ANNUAL REPORT 2021
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HighlightsChairman’s LetterCEO’s ReportEnvironment, Social & GovernanceDirectors’ Report Operating & Financial Review Remuneration Report Auditor’s Independence DeclarationCorporate Governance StatementAnnual Financial ReportIndependent Audit Report to the MembersShareholder InformationIntellectual Property ReportCorporate Directory Testing for VIRALEZE™
confirms SPL7013 has
been shown in vitro to
have potent antiviral
and virucidal activity in
multiple respiratory viruses
and multiple variants of
SARS-CoV-2, including
inactivation of >99.9% of
the Delta variant, and three
other Variants of Concern,
in laboratory studies
VIRALEZE™ administered
nasally reduced viral load
by >99.9% (vs. saline
control) in the lungs
and trachea of animals
challenged with SARS-
CoV-2 and the study
was published in the
international peer-reviewed
journal, Viruses
VIRALEZE™ antiviral nasal
spray launched in Europe
Starpharma
signs new DEP®
partnership with
pharmaceutical
company
Chase Sun
VIRALEZE™ antiviral
nasal spray partners with
2021 English Premiership
rugby union champions,
Harlequins
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 1
Starpharma signed DEP® Research Agreement with Merck & Co., Inc., (MSD) for DEP® Antibody Drug Conjugates (ADCs) Starpharma’s second radiopharmaceutical candidate, DEP® HER2-lutetium, outperforms in human breast cancer model TGA approves an expansion of the marketing authorisation for VivaGel® BV (Fleurstat BVgel) to include prevention of recurrent BV indication VIRALEZE™ well tolerated in multiple dose clinical study LifeStyles launched the VivaGel® condom in countries in Europe, marketed under Absolute™ DUAL PROTECTION brand AstraZeneca expanded and expedited its DEP® AZD0466 clinical program into a global, multi-centre phase 1/2 trial Starpharma awarded $1 million in matched funding by the Australian Government’s Medical Research Future Fund (MRFF) Biomedical Translation Bridge (BTB) Program to expedite development and commercialisation of VIRALEZE™ VIRALEZE™ antiviral nasal spray registered in India Testing for VIRALEZE™ confirms SPL7013 active against other pandemic respiratory viruses “SARS” and “MERS”, in laboratory studies Testing for VIRALEZE™ confirms SPL7013 active against human respiratory syncytial virus (RSV), in laboratory studies VIRALEZE™ antiviral nasal spray registered for sale in UK/Europe Starpharma signed a sales and distribution agreement for VIRALEZE™ with LloydsPharmacy, one of the largest pharmacy groups in the UK VIRALEZE™ launched via LloydsPharmacy in the UK Starpharma creates slow-release soluble DEP® remdesivir, further demonstrating the broad applicability of DEP® in multiple therapeutic areas DEP® docetaxel and gemcitabine combination clinical study commences The Kinghorn Cancer Centre (Sydney) added as a clinical site for DEP® cabazitaxel and DEP® irinotecan phase 2 trials Starpharma raised $48.9M via oversubscribed placement and share purchase plan, to advance and expand the DEP® portfolio and support commercialisation of VIRALEZE™ 2021 HIGHLIGHTS CHAIRMAN'S LETTER
all four SARS-CoV-2 variants of concern
(Delta, Alpha, Beta, Gamma), as
well as respiratory syncytial virus (RSV),
SARS and MERS.
With such compelling antiviral data,
the company proceeded to register
VIRALEZE™ in Europe and India, and is
prioritising regulatory activities for other
regions. Shortly after achieving its first
registration, Starpharma signed a sales and
distribution agreement for VIRALEZE™ with
LloydsPharmacy, one of the largest pharmacy
groups in the UK. The product was launched
in March, ahead of our original timeline.
The team is working on further commercial
arrangements in other regions, including the
private (consumer) and Government markets
in India.
COVID-19 is not the first pandemic the world
has faced, and it will certainly not be the last.
The broad-spectrum antiviral and virucidal
activity of SPL7013 in multiple viruses and
multiple variants, is a significant advantage for
the product. VIRALEZE™, with its advantages
of excellent stability and room temperature
storage, has potential for providing an
additional layer of protection against a range
of respiratory viruses and in future pandemic
preparedness.
