110 to
130 patients.

• Patient recruitment which was put
on hold due to COVID-19 related
restrictions, will remain suspended
in the US for the foreseeable future;
clinical trial sites will be kept open
and patients already treated will be
followed up over time in line with
the clinical trial protocol.

ReNeuron Annual Report for the year ended 31 March 2020

Chief Executive Officer’s review of performance

The decision we have recently taken to focus our in-house
activities on our retinal disease and exosome-based
programmes provides the Company with significant
near-term opportunities to deliver value-enhancing data
and commercial partnerships.

Review of clinical programmes
hRPC (human retinal progenitor
cells) for retinal disease
During the period under review, and
thereafter, we have made significant
progress with our ongoing clinical
programme targeting retinitis pigmentosa
(RP). RP is a group of hereditary diseases
of the eye that lead to progressive loss of
sight due to cells in the retina becoming
damaged and eventually dying.

The ongoing Phase 1/2a clinical trial is an
open-label study to evaluate the safety,
tolerability and preliminary efficacy of
our hRPC stem cell therapy candidate
in patients with advanced RP. The Phase
2a segment of the study, which uses
a cryopreserved hRPC formulation,
enrols subjects with some remaining
retinal function and, thus far, has been
conducted at two clinical sites in the US
– Massachusetts Eye and Ear in Boston
and Retinal Research Institute in Phoenix,
Arizona.

In April 2019, initial data from the first
cohort of three patients in the Phase 2a
segment of the study were presented at
the sixth annual Retinal Cell and Gene
Therapy Innovation Summit in Vancouver,
Canada. The data demonstrated a
sustained improvement in visual acuity
compared with baseline in these patients,
as measured by the number of letters read
on the ETDRS chart (the standardised
eye chart used to measure visual acuity in
clinical trials).

In October 2019, further positive efficacy
data from the study were presented at the

American Academy of Ophthalmology
Annual Meeting (AAO) in San Francisco.
At this point, 22 patients had been treated
in the study, consisting of 12 patients in
the Phase 1 segment of the study and
10 patients in the Phase 2a segment of
the study. Eight out of the ten Phase 2a
patients treated had reached at least the
one month follow up time point. The
visual acuity data presented at the AAO
conference from the patients treated
in the Phase 2a segment of the study
continued to show the hRPC therapy’s
ability to deliver clinically meaningful
signals of efficacy in a patient population
where inexorable disease progression is
the norm.

We announced further updates regarding
the Phase 2a study in February 2020 and,
more recently, in June 2020. This latest
update summarised data gathered from
patients at six, nine, twelve and, for the
first patient treated, 18 months follow-up.
The latest data continue to demonstrate
the efficacy of the therapy, with a clinically
meaningful benefit being observed at
all time-points. The results announced
in February 2020 excluded two subjects
who experienced sight loss in the treated
eye as a result of complications arising
from the surgical procedure. In the June
update, we reported that one of these two
patients has now recovered their vision
and is back to at least baseline at one year
post treatment.

Also in June 2020, we announced that
the Group had received regulatory
approval from both the FDA and MHRA
to expand the ongoing Phase 2a clinical

During the period
under review, and
subsequent to it,
we have continued
to generate
encouraging
positive efficacy data
from the ongoing
US Phase 2a clinical
trial of our hRPC cell
therapy candidate in
retinitis pigmentosa.

Olav Hellebø
Chief Executive Officer

12 August 2020

ReNeuron Annual Report for the year ended 31 March 2020Strategic Reportstudy to treat patients with RP at a higher
dose level, at clinical sites in both the
US and the UK. We intend to open the
ongoing study to a highly experienced
UK clinical site, the Oxford Eye Hospital,
with Professor Robert MacLaren, a world-
renowned leader in the treatment of
retinal diseases, as Principal Investigator.
These approvals will enable the treatment
of up to a further nine patients in the
Phase 2a extension segment of the study
(beyond the ten Phase 2a patients already
treated).

We expect to commence treating
patients shortly in both the US and the
UK under the revised approved study
protocol, subject to a continued easing
of COVID-19 related restrictions at the
relevant clinical sites. On this basis, and as
announced in June, we expect to present
further data from the expanded Phase 2a
clinical trial during the next twelve months
and we expect to have sufficient data from
the study to enable the Group to seek
approval in the second half of 2021 to
commence a single pivotal clinical study
with our hRPC cell therapy candidate in RP.

Our hRPC cell therapy candidate offers
a number of potential advantages over
alternative approaches to the treatment
of RP. Firstly, our cell therapy candidate is
independent of the many specific genetic
defects that collectively define RP as a
disease, thereby allowing a much broader
potential patient population to be eligible
for the treatment. Secondly, the cells are
cryopreserved, enabling on-demand
shipment and use at local surgeries and
hospitals. Finally, the cells are injected
directly to the site of retinal degeneration,
allowing a greater chance of anatomic
restoration of photoreceptor function.

Our RP clinical programme has been
granted Orphan Drug Designation in
both Europe and the US, as well as Fast
Track designation from the FDA in the US.
Orphan Drug Designation provides the
potential for a significant period of market
exclusivity once the therapy is approved
in those territories. Fast Track designation
provides eligibility for an accelerated
approval and priority review process by
the FDA.

Exosome and iPS cell
technologies
Our exosome technology is being
exploited as a novel vector for delivering
third party biological drugs. We have
developed exosomes derived from our
CTX human neural stem cell line that
have a natural ability to cross the blood
brain barrier and can thus be used to
deliver therapeutics for diseases of the
brain. These exosomes can be produced
through a fully qualified, xeno-free,
scalable process and the clinical-grade
source cell-line ensures consistent
exosome product. The exosomes can
be loaded with a diverse range of
potential therapeutics, such as siRNA/
mRNA/miRNA, CRISPR/Cas9, antibodies,
peptides and small molecules.

In July 2019, we announced the grant
of a number of key patents in Europe,
Japan, China and South Korea covering
our exosomes and their methods
of production. In August 2019, we
announced a new grant-funded
collaboration with the European Cancer
Stem Cell Research Institute at Cardiff
University to develop novel systems to
enable the delivery of therapeutic nucleic
acids across the blood brain barrier using
our exosomes.

Further collaborations with
pharmaceutical/biotechnology companies
are anticipated to commence over the
coming months. In response to COVID-19,
we have also developed a proprietary
exosome displaying the SARS-CoV-2 spike
protein with the objective of out-licensing
it for the potential delivery of COVID-19
vaccines.

In October 2019, we presented new data
demonstrating the stability and scalability
of new stem cell lines derived from our
CTX human neural stem cells following
re-programming to an embryonic stem
cell-like state (induced pluripotent stem
cells, or iPSCs). This means that we are
able to take our CTX neural stem cells
back to being stem cells that are able
to differentiate into any other type of
stem cell, including bone, nerve, muscle
and skin. Further, we showed that the
new stem cell lines generated could be
grown at scale by virtue of the Group’s
conditional immortalisation technology,
enabling the efficient production of
clinical-grade, allogeneic (“off-the-shelf”)
cell therapy candidates.

As a result of the above findings, we
are exploring the potential of our iPSC
technology to be utilised to develop
further new, immortalised allogeneic
cell lines of varying types as potential
therapeutic agents in diseases of unmet
medical need for subsequent licensing to
third parties. For example, the production
of allogeneic haematopoietic stem
cells from our iPSCs could potentially
provide an alternative approach to those
cancer immunotherapies currently in
development that rely on the use of the
patient’s own T-cells. The iPSC-derived
cell populations can also be utilised
for the production of exosomes with
specific tissue targeting, thus providing
further scope for a wide range of industry
partnerships.

CTX for stroke disability
During the period, we continued to
progress the clinical development of our
CTX cell therapy candidate for stroke
disability, via our PISCES III clinical study, a
randomised, placebo-controlled, Phase 2b
clinical trial being undertaken in the US.
Patients in the study are treated between
six and 24 months after their stroke and
are randomised to receive either CTX
therapy or placebo treatment. The primary
end-point of the PISCES III study is the
proportion of patients showing a clinically
important improvement (at least one
point) on the modified Rankin Scale (mRS)
at six months post-treatment compared
with baseline. The mRS is a global

ReNeuron Annual Report for the year ended 31 March 2020Strategic ReportChief Executive Officer’s review of performance

measure of disability or dependence
upon others in carrying out activities of
daily living and is accepted by regulatory
authorities as an appropriate end-point for
marketing approval in stroke disability.

In February 2020, we announced that
positive data from the PISCES II Phase
2a clinical trial of CTX in stroke disability
had been published in the Journal of
Neurology, Neurosurgery, and Psychiatry.
PISCES II was a single arm, open-label
study in patients living with significant
disability resulting from ischaemic stroke.
A total of 23 stable stroke patients with
moderate to severe disability were treated
with a single dose of 20 million CTX cells
a median of seven months post-stroke.
Clinically meaningful improvements in
disability scales were measured out to 12
months post-implantation.

In June 2020, we announced that,
following a review of programme
priorities and resource requirements, we
intended to focus the Group’s resources
on our retinal disease programme and
our exosome and induced pluripotent
stem cell (iPSC) research platforms.
Consequently, we have suspended the
PISCES III clinical trial in the US and our
stroke disability programme will now
continue through regional partnerships.
Fosun Pharma, our exclusive licensing
partner in China, will develop the CTX
cell therapy candidate for stroke disability
in the licensed territory (Greater China
including Hong Kong, Macao and Taiwan)
where the Company has the potential
to benefit from future operational
and regulatory milestones under this
out-license agreement. Clinical trial
applications have recently been filed by
Fosun Pharma to open clinical sites in the
licensed territory to build on the clinical
data already generated in the US. Patient
recruitment in the PISCES III study, which
has been on hold due to COVID-19
related restrictions, will remain suspended
in the US for the foreseeable future; clinical
trial sites will be kept open and patients
already treated will be followed up over
time in line with the clinical trial protocol.

As part of the June 2020 programme
update, we announced that our CTX
cell therapy candidate would be made
available for licensing in stroke disability
outside China. We further announced that
the CTX cell therapy candidate would be
available for licensing in other indications
where the candidate might have the
potential to address the deficits in those
indications. As an illustration of this
potential, in May 2020 we announced the
publication of new positive data relating
to our CTX cell therapy candidate in the
journal Stem Cells. The new data showed
for the first time that our CTX human
neural stem cell line can rescue deficits
associated with an accepted animal model
of Huntington’s disease, a progressive
genetic brain disorder.

Other activities
In April 2019, we announced the signing
of an exclusive licence agreement with
Fosun Pharma for the development,
manufacture and commercialisation of
both our CTX and hRPC cell therapy
programmes in the People’s Republic of
China. Under the terms of the licence
agreement, Fosun Pharma will fully
fund the development of our CTX and
hRPC cell therapy programmes in China,
including clinical development and
subsequent commercialisation activities.
Fosun Pharma has also been granted
rights to manufacture the licensed
products in China. In return, ReNeuron
received £6.0 million (before withholding
tax) on entering into the agreement and
will receive up to £6.0 million in near-term
operational milestones and up to £8.0
million in future regulatory milestone
payments. In addition, ReNeuron will
receive post-launch profit threshold
milestone payments derived from the
licensed products, leading to total
estimated milestone payments of £80.0
million provided all milestones and profit
thresholds are successfully met, as well as
tiered royalties at rates between 12% and
14% on sales of the licensed products in
the Chinese market.

We continue to work closely with Fosun
Pharma as it pursues the development,
manufacture and commercialisation
of our cell therapy programmes in the
People’s Republic of China, with the CTX
programme for stroke disability being the
initial focus of activities.

Summary and outlook
During the period under review, and
subsequent to it, we have continued to
generate encouraging positive efficacy
data from the ongoing US Phase 2a clinical
trial of our hRPC cell therapy candidate
in retinitis pigmentosa. We are pleased
to have recently received regulatory
approvals in both the US and the UK to
pursue this study in further patients at a
higher dose level and we look forward to
presenting further data from this extended
study in due course.

Additionally, we have been very
encouraged to see the potential of
our exosome and iPS cell technologies
emerge during the period, with further
collaboration agreements expected in the
near term to complement the agreements
we have already signed with major
pharmaceutical/biotechnology companies
regarding our exosome programme.

The decision we have recently taken to
focus our in-house activities on our retinal
disease and exosome-based programmes
provides the Group with significant
near-term opportunities to deliver
value-enhancing data and commercial
partnerships. Our stroke disability
programme will continue through regional
partnerships and we are pleased to be
working with Fosun Pharma as our partner
for China, following the signing of the
exclusive licence agreement for both
our CTX and hRPC programmes in that
territory during the period.

Olav Hellebø
Chief Executive Officer

ReNeuron Annual Report for the year ended 31 March 2020Strategic ReportFinancial review

Michael Hunt ACA
Chief Financial Officer

12 August 2020

The total tax credit for the year was £3.0
million (2019: £2.9 million). This was offset
by overseas taxation of £0.6 million (2019:
£Nil).

As a result of the above, the total
comprehensive loss for the year reduced
to £11.4 million (2019: £14.3 million).

Net cash used in operating activities
was £14.3 million (2019: £11.9 million),
largely reflecting the operating costs
incurred during the period, net of the
Fosun Pharma licence fee of £5.4 million
(net of withholding tax). The Group had
cash, cash equivalents and bank deposits
totalling £12.6 million at the year-end
(2019: £26.4 million).

Revenues in the year amounted to £6.1
million (2019: £0.05 million), being
an upfront licence fee of £6.0 million
received from Fosun Pharma in respect
of the license agreement signed with
that company in April 2019, together
with £0.1 million (2019: £0.05 million) of
royalties from non-therapeutic licensing
activities. Grant income of £0.1 million
(2019: £0.8 million) has been recognised
in other income. In 2019, other income
also included £1.9 million relating to
an exclusivity fee received during out-
licensing negotiations.

Research and development costs in the
year were £16.3 million (2019: £16.2
million) and accounted for 79% of
operating expenses (2019: 77%). General
and administrative expenses were £4.2
million (2019: £4.8 million), the decrease
in costs being primarily due to reductions
in staff costs and reductions in legal and
professional fees over the prior year.

Finance income represents income
received from the Group’s cash and
investments and gains from foreign
exchange, with lease interest arising
from the application of IFRS 16 shown in
finance costs. Finance income was £0.6
million in the year (2019: £1.1 million),
primarily reflecting reduced foreign
exchange gains. The Group holds cash
and investments in foreign currencies in
order to hedge against operational spend
in those currencies.

ReNeuron Annual Report for the year ended 31 March 2020Strategic ReportDirectors’ duties

The Directors of ReNeuron Group plc and its subsidiary
companies are required to act in accordance with a set of
general duties which are detailed in the Companies Act 2006.

As part of their induction, Directors are
briefed on their duties and they are
regularly updated by both the Company
Secretary or external advisers. Directors
may also seek advice on their duties at any
time, either via the Company Secretary
or externally. More details are set out in
the Corporate Governance section on
page 43.

Section 172 Statement

The Directors are required by the
Companies Act 2006 to act in the way
they consider, in good faith, would
most likely promote the success of
the Company for the benefit of its
shareholders as a whole and in doing
so, are required to have regard to the
following:

• The likely consequences of any decision

in the long term;

• The interests of the Company’s

employees;

• The need to foster the Company’s
business relations with suppliers,
customers and others;

• The impact of the Company’s

operations on the community and the
environment;

• The Company’s reputation for high
standards of business conduct; and

• The need to act fairly as between

members of the Company.

In 2018, the Group adopted the
Corporate Governance Code for Small
and Mid-Size Quoted Companies from the
Quoted Companies Alliance (the “QCA
Code”). The QCA code is an appropriate
code of conduct for the Group’s size and
stage of development. Details of how the

Group applies the ten principles of the
QCA Code are set out on pages 40 to 45.

The Chairman’s and Chief Executive
Officer’s statements describe the Group’s
activities, strategy and future prospects
including considerations for long-term
decision making on pages 06 and 24.

The Board considers the Group’s major
stakeholders to be its shareholders, its
employees and its suppliers.

Overview as to how the Board
performed its duties
Shareholders
The Board is committed to openly
engaging with the Company’s
shareholders and recognising the
importance of an effective dialogue. It is
important that shareholders understand
the Group’s strategy and objectives,
so these must be explained clearly
and feedback received and issues
raised carefully considered. Details of
shareholder engagement are set out
in sections 2 and 10 of the Corporate
Governance Report on pages 41 and 45.

Employees
The Group is a relatively small organisation
and Executive Directors have regular
day-to-day contact with employees
at all levels, both formal and informal.
The CEO regularly briefs employees
on developments in the business and
conducts question and answer sessions at
these times. An Employee Engagement
Group provides a more formal means
of consultation with staff, and a Staff
Engagement Survey is carried out
annually.

Suppliers
The Board takes a close interest in
relations with key suppliers whose
performance is crucial to the Group’s
success. The Group endeavours to
maintain good relationships with its
suppliers and seeks to pay them promptly
in accordance with the contracted terms.
Where appropriate, the activities of
suppliers are subject to audit.

Community and environment
The Board is mindful of the potential social
and environmental impacts of the Group’s
activities. The Board is committed to
minimising the environmental effect of the
Group’s activities wherever possible and
seeks rigorous compliance with relevant
legislation.

Business reputation
The Group operates in a highly regulated
sector and the Board is committed to
maintaining the highest standards of
conduct. Staff behaviour is governed by
appropriate policies, including anti-bribery
policies, supported by a whistle-blowing
process. There were no reported incidents
in relation to this policies in the year
ended 31 March 2020.

ReNeuron Annual Report for the year ended 31 March 2020Strategic ReportSustainability

The Directors believe that operating the business responsibly
is key to its long-term future and success.

People

The Group relies for its success on the
intellectual qualities of its employees.
Therefore it seeks to recruit and retain
highly skilled and well-qualified employees.

Reward
The Group recognises the importance
of a fair and competitive reward
package which seeks to incentivise high
performance and align the interests of
the employees and the Group. Salaries
are competitive, and the bonus scheme
is based upon the attainment of both
personal and corporate objectives. The
Group also offers pension entitlement and
health insurance or gym membership.
Details of the Group’s employee share
schemes are set out in note 27 to the
Financial Statements.

Diversity
The Board believes in a diverse and
gender balanced workforce and
the Group’s Equal Opportunities
Policy ensures the provision of equal
opportunities in all areas of employment.

At 31 March 2020 the Group employed 29
men and 33 women.

Employee engagement
Employee engagement is described in the
Section 172 report above.

Development
Employees have significant opportunities
for learning and development, often
identified from the annual appraisal
process. Examples include PhD studies,
process management and quality
management skills such as six sigma
black belt, as well as soft skill courses and
various formal training courses identified
as part of employees’ annual personal
development plans.

Health and safety
Keeping its employees safe is a priority for
the Group. A Health and Safety (“H&S”)
Committee meets regularly, monitors
performance and drives improvements
through H&S Committee representatives.
A number of employees work in a
laboratory environment and are trained
and required to comply with the relevant
regulations and best practice. The H&S
Committee reports to the Group’s Senior
Management Team and the Board.

The Group also offers Employee
Wellbeing support.

During the COVID-19 crisis, the Group has
made resources available to support the
mental health needs of employees who
may feel isolated by working from home.

Policies and procedures
The Group has a comprehensive Employee
Handbook and supporting policies which
set standards for ensuring that the Group’s
business activities are conducted in a
responsible manner for the benefit of its
shareholders, employees, research partners
and suppliers. The Board believes that
ensuring employees understand their
responsibilities and act in an ethical way is
vital to the Group’s future success.

Patients

As explained earlier in this report, the
Group’s objective is to produce new stem
cell therapies for the treatment of patients
whose medical needs are currently unmet.
The Group’s two clinical stage candidates
are in development for the treatment of
patients suffering from retinitis pigmentosa
and disability as a result of a stroke while
research with exosomes has indicated
their potential as a drug delivery system
which can cross the blood brain barrier.

Exosomes may also have potential for use
as a delivery vehicle for viral vaccines.

In April 2019 the Group licensed its hRPC
and CTX products to Fosun, covering
the Greater China market and will look
to further patient access to its stem cell
based therapies via future licensing
arrangements in other territories.

Clinical trials
ReNeuron has established a standard
set of Standard Operating Procedures
(“SOPs”) and policies which govern
the conduct of the clinical trials which
it sponsors. These SOPs and policies
ensure compliance with internationally
recognised and adopted standards
together with national and international
legislation in the relevant territories.
They also ensure consistency across
studies and programmes in the way that
data is collected, analysed and stored.
Compliance with the Group’s SOPs and
policies is monitored by its internal Quality
Assurance department.

Our social impacts

The Group endeavours to maintain
links with universities and local schools.
University students and schoolchildren
have visited the Pencoed site and been
given an introduction to practical research
based science. The Group has supported
PhD research, and placements are
provided from time to time.

Environmental impact

Due to the nature of the business, the
Board considers that the Group has a low
environmental impact. The Group seeks
to minimise any environmental impact of
its operations and complies with relevant
regulations and legislation.

ReNeuron Annual Report for the year ended 31 March 2020Strategic ReportRisks and uncertainties

Risk

Potential impact

Mitigation action/control

Clinical potential impact
The Group may fail to develop a drug
candidate successfully because we
cannot demonstrate in clinical trials that it
is safe and efficacious.

Delays in achieving regulatory approval
may impose substantial costs on the
business.

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.
Once approved, the product and its
manufacture will continue to be reviewed
by the regulators and may be withdrawn
or restricted.

Regulatory potential impact
Reduction of an income stream through
regulation could adversely affect the
commercial viability of a drug product.

Withdrawal of a drug product by a
particular regulatory agency would
prevent sale in that particular territory and
may be followed by regulators in other
territories.

The Group’s internal development
expertise and knowledge in its targeted
clinical areas will enable it to develop
therapeutic products in a manner which
will substantially mitigate, but which
cannot eliminate this risk in the future.

