RENEURON GROUP PLC
ANNUAL REPORT
for the year ended 31 March 2023
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Creating a valuable
and differentiated
drug delivery platform
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Contents
Strategic Report
Financial and Operational Highlights
Executive Chairman’s Statement
Technology Overview
Financial Review
Directors’ Duties
Sustainability
Risks and Uncertainties
Governance
Board of Directors
Senior Management
Directors’ Report for the year ended 31 March 2023
Corporate Governance
Audit Committee Report
Directors’ Remuneration Report
Financial Statements
Independent Auditors’ Report to the Members of ReNeuron Limited
Group Statement of Comprehensive Income for the year ended 31 March 2023
Group and Company Statements of Financial Position as at 31 March 2023
Group and Company Statements of Changes in Equity for the year ended 31 March 2023
Group and Company Statements of Cash Flows for the year ended 31 March 2023
Notes to the Financial Statements for the year ended 31 March 2023
Other information
Advisers
Shareholder Information
Glossary of Scientific Terms
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Financial and Operational Highlights
Financial Highlights
l Revenue for the year of £0.5 million (2022: £0.4 million) from partner funded development activities and
royalty income.
l Cash, cash equivalents and bank deposits at 31 March 2023 of £7.2 million (31 March 2022: £14.5 million)
with cash runway extended to 2024.
l Reduced operating costs in the year of £7.6 million (2022: £11.6 million) primarily due to reduction in
clinical trial related costs. Full benefit of the January 2023 restructuring will be realised in FY24.
l Loss for the year of £5.4 million (2022: loss of £9.7 million), driven by lower costs and increased revenue.
Operational Highlights
l The Company’s R&D team established CustomEX™, the first scalable, consistent, targeted and
customisable stem cell-derived exosome drug delivery platform.
l Proof-of-concept studies established unique in vitro targeting and delivery characteristics for all seven
exosome populations and demonstrated a significant improvement in uptake and subsequent delivery of
a therapeutic siRNA cargo using the CustomEX™ platform compared to current delivery methods and a
HEK 293-derived exosome.
l In vivo studies to generate data to further validate the cellular and tissue targeting capabilities and
subsequent functional delivery of therapeutic payloads using the CustomEXTM platform are ongoing.
l ReNeuron negotiated and signed the CTX Technology Transfer Supplemental Terms Agreement with
Fosun Pharma (1 July 2022), underscoring Fosun Pharma’s continued commitment to the CTX stroke
disability programme.
l Senior leadership team changes: Appointment of Iain Ross as Executive Chairman, John Hawkins joined
the Board as Chief Financial Officer, Dr. Randolph Corteling assumed the role of Chief Scientific Officer
and Suzanne Hancock was appointed as Chief Operations Officer and Simon Dew as Chief Business
Officer. Catherine Isted stepped down as Chief Executive Officer.
l Professor Stefano Pluchino assumed the role of Chair of the new Scientific Advisory Board (SAB) that
has been established, composed of leading academics and industry executives, Prof. Giuseppe (Beppe)
Battaglia, Prof. Edit I Buzás, Prof. Dr. rer. nat. Bernd Giebel and Prof. Kenneth W. Witwer.
l Restructuring of the business with an internal operational re-alignment in line with the business needs
resulting in a reduction of headcount of 40% and a lowering of the variable costs of the business.
Executive Chairman, Iain Ross, commented: “During the last year the Company has undergone a complete
transition including an organisational restructuring; a change in management and a strategic re-alignment, to
create sustainable value for shareholders with the emphasis on the development, partnering and potential
licensing of CustomEXTM, our proprietary drug delivery platform. During the year under review the underlying
cost base has been reduced and resources re-aligned to meet the immediate needs of the business. I remain
very excited about the Company’s potential as we are on course to generate validating data which would allow
us to complete partnering and license deals in the coming year which will transform the Company.”
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Executive Chairman’s Statement
Dear Shareholders,
Our immediate strategic focus remains primarily on our CustomEXTM Exosome Technology Platform, producing
exosomes with unique tissue targeting capabilities to deliver a payload of choice to a preferred cell type. Our
mission is, in collaboration with academic and industry partners, to develop novel exosome therapeutics for
diseases with significant unmet needs.
CustomEXTM provides a unique delivery mechanism for a variety of payloads including nucleic acids, proteins,
and gene editing technologies. We use our conditionally immortalised induced pluripotent stem cell (CI-iPSC)
platform to make allogeneic tissue cells of choice, which have the potential to produce exosomes with tissue
specific targeting ability. Both platforms are supported by an extensive and proprietary intellectual property
portfolio.
Our overall strategic goal is to exploit the global drug delivery market opportunity by providing exosomes as
a vector to facilitate the delivery of therapeutics. It is estimated that the supply of viral and non-viral vectors is
worth c. $2.1 billion1 today increasing up to $3.9 billion1 by 2026 and there is considerable academic and
industry interest in the development of next-generation delivery vectors such as exosomes. Over the past few
years, peer companies have raised $403 million2 in support of exosome-based activities and secured exosome
related license agreements with potential revenues in excess of $3 billion2. We believe our stem-cell derived
exosomes can potentially overcome issues such as tissue specificity, crossing the blood-brain barrier and
unwanted immune activation, which have hampered first-generation drug delivery platforms. So, through the
combination of our two proprietary platforms we are competitively well positioned to exploit this growing
market opportunity.
Financial highlights
In January 2023, the Company undertook a restructuring of the business, reducing headcount by 40% and
lowering variable costs of the business, with the latest forecasted cash runway now extending into mid-calendar
year 2024. The full benefit of the cost savings from this restructuring will not be seen until financial year 2024.
Revenue for the year was £0.5 million (2022: £0.4 million) related to income from partner funded development
activities and royalty income. We also saw reduced operating costs of £7.6 million (2022: £11.6 million) primarily
due to a reduction in clinical trial related costs following the strategic review in January 2022. This reduction
was partly offset by additional investment made in the exosome technology platform.
Net cash used in operating activities was £7.5 million (2022: £7.4 million). Cash used was higher than the loss
for the year which is explained by changes in working capital and capital investment made to support exosome
platform development. Cash, cash equivalents and bank deposits at 31 March 2023 were £7.2 million (31 March
2022: £14.5 million). Loss for the year was £5.4 million (2022: loss of £9.7 million), the reduction being driven
by lower costs and increased revenue as noted above.
Corporate and organisational development
There have been several senior leadership team changes over the last 12 months. In September 2022, the
Company announced that John Hawkins had been promoted to Chief Financial Officer and joined the
ReNeuron Board, Dr. Randolph Corteling assumed the role of Chief Scientific Officer, Suzanne Hancock was
appointed as Chief Operations Officer and Simon Dew, an experienced business development professional
with significant track record of dealmaking in the exosome filed, would be joining the Company as Chief
Business Officer.
In December 2022, Catherine Isted stepped down as Chief Executive Officer and Iain Ross was appointed as
Executive Chairman. Subsequently the Company undertook a restructuring of the business with an internal
operational re-alignment in line with the business needs resulting in a reduction of headcount of 40% and a
lowering of the variable costs of the business.
1 Liberum estimates; Viral vector supply – Oxford Biomedica estimates of global viral sector supply (outsourced);
LNP vector supply – Allied Market Research; 360 Research Reports
2 Liberum estimates
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Executive Chairman’s Statement
continued
Professor Stefano Pluchino assumed the role of Chair of the new Scientific Advisory Board (SAB) combining
working with ReNeuron with his academic work in Exosomes and Regenerative Neuroimmunology at the
University of Cambridge. The new exosome focused SAB has also been established composed of leading
academics and industry executives, Prof. Giuseppe (Beppe) Battaglia, Prof. Edit I Buzás, Prof. Dr. rer. nat. Bernd
Giebel and Prof. Kenneth W. Witwer and chaired by Prof. Stefano Pluchino. This new SAB brings a world-class
breadth of expertise across the extracellular vesicle (EV) field. Its role is to advise the Company on scientific
matters relating to its exosome platform research and development strategy.
Research & development
In FY22 the Company’s R&D team established CustomEX™, the first scalable, consistent, targeted and
customisable stem cell-derived exosome drug delivery platform. This unique exosome platform is based upon
the exosomes produced from different stem cells having the unique cellular targeting properties of the stem
cells from which the exosomes were produced. Proof-of-concept studies have determined unique in vitro
targeting and delivery characteristics for all seven exosome populations and demonstrated a significant
improvement in uptake and subsequent delivery of a therapeutic siRNA cargo using the CustomEX™ platform
compared to current delivery methods and a HEK 293-derived exosome.
Further proof-of-concept in vitro studies are ongoing to validate the benefits observed in vitro of the
CustomEXTM platform to deliver therapeutic cargoes
To demonstrate the enhanced utility of the CustomEX™ drug delivery platform, the R&D team has made
significant improvements to the loading of nucleic acid cargos. In-house optimisation and further modifications
to the downstream manufacturing process has led to increases in exosome concentration and purity, leading
to an approximate 30-fold increase in siRNA being associated with CustomEX™ exosomes. In addition, further
in vitro proof-of-concept for our engineered exosome product, Exo-BDNF was established through a
collaboration with Cardiff University that demonstrated the products efficacy to improve retinal ganglion cell
survival in a model of glaucoma.
The Group’s iPSC platform continues to support the expansion of the CustomEX™ platform and following
Dr Pell’s presentation at the 2nd iPSC derived Cell Therapy Summit in December, there is growing interest in
the platform in its own right. ReNeuron’s iPSCs were developed from the Group’s conditionally immortalised
CTX stem cell line. This immortalisation characteristic is retained by the iPSCs (conditionally immortalised iPSCs
or CI-iPSCs), allowing subsequent cell lines to be rapidly developed that benefit from their highly stable and
reproducible expansion. Investigation into the utility of CI-iPSCs continues with two groups at University College
London (UCL), firstly investigating the potential use of CI-iPSCs to generate CAR-T / CAR-NK cells and secondly
with a separate group at UCL investigating the ability to differentiate into Schwann cells for potential use in
peripheral nerve damage repair.
In July, ReNeuron negotiated and signed the CTX Technology Transfer Supplemental Terms Agreement with
Fosun Pharma, underscoring Fosun Pharma’s continued commitment to the CTX stroke disability programme.
The project to transfer both the CTX Drug Product and Working Cell Bank manufacturing processes and quality
control testing know-how to Fosun Pharma has continued to make good progress. In addition to the
£320k upfront payment received in January 2022 for services delivered in FY23, ReNeuron has received
approximately a further £100k for supply of initial CTX working cell bank vials and additional ReNeuron
resources and project related costs; with further milestone payments expected in accordance with defined
project milestones. Under the Technology Transfer agreement there is potential for the Group to receive up to
£5 million over the medium to long term, with further potential milestone payments of up to £74 million linked
to the main license agreement signed in 2019.
In 2022, Dr Corteling was a guest speaker at two international conferences where he presented, for the first
time, the full breadth of the Group’s CustomEX™ exosome platform. Consisting of four distinct neural producer
stem cell lines (cortical, striatal, hippocampal and mesencephalic), three non-neural stem cell lines (liver, retinal
and pancreatic), and its conditionally immortalised induced pluripotent stem cell line (CI-iPSCs) which can be
used to produce further exosome producer cell lines depending on the target required.
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Executive Chairman’s Statement
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Outlook
As of today, ReNeuron has seven proprietary, conditionally immortalised exosome producer stem cell lines. We
believe that our catalogue of proprietary stem cells, from neural and non-neural tissue, differentiates us from
competitors in the field and leads to a greater chance of success for optimised delivery of a payload to a
particular target. The Company has years of experience and knowledge in the manufacture of consistent stem
cell banks to good manufacturing practice (GMP), including two investigation new drugs (INDs), and is
continuing to work with third parties to develop improvements in downstream processing and analytics.
In summary, over the next 3-6 months the Company will continue to develop its exosomes platform, generating
in vivo data exemplifying the cellular and tissue targeting capabilities of exosomes produced from its multiple
conditionally immortalised producer cell lines and the subsequent functional delivery of therapeutic
payloads. Favourable in vivo data will allow the Group to differentiate its exosome platform and progress
ongoing partnering and licensing discussions. The Board has identified a number of potential sources of
revenue and non-dilutive funding in order to maintain the business as a going concern and is confident it will
be able to conclude third party transactions and/or issue new equity as required. Such transactions will
further strengthen and differentiate our exosomes platform, highlighting our potential leadership in the field.
Finally, I would like to thank past and present members of the Board, Management team and staff for their
continued commitment and hard work throughout what has been a tough and challenging year. I would
especially like to thank Catherine Isted for her contribution as CFO and latterly as CEO and to wish her well in
the future.
I look forward to an exciting and rewarding year ahead and would like to thank the shareholders for their
continued support.
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Iain Ross
Executive Chairman
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Technology Overview
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ReNeuron’s stem cell derived proprietary exosome technology platform CustomEX™ offers a delivery
mechanism for a variety of potential payloads that could include siRNA, mRNA, proteins, small molecules and
genes.
What are exosomes?
l Naturally occurring biological nano particles produced by every cell to mediate intercellular
communication.
l Can encapsulate various biological molecules within their lipid bilayer membrane or within the lumen of
the Exosome.
l Can be engineered to deliver drug cargos to target cells, offering an opportunity to treat diseases.
The benefits of exosomes
l Proven ability to carry and deliver a variety of cargos including proteins and nucleic acids.
l Potential to deliver more than one bio-active cargo simultaneously.
l Target recipient cells via specific surface proteins that are determined by their cell of origin.
l Low or no immunogenicity, thereby evading immune detection.
Current delivery mechanisms have limitations
l Viral vectors have been plagued by side effect issues and high costs, limitation on the type and size of
cargo they can deliver.
l Lipid nanoparticles (LNPs) have no natural tissue and cell targeting capabilities with delivery therefore
untargeted and mainly to the liver.
l Both have immunogenetic properties that can be problematic.
CustomExTM: A customisable exosome platform
l Seven proprietary conditionally immortalised* exosome producer stem cell lines producing unique
exosome populations.
l ReNeuron’s iPSC platform allows production of exosomes that have the functional properties based on
parent stem cells.
l Capable of delivering a variety of payloads including proteins and nucleic acids and the next generation
for delivery of gene editing technologies.
l Data highlights increased uptake and delivery of payload when compared to a conventional HEK exosome
approach.
l Our CustomExTM exosomes have distinct surface marker profiles (tropisms) enabling a greater tissue
targeting capability.
*Conditional immortalisation of stem cell exosome producer lines offers an elegant solution to not only
consistently produce cell lines that are genetically stable and can be grown at scale, but also to produce a high
yielding source of consistent exosomes for the delivery of complex drug modalities. The standard approach
used by our competitors is to produce exosomes from a single generic cell line. A one-size-fits-all approach.
A single cell line, giving rise to a single outcome.
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Technology Overview
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At ReNeuron, we have a portfolio of stem cell exosomes that have distinct properties. This allows us to choose
the most appropriate exosome delivery vehicle, not only based upon its tissue targeting but also upon the
specific requirements of the therapeutic payload in terms of the cellular compartment that the cargo needs to
reach to achieve a therapeutic effect (i.e. the fluid that fills the cell (cytoplasm) for RNAi and the nucleus
for DNA).