Alongside its antiviral work on VIRALEZE™,
Starpharma also expanded the application of
its cutting-edge DEP® drug delivery platform
to develop and patent a DEP® version of
Gilead’s antiviral drug, remdesivir (Veklury®),
achieving reduced injection volume and
improved pharmacokinetic characteristics.
In addition, Starpharma continued to build
its commercial opportunities for DEP® with a
new and important DEP® research agreement
with leading global pharmaceutical company
Merck & Co., Inc., (MSD), in the exciting and
growing area of Antibody Drug Conjugates
(ADCs). This agreement and Starpharma’s
impressive ADC data triggered a number of
new ADC discussions with other commercial
parties, and we look forward to progressing
those opportunities.
We also worked to support AstraZeneca with
multiple DEP® programs. During the year,
AstraZeneca expedited and expanded its
DEP® AZD0466 program to include a global
multi-region phase 1/2 clinical study, to
facilitate marketing approval.
Starpharma’s three internal phase 2 clinical
trials for DEP® irinotecan, DEP® docetaxel
and DEP® cabazitaxel continued to recruit and
progress well in the clinic, despite COVID-19
related delays. It is incredibly heartening
to see so many patients treated with our
DEP® products demonstrate efficacy signals,
particularly for those who have failed previous
treatments and have limited options. To
enable us to keep developing additional DEP®
candidates towards the clinic and build value
in this internal portfolio, Starpharma has also
deepened its development pipeline with a
range of new DEP® radiopharmaceutical and
DEP® ADC candidates.
The value of Starpharma’s DEP® platform
lies not only in its ability to improve the
performance of existing and new drugs and
reduce side effects, but also its versatility and
broad applicability to such a wide range of
medical products, including oncology agents,
antivirals and so on.
To ensure we were in the best position to
capitalise on DEP® opportunities and rapidly
commercialise VIRALEZE™, Starpharma
undertook a capital raising in 2020. On behalf
of the Board, I thank those investors and
shareholders who participated and ensured
that the company remains in an extremely
strong financial position.
We also thank our CEO, Dr Jackie Fairley,
and the entire team at Starpharma for their
determination and tremendous work this
year. The company continues to achieve
important and valuable milestones, which are
made possible through retaining and building
on our people, and instilling a culture of
innovation, teamwork, tenacity and superior
performance.
At a Board level, we were sorry to see Peter
Turvey step down as a director this year
due to ill health. My colleagues and I are
extremely grateful for Peter’s exceptional
contribution to the company during a period of
significant growth and wish him well. We also
farewelled retiring director Richard Hazleton
in November 2020, as foreshadowed in last
year's Annual Report. As part of our board
renewal process, we welcome Lynda Cheng
as an independent non-executive director
from 1 August 2021. Lynda Cheng has
extensive experience as a finance executive,
including substantial international experience
and several non-executive directorships.
The Board acknowledges the continued
support of Starpharma’s shareholders,
customers, and business partners. The
company has an increasingly broad and high-
value product pipeline, with multiple clinical-
stage products, more than 200 granted
patents and a growing list of partners that
together can generate significant long-term
value for our shareholders. Most importantly,
our products have real potential to create
positive, even life-changing, results for patient
and customer health worldwide.
Yours sincerely,
!