The Group looks to employ suitably
qualified and experienced staff. It also
consults, where necessary, with regulatory
advisers and regulatory approval bodies
to ensure that regulatory requirements
are met.

Additionally, the Group seeks to foster
a culture where quality is a key priority.
Both it and its clinical and manufacturing
partners comply with Good Clinical
Practice and Good Manufacturing
Practice and the Group employs
rigorous processes in its research and
development of therapeutic products.

The Group uses experienced and
reputable clinical research organisations
in its clinical trials.

There is a risk that intellectual property
may become invalid or expire before,
or soon after, commercialisation of a
drug product and the Group may be
blocked by other companies’ patents and
intellectual property.

The Group invests significantly in
maintaining and protecting this
intellectual property through the use
of expert lawyers and patent agents to
reduce the risks over the validity and
enforceability of our patents.

The protection of the Group’s intellectual
property is a significant consideration
throughout the Group’s contracting
activity.

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. The regulatory process is both
complex and multi-jurisdictional.

Intellectual property risk
Intellectual property protection remains
fundamental to the Group’s strategy of
developing novel drug candidates. The
Group’s 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. The Group manages a portfolio
of patents and patent applications which
underpin its research and development
programmes.

ReNeuron Annual Report for the year ended 31 March 2020Strategic ReportRisk

Potential impact

Mitigation action/control

Manufacturing and supply risk
The Group’s ability to successfully scale
up production processes to viable clinical
trial or commercial levels is vital to the
commercial viability of any product.

Financial risk
The financial risks faced by the Group
include foreign currency risk, liquidity
risk and risk associated with cash held on
deposit with financial institutions.

Manufacturing potential impact
Inability to sell a drug product on a
commercially viable scale.

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.

Availability of raw materials is extremely
important to ensure that manufacturing
campaigns are performed on schedule.

Supply potential impact
Substantial cost increases and delays in
production which could adversely impact
on the Group’s financial results and cash
liquidity.

These risks may adversely affect the
Group’s financial results and cash liquidity.

Fundraising risk
The Group has incurred considerable
losses since its inception and is
dependent upon equity and public grant
financing. It does not currently have
any approved or revenue generating
products.

The Group may not be able to raise
additional funds that will be needed
to support its product development
programmes or commercialisation
efforts. Any new funds raised may lead to
dilution of existing investors.

Cyber risk
There is risk that third parties may seek
to disrupt the Group’s business, or
perpetrate acts of fraud using digital
media.

Loss of IT systems for a significant period
may result in delays in the development
and commercialisation of drug product.
Fraud may result in financial loss.

The Group utilises reputable contract
manufacturing organisations,
experienced in meeting the requirements
of Good Manufacturing Practice.

The Group maintains contractual
relationships with key manufacturers and
suppliers to ensure availability of supply
and sufficient notice of disruption.

Additionally, the Group seeks to avoid
reliance upon any single supplier or
manufacturer.

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.
The Group holds currency in US dollars
and euros to cover short and medium-
term expenses in those currencies.

The Group is continually seeking business
development opportunities which
enable it to support the future costs of
development of its drug products and
commercialise them successfully.

Additionally, the Board places
considerable emphasis on
communication with shareholders and
potential investors, to maximise the
chances of successful future fundraising.

The Group is focused on maintaining a
robust and secure IT environment that
protects its corporate data and systems.
IT systems are continuously monitored
and employees are trained to be aware
of cyber security and the associated risks.

ReNeuron Annual Report for the year ended 31 March 2020Strategic ReportRisks and uncertainties

Risk

Potential impact

Mitigation action/control

Site and system disruption risk
Unexpected events could disrupt the
business by affecting its key facility, critical
equipment, IT systems or a number of
employees.

Loss of IT systems for a significant period
or key employees may result in delays in
the development and commercialisation
of drug product.

Staff turnover risk
The Group is dependent upon its ability
to attract and retain highly qualified and
skilled staff.

Loss of key staff could delay the
development and commercialisation of
drug product.

The Group has developed a business
continuity plan to ensure that it can
respond effectively to identified risks. All
critical equipment will have active service
contracts in place.

Business continuity insurance is in place.

The Group offers attractive employment
packages, including share incentive
plans, and actively encourages employee
engagement in the business. Employees
also have significant opportunities for
learning and development as well as
promotion opportunities born out of the
Group’s staff appraisal and succession
planning processes.

Risks associated with the departure of the United Kingdom from the EU (“Brexit”)

SME and Orphan Drug status
Within the EU, the Group holds SME
status, together with Orphan Drug
Designation in respect of its hRPC
product.

Regulatory risks
After Brexit, regulatory requirements
for the development and approval of
drug products and medical devices may
diverge between the EU and the UK.
Currency risks
The Group makes purchases of supplies
and services overseas, notably in the EU
and the USA.

Loss of SME status and Orphan Drug
Designation within the EU upon the
United Kingdom’s exit would expose the
Group to increased costs of development
and commercialisation of drug product
within the EU.

The Group has incorporated ReNeuron
Ireland Limited to enable it to maintain a
presence within the EU and to manage
and mitigate the risks and uncertainties
surrounding the final outcome of exit
negotiations between the United
Kingdom and the EU.

The EU is seen as a major future
market for the Group’s products. The
regulatory divergence may complicate
and slow the process of developing and
commercialising drug product in the EU.

The Group has considerable experience
of dealing with major overseas regulators
including in the EU and the USA and
will monitor changing requirements and
adapt accordingly.

Currency volatility or a post-Brexit
depreciation of sterling may increase
costs.

The Group will monitor the situation and
will utilise the methods described under
financial risk above to mitigate the risks.

ReNeuron Annual Report for the year ended 31 March 2020Strategic Report
Risk

Potential impact

Mitigation action/control

Risks associated with the COVID-19 pandemic and associated public health measures

In common with many businesses world-
wide the Group’s activities have been
disrupted by the economic effects of
the public health measures enacted to
contain the spread of the coronavirus.

Government measures implemented in
the UK and the USA cause the ongoing
clinical trials to be subject to delays in
patient recruitment. The extent of the
delay and the eventual cost implications
are unknown.

The Group’s internal research projects
may be delayed.

The Group’s fundraising activities may be
constrained by the continuing economic
effects of the government measures to
contain the spread of the coronavirus.

Loss of economic confidence in financial
markets may either reduce the level of
future funding available to the Group, or
prevent it from raising funds within the
necessary timescale.

Pages 08 to 33 of this Annual Report and
Accounts comprise the Strategic Report
for the Group which has been prepared in
accordance with chapter 4A of part 15 of
the Companies Act 2006.

Approved by the Board and signed on its
behalf by:

Michael Hunt
Chief Financial Officer

12 August 2020

In addition, and in common with other
small biotechnology companies, the
Group is subject to a number of other risks
and uncertainties, which include:

• the early stage of development of the

business;

• availability and terms of capital needed
to sustain operations, and failure to
secure partnerships that will fund late-
stage trials and commercial exploitation;

• competition from other companies and
market acceptance of its products; and

• its reliance on consultants, contractors
and personnel at third-party research
institutions.

The Group will monitor the situation
and when it is free to do so, will take
appropriate action consistent with staff
and patient safety.

The Group implemented home-working
wherever possible from 17 March 2020.
Where staff have been required to attend
the Group’s premises, appropriate social
distancing and hygiene practices have
been implemented. Laboratory staff
continue to work to safely maintain the
Group’s essential research work. Priority
internal research projects are progressing
to current timelines.

Patient recruitment has been on hold
in the Group’s clinical trials due to the
COVID-19 related restrictions. Wherever
possible, follow-up consultations with
existing patients are taking place
remotely. Patient recruitment will re-
commence subject to an easing of these
COVID-19 related restrictions at the
relevant clinical sites.
The Board recognises the need for
further fundraising in the near future
and will continue its dialogue with
shareholders and potential investors. The
Board will fully consider all stakeholders’
interests during this process.

ReNeuron Annual Report for the year ended 31 March 2020Strategic ReportBoard of directors

John Berriman
Non-executive Chairman

Olav Hellebø
Chief Executive Officer

Michael Hunt ACA
Chief Financial Officer

Appointed
John Berriman was appointed
to the Board in July 2011 and
became Chairman in March 2015.

External appointments
He is currently also chairman of
Confo Therapeutics NV, Autifony
Therapeutics Ltd and Depixus
SAS, and Deputy Chairman (non-
executive) of Autolus Therapeutics
plc.

Experience and skills
He is past chairman of Heptares
Therapeutics Ltd (sold to Sosei in
February 2015) and Algeta ASA
(sold to Bayer AG in 2014) and was
a director of Micromet Inc. until its
sale to Amgen in 2012. Previously
he was a director of Abingworth
Management, an international
healthcare venture capital firm.

Appointed
Olav Hellebø was appointed to the
Board in September 2014.

Experience and skills
Prior to ReNeuron, he held the
role of CEO at Clavis Pharma ASA,
a Norwegian, oncology-focused,
listed biotechnology company.
He joined Clavis from UCB where
he built the global organisation
responsible for the successful
registration and launch of the
anti-TNF Cimzia®. Mr Hellebø was
COO of Novartis UK and prior to
that held a series of senior roles
at Schering Plough, including US
marketing director for Claritin and
head of the Biotech Oncology
Business Unit in the USA.

Key: Committees

A Audit

R Remuneration

N Nominations and Corporate Governance

Committee Chair

Appointed
Michael Hunt joined ReNeuron
in 2001. Between 2005 and 2014
he served as its CEO, leading
the business through its early
development to its current position
as one of the global, clinical-
stage leaders in the regenerative
medicine field. He was appointed

as Chief Financial Officer in 2014.

External appointments
He sits on the Board and
Executive Committee of the US-
based Alliance for Regenerative
Medicine (ARM) and is a founding
member and co-chair of ARM’s
European Section. He sits on
the UK BioIndustry Association’s
Cell & Gene Therapy Advisory
Committee and its Finance and
Tax Advisory Committee and is
a member of the Cell & Gene

Therapy Catapult’s Advisory Panel.

Experience and skills
He sits on the Board and
Executive Committee of the US-
based Alliance for Regenerative
Medicine (ARM) and is a founding
member and co-chair of ARM’s
European Section. He sits on
the UK BioIndustry Association’s
Cell & Gene Therapy Advisory
Committee and its Finance and
Tax Advisory Committee and is
a member of the Cell & Gene
Therapy Catapult’s Advisory Panel.

Simon Cartmell OBE
Non-executive Director
A R N
Appointed
Simon Cartmell OBE was
appointed to the Board in July
2011.

External appointments
He is an experienced non-
executive director currently
chairing OssDsign AB, Oviva AG
and Ieso Digital Health Ltd. He
is also non-executive director of
BoneSupport Holding AB and is
active in charitable educational
activities through the Worshipful
Company of Haberdashers.

Experience and skills
As CEO of ApaTech Ltd, he built a
world leader in orthobiologics and
led its sale to Baxter International
Inc. in March 2010. Prior to
ApaTech he was CEO of Celltech
Pharmaceuticals and a director
of Celltech Group plc before
which he was COO 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.
Most recently he has served as
an operating partner for Imperial
Innovations plc, latterly IP Group
plc after its acquisition, a leading
UK bioscience venture capital firm.

ReNeuron Annual Report for the year ended 31 March 2020GovernanceDr Tim Corn
Non-executive Director
A R
Appointed
Dr Tim Corn was appointed to the
Board in June 2012.

External appointments
He serves as Chief Medical Officer
of both Izana Bioscience and Akasa
Bioscience, and Trustee of Nerve
Tumours UK.

Experience and skills
He was formerly Chief Medical
Officer at EUSA Pharma (sold to
Jazz Pharmaceuticals in 2016)
and at Zeneus Pharma (sold to
Cephalon in 2006), as well as
non-executive director at Circassia
Pharmaceuticals plc, Neurocentrx
Pharma Ltd and HRA Pharma.

He has held senior medical, clinical
and regulatory positions in both
big and small pharma as well as in
the UK regulatory agency and has
played a key role in more than 20
regulatory approvals in the USA
and Europe for products mainly
in the fields of neurology and
oncology.

Dr Claudia D’Augusta
Non-executive Director
A N
Appointed
Dr Claudia D’Augusta was
appointed to the Board in
September 2017.

External appointments
She is the CFO of VectivBio AG,
a global biotechnology company
created in July 2019 as a spin-out
of Therachon, recently acquired by
Pfizer for up to $810 million.

Experience and skills
She has over 20 years’ experience
in corporate finance, capital
markets and M&A. Before joining
Therachon in January 2019, she
was CFO, then general manager
at TiGenix (now Takeda) where
she led the company’s IPO on
NASDAQ in 2016. She also
served as CFO of Cellerix and
led its merger with TiGenix.
She was also finance director of
Aquanima (Santander Group).
Previous experience includes roles
in corporate finance and M&A at
Deloitte & Touche in Milan and
Apax Partners in Madrid. She holds
a degree in Economics and a Ph.D.
in Business Administration from the
University of Bocconi, Italy.

Professor
Sir Chris Evans OBE
Non-executive Director

Appointed
Professor Sir Chris Evans OBE was
appointed to the Board in August
2013.

External appointments
He was the founder of
Chiroscience, Celsis, Biovex, Merlin
Biosciences, Vectura, Piramed,
Excalibur Group, Arthurian Life
Sciences, Arix Bioscience plc
and Proton Partners. He is also
currently Founder and Chairman
of Ellipses Pharma, a new cancer
medicines company.

Experience and skills
He has built over 50 medical
companies from scratch, many
from his own ideas and inventions,
and floated 20 new medical
businesses on stock markets in six
different countries. He has created
companies worth over $7 billion,
employing over 4,000 scientists,
built hundreds of complex medical
laboratories and facilities around
the world and positively impacted
many millions of lives with his work.
He has also raised $2 billion for
cancer research projects. He has
received numerous prestigious
awards and medals for his work
and was knighted in the year 2000.

Dr Mike Owen
Non-executive Director

Appointed
Dr Mike Owen was appointed to
the Board in December 2015.

External appointments
He currently serves as a director
of Zealand Pharma, Ossianix Inc,
Ossianix UK Ltd, Avacta Group plc,
GammaDelta Therapeutics Ltd,
Sarium Holdings plc and Ikusda
Therapeutics Ltd. He is also a
member of the scientific advisory
board at Avacta.

Experience and skills
His career in biotech, the
pharmaceutical industry and
academia spans almost 40 years.
He was formerly senior vice
president for biopharmaceuticals
research at GlaxoSmithKline and
was also a founder and chief
scientific officer of Kymab Ltd, an
antibody-based biotech company.
He has also previously served as a
director for BLINK Biomedical SAS.
For many years he held a research
position at the Imperial Cancer
Research Fund (now CR-UK) and
he has previously served on the
scientific advisory board of the
CRT Pioneer Fund LP.

He is also a member of the
European Molecular Biology
Organisation.

Fellowships
He is a Fellow of the Academy of
Medical Sciences.

ReNeuron Annual Report for the year ended 31 March 2020GovernanceSenior management

Dr Richard Beckman
Chief Medical Officer

Dr Randolph Corteling
Head of Research

Appointed
Dr Richard Beckman was appointed Chief
Medical Officer in April 2018.

Experience and skills
Prior to joining ReNeuron, Dr Beckman was
the Chief Medical Officer of several innovative
biotech and device firms, including Clearside,
Ophthotech and Neurotech. Prior to that, he
had leadership roles at Alcon, Lux Bio, Becton
Dickinson and Allergan.

Dr Beckman received his MD from the
University of Michigan, completed a residency
in ophthalmology at Henry Ford Hospital, and
a glaucoma fellowship at the Mass. Eye and
Ear Infirmary/Harvard University. Prior to joining
the industry, he practised in academic medicine
for three years at Cornell University Medical
College and was in private practice for ten
years.

Appointed
Dr Randolph Corteling was appointed Head
of Research in April 2015 having been a senior
member of the research team since 2007.

Experience and skills
Prior to joining ReNeuron, Dr Corteling started
his scientific career as a Research Associate at
Novartis, before undertaking a PhD in Medical
and Surgical Sciences at The University of
Nottingham. He then spent three years in
Canada as a Heart and Stroke Foundation
Fellow before joining ReNeuron in 2007. During
his career Dr Corteling has developed a number
of new discoveries along with a thorough
understanding of cell and stem cell biology,
with a particular interest and expertise in the
role of extracellular vesicles and exosomes.

Shaun Stapleton
Vice President Regulatory Affairs and
Pharmacovigilance

Appointed
Shaun Stapleton was appointed Head of
Regulatory Affairs in June 2015.

Experience and skills
Shaun Stapleton joined ReNeuron from RRG
(a Voisin Consulting Life Sciences company),
where he was a Director and Vice President of
Regulatory Science. He supported clients on a
number of global development and registration
projects, including advanced therapies
and orphan drugs. Having graduated in
Biochemistry from Imperial College London, he
began his career in research with the Imperial
Cancer Research Fund, before moving into the
pharmaceutical industry. He held positions of
increasing responsibility in regulatory affairs
at Sterling Winthrop, Eli Lilly and Boehringer
Ingelheim before becoming Senior Director
of Regulatory Affairs at Ipsen, where he
managed regulatory input into development
programmes globally, securing new product
approvals in the US, the EU and internationally
in the neurology, endocrinology and oncology
therapeutic areas.

ReNeuron Annual Report for the year ended 31 March 2020Governance37

ReNeuron Annual Report for the year ended 31 March 2020GovernanceDirectors’ report
for the year ended 31 March 2020

The Directors present their report and the
audited consolidated financial statements
of the Company for the year ended
31 March 2020.

Presentation of financial
statements

wherever possible and where it is
necessary for staff to attend the Group’s
premises, appropriate social distancing
and hygiene practices have been
implemented.

Financial risk management

The Group accounts include the financial
statements of the Company and its
subsidiary undertakings made up to 31
March 2020.

Financial risk management is set out in
note 24 to the financial statements and
also in risks and uncertainties on pages
30 to 33.

Future developments

Directors

Future developments are set out in the
Strategic Report on pages 08 to 33.

Results and dividends

The results for the year are given in the
Group statement of comprehensive
income set out on page 61. The Directors
do not recommend the payment of a
dividend (2019: £nil).

Research and development

During the year the Group incurred
research and development costs of
£16,335,000 (2019: £16,246,000)
all charged to the statement of
comprehensive income.

Events after the reporting
period

During March 2020, the COVID-19
pandemic became increasingly prevalent
in the UK and US where the Group’s
principal operations are conducted.
The Group continues to comply with
governmental advice and requirements
across its operations in the UK and
US, without significant impact on our
priority internal research projects. Patient
recruitment has been on hold in the
Group’s clinical trials due to the COVID-19
restrictions but we expect to commence
treating patients shortly in our Phase 1/2a
clinical trial in retinitis pigmentosa, subject
to a continued easing of COVID-19
related restrictions at the relevant clinical
sites.

The Group and its employees have
adapted to new working arrangements,
with home-working implemented

The Directors who held office during the
year and up to the signing of the financial
statements, unless otherwise stated, are
listed below:

John Berriman,
Non-executive Chairman

Olav Hellebø,
Chief Executive Officer

Michael Hunt,
Chief Financial Officer

Simon Cartmell OBE,
Non-executive Director

Dr Tim Corn,
Non-executive Director

Dr Claudia D’Augusta,
Non-executive Director

Professor Sir Chris Evans OBE,
Non-executive Director

Dr Mike Owen,
Non-executive Director

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.

Going concern

The Group is expected to incur significant
further costs as it continues to develop
its therapies and technologies through
clinical development. The operations of
the Group are currently being financed
from funds that have been raised from
share placings, commercial partnerships
and grants.

The Group actively seeks further
business development and fundraising
opportunities in order to support its
ongoing development programmes.
The Board places considerable emphasis
on communication with shareholders,
potential investors and other commercial
organisations in order to maximise
the chances of success in exploiting
these opportunities. Further, it was
announced post year-end that the Group’s
existing resources will be refocused on
programmes and activities offering the
greatest prospect of value generation in
the near to medium term.

Based on the above, the Directors expect
that the Group’s and Company’s current
financial resources will be sufficient to
support the business until at least mid-
2021 and the Directors are considering
a number of options to secure further
funding sufficient for the future needs of
the business beyond mid-2021.

The Directors therefore consider it
appropriate to continue to adopt the
going concern basis in the preparation of
these financial statements. However, there
is no guarantee that attempts to raise
adequate additional funding on a timely
basis will be successful and therefore
this represents a material uncertainty,
which may cast significant doubt about
the Group’s and Company’s ability to
continue as a going concern. These
financial statements do not include the
adjustments that would result if the Group
and/or Company were unable to continue
as a going concern.

Engagement with suppliers,
customers and others

The Group and Company’s engagement
with suppliers, customers and others is
detailed in the Strategic Report.

Energy and carbon reporting

The Company and its subsidiaries are low
energy users, hence no energy usage
information is provided.

ReNeuron Annual Report for the year ended 31 March 2020Governancereasonable steps for the prevention and
detection of fraud and other irregularities.

The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Group
and Parent Company’s transactions and
disclose with reasonable accuracy at any
time the financial position of the Group
and Parent Company and enable them
to ensure that the financial statements
comply with the Companies Act 2006.

The Directors are responsible for the
maintenance and integrity of the Parent
Company’s website. Legislation in
the United Kingdom governing the
preparation and dissemination of financial
statements may differ from legislation in
other jurisdictions.

Directors’ confirmations

In the case of each Director in office at the
date the Directors’ report is approved:

• so far as the Director is aware, there is
no relevant audit information of which
the Group and Parent Company’s
auditors are unaware; and

• they have taken all the steps that they
ought to have taken as a Director in
order to make themselves aware of
any relevant audit information and to
establish that the Group and Parent
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 reappointment 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
ReNeuron Group plc, Pencoed Business
Park, Pencoed, Bridgend, CF35 5HY on
10 September 2020 at 10.00 a.m.