The current portfolio of stem cell exosomes can also be rapidly expanded using ReNeuron’s proprietary CI-iPSC
lines. Additional stem cell exosome producer lines from any cell lineage can be generated from our iPSCs if
the specific exosome population does not already form part of our catalogue.
EXOSOMES – The science in more detail
Exosomes – a natural next-generation drug delivery vector
Throughout the twentieth century, small molecule drugs made by medicinal chemists drove value in the
pharmaceutical industry and comprised essentially all the world’s most innovative prescription medicines. As
therapeutically relevant targets became harder to identify, the industry turned to drug targets that were
unachievable using small molecules. More complex drug modalities such as monoclonal antibodies, therefore,
became the predominant therapeutic class in several important disease areas and currently represent the fastest
growing segment in the drug industry.
More recently, various gene editing technologies such as RNAi and CRISPR have been used to modulate new
classes of intracellular targets and will undoubtedly generate therapeutically useful drugs in the future. However,
a major hurdle that continues to hold back the clinical development of many complex drug modalities is delivery.
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Technology Overview
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Why stem cell exosomes?
Stem cells naturally communicate with other cells by releasing exosomes, nano-sized delivery vehicles that
carry biologically active molecules such as RNA and protein from one cell to another, thereby enhancing
intracellular communication.
The surface membrane of an exosome provides a protected and controlled internal microenvironment, allowing
cargo within the exosome to travel long distances within tissues without degradation. Specific characteristics
of the exosome (i.e. surface marker profile and lipid composition), determined by their stem cell type of origin,
facilitate the delivery of their cargo in a targeted manner. Charts on page 10 – ELISA surface marker profile
highlight the difference between exosomes produced from different cell types. The charts represent the surface
marker profile of four different exosome types; three from our proprietary stem cell lines, compared to a generic
HEK 293 cell. While the size distribution for each exosome population is similar for all exosomes, the charts
illustrate the unique surface marker profile of the different exosome types. Even the classic markers of exosomes
(CD9, CD63 and CD81) are expressed at different levels between the exosome types. This, coupled with the
presence or absence of surface markers specific to the cell type of origin, facilitates interactions between the
exosome and the target cell. Therefore, choosing the correct cell source is an important consideration when
developing any exosome-based drug delivery vehicle.
Interactions between the exosome and the target cell can occur through several different mechanisms, allowing
active molecules on the surface or held within the exosome to deliver a functional effect.
Studies have shown that entire exosomes can be internalised or can fuse directly with the cell surface to deliver
their payload into the cytoplasm of the cell. Alternatively, proteins expressed on the surface of the exosome
can activate specific receptors on the surface of the target cell.
Either way, the net result of exosome-cell interactions is a functional change of the target cell, ultimately
influencing the biology of the target tissue.
A significant advantage of an exosome-based delivery vehicle is its superior safety profile. Exosomes have been
shown to be non-toxic and non-immunogenic, potentially allowing for larger doses to be administrated and
creating the possibility for re-administration, where existing delivery technologies such as lipid nanoparticles
(LNPs) or viral vectors have failed.
Other drug delivery systems
Lipid nanoparticles and viral vectors such as lentivirus and adeno-associated virus (AAV) are recognised drug
delivery systems for certain complex drug modalities (see table 1 overleaf which sets out the relative
capabilities of four delivery technologies with +++ being highest and + the lowest). The use of LNPs was first
approved in 2018 for the delivery of small-interfering siRNA (Patisiran), however, they have become widely
recognised following their use to deliver RNA-based COVID-19 vaccines in 2020. The first AAV-based therapy
was approved in 2017 (Luxturna) where the technology was used to deliver a replacement gene for the
treatment of an inherited eye disorder causing progressive blindness.
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TABLE 1
Lipid
nanoparticles
Gene delivery in vivo ++
Safety profile +
Max payload size +++
Pre-existing immunity +++
Repeat-dose immunity +
Permanent effect –
Multiplex payload delivery (2+ payloads) ++
Ease of manufacture +++
Tissue targeting + (mainly liver)
Tissue specificity –
Payload presentation Internal
Payload repertoire siRNA
mRNA
Soluble protein
Small molecules
Genes
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Lentivirus AAVs Exosomes
+++ +++ +++ (ExoAAV)
++ ++ +++
++ + ++
+++ – +++
+ – +++
+++ + +
++ – +++
+ ++ ++
+ + +++*
– – +++*
Internal Internal Internal &
external
Genes Genes siRNA
mRNA
Soluble protein
Membrane-
assoc. protein
Small molecules
Genes
Source: ReNeuron estimates.
* ReNeuron predicts an advantage compared to exosomes derived from a single genetic cell line, when matching
exosome source to target tissue.
While both viral vectors and LNPs have demonstrated their use in certain situations, there are currently significant
limitations to both technologies. Certain components of viral vectors share similarities to their parent viruses, which
the mammalian immune system has evolved to recognise as an infectious agent, and this can therefore, trigger an
immune response or activate pre-existing immunity.
Key advantages over existing delivery technology
l Multiplex delivery (2 + payloads)
l Tissue targeting
l Safety profile – re-administration possible
Payload versatility of exosomes
Based on clinically proven technology, ReNeuron has developed a platform to exploit the natural function of stem
cell-derived exosomes to enable the delivery of complex therapeutics to specific cells and tissues, thereby potentially
overcoming many of the challenges facing the drug delivery and targeted therapy fields.
Typical types of therapeutic cargos:
l siRNA
l Soluble protein
l Membrane-associated protein
l Small molecules
l Gene editing systems (i.e. CRISPR/Cas)
Through either genetic modification of the stem cell line or direct loading of therapeutic modalities onto purified
exosomes, ReNeuron has developed and patented the technology to modify the cargo of stem cell-derived exosomes
to load a range of payloads either on the exosome surface, into the centre (lumen), or both simultaneously.
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Genetic engineering of our proprietary stem cell lines allows us to not only insert (knock-in) different complex
therapeutic molecules, such as proteins or nucleic acids, but also to permanently remove (knock-out) potentially
unwanted components from stem cell-derived exosomes, reducing the possibility of off-target effects. This technique
creates a stably modified stem cell line and highly consistent loaded exosomes for ease of manufacture at a scale
relevant for clinical development. Furthermore, the same approach acts as a blueprint for loading a variety of
therapeutic molecules, thus considerably reducing development timelines for other therapeutic candidates.
Depending on the therapeutic modality, an alternative approach is to utilise the native stem cell-derived exosome
and passively or actively load therapeutics into the centre or onto the surface of the exosomes. Depending upon the
individual properties of the active molecule, loading can be achieved by simply mixing the two components or by
utilising a concentration gradient.
ELISA surface marker profile
The charts overleaf clearly demonstrate that each exosome population produced from a specific cell line is unique.
The presence or absence of different surface markers will allow the exosome to bind to specific cells to achieve
targeted delivery of a payload.
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Ability to load exosome through passive, active or genetic engineering
Focus at ReNeuron is on specific loading of exosomes, either through passively loaded exosomes or engineered
exosomes. For ‘passive loading’ (chemical) the exosomes are isolated first, then the cargo is loaded afterwards. In
‘engineered’ (biological) exosomes you first start by genetically modifying the producer cell line.
These cells are instructed to produce and package molecules of interest during exosome generation. These
‘engineered’ exosomes are isolated as normal but now carry the intended additional cargo. It is also worth mentioning
that the cargo can be placed either inside or outside the exosome, therefore, creating a vast number of possibilities
for therapeutic agent delivery.
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RENEURON’S EXOSOMES PLATFORM – What makes us different?
OUR TECHNOLOGY
CustomEX™, A customisable exosome delivery platform optimised for specific delivery needs
At ReNeuron, we have developed seven proprietary, conditionally immortalised exosome producer cell lines, each
with a distinct surface marker profile determined by their cell type of origin. We believe that this catalogue of exosome
producing stem cell lines, from neural and non-neural tissue, differentiates us from others in the field by giving us a
truly customisable platform and a greater chance of success when targeting specific tissues within the body.
An essential feature of any delivery vehicle is consistency. Conditional immortalisation of stem cell exosome producer
lines offers an elegant solution to not only produce cell lines that are genetically stable and can be grown at scale,
but also to produce a high yielding source of consistent exosomes for the delivery of complex drug modalities.
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The standard approach used by our competitors is to produce exosomes from a single generic cell line.
A one-size-fits-all approach. A single cell line, giving rise to a single outcome. At ReNeuron, we have developed the
CustomEX™ platform, a portfolio of stem cell exosomes that have distinct cell and tissue targeting capabilities. This
allows us to choose the most appropriate exosome delivery vehicle, not only based upon its tissue targeting but also
upon the specific requirements of the therapeutic payload in terms of the cellular compartment that the cargo needs
to reach to achieve a therapeutic effect (i.e. the fluid that fills the cell (cytoplasm) for RNAi and the nucleus for DNA).
The current portfolio of stem cell exosomes can also be rapidly expanded using ReNeuron’s proprietary CI-iPSC lines.
Additional stem cell exosome producer lines from any cell lineage can be generated from our CI-iPSCs if the specific
exosome population does not already form part of our catalogue.
OUR KNOW-HOW
The ReNeuron team has extensive know-how in the field with our Chief Scientific Officer having in excess of 15 years’
experience in stem cell and stem cell-based exosomes as well as extensive knowledge of the biology of the field.
Through the years of experience gained in the manufacture of consistent stem cell banks to enable the manufacture
of drug product, in accordance with good manufacturing practice (GMP), for use in two clinical stem cell programmes,
the team has become expert in process and analytical development as well as manufacturing and technology transfer.
All of which is highly valuable for the exosomes platform, which involves many of the same upstream processes for
exosomes production.
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OUR PATENTS
ReNeuron believes it has the third largest patent estate globally in the field of exosomes, highlighting its strength
and depth in the field. The Group has eight different patent families with patent lives in to the 2030s and beyond.
One of our major patent families covers any neural stem cells that make exosomes. It has been granted in the EU
and many other countries and is pending in the US. The Group already has a granted patent for the use of an exosome
generated from any neural stem cell to treat Nestin positive cancers in the US, EU and other territories.
The other key patent family surrounds ReNeuron’s conditional immortalisation technology and covers the use of a
conditionally immortalised cell to produce exosomes. It encompasses a wide range of cell types including, but not
limited to, mesenchymal stem cells (MSCs), haematopoietic stem cells, very small embryonic-like stem cells (VSELs),
iPSCs, fibroblasts and dendritic cells.
OUR INDUCED PLURIPOTENT STEM CELLS (iPSCs)
Human pluripotent stem cells (hPSCs) have great potential in cell therapy because of their unique ability to
differentiate into all cell types found in the human body. They provide, at least in theory, an inexhaustible supply of
cells to treat any condition caused by cell loss. The archetypal hPSC is the embryonic stem cell (hESC), derived from
the preimplantation embryo. Ethical issues surrounding the use of hESCs for medical applications have, however,
driven the search for an alternative cell source.
In a method first pioneered by Shinya Yamanaka in 2006, adult cells were reprogrammed to a pluripotent state
generating induced pluripotent stem cells (iPSCs). This creates a cell source with all the benefits associated with
pluripotency without the associated ethical issues of hESCs.
ReNeuron’s neural stem cell line, CTX, is a clinical grade stem cell line capable of generating several types of neural
cells. It is immortalised with a transgene whose activity is easily controllable with a synthetic drug.
ReNeuron have successfully reprogrammed CTX cells to pluripotency, to conditionally immortalised induced
pluripotent stem cells (CI-iPSCs), and have demonstrated that CI-iPSCs display many features characteristic of
pluripotent cells.
Differentiation experiments show that CI-iPSCs can create cells from all three of the early cell lineages (endoderm,
mesoderm and ectoderm), confirming that they are truly pluripotent and hence able to create all cell types in the
body. This includes clinically important cell types such as mesenchymal stem cells, beating heart muscle, cells of the
immune system, including the T-cells used in modern anti-cancer cell therapy, and various types of neural cells.
The preferred therapeutic cells for a given application are often adult stem cells or progenitors rather than the
differentiated cells lost in disease. Such cells can be difficult to manufacture, and their short lifespan limits their
clinical use.
ReNeuron’s unique conditionally immortalised iPSCs has the potential to resolve many of these issues. Following
differentiation along a particular lineage, activation of the conditional immortalisation technology within CI-iPSCs
allow the resulting cells to be purified, qualified, expanded and banked. Thus, enabling a large number of patients
to be treated with CI-iPSC-derived cells or cell products (e.g. exosomes) as an “off-the-shelf” medicine. Furthermore,
as these CI-iPSC-derived therapeutics are made from a cell line which has already passed clinical phase safety trials
(CTX), their entry into clinical trials for new indications are likely to be more rapid.
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Financial Review
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During the financial year costs continued to be closely controlled with spend primarily directed towards progressing
the CustomEXTM proprietary exosome platform. In January 2023, the Company undertook a restructuring of the
business with headcount reducing by 40% and the variable costs of the business lowered.
The full benefit of these cost savings will not be seen until the next financial year, but the decision made in
January 2022 to shift away from clinical development programmes to the exosome platform has enabled a reduction
in costs of £4.0 million compared to the year ended 31 March 2022. As a result, the total comprehensive loss for the
year reduced to £5.4 million (2022: £9.7 million).
At 31 March 2023, the Group had cash, cash equivalents and bank deposits of £7.2 million with the latest base case
forecast showing a cash runway to July 2024. This base case forecast includes assumed further revenues/funding.
Without such revenues/funding, the forecast indicates a cash runway until February 2024. Details on the Directors’
assessment on going concern is provided in note 3 to the financial statements.
Year ended Year ended
FINANCIAL HIGHLIGHTS (£’000) 31 March 2023 31 March 2022
Cash, cash equivalents & bank deposits 7,153 14,548
Net cash used in operating activities 7,484 7,411
Revenue 530 403
Operating expenses 7,645 11,631
Total comprehensive loss 5,408 9,689
Revenue and other operating income
In the year to 31 March 2023, revenues, which relate to research and collaboration activities and royalty income, were
£530,000 (2022: £403,000).
Operating expenses
Total operating expenses reduced in the year to £7.6 million (2022: £11.6 million).
As noted above, this reduction in costs follows the strategic decision made in January 2022 to halt clinical
development and instead focus resources on the exosome platform. Research and development costs in the year
reduced to £4.5 million (2022: £8.1 million), primarily reflecting the refocussing of activities as described above,
together with other cost reductions. General and administrative expenses also reduced in the year to £3.2 million
(2022: £3.6 million).
Finance income/expense
Finance income represents income received from the Group’s cash and investments and gains from foreign exchange.
Finance income was £478,000 in the year (2022: £195,000), the increase on the prior year being explained by an
increase in both interest receivable and foreign exchange gains. In the year, finance expense solely comprises lease
interest of £20,000 (2022: £25,000).
Taxation
Taxation for the year at £1.2 million primarily comprises an R&D tax credit (2022: £1.4 million). The amount of the
R&D tax credit for the year has reduced as a result of the lower research and development spend in the year.