Rob Thomas AO
Starpharma Chairman
2 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
On behalf of the Board, I am delighted to present our 2021 Annual Report. FY2021 was an exciting year with opportunity and growth for Starpharma across its VIRALEZE™, VivaGel® and DEP® drug delivery portfolios, with multiple product launches and new partnerships.However, the year has not come without challenges posed by the global pandemic. We are living in unprecedented times, amid a global health crisis, which is having a profound effect on the lives of people around the world. I am proud of Starpharma’s proactive response to the pandemic, employing a comprehensive set of measures to ensure the safety of our staff and trial participants, while also minimising disruption to the operation of our laboratories in Melbourne throughout varying stages of restriction. During this time, our team’s demonstration of Starpharma’s core values of teamwork, superior performance and innovation, has been exemplary. Innovation is more important now than ever before. Our strategic focus is unchanged – to leverage Starpharma’s proprietary dendrimer technology to build a stable of high-value products and partnerships that address significant unmet patient need for the betterment of the community and our shareholders.Starpharma’s VIRALEZE™ antiviral nasal spray is an embodiment of this strategy, and the team’s commitment to expedite the development, manufacture, regulatory and commercialisation activities for this important product was truly extraordinary. The product is based on our existing proprietary broad spectrum antiviral dendrimer, SPL7013 – the agent in our VivaGel® products which are registered in more than 45 countries, and the subject of extensive and impressive published data. The company was pleased to complete and announce multiple laboratory studies showing that SPL7013 is rapid acting and virucidal, inactivating more than 99.9% of SARS-CoV-2, the virus that causes COVID-19, within 30 seconds. As coronavirus variants emerged during the year, Starpharma continued to undertake further antiviral testing which confirmed SPL7013 is also virucidal against ' CEO'S REPORT
range of respiratory viruses whereby SPL7013 was shown to inactivate
>99.9% of all four SARS-CoV-2 variants of concern, including Delta,
Alpha, Beta, and Gamma variants, in laboratory studies. We also
recently tested VIRALEZE™ in a SARS-CoV-2 challenge model where
it demonstrated a very high level of protection against SARS-CoV-2,
reducing viral load by >99.9% (vs. saline control), and significantly
reducing levels of pro-inflammatory cytokines. These results, in a
WHO-recommended animal model of coronavirus infection, provide
compelling data supporting the utility of a broad-spectrum nasal spray,
like VIRALEZE™, to reduce exposure to virus.
During the year, we were very excited to have impressive data on
SPL7013 published in the prestigious scientific journal Antiviral
Research and delighted to be recognised by the Australian Government
and awarded $1 million in matched funding by the Australian
Government’s Medical Research Future Fund (MRFF) for VIRALEZE™.
Starpharma has to date registered the product in Europe and India,
and achieved the first launch of VIRALEZE™ in late March 2021,
ahead of the original schedule, and within one year of commencing
development. Starpharma partnered with one of the largest pharmacy
groups in the UK, LloydsPharmacy, to distribute VIRALEZE™ across
their ~1,400 stores in the UK and online. At time of writing we note
the voluntary temporary pause in sales via LloydsPharmacy in the UK
while Starpharma and its distribution partner address correspondence
from the MHRA in relation to promotional claims. The promotion of
antiviral products during the pandemic has been closely scrutinised
by regulatory authorities around the world, and like other companies
who are operating in this area, we continue to work closely with
regulatory authorities to ensure any requests or concerns are thoroughly
addressed. Starpharma is continuing to prioritise regulatory and
commercialisation activities for VIRALEZE™ in multiple regions
and is in commercial discussions for local distribution arrangements
in India as well as other regions where registration is being sought,
including in Australia.
Finally, in our VivaGel® portfolio, our commercial partners continued
to roll out our products, including the launch of VivaGel® BV by
Mundipharma in Nordic countries and South Africa, and the launch
of the VivaGel® condom by LifeStyles in Europe. VivaGel® BV is now
registered in more than 45 countries, and we continue to work closely
with our partners to advance registrations to enable further launches in
other countries.