The Notice of the annual general meeting
is enclosed on page 91 of this document.
Shareholders should note the provisions
set out in the Notice of the annual
general meeting relating to the impact
on the conduct of the meeting of the UK
Government’s measures for prevention of
the spread of the COVID-19 virus.

On behalf of the Board

Michael Hunt
Director

12 August 2020

Statement of Directors’
responsibilities

The Directors are responsible for
preparing the Annual Report and the
financial statements in accordance with
applicable law and regulation.

Company law requires the Directors
to prepare financial statements for
each financial year. Under that law the
Directors have prepared the Group
financial statements in accordance
with International Financial Reporting
Standards (IFRSs) as adopted by the
European Union 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 Parent Company and of the profit or
loss of the Group and Parent Company
for that period. In preparing the financial
statements, the Directors are required to:

• select suitable accounting policies and

then apply them consistently;

• state whether applicable IFRSs as

adopted by the European Union have
been followed for the Group financial
statements and IFRSs as adopted by the
European Union have been followed
for the Company financial statements,
subject to any material departures
disclosed and explained in the financial
statements;

• make judgements and accounting
estimates that are reasonable and
prudent; and

• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Group and Parent Company will
continue in business.

The Directors are also responsible for
safeguarding the assets of the Group and
Parent Company and hence for taking

ReNeuron Annual Report for the year ended 31 March 2020GovernanceCorporate governance

The Group’s overall strategic objective
is to develop best-in-class cell-based
therapies in its areas of therapeutic focus.

The Group has a balanced portfolio of
cell-based platform technologies and
therapeutic programmes targeting
significant, unmet or poorly met areas
of medical need. The Group deploys
its financial and other resources
towards gaining clinical validation for
its therapeutic programmes, via well-
designed clinical trials in well-regulated
territories. Ultimately, the Directors believe
that this approach will deliver significant
long-term value for shareholders if the
resulting clinical trial data are compelling.

At the appropriate stage of development,
the Group may choose to realise monetary
value in a therapeutic programme via
high-value out-licensing deals with
pharmaceutical or biotechnology
companies with interests in the relevant
therapeutic field and/or geographical
territories. The out-licensing in April 2019
of the development and commercialisation
of the Group’s hRPC and CTX products
to Fosun Pharma in China represents a
successful manifestation of this strategy.
Alternatively, and if resources permit,
the Group may choose to advance a
therapeutic candidate through late-stage
clinical development unpartnered in order
to retain the full value of the programme
within the Group.

on the website and/or in the Group’s
Annual Report pertaining to the Group’s
application of the QCA Code.

1. Establish a strategy and
business model which promote
long-term value for shareholders

The strategy and business operations
of the Group are set out in the Strategic
Report on pages 08 to 33.

The Group’s strategy and business
model, and amendments thereto, are
developed by the Chief Executive Officer
and his senior management team, and
approved by the Board. The management
team, led by the Chief Executive Officer,
is responsible for implementing the
strategy and managing the business at an
operational level.

This report provides general information
on the Group’s adoption of corporate
governance principles. As an AIM-listed
company, ReNeuron intends to adopt
as far as possible the principles of the
Quoted Companies Alliance Corporate
Governance Code (the “QCA Code”).
The QCA Code identifies ten principles
to be followed in order for companies to
deliver growth in long-term shareholder
value, encompassing an efficient, effective
and dynamic management framework
accompanied by good communication to
promote confidence and trust.

The sections below set out the ways
in which the Group applies the ten
principles of the QCA Code in support
of the Group’s medium to long-term
success. The Investor Centre (Corporate
Governance section) on the Group’s
website also contains an index setting
out the locations of relevant disclosures

ReNeuron Annual Report for the year ended 31 March 2020Governance3. Take into account wider
stakeholder and social
responsibilities and their
implications for long-term
success

The Group is aware of its corporate social
responsibilities and the need to maintain
effective working relationships across
a range of stakeholder groups. These
include the Group’s employees, partners,
suppliers, regulatory authorities and the
patients involved in the Group’s clinical
development activities. The Group’s
operations and working methodologies
take account of the need to balance the
needs of all of these stakeholder groups
while maintaining focus on the Board’s
primary responsibility to promote the
success of the Group for the benefit
of its members as a whole. The Group
endeavours to take account of feedback
received from stakeholders, making
amendments to working arrangements and
operational plans where appropriate and
where such amendments are consistent
with the Group’s longer term strategy.

The Group takes due account of any
impact that its activities may have 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.

4. Embed effective risk
management, considering both
opportunities and threats,
throughout the organisation

The Board is responsible for the systems
of risk management and internal control
and for reviewing their effectiveness.
The internal controls are appropriate to
a business of this size and complexity
and are designed to manage rather than
eliminate risk and provide reasonable
but not absolute assurance against
material misstatement or loss. Through
the activities of the Audit Committee, the
effectiveness of these internal controls is
reviewed annually. Key elements of the
system of internal control include:

• setting and communicating clear

strategic goals;

• a comprehensive budgeting process is
completed once a year and is reviewed
and approved by the Board;

• the Group’s results, compared with the
budget, are reported on a monthly
basis;

• the Group reforecasts the budget as

necessary during the financial year, with
the results reviewed and approved by
the Board;

• working within a defined set of

delegated authorities, approved by the
Board; and

• all material contracts are reviewed by
an Executive Director of the Company
and external legal advice is taken as
appropriate.

The Group has adopted a portfolio
approach to its strategic assets and is not
dependent on one particular platform
technology, having developed therapeutic
programmes around its hRPC retinal
stem cell therapy, exosome platform,
induced Pluripotent Stem Cells as well as
its CTX neural stem cell based asset. The
Directors believe that this approach helps
to mitigate the risk of failure in any one
particular programme.

The Group operates in an inherently
high-risk and heavily regulated sector
and this is reflected in the principal risks
and uncertainties set out on pages 30
to 33. In executing the Group’s strategy
and operational plans, management will
typically confront a range of day-to-day
challenges associated with these key risks
and uncertainties, and will seek to deploy
the identified mitigation steps to manage
these risks as they manifest themselves.

2. Seek to understand and
meet shareholder needs and
expectations

The Group seeks to maintain a regular
dialogue with both existing and potential
new shareholders in order to communicate
the Group’s strategy and progress and to
understand the needs and expectations of
shareholders.

Beyond the annual general meeting, the
Chief Executive Officer, Chief Financial
Officer and, where appropriate, other
members of the senior management team
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.

The Group’s investor relations activities
encompass dialogue with both
institutional and private investors. The
Company is a regular presenter at private
investor events, providing an opportunity
for those investors to meet with
representatives from the Group in a more
informal setting.

ReNeuron Annual Report for the year ended 31 March 2020GovernanceCorporate governance

The Group’s regulated activities are
governed by appropriate Standard
Operating Procedures. Staff behaviour
is governed by appropriate policies
including an Anti-Bribery Policy.

The Group maintains appropriate
insurance cover in respect of actions
taken against the Directors because of
their roles, as well as against material
loss or claims against the Group. The
insured values and type of cover are
comprehensively reviewed on a
periodic basis.

The senior management team meet at
least twice monthly to consider new risks
and opportunities presented to the Group,
making recommendations to the Board
and/or Audit Committee as appropriate.

A summary of the principal risks and
uncertainties facing the Group, as well as
mitigating actions, are set out on pages
30 to 33.

5. Maintain the Board as a well-
functioning, balanced team led
by the Chair

As at 31 March 2020, the Board
comprised six Non-executive Directors,
and two Executive Directors.

Directors’ biographies are set out on
pages 34 and 35.

All of the Directors are subject to election
by shareholders at the first annual general
meeting after their appointment to the
Board and will continue to seek re-election
at least once every three years.

John Berriman and Simon Cartmell OBE
(having served for nine years and become
non-independent under the QCA code
of corporate governance) have expressed
their intention not to seek re-election at
the forthcoming annual general meeting
of the Company and they and Dr
Claudia D’Augusta will retire with effect
from the close of that meeting thereby
achieving the planned reconfiguration

of the non-executive membership of the
Board. Dr Tim Corn will be appointed
Chairman of the Company in place of
John Berriman. Mark Evans will also
be appointed as a representative of
substantial shareholder Obotritia Capital
KGaA with effect from the close of the
Annual General Meeting.

The Board is responsible to the
shareholders for the proper management
of the Group and meets at least six times
a year to set the overall direction and
strategy of the Group, to review scientific,
operational and financial performance and
to advise on management appointments.
All key operational and investment
decisions are subject to Board approval.
A schedule of Matters Reserved for the
Board may be found in the Corporate
Governance Policies on the Group’s
website.

11 formal Board meetings were held in the
year ended 31 March 2020.

A summary of Board and Committee meetings attended in the year ended 31 March 2020 is set out below:

Board meetings

Nominations and
Corporate Governance
Committee

Director

Attended

Eligible

Attended

Eligible

Audit Committee
Eligible

Attended

Remuneration Committee
Attended

Eligible

J Berriman

O Hellebø

M Hunt

S Cartmell

T Corn

C D’Augusta

C Evans

M Owen

ReNeuron Annual Report for the year ended 31 March 2020Governancecourse of the year, Directors received
updates from the Company Secretary and
various external advisers on a number of
corporate governance matters.

The Board may utilise the results of the
evaluation process when considering the
adequacy of the composition of the Board
and for succession planning.

Directors’ service contracts or
appointment letters make provision
for a Director to seek personal advice
in furtherance of his or her duties and
responsibilities, normally via the Company
Secretary.

7. Evaluate Board performance
based on clear and relevant
objectives, seeking continuous
improvement

The Board has a process for evaluation
of its own performance, that of its
committees and individual Directors,
including the Chairman. This process is
conducted biennially and last took place in
May 2019. The Board utilises the services
of an independent third party organisation
to manage the evaluation process, analyse
the results and report back to the Board
for subsequent follow-up. Evaluation
criteria include Controls and Procedures,
Strategic Aims, Entrepreneurial Leadership
and Communications and Relationships.

8. Promote a corporate culture
that is based on ethical values
and behaviours

The Board seeks to maintain the highest
standards of integrity and probity in
the conduct of the Group’s operations.
These values are enshrined in the written
policies and working practices adopted
by all employees in the Group. An
open culture is encouraged within the
Group, with regular communications
to staff regarding progress and staff
feedback regularly sought. There is an
Employee Engagement Group and a Staff
Engagement Survey has been introduced
which has delivered positive feedback.
The Executive Committee regularly
monitors the Group’s cultural environment
and seeks to address any concerns that
may arise, escalating these to Board level
as necessary.

The Board considers itself to be sufficiently
independent. The QCA Code suggests
that a board should have at least two
independent Non-executive Directors.
The Company meets this requirement.

Non-executive Directors receive their
fees in the form of a basic cash fee and
an equity-based fee which takes the form
of nominal price share options under the
Company’s Non-executive Share Option
Scheme. To avoid any incentive effect
that may influence the Non-executive
Directors’ independence, these share
options vest over three years on a
straight-line basis and are not subject
to performance conditions. The option
grants concerned are not deemed to
be significant, either for any individual
Non-executive Director or in aggregate.
The current remuneration structure for
the Board’s Non-executive Directors is
deemed to be proportionate and was
subject to a shareholder consultation
process prior to its implementation.

6. Ensure that between them,
the Directors have the necessary
up-to-date experience, skills and
capabilities

The Board considers that all of the
Non-executive Directors are of sufficient
competence and calibre to add strength
and objectivity to the Board, and bring
considerable experience in scientific,
operational and financial development
of biopharmaceutical products and
companies.

The Directors’ biographies are set out on
pages 34 and 35. The Board regularly
reviews the composition of the Board to
ensure that it has the necessary breadth
and depth of skills to support the ongoing
development of the Group.

The Chairman, in conjunction with the
Company Secretary, ensures that the
Directors’ knowledge is kept up to date on
key issues and developments pertaining
to the Group, its operational environment
and to the Directors’ responsibilities
as members of the Board. During the

ReNeuron Annual Report for the year ended 31 March 2020GovernanceCorporate governance

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.

9. Maintain governance
structures and processes that
are fit for purpose and
support good decision-making
by the Board

The Board has overall responsibility for
promoting the success of the Group.
The Executive Directors have day-to-
day responsibility for the operational
management of the Group’s activities. The
Non-executive Directors are responsible
for bringing independent and objective
judgement to Board decisions.

There is a clear separation of the roles
of Chief Executive Officer and Non-
executive Chairman. The Chairman is
responsible for overseeing the running
of the Board, ensuring that no individual
or group dominates the Board’s decision-
making and ensuring the Non-executive
Directors are properly briefed on matters.
The Chairman has overall responsibility
for corporate governance matters in
the Group and chairs the Nominations
and Corporate Governance Committee.
The Chief Executive Officer has the
responsibility for implementing the
strategy of the Board and managing
the day-to-day business activities of
the Group. The Company Secretary
is responsible for ensuring that Board
procedures are followed and applicable
rules and regulations are complied with.

The Board has established an Audit
Committee, Remuneration Committee
and Nominations and Corporate
Governance Committee with formally
delegated duties and responsibilities.

The Audit Committee normally meets
twice a year, which the Board deems to
be sufficiently frequent in order for the
Committee to discharge its responsibilities
in the normal course of annual events.
It has responsibility for, amongst other
things, planning and reviewing the
annual report and accounts and interim
statements involving, where appropriate,
the external auditors. The Committee
also approves external auditors’ fees and
ensures the auditors’ independence as
well as focusing on compliance with legal
requirements and accounting standards.
It is also responsible for ensuring that
an effective system of internal control is
maintained. The ultimate responsibility
for reviewing and approving the
annual financial statements and interim
statements remains with the Board.

The Audit Committee Report is set out on
pages 46 to 47.

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 Company’s
share incentive schemes and sets
performance conditions for share options
granted under the schemes.

ReNeuron Annual Report for the year ended 31 March 2020GovernanceDuring the year ended 31 March 2020, the
Remuneration Committee met nine times.
The Committee reviewed and approved:

i. the degree of achievement of

During the year ended 31 March 2020, the
Nominations and Corporate Governance
Committee met twice. The Committee
reviewed and approved:

objectives for the year ended 31 March
2019 and consequent bonus awards
and other adjustments to remuneration
for Executive Directors and senior
management;

i. the outcomes of the Board evaluation
exercise undertaken in May 2019;

ii. the continuation of the appointment
of Professor Sir Chris Evans OBE as a
Non-executive Director;

iii. the independence of long serving Non-

executive Directors; and

iv. potential future recruitment of a US

based Non-executive Director.

The terms of reference of the above
Committees are set out in the Company’s
Corporate Governance Policies document,
which is regularly updated and can
be found in the Investors (Corporate
Governance) section on the Group’s
website. The Corporate Governance
Policies document also contains a
schedule of matters specifically reserved
for Board decision or approval and
sets out the Company’s share dealing
code and its public interest disclosure
(‘whistleblowing’) policy and procedures.

ii. the corporate and personal objectives
for the Group and Executive Directors
for the year ended 31 March 2020;

iii. the exercise of share options by

employees;

iv. non-executive director fees;

v. the remuneration package of the Head
of Business Development and Alliance
Management; and

vi. the Executive Directors’ salaries and

benefits.

The Directors’ Remuneration Report is
set out on pages 48 to 56. The Directors
believe that this, together with the
above summary of the work of the
Remuneration Committee, constitutes
sufficient disclosure to meet the QCA
Code’s requirement for a Remuneration
Committee Report. Consequently, a
separate Remuneration Committee Report
is not presented.

The Nominations and Corporate
Governance Committee, which meets
as required, but at least twice a year,
has responsibility for reviewing the
size and composition of the Board,
the appointment of replacement or
additional Directors, regularly evaluating
the performance of the Board and the
CEO, the monitoring of compliance with
applicable laws, regulations and corporate
governance guidance and making
appropriate recommendations to the
Board.

10. Communicate how the
Group is governed and is
performing by maintaining a
dialogue with shareholders and
other relevant stakeholders

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’s website is regularly
updated and users can register to be
alerted when announcements or details of
presentations and events are posted onto
the website.

Historical annual reports and other
governance-related material can be found
on the Group’s website in the relevant
sections in the Investors section of the site.

The results of voting on all resolutions in
future general meetings will be posted on
the Group’s website, including any actions
to be taken as a result of resolutions for
which votes against have been received
from at least 20% of independent
shareholders.

By order of the Board

John Berriman
Non-executive Chairman

12 August 2020

ReNeuron Annual Report for the year ended 31 March 2020GovernanceAudit committee report
for the year ended 31 March 2020

As Chair of the Audit Committee, I am
pleased to present the Committee’s report
for the year ended 31 March 2020.

The Audit Committee is a subcommittee
of the Board and is responsible for
ensuring effective governance over
financial reporting and internal controls.
The Committee represents the interests of
the shareholders in relation to the integrity
of information and the effectiveness of
audit processes in place.

The Audit Committee consists of three
Non-executive Directors. It is chaired by
me and its other members are Simon
Cartmell OBE and Dr Tim Corn.

I am an independent Director and have
relevant financial experience. Audit
Committee meetings are also attended,
by invitation, by the Chief Financial
Officer, Financial Controller and, where
appropriate, other members of the Board.
Representatives of the external auditor
also attend by invitation and meet with
the Audit Committee at least twice a year,
with time allowed for discussion without
any members of the executive team being
present, to allow the external auditor to
raise any issues of concern.

The Audit Committee acts independently
of management to ensure that the
interests of shareholders are protected
in relation to the financial reporting and
internal controls.

The principal duties of the Committee
are to:

• monitor the integrity of the Group’s

financial reporting including the review
of significant financial reporting issues
and judgements;

• review and challenge whether

appropriate accounting policies
have been adopted, in particular for
significant or unusual transactions where
different approaches are possible;

• where requested by the Board, review
the content of the Annual Report and
Accounts and advise the Board on
whether, taken as a whole, it is fair,
balanced, understandable and provides
the information for shareholders to
assess the Group’s performance,
business model and strategy;

• keep under review the adequacy and
effectiveness of the internal financial
controls and internal control and risk
management systems;

• review and challenge, if appropriate,

any significant related party transactions;

• oversee the external audit process
including monitoring the external
auditor’s independence, objectivity,
effectiveness and performance;

• review the Group’s systems and controls

for detecting fraud and preventing
bribery; and

• monitor and review the Group’s
whistleblowing arrangements.

The Audit Committee has primary
responsibility for the relationship between
the Group and the external auditor.

This includes:

• considering and recommending to

the Board, to be put to shareholders
for approval at the annual general
meeting, in relation to the appointment,
reappointment and removal of the
Group’s external auditors;

• considering the auditor’s independence,

objectivity, qualifications and
effectiveness;

• reviewing the audit plan presented by
the auditor and considering the risks
identified therein;

• reviewing the auditors’ findings reports

on the Group’s Annual Report and
Accounts; and

• approving the level of fees paid to

the auditors for audit and non-audit
services.

During the year ended 31 March 2020,
the Audit Committee met twice. The
Committee reviewed and approved the
financial statements for the year ended
31 March 2019, the interim results for the
six months to 30 September 2019 and
the external auditor’s plan and fee for
the 2020 external audit. The Committee
also considered the impact of IFRS 15
“Revenue” and IFRS 16 “Leasing” and
approved management proposals.

The Audit Committee considers risk areas
in the financial statements throughout the
year and before the audit commences.
The Committee considered the following
items to be areas of risk.

ReNeuron Annual Report for the year ended 31 March 2020Governanceof accrued costs at each period end to
account for expenditure that has been
incurred. This requires management to
estimate full costs to complete for each
project and also to estimate its current
stage of completion. The Committee
pays particular attention to management’s
estimates of these items, its analysis of any
unusual movements and their impact on
cost recognition.

The Committee reviews the going
concern basis that the accounts are
prepared. The Group is in clinical-stage
development and suffers significant
operating losses from expenses incurred
in research and development of its
therapeutic programmes, as well as from
general and administrative costs that
have been incurred building our business
infrastructure. The Group expects to
continue to incur significant operating
losses for the foreseeable future as it
furthers its therapeutic programmes.

The Committee has reviewed cash
balances and short and long term
cashflow forecasts as well as plans to raise
funding and considers the going concern
basis to be appropriate. However, there
is no guarantee that attempts to raise
adequate additional funding on a timely
basis will be successful and therefore this
represents a material uncertainty, which
may cast significant doubt about the
Group’s and Company’s ability to continue
as a going concern.

The Audit Committee has satisfied itself
that the external auditor is independent.
The Audit Committee has concluded
that the external audit process was
effective, that the scope of the audit
was appropriate and that significant
judgements have been robustly
challenged. No significant issues have
been reported by the auditor.

The Audit Committee does not believe
it necessary at this time to propose re-
tendering of the audit contract.

A resolution for the reappointment of
PricewaterhouseCoopers LLP as the
statutory auditor will be proposed at the
forthcoming annual general meeting.

No formal recommendations other than
the approval of the Interim Statement
and Annual Report and Accounts have
been made to the Board by the Audit
Committee and no external reports have
been commissioned on financial control
processes during the year ended 31
March 2020.

By order of the Board

Dr Claudia D’Augusta

Chair – Audit Committee

12 August 2020

ReNeuron Annual Report for the year ended 31 March 2020GovernanceNon-executive Directors’
remuneration

The remuneration of the Non-executive
Directors is determined by the
Remuneration Committee with regard
to market comparatives. In setting the
remuneration policy for Non-executive
Directors, the Committee has sought
independent advice and, where
appropriate, has consulted with certain
of its shareholders. Non-executive
Directors are appointed for an initial
three-year term via an appointment
letter from the Company, with a three
months’ notice period. The appointment
term is renewable for further three-year
terms after the initial term has expired.
Appointment letters stipulate that the
Non-executive Director is expected to
commit sufficient time to the role to meet
the Company’s expectations.