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Financial Review
continued
Cash flow
Net cash used in operating activities in the year increased to £7.5 million (2022: £7.4 million). Cash used was higher
than the loss for the year explained by changes in working capital and capital investment made to support exosome
platform development.
The Group had cash, cash equivalents and bank deposits totalling £7.2 million as of 31 March 2023 (31 March 2022:
£14.5 million).
Statement of financial position
Non-current assets – Property, plant and equipment have increased as we invest in our exosome technology platform.
Current assets – Corporation tax receivable of £1.2 million comprises the amount due from R&D tax credits for the
full year ended 31 March 2023 (2022: £1.4 million). This debtor is lower than 2022 due to the reduction in research
and development expenditure.
Current liabilities – Trade and other payables at £4.2 million have reduced (2022: £6.9 million). This reduction primarily
reflects changes in the level of accruals (mainly across the legacy clinical trials).
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Chief Financial Officer
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Directors’ 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 33.
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:
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l The likely consequences of any decision in the long term;
l The interests of the Company’s employees;
l The need to foster the Company’s business relations with suppliers, customers and others;
l The impact of the Company’s operations on the community and the environment;
l The Company’s reputation for high standards of business conduct; and
l The need to act fairly as between members of the Company.
The Group has 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 31 to 36.
The Executive Chairman’s Statement and the rest of the Strategic Report describe the Group’s activities, strategy
and future prospects including considerations for long-term decision making.
The Board considers the Group’s major stakeholders to be its shareholders, its employees, suppliers,
collaboration partners and those involved in clinical trials.
Overview as to how the board performed its duties to 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 31
and 36.
Key decisions
Key decisions taken by the Board included:
l strategic realignment, focusing the Company’s resources on the exosome and iPSC research platforms.
l organisational re-structuring to align with the needs of the business and to focus financial and personnel
resources accordingly
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Directors’ Duties
continued
Employees
The Group is a relatively small organisation and Directors have regular day-to-day contact with employees at
all levels, both formal and informal. The Executive Chairman and CFO regularly brief employees on
developments in the business and conduct question and answer sessions at these times.
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 these policies in the
year ended 31 March 2023.
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Sustainability
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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 26 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 2023 the Group employed 13 men and 13 women across a diverse range of backgrounds and had
20% female representation on the Board with 33% women on the Senior Management Team. Details of Board
membership are on pages 23 to 25 and the Senior Management Team on pages 26 to 27.
Employee engagement
Employee engagement is described in the Section 172 Report on page 17.
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 skills 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.
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.
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.
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Risks and Uncertainties
Risk Potential impact Mitigation action/control
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Clinical and regulatory
risk
are
significant
There
inherent risks in developing
stem cell or stem cell-
based exosome therapies
for commercialisation due
to the long and complex
development process.
Any therapy that we or our
partners/licensees wish to
offer commercially in the
future 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.
Clinical potential impact
The Group or licensed partners may fail
to successfully develop a drug candidate
incorporating the Group’s stem cell or
delivery technologies because it cannot
be demonstrated in clinical trials that it
is safe and efficacious.
The Group and its partners/licensees
may fail to successfully out-license
products that have been developed
and/or products may be returned from
partners.
Delays in achieving regulatory approval
of any product utilising the Group’s stem
cell or delivery technology 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
levels of
the
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.
will
expertise
The Group’s internal drug delivery
development
and
scientific knowledge in its targeted
areas
its
partners/licensees
to develop
therapeutic products in a manner
which will substantially mitigate, but
which cannot eliminate this risk in
the future.
enable
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.
incorporating
The Group will seek via
its
partners/licensees to take drug
candidates,
the
Group’s stem cell or delivery
technology, to the clinic by working
in partnership with other parties.
This will increase the pool of
expertise available to the Group
and mitigate further clinical and
regulatory risks.
Both the Group 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.
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Risks and Uncertainties
continued
Risk Potential impact Mitigation action/control
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
the
throughout
consideration
Group’s contracting activity.
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Intellectual property risk
to
for
strategy
property
Intellectual
remains
protection
the
fundamental
Group’s
of
developing novel delivery
the
technologies
delivery of novel drug
candidates. The Group’s
ability
to stop others
making a drug, using it or
selling the invention or
proprietary
by
obtaining and maintaining
protection is critical to our
success.
The Group
manages a portfolio of
patent
patents
and
which
applications
underpin its research and
development
programmes.
rights
reputable
The Group utilises
manufacturing
contract
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 Group continually develops its
manufacturing processes and is
building its in-house capabilities to
reduce its reliance on third parties.
and
Manufacturing potential impact
Could impact speed of development
and the ability to sell a drug product on
a commercially viable scale.
is subject to
Product manufacture
continual
control and
regulatory
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
the Group’s activities,
impact on
financial results and cash liquidity.
Manufacturing
supply risk
The Group’s and
its
partners’/licensees’ ability
to successfully manufacture
and scale up production
processes is vital to the
and
development
commercial viability of any
product.
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Risks and Uncertainties
continued
Risk Potential impact Mitigation action/control
These risks may adversely affect the
Group’s financial results and cash
liquidity.
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.
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
business. The Group does not
enter
currency
contracts. The Group holds
currency in US dollars and euros to
cover short and medium-term
expenses in those currencies.
the assets of
forward
into
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Fundraising risk
and
inception
The Group has incurred
considerable losses since
its
is
dependent upon equity,
partnerships and public
grant financing. It does
not currently have any
revenue
approved
generating
products/technologies
although it does generate
from
revenue
some
partner collaborations.
The Group may not be able to raise
additional funding that will be needed
to support its delivery technologies’
development efforts. Any new equity
funds raised may lead to dilution of
existing investors.
In the light of the strategic changes to
the business in the year and the inability
to raise additional funds in the latter part
of the year, the Board considers this risk
to have increased in comparison with
previous years.
The Group is continually seeking
business
development
opportunities which enable it to
support
future costs of
its exosomes
development of
platform and other proprietary
drug delivery technologies.
the
emphasis
Additionally, the Board places
considerable
on
communication with shareholders
and potential
to
maximise the chances of successful
future fundraising.
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 of drug products for
ReNeuron or partners and for platform
developments. Fraud may result in
financial loss.
For further information, please
refer to the Directors’ Report on
the Corporate
page 29 and
Governance Section on pages 31
to 36.
that protects
focused on
is
The Group
maintaining a robust and secure IT
environment
its
corporate data and systems. IT
systems
continuously
monitored and upgraded and
employees are trained to be aware
of
the
cyber
associated risks.
security and
are
Site
disruption risk
and
system
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 of drug
products for ReNeuron or partners and
for platform developments.
The Group has developed a
business continuity plan to ensure
that it can respond effectively to
critical
identified
equipment will have active service
contracts in place.
risks. All
Business continuity insurance is in
place.
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Risks and Uncertainties
continued
Risk Potential impact Mitigation action/control
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 of drug products for
ReNeuron or partners and for platform
developments.
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The Group offers
attractive
employment packages, including
share incentive plans, and actively
encourages
employee
engagement
the business.
in
Employees also have significant
learning and
for
opportunities
development as well as promotion
opportunities born out of the
Group’s
and
succession planning processes.
appraisal
staff
Risks associated with a
global pandemic and
associated public health
measures
The Group’s research and development
activities either for itself or partners may
be delayed and additional costs
incurred.
The Group has demonstrated its
ability to continue its research and
development
using
modified working practices.
activities
In any future pandemic,
governments may institute
public health measures
similar to those used in
respect of COVID-19,
which may
constrain
economic activity and
Group’s
the
inhibit
activities.
Russia/Ukraine war
The Russia/Ukraine war
has stimulated surges in
energy and raw material
costs and also dampened
investor confidence.
The Russia/Ukraine War could adversely
affect the Group’s operations through
increased costs, possible supply chain
interruptions and reduced
investor
appetite. There is also increased risk of
cyber-attacks.
The Group is a low energy user
and will seek to manage cost
its normal
pressure
procurement processes.
The
Group’s cyber risk measures are
described above.
through
In addition, and in common with other small biotechnology companies, the Group is subject to a number of
other risks and uncertainties, which include:
l the early stage of development of the business;
l availability and terms of capital needed to sustain operations, and failure to secure partnerships that will
fund further pre-clinical development;
l competition from other companies and market acceptance of its products; and
l its reliance on consultants, contractors and personnel at third-party research institutions.
Pages 2 to 22 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:
Iain Ross
Executive Chairman
15 June 2023
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Board of Directors
Iain Ross
Executive Chairman
N&CG (Chair)
John Hawkins
Chief Financial Officer & Company Secretary
Appointed
Iain Ross was appointed to the Board as Non-
Executive Chairman in July 2021. He has assumed
Executive responsibility in the absence of a CEO.
Appointed
John Hawkins joined ReNeuron in October 2014 and
was appointed Chief Financial Officer in September
2022.
External Appointments
Currently Iain is Non-Executive Chairman at Silence
Therapeutics PLC (NASDAQ), Kazia Therapeutics
Limited
(ASX/NASDAQ) and a Non-Executive
Director of BiVitriX Therapeutics plc.
Experience and skills
Iain Ross is a highly experienced board director with
a career in the international life sciences and
technology sectors that spans 40 years. He held
senior commercial roles at Sandoz, Fisons and
the
Hoffman-La Roche before moving
biotechnology sector where he has been chairman,
CEO and director of
international
biotechnology companies including Celltech Group
plc, Quadrant Healthcare plc and Redx Pharma plc.
several
into
Mr Ross is a qualified Chartered Director, Fellow of
the Institute of Directors and Honorary Fellow of
Royal Holloway, London University.
Experience and skills
John is an experienced finance professional with a
breadth of experience gained within a variety of
businesses, from large PLCs to family-owned SMEs.
He joined ReNeuron, after leaving his role as Finance
Director of an insurance business, having previously
worked for a number of years in the financial services
sector where he specialised in business partnering,
helping to drive growth and profitability. During this
time, he played a lead role in a number of acquisitions
and played a key role in the sale of a division of
Standard Chartered Bank to The Lloyds Banking
Group.
John graduated from university with a 1st class
honours degree in industrial chemistry and started his
career with KPMG, where he qualified as a Chartered
Accountant.
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Board of Directors
continued
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Barbara Staehelin
Senior Independent
Non-Executive Director
Dr. Mike Owen
Non-executive Director
Audit (Chair), N&CG, Rem
Rem (Chair), N&CG, Audit
Appointed
Barbara Staehelin was appointed to the Board as
Senior Independent Non-Executive Director in July
2021.
External Appointments
Barbara is Non-Executive Chair for Resistell AG. She
is a board member at Assura Group, a Swiss medical
insurance company, where she is President of the
Audit and Risk Committee. She is also co-founder and
Chair at Axicos AG.
Experience and skills
Barbara Staehelin began her professional career in
management consultancy, focusing on healthcare at
McKinsey & Co., Inc. She has also served as a
member of the Global Executive Committee at F.
Hoffman-La Roche Diagnostics. Her wide experience
both in senior leadership roles and in founding
companies has given her extensive high-level
exposure to commercial, regulatory and governance
matters in the biotech sector.
Ms. Staehelin holds a Directors Certificate from
Harvard University, USA, an MBA from INSEAD
Fontainebleau, France and an MSc in biochemistry
from ETH Zurich.
Appointed
Dr Mike Owen was appointed to the Board in
December 2015.
External Appointments
Mike currently serves as a Director of Zealand Pharma,
Sareum Holdings plc and Ossianix Inc. He is also a
member of the scientific advisory board at Avacta
Group plc.
Experience and skills
Mike’s career in biotech, the pharmaceutical industry
and academia spans more than 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.
He is a Fellow of the Academy of Medical Sciences.
ReNeuron Group plc
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Board of Directors
continued
Martin Walton
Non-executive Director
Rem, N&CG, Audit
Appointed
Martin Walton was appointed to the Board in March
2022.
External Appointments
Martin currently serves as Chairman and CEO of
Bradshaw Consulting Ltd. He is CEO of virtual biotech
Excalibur Medicines Ltd, Board Director of Interrad
Medical and a Board Member of the Liverpool Life
Sciences Accelerator Partnership.
Experience and skills
Martin spent 25 years in global investment banking
and asset management, culminating as vice chair in
charge of Wholesale and Commercial Banking for
Europe and Asia Pacific at Toronto Dominion Bank.
Martin is co-founder of LSE-listed Arix Bioscience plc
(LSE: ARIX) and since 2010, he has been an active
VC/PE investor, portfolio manager, and advisor in life
sciences involving a number of executive and non
executive positions, completing over 25 transactions
(spinouts, financings, M&A, IPOs and divestitures) and
has raised over £1 billion in investment and co-
investment capital.
In addition to a wealth of experience in the life
sciences sector, he also has extensive governance,
oversight, audit committee and risk committee
experience as well as specific experience in start-up,
growth (organic and acquisition), turnaround and
consolidation strategies.
Key: Committees
Audit - Audit committee
Rem – Remuneration committee
N&CG - Nominations and Corporate Governance
committee
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Senior Management
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Randolph Corteling
Chief Scientific Officer
Simon Dew
Chief Business Officer
Appointed
Dr Randolph Corteling rejoined ReNeuron as Vice
President of Research in March 2022 and was
appointed Chief Scientific Officer in September 2022.
Experience and skills
Dr Randolph Corteling has 24 years’ experience in
medical research and drug discovery, spanning
academia, biotechnology and the pharmaceutical
industry. He gained his PhD in Medical and Surgical
Sciences at Nottingham University, followed by three
years as a Heart and Stroke Foundation Postdoctoral
Fellow at the University of Calgary, Canada.
In 2007 he joined ReNeuron as a senior member of
the research team where he established a deep
understanding of stem cell biology and in particular
the role of extracellular vesicles in cell to cell
communication. In 2011 he was appointed Head of
Cell Biology where he established the first exosome
programmes at ReNeuron, which are now a major
commercial opportunity for the Company. He was
later promoted to Head of Research at ReNeuron.
At Evox Therapeutics, a private company focused on
exosome-based therapeutics for rare diseases,
Dr Corteling led its Disease Biology and Exosome
Payloads teams.
Appointed
Simon Dew was appointed Chief Business Officer in
November 2022.
Experience and skills
Simon joined ReNeuron from Mereo BioPharma Plc,
where he was Vice President Business and Corporate
Development. Prior to that he was Vice President
Business Development at Evox Therapeutics, where
he was responsible for several transformative deals in
the exosome space.
in
Simon has over 25 years’ experience
pharmaceutical Business Development, Corporate
Development and Corporate Strategy, responsible for
multiple BD&L and M&A transactions.
Over his career, he has held senior leadership roles in
Pharma and Biotech, including VP Corporate Strategy
at Gyroscope Therapeutics, prior to its acquisition by
Novartis and as SVP Corporate Strategy and Business
Development as Astellas Pharmaceuticals, as well as
operational leadership roles in Quintiles (IQVIA),
Parexel, Phytopharm plc and GSK/SB, in Europe and
in international markets.
He is currently on the Business Development Board
of Sunstone Capital a Danish Venture Capital
Company.