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 3
''2021 was an exciting and busy year for Starpharma and I am very pleased to report on another positive year for the company.We achieved many significant milestones across our business, including the rapid development and commercialisation of VIRALEZE™, the continued rollout of VivaGel® products, as well as securing new commercial DEP® partnerships, important progress with our internal clinical-stage DEP® assets and the expansion of our DEP® pipeline of candidates.Even with the unpredictable restrictions put in place due to COVID-19, I am pleased that Starpharma was able to operate with minimal disruption under a comprehensive COVID-19 Safe Plan. The company implemented a broad program of measures to protect the health and safety of our staff and clinical trial patients, and to ensure product supply to our customers, and as a result was able to reduce impact.Despite the extraordinary challenges presented by the pandemic over the past year, Starpharma has steadily maintained its strategic focus – to leverage its proprietary dendrimer technology to build a stable of high-value products and partnerships that address significant unmet patient need for the betterment of the community and our shareholders.During the year, we continued to progress our three most advanced DEP® products, DEP® docetaxel, DEP® cabazitaxel, and DEP® irinotecan, through each of their phase 2 clinical development programs. Despite varying impacts of COVID-19 on each trial, all continued to recruit patients and to make good progress. We also added further candidates to our DEP® preclinical development pipeline, including two new radiopharmaceutical candidates, DEP® zirconium and DEP® HER2-lutetium as well as to build on and advance our ADCs program.In parallel with the development of our internal DEP® assets, Starpharma continued to leverage its drug delivery platform to develop DEP® versions of its partners’ drugs. In an exciting development, early in 2021, AstraZeneca advised of its plan to expedite and expand the clinical program for its first DEP® product, AZD0466, into a multi-region phase 1/2 study, to facilitate marketing approvals as quickly as possible. We also signed an exciting new partnership, with Merck & Co., Inc., (MSD) to research specific dendrimer based Antibody Drug Conjugates (ADCs), utilising Starpharma’s DEP® technology. DEP® ADCs (Targeted DEP® conjugates) are an exciting and valuable extension of Starpharma’s DEP® platform and the basis of both internal candidates and a number of partnered programs in the area.This year I am especially proud of our staff, who worked tirelessly to rapidly bring our newest product, VIRALEZE™ antiviral nasal spray, to market during the year. Starpharma formulated its proprietary antiviral agent, SPL7013, into a convenient and easy to use nasal spray and pursued expedited regulatory pathways for VIRALEZE™. We tested SPL7013 extensively at the renowned Scripps Research Institute to ascertain the veracity of SPL7013 against coronavirus SARS-CoV-2 and a number of other important respiratory viruses. Given the broad spectrum antiviral activity of SPL7013, we were unsurprised to see impressive results, demonstrating potent activity of the agent against a Dr Jackie Fairley, Chief Executive OfficerPreclinical PipelineDeveloping new assets to progress to the clinicClinical-Stage AssetsThree internal phase 2 productsDEP® platformOffers exceptional optionality for multiple programs to run in parallelMultiple DEP® Partnered ProgramsPotential to generate significant revenue through royalties and milestonesInnovative products developed through leveraging existing products and utilising extensive dataSPL7013Multiple Products on MarketStarpharma has an extensive, expanding portfolio of high-value assets based on its proprietary dendrimer technologyStarpharma’s products and programs span across multiple treatment areas that address significant unmet patient need and build value for the community and our shareholdersDEP® treatment areas include: Antivirals; Anti-infectives; Chemotherapeutics; Radiotheranostics; Antibody Drug Conjugates (ADCs); Endocrinology & other non-oncology areas VIRALEZE™ Antiviral Nasal Spray
launched in UK/Europe FY21
1 SPL7013 is also known as astodrimer sodium
† Paull, J.R.A. et al. Virucidal and antiviral activity of astodrimer sodium
against SARS-CoV-2 in vitro (2021).
Antiviral Research: https://doi.org/10.1016/j.antiviral.2021.105089
4 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
a number of other markets, including Australia. VIRALEZE™ is not yet
approved for sale or supply in Australia. A submission has been made to
the Therapeutic Goods Administration in Australia.
SPL7013 in VIRALEZE™ has broad-spectrum activity against a
range of common respiratory viruses including SARS-CoV-2,
as shown in multiple laboratory studies
VIRALEZE™ was designed for use in situations where individuals may
be at risk of exposure to “cold”/respiratory viruses and in situations
where the nasal passages may be dry and irritated. The product should
be used together with other physical and pharmacological prevention
strategies, including masks and vaccines. As seen with recent
outbreaks, high risk situations for transmission include where social
distancing is not possible such as crowded environments like travel,
sporting and social events, and hotel quarantine.
Starpharma has been in
discussions with multiple
sporting teams interested in
using VIRALEZE™ to help reduce
their players and athletes' risk of
exposure to respiratory viruses.
In May, Starpharma announced a
partnership between VIRALEZE™
and Harlequins, a professional,
Premiership winning rugby union team in England. Harlequins’ Head
of Medical Services, Mike Lancaster, said the Quins were delighted
to add VIRALEZE™ to their range of COVID-19 safety measures,
and commented:
“Player health is paramount in professional sport and now
more than ever, we look to maximise the level of protection
we can offer our players. The VIRALEZE™ partnership
is an important additional level of protection for our Men’s
and Women’s players against viruses such as flu and
coronavirus/SARS-CoV-2.”