Non-executive Directors do not receive
any pension, bonus or other benefits from
the Company. The remuneration of the
Non-executive Directors is reviewed by
the Board annually.

Directors’ remuneration report
for the year ended 31 March 2020

This report sets out the remuneration
policy operated by the Company in
respect of the Executive and Non-
executive Directors, as of the date of
this report. No Director is involved
in discussions relating to their own
remuneration.

Remuneration policy for
Executive Directors

The Remuneration Committee sets the
remuneration policy that aims to align
Executive Director remuneration with
shareholders’ interests and to attract and
retain the best talent for the benefit of
the Group. The Committee has sought
independent advice when setting the
remuneration policy. Executive Directors
are appointed under service contracts
with notice periods not exceeding 12
months. The basic contractual working
week is 37.5 hours but contracts stipulate
that Executive Directors are required to
work whatever hours are necessary in
order for them to fulfil their executive
responsibilities.

Remuneration for Executive Directors is
composed of the following elements:

Basic salary

Basic salaries are reviewed annually
and revised salaries take effect from the
start of the financial year. The review
process is managed by the Remuneration
Committee with reference to market salary
data and the Executive’s performance
during the year.

Bonuses

Annual bonuses are based on
achievement of Group strategic and
operational objectives, and personal
performance objectives. The maximum
annual bonus that may be payable in
cash is set at 50% of base salary for the
Executive Directors. Up to a further 50%
of base salary may be awarded, payable
in nominal price share options under the
Company’s Long Term Incentive Plan.

Longer Term Incentives

In order to further incentivise Executive
Directors and align their interests with
shareholders, the Company operates a
Long Term Incentive Plan under which
nominal price share options may be
granted from time to time. The quantum
of these awards will relate to the Executive
Director’s base salary and will vest subject
to the performance conditions detailed in
the tables and notes on pages 50 to 56 of
this report.

Executive Directors are expected to build
a direct stake in the Company’s shares
over time, either through the purchase
of shares in the market from time to time
and/or through the future exercise of share
options.

The Company has the ability to grant
share options under its active Share
Option schemes subject to a cap of up
to 10% of total issued share capital in any
ten-year period.

Pension

The Group operates a defined
contribution pension scheme which is
available to all employees. The Company
contribution in respect of Executive
Directors is currently set at 10% of base
salary. The Executive Director may choose
to take some or all of this benefit as a
cash alternative, subject to the Company
remaining cash neutral after relevant
payroll taxes.

Other benefits

Other benefits provided are life assurance,
private medical insurance and professional
subscriptions, where relevant to the
duties of the Executive Director, and a car
allowance of £10,000 per annum to each
Executive Director (disclosed as part of
Salaries and fees in the remuneration table
below). During the year, the Company
paid a living allowance of £47,000 (2019:
£50,000) to the Chief Executive Officer
pertaining to the relocation of the Group
to the Pencoed, South Wales site (also
disclosed as part of Salaries and fees in
the remuneration table below).

ReNeuron Annual Report for the year ended 31 March 2020GovernanceDirectors’ emoluments

The Directors received the following remuneration during the year:

Audited
John Berriman
Olav Hellebø
Michael Hunt
Simon Cartmell OBE
Dr Tim Corn
Dr Claudia D’Augusta
Professor Sir Chris Evans OBE
Dr Mike Owen
Total

Salaries
and fees
£’000
46
364
224
38
33
37
26
30
798

Bonuses
£’000
–
–
–
–
–
–
–
–
–

Benefits
in kind
£’000
–
2
2
–
–
–
–
–
4

2020
Pension
contributions
£’000
–
31
21
–
–
–
–
–
52

2020
Total
£’000
46
366
226
38
33
37
26
30
802

2019
Total
£’000
52
509
323
38
30
37
26
27
1,042

2019
Pension
contributions
£’000
–
30
21
–
–
–
–
–
51

Directors’ bonuses comprise a cash element paid as a percentage of base salary, being 50% in both cases, based on achievement of
corporate and personal performance objectives in the financial year.

In addition to the above cash bonus, and in line with the above stated remuneration policy, the Executive Directors may earn a non-
cash bonus based on achievement of corporate and personal performance objectives, paid in the form of nominally priced share
options awarded under the Group’s Long-term Incentive Plan.

In the light of the impact of COVID-19, the Executive Directors have waived all bonuses earned based upon the achievement of
personal and corporate objectives for the year ended 31 March 2020. As such no cash bonuses are to be paid and no bonus-related
options granted in respect of the year ended 31 March 2020. The estimated gain on options granted in respect of the year ended
31 March 2019 at the date of grant was for Olav Hellebø £72,000 and for Michael Hunt £56,000.

The Executive Directors elected to take some of their pension benefit as a cash alternative.

The Non-executive Directors also received an equity-based fee in the year which took the form of nominal price share options under
the Company’s Non-executive Share Option Scheme. The estimated gain on these options at the time of grant was £12,900 (2019:
£11,859) to each of the Non-executive Directors.

Directors’ emoluments include amounts payable to third parties in respect of fees as described in note 33 of the financial statements.

The Directors, who held office at the end of the year, held the following interests in the Ordinary shares of the Company.

John Berriman
Olav Hellebø
Michael Hunt
Simon Cartmell OBE
Dr Tim Corn
Dr Claudia D’Augusta
Professor Sir Chris Evans OBE
Dr Mike Owen

Ordinary shares of 1p each

31 March
2020
Number
90,434
21,630
30,036
15,633
2,000
–
254,605
4,237

31 March
2019
Number
10,434
21,630
27,546
7,875
2,000
–
240,105
–

ReNeuron Annual Report for the year ended 31 March 2020GovernanceDirectors’ remuneration report

The Directors, who held office at the end of the year, held the following interests in options over shares of the Company.

John Berriman

Options – unapproved

Olav Hellebø

Options – approved

Options – unapproved

At
1 April
2019
Number

Exercised
during
the year
Number

Granted
during
the year
Number

At
31 March
2020
Number

Note

Exercise
price

Note

4,800

5,752

6,000

3,000

5,000

17,700

–
48,252

At
1 April
2019
Number

72,463

83,091

181,236

190,666

25,000

97,666

155,738

–

–
805,860

–

–
–

–

4,800

£3.75

5,752

£2.87

6,000

£3.60

6,000

£3.45

3,000

£1.00

5,000

£1.00

17,700

£0.01

6,000
6,000

6,000
54,252

£0.01

Exercised
during
the year
Number

Granted
during
the year
Number

At
31 March
2020
Number

Exercise
price

–

–
–

–

72,463

£1.00

83,091

£1.00

181,236

£1.00

190,666

£1.00

25,000

£1.00

97,666

£1.00

155,738

£0.01

260,861

£0.01

30,254
291,115

30,254
1,096,975

£0.01

Exercise period
September 2014
– September 2021
September 2015
– September 2022
September 2016
– September 2023
September 2017
– September 2024
August 2016
– July 2026
October 2017
– September 2027
October 2018
– September 2028
May 2019
– April 2029

Exercise period*
September 2017
– September 2024
September 2017
– September 2024
October 2018
– October 2025
July 2019
– July 2026
July 2018
– July 2026
July 2020
– September 2027
September 2021
– September 2028
April 2022
– April 2029
July 2021
– July 2029

* The exercise periods indicate the earliest dates for which the options are exercisable subject to meeting the performance conditions disclosed in the following notes.

ReNeuron Annual Report for the year ended 31 March 2020GovernanceMichael Hunt

Options – approved

Options – unapproved

Options – approved

Options – unapproved

Options – approved

Options – unapproved

Options – parallel

Options – unapproved

At
1 April
2019
Number

Exercised
during
the year
Number

Granted
during
the year
Number

At
31 March
2020
Number

Note

Exercise
price

3,478

(3,478)**

10,355

14,583

31,818

6,945

32,638

17,153

23,471

70,909

82,916

12,500

68,000

33,334

44,117

–

£1.00

10,355

£1.00

14,583

£1.00

31,818

£1.00

6,945

£1.00

32,638

£1.00

17,153

£1.00

23,471

£1.00

70,909

£1.00

82,916

£1.00

12,500

£1.00

68,000

£1.00

33,334

44,117

£0.01
£0.01 or
£0.68

103,785

£0.01

–
452,217

–
(3,478)

23,697
127,482

23,697
576,221

£0.01

Exercise period*
August 2011
– August 2019
August 2013
– August 2020
September 2014
– September 2021
September 2015
– September 2022
September 2016
– September 2023
September 2016
– September 2023
September 2017
– September 2024
September 2017
– September 2024
October 2018
– October 2025
July 2019
– July 2026
July 2018
– July 2026
July 2020
– September 2027
September 2021
– September 2028
September 2021
– September 2028
April 2022
– April 2029
July 2021
– July 2029

* The exercise periods indicate the earliest dates for which the options are exercisable subject to meeting the performance conditions disclosed in the following notes.
** These options were issued under the Group Deferred Share-based Bonus Plan. The estimated gain on these options was disclosed in the Directors Remuneration

Report in the year that the options were granted.

ReNeuron Annual Report for the year ended 31 March 2020Governance
Directors’ remuneration report

Simon Cartmell OBE

At
1 April
2019
Number

Exercised
during
the year
Number

Granted
during
the year
Number

At
31 March
2020
Number

Note

Exercise
price

Options – unapproved

Dr Tim Corn

Options – unapproved

Note

4,800

5,752

6,000

3,000

5,000

17,700

–
48,252

–

–
–

–

4,800

£3.75

5,752

£2.87

6,000

£3.60

6,000

£3.45

3,000

£1.00

5,000

£1.00

17,700

£0.01

6,000
6,000

6,000
54,252

£0.01

At
1 April
2019
Number

Exercised
during
the year
Number

Granted
during
the year
Number

At
31 March
2020
Number

Exercise
price

5,752

5,000

3,000

5,000

17,700

–
41,452

–

–
–

–

5,752

£2.87

5,000

£3.60

5,000

£3.45

3,000

£1.00

5,000

£1.00

17,700

£0.01

6,000
6,000

6,000
47,452

£0.01

Exercise period*
September 2014
– September 2021
September 2015
– September 2022
September 2016
– September 2023
September 2017
– September 2024
August 2016
– July 2026
October 2017
– September 2027
October 2018
– September 2028
May 2019
– April 2029

Exercise period*
September 2015
– September 2022
September 2016
– September 2023
September 2017
– September 2024
August 2016
– July 2026
October 2017
– September 2027
October 2018
– September 2028
May 2019
– April 2029

* The exercise periods indicate the earliest dates for which the options are exercisable subject to meeting the performance conditions disclosed in the following notes.

ReNeuron Annual Report for the year ended 31 March 2020GovernanceDr Claudia D’Augusta

Options – unapproved

At
1 April
2019
Number

Exercised
during
the year
Number

Granted
during
the year
Number

At
31 March
2020
Number

Exercise
price

5,000

17,700

–
22,700

–

–
–

–

5,000

£1.00

17,700

£0.01

6,000
6,000

6,000
28,700

£0.01

Note

Exercise period*
October 2017
– September 2027
October 2018
– September 2028
May 2019
– April 2029

Professor Sir Chris Evans OBE

Options – unapproved

Dr Mike Owen

Options – unapproved

Note

At
1 April
2019
Number

Exercised
during
the year
Number

Granted
during
the year
Number

At
31 March
2020
Number

Exercise
price

5,000

3,000

5,000

17,700

–
35,700

–

–
–

–

5,000

£3.60

5,000

£3.45

3,000

£1.00

5,000

£1.00

17,700

£0.01

6,000
6,000

6,000
41,700

£0.01

Exercise period*
September 2016
– September 2023
September 2017
– September 2024
August 2016
– July 2026
October 2017
– September 2027
October 2018
– September 2028
May 2019
– April 2029

At
1 April
2019
Number

Exercised
during
the year
Number

Granted
during
the year
Number

At
31 March
2020
Number

Exercise
price

3,000

5,000

17,700

–
25,700

–

–
–

–

3,000

£1.00

5,000

£1.00

17,700

£0.01

6,000
6,000

6,000
31,700

£0.01

Exercise period*
August 2016
– July 2026
October 2017
– September 2027
October 2018
– September 2028
May 2019
– April 2029

* The exercise periods indicate the earliest dates for which the options are exercisable subject to meeting the performance conditions disclosed in the following notes.

ReNeuron Annual Report for the year ended 31 March 2020GovernanceDirectors’ remuneration report

Note 1:

Note 4:

These options have been issued 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 carry no further
performance conditions; at 31 March 2020
these options have been exercised.

Note 2:

These options were issued subject to the
amended performance conditions below.
If all the performance conditions bar
performance condition (ii) are met then
50% of the options become exercisable; at
31 March 2020 50% of these options were
exercisable.

i. The first patient is administered with
a ReNeuron cell therapy in a second
clinical trial;

ii. The Total Shareholder Return (TSR) of
the Company meets or exceeds that
of the AIM Healthcare Index in any
three-year period from date of grant of
the option;

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.

These options were awarded in
accordance with the Group’s Long
Term Incentive Plan and are subject to
the amended performance conditions
set out below. If all the performance
conditions bar performance condition (ii)
are met then 50% of the options become
exercisable; at 31 March 2020 50% of
these options were exercisable.

i. The first patient is administered with a
ReNeuron cell therapy in a third clinical
trial;

ii. The Total Shareholder Return (TSR) of
the Company meets or exceeds that
of the AIM Healthcare Index in any
three-year period from date of grant of
the option;

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 5:

These options were issued subject to a
performance condition, being the first
patient administered with a ReNeuron
cell therapy in a fourth clinical trial; at
31 March 2020 these options were
exercisable.

Note 3:

Note 6:

These options were issued subject to a
performance condition, being the first
patient administered with a ReNeuron cell
therapy in a third clinical trial; at 31 March
2020 these options were exercisable.

i. The first patient is administered with
a ReNeuron cell therapy in a fourth
clinical trial;

ii. The Total Shareholder Return (TSR) of
the Company meets or exceeds that
of the AIM Healthcare Index in any
three-year period from date of grant of
the option;

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 were issued subject to a
performance condition, being the first
patient administered with a ReNeuron cell
therapy in a fifth clinical trial; at 31 March
2020 these options were exercisable.

Note 8:

i. The first patient is administered with a
ReNeuron cell therapy in a fifth clinical
trial;

ii. The Total Shareholder Return (TSR) of
the Company meets or exceeds that
of the AIM Healthcare Index in any
three-year period from date of grant of
the option;

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.

ReNeuron Annual Report for the year ended 31 March 2020GovernanceNote 9:

Note 12:

Note 16:

These options were issued subject to a
performance condition, being the first
patient administered with a ReNeuron cell
therapy in a sixth clinical trial; at 31 March
2020 these options were exercisable.

Note 10:

i. The first patient is administered with a
ReNeuron cell therapy in a sixth clinical
trial;

ii. The Total Shareholder Return (TSR) of
the Company meets or exceeds that
of the AIM Healthcare Index in any
three-year period from date of grant of
the option;

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 11:

These options were awarded in
accordance with the Group’s Long Term
Incentive Plan and are subject to the
performance conditions set out below; at
31 March 2020 66.66% of these options
were exercisable.

i. 33.3% vest when the first patient is
administered with a ReNeuron cell
therapy in a sixth clinical trial;

ii. 33.3% vest on completion of the fourth
clinical trial of a ReNeuron cell therapy;

iii. 33.4% vest if the Total Shareholder

Return (TSR) of the Company meets
or exceeds that of the AIM Healthcare
Index in any three-year period from
date of grant of the option.

These options were awarded in
accordance with the Group’s Long Term
Incentive Plan and are subject to the
performance conditions set out below;
at 31 March 2020 these options were not
exercisable.

iv. 33.3% vest when the first patient is
administered with a ReNeuron cell
therapy in a seventh clinical trial;

v. 33.3% vest on completion of the fifth

clinical trial of a ReNeuron cell therapy;

vi. 33.4% vest if the Total Shareholder

Return (TSR) of the Company meets
or exceeds that of the AIM Healthcare
Index in any three-year period from
date of grant of the option.

Note 13:

These options have been issued 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 2016 and carry no further
performance conditions; at 31 March 2020
these options were exercisable.

Note 14:

These options have been issued in
accordance with the Non-executive Share
Option Scheme. These share options
vest over three years on a straight-line
basis and are not subject to performance
conditions; at 31 March 2020 these
options were exercisable.

Note 15:

These options were issued subject to the
performance conditions set out below. At
31 March 2020 these options were not
exercisable.

i. 33.3% vest when the first patient is
administered with a ReNeuron cell
therapy in an eighth clinical trial;

ii. 33.3% vest on completion of the sixth
clinical trial of a ReNeuron cell therapy;

iii. 33.4% vest if the Total Shareholder

Return (TSR) of the Company meets
or exceeds that of the FTSE AIM
Healthcare Index in any three-year
period from the date of grant of the
option.

Note 17:

Note 18:

These options were issued subject to the
performance conditions set out below. At
31 March 2020 these options were not
exercisable.

i. 33.3% vest when the Company signs
an out-licensing deal (or deals) for any
of its technologies or programmes
which provides sufficient funding to
allow the achievement of clinical proof
of concept data for the CTX and hRPC
products;

ii. 33.3% vest when the sixth clinical trial
of a ReNeuron cell therapy completes;

iii. 33.4% vest if the Total Shareholder

Return (TSR) of the Company meets
or exceeds that of the FTSE AIM
Healthcare Index in any three-year
period from the date of grant of the
option.

ReNeuron Annual Report for the year ended 31 March 2020GovernanceDirectors’ remuneration report

Note 19:

Note 21:

These are parallel options which may be
exercised either as an unapproved option
at an exercise price of 1p, or alternatively,
at the choice of the option holder, as
approved CSOP options at an exercise
price of 68p. These options were issued
subject to the performance conditions
set out below. At 31 March 2020 these
options were not exercisable.

ii. 33.3% vest when the sixth clinical trial
of a ReNeuron cell therapy completes;

iii. 33.4% vest if the Total Shareholder

Return (TSR) of the Company meets
or exceeds that of the FTSE AIM
Healthcare Index in any three-year
period from the date of grant of the
option.

Note 20:

These options were issued subject to the
performance conditions set out below. At
31 March 2020 these options were not
exercisable.

i. 33% vest when the Company signs an
out-licensing deal (or deals) for any of
its technologies or programmes which,
together with other financial resources,
provides sufficient funding to allow
the achievement of clinical proof of
concept data for the CTX and hRPC
products;

ii. 33% vest when the Company’s share

price has doubled from the price at the
date of grant;

iii. 34% vest when the sixth clinical trial of
a ReNeuron cell therapy completes.

Note 22:

These options have been issued 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 2019 and carry no further
performance conditions; at 31 March 2020
these options were not exercisable.

By order of the Board

Simon Cartmell OBE

Chair – Remuneration Committee

12 August 2020

ReNeuron Annual Report for the year ended 31 March 2020GovernanceIndependent auditors’ report
to the members of ReNeuron Group plc

Report on the audit of the financial
statements
Opinion

In our opinion, ReNeuron Group plc’s group financial statements
and parent company financial statements (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 2020 and of the
group’s loss and the group’s and the parent company’s cash
flows for the year then ended;

• have been properly prepared in accordance with International

Financial Reporting Standards (IFRSs) as adopted by the
European Union and, as regards the parent company’s financial
statements, as applied in accordance with the provisions of the
Companies Act 2006; and

• have been prepared in accordance with the requirements of

the Companies Act 2006.

We have audited the financial statements, included within the
Annual Report and Accounts (the “Annual Report”), which
comprise: the Group and Parent Company statements of
financial position as at 31 March 2020; the Group statement
of comprehensive income, the Group and Parent Company
statements of cash flows, and the Group and Parent Company
statements of changes in equity for the year then ended; and the
notes to the financial statements, which include a description of
the significant accounting policies.

Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’
responsibilities for the audit of the financial statements section of
our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.

Independence
We remained independent of the group in accordance with the
ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard,
as applicable to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.

Material uncertainty related to going concern –
Group and Parent Company
In forming our opinion on the financial statements, which are not
modified, we have considered the adequacy of the disclosure
made in note 3 to the financial statements concerning the group
and parent company’s ability to continue as a going concern.
Based on the Directors’ current forecasts and plans the Directors
expect the group’s and parent company’s current financial
resources will be sufficient to support the business until at least

mid-2021 and the Directors are considering a number of options
to secure further funding sufficient for the future needs of the
business beyond mid-2021. However, there is no guarantee
that attempts to raise adequate additional financing on a timely
basis will be successful. These conditions, along with the other
matters explained in note 3 to the financial statements, indicate
the existence of a material uncertainty which may cast significant
doubt about the group and parent company’s ability to continue
as a going concern. The financial statements do not include the
adjustments that would result if the group and/or the parent
company were unable to continue as a going concern.

Audit procedures performed
In concluding that there was a material uncertainty, we reviewed
the Directors’ model supporting their going concern assumption,
tested mathematical accuracy and considered the reasonableness
of the assumptions made and the available headroom
throughout the twelve-month period from the date of approval of
the financial statements. Our procedures included:

• considering whether the assumptions made indicate that

material uncertainty exists in relation to going concern and
considering how sensitive the model is to reasonably possible
changes in those assumptions;

• reviewing the underlying base year back to supporting

documentation (i.e. comparison with costs in current year); and

• considering whether judgements/estimates are appropriately

disclosed within the financial statements.

Our audit approach
Overview

• Overall group materiality: £693,000 (2019:
£859,000), based on 5% of loss before tax.

Materiality

• Overall parent company materiality:

Audit scope

Key
audit
matters

£628,000 (2019: £677,000), based on 1%
of total assets.