He holds a degree in Pharmacy and is a member of
the Royal Pharmaceutical Society of Great Britain.
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Senior Management
continued
Suzanne Hancock
Chief Operations Officer
Professor Stefano Pluchino
Chair of the Scientific Advisory Board
Appointed
Suzanne Hancock was appointed Chief Operations
Officer in September 2022, having joined ReNeuron
as a Programme Manager in 2017.
Appointed
Dr Stefano Pluchino was appointed Chair of the
Scientific Advisory Board in September 2022 having
previously served as Chief Scientific Officer from May
2021.
Experience and skills
Suzanne has broad experience of both leadership and
technical scientific roles. She joined ReNeuron from
GE Healthcare, where she spent almost 12 years and
held a number of managerial roles forming and
leading global cross functional teams engaged in the
development and delivery of new products in the Life
Sciences and Cell Therapy industry. Suzanne began
her career as a scientist with Amersham International
where she was involved in developing cell-based
assays and high content image analysis platforms for
drug development.
She holds a BSc in Applied Biological Sciences and
in 2019 successfully completed an MSP Practitioner
qualification at Cardiff University.
is
of
Professor
Experience and skills
Stefano
Regenerative
Neuroimmunology and Honorary Consultant at the
University of Cambridge since 2010. He obtained his
MD and PhD at the University of Siena, Italy and
progressed to two consecutive post doctorate
appointments at the San Raffaele Scientific Institute
in Milan.
in
of
the
Stefano has more than 230 publications to his credit
and is internationally recognised as a leader and
pioneer
regenerative
field
neuroimmunology. He was the recipient of the 2003
European Charcot Foundation (ECF) Award, the 2006
Sorono Foundation Multiple Sclerosis Award, the
2007 Rita Levi-Montalcini Award, the 2009 Italian
Ministry of Health Young Investigator Award and the
2010 International Royan Award for outstanding
research in Stem Cell Biology and Technology.
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Directors’ Report
For the year ended 31 March 2023
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The Directors present their report and the audited consolidated financial statements of the Company for
the year ended 31 March 2023.
Presentation of financial statements
The Group financial statements include the financial statements of the Company and its subsidiary undertakings
made up to 31 March 2023.
Future developments
Future developments are set out in the Strategic Report on pages 2 to 22.
Results and dividends
The results for the year are given in the Group statement of comprehensive income set out on page 51. The
Directors do not recommend the payment of a dividend (2022: £Nil).
Research and development
During the year, the Group incurred research and development costs of £4,463,000 (2022: £8,068,000) all
charged to the statement of comprehensive income.
Financial risk management
Financial risk management is set out in note 23 to the financial statements and also in risks and uncertainties
on pages 19 to 22.
Directors
The Directors who held office during the year and up to the signing of the financial statements, unless otherwise
stated, are listed below:
Iain Ross
Executive Chairman
John Hawkins ACA
(appointed 14 September 2022)
Chief Financial Officer
Barbara Staehelin
Senior Independent Non-Executive Director
Dr Mike Owen
Non-Executive Director
Martin Walton
Non-Executive Director
Catherine Isted resigned on 31 December 2022.
Qualifying third-party indemnity
Certain Directors benefited from qualifying third-party indemnity provisions in place during the year and to the
date of signing the financial statements.
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Directors’ Report
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Going concern
The operations of the Group and Company are financed from funds that have been raised from share placings,
commercial partnerships and grants.
The goal of the Group is to achieve the commercial validation of the CustomExTM platform by generating in
vivo data aimed at differentiating the platform from that of the Group’s competitors. In addition, the plan is to
realise value from the Group’s other assets via potential out-licencing and/or disposal. The Directors continue
to seek opportunities to secure further revenues/funding sufficient for the short to medium term future needs
of the business and favourable in vivo data should enhance those opportunities.
As previously noted, in January 2023, the Group undertook a restructuring of the business with the underlying
cost base reduced and resources re-aligned to meet the immediate needs of the business. Based on the
Directors base case assessment, the current cash runway is forecast to extend until July 2024, at which point a
further capital injection would be required. The base case assessment includes assumed upfront payments over
the next 6 to 12 months from potential future partners and collaborators on the Group’s exosome platform,
intellectual property (IP) and legacy assets and potential further equity fund raising. The Directors recognise
that not all of these assumed inflows are fully within the control of the Group and Company and have prepared
a further plausible but downside scenario which excludes these inflows and indicates a cash runway until
February 2024.
Based on the forecasts prepared and considered by the Board, the Directors 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 secure adequate cash inflows from the Group’s exosome platform, IP and legacy assets or
through equity fund raising with the timescales stated above will be successful. These conditions indicate the
existence of 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 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 and also fall below Streamlined Energy and Carbon
Reporting requirements, hence no energy usage information is provided.
Statement of Directors’ responsibilities in respect of the financial statements
The Directors are responsible for preparing the Annual Report and Accounts 2023 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 and the Company financial statements in accordance with UK-adopted
international accounting standards.
Under company law, 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 Company and of the profit or loss of the Group
for that period. In preparing the financial statements, the directors are required to:
l select suitable accounting policies and then apply them consistently;
l state whether applicable UK-adopted international accounting standards have been followed, subject to
any material departures disclosed and explained in the financial statements;
l make judgements and accounting estimates that are reasonable and prudent; and
l prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group and Company will continue in business.
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Directors’ Report
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The Directors are responsible for safeguarding the assets of the Group and Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate accounting records that are sufficient to show and
explain the Group’s and Company’s transactions and disclose with reasonable accuracy at any time the financial
position of the Group and 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 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:
l so far as the Director is aware, there is no relevant audit information of which the Group’s and Company’s
auditors are unaware; and
l 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’s and 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 date and location of the Annual General Meeting of the Company will be communicated separately.
On behalf of the Board
John Hawkins
Chief Financial Officer
15 June 2023
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Corporate Governance
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The Directors remain committed to maintaining high standards of transparency, ethics and corporate
governance.
The Quoted Companies Alliance Corporate Governance Code (The QCA Code)
ReNeuron has adopted, 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 following sections 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 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 2 to 22.
The Group’s strategy and business model, and amendments thereto, are developed by the Executive Chairman,
the Chief Financial Officer and the rest of the senior management team, and approved by the Board. The senior
management team, is responsible for implementing the strategy and managing the business at an operational
level.
The Group’s overall strategic objective is to develop a best-in-class exosomes delivery platform, harnessing its
unique stem cell technologies to develop off-the-shelf treatments for diseases with significant unmet needs,
either alone or with partners.
The Group deploys its financial and other resources towards gaining collaborative development opportunities
in areas of scientific and commercial interest for its exosome and induced pluripotent stem cell (iPSC) technology
platforms. Concurrently, it continues to seek further out-licensing opportunities for its legacy CTX and hRPC
therapeutic products, which have already been licensed to Fosun Pharma in China. Ultimately, the Directors
believe that this approach will deliver significant long-term value for shareholders if the data are compelling.
The short term strategy of the Group is to realise monetary value in a platform technology or a therapeutic
product via high-value out-licensing deals with pharmaceutical or biotechnology companies with interests in
the relevant therapeutic field and/or geographical territories. In the medium term, if resources permit, and with
shareholder support, the Group may choose to advance a therapeutic candidate through early-stage clinical
development unpartnered in order to increase value in the programme prior to out-licensing to a suitable
partner to complete further clinical development.
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 19 to 22. 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 Executive Chairman, 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.
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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.
3. 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 that have been 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:
l setting and communicating clear strategic goals;
l a comprehensive budgeting process is completed once a year and is reviewed and approved by the
Board;
l the Group’s results, compared with the budget, are reported on a monthly basis;
l the Group reforecasts the budget as necessary during the financial year, with the results reviewed and
approved by the Board;
l working within a defined set of delegated authorities, approved by the Board; and
l all material contracts are reviewed by an Executive Director of the Company and external legal advice is
taken as appropriate.
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 19 to 22.
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5. Maintain the Board as a well-functioning, balanced team led by the Chair
At 31 March 2023, the Board comprised the Executive Chairman, three Non-Executive Directors, and one
Executive Director.
Directors’ biographies are set out on pages 23 and 25.
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.
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.
There were 13 formal Board meetings held in the year ended 31 March 2023. 11 of these meetings were held
remotely.
A summary of Board and Committee meetings attended in the year ended 31 March 2023 is set out below:
Board meetings
Nominations and
Corporate
Governance Committee
Audit Committee
Remuneration
Committee
Director
Attended
Eligible
Attended
Eligible
Attended
Eligible
Attended
Eligible
I Ross
J Hawkins
B Staehelin
M Owen
M Walton
C Isted
13
8
13
11
13
9
13
10
13
13
13
11
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2
2
2
–
–
–
2
2
2
–
–
–
4
4
4
–
–
–
4
4
4
–
The Board considers itself to be sufficiently independent. The QCA Code suggests that a board should have
at least two independent Non-Executive Directors. Barbara Staehelin is Senior Independent Non-Executive
Director (SINED). She, Dr Mike Owen and Martin Walton are regarded as independent Non-Executive Directors
under the QCA’s Code’s guidance for determining such independence.
The Board has deemed that Iain Ross who is Executive Chairman, is not independent because his remuneration
package includes eligibility to receive share options with a performance condition.
Non-Executive Directors receive their fees in the form of a basic cash fee. Non-Executive Directors do not
receive share options as part of their remuneration package. The current remuneration structure for the Board’s
Non-Executive Directors is deemed to be proportionate and in line with general market practice.
The Executive Chairman has received share options which are set out in the Directors’ Remuneration Report
on page 41.
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.
Directors’ biographies are set out on pages 23 to 25. The Board regularly reviews its composition to ensure
that it has the necessary breadth and depth of skills to support the ongoing development of the Group.
The Executive 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
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the Directors’ responsibilities as members of the Board. During the course of the year, Directors received
updates from various external advisers on a number of corporate governance matters.
Directors’ service contracts or appointment letters make provision for a Director to seek personal advice in
furtherance of their 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 Executive Chairman. This process is conducted biennially and last took place in April 2021 and is
scheduled to be completed in June 2023. The Executive Chairman and SINED are managing the 2023
evaluation process. Evaluation criteria include Controls and Procedures, Strategic Aims, Entrepreneurial
Leadership and Communications and Relationships and will be conducted through a series of questionnaires
and face to face interviews.
The Board may utilise the results of the evaluation process when considering the adequacy of the composition
of the Board and for succession planning.
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. Regular meetings are held with an opportunity for anonymous
Q&A and suggestions on any aspect of the business. 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 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 bi- 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 Non-Executive Directors are
responsible for bringing independent and objective judgement to Board decisions.
Following the departure of the CEO, the Chairman has assumed executive responsibility for the running of the
business and has regular meetings (at least every two weeks) with the SINED to discuss key developments and
ongoing plans. The Chairman is also 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.
Senior Independent Non-Executive Director
The principal role of the SINED is to support the Executive Chairman in their role; to act as an intermediary for
other Non-Executive Directors when necessary; to lead the Non-Executive Directors in the oversight of the
Executive Chairman; and to ensure there is an appropriate division of responsibility between the Executive
Chairman and the CFO and leadership team.
The SINED provides an alternative to the Executive Chairman or CFO for communication with shareholders,
providing an additional conduit for issues, concerns or observations to be expressed. Additionally, the SINED
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will lead the Non-Executive Directors in the annual performance evaluation of the Executive Chairman, including
the working relationship between the Executive Chairman, the CFO and the leadership team.
The Executive Chairman is responsible 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.
Board committees
The Board has established an Audit Committee, Remuneration Committee and Nominations and Corporate
Governance Committee with formally delegated duties and responsibilities.
Audit Committee
The Audit Committee comprises Barbara Staehelin (Chair), Dr Mike Owen and Martin Walton. It 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 37 to 38.
Remuneration Committee
The Remuneration Committee comprises Dr Mike Owen (Chair), Barbara Staehelin and Martin Walton. It 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.
During the year ended 31 March 2023, the Remuneration Committee met 4 times. The Committee reviewed
and approved:
l the degree of achievement of objectives for the year ended 31 March 2022;
l the corporate and personal objectives for the Group and Executive Directors for the year ended 31 March
2023;
l the exercise of share options;
l Executive and senior management remuneration; and
l the granting of share options to Directors and employees.
Award of share options
Following the award of share options during the year ended 31 March 2023, the total outstanding options
exceeded 10% of the total shares in issue. Whilst the 10% figure is regarded as best practice, the Board is
conscious of the need to incentivise and retain valued employees in order to generate value for shareholders
and is also mindful that many of the extant options are unlikely to become exercisable in the foreseeable future.
Having consulted with several key investors, the Board therefore approved the award of options as set out in
note 26.
The Directors’ Remuneration Report is set out on pages 39 to 43. The Directors believe that this, together with
the above mentioned 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.
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Nominations and Corporate Governance Committee
The Nominations and Corporate Governance Committee comprises Iain Ross (Chair), Barbara Staehelin,
Dr Mike Owen and Martin Walton. It meets as required and has responsibility for reviewing the size and
composition of the Board, the appointment of replacement or additional Directors, the monitoring of
compliance with applicable laws, regulations and corporate governance guidance and making appropriate
recommendations to the Board.
During the year ended 31 March 2023, the Nominations and Corporate Governance Committee did not meet,
primarily because matters within its remit have been discussed by the full Board.
Corporate Governance Policies
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 also contain 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
(“whistle-blowing”) policy and procedures. The background to the Corporate Governance Policies is set out in
the Corporate Governance Memorandum.
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 Investor Centre section of the site.
The results of voting on all resolutions in future General Meetings will be posted to 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.
Iain Ross
Executive Chairman
15 June 2023
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Audit Committee Report
For the year ended 31 March 2023
As Chair of the Audit Committee, I am pleased to present the Committee’s
Report for the year ended 31 March 2023.
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
Dr Mike Owen and Martin Walton.
I am an independent Director and have relevant financial experience. Audit Committee meetings are also
attended, by invitation, by the Chief Financial Officer and, where appropriate, other members of the Board.
Representatives of the external auditors 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 auditors 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:
l monitor the integrity of the Group’s financial reporting including the review of significant financial reporting
issues and judgements;
l review and challenge whether appropriate accounting policies have been adopted, in particular for
significant or unusual transactions where different approaches are possible;
l review the content of the Annual Report and financial statements 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;
l keep under review the adequacy and effectiveness of the internal financial controls and internal control
and risk management systems;
l review and challenge, if appropriate, any significant related party transactions;
l oversee the external audit process including monitoring the external auditors’ independence, objectivity,
effectiveness and performance;
l review the Group’s systems and controls for detecting fraud and preventing bribery; and
l monitor and review the Group’s whistle-blowing arrangements.
The Audit Committee has primary responsibility for the relationship between the Group and the external
auditors.
This includes:
l 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;
l considering the auditors’ independence, objectivity, qualifications and effectiveness;
l reviewing the audit plan presented by the auditors and considering the risks identified therein;
l reviewing the auditors’ findings reports on the Group’s Annual Report and Financial Statements; and
l approving the level of fees paid to the auditors for audit and non-audit services.