Testing at The Scripps Research Institute demonstrated SPL7013
is virucidal against several SARS-CoV-2 ‘Variants of Concern’ /
‘Variants of Interest’, confirming the broad-spectrum nature
of VIRALEZE™
Antiviral laboratory testing during the year confirmed SPL7013
has potent antiviral and virucidal activity against the Delta, Alpha,
Beta, Gamma, and Kappa variants of coronavirus SARS-CoV-2,
as demonstrated in laboratory studies conducted at The Scripps
Research Institute in the US. These studies were led by internationally
recognised virologist, Professor Philippe Gallay, who commented:
“It is remarkable that SPL7013 has demonstrated potent anti-SARS-
CoV-2 activity against the broad-spectrum of Variants of Concern,
Alpha, Beta, Gamma, and now importantly Delta, and Variant of
Interest, Kappa, in vitro. SPL7013 acts as a barrier to viral infection and
its broad-spectrum activity demonstrates its resilience against a rapidly
changing target.”
VIRALEZE™ has been developed by Starpharma as a barrier nasal spray against respiratory pathogens, following demonstration of the ability of the proprietary agent, SPL70131, to block and inactivate a broad-spectrum of viruses in laboratory studies.SPL7013, which already had a strong pedigree as an antiviral compound, was shown to be highly active in coronavirus SARS-CoV-2. Laboratory data published recently in a peer-reviewed journal show that SPL7013 is virucidal, irreversibly inactivating >99.9% of coronavirus SARS-CoV-2 (the virus that causes COVID-19) within one minute of exposure.† Starpharma was also awarded $1 million in funding in September 2020 for the development of VIRALEZE™ by the Australian Government’s Medical Research Future Fund (MRFF) under the Biomedical Translation Bridge (BTB) Program, recognising the potential for VIRALEZE™ to have a positive near-term impact.During the year, Starpharma expedited the manufacture, regulatory and commercialisation activities for VIRALEZE™. The company contracted a European manufacturer and undertook rapid scale-up and manufacture of VIRALEZE™ in readiness for market in early 2021. Starpharma directed its efforts to register VIRALEZE™ in markets with significant need, and secured product registrations in Europe in February 2021 and in India a few months later.In March 2021, Starpharma signed an exclusive sales, marketing and distribution agreement with LloydsPharmacy, one of the largest pharmacy groups in the UK, with ~1,400 pharmacy stores. The first commercial launch of VIRALEZE™, in the UK in March 2021, was ahead of the original projected timing for the product. LloydsPharmacy is part of the global McKesson group, a leading international pharmaceutical wholesale and retail company. McKesson UK is also one of the largest pharmaceutical wholesalers in the UK (via AAH), supplying over 14,000 independent pharmacies.Starpharma launched VIRALEZE™ in other parts of Europe in May 2021, and the product is available in certain markets online through the VIRALEZE™ product webstore.In India, the company is working towards launching VIRALEZE™ as soon as practicable. Starpharma is currently in discussion with a number of potential commercial partners for distribution into multiple channels.Meanwhile, consumers in India can already purchase the product via the VIRALEZE™ product webstore. In parallel with the aforementioned commercial activities, the company is progressing regulatory activities for Pictured below: Teammates from 2021 English premiership winning rugby union team, Harlequins CEO'S REPORT
All vaccines are particularly effective against severe illness, hospitalisation, and death.
^https://www.cdc.gov/coronavirus/2019-ncov/variants/variant.html
1https://cov-lineages.org/global_report_B.1.1.7.html
2https://cov-lineages.org/global_report_P.1.html
3https://cov-lineages.org/global_report_B.1.351.html
4https://cov-lineages.org/global_report_B.1.617.2.html
† Paull, J.R.A. et al. Virucidal and antiviral activity of astodrimer sodium against
SARS-CoV-2 in vitro (2021). Antiviral Research: https://doi.org/10.1016/j.antiviral.2021.105089
*(Tyssen et al, 2010), **(Gong et al, 2005), ***(Romanowski et al, 2021).
^ Hou, Y.J., et al. 2020. SARS-CoV-2 reverse genetics reveals a variable infection gradient in the
respiratory tract. Cell 182(2), 429-446.e14. https://doi.org/10.1016/j.cell.2020.05.042
1The study used the K18-hACE2 mouse model, which is an in vivo humanised mouse model that
expresses the human angiotensin converting enzyme (hACE2) receptor, the receptor used by
SARS-CoV-2 to infect cells in the human nasal cavity and respiratory tract.