• The UK audit team performed an audit of
the complete financial information of the
one operating entity in the UK (ReNeuron
Limited) as well as the parent company
based in the UK (ReNeuron Group Plc),
which comprise over 99% of the Group’s
loss before tax and over 99% of the
group’s total assets.

• Going concern – refer to the Material
uncertainty related to going concern
above (Group and Parent Company).

• Accounting for research and development

expenditure (Group).

• Risks posed by COVID-19 (Group and

Parent Company).

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsIndependent auditors’ report
to the members of ReNeuron Group plc

The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
In particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed
the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.

Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters. In addition to going concern, described in the Material uncertainty related to
going concern section above, we determined the matters described below to be the key audit matters to be communicated in our
report. This is not a complete list of all risks identified by our audit.

Key audit matter
Accounting for research and development expenditure
(Group)

Due to the nature of the clinical trials and general research it is
often difficult to estimate the amount of time a particular trial
is going to take. ReNeuron outsources most of its research and
development to third parties which restricts visibility and the
ability to monitor the progression of a piece of research, or a
trial’s stage of completion.

As a result, it can be difficult for ReNeuron to measure what
costs have been incurred in relation to a trial at a particular point
in time and as such, based on billings received, whether project
accruals and prepayments recorded are reasonably estimated.
Our audit risk is focussed on whether the relevant expenditure
has been appropriately included in the income statement and
whether prepayments and accruals are appropriately calculated
and recognised.

Risks posed by COVID-19 (Group and Parent Company)

The Directors have considered the risks posed by COVID-19,
as set out in the Strategic report. Given the nature of the
Group’s operations, the risks are assessed as being in relation
to the potential slowing of Research & Development activities
including possible knock-on delays in clinical trial data and
sustained fixed costs during periods of relative inactivity.

How our audit addressed the key audit matter
We performed the following procedures:

• We verified the status of projects through a meeting with the
Chief Medical officer where the progress and status of each
project was discussed.

• We obtained management’s calculations that support the

research and development costs incurred during the year and
verified the mathematical formulae used.

• We obtained the contracts register and for a sample of

contracts agreed that management had recognised costs in
line with the underlying terms of the contract.

• We sampled invoices detailed in management’s calculations

and tested back to invoice and verified that the cost
description in the invoice matched costs included in
management’s schedule.

• We obtained management’s calculation of the accrual and

prepayment position and verified the mathematical formulae.

• We sampled the accrual position and tested back to either

contract or invoice and verified the accuracy and existence of
the accrual included in management’s schedule.

• We reviewed invoices received post 31 March 2020 to

identify any costs not included in management’s schedules.
We read relevant disclosures in the Annual Report and checked
for consistency with our knowledge of the business based on
our audit. No exceptions were noted from our testing.

How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements
as a whole, taking into account the structure of the group and the parent company, the accounting processes and controls, and the
industry in which they operate.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsIndependent auditors’ report
to the members of ReNeuron Group plc

ReNeuron Group Plc is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and its principal activities are
research and clinical development of cell based therapeutics.

The group’s accounting process is structured around a local finance function based in the United Kingdom. There are three active
entities in the group; ReNeuron Group Plc (which raises the equity to support the principal activity of the group), ReNeuron Limited
(which records the majority of group activity) and ReNeuron, Inc. (which incurs the costs of supervising the group’s clinical trials in
the United States of America and recharges these back to ReNeuron Limited). ReNeuron Ireland Limited is not currently trading but
a management charge has been recognised in the year. There are two dormant entities in the group; ReNeuron (UK) Limited and
ReNeuron Holdings Limited.

For each active entity we determined whether we required an audit of their complete financial information (“full scope”) or whether
specified procedures addressing specific risk characteristics of particular financial statement line items would be sufficient.

It was assessed that ReNeuron Group Plc and ReNeuron Limited required full scope audit procedures whilst ReNeuron, Inc. and
ReNeuron Ireland Limited, which contribute less than 1% of the loss before tax and 1% of group total assets, and contained no
financial statement items that comprised more than 15% of the group total, did not.

Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our
audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Overall materiality
How we determined it
Rationale for benchmark applied

Group financial statements
£693,000 (2019: £859,000).
5% of loss before tax.
Based on the benchmarks used in the
Annual Report, loss before tax is the
most relevant measure in assessing
the performance of the group, and is a
generally accepted auditing benchmark.

Parent Company financial statements
£628,000 (2019: £677,000).
1% of total assets.
We believe that total assets is the most
appropriate measure since this entity is
a holding company, and is a generally
accepted auditing benchmark. This has
been restricted to c. 72% of the benchmark.

For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The
range of materiality allocated across components was between £619,000 and £628,000. Certain components were audited to a local
statutory audit materiality that was also less than our overall group materiality.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £35,000 (Group
audit) (2019: £43,000) and £31,000 (Parent company audit) (2019: £34,000) as well as misstatements below those amounts that, in our
view, warranted reporting for qualitative reasons.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the
other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this
report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report based on these responsibilities.

With respect to the Strategic Report and Directors’ report, we also considered whether the disclosures required by the UK Companies
Act 2006 have been included.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsIndependent auditors’ report
to the members of ReNeuron Group plc

Based on the responsibilities described above and our work
undertaken in the course of the audit, ISAs (UK) require us also to
report certain opinions and matters as described below.

Strategic Report and Directors’ report
In our opinion, based on the work undertaken in the course of the
audit, the information given in the Strategic Report and Directors’
report for the year ended 31 March 2020 is consistent with the
financial statements and has been prepared in accordance with
applicable legal requirements.

In light of the knowledge and understanding of the group and
parent company and their environment obtained in the course of
the audit, we did not identify any material misstatements in the
Strategic Report and Directors’ report.

Responsibilities for the financial statements
and the audit
Responsibilities of the directors for the
financial statements
As explained more fully in the Statement of Directors’
responsibilities statement, the directors are responsible for the
preparation of the financial statements in accordance with the
applicable framework and for being satisfied that they give a true
and fair view. The directors are also responsible for such internal
control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.

In preparing the financial statements, the directors are
responsible for assessing the group’s and the parent company’s
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate
the group or the parent company or to cease operations, or have
no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.

A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website at:

www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditors’ report.

Use of this report
This report, including the opinions, has been prepared for and
only for the parent 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.

Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you
if, in our opinion:

• we have not received all the information and explanations we

require for our audit; or

• 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

• certain disclosures of directors’ remuneration specified by law

are not made; or

• the parent company financial statements are not in agreement

with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Other voluntary reporting
Directors’ remuneration
The parent company voluntarily prepares a Directors’
Remuneration Report in accordance with the provisions of the
Companies Act 2006. The directors requested that we audit
the part of the Directors’ Remuneration Report specified by the
Companies Act 2006 to be audited as if the parent company
were a quoted company.

In our opinion, the part of the Directors’ Remuneration Report to
be audited has been properly prepared in accordance with the
Companies Act 2006.

Jason Clarke BSc ACA (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Cardiff

12 August 2020

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsGroup statement of comprehensive income
for the year ended 31 March 2020

Revenue
Other income
Research and development costs
General and administrative costs
Operating loss
Finance income
Finance expense
Loss before income tax
Taxation
Loss and total comprehensive loss for the year
Loss and total comprehensive loss attributable to equity owners of the Company
Basic and diluted loss per Ordinary share

Note

2020
£’000
6,065
100
(16,335)
(4,239)
(14,409)
593
(42)
(13,858)
2,446
(11,412)
(11,412)
(35.9p)

2019
Restated1
£’000
49
2,671
(16,246)
(4,773)
(18,299)
1,103
(39)
(17,235)
2,887
(14,348)
(14,348)
(45.3p)

1 For further details on the restatement of the reported results for IFRS 16 in the year ended 31 March 2019, see notes 2 and 35.

ReNeuron Annual Report for the year ended 31 March 2020Financial Statements

Group and Parent Company statements of financial position
as at 31 March 2020

Note

2020
£’000

Group

2019
Restated1
£’000

2018
Restated1
£’000

2020
£’000

Company

2019
Restated1
£’000

2018
Restated1
£’000

Assets
Non-current assets
Property, plant and equipment
Right-of-use asset
Intangible assets
Investment in subsidiaries

Current assets
Trade and other receivables
Income tax receivable
Investments – bank deposits
Cash and cash equivalents

Total assets
Equity
Equity attributable to owners of the Company
Share capital
Share premium account
Capital redemption reserve
Merger reserve
Accumulated losses
At 1 April
Loss for the year attributable to the owners
Other changes in accumulated losses
At 31 March
Total equity
Liabilities
Current liabilities
Trade and other payables
Lease liabilities

Non-current liabilities
Lease liabilities

Total liabilities
Total equity and liabilities

15
16
17
18

20
21

25
25

22
23

452
591
186
–
1,229

696
5,826
–
12,625
19,147
20,376

632
704
186
–
1,522

834
2,768
5,954
20,432
29,988
31,510

726
755
186
–
1,667

1,282
3,010
9,500
27,911
41,703
43,370

–
564
–

–
659
–
75,000 112,527
75,564 113,186

7
20
–
–
–
5,954
11,079
19,083
11,086
25,057
86,650 138,243

–
755
–
103,195
103,950

73
–
9,500
25,026
34,599
138,549

318
97,890
40,294
2,223

316
97,704
40,294
2,223

318
97,890
40,294
1,858

316
97,704
40,294
1,858

(11,412)
1,203

(117,293) (103,985)
(14,348)
1,040
(127,502) (117,293)
23,244

13,223

(87,441)
(17,671)
1,127
(103,985)
36,552

(8,387)
(8,112)
(47,367)
(1,315)
1,203
1,040
(54,551)
(8,387)
85,809 131,785

(6,179)
(3,060)
1,127
(8,112)
132,060

6,280
166
6,446

707
707
7,153
20,376

7,261
141
7,402

864
864
8,266
31,510

5,819
31
5,850

968
968
6,818
43,370

3
135
138

5,490
130
5,620

5,490
31
5,521

703
703
841

838
838
6,458
86,650 138,243

968
968
6,849
138,549

1 For further details on the restatement of the reported results for IFRS 16 in the year ended 31 March 2019, see notes 2 and 35.

The financial statements on pages 61 to 90 were approved by the Board of Directors on 12 August 2020 and were signed on
its behalf by:

Michael Hunt
Director
Company registered number: 05474163

ReNeuron Annual Report for the year ended 31 March 2020Financial Statements

Group and Parent Company statements of changes in equity
for the year ended 31 March 2020

Group

As at 1 April 2018 (as previously reported)
Change in accounting policy1
As at 1 April 2018 (restated)

Credit on share-based payment

Loss and total comprehensive loss for the year
As at 31 March 2019
Exercise of employee share options
Credit on share-based payment
Loss and total comprehensive loss for the year
As at 31 March 2020

Company

As at 1 April 2018
Change in accounting policy1
As at 1 April 2018 (restated)

Credit on share-based payment
Loss and total comprehensive loss for the year
As at 31 March 2019

Exercise of employee share options

Credit on share-based payment
Loss and total comprehensive loss for the year
As at 31 March 2020

Share
capital
£’000

316

–

316

–

–
316
2
–
–
318

Share
capital
£’000

316

–

316

–
–
316

–
–
318

Share
premium
account
£’000

97,704

–

97,704

–

–
97,704
186
–
–
97,890

Share
premium
account
£’000

97,704

–

97,704

–
–
97,704

186

–
–
97,890

Capital
redemption
reserve
£’000

Merger
reserve
£’000

Accumulated
losses
£’000

Total
equity
£’000

40,294

2,223

(103,868)

36,669

–

(117)

40,294

2,223

(103,985)

36,552

–

–
40,294
–
–
–
40,294

Capital
redemption
reserve
£’000

40,294

–

–
2,223
–
–
–
2,223

1,040

(14,348)
(117,293)
–
1,203
(11,412)
(127,502)

(14,348)
23,244
188
1,203
(11,412)
13,223

Merger
reserve
£’000

1,858

–

Accumulated
losses
£’000

Total
equity
£’000

(7,838)

132,334

(274)

40,294

1,858

(8,112)

132,060

–
–

1,040
(1,315)

40,294

1,858

(8,387)

131,785

–

–
–
40,294

–

–
–
1,858

–

188

1,203
(47,367)
(54,551)

1,203
(47,367)
85,809

1 For further details on the restatement of the reported results for IFRS 16 in the year ended 31 March 2019, see notes 2 and 35.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsGroup and Parent Company statements of cash flows
for the year ended 31 March 2020

Cash flows from operating activities
Cash used in operations
Overseas taxes paid
Income tax credit received
Interest paid

Net cash used in operating activities

Cash flows from investing activities
Capital expenditure
Investment in subsidiaries
Interest received

Net cash generated from/(used in) investing activities
Cash flows from financing activities
Proceeds from the issue of ordinary shares
Bank deposit matured
Lease payments
Lease finance
Net cash generated from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the start of the year

Cash and cash equivalents at the end of the year

Note

Group

Company

2020
£’000

(13,651)
(611)
–
(42)

(14,304)

(119)
–
300

181

188
6,260
(144)
12
6,316
(7,807)
20,432

12,625

2019
Restated1
£’000

(15,037)
–
3,129
(39)

(11,947)

(239)
–
342

103

–
4,359
(45)
51
4,365
(7,479)
27,911

20,432

2020
£’000

(1,082)
–
–
(34)

(1,116)

–
(13,505)
299

(13,206)

188
6,260
(130)
–
6,318
(8,004)
19,083

11,079

2019
Restated1
£’000

(1,415)
–
–
(38)

(1,453)

–
(9,162)
343

(8,819)

–
4,359
(30)
–
4,329
(5,943)
25,026

19,083

1 For further details on the restatement of the reported results for IFRS 16 in the year ended 31 March 2019, see notes 2 and 35.

ReNeuron Annual Report for the year ended 31 March 2020Financial Statements

Notes to the financial statements

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 the United Kingdom. The address
of its registered office is Pencoed Business Park, Pencoed,
Bridgend, CF35 5HY. Its shares are listed on the Alternative
Investment Market (AIM) 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 (IFRSs) as
adopted by the European Union, the interpretations of the
International Financial Reporting Standards Interpretations
Committee (IFRSIC) and the Companies Act 2006 applicable to
companies reporting under IFRS.

These financial statements have been prepared on a historical
cost basis.

As permitted by Section 408 of the Companies Act 2006, the
Parent Company’s statement of comprehensive income has not
been presented in these financial statements.

Basis of consolidation
The consolidated financial statements include the financial
statements of the Company and its subsidiary undertakings made
up to 31 March 2020.

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 Group statement of comprehensive income.

Intercompany transactions and 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 preparation of financial statements in conformity with IFRS
requires the use of accounting estimates and assumptions that
affect the reported amounts of assets and liabilities at the date
of the financial statements and the reported amounts of income
and expenses during the reporting period. Although these
estimates are based on management’s best knowledge of current
events and actions, actual results ultimately may differ from
those estimates. IFRS also requires management to exercise its
judgement in the process of applying the Group’s accounting
policies.

The areas involving a higher degree of judgement or complexity,
or areas where assumptions and estimates are significant to the
consolidated financial statements are as follows:

a) Recognition of research and development expenditure

The Group incurs research and development expenditure from
third parties. The Group recognises this expenditure in line with
the management’s best estimation of the stage of completion
of each research and development project. This includes the
calculation of accrued costs at each period end to account for
expenditure that has been incurred. This requires management
to estimate full costs to complete for each project and also to
estimate its current stage of completion. Costs relating to clinical
research organisation expenses in the year were £2.9 million. The
related accruals were £0.9 million.

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
Group statement of comprehensive income in the year in which
they occur.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsNotes to the financial statements continued

Revenue
Revenue is accounted for in line with the principles of IFRS 15
‘Revenue from Contracts with Customers’. It is measured at the
fair value of the consideration received or receivable, net of
discounts and sales-related taxes.

Licensing agreements may contain a number of elements and
provide for varying consideration terms, such as initial fees,
sales, development and regulatory milestones together with
sales-based royalties and similar payments. Such arrangements
are within the scope of IFRS 15 and are assessed under its
five-step model to determine revenue recognition. The distinct
performance obligations within the contract and the arrangement
transaction price are identified. The fair value of the arrangement
transaction price is allocated to the different performance
obligations based upon the relative stand-alone selling price
of those obligations together with the performance obligation
activities to which the terms of the payments specifically relate.
The allocated transaction price is recognised over the respective
performance period of each performance obligation.

Initial fees relating to the immediate transfer of intellectual
property are recognised as revenue upon signature of the
contract.

Development and regulatory approval milestone payments
are recognised as revenue when the respective milestones are
achieved.

Sales-based royalty income and related milestone payments are
recognised in the period when the related sales occur or when
the relevant milestone is achieved.

Income which is related to ongoing development activity or
technology transfer is recognised as the activity is undertaken, in
accordance with the contract.

Where the Group acts as principal in a transaction it recognises
the gross revenue to which it is entitled. If the Group acts as
agent in a transaction, it recognises the fee or commission
received.

Other income
Other income represents government grants, together with
transactions that do not arise in the course of an entity’s
normal activities and outside the definition of revenue above.
Government grants related to expenses are recognised in the
same period as the relevant expense. Other items are recognised
when there is an unconditional right to the income, they fall due,
and there is no risk of clawback to the Group.

Research and development expenditure
Capitalisation of expenditure on product development
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 Group’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 Group
statement of comprehensive income as incurred.

Pension benefits
The Group operates a defined contribution pension scheme.
Contributions payable for the year are charged to the Group
statement of comprehensive income. Differences between
contributions payable in the year and contributions actually paid
are shown as either accruals or prepayments in the Group and
Parent Company statements of financial position. The Group has
no further payment obligations once the contributions have been
paid.

Leases
IFRS 16 ’Leases’ replaces IAS 17 ‘Leases’ and IFRIC 4
‘Determining whether an arrangement contains a Lease’, SIC-
15 ‘Operating Leases – Incentives’ and SIC 27 ‘Evaluating the
Substance of Transactions Involving the Legal Form of a Lease’.
The standard applies a single recognition and measurement
approach for all applicable leases under which the Group is the
lessee.

The Group has lease contracts for property and equipment. Prior
to the adoption of IFRS 16, these were classified as operating
leases under IAS 17 and the lease payments were recognised
as rental costs in the statement of comprehensive income.
Any prepayed rent and accrued rent were recognised under
prepayments and accruals respectively.

The Group has applied IFRS 16 for the first time for the year
ended 31 March 2020 using the fully retrospective method.
Therefore, the Group has applied IFRS 16 at the date of
initial application as if it had already been effective at the
commencement date of existing lease contracts. Accordingly, the
comparative information in these financial statements has been
restated. The impact of the implementation of IFRS 16 ‘Leases’ is
described in note 35 below.

At transition, the Group used the practical expedient allowing
IFRS 16 to be applied only to contracts that were previously
classified as leases under IAS 17 and IFRIC 4.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsA lease is defined as ‘a contract, or part of a contract, that
conveys the right to use an asset (the underlying asset) for a
period of time in exchange for consideration’. To apply this
definition, the Group assesses whether the contract meets two
key evaluations, which are whether:

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.

• the contract contains an identifiable asset;

• the Group has the right to obtain substantially all of the

economic benefits from use of the identified asset throughout
the period of use.

At lease commencement date, the Group recognises a right-of-
use asset and a lease liability on the balance sheet. The right-of-
use asset is measured at cost. The Group depreciates the right-of-
use assets on a straight line basis from the lease commencement
date to the earlier of the end of the useful life of the right-of-use
asset or the end of the lease term. The Group also assesses the
right-of-use asset for impairment when such indicators exist.

At the commencement date, the Group measures the lease
liability at the present value of the lease payments unpaid at
that date, discounted using the Group’s incremental borrowing
rate. Lease payments included in the measurement of the lease
liability are made up of fixed payments (including in substance
fixed), variable payments based on an index or rate, amounts
expected to be payable under a residual value guarantee and
payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced
for payments made and increased for interest.

Government and other grants
Revenue grants are credited to other income within the Group
statement of comprehensive income, 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 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 as disclosed in note 27. The
calculation uses the Black-Scholes model. 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 Group statement of comprehensive income, with
a corresponding adjustment to equity.

Warrants
Where warrants have been issued together with Ordinary shares,
the proportion of the proceeds received that relates to the
warrants is credited to reserves.

Where warrants have been issued as recompense for services
supplied, the fair value of warrants is charged to the Group
statement of comprehensive income over the period the services
are received and a corresponding credit is made to reserves.

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. Milestone payments associated with these rights
are capitalised when incurred. 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. 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.

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 Term of the lease

Plant and equipment

3–8 years

Computer equipment

3–5 years

Investments in subsidiaries
Investments in subsidiaries are shown at cost less any provision
for impairment. Any monies paid to subsidiaries are deemed to
be a capital contribution.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsNotes to the financial statements continued

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
substantively 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 substantively 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.

Trade and other receivables
Trade and other receivables are recognised initially at fair value
and subsequently measured at amortised cost using the effective
interest method, less loss allowance. The Group assesses, on a
forward-looking basis, the expected credit losses associated with
its trade and other receivables carried at amortised cost. The
impairment methodology applied depends on whether there has
been a significant increase in credit risk.

Bank deposits, cash and cash equivalents
Cash and cash equivalents in the Group and Parent Company
statements of cash flows and the Group and Parent Company
statements of financial position include cash in hand and deposits
with banks with original maturities of three months or less. Bank
deposits with original maturities in excess of three months are
classed as investments and measured at amortised cost using
the effective interest rate method. Bank deposits with maturities
between four and 12 months are disclosed within current assets
and those with maturities greater than 12 months are disclosed
within non-current assets.