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Audit Committee Report
continued
During the year ended 31 March 2023, the Audit Committee met twice. The Committee reviewed and approved
the financial statements and the auditors’ findings report for the year ended 31 March 2022, the interim results
for the six months to 30 September 2022 and the external auditors’ plan and fee for the 2023 external audit.
The Audit Committee considers risk areas in the financial statements throughout the year and before the audit
commences. It also approved an updated Whistle Blowing Policy.
The Committee considered the following items to be areas of risk.
The Group is expected to incur further costs as it continues to develop its technologies through the research
and pre-clinical development pathway. 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. 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 upon which the accounts are prepared. The Group is in pre-
clinical-stage development and suffers significant planned operating losses from expenses incurred in research
and development of its platform and therapeutic programmes, as well as from general and administrative costs.
The Group expects to continue to incur significant operating losses for the foreseeable future as it furthers its
exosome platform and 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, whilst highlighting a material uncertainty
as further referenced in note 3 to the financial statements.
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.
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 Results and Annual Report and Financial
Statements 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 2023.
By order of the Board.
Barbara Staehelin
Chair – Audit Committee
15 June 2023
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Directors’ Remuneration Report
For the year ended 31 March 2023
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 6 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. This may be paid in cash or 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 share options may be granted from time to time. The quantum
of these awards is approved by the Remuneration Committee and are considered in line with market levels
and consistent with positions held.
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 which in accordance
with best practice are ordinarily granted subject to a cap of up to 10% of total issued share capital in any ten-
year period. The rules of the share options scheme give the Board the flexibility to exceed this 10% limit. During
the year, in accordance with the rules of the share option schemes, the Board approved the grant of share
options to the Executive Chairman, Executive Director, senior management and staff which led to the 10% cap
being exceeded. The Board took the decision following consultation with several key shareholders being
conscious of the need to incentivise and retain valued employees in order to generate value for shareholders
whilst also being mindful of the fact that many of the extant options were unlikely to become exercisable in the
foreseeable future.
Pension
The Group operates a defined contribution pension scheme, which is available to all employees. The Company
contribution in respect of Executive Directors (excluding the Executive Chairman) is currently set at 10% of base
salary. An 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.
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Directors’ Remuneration Report
continued
Other benefits
Other benefits provided are life assurance, private medical insurance and professional subscriptions, where
relevant to the duties of the Executive Director (disclosed as part of Salaries and fees in the following
remuneration table).
Non-Executive Directors’ remuneration
The remuneration of the Non-Executive Directors is set at a level that is sufficient to attract and retain
high-calibre non-executives who contribute to the business. Fee levels are determined by the Remuneration
Committee with regard to market comparatives, Board Committee responsibilities and ongoing time
commitments. Non-Executive Directors are appointed for an initial three-year term via an appointment letter
from the Company, with a three months’ notice period, with the exception of the Executive Chairman who has
a six 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 receive their fees in the form of a basic cash fee. The Executive Chairman receives
share options as part of his remuneration package. Details are set out below.
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’ emoluments
The Directors received the following remuneration during the year:
Executive Directors
Iain Ross3,4,5
Catherine Isted2
John Hawkins1,5
Non-Executive Directors
Barbara Staehelin
Dr Mike Owen
Martin Walton
Salary and
fees
£'000
255
103
202
109
98
0
60
43
48
48
50
2
Year
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Bonus
£'000
175
0
0
85
0
0
0
0
0
0
0
0
Payment in
lieu of
notice
£'000
Benefits in
Kind
£'000
Pension
contributions
£'000
Total
£'000
0
0
150
0
0
0
0
0
0
0
0
0
0
0
2
1
2
0
0
0
0
0
0
0
0
0
20
10
10
0
0
0
0
0
0
0
430
103
374
205
110
0
60
43
48
48
50
2
1 Appointed as Chief Financial Officer on 14 September 2022 on a base salary of £180,000.
2 Resigned 31 December 2022.
3 From February 2022, Iain Ross assumed temporary Executive responsibility which continued until the appointment of
Catherine Isted as CEO. Mr Ross then resumed his role as Non-Executive Chairman. In recognition of the additional
responsibility and in addition to his monthly Chairman/Director fees of £8,333 per month Mr Ross was paid an additional
remuneration of £17,500 per month. Iain Ross continued to be paid £17,500 on a monthly basis until one month following
the appointment of a new CEO in September 2022. Following appointment of a new CEO or after achievement of certain
corporate objectives, Iain was eligible to receive a bonus of £175,000 on the understanding that he invested £75,000 of
the net amount in Company shares.
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Directors’ Remuneration Report
continued
4 Following the departure of the CEO on 31 December 2022, Iain Ross was appointed as Executive Chairman, Iain Ross’s
fees were increased to £250,000 per annum, together with a discretionary bonus available in each financial year to a
maximum of 50% of annual fees.
5 Additionally, in the event the shareholders approve a corporate merger or acquisition of the Company, Iain Ross and John
Hawkins are eligible to receive a bonus equivalent to 100% of annual fees and 75% of annual salary respectively.
The Directors, who held office at the end of the year, and/or at the date of signing of the financial statements,
held the following interests in the Ordinary shares of the Company.
Ordinary shares of 1p each
31 March 2023 31 March 2022
Number Number
Iain Ross 400,000 –
John Hawkins 147,668 –
Barbara Staehelin 300,000 43,000
Dr Mike Owen 11,379 11,379
Martin Walton 15,000 15,000
During the year ended 31 March 2023, Iain Ross and John Hawkins received share options as set out in the
tables below. At the date of grant, no gains arose.
The Directors, who held office at the end of the year, held the following interests in options over shares of the
Company.
Iain Ross
Options – unapproved
Options – unapproved
Options – unapproved
Options – unapproved
Options – unapproved
Note
2
2
1
1
2
At 1 April
2022
Number
100,000
100,000
–
–
–
200,000
Lapsed
during
the year
Number
Granted
during
the year
Number
At
31 March
2023
Number
Exercise
price Exercise period*
–
–
–
–
–
–
–
–
100,000
£0.01 November 2021 –
October 2031
100,000
£1.07 November 2021 –
300,000
300,000
October 2031
£0.315 August 2022 –
July 2032
250,000
250,000
£0.50 March 2023 –
750,000
750,000
1,300,000
1,500,000
February 2033
£0.1025 March 2023 –
February 2033
ReNeuron Group plc
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Directors’ Remuneration Report
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continued
John Hawkins
Options – unapproved
Options – unapproved
Options – unapproved
Options – unapproved
Options – unapproved
Options – unapproved
Options – unapproved
Options – unapproved
Options – unapproved
Options – unapproved
At
14 September
2022
Number
Note
Lapsed
during
the year
Number
Granted
during
the period
Number
At
31 March
2023
Number
Exercise
price Exercise period*
4
4
4
4
4
4
4
3
3
4
4,000
4,000
4,000
4,000
4,000
20,0001
50,000
250,000
–
–
340,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,000
£3.45 September 2017 –
4,000
September 2024
£1.00 October 2018 –
October 2025
4,000
£1.00 July 2019 –
4,000
July 2026
£1.00 September 2020 –
September 2027
4,000
£1.00 September 2021 –
September 2028
20,000
£0.01 April 2022 –
50,000
April 2029
£0.01 February 2024 –
February 2031
250,000
£0.315 July 2023 –
250,000
250,000
July 2032
£0.315 February 2024 –
February 2033
250,000
250,000
£0.1025 February 2024 –
February 2033
500,000
840,000
1 12,288 of these shares are parallel options exercisable either as a non-tax advantaged option at an exercise
price of £0.01 or as a tax-advantaged option at an exercise price of £2.22
Dr. Mike Owen
At 1 April
2022
Number
Note
Lapsed
during
the year
Number
Granted
during
the year
Number
At
31 March
2023
Number
Exercise
price Exercise period*
Options – unapproved
Options – unapproved
Options – unapproved
Options – unapproved
Options – unapproved
1
1
1
1
1
3,000
5,000
17,700
6,000
13,500
45,200
–
–
–
–
–
–
–
–
–
–
–
–
3,000
£1.00 August 2016 –
5,000
17,700
July 2026
£1.00 October 2017 –
September 2027
£0.01 October 2018 –
September 2028
6,000
£0.01 May 2019 –
April 2029
£0.01 March 2021 –
February 2031
13,500
45,200
* The exercise periods indicate the earliest dates for which the options are exercisable subject to meeting the
performance conditions disclosed in the following notes.
Note 1: These options were issued under the Group’s Non-Executive Share option Scheme. They vest monthly
over three years on a straight-line basis and carry no performance conditions.
Note 2: These options were issued under the Group’s Non-Executive Share option Scheme. They vest monthly
over three years on a straight-line basis and carry a performance condition based upon a share price target.
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Directors’ Remuneration Report
continued
Note 3: These options were issued under the Group’s Long-Term Incentive Plan. They carry no performance
conditions.
Note 4: These options were issued subject to performance conditions. These performance conditions may be
market related or relating to clinical, scientific or commercial targets. Certain options issued from 2018 on,
were issued as a parallel option, exercisable either as a tax-advantaged option (with an exercise price equal to
the market price on the date of grant) or as a non-tax advantaged option (with an exercise price of one pence.
By order of the Board.
43
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Chair – Remuneration Committee
15 June 2023
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Annual Report and Accounts 2023
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Independent Auditors’ Report to the Members of
ReNeuron Group Plc
Report on the audit of the financial statements
44
Opinion
In our opinion, ReNeuron Group plc’s group financial statements and company financial statements (the
“financial statements”):
I
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A
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A
L
S
T
A
T
E
M
E
N
T
S
•
•
•
give a true and fair view of the state of the group’s and of the company’s affairs as at 31 March 2023 and
of the group’s loss and the group’s and company’s cash flows for the year then ended;
have been properly prepared in accordance with UK-adopted international accounting standards 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, which comprise: the Group and
Company Statements of Financial Position as at 31 March 2023; the Group Statement of Comprehensive
Income, the Group and Company Statements of Changes in Equity, the Group and Company Statements of
Cash Flows 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
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy
of the disclosure made in note 3 to the financial statements concerning the group’s and the company’s ability
to continue as a going concern. Based on the current financial forecasts, the directors expect that upfront
payments from future partners and collaborators on their IP and legacy assets will enable a cash runway to July
2024, at which point further capital injection would be required. If those upfront payments, which are not wholly
within the control of the Group and Company, are not received then the cash runway would extend until
February 2024. 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’s and the
company’s ability to continue as a going concern. The financial statements do not include the adjustments that
would result if the group and the company were unable to continue as a going concern.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
ReNeuron Group plc
45
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Independent Auditor’s Report
continued
Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the
going concern basis of accounting included:
•
•
•
•
•
we evaluated the directors’ model supporting their going concern assessment and considered whether
the assumptions made supported their conclusion;
we tested the mathematical accuracy of the model and considered the reasonableness of the assumptions
made and the availability of cash throughout the going concern period;
we compared underlying base assumptions against comparable costs incurred in the year to 31 March
2023;
we verified certain assumptions to supporting documentation; and
we considered whether the key matters in relation to going concern are appropriately disclosed within
the financial statements.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Our audit approach
Overview
Audit scope
• We have performed full-scope audit procedures in respect of the Company, ReNeuron Group plc and it’s
•
•
subsidiary ReNeuron Limited
Our audit scope included limited desktop audit procedures on the subsidiary, ReNeuron Inc., which were
performed by the Group engagement team
Our audit procedures, all of which have been performed by the Group engagement team and which
included the Group finance consolidation and financial statement disclosures, covered 100% of the
Group’s loss before tax for the year ended 31 March 2023. Our audit scope provided sufficient appropriate
audit evidence as a basis for our opinion on the Group financial statements as a whole.
Key audit matters
•
•
•
Material uncertainty related to going concern (group and company)
Completeness of research and development accruals (group)
Valuation of the Company’s investment in ReNeuron Limited (company)
Materiality
•
•
•
Overall group materiality: £332,900 (2022: £552,000) based on 5% of loss before tax.
Overall company materiality: £282,000 (2022: £300,000) based on 5% of loss before tax, restricted to 85%
of group materiality.
Performance materiality: £249,600 (2022: £414,675) (group) and £211,500 (2022: £225,000) (company).
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.
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.
ReNeuron Group plc
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Independent Auditor’s Report
continued
46
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.
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The key audit matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Completeness of research and development accruals (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. The Group 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 the Group to measure which 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 are reasonably estimated.
Our audit risk is focussed on whether the relevant accruals
have been appropriately calculated and reflected on the
balance sheet including assessing whether any releases have
appropriate justification. As at 31 March 2023, the Accruals
and deferred income balance for the group amounted to
£3.8m.
Valuation of the Company’s investment in ReNeuron Limited
(company)
The Group’s market capitalisation as at 31 March 2023 was
£5.2m compared to investments in its subsidiary, ReNeuron
Limited, of £23.3m pre any impairment. Accordingly,
management has identified that an impairment indicator
exists and an impairment assessment has been undertaken.
The impairment assessment compares the carrying value to
the recoverable amount, which is calculated as the higher of
the value in use and the fair value less costs to sell.
Management has performed a value in use calculation,
based on its forecasts for the next five years. In the absence
of other information, management has used the market
capitalisation of the Company at 31 March 2023 as a proxy
for the fair value less costs to sell. The recoverable amount,
based on using the higher of these two models, is £nil, after
taking into account the other assets that are held by the
Company and which are considered as part of the Group’s
market capitalisation. Accordingly an impairment of £23.3m
has been recorded. There is complexity and judgement
involved in calculating the valuation of the investments.
The key judgement in regard to this balance is using market
capitalisation as a proxy for fair value less costs to sell. The
key estimate in regards to the value in use calculation is the
revenue growth and R&D expenditure over the next 5 years.
We performed the following procedures:
• We verified the status of projects through a
meeting with the Chief Operations 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 sampled management’s calculations back to
invoices and contracts
• We obtained management’s calculation of the
accrual and verified the mathematical formulae.
• We reviewed invoices received and payments
post 31 March 2023 and performed analytical
procedures to identify any costs not included in
management’s schedules
We concluded that management’s recording of
the accruals balance as at 31 March 2023 was
appropriate.
We have performed the following procedures:
• Assessed whether market capitalisation is
appropriate, recalculated the exercise and
concluded that the exclusion of costs to sell and
control premium in the fair value less costs to sell
calculation was reasonable.
• Considered any post year-end movements in
share price and concluded that none were
indicative of conditions existing before year end
and should not therefore be reflected in the year-
end fair value less costs to sell calculation.
• We have confirmed the mathematical accuracy
of the value in use model, confirmed the growth
forecasts are in line with the Board-approved plan
and that the growth assumptions are in line with
IAS 36.
We have concluded that management’s
assessment that an impairment of £23.3m is
required in relation to the carrying value of the
investment is appropriate.
ReNeuron Group plc
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Independent Auditor’s Report
continued
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 company, the
accounting processes and controls, and the industry in which they operate.
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ReNeuron Group plc’s shares are admitted to trading 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 function 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 certain operating costs and recharges these back to ReNeuron 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. did not as it contributed less than 1% of the loss before tax and 1% of
Group total assets and contain no financial statement items that comprise more than 15% of the Group total.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of
climate risk on the group’s and company’s financial statements, and we remained alert when performing our
audit procedures for any indicators of the impact of climate risk. Our procedures did not identify any material
impact as a result of climate risk on the group’s and company’s financial statements.