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 5
The Alpha, Beta, Gamma and Delta variants of SARS-CoV-2 are all classified ‘Variants of Concern’ by global health authorities, and Kappa, a ‘Variant of Interest’, due to the variants’ increased transmissibility, increased disease severity (COVID-19), and/or reduced effectiveness of current treatments or vaccines. SPL7013 has shown, in laboratory studies, rapid and potent virucidal activity against all four SARS-CoV-2 Variants of Concern.Virus: SPL7013† Incubation TimePercent Reduction of Infectious Virus vs Virus Control^ USAlphaBetaGammaDeltaKappa30 seconds>99.9%>99.9%>99%>99%>99.99%>99.99%† 10 mg/mL SPL7013; ^ virus without exposure to SPL7013The antiviral agent in VIRALEZE™, SPL7013, has a deep pedigree as an antiviral compound, with substantial published data, including recently in the prestigious, peer reviewed scientific journal, Antiviral Research†. The broad-spectrum antiviral activity of SPL7013 is a significant feature of VIRALEZE™, especially as new SARS-CoV-2 variants continue to emerge and spread worldwide. Antiviral activity of SPL7013 has also been shown against other important respiratory viruses, including influenza viruses and human respiratory syncytial virus (RSV). Further, SPL7013 has been shown to have potent antiviral activity against respiratory viruses that have caused pandemics, including SARS, MERS, and Swine Flu (H1N1) – the last three pandemics before COVID-19. The wide breadth of the spectrum activity of SPL7013 is also evidenced by its potent activity in non-respiratory viruses including HIV*, HSV**, HPV, adenovirus***, HBV, and Zika, in laboratory studies.VIRALEZE™ Mechanism of ActionVIRALEZE™ is applied to the nasal cavity where respiratory viruses that cause colds, flu and more severe respiratory illness first attach and start to multiply. The nasal cavity has been identified as the primary site where SARS-CoV-2 becomes established, before spreading to the lungs.^ VIRALEZE™, which contains SPL7013, provides a protective moisture barrier in the nose and acts by trapping viruses, and blocking the interaction between virus attachment proteins, or “spikes”, and the human cells viruses are seeking to infect. “Spike” proteins on the surface of viruses that encounter VIRALEZE™ are physically trapped by SPL7013. This interaction is irreversible (“virucidal”) and blocked viruses can no longer infect cells.VIRALEZE™ protects against SARS-CoV-2 in challenge modelStarpharma recently announced publication of new data demonstrating the protective efficacy of VIRALEZE™ antiviral nasal spray against SARS-CoV-2 challenge in vivo in a humanised mouse model of coronavirus infection. The study results showed that VIRALEZE™ administered nasally reduced viral load by >99.9% (vs. saline control) in the lungs and trachea of animals challenged with SARS-CoV-2.1 The study also demonstrated protective effects of VIRALEZE™ against SARS-CoV-2 in animals, consistent with the previously reported in vitro virucidal activity of SPL7013, which reduces infectious SARS-CoV-2, including the Delta variant, by >99.9% within 30 seconds of exposure.The results of the study (conducted at The Scripps Research Institute) have been published in the international peer-reviewed journal, Viruses, in a special issue titled, Medical Interventions for Treatment and Prevention of SARS-CoV-2 Infections (https://www.mdpi.com/1999-4915/13/8/1656). VIRALEZE™ well tolerated in multiple dose clinical studyStarpharma has conducted a randomised double-blind, placebo-controlled, safety, tolerability and pharmacokinetic study of VIRALEZE™ in 40 healthy volunteers, who used the product four times a day for 14 days. The product was well tolerated with no notable or serious adverse events reported, and no participants discontinued product use. The study also confirmed that SPL7013 was not absorbed in the bloodstream following repeated nasal application. This finding is consistent with previous extensive nonclinical and clinical data showing lack of systemic absorption of SPL7013 following topical application to mucosal membranes.VivaGel® Portfolio The antiviral agent in VIRALEZE™, SPL7013, is also included in Starpharma’s VivaGel® products, which are currently registered in >45 countries and available for sale in the UK, Europe, Japan, South East Asia