Trade and other payables
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial year which
are unpaid. The amounts are unsecured and are, when correctly
submitted, usually paid within 30 days of recognition. Trade and
other payables are presented as current liabilities unless payment

is not due within 12 months after the reporting period. They are
recognised initially at their fair value and subsequently measured
at amortised cost using the effective interest method.

Capital redemption reserve
Section 733 of the 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.

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 is expected to be achieved.

Accounting developments
The following new standards, new interpretations and
amendments to standards and interpretations are applicable for
the first time for the financial year ended 31 March 2020. With
the exception of IFRS 16 Leases, none of them have any impact
on the financial statements of the Group:

• IFRS 16 ‘Leases’ (effective 1 January 2019);

• Amendments to IFRS 9 ‘Prepayment Features with Negative

Compensation’ (effective 1 January 2019);

• IFRIC Interpretation 23 ‘Uncertainty over Income Tax

Treatments’ (effective 1 January 2019);

• Amendments to IAS 28 – ‘Long-term Interests in Associates

and Joint Ventures’ (effective 1 January 2019);

• Amendments to IAS 19 – ‘Plan Amendment, Curtailment or

Settlement’ (effective 1 January 2019);

• Annual improvements to IFRS 2015-17 cycle (effective 1

January 2019); and

• IFRS Practice Statement 2 ‘Making Materiality Judgements’

(can be applied immediately).

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsThere are a number of new standards, interpretations and
amendments to existing standards that are not yet effective
and have not been adopted early by the Group. The future
introduction of these standards is not expected to have a material
impact on the financial statements of the Group.

• Amendments to IFRS 9 – IAS 39 and IFRS 7- ‘Interest Rate

Benchmark Reform’ (effective 1 January 2020);

• Amendments to IFRS 3 – ‘Definition of a Business’ (effective

1 January 2020);

• Amendments to IAS 1 and IAS 8 – ‘Definition of Material’

(effective 1 January 2020);

• Conceptual Framework for Financial Reporting (effective

1 January 2020);

• IFRS 17 ‘Insurance Contracts’ (effective 1 January 2021); and

and Company’s ability to continue as a going concern. These
financial statements do not include the adjustments that would
result if the Group and/or Company were unable to continue as a
going concern.

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, and activities and assets are predominantly based
in the UK. 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

• Amendments to IFRS 10 and IAS 28 – ‘Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture’
(deferred indefinitely).

Royalty income
Initial licence fee
Total

2020
£’000
65
6,000
6,065

2019
£’000
49
–
49

3. Going concern

The Group is expected to incur significant further costs as it
continues to develop its therapies and technologies through
clinical development. The operations of the Group are currently
being financed from funds that have been raised from share
placings, commercial partnerships and grants.

The Group actively seeks further business development and
fundraising opportunities in order to support its ongoing
development programmes. The Board places considerable
emphasis on communication with shareholders, potential
investors and other commercial organisations in order
to maximise the chances of success in exploiting these
opportunities. Further, it was announced post year-end that the
Group’s existing resources will be refocused on programmes and
activities offering the greatest prospect of value generation in the
near to medium term.

Based on the above, the Directors expect that the Group’s
and Company’s current financial resources will be sufficient to
support the business until at least mid-2021 and the Directors
are considering a number of options to secure further funding
sufficient for the future needs of the business beyond mid-2021.

Royalty income is derived from customers in the USA. The initial
licensing fee was earned in the People’s Republic of China.

On 9 April 2019, ReNeuron Limited signed an exclusive
licensing agreement (“the Agreement”) with Shanghai Fosun
Pharmaceutical Development Co. Ltd (“Fosun Pharma”), a
subsidiary of Shanghai Fosun Pharmaceutical (Group) Co.,
Ltd., for the development, manufacture and commercialisation
of ReNeuron’s CTX and hRPC cell therapy programmes (the
“Licensed Products”) in the People’s Republic of China (“China”).

Under the terms of the Agreement, Fosun Pharma will fully fund
the development of ReNeuron’s CTX and hRPC cell therapy
programmes in China including clinical development and
subsequent commercialisation activities. Fosun Pharma has also
been granted rights to manufacture the Licensed Products in
China. ReNeuron retains the rights to the Licensed Products in
the rest of the world.

In May 2019, ReNeuron received an initial licensing fee of £6
million (before withholding tax). Only the initial licensing fee has
been included in the transaction price. It has been determined
that the development, regulatory and sales milestones should
be included in the transaction price when each performance
obligation is met.

Under the terms of the Agreement, ReNeuron is entitled to
further payments based upon the achievement of development,
regulatory and sales milestones. The Agreement also entitles
ReNeuron to royalty payments based upon future net sales of the
Licensed Products in China.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsNotes to the financial statements continued

6. Other income

Government grants
Exclusivity fee
Total

2020
£’000
100
–
100

2019
£’000
778
1,893
2,671

The non-refundable exclusivity fee was received from an interested party relating to the potential out-licensing of the Group’s hRPC
retinal technology.

7. Operating expenses

2020
£’000

2019
£’000

Loss before income tax is stated after charging:
Research and development costs:
Employee benefits (note 11)
Depreciation of property, plant and equipment (note 15)
Depreciation of right-of-use asset (note 16)
Other expenses
Total research and development costs
General and administrative costs:
Employee benefits (note 11)
Legal and professional fees
Depreciation of property, plant and equipment (note 15)
Depreciation of right-of-use asset (note 16)
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 auditors and its associates as detailed below:

Services provided by the Group’s auditors
Fees payable to the Group’s auditors:
– for the audit of the Parent Company and consolidated financial statements
– for the audit of the Company’s subsidiaries pursuant to legislation
– audit-related assurance services
– advisory services
Total

8. Finance income

Interest receivable on short-term and investment bank deposits
Foreign exchange gains
Total

9. Finance expense

Lease interest

4,502
228
25
11,580
16,335

2,166
911
59
100
1,003
4,239
20,574

2020
£’000

22
25
3
–
50

2020
£’000
287
306
593

2020
£’000
42

4,712
208
6
11,320
16,246

2,300
1,304
74
96
999
4,773
21,019

2019
£’000

22
23
3
65
113

2019
£’000
291
812
1,103

2019
£’000
39

ReNeuron Annual Report for the year ended 31 March 2020Financial Statements

10. Directors’ emoluments

The Directors of the Company have authority and responsibility for planning, directing and controlling the activities of the Group and
they therefore comprise key management personnel as defined by IAS 24 ‘Related Party Disclosures’.

Aggregate emoluments of Directors:
Salaries and other short-term employee benefits
Pension contributions

Share-based payments
Directors’ emoluments including share-based payments

2020
£’000

802
52
854
660
1,514

2019
£’000

1,042
51
1,093
570
1,663

Two Directors (2019: two) had retirement benefits accruing to them under defined contribution pension schemes in respect of
qualifying services.

One of the Directors exercised 3,478 share options during the year (2019: none). These options were issued under the Group deferred
share-based bonus plan. The estimated gain on these options was disclosed in the Directors’ remuneration report in the year of grant.

For detailed disclosure of Directors’ emoluments, including highest paid Director, please refer to the Directors’ remuneration report on
pages 48 to 56.

Directors’ emoluments include amounts payable to third parties as described in note 33.

11. Employee information

The monthly average number of persons (including Executive Directors) employed by the Group during the year was:

By activity:
Research and development
Administration
Total

Staff costs:
Wages and salaries
Social security costs
Share-based payment charge
Other pension costs
Total

2020
Number

2019
Number

49
12
61

2020
£’000

4,698
533
1,203
234
6,668

49
10
59

2019
£’000

5,162
572
1,040
238
7,012

The Company holds the employment contracts for the two Executive Directors (2019: two) but all employee costs relating to these
individuals are incurred by ReNeuron Limited.

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 £234,000 (2019:
£238,000). There were no prepaid or accrued contributions to the scheme at the year end (2019: £Nil).

ReNeuron Annual Report for the year ended 31 March 2020Financial Statements

Notes to the financial statements continued

12. Taxation

UK research and development tax credit at 14.5% (2019: 14.5%)
Overseas taxation
Total

No corporation tax liability arises on the results for the year due to the loss incurred.

2020
£’000
3,057
(611)
2,446

2019
£’000
2,887
–
2,887

As a loss-making small and medium-sized enterprise, the Group is entitled to research and development tax credits at 14.5% (2019:
14.5%) on 230% (2019: 230%) of qualifying expenditure for the year to 31 March 2020.

The tax credit compares with the loss for the year as follows:

Loss before income tax
Loss before income tax multiplied by the main rate of corporation tax of 19% (2019: 19%)
Effects of:
– difference between depreciation and capital allowances
– expenses not deductible for tax purposes
– losses not recognised
– overseas losses utilised
– adjustments in respect of prior year
Overseas taxes paid
Tax credit

2020
£’000
13,858
2,633

(22)
(612)
900
–
158
(611)
2,446

2019
£’000
17,235
3,275

(13)
(197)
(302)
5
119
–
2,887

No deferred tax asset has been recognised by the Group or Company as there are currently no foreseeable trading profits.

The potential deferred tax assets/(liabilities) of the Group are as follows:

Tax effect of timing differences because of:
Accelerated capital allowances
Losses carried forward
Total

The potential deferred tax assets of the Company are as follows:

Tax effect of timing differences because of:
Losses carried forward

13. Loss for the financial year

Amount not
recognised
2020
£’000

Amount not
recognised
2019
£’000

31
18,558
18,589

10
16,058
16,068

Amount not
recognised
2020
£’000

Amount not
recognised
2019
£’000

1,141

921

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 £47,367,000 (2019: £1,315,000). The loss in the current year was derived from the impairment of investments in subsidiary
companies.

14. 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 £11,412,000 (2019: £14,348,000) by
31,811,456 shares (2019: 31,646,186 shares), being the weighted average number of 1 pence Ordinary shares in issue during the year.

Potential Ordinary shares are not treated as dilutive as the entity is loss making.

ReNeuron Annual Report for the year ended 31 March 2020Financial Statements
15. Property, plant and equipment

Group
At 1 April 2018
Additions
Disposals
At 31 March 2019
Accumulated depreciation
At 1 April 2018
Charge for the year
Disposals
At 31 March 2019
Net book amount
At 31 March 2019
Cost
At 1 April 2019
Additions
Disposals
At 31 March 2020
Accumulated depreciation
At 1 April 2019
Charge for the year
Disposals
At 31 March 2020
Net book amount
At 31 March 2020

The Company had no property, plant or equipment at 31 March 2020 (2019: £Nil).

16. Right-of-use asset

Group
At beginning of the period
Additions
Depreciation charge
At end of the period

The net book value of the underlying assets is as follows:

Land and buildings
Computer and office equipment
At end of the period

Company
At beginning of the period
Depreciation charge
At end of the period

The above comprises land and buildings.

Plant and
equipment
£’000
1,140
169
(51)
1,258

Computer
equipment
£’000
299
19
(132)
186

481
222
(51)
652

606

1,258
40
(43)
1,255

652
238
(43)
847

408

232
60
(132)
160

186
67
(8)
245

160
49
(8)
201

31 March
2020
£’000
704
12
(125)
591

31 March
2020
£’000
564
27
591

31 March
2020
£’000
659
(95)
564

Total
£’000
1,439
188
(183)
1,444

713
282
(183)
812

632

1,444
107
(51)
1,500

812
287
(51)
1,048

452

31 March
2019
£’000
755
51
(102)
704

31 March
2019
£’000
659
45
704

31 March
2019
£’000
754
(95)
659

ReNeuron Annual Report for the year ended 31 March 2020Financial Statements

Notes to the financial statements continued

17. Intangible assets

Group
At 1 April 2019 and 31 March 2020
Cost
Accumulated amortisation and impairment
Net book amount at 31 March 2019 and 31 March 2020

The Company holds no intangible assets (2019: £Nil).

18. Investment in subsidiaries
Company

Net book amount
At the start of the year
Increased investment in subsidiaries
Capital contribution arising from share-based payments
Impairment of investments in subsidiaries
Net book amount at 31 March

Intellectual
property
rights not
amortised
£’000

6,143
(6,143)
–

Licence
fees
£’000

2,070
(1,884)
186

Total
£’000

8,213
(8,027)
186

2020
£’000
112,527
13,505
116
(51,148)
75,000

2019
£’000
103,195
9,162
170
–
112,527

The Company has invested in ReNeuron Limited to allow it to carry on the trade of the Group. A capital contribution arises where
share-based payments are provided to employees of subsidiary undertakings settled with equity to be issued by the Company.

The large element of the Group’s funds are raised by ReNeuron Group plc, with funds then being passed to subsidiary companies via
intercompany transactions. The resultant intercompany debtor is reclassified to investment in subsidiaries. Following the decision to
suspend the Phase 2b study in the US with ReNeuron Limited’s CTX stem cell therapy candidate for stroke disability, the Company has
booked a provision of £51,148,000 (2019: £nil) against the amount outstanding, relating to the CTX stem cell therapy candidate, from
ReNeuron Limited to ReNeuron Group plc.

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

ReNeuron
Holdings
Limited
England
and Wales
£0.10
Ordinary
shares

ReNeuron
Limited
England
and Wales
£0.001
Ordinary
shares

ReNeuron
(UK) Limited
England
and Wales
£0.10
Ordinary
shares

ReNeuron,
Inc.
Delaware,
USA
$0.001
Common
stock

ReNeuron
Ireland
Limited
Republic
of Ireland
€1
Ordinary
shares

Proportion of nominal value of shares held by the
Company

100%

ReNeuron Limited is the principal trading company in the Group. ReNeuron Inc. employs staff who supervise the Group’s clinical
trials in the USA. ReNeuron Ireland Limited has been incorporated to enable the Group to maintain a presence in the EU after the
United Kingdom’s exit, and to mitigate the risks and uncertainties surrounding the final outcome of the exit negotiations. The other
subsidiaries are dormant.

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. ReNeuron Ireland Limited is held directly by ReNeuron Limited. The registered office
address for the UK subsidiaries is Pencoed Business Park, Pencoed, Bridgend, CF35 5HY. The registered office addresses of the non-
UK subsidiaries are:

• ReNeuron Inc., 155 Federal Street, Suite 700, Boston, MA 02110, USA; and

• ReNeuron Ireland Limited, The Black Church, St Mary’s Place, Dublin 7, D07 P4AX, Ireland.

ReNeuron Annual Report for the year ended 31 March 2020Financial Statements

19. Trade and other receivables

Current
Other receivables
Prepayments and accrued income
Total trade and other receivables

The classes within trade and other receivables do not include impaired assets.

20. Investments – bank deposits

Bank deposits maturing:
Four to 12 months: current asset investments

21. Cash and cash equivalents

Cash at bank and in hand

22. Trade and other payables

Trade payables
Taxation and social security
Accruals and deferred income
Amounts owed to Group undertakings
Total payables falling due within one year

Group

Company

2020
£’000

294
402
696

2019
£’000

400
434
834

2020
£’000

7
–
7

2019
£’000

20
–
20

Group

Company

2020
£’000
–

2019
£’000
5,954

2020
£’000
–

2019
£’000
5,954

Group

Company

2020
£’000
12,625

2019
£’000
20,432

2020
£’000
11,079

2019
£’000
19,083

Group

Company

2020
£’000
2,426
145
3,709
–
6,280

2019
£’000
2,546
131
4,584
–
7,261

2020
£’000
3
–
–
–
3

Amounts owed by the Company to Group undertakings were not interest-bearing and had no fixed repayment date.

23. Lease liabilities

Current lease liabilities
Non-current lease liabilities
Total payables falling due within one year

Group

Company

2020
£’000
166
707
873

2019
£’000
141
864
1,005

2020
£’000
135
703
838

2019
£’000
3
–
–
5,487
5,490

2019
£’000
130
838
968

ReNeuron Annual Report for the year ended 31 March 2020Financial Statements

Notes to the financial statements continued

Maturity of lease liabilities

The maturity profile of the Group’s lease liabilities based upon contractual undiscounted payments is set out below:

Less than one year
One year to two years
Two years to three years
Three years to four years
Four years to five years
More than five years

Group

Company

2020
£’000
187
169
165
165
165
110

2019
Restated1
£’000
187
187
169
165
165
275

2020
£’000
165
165
165
165
165
110

2019
£’000
165
165
165
165
165
275

1 For further details of the impact of IFRS 16 on the prior year’s results, see note 35

The interest expense on lease liabilities in the years ended 31 March 2020 and 31 March 2019 is shown in note 9.

Other information

The principal lease commitment is in respect of the lease of offices and laboratories in Pencoed. The ten-year lease was signed by
the Company with the Welsh Ministers on 11 February 2016 for the offices and laboratory space in new premises in Pencoed, South
Wales, with the initial rent being reduced over the first three years.

An agreement for lease entered into on 31 March 2014 has been rescinded subsequent to the year ended 31 March 2020.

24. Financial risk management
Capital management
The Group’s key objective in managing its capital is to safeguard its ability to continue as a going concern. In particular, it has
sought and obtained equity funding alongside non-dilutive grant support commercial partnerships and collaborations to pursue
its programmes. The Group strives to optimise the balance of cash spend between research and development and general and
administrative expenses and, in so doing, maximise progress for all pipeline products.

Risk
The financial risks faced by the Group include liquidity and credit risk, interest rate risk and foreign currency risk.

Liquidity and credit risk
The Group seeks to maximise the returns from funds held on deposit balanced with the need to safeguard the assets of the business.

The agreed policy is to invest surplus cash in interest-bearing current/liquidity accounts and term deposits and to spread the credit risk
across a number of counterparties, the selection criteria being as follows:

• UK-based banks;

• minimum credit rating with Fitch and/or Moody’s (long-term A-/A3; short-term F1/P-1); and

• familiar and respected names.

At 31 March 2020 and 31 March 2019 no current asset receivables were aged over three months. No receivables were impaired or
discounted.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsAgeing profile of the Group’s and the Company’s financial liabilities

The Group’s and the Company’s financial liabilities consist of:

Trade and other payables due within three months
Current lease liabilities – due within one year
Non-current lease liabilities – due after more than one year

Group

Company

2020
£’000
6,280
166
707
7,153

2019
£’000
7,261
141
864
8,266

2020
£’000
3
135
703
841

2019
£’000
5,490
130
838
6,458

Interest rate risk
A portion of the Group’s cash resources are placed on fixed deposit, with an original term of between three and 24 months, to secure
fixed and higher interest rates. The Directors do not currently consider it necessary to use derivative financial instruments to hedge the
Group’s exposure to fluctuations in interest rates.

Foreign currency risk
The Group holds part of its cash resources in US dollars and euros to cover payments committed in the immediate future. At 31
March 2020 cash and bank deposits of £7,150,000 (2019: £13,405,000) were held in these currencies. Creditors of the Group include
£586,000 (2019: £1,162,000) denominated in US dollars and £237,000 (2019: £761,000) denominated in euros. All of the Group’s
receivables are denominated in pounds sterling.

At 31 March 2020, if pounds sterling had weakened/strengthened by 5% against the US dollar with all other variables held constant,
the recalculated post-tax loss for the year would have been £311,000 (2019: £414,000) higher/lower.

At 31 March 2020, if pounds sterling had weakened/strengthened by 5% against the euro with all other variables held constant, the
recalculated post-tax loss for the year would have been £22,000 (2019: £21,000) higher/lower.

The Group has not entered into forward currency contracts.

Currency profile of the Group’s and the Company’s cash and cash equivalents

Currency
Pounds sterling
US dollars
Euros

Group

Company

2020
£’000
5,475
6,487
663
12,625

2019
£’000
10,481
9,417
534
20,432

2020
£’000
4,878
6,023
178
11,079

Currency profile of the Group’s and the Company’s bank deposit investments

Currency
Pounds sterling
US dollars

Group

Company

2020
£’000
–
–
–

2019
£’000
2,500
3,454
5,954

2020
£’000
–
–
–

2019
£’000
10,199
8,539
345
19,083

2019
£’000
2,500
3,454
5,954

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsNotes to the financial statements continued

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 and the Company’s
financial assets and liabilities measured at amortised cost at 31 March. 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.

Group
Investments – bank deposits
Cash at bank and in hand
Trade and other receivables excluding prepayments and accrued
income
Trade and other payables excluding taxation and social security and
accruals and deferred income
Lease liabilities

Company
Investments – bank deposits
Cash at bank and in hand
Receivables: current
Trade and other payables
Lease liabilities

25. Share capital and share premium

Authorised share capital (at 1 April 2019 and 31 March 2020)
At 1 April 2019 shares of 1 pence each
Issue of new shares – exercise of employee share options
At 31 March 2020 shares of 1 pence each

2020

2019

Book value
£’000
–
12,625

Fair value
£’000
–
12,625

Book value
£’000
5,954
20,432

Fair value
£’000
5,954
20,432

294

400

2,426
873

2,546
1,005

2020

2019

Book value
£’000
–
11,079
7
3
838

Fair value
£’000
–
11,079
7
3
838

Book value
£’000
5,954
19,083
20
5,490
968

Fair value
£’000
5,954
19,083
20
5,490
968

Issued and
fully paid
share capital
£’000

316
2
318

Number of
shares
Unlimited
31,646,186
187,584
31,833,770

Share
premium
£’000

97,704
186
97,890

Total
£’000

98,020
188
98,208

26. Warrants
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 5,823 Ordinary shares of the Company.

ReNeuron Annual Report for the year ended 31 March 2020Financial Statements27. 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 Enterprise Management Incentive (“EMI”) scheme and Company
Share Option Scheme (“CSOP”) together with unapproved schemes. Incentive Stock Options are provided to US staff.

Awards to Non-executive Directors are made in accordance with the Group’s Non-Executive Share Option Scheme.

The awards of share options to Executive Directors and employees of the Group are made in accordance with the Group’s previous
Deferred Share-based Bonus Plan, its Long Term Incentive Plans and US Incentive Stock Option Plan. Total options existing over
1.0 pence Ordinary shares in companies in the Group as at 31 March 2020 are summarised below. At 31 March 2020, the total
outstanding options represented 11.3% of the total shares in issue.