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:
Financial statements - group Financial statements - company
Overall
materiality
How we
determined it
Rationale for
benchmark
applied
£332,900 (2022: £552,000).
£282,000 (2022: £300,000).
5% of loss before tax
5% of loss before tax, restricted to 85% of group
materiality
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.
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 company
and is a generally accepted auditing benchmark. In the
prior year total assets was the most appropriate
measure for the company since the principal activity of
the company was to hold the investment in subsidiary.
However in the current year, this investment has been
fully impaired and the primary activity is now expense
based. Materiality has been restricted in line with
Group scoping in 2023 and 2022.
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 £282,000 and £316,000. Certain
components were audited to a local statutory audit materiality that was also less than our overall group
materiality.
ReNeuron Group plc
Annual Report and Accounts 2023
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Independent Auditor’s Report
continued
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance
materiality in determining the scope of our audit and the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality
was 75% (2022: 75%) of overall materiality, amounting to £249,600 (2022: £414,675) for the group financial
statements and £211,500 (2022: £225,000) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements,
risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the
upper end of our normal range was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during
our audit above £16,645 (group audit) (2022: £27,600) and £14,100 (company audit) (2022: £15,000) 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.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires 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 2023 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 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 in respect of the financial statements,
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 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 company
or to cease operations, or have no realistic alternative but to do so.
ReNeuron Group plc
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Independent Auditor’s Report
continued
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is
detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance
with laws and regulations related to product safety (including but not limited to drug regulation) and
employment legislation (including health & safety regulation), and we considered the extent to which non-
compliance might have a material effect on the financial statements. We also considered those laws and
regulations that have a direct impact on the financial statements such as tax legislation and the Companies Act
2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls), and determined that the principal risks were related to
inappropriate journal entries and management bias in accounting entries. Audit procedures performed by the
engagement team included:
•
•
•
•
Discussions with management, including consideration of known or suspected instances of non-
compliance with laws and regulations and fraud;
Reviewing Board minutes and legal expenses;
Identifying and testing journal entries, in particular those having unusual account combinations; and
Designing audit procedures to incorporate unpredictability around the nature, extent and timing of our
testing.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that are not closely related to events and transactions
reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly
using data auditing techniques. However, it typically involves selecting a limited number of items for testing,
rather than testing complete populations. We will often seek to target particular items for testing based on
their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion
about the population from which the sample is selected.
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 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.
ReNeuron Group plc
Annual Report and Accounts 2023
266079 ReNeuron AR_pp44-pp54.qxp 15/06/2023 19:09 Page 50
Independent Auditor’s Report
continued
Other required reporting
50
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
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•
•
we have not obtained all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the 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 company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Stuart Couch (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Cardiff
15 June 2023
ReNeuron Group plc
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266079 ReNeuron AR_pp44-pp54.qxp 15/06/2023 19:09 Page 51
Group Statement of Comprehensive Income
For the year ended 31 March 2023
Revenue
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
5
6
6
7
8
11
13
2023
£’000
530
(4,463)
(3,182)
(7,115)
478
(20)
(6,657)
1,249
(5,408)
(5,408)
(9.5p)
2022
£’000
403
(8,068)
(3,563)
(11,228)
195
(25)
(11,058)
1,369
(9,689)
(9,689)
(17.0p)
ReNeuron Group plc
Annual Report and Accounts 2023
266079 ReNeuron AR_pp44-pp54.qxp 15/06/2023 19:09 Page 52
Group and Company Statements of Financial Position
As at 31 March 2023
Group
Company
52
2023 2022 2023 2022
Note £’000 £’000 £’000 £’000
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Assets
Non-current assets
Property, plant and equipment 14 338 288 – –
Right-of-use asset 15 283 373 278 373
Intangible assets 16 186 186 – –
Investment in subsidiaries 17 – – – 17,500
807 847 278 17,873
Current assets
Trade and other receivables 18 500 536 26 5
Income tax receivable 1,185 1,392 – –
Investments – bank deposits 19 1,000 5,000 1,000 5,000
Cash and cash equivalents 20 6,153 9,548 5,616 8,153
8,838 16,476 6,642 13,158
Total assets 9,645 17,323 6,920 31,031
Equity
Equity attributable to owners of the Company
Share capital 24 572 571 572 571
Share premium account 24 113,925 113,925 113,925 113,925
Capital redemption reserve 40,294 40,294 40,294 40,294
Merger reserve 2,223 2,223 1,858 1,858
Accumulated losses
At 1 April (147,125) (138,085) (126,182) (62,311)
Loss for the year attributable to the owners (5,408) (9,689) (24,539) (64,520)
Other changes in accumulated losses 576 649 576 649
At 31 March (151,957) (147,125) (150,145) (126,182)
Total equity 5,057 9,888 6,504 30,466
Liabilities
Current liabilities
Trade and other payables 21 4,167 6,873 – 3
Lease liabilities 22 153 146 151 146
4,320 7,019 151 149
Non-current liabilities
Lease liabilities 22 268 416 265 416
268 416 265 416
Total liabilities 4,588 7,435 416 565
Total equity and liabilities 9,645 17,323 6,920 31,031
The financial statements on pages 51 to 76 were approved by the Board of Directors on 15 June 2023 and
were signed on its behalf by:
John Hawkins
Director
Company registered number: 05474163
ReNeuron Group plc
266079 ReNeuron AR_pp44-pp54.qxp 15/06/2023 19:09 Page 53
Group and Company Statements of Changes in Equity
For the year ended 31 March 2023
Share Capital
Share premium redemption Merger Accumulated Total
capital account reserve reserve losses equity
Group £’000 £’000 £’000 £’000 £’000 £’000
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As at 1 April 2021 569 113,904 40,294 2,223 (138,085) 18,905
Exercise of employee
share options 2 21 – – – 23
Credit on share-based
payment – – – – 649 649
Loss and total
comprehensive
loss for the year – – – – (9,689) (9,689)
As at 31 March 2022 571 113,925 40,294 2,223 (147,125) 9,888
Exercise of employee
share options 1 – – – – 1
Credit on share-based
payment – – – – 576 576
Loss and total
comprehensive
loss for the year – – – – (5,408) (5,408)
As at 31 March 2023 572 113,925 40,294 2,223 (151,957) 5,057
Share Capital
Share premium redemption Merger Accumulated Total
capital account reserve reserve losses equity
Company £’000 £’000 £’000 £’000 £’000 £’000
As at 1 April 2021 569 113,904 40,294 1,858 (62,311) 94,314
Exercise of employee
share options 2 21 – – – 23
Credit on share-based
payment – – – – 649 649
Loss and total
comprehensive
loss for the year – – – – (64,520) (64,520)
As at 31 March 2022 571 113,925 40,294 1,858 (126,182) 30,466
Exercise of employee
share options 1 – – – – 1
Credit on share-based
payment – – – – 576 576
Loss and total
comprehensive
loss for the year – – – – (24,539) (24,539)
As at 31 March 2023 572 113,925 40,294 1,858 (150,145) 6,504
ReNeuron Group plc
Annual Report and Accounts 2023
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Group and Company Statements of Cash Flows
For the year ended 31 March 2023
Group
Company
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2022 2022
2023 Restated 2023 Restated
Note £’000 £’000 £’000 £’000
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Cash flows from operating activities
Cash used in operations 27 (8,920) (9,196) (1,147) (1,104)
Overseas taxes paid (5) (52) – –
Income tax credit received 1,461 1,862 – –
Interest paid (20) (25) (19) (24)
Net cash used in operating activities (7,484) (7,411) (1,166) (1,128)
Cash flows from investing activities
Capital expenditure (220) (302) – –
Investment in subsidiaries – – (5,684) (5,338)
Bank deposit matured 2 4,000 2,500 4,000 2,500
Interest received 131 26 131 26
Net cash generated from/(used in)
investing activities 3,911 2,224 (1,553) (2,812)
Cash flows from financing activities
Proceeds from the issue of ordinary shares 1 23 1 23
Principal element of lease payments (148) (157) (146) (140)
Net cash used in financing activities (147) (134) (145) (117)
Net decrease in cash and cash equivalents (3,720) (5,321) (2,864) (4,057)
Effect of foreign exchange movements on cash 325 166 327 161
Cash and cash equivalents at the start of the year 9,548 14,703 8,153 12,049
Cash and cash equivalents
at the end of the year 6,153 9,548 5,616 8,153
ReNeuron Group plc
266079 ReNeuron AR_pp55-pp69.qxp 15/06/2023 19:09 Page 55
Notes to the Financial Statements
For the year ended 31 December 2023
1. General information
ReNeuron Group plc (the Company or ReNeuron) and its subsidiaries (together, the Group or ReNeuron)
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 admitted to trading on the AIM Market of the London Stock Exchange.
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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
The financial statements have been prepared in accordance with UK adopted International Accounting
Standards (IFRS) and with the requirements of the Companies Act 2006 as applicable to companies reporting
under those standards.
These financial statements have been prepared on a historical cost basis unless otherwise specified.
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 2023.
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:
ReNeuron Group plc
Annual Report and Accounts 2023
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Notes to the Financial Statements
continued
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 £0.1 million, none of which met the criteria for capitalisation. The related accruals
were £1.1 million.
Estimated future recoverability of investment in subsidiary companies
The Company holds an investment balance with its subsidiary companies. This is reviewed for impairment
annually or more frequently if events or changes in circumstances indicate a potential impairment.
The directors have considered the Group’s market capitalisation at 31 March 2023 and the carrying value of
other assets held by the Parent Company when making an assessment of the fair value less costs to sell of its
investment in subsidiaries. Consequently, this has been written down to £nil, giving rise to an impairment charge
of £23.3 million (2022: £62.9 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.
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 non-refundable and 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.
Agreements that are related to development activities or technology transfer can contain a number of elements
and provide for varying consideration terms such as payment for utilisation of staff resources and for the
purchase of cell line related products. 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 (that can
include agreed assigned staff resources) within the contract and the arrangement transaction price are identified.
The fair value of the arrangement transaction price is allocated to the different performance obligation based
on the stand-alone selling price of that obligation together with the performance obligation activity to which
the terms of payment specifically relate. The allocated transaction price relating to the utilisation of staff is
recognised over time and that relating from the sale of cell lines is at a point in time.
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.
ReNeuron Group plc
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Notes to the Financial Statements
continued
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.
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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 applies a single recognition and measurement approach for all applicable leases under which
the Group is the lessee.
A 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:
l
l
the contract contains an identifiable asset; and
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.
Payments associated with short-term leases and all leases of low-value assets are recognised on a straight-line
basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less without
a purchase option. Low-value assets comprise IT equipment.
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.
ReNeuron Group plc
Annual Report and Accounts 2023
266079 ReNeuron AR_pp55-pp69.qxp 15/06/2023 19:09 Page 58
58
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Notes to the Financial Statements
continued
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 26. 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.
For equity-settled share-based payments, where employees of subsidiary undertakings are rewarded with shares
issued by the Parent Company, a capital contribution is recorded in the subsidiary, with a corresponding increase
in the investment in the Parent Company.
Warrants
Where warrants have been issued together with Ordinary shares, the proportion of the proceeds received that
relates to the warrants is 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 licence fees have infinite lives and are not amortised but are tested for impairment
annually. 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:
Plant and equipment
Computer equipment
3–8 years
3–5 years
The residual values and estimated useful lives are reviewed annually.
Profits or losses on disposal of property, plant and equipment reflect the difference between net selling price
and carrying amount at the date of disposal and are recognised in the consolidated income statement.
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.
Current income tax
The credit for current income tax is based on the results for the year, adjusted for items that are non-assessable
or disallowed. It is calculated using tax rates that have been enacted or substantively enacted at the financial
year-end.
ReNeuron Group plc
59
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266079 ReNeuron AR_pp55-pp69.qxp 15/06/2023 19:09 Page 59
Notes to the Financial Statements
continued
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.
The prior year statement of cash flows has been restated due to a reclassification from financing activities to
investing activities of a £2.5m cash inflow relating to the maturity of short term investments. This restatement
does not impact the opening or closing cash balances.
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 a contractual or constructive 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.
ReNeuron Group plc
Annual Report and Accounts 2023
266079 ReNeuron AR_pp55-pp69.qxp 15/06/2023 19:09 Page 60
Notes to the Financial Statements
continued
60
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 2022. None of them have any impact on the
financial statements of the Group:
I
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A
N
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T
A
T
E
M
E
N
T
S
l
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Amendments to IFRS 3 ‘business combinations’ IAS 16 ‘property, plant and equipment’ and IAS 38
‘provisions, contingent liabilities and contingent assets’; and
Annual improvements make minor amendments to IFRS 1, ‘First-time Adoption of IFRS’, IFRS 9, ‘Financial
instruments’, IAS 41, ‘Agriculture’ and the Illustrative Examples accompanying IFRS 16, ‘Leases’.
There 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.
l
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IFRS 17, ‘Insurance contracts’ as amended in December 2021 (effective 1 January 2023);
Narrow scope amendments to IAS 1, Practice statement 2 and IAS 8 (effective 1 January 2023);
Amendment to IAS 12 – deferred tax related to assets and liabilities arising from a single transaction
(effective 1 January 2023);
Amendment to IAS 1 – Non current liabilities with covenants (effective 1 January 2024); and
Amendment to IFRS 16 – Leases on sale and leaseback (effective 1 January 2024).
3. Going concern
The operations of the Group and Company are financed from funds that have been raised from share placings,
commercial partnerships and grants.
The goal of the Group is to achieve the commercial validation of the CustomExTM platform by generating in
vivo data aimed at differentiating the platform from that of the Group’s competitors. In addition, the plan is to
realise value from the Group’s other assets via potential out-licencing and/or disposal. The Directors continue
to seek opportunities to secure further revenues/funding sufficient for the short to medium term future needs
of the business and favourable in vivo data should enhance those opportunities.
As previously noted, in January 2023, the Group undertook a restructuring of the business with the underlying
cost base reduced and resources re-aligned to meet the immediate needs of the business. Based on the
Directors’ base case assessment, the current cash runway is forecast to extend until July 2024, at which point
a further capital injection would be required. The base case assessment includes assumed upfront payments
over the next 6 to 12 months from potential future partners and collaborators on the Group’s exosome platform,
IP and legacy assets and potential further equity fund raising. The Directors recognise that not all of these
assumed inflows are fully within the control of the Group and Company and have prepared a further severe but
plausible downside scenario which excludes these inflows and indicates a cash runway until February 2024.
Based on the forecasts prepared and considered by the Board, the Directors 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 secure adequate cash inflows from the Group’s exosome platform, IP and legacy
assets or through equity fund raising with the timescales stated above will be successful. These conditions
indicate the existence of 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 Company were unable to continue as a going concern.
ReNeuron Group plc
266079 ReNeuron AR_pp55-pp69.qxp 15/06/2023 19:09 Page 61
Notes to the Financial Statements
continued
4. Segment analysis
The Group has identified the Executive Chairman, 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.
61
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A
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C
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T
A
T
E
M
E
N
T
S
5. Revenue
Royalty income
Income associated with development activities
Total
2023
£’000
136
394
530
2022
£’000
119
284
403
Royalty income is derived from the licensed sale of the Group’s products to customers in the USA.
Income associated with development activities relates to fees received under research agreements and is
generated in the United Kingdom, the USA, the People’s Republic of China and South East Asia. At 31 March
2023, an amount of £227,000 (31 March 2022: £320,000) is included in deferred revenue in relation to
development contracts, with £320,000 being released from deferred income in the year.
6. Operating expenses
Loss before income tax is stated after charging:
Research and development costs:
Employee benefits (note 10)
Depreciation of property, plant and equipment (note 14)
Other expenses
Total research and development costs
General and administrative costs:
Employee benefits (note 10)
Legal and professional fees
Depreciation of property, plant and equipment (note 14)
Depreciation of right-of-use asset (note 15)
Loss on disposal of fixed assets
Other expenses
Total general and administrative costs
Total research and development costs and general and administrative costs
2023
£’000
2,162
160
2,141
4,463
1,943
596
10
97
–
536
3,182
7,645
2022
£’000
2,530
199
5,339
8,068
2,308
504
25
100
3
623
3,563
11,631
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 Company and consolidated financial statements
– for the audit of the Company’s subsidiaries pursuant to legislation
Total
2023
£’000
56
46
102
2022
£’000
25
26
51
ReNeuron Group plc
Annual Report and Accounts 2023
266079 ReNeuron AR_pp55-pp69.qxp 15/06/2023 19:09 Page 62
Notes to the Financial Statements
continued
7. Finance income
62
Interest receivable on short-term and investment bank deposits
Foreign exchange gains
Total
8. Finance expense
Total: Lease interest
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F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
2023
£’000
153
325
478
2023
£’000
20
2022
£’000
29
166
195
2022
£’000
25
9. 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
Termination costs
Pension contributions
Share-based payments
Directors’ emoluments including share-based payments
2023
£’000
892
150
30
1,072
105
1,177
2022
£’000
863
483
43
1,389
293
1,682
One director (2022: one) had retirement benefits accruing to them under defined contribution pension schemes
in respect of qualifying services.
The Directors exercised no share options during the year (2022: Nil).
For detailed disclosure of Directors’ emoluments, including highest paid Director, please refer to the Directors’
Remuneration Report on pages 39 to 43.
Directors’ emoluments include amounts payable to third parties as described in note 32.
ReNeuron Group plc
266079 ReNeuron AR_pp55-pp69.qxp 15/06/2023 19:09 Page 63
Notes to the Financial Statements
continued
10. Employee information
The monthly average number of persons (including Executive Directors) employed by the Group during the
year was:
63
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F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
By activity:
Research and development
Administration
Total
2023
Number
2022
Number
27
7
34
29
7
36
The headcount reduction following the January 2023 restructuring does not have a material effect on the
average headcount for the year.
Staff costs:
Wages and salaries
Termination costs
Social security costs
Share-based payment charge
Other pension costs
Total
2023
£’000
2,808
192
375
576
154
4,105
2022
£’000
3,164
483
414
649
128
4,838
The Company holds the employment contracts for the Executive Directors but all employment costs relating
to these individuals are incurred by ReNeuron Limited. At 31 March 2023 there were two (2022: one) Executive
Directors in office.
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 £154,000 (2022: £128,000). There were no prepaid or accrued contributions to the scheme
at the year-end (2022: £Nil).
11. Taxation
UK research and development tax credit at 14.5% (2022: 14.5%)
Overseas taxation
Adjustments in respect of prior years
Total tax credit
2023
£’000
1,185
(5)
69
1,249
2022
£’000
1,392
(53)
30
1,369
No UK corporation tax liability arises on the results for the year due to the loss incurred.
As a loss-making small and medium sized enterprise, the Group is entitled to research and development tax
credits at 14.5% (2022: 14.5%) on 230% (2022: 230%) of qualifying expenditure for the year to 31 March 2023.
ReNeuron Group plc
Annual Report and Accounts 2023
266079 ReNeuron AR_pp55-pp69.qxp 15/06/2023 19:09 Page 64
Notes to the Financial Statements
continued
The tax credit compares with the loss for the year as follows:
64
I
I
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
Loss before income tax
Loss before income tax multiplied by the small companies rate of
corporation tax of 19% (2022: main rate of 19%)
Effects of:
– difference between depreciation and capital allowances
– expenses not deductible for tax purposes
– losses not recognised
– adjustments in respect of prior year
Overseas taxes paid
2023
£’000
6,657
1,265
13
(143)
50
69
(5)
2022
£’000
11,058
2,101
42
(108)
(643)
30
(53)
Total tax credit
1,249
1,369
No deferred tax asset has been recognised by the Group or Company as there are currently no foreseeable
trading profits.
Following the enactment of the Finance Act 2021, potential deferred taxation has been calculated at 25%
(2022: 25%).
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
Amount not
recognised
2023
£’000
Amount not
recognised
2022
£’000
53
28,304
28,357
53
27,694
27,747
Amount not
recognised
2023
£’000
Amount not
recognised
2022
£’000
2,342
2,181
12. Loss for the financial year
As permitted by Section 408 of the Companies Act 2006, the Parent Company’s statement of comprehensive
income for the current year has not been presented in these financial statements. The Parent Company’s loss
and total comprehensive loss for the financial year was £24,539,000 (2022: £64,520,000). The loss in the current
year was primarily derived from the impairment of investment in subsidiaries.
ReNeuron Group plc
266079 ReNeuron AR_pp55-pp69.qxp 15/06/2023 19:09 Page 65
Notes to the Financial Statements
continued
13. 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 £5,408,000 (2022:
£9,689,000) by 57,125,960 shares (2022: 56,975,677 shares), being the weighted average number of one pence
ordinary shares in issue during the year.
65
Potential dilutive ordinary shares relating to share options are anti-dilutive as they would have decreased the
loss per share and are excluded from the calculation of diluted loss per share. Therefore, the weighted average
shares outstanding used to calculate both the basic and diluted loss per share are the same.
The weighted average number of diluted one pence ordinary shares (including potential dilutive ordinary shares
related to share options) is 58,607,176 shares (2022: 58,751,314 shares).
14. Property, plant and equipment
Plant and Computer
equipment equipment
Group £’000 £’000
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I
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
Cost
At 1 April 2021
Additions
Reclassification
Disposals
At 31 March 2022
Accumulated depreciation
At 1 April 2021
Charge for the year
Reclassification
Disposals
At 31 March 2022
Net book amount:
At 31 March 2022
Cost
At 1 April 2022
Additions
Disposals
At 31 March 2023
Accumulated depreciation
At 1 April 2022
Charge for the year
Disposals
At 31 March 2023
Net book amount:
At 31 March 2023
1,277
294
343
(29)
1,885
1,071
200
367
(29)
1,609
240
9
62
(94)
217
233
24
39
(91)
205
Total
£’000
1,517
303
405
(123)
2,102
1,304
224
406
(120)
1,814
276
12
288
1,885
201
–
2,086
1,609
161
–
1,770
217
19
(20)
216
205
9
(20)
194
2,102
220
(20)
2,302
1,814
170
(20)
1,964
316
22
338
The Company had no property, plant or equipment at 31 March 2023 (2022: £Nil).
ReNeuron Group plc
Annual Report and Accounts 2023
266079 ReNeuron AR_pp55-pp69.qxp 15/06/2023 19:09 Page 66
Notes to the Financial Statements
continued
15. Right-of-use asset
66
Group
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I
F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
At beginning of the year
Additions
Depreciation charge
At end of the year
The depreciation charge relating to the Right-of use asset is as follows:
Land and buildings
Computer and office equipment
At end of the year
The net book value of the underlying assets is as follows:
Group
Land and buildings
Computer and office equipment
At end of the year
Company
At beginning of the year
Depreciation charge
At end of the year
2023
£’000
373
7
(97)
283
2023
£’000
95
2
97
2022
£’000
473
–
(100)
373
2022
£’000
96
4
100
31 March 2023
£’000
31 March 2022
£’000
278
5
283
373
–
373
31 March 2023
£’000
31 March 2022
£’000
373
(95)
278
469
(96)
373
The above comprises land and buildings. The associated lease liabilities are set out in note 22.
16. Intangible assets
Intellectual
property
Licence rights not
fees amortised
Group £’000 £’000
At 1 April 2021 and 1 April 2022
Cost
Impairment
2,070
(1,884)
6,143
(6,143)
Net book amount at 31 March 2022 and 31 March 2023
186
–
The Company holds no intangible assets (2022: £Nil).
ReNeuron Group plc
Total
£’000
8,213
(8,027)
186
67
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N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S
266079 ReNeuron AR_pp55-pp69.qxp 15/06/2023 19:09 Page 67
Notes to the Financial Statements
continued
17. Investment in subsidiaries
Company
At the beginning 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
2023
£’000
17,500
5,684
151
(23,335)
–
2022
£’000
75,000
5,338
115
(62,953)
17,500
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 main 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 as a capital contribution. At 31 March 2023 the Group’s market capitalisation was
£5.2 million as determined by the closing share price, which, when taking into account other assets held by
the Parent Company, resulted in a further impairment of £23,335,000. The directors consider this to be a
reasonable representation of fair value less costs to sell. 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
ReNeuron
(UK) Limited
England
and Wales
£0.001
Ordinary
shares
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%
100%
100%
100%
100%
ReNeuron Limited is the principal trading company in the Group. ReNeuron Inc provides a point of contact
with the FDA in the USA and 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
future relations between the EU and the UK. 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:
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ReNeuron Inc., 21/2 Beacon Street, Concord, New Hampshire 03301-4447; and
ReNeuron Ireland Limited, The Black Church, St Mary’s Place, Dublin 7, Ireland D07 P4AX.
ReNeuron Group plc
Annual Report and Accounts 2023
266079 ReNeuron AR_pp55-pp69.qxp 15/06/2023 19:09 Page 68
68
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Notes to the Financial Statements
continued
18. Trade and other receivables
Group
Company
31 March 31 March 31 March 31 March
2023 2022 2023 2022
£’000 £’000 £’000 £’000
Current
Other receivables 226 164 26 5
Prepayments and accrued income 274 372 – –
Total trade and other receivables 500 536 26 5
The classes within trade and other receivables do not include impaired assets. Due to the short-term nature of
the trade and other receivables, their carrying amount is considered to be the same as their fair value.
19. Investments – bank deposits
Group
Company
31 March 31 March 31 March 31 March
2023 2022 2023 2022
£’000 £’000 £’000 £’000
Deposits with an original maturity at four to
12 months:
Current asset investments 1,000 5,000 1,000 5,000
The £1,000,000 bank deposit at 31 March 2023 matured in May 2023 and is now deemed to be classified as
cash and cash equivalents.
20. Cash and cash equivalents
Group
Company
31 March 31 March 31 March 31 March
2023 2022 2023 2022
£’000 £’000 £’000 £’000
Cash at bank and in hand 6,153 9,548 5,616 8,153
21. Trade and other payables
Group
Company
31 March 31 March 31 March 31 March
2023 2022 2023 2022
£’000 £’000 £’000 £’000
Trade payables 319 734 – 3
Taxation and social security 96 103 – –
Accruals and deferred income 3,752 6,036 – –
Total payables falling due within one year 4,167 6,873 – 3
Amounts owed by the Company to Group undertakings were not interest-bearing and had no fixed repayment
date. Trade payables are unsecured and are usually paid within 35 days of recognition. Included within accruals
and deferred income are government grants of £457,000 (2022: £457,000).
The carrying amounts of trade and other payables are considered to be the same as their fair values, due to
their short-term nature.
ReNeuron Group plc
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Notes to the Financial Statements
continued
22. Lease liabilities
Group
Company
31 March 31 March 31 March 31 March
2023 2022 2023 2022
£’000 £’000 £’000 £’000
Current lease liabilities 153 146 151 146
Non-current lease liabilities 268 416 265 416
Total lease liability 421 562 416 562
The associated right-of-use asset is set out in note 15.
Maturity of lease liabilities
The maturity profile of the Group’s lease liabilities based upon contractual undiscounted payments is set out
below:
Group
Company
31 March 31 March 31 March 31 March
2023 2022 2023 2022
£’000 £’000 £’000 £’000
Less than one year 168 165 165 165
One year to two years 168 165 165 165
Two years to three years 110 165 110 165
Three years to four years – 110 – 110
The interest expense on lease liabilities in the years ended 31 March 2023 and 31 March 2022 is shown in
note 8.
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.
The incremental borrowing rate for the lease is 3.8%.
ReNeuron Group plc
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266079 ReNeuron AR_pp70-end.qxp 15/06/2023 19:10 Page 70
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Notes to the Financial Statements
continued
23. 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:
l
UK-based banks;
l minimum credit rating with Fitch and/or Moody’s (long-term A-/A3; short-term F1/P-1); and
l
familiar and respected names.
At 31 March 2023 and 31 March 2022, no current asset receivables were aged over three months.
No receivables were impaired or discounted.
The Group’s cash and cash equivalents and bank deposits are analysed below according to the credit ratings
of the deposit holding financial institutions:
Group
Company
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2023 2022 2023 2022
£’000 £’000 £’000 £’000
F1/P-1 4,153 9,548 3,616 8,153
F2/P-1 3,000 5,000 3,000 5,000
Ageing profile of the Group’s and the Company’s financial liabilities
The Group’s and the Company’s financial liabilities consist of:
Group
Company
31 March 31 March 31 March 31 March
2023 2022 2023 2022
£’000 £’000 £’000 £’000
Trade and other payables due within 12 months 4,071 6,770 – 3
Current lease liabilities – due within one year 153 146 151 146
Non-current lease liabilities –
due after more than one year 268 416 265 416
4,492 7,332 416 565
The undiscounted cash flows for leases are shown in note 22, trade and other payables exclude taxation and
social security and are not discounted.
ReNeuron Group plc
Notes to the Financial Statements
continued
Interest rate risk
A portion of the Group’s cash resources are placed on fixed deposit, with an original term of between three
and 12 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.
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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 2023, cash of £1,114,000 (2022: £4,213,000) was held in these currencies.
Creditors of the Group include £1,400,000 (2022: £429,000) denominated in US dollars and £66,000 (2022:
£149,000) denominated in euros. Of the Group’s debtors, £nil (2022: £6,000) is denominated in euros. The
remainder are denominated in pounds sterling.
At 31 March 2023, 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 £31,000 (2022: £156,000)
higher/lower.
At 31 March 2023, 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 £14,000 (2022: £25,000) 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
Group
Company
31 March 31 March 31 March 31 March
2023 2022 2023 2022
Currency £’000 £’000 £’000 £’000
Pounds sterling 5,039 5,335 4,828 2,999
US dollars 778 3,548 523 4,645
Euros 336 665 265 509
6,153 9,548 5,616 8,153
Currency profile of the Group’s and the Company’s bank deposit investments
Group
Company
31 March 31 March 31 March 31 March
2023 2022 2023 2022
Currency £’000 £’000 £’000 £’000
Pounds sterling 1,000 5,000 1,000 5,000
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.