Number of
options at
1 April
2019

Granted
during
the year

Exercised
in year

10,101

3,478

17,136

9,268

36,222

21,600

44,537

26,574

64,261

31,450

75,387

52,250

247,343

37,250

434,749

467,664

42,500

15,000

50,500

328,332

84,500

30,000

106,200

383,339

161,582

86,500

18,000

132,000

–

–
–

36,000

529,446

32,000

146,946

53,951
77,895

–

(3,478)

(17,136)

–

(12,933)

(14,977)

–

(12,254)

–

(13,093)

(8,576)

(25,500)

(79,637)

–

–
–

Date of grant

August 2009

August 2010

September 2011

September 2012

September 2013

September 2014

October 2015

July 2016

September 2017

September 2018

February 2019

April 2019

July 2019

Total

Lapsed
during
the year

(10,101)

As at
31 March

2020 Note
–

–

(5,000)

–

(14,000)

–

9,268

23,289

21,600

29,560

26,574

52,007

31,450

62,294

47,250

238,767

11,750

355,112

467,664

42,500

15,000

36,500

–

328,332

(20,500)

–

(20,500)

–

(37,500)

–

–
–

64,000

30,000

106,200

383,339

161,582

66,000

18,000

94,500

36,000

529,446

32,000

146,946

53,951

77,895
3,598,776

Exercise
price

Date from which
exercisable*

Date of expiry †

£4.22

£1.00

£3.85

£1.00

August 2012

August 2019

August 2011

August 2019

August 2012

August 2019

August 2013

August 2020

August 2013

August 2020

£3.75 September 2014 September 2021

£1.00 September 2014 September 2021

£2.87 September 2015 September 2022

£1.00 September 2015 September 2022

£3.60 September 2016 September 2023

£1.00 September 2016 September 2023

£3.45 September 2017 September 2024

£1.00 September 2017 September 2024

£1.00

£0.01

October 2018

October 2025

October 2018

October 2025

July 2019

July 2018

August 2016

July 2019

July 2026

July 2020 September 2027

October 2017 September 2027

October 2018 September 2028

£0.01 September 2021 September 2028

£0.68 September 2020 September 2028

£0.01 September 2021 September 2028

February 2021

February 2029

February 2022

February 2029

£0.53

£0.01

May 2019

April 2022

April 2021

July 2021

July 2022

April 2029

July 2029

3,017,723

876,238

(187,584)

(107,601)

* The exercise periods indicate the earliest dates for which the options are exercisable subject to meeting the performance conditions disclosed overleaf.
† All options lapse in full if they are not exercised by the date of expiry.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsNotes to the financial statements continued

Note 1:
These options were issued subject to a performance condition,
being the first patient administered with a ReNeuron cell therapy
in a second clinical trial. These options lapsed in August 2019.

Note 2:
These options have been issued 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 carry no further performance conditions. These
options were exercised during the year.

Note 3:
These options were awarded in accordance with the Group’s
Long Term Incentive Plan and are subject to the performance
conditions below. These options were exercised during the year.

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 4:
These options were issued subject to a performance condition,
being the successful completion of a second clinical trial of a
ReNeuron cell therapy. At 31 March 2020 these options were
exercisable.

Note 5:
These options were issued subject to the amended performance
conditions below. If all the performance conditions bar
performance condition (ii) are met then 50% of the options
become exercisable; at 31 March 2020 5,177 of these options
were exercisable.

ii)

The first patient is administered with a ReNeuron cell therapy
in a second clinical trial.

The total shareholder return (“TSR”) of the Company meets
or exceeds that of the AIM Healthcare Index in any three-year
period from date of grant of the option.

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 6:
These options were issued subject to a performance condition,
being the first patient administered with a ReNeuron cell therapy
in a third clinical trial; at 31 March 2020 these options were
exercisable.

Note 7:
These options were awarded in accordance with the Group’s
Long Term Incentive Plan and are subject to the amended
performance conditions set out below. If all the performance
conditions bar performance condition (ii) are met then 50% of the
options become exercisable; at 31 March 2020 7,291 of these
options were exercisable.

ii)

The first patient is administered with a ReNeuron cell therapy
in a third clinical trial.

The total shareholder return (“TSR”) of the Company meets
or exceeds that of the AIM Healthcare Index in any three-year
period from date of grant of the option.

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 8:
These options were issued subject to a performance condition,
being the first patient administered with a ReNeuron cell therapy
in a fourth clinical trial; at 31 March 2020 these options were
exercisable.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsNote 9:
These options were awarded in accordance with the Group’s
Long Term Incentive Plan and are subject to the amended
performance conditions set out below. If all the performance
conditions bar performance condition (ii) are met then 50% of the
options become exercisable; at 31 March 2020 19,877 of these
options were exercisable.

Note 13:
These options were awarded in accordance with the Group’s
Long Term Incentive Plan and are subject to the amended
performance conditions set out below. If all the performance
conditions bar performance condition (ii) are met then 50% of the
options become exercisable; at 31 March 2020 103,637 of these
options were exercisable.

ii)

The first patient is administered with a ReNeuron cell therapy
in a fourth clinical trial.

The total shareholder return (“TSR”) of the Company meets
or exceeds that of the AIM Healthcare Index in any three-year
period from date of grant of the option.

ii)

The first patient is administered with a ReNeuron cell therapy
in a sixth clinical trial.

The total shareholder return (“TSR”) of the Company meets
or exceeds that of the AIM Healthcare Index in any three-year
period from date of grant of the option.

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 14:
These options were issued subject to the performance conditions
set out below; at 31 March 2020 these options were exercisable.

ii)

50% vest when the first patient is administered with a
ReNeuron cell therapy in a sixth clinical trial.

50% vest on completion of the fourth clinical trial of a
ReNeuron cell therapy.

Note 15:
These options were awarded in accordance with the Group’s
Long Term Incentive Plan and are subject to the performance
conditions set out below; at 31 March 2020 210,116 of these
options were exercisable.

ii)

33.3% vest when the first patient is administered with a
ReNeuron cell therapy in a sixth clinical trial.

33.3% vest on completion of the fourth clinical trial of a
ReNeuron cell therapy.

iii) 33.4% vest if the total shareholder return (“TSR”) of the

Company meets or exceeds that of the AIM Healthcare Index
in any three-year period from date of grant of the option.

Note 10:
These options were issued subject to a performance condition,
being the first patient administered with a ReNeuron cell therapy
in a fifth clinical trial; at 31 March 2020 these options were
exercisable.

Note 11:
These options were awarded in accordance with the Group’s
Long Term Incentive Plan and are subject to the amended
performance conditions set out below. If all the performance
conditions bar performance condition (ii) are met then 50% of the
options become exercisable; at 31 March 2020 24,600 of these
options were exercisable.

ii)

The first patient is administered with a ReNeuron cell therapy
in a fifth clinical trial.

The total shareholder return (“TSR”) of the Company meets
or exceeds that of the AIM Healthcare Index in any three-year
period from date of grant of the option.

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 12:
These options were issued subject to a performance condition,
being the first patient administered with a ReNeuron cell therapy
in a sixth clinical trial; at 31 March 2020 these options were
exercisable.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsNotes to the financial statements continued

Note 16:
These options were awarded in accordance with the Group’s
Long Term Incentive Plan and are subject to the performance
conditions set out below; at 31 March 2020 these options were
not exercisable.

ii)

33.3% vest when the first patient is administered with a
ReNeuron cell therapy in a seventh clinical trial.

33.3% vest on completion of the fifth clinical trial of a
ReNeuron cell therapy.

iii) 33.4% vest if the total shareholder return (“TSR”) of the

Company meets or exceeds that of the AIM Healthcare Index
in any three-year period from date of grant of the option.

Note 17:
These options have been issued 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 2016 and carry no further performance conditions; at 31
March 2020 these options were exercisable.

Note 18:
These options have been issued in accordance with the Non-
executive Share Option Scheme. These share options vest
over three years on a straight-line basis and are not subject to
performance conditions; at 31 March 2020 these options were
exercisable.

Note 21:
These options were issued subject to the performance conditions
set out below. At 31 March 2020 these options were not
exercisable.

ii)

50% vest when the first patient is administered with a
ReNeuron cell therapy in an eighth clinical trial.

50% vest on completion of the sixth clinical trial of a
ReNeuron cell therapy.

Note 22:
These options have been issued in accordance with the Non-
executive Share Option Scheme. These share options vest
over three years on a straight-line basis and are not subject to
performance conditions; at 31 March 2020 83.33% of these
options were exercisable.

Note 23:
These options have been issued in accordance with the Non-
executive Share Option Scheme. These share options vest
over three years on a straight-line basis and are not subject to
performance conditions; at 31 March 2020 50% of these options
were exercisable.

Note 24:
These options were issued under the Company’s Long Term
Incentive Plan and are subject to the performance conditions set
out below. At 31 March 2020 these options were not exercisable.

Note 19:
These options were issued subject to the performance conditions
set out below; at 31 March 2020 these options were not
exercisable.

33.3% vest when the Company signs an out-licensing deal
(or deals) for any of its technologies or programmes which
provides sufficient funding to allow the achievement of clinical
proof of concept data for the CTX and hRPC products.

50% vest when the first patient is administered with a
ReNeuron cell therapy in a seventh clinical trial.

ii)

33.3% vest when the sixth clinical trial of a ReNeuron cell
therapy completes.

iii) 33.4% vest if the Total Shareholder Return (“TSR”) of the

Company meets or exceeds that of the FTSE AIM Healthcare
Index in any three-year period from the date of grant of the
option.

Some of these options (186,145 as at 31 March 2020) will
be exercisable at the option holder’s choice either as a tax
advantaged option at an exercise price of 68p, or alternatively as
a non-tax advantaged option with an exercise price of 1p.

ii)

50% vest on completion of the fifth clinical trial of a ReNeuron
cell therapy.

Note 20:
These options were issued subject to the performance conditions
set out below. At 31 March 2020 these options were not
exercisable.

ii)

33.3% vest when the first patient is administered with a
ReNeuron cell therapy in an eighth clinical trial.

33.3% vest on completion of the sixth clinical trial of a
ReNeuron cell therapy.

iii) 33.4% vest if the Total Shareholder Return (“TSR”) of the

Company meets or exceeds that of the FTSE AIM Healthcare
Index in any three-year period from the date of grant of the
option.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsNote 25:
These options were issued under the Company’s US ISO Scheme
and are subject to the performance conditions set out below.
At 31 March 2020 these options were not exercisable.

50% vest when the Company signs an out-licensing deal
(or deals) for any of its technologies or programmes which
provides sufficient funding to the allow the achievement of
clinical proof of concept data for the CTX and hRPC products.

ii)

50% vest when the sixth clinical trial of a ReNeuron cell
therapy completes.

iii) A maximum of $100,000 across all ISO grants, based upon

market value at the date of grant, is exercisable per employee
in a calendar year.

Note 26:
These options were issued under the Company’s Long Term
Incentive Plan and are subject to the performance conditions set
out below. At 31 March 2020 these options were not exercisable.

ii)

50% vest when the sixth clinical trial of a ReNeuron cell
therapy completes.

These options will be exercisable at the option holder’s choice
either as a tax advantaged option with an exercise price of 68p,
or alternatively as a non-tax advantaged option with an exercise
price of 1p.

Note 27:
These options were issued under the Company’s Long Term
Incentive Plan and are subject to the performance conditions set
out below. At 31 March 2020 these options were not exercisable.

ii)

50% vest when the sixth clinical trial of a ReNeuron cell
therapy completes.

These options will be exercisable at the option holder’s choice
either as a tax advantaged option at an exercise price of 53p,
or alternatively as a non-tax advantaged option with an exercise
price of 1p.

Note 28:
These options have been issued in accordance with the
Non-executive Share Option Scheme. These share options
vest over three years on a straight-line basis and are not subject
to performance conditions; at 31 March 2020 30.56% of these
options were exercisable.

Note 29:
These options were issued under the Company’s Long Term
Incentive Plan and are subject to the performance conditions set
out below. At 31 March 2020 these options were not exercisable.

33% vest when the Company signs an out-licensing deal
(or deals) for any of its technologies or programmes which,
together with other financial resources provides sufficient
funding to allow the achievement of clinical proof of concept
data for the CTX and hRPC products.

ii)

33% vest when the Company’s share price has doubled from
that at the date of grant

iii) 34% vest when the sixth clinical trial of a ReNeuron cell

therapy completes.

Some of these options (5,356 as at 31 March 2020) will be
exercisable at the option holder’s choice either as a tax
advantaged option at an exercise price of £2.22, or alternatively
as a non-tax advantaged option with an exercise price of 1p.

Note 30:
These options were issued under the Company’s Long Term
Incentive Plan and are subject to the performance conditions set
out below. At 31 March 2020 these options were not exercisable.

50% vest when the Company signs an out-licensing deal
(or deals) for any of its technologies or programmes which,
together with other financial resources provides sufficient
funding to allow the achievement of clinical proof of concept
data for the CTX and hRPC products.

ii)

50% vest when the sixth clinical trial of a ReNeuron cell
therapy completes.

Some of these options (24,288 as at 31 March 2020) will
be exercisable at the option holder’s choice either as a tax
advantaged option at an exercise price of £2.22p, or alternatively
as a non-tax advantaged option with an exercise price of 1p.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsNotes to the financial statements continued

Note 31:
These conditional rights were issued under the Company’s US
ISO Scheme and are subject to the performance conditions set
out below. At 31 March 2020 these conditional rights were not
exercisable.

Note 32:
These options have been issued 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 2019 and carry no further performance conditions;
at 31 March 2020 these options were not exercisable.

Note 33:
These options were issued under the Company’s Long Term
Incentive Plan and are subject to the performance conditions set
out below. At 31 March 2020 these options were not exercisable.

ii)

33% vest when the Company’s share price has doubled from
that at the date of grant.

iii) 34% vest when the sixth clinical trial of a ReNeuron cell

therapy completes.

Some of these conditional rights (56,282 as at 31 March 2020)
will be exercisable at the holder’s choice either as an ISO at an
exercise price of £2.22p, or alternatively as a conditional right
with an exercise price of 1p.

ii)

33% vest when the Company’s share price has doubled from
that at the date of grant.

iii) 34% vest when the sixth clinical trial of a ReNeuron cell

therapy completes.

Some of these options (12,631 as at 31 March 2020) will
be exercisable at the option holder’s choice either as a tax
advantaged option at an exercise price of £2.375, or alternatively
as a non-tax advantaged option with an exercise price of 1p.

Fair value charge
Fair value charges for share options have been prepared based on a Black-Scholes model with the following key assumptions:

Name of undertaking
October 2015
July 2016
September 2017
September 2018 UK Plan
September 2018 US ISO plan
February 2019 UK Plan
February 2019 US ISO Plan
April 2019 UK plan
April 2019 US ISO Plan
July 2019 UK Plan

Exercise
price
£
1.00
1.00
1.00
0.01*
0.68
0.01*
0.53
0.01*
0.01†
0.01*

Share price
at date
of grant
£
4.125
3.00
1.70
0.68
0.68
0.53
0.53
2.16
2.16
2.45

Risk-free
rate
%
1.74
0.80
1.34
1.60
1.60
1.18
1.18
1.10
1.10
0.82

Assumed
time to
exercise
Years
5
5
5
5
5
5
5
5
5
5

Assumed
volatility
%
58.3
58.4
50.4
58.9
58.9
57.7
57.7
84.6
84.6
86.8

Fair value
per option
£
3.37
2.25
1.01
0.67
0.35
0.52
0.26
2.15
2.15
2.44

* Certain of these non-tax advantaged options were issued in parallel with tax advantaged CSOP options, either of which lapses upon the exercise of the other.

† Certain of these conditional rights were issued in parallel with ISO options, either of which lapses upon the exercise of the other.

The risk-free rate is taken from the average yields on government gilt edged stock. No dividends are assumed. The assumed vesting
period is four years. No lapses are assumed until they take place. Assumed volatility is based on historical experience up to the date of
the grant.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsThe weighted average exercise prices for options were as follows:

Outstanding at 1 April
Granted
Exercised
Lapsed
Outstanding at 31 March
Exercisable at 31 March

2020

2019

Number of
options
’000
3,017
877
(187)
(108)
3,599
654

Weighted
average
exercise price
£
0.83
0.01
1.00
1.06
0.62
1.43

Number of
options
’000
2,310
892
–
(185)
3,017
821

Weighted
average
exercise price
£
1.20
0.14
–
1.45
0.83
1.44

The share price on 31 March 2020 was 99.0 pence (2019: 102.5 pence).

The pattern of exercise price and life is shown below:

2020

Weighted average
remaining life (years)

2019

Weighted average
remaining life (years)

Range of exercise
prices
Up to £1.00
From £1.00 to
£10.00
Total

Weighted
average
exercise
price
0.51

Number of
options
3,462,634

3.45

136,142
3,598,776

28. Cash used in operations

Expected Contractual
7.33

2.55

Weighted
average
exercise
price
0.69

2.51

3.09

3.50

Number of
options
2,866,480

151,243
3,017,723

Expected
2.25

Contractual
7.56

2.71

3.88

Loss before income tax
Adjustments for:
Finance income
Finance expense
Depreciation of property, plant and equipment
Depreciation of right-of-use asset
Share-based payment charges
Impairment of investment in subsidiary companies
Changes in working capital:
Receivables
Payables
Cash used in operations

Group

Company

Year ended
31 March
2020
£’000
(13,858)

Year ended
31 March
2019
£’000
(17,235)

Year ended
31 March
2020
£’000
(47,367)

Year ended
31 March
2019
£’000
(1,315)

(593)
42
287
125
1,203
–

(1,103)
39
282
102
1,040
–

126
(983)
(13,651)

397
1,441
(15,037)

(593)
34
–
95
1,088
51,148

–
(5,487)
(1,082)

(1,103)
38
–
95
870
–

–
–
(1,415)

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsNotes to the financial statements continued

29. Reconciliation of net cash flow to movement in net debt

Decrease in cash and cash equivalents
Non-cash inflow from increase in lease liabilities
Lease repayments
Lease interest
Net funds at start of period
Net funds at end of period

30. Analysis of net funds

Cash and cash equivalents
Lease liabilities
Net funds

31. Financial commitments

Group

Company

Year ended
31 March
2020
£’000
(7,807)
(12)
186
(42)
19,427
11,752

Year ended
31 March
2019
£’000
(7,479)
(51)
84
(39)
26,912
19,427

Year ended
31 March
2020
£’000
(8,004)
–
164
(34)
18,115
10,241

Year ended
31 March
2019
£’000
(5,943)
–
69
(38)
24,027
18,115

Group

Company

Year ended
31 March
2020
£’000
12,625
(873)
11,752

Year ended
31 March
2019
£’000
20,432
(1,005)
19,427

Year ended
31 March
2020
£’000
11,079
(838)
10,241

Year ended
31 March
2019
£’000
19,083
(968)
18,115

The Company had no other financial commitments at 31 March 2020 (2019: £Nil).

The Group is expected to incur future contractual milestone payments linked to the future development of its therapeutic
programmes. These costs will be recognised when each contractual milestone has been achieved.

32. Contingent liabilities

The Group had no contingent liabilities as at 31 March 2020 (2019: £Nil).

33. Related party disclosures

The following transactions were carried out with some of the Directors of the Company who are key management personnel as
defined by IAS 24 “Related Party Disclosures”.

Aesclepius Consulting Limited charged fees of £19,000 (2019: £19,000) in respect of services provided as a Non-executive Director by
Dr Tim Corn, together with £Nil (2019: £2,750) relating to consultancy services provided on an arm’s length basis by Dr Tim Corn.

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsParent Company and subsidiaries
The Parent Company is responsible for financing and setting Group strategy. ReNeuron Limited carries out the Group strategy,
employs all UK-based staff, excluding the Directors, and owns and manages all of the Group’s intellectual property. Funds are passed
by the Parent Company when required to ReNeuron Limited and treated as an investment. ReNeuron Limited makes payments
including the expenses of the Parent Company. ReNeuron Inc. employs US-based staff who supervise the Group’s clinical trials in the
USA. ReNeuron Limited finances the activities of ReNeuron Inc. via investments in the US subsidiary.

Company: transactions with subsidiaries
Purchases and staff:
Parent Company expenses paid by subsidiary
Transactions involving Parent Company shares:
Share options
Cash management:
Capital contribution to subsidiary

Company
Year-end balance of investment in subsidiary after impairment

34. Events after the reporting period

2020
£’000

2019
£’000

1,047

1,347

116

170

13,505

2020
£’000
75,000

9,162

2019
£’000
109,038

During March 2020, the COVID-19 pandemic became increasingly prevalent in the UK and US where the Group’s principal operations
are conducted. The Group continues to comply with governmental advice and requirements across its operations in the UK and
US, without significant impact on our priority internal research projects. Patient recruitment has been on hold in the Group’s clinical
trials due to the COVID-19 restrictions but we expect to commence treating patients shortly in our Phase 1/2a clinical trial in retinitis
pigmentosa, subject to a continued easing of COVID-19 related restrictions at the relevant clinical sites.

The Group and its employees have adapted to new working arrangements, with home-working implemented wherever possible
and where it is necessary for staff to attend the Group’s premises, appropriate social distancing and hygiene practices have been
implemented.

35. Implementation of IFRS 16

The Group has adopted the fully retrospective approach to transition for IFRS 16 and accordingly, the opening consolidated statement of
financial position at 1 April 2018 and the comparative consolidated statement of financial position at 31 March 2019 have been restated.

Impact on the Consolidated Income Statement

The implementation of IFRS 16 has resulted in the following changes to the Consolidated Income Statement:

Result as previously stated
Research and development costs
Lease payment
Depreciation of right-of-use asset

General and administration costs
Rent charged
Depreciation of right-of-use asset

Finance cost – lease interest
Result adjusted for IFRS 16

The adjustments arise from the replacement of the operating lease rentals charged under IAS 17, with charges in respect of
depreciation of the right of use asset and also lease interest.

Year ended
31 March
2019
£’000
(14,292)

15
(6)
9

70
(96)
(26)
(39)
(14,348)

ReNeuron Annual Report for the year ended 31 March 2020Financial StatementsNotes to the financial statements continued

Impact on the Consolidated Statement of Financial Position

Upon adoption of IFRS 16, the Group recognised right-of-use assets and lease liabilities for lease payments on the discounted future
obligations.

The impact of IFRS 16 on the relevant lines in the Consolidated Statement of Financial Position as at 31 March 2019 and 1 April 2018
is illustrated below:

Group

31 March
2019
as previously
reported
£’000

IFRS 16
adjustment
£’000

31 March
2019
Restated
£’000

1 April
2018
as previously
reported
£’000

IFRS 16
adjustment
£’000

1 April 2018
Restated
£’000

Assets
Non-current assets
Property, plant and equipment
Right-of-use-asset
Intangible assets

Current assets
Trade and other receivables
Income tax receivable
Investments – bank deposits
Cash and cash equivalents

Total assets
Equity
Equity attributable to owners of the
Company
Share capital
Share premium account
Capital redemption reserve
Merger reserve
Accumulated losses
Total equity
Liabilities
Current liabilities
Trade and other payables
Lease liabilities

Non-current liabilities
Lease liabilities

Total liabilities
Total equity and liabilities

632
–
186
818

875
2,768
5,954
20,432
30,029
30,847

316
97,704
40,294
2,223
(117,120)
23,417

7,430
–
7,430

–
–
7,430
30,847

–
704
–
704

(41)
–
–
–
(41)
663

–
–
–
–
(173)
(173)

(169)
141
(28)

864
864
836
663

632
704
186
1,522

834
2,768
5,954
20,432
29,988
31,510

726
–
186
912

1,285
3,010
9,500
27,911
41,706
42,618

316
97,704
40,294
2,223
(117,293)
23,244

316
97,704
40,294
2,223
(103,868)
36,669

7,261
141
7,402

864
864
8,266
31,510

5,949
–
5,949

–
–
5,949
42,618

–
755
–
755

(3)
–
–
–
(3)
752

–
–
–
–
(117)
(117)

(130)
31
(99)

968
968
869
752

726
755
186
1,667

1,282
3,010
9,500
27,911
41,703
43,370

316
97,704
40,294
2,223
(103,985)
36,552

5,819
31
5,850

968
968
6,818
43,370

The above adjustments to the Consolidated Statement of Financial Position reflect:

• The recognition of a right-of-use asset;

• The writing back of prepaid rent;

• The writing back of accrued lease incentives;

• The creation of a lease creditor, initially corresponding to the right-of–use asset; and

• A reduction in reserves representing the cumulative impact of the above.

ReNeuron Annual Report for the year ended 31 March 2020Financial Statements

The impact of IFRS 16 on the relevant lines in the Company’s Statement of Financial Position as at 31 March 2019 and 1 April 2018 is
illustrated below:

Company

31 March
2019
as previously
reported
£’000

IFRS 16
adjustment
£’000

31 March
2019
Restated
£’000

1 April
2018
as previously
reported
£’000

IFRS 16
adjustment
£’000

1 April 2018
Restated
£’000

Assets
Non-current assets
Right-of-use-asset
Investment in subsidiaries

Current assets
Trade and other receivables
Investments – bank deposits
Cash and cash equivalents

Non-current liabilities
Lease liabilities

Total liabilities
Total equity and liabilities

–
112,625
112,625

20
5,954
19,083
25,057
137,682

316
97,704
40,294
1,858
(7,980)
132,192

5,490
–
5,490

–
–
5,490
137,682

659
(98)
561

–
–
–
–
561

–
–
–
–
(407)
(407)

–
130
130

838
838
968
561

659
112,527
113,186

20
5,954
19,083
25,057
138,243

316
97,704
40,294
1,858
(8,387)
131,785

5,490
130
5,620

838
838
6,458
138,243

–
103,225
103,225

73
9,500
25,026
34,599
137,824

316
97,704
40,294
1,858
(7,838)
132,334

5,490
–
5,490

–
–
5,490
137,824

755
(30)
725

–
–
–
–
725

–
–
–
–
(274)
(274)

–
31
31

968
968
999
725

755
103,195
103,950

73
9,500
25,026
34,599
138,549

316
97,704
40,294
1,858
(8,112)
132,060

5,490
31
5,521

968
968
6,489
138,549

The above adjustments to the Consolidated Statement of Financial Position reflect:

• The recognition of a right-of-use asset;

• An adjustment to Investment in subsidiaries reflecting the impact of amounts paid by a subsidiary company on behalf of ReNeuron

Group plc.

• The creation of a lease creditor, initially corresponding to the right-of–use asset; and

• A reduction in reserves representing the cumulative impact of the above.

ReNeuron Annual Report for the year ended 31 March 2020Financial Statements

Notes to the financial statements continued

Impact on the Group and Parent Company statements of cash flows

The adoption of IFRS 16 has no impact upon the net cash flows of the Group or the Company, however the presentation of the
Consolidated and Company Statement of Cash flows is amended because lease payments which were previously recognised within
cash consumed by operations is now split between the interest element, which remains within cash consumed by operations and the
capital element which is now presented within cash flows from financing activities as a reduction in the lease creditor.

Group

Company

2019
as previously
reported
£’000

IFRS 16
adjustment
£’000

2019
Restated
£’000

2019
as previously
reported
£’000

IFRS 16
adjustments
£’000

2019
Restated
£’000

Cash flows from operating activities
Cash used in operations
Income tax credit received
Interest paid
Net cash used in operating activities
Cash flows from investing activities
Capital expenditure
Investment in subsidiaries
Interest received
Net cash generated from/(used in)
investing activities
Cash flows from financing activities
Bank deposit matured
Lease payments
Lease finance
Net cash generated from financing
activities
Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at the start of
the year
Cash and cash equivalents at the end of
the year

The above adjustments reflect:

Group

(15,121)
3,129
–

(11,992)

(188)
–
342

154

4,359
–
–

4,359

(7,479)

27,911

20,432

84
–
(39)
45

(51)
–
–

(51)

–
(45)
51

–

(15,037)
3,129
(39)
(11,947)

(239)
–
342

(1,415)
–
–
(1,415)

–
(9,230)
343

103

(8,887)

4,359
(45)
51

4,359
–
–

4,365

4,359

(7,479)

(5,943)

27,911

25,026

20,432

19,083

–
–
(38)
(38)

–
68
–

–
(30)
–

(30)

–

(1,415)
–
(38)
(1,453)

–
(9,162)
343

(8,819)

4,359
(30)
–

4,329

(5,943)

25,026

19,083

• The effect on working capital of adjustments to accruals and prepayments arising from the implementation of IFRS 16;

• The split of lease payments into interest and capital elements as described above; and

• The creation during the year ended 31 March 2019 of a right of-use asset and a corresponding lease creditor of £51,000 in respect

of IT equipment acquired under an arrangement previously treated as an operating lease under IAS 17.

Company

• The split of lease payments into interest and capital elements as described above; and

• Adjustment to investment in subsidiaries, reflecting payments made by a subsidiary company on behalf of ReNeuron Group plc.

ReNeuron Annual Report for the year ended 31 March 2020Financial Statements

Notice of annual general meeting

NOTICE IS HEREBY GIVEN that the annual general meeting
(the “AGM” or the “Meeting”) of ReNeuron Group plc
(incorporated and registered in England and Wales with
registered no. 5474163) (the “Company”) will be held at the
offices of ReNeuron Group plc, Pencoed Business Park, Pencoed,
Bridgend, CF35 5HY on 10 September 2020 at 10.00 a.m. to
consider and, if thought fit, pass the following resolutions, of
which Resolutions 1 to 3 will be proposed as ordinary resolutions
and Resolution 4 will be proposed as a special resolution.

At the date of this Notice, the UK Government has passed
into law mandatory measures in order to reduce the spread of
COVID-19. These mandatory measures prohibit, amongst other
things, individuals engaging in non-essential travel and larger
public gatherings, save where the gathering is essential for work
purposes (the “Stay at Home Measures”).

The Company is required to hold the AGM to approve
the Annual Report and Accounts, and to conduct annually
recurring business. However, the Stay at Home Measures will
restrict the Company’s ability to follow the normal Meeting
format. Consequently, in order that shareholders can comply
with the Stay at Home Measures, the Board has concluded
that shareholders should not attend the Meeting in person.
It is currently intended that the AGM will be held with only a
minimum number of shareholders present as required to form a
quorum under the Company’s Articles of Association, and who
are essential for the business of the Meeting to be conducted.

Shareholders are therefore respectfully requested not to make
plans to attend the Meeting. To ensure the safety of the limited
numbers of people whose attendance at the Meeting is essential,
the Company will not be able to allow other shareholders to
gain access to the Meeting on the day. Shareholders are strongly
encouraged to exercise their right to vote and to submit a
form of proxy appointing the Chairman of the Meeting as their
proxy with their voting instructions as early as possible. If the
situation changes before the proposed date of the AGM,
the Company will consider whether different arrangements
are appropriate for the holding of the AGM and, if so, any
changes will be communicated to shareholders in advance
through the Company’s website at www.reneuron.com and,
where appropriate, by RIS announcement.

Shareholders are requested to send any questions for the
Chairman to info@reneuron.com at least 48 hours prior to the
Meeting. Where appropriate, such questions and answers will be
collated and later published on the Company’s website at www.
ReNeuron.com.

The results of the proposed resolutions will be announced in the
normal way as soon as practicable after the conclusion of the
AGM.

Ordinary business

1. To receive and adopt the Company’s Annual Report and

Accounts for the financial year ended 31 March 2020 and the
Directors’ Report, and the Independent Auditors’ Report on
those accounts.

2. 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

3. 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
£106,113 in nominal value in aggregate of shares; and

b. allot Relevant Securities (other than pursuant to paragraph
(a) above) representing up to £106,113 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.

ReNeuron Annual Report for the year ended 31 March 2020AGMNotice of annual general meeting continued

4. That the Directors are hereby empowered pursuant to Section

570 of the 2006 Act:

a. subject to and conditionally upon the passing of Resolution
3 to allot equity securities (as defined by Section 560 of the
2006 Act) for cash pursuant to the authority conferred by
Resolution 3 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. the allotment of equity securities (or sale of Ordinary
shares) representing up to £106,113 in nominal value
in aggregate of shares pursuant to the authority
conferred by paragraph (b) of Resolution 3; and

ii. the allotment of equity securities (or sale of Ordinary
shares), otherwise than pursuant to sub-paragraph
(i) above, representing up to £63,668 in nominal
value in aggregate of shares (and including, for the
avoidance of doubt, in connection with the grant of
options (or other rights to acquire Ordinary shares)
in accordance with the rules of the Company’s share
option 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

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.

12 August 2020

By order of the Board

Michael Hunt

Company Secretary

Registered office
Pencoed Business Park
Pencoed
Bridgend
CF35 5HY
United Kingdom

ReNeuron Annual Report for the year ended 31 March 2020AGMThe following notes explain your general rights as a shareholder
and your rights to attend and vote at the AGM or to appoint
someone else to vote on your behalf. In light of the Stay-at-
Home Measures which prohibit all non-essential travel and larger
public gatherings, shareholders are strongly encouraged not to
try to attend this year’s AGM. To ensure the safety of the limited
number of people whose attendance at the meeting is essential,
shareholders will not be allowed into the AGM.

3. 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. As with proxies, it will not be possible for corporate
representatives of shareholders to attend the AGM in light of
the COVID-19 restrictions.

The UK Government may yet change current restrictions over
the coming weeks which might then allow the Company to host
a more traditional AGM. Any changes to the arrangements for
the holding of the AGM will be communicated to shareholders in
advance through the Company’s website at www.reneuron.com.

Given the degree of uncertainty, we encourage shareholders to
submit a proxy vote in advance of the meeting, appointing the
Chairman of the Meeting as their proxy. Forms of proxy should
be submitted as soon as possible and in any event so as to be
received by no later than 10.00 a.m. on Tuesday, 8 September
2020. If you appoint someone other than the Chairman of the
meeting as your proxy, they will be refused entry to the Meeting
and will not therefore be able to vote.

Notes

1. In this Notice “Ordinary shares” shall mean Ordinary shares
in the capital of the Company, having a nominal value of 1.0
pence per share. References in these Notes to ‘attend’ should
however be construed in light of the COVID-19 restrictions, as
summarised above, which will restrict physical attendance at
the AGM in this case.

2. 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 Form of
Proxy. 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. In light
of the COVID-19 restrictions, all shareholders are strongly
encouraged and requested to only appoint the Chairman
as their proxy or representative as any other persons so
appointed will not be permitted to attend the AGM.

4. 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, by no later than 10.00
a.m. on 8 September 2020 except that should the meeting be
adjourned, such deposit may be made not later than 48 hours
before the time of the adjourned meeting, provided that the
Directors may in their discretion determine that in calculating
any such period no account shall be taken of any day that
is not a working day. 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 0370 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.

5. 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.

6. 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 working 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.

ReNeuron Annual Report for the year ended 31 March 2020AGMExplanatory notes to the business of the annual general meeting

The Directors consequently consider it important that they have
the authority set out in sub-paragraph b1(ii), which they regard
as providing the required flexibility to allow the Company to
raise funds at the appropriate time via the issue of such shares as
efficiently as possible, on the best terms available and in a timely
fashion. The authority set out in sub-paragraph b1(ii) also enables
the Company to issue 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 option schemes and more
generally for other purposes.

Retirement of Directors

Article 122 of the Company’s articles of association requires that
at every annual general meeting of the Company at least one
third of the Directors for the time being (or, if their number is
not a multiple of three, the number nearest to but not greater
than one third) shall retire from office by rotation and that all
Directors holding office at the start of business on the date of
this Notice, and who also held office at the time of both of the
two immediately preceding annual general meetings and did
not retire at either meeting, shall retire from office and shall be
counted in the number required to retire at the annual general
meeting.

It is noted that John Berriman, Simon Cartmell OBE (having
served for nine years and become non-independent under the
QCA code of corporate governance) and Claudia D’Augusta
have confirmed to the Company that they wish to retire at the
meeting and not offer themselves for re-election and these
retirements, which shall take effect from the conclusion of the
meeting, have been included for the purposes of calculating the
number of Directors who are to retire by rotation in accordance
with Article 123 of the Company’s Articles of Association.

Dr Tim Corn will be appointed Chairman of the Company in
place of Mr John Berriman. Mr Mark Evans will also be appointed
as a non-executive director and representative of substantial
shareholder Obotritia Capital KGaA with effect from the close of
the Annual General Meeting.

Resolution 1

The Company’s Annual Report and Accounts for the financial
year ended on 31 March 2020 and the Directors’ Report and
the Independent Auditors’ Report on those accounts will be
presented to shareholders for approval.

Resolution 2

At every annual general meeting at which accounts are
presented to shareholders, the Company is required to appoint
auditors 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 Directors 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 3

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. The Investment Association (“IA”)
regards as routine a request by a company seeking an annual
authority to allot new shares in an amount of up to a third of the
existing issued share capital. In addition, the IA will also regard
as routine a request for authority to allot up to a further third of
the existing issued share capital provided such additional third
is reserved for fully pre-emptive rights issues. Resolution 5 seeks
to reflect the spirit of the IA’s recommendations, though sub-
paragraph (b) of Resolution 3 covers a broader range of offers,
issues and allotments. The limits imposed under sub-paragraphs
(a) and (b) of Resolution 3 each represent one third of the existing
issued share capital of the Company.

Resolution 4

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 b1(i) of Resolution 4 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 general
disapplication pursuant to sub-paragraph b1(ii) of Resolution
4 represents 20% of the existing issued share capital of the
Company. The Company is increasingly competing for capital
on an international basis against other companies incorporated
in the US and elsewhere who are not subject to allotment or
pre-emption restrictions such as those applicable to the
Company.

ReNeuron Annual Report for the year ended 31 March 2020AGMAdvisers

Company Secretary and
registered office
Michael Hunt
Pencoed Business Park
Pencoed
Bridgend
CF35 5HY

Principal banker
Barclays Bank plc
PO Box 326
28 Chesterton Road
Cambridge
CB4 3UT

Patent agents
Elkington & Fife
Prospect House
6 Pembroke Road
Sevenoaks
TN13 1XR

Nominated adviser and joint
broker
Stifel Nicolaus Europe Limited
150 Cheapside
London
EC2V 6ET

Joint broker
Nplus1 Singer Advisory LLP
One Bartholomew Lane
London
EC2N 2AX

Financial PR consultants
Buchanan
107 Cheapside
London
EC2V 6DN

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
1 Kingsway
Cardiff
CF10 3PW

Shareholder information

Shareholder enquiries

Any shareholder with enquiries should, in the first instance,
contact our registrar, Computershare Services, using the address
provided above in the Advisers section.

Share price information

London Stock Exchange Alternative Investment Market (AIM)
symbol: RENE

Information on the Company’s share price is available on the
ReNeuron website at www.reneuron.com

Investor relations

ReNeuron Group plc
Pencoed Business Park
Pencoed
Bridgend
CF35 5HY

Email: info@reneuron.com

Phone: +44 (0) 203 819 8400

Website: www.reneuron.com

Financial calendar

Financial year end
Full year end results announced 20 July 2020
Annual general meeting

31 March 2020

10 September 2020

ReNeuron Annual Report for the year ended 31 March 2020Other InformationGlossary of scientific terms

Allogeneic:

Immortalised cell line:

Where a tissue donor and recipient of the cells are different
individuals.

Cell line:

A well characterised cell culture that has been demonstrated to
be consistent. 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.

Cryopreservation:

Maintenance of the viability of cells using agents to protect them
from damage that can occur during cooling and storage at very
low temperatures.

Differentiation:

Development of a stem cell into a more specialised type.

ETDRS eye chart:

This chart is designed to enable a more accurate estimate of
visual acuity and is the standardised eye chart used in clinical
trials to measure visual acuity.

ExoPr0:

Our first CTX-derived exosome therapeutic candidate which
targets cancer.

Exosomes:

These are nanoparticles secreted from many different types of
cells, including the Company’s proprietary CTX stem cell line.
They play a key role in cell-to-cell signalling.

Good Manufacturing Practice (GMP):

Regulations, codes and guidelines to ensure that products
are consistently produced and controlled according to quality
standards appropriate to their intended use and as required
by the product specification (c GMP refers to current good
manufacturing practice).

A population of cells from a multicellular organism which would
normally not proliferate indefinitely but, due to mutation, have
evaded normal cellular senescence and instead can keep
undergoing division. The cells can therefore be grown for
prolonged periods in vitro.

Immunogenicity:

Immunogenicity can be stated as the ability of a substance to
provoke an immune response or the degree to which it provokes
an immune response.

Immunosuppressants:

An agent that can suppress or prevent the body’s immune
response.

In vitro vs in vivo:

‘In vitro’ is in an artificial environment whereas ‘in vivo’ is in a
more natural environment (animal model).

Investigational New Drug Application (IND):

First step in the drug review process whereby a request to the
Food and Drug Administration (FDA) is made to authorise
administration of an investigational drug to humans.

Lipid nanoparticles:

Lipid nanoparticles (abbreviated LNPs) are a mixture of lipids
manufactured in the laboratory to a specific size and density to
mimic low-density lipoproteins which allow them to be taken up
into living cells.

miRNA:

A short segment of RNA that regulates gene expression by
binding to complementary segments of messenger RNA to down
regulate the subsequent formation of protein.

Modified Rankin Scale:

A well-established, clinician-reported global measure of
functional disability in patients and their dependence upon others
in carrying out daily activities.

ReNeuron Annual Report for the year ended 31 March 2020Other InformationGalNac (N-acetylgalactosamine):

siRNA (small interfering RNA):

A type of drug delivery system that focuses on delivering siRNA
to the liver.

siRNA is a class of double-stranded RNA and non-coding RNA
molecules with a length of 18-25 base pairs.

Lipid Nanoparticles (LNP):

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.

Trophic support:

The release of biological factors and support molecules that
promote cellular growth, differentiation and survival.

A type of drug delivery system that delivers nucleic acids to areas
of the body.

Nano-sized:

Between 1-100nm in size.

Oligonucleotides:

Oligonucleotides are short, single-stranded lengths of DNA
or RNA. An example would be siRNAs; small RNA molecules
that specifically interact with messenger RNA to prevent the
translation of a targeted gene.

Open-label:

Type of clinical trial in which the identity of treatment is known by
all involved in the trial.

Photoreceptors:

Cells in the retina (rod cells and cone cells) that convert light into
electrical impulses.

Pluripotency:

Pluripotency describes the ability of a cell to develop into the
three primary germ cell layers of the early embryo and therefore
into all cells of the adult body.

Proprietary technology:

This technology is the property of a business or an individual.

Regeneration:

The restoration of function in damaged body organs and tissues.

Retinal diseases:

Conditions that lead to damage of the layer of tissue in the back
of the eye that senses light and sends images to the brain.

Retinitis pigmentosa:

A group of inherited diseases of the retina that cause damage to
the rods leading to a loss of peripheral vision that is progressive
over time.

ReNeuron Annual Report for the year ended 31 March 2020Other InformationShareholder notes

ReNeuron Annual Report for the year ended 31 March 2020Other InformationR

ReNeuron Group plc
Pencoed Business Park
Pencoed
Bridgend
CF35 5HY
t: +44 (0) 203 819 8400
e: info@reneuron.com
Registered number:
05474163

www.reneuron.com

Stock code: RENE