31 March 2023
31 March 2022
Book value Fair value Book value Fair value
Group £’000 £’000 £’000 £’000
Investments – bank deposits 1,000 1,000 5,000 5,000
Cash at bank and in hand 6,153 6,153 9,548 9,548
Trade and other receivables excluding prepayments
and accrued income 226 226 164 164
Trade and other payables excluding taxation and
social security and accruals and deferred income 319 319 734 734
Lease liabilities 421 421 562 562
ReNeuron Group plc
Annual Report and Accounts 2023
266079 ReNeuron AR_pp70-end.qxp 15/06/2023 19:10 Page 72
Notes to the Financial Statements
continued
31 March 2023
31 March 2022
72
Book value Fair value Book value Fair value
Company £’000 £’000 £’000 £’000
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Investments – bank deposits 1,000 1,000 5,000 5,000
Cash at bank and in hand 5,616 5,616 8,153 8,153
Receivables: current 26 26 5 5
Trade and other payables – – 3 3
Lease liabilities 416 416 562 562
24. Share capital and share premium
Issued and
fully paid
Number
share capital
Authorised share capital
At 1 April 2021 shares of 1 pence each
Issue of new shares – exercise of
employee share options
As at 31 March 2022
At 1 April 2022 shares of 1 pence each
Issue of new shares – exercise of
employee share options
of shares
Unlimited
56,855,705
207,918
57,063,623
57,063,623
110,137
At 31 March 2023 shares of 1 pence each
57,173,760
25. Warrants
£’000
569
2
571
571
1
572
Share
premium
£’000
Total
£’000
113,904
114,473
21
113,925
113,925
23
114,496
114,496
–
1
113,925
114,497
Warrant instrument with Novavest Growth Fund Limited
Novavest Growth Fund Limited (“Novavest”) 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 (UK) Limited shares acquired by Novavest
are exchanged directly for 5,823 Ordinary shares of the Company.
26. Share options
The Group operates share option schemes for Directors and employees of Group companies and specific
consultants. Options have been issued through a combination of an Inland Revenue-approved Enterprise
Management Incentive (EMI) scheme and Company Share Option Scheme (CSOP).
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 one pence Ordinary shares in companies in the Group as at 31 March
2023 are summarised below. At 31 March 2023, the total outstanding options represented 15.4% of the total
shares in issue.
ReNeuron Group plc
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Notes to the Financial Statements
continued
Number of
Number of Granted Exercised options Weighted
options at during during Lapsed as at average Weighted
1 April the the during 31 March exercise average
Scheme name 2022 year year the year 2023 Note price life
Non-Executive Director Scheme 20,000 – – (20,000) – 1 – –
2009 Employees’ Share Option Plan (EMI) 116,195 – – (5,752) 110,443 2 £1.17 1.50
2009 Employees’ Share Option Plan 1,256,906 – – (234,620) 1,022,286 2 £1.00 1.85
2016 Non-Executive Director Scheme 314,225 1,300,000 (27,867) (41,158) 1,545,200 3 £0.27 3.46
2018 Employees’ Share Option Plan 2,014,628 5,680,000 (82,270) (1,463,127) 6,149,231 2 £0.20 3.3
3,721,954 6,980,000 (110,137) (1,764,657) 8,827,160
Note 1: These options were issued under the Non-Executive Directors’ Scheme and were subject to clinically
related performance targets.
Note 2: With the exception of 388,400 options held by current and former Executive Directors, these options
were issued subject to performance conditions. These performance conditions may be market related or relating
to clinical, scientific or commercial targets. Certain options issued from 2018 on were issued as a parallel option,
exercisable either as a tax-advantaged option (with an exercise price equal to the market price on the date of
grant) or as a non-tax advantaged option (with an exercise price of one pence).
Note 3: These options were issued under the Group’s 2016 Non-Executive Share option Scheme. They vest
over three years on a straight-line basis and with the exception of 750,000 options held by Mr Iain Ross, they
carry no performance conditions. 750,000 of the options held by Mr. Ross are subject to share price based
performance targets.
Fair value charge
Fair value charges for share options have been prepared based on a Black-Scholes model with the following
key assumptions:
September 2018 UK Plan
February 2019 UK Plan
April 2019 UK plan
July 2019 UK Plan
February 2021 UK Plan
October 2021 UK Plan
October 2021 UK Plan
July 2022 UK Plan
February 2023 UK Plan
February 2023 UK Plan
February 2023 UK Plan
Exercise
price
£
Share price
at date
of grant
£
Risk-free
rate
%
Assumed
time to
exercise
Years
Assumed Fair value
volatility per option
£
%
0.01*
0.01*
0.01*
0.01*
0.01*
0.01
1.07
0.315
0.1025
0.315
0.50
0.68
0.53
2.16
2.45
1.10
1.14
1.14
0.315
0.1025
0.1025
0.1025
1.60
1.18
1.10
0.82
0.49
1.20
1.20
2.06
3.54
3.54
3.54
5
5
5
5
5
5
5
5
5
5
5
58.9
57.7
84.6
86.8
80.4
66.6
66.6
85.3
70.5
70.5
70.5
0.67
0.52
2.15
2.44
1.09
1.13
0.65
0.21
0.06
0.04
0.03
* 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.
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 Group plc
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266079 ReNeuron AR_pp70-end.qxp 15/06/2023 19:10 Page 74
Notes to the Financial Statements
continued
The weighted average exercise prices for options were as follows:
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Weighted Weighted
Number of average Number of average
options exercise price options exercise price
’000 £ ’000 £
Outstanding at 1 April 3,722 0.51 4,340 0.40
Granted 6,980 0.25 748 0.47
Exercised (110) 0.01 (208) 0.11
Lapsed (1,765) 0.45 (1,158) 0.35
Outstanding at 31 March 8,827 0.32 3,722 0.51
Exercisable at 31 March 1,139 0.88 1,354 0.97
The share price on 31 March 2023 was 9.05 pence (2022: 30.5 pence).
The pattern of exercise price and life is shown below:
2023
Weighted average remaining life (years)
2022
Weighted average remaining life (years)
Weighted Weighted
average average
exercise Number Contrac- exercise Number Contrac-
tual
Range of exercise prices price of options Expected tual price of options Expected
Up to £1.00 £0.31 8,719,410 3.13 8.40 £0.47 3,588,452 2.09
From £1.01 to £10.00 £1.24 107,750 3.36 8.27 £1.65 133,502 3.09
7.41
8.15
Total 8,827,160 3,721,954
27. Cash used in operations
Group
Company
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2023 2022 2023 2022
£’000 £’000 £’000 £’000
Loss before income tax (6,657) (11,058) (24,539) (64,520)
Adjustments for:
Finance income (478) (195) (479) (191)
Finance expense 20 25 19 24
Depreciation of property, plant and equipment 170 224 – –
Depreciation of right-of-use asset 97 100 95 96
Loss on disposal of fixed assets – 3 – –
Share-based payment charges 576 649 425 534
Impairment of investment in subsidiary companies – – 23,335 62,953
Changes in working capital:
Receivables 58 (90) – –
Payables (2,706) 1,146 (3) –
Cash used in operations (8,920) (9,196) (1,147) (1,104)
ReNeuron Group plc
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Notes to the Financial Statements
continued
28. Reconciliation of net cash flow to movement in net debt
Group
Company
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2023 2022 2023 2022
£’000 £’000 £’000 £’000
Decrease in cash and cash equivalents (3,720) (5,321) (2,864) (4,057)
Effect of foreign exchange differences 325 166 327 161
Cash inflow from increase in lease liability (7) – – –
Lease repayments 168 182 165 165
Lease interest (20) (25) (19) (24)
Net funds at start of year 8,986 13,984 7,591 11,346
Net funds at end of year 5,732 8,986 5,200 7,591
29. Analysis of net funds
Group
Company
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2023 2022 2023 2022
£’000 £’000 £’000 £’000
Cash and cash equivalents 6,153 9,548 5,616 8,153
Lease liabilities (421) (562) (416) (562)
Net funds 5,732 8,986 5,200 7,591
30. Financial commitments
The Company had no other financial commitments at 31 March 2023 (2022: £Nil).
The Group is expected to incur future contractual milestone payments linked to the future development of its
legacy therapeutic programmes. These costs will be recognised when each contractual milestone has been
achieved.
31. Contingent liabilities
The Group and Company had no contingent liabilities as at 31 March 2023 (2022: £Nil).
32. 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:
Services provided
Aesclepius Consulting Limited charged fees of £nil (2022: £16,000) in respect of services provided as a
Non-Executive Director by Dr Tim Corn.
ReNeuron Group plc
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Notes to the Financial Statements
continued
Directors’ purchases of shares
Ordinary shares of 1p each
31 March 2023 31 March 2022
Consideration Consideration
Number £ Number £
Iain Ross 400,000 55,838 – –
John Hawkins 147,668 14,878 N/A N/A
Barbara Staehelin 257,000 51,733 43,000 49,950
Catherine Isted 50,000 15,950 – –
All the above purchases were made on the open market.
Subsequent to the year-end, Barbara Staehelin purchased a further 50,000 shares at an open market price of
8.7p per share, giving total consideration of £4,350.
Parent 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. employed US-based staff who supervised 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
2023
£’000
1,000
151
5,684
2023
£’000
–
2022
£’000
1,100
115
5,338
2022
£’000
17,500
ReNeuron Group plc
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Advisers
COMPANY SECRETARY AND
REGISTERED OFFICE
John Hawkins
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 SOLE BROKER
Allenby Capital Limited
5 St Helen’s Place
London
EC3A 6AB
FINANCIAL PR CONSULTANTS
Walbrook PR Ltd
75 King William Street
London
EC4N 7BE
REGISTRARS
Computershare Services plc
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
SOLICITORS
Covington & Burling LLP
22 Bishopsgate
London
EC2N 4BQ
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
Chartered Accountants and
Statutory Auditors
1 Kingsway
Cardiff
CF10 3PW
ReNeuron Group plc
Annual Report and Accounts 2023
266079 ReNeuron AR_pp70-end.qxp 15/06/2023 19:10 Page 78
Shareholder Information
Shareholder enquiries
Any shareholder with enquiries should, in the first instance, contact our registrar, Computershare Services plc,
using the address provided above in the Advisers section.
Share price information
London Stock Exchange AIM (“AIM”) symbol: RENE
Information on the Company’s share price is available on the ReNeuron website at www.reneuron.com
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Financial calendar
Financial year-end
Full year-end results announced
Annual General Meeting
31 March 2023
25 May 2023
To be confirmed (prior to 30 September 2023)
Investor relations
ReNeuron Group plc
Pencoed Business Park
Pencoed
Bridgend
CF35 5HY
General enquiries: info@reneuron.com
Phone: +44 (0) 20 3819 8400
Media/investor enquiries: reneuron@walbrookpr.com
Phone: +44 (0) 20 7933 8780
Website: www.reneuron.com
ReNeuron Group plc
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Glossary of Scientific Terms
Adeno associated virus (AAV):
AAV based vectors are small and are generally administered directly to patients into target tissues or into the blood.
They allow expression of the therapeutic protein in cells that generally do not divide such as in the liver, the brain
or eye.
Allogeneic:
Where a tissue donor and recipient of the cells are from different individuals.
CAR-T/CAR-NK Cells:
These are T-cells or NK cells that have been modified or engineered to produce proteins on their surface called
chimeric antigen receptors (CARs). CAR-T cells main use is as a cancer therapy.
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.
CMC:
To appropriately manufacture a pharmaceutical or biologic product, specific manufacturing processes, product
characteristics and product testing must be defined in order to ensure that the product is safe, effective and consistent
between batches. These activities are known as chemistry, manufacturing and controls (CMC).
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.
Cytoplasm:
Clear, gel-like substance that fills the inside of a cell but excluding the nucleus.
Differentiation:
Development of a stem cell into a more specialised cell type.
DNA:
Deoxyribonucleic acid (DNA) is a molecule that carries genetic information.
Ectoderm:
One of the three primary germ layers formed in early embryonic development. It is the outermost layer and
differentiates to form epithelial and neural tissues (spinal cord, peripheral nerves and brain).
Endocytosis:
A cellular process in which substances are brought into the cell. The material to be internalised is surrounded by an
area of cell membrane, which then buds off inside the cell to form a vesicle containing the ingested material.
Endoderm:
The innermost of the three germ layers, or masses of cells (lying within ectoderm and mesoderm), which appears
early in the development of an animal embryo.
ReNeuron Group plc
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Glossary of Scientific Terms
continued
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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.
FDA:
US Food and Drug Administration (FDA) is responsible for protecting the public health by assuring the safety,
effectiveness, quality, and security of human and veterinary drugs, vaccines and other biological products, and
medical devices.
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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 (GMP refers to current
good manufacturing practice).
Immortalised cell line:
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.
Induced pluripotent stem cells (iPSC):
iPSCs are cells that are reprogrammed back into an embryonic-like pluripotent state that enables the development
of an unlimited source of any type of human cell needed for therapeutic purposes.
In vitro vs in vivo:
“In vitro” is in an artificial environment whereas “in vivo” is in a more natural environment (animal model).
Lentivirus:
Lentiviral based vectors integrate into patients’ cells and give rise to long term expression and can be used in both
dividing and non-dividing cells.
Ligand:
A substance that forms a complex with a biomolecule to serve a biological purpose.
Lipid nanoparticles:
Lipid nanoparticles (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.
Mesoderm:
One of the three primary germ layers in the very early embryo. The other two layers are the ectoderm (outside layer)
and endoderm (inside layer), with the mesoderm as the middle layer between them.
MHRA:
Medicines and Healthcare products Regulatory Agency (MHRA) is an Executive agency of the Department of Health
and Social Care in the United Kingdom which is responsible for ensuring that medicines and medical devices work
and are acceptably safe.
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Glossary of Scientific Terms
continued
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.
Monoclonal antibodies:
Identical antibodies derived from a group of identical cloned cells or from an expression vector. Monoclonal antibodies
recognise only one kind of antigen, i.e. they bind to the same site on a protein.
mRNA:
Messenger RNA is a type of single stranded RNA that carries codes from the DNA in a cell’s nucleus to the sites of
protein synthesis in the cell’s cytoplasm. One of the uses of synthetic mRNA is in the development of vaccines.
Nano-sized:
Between One–1000nm in size.
Peptides:
Short chains of between two and 50 amino acids, linked by peptide bonds.
Plasmid:
A small circle of DNA, which can be engineered to introduce genes of interest into cells.
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.
Proteins:
Large, complex molecules made up of amino acids. Proteins are required for the structure, function and regulation
of the body’s tissues and organs.
RNA:
Ribonucleic acid (RNA) is a polymeric molecule essential in various biological roles in coding, decoding, regulation
and expression of genes.
siRNA (small interfering RNA):
siRNA is a class of double-stranded RNA and non-coding RNA molecules with a length of 18–25 base pairs.
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.
TM Domain:
Transmembrane domain.
Viral vectors:
Tools commonly based on viruses used by molecular biologists to deliver genetic material into cells.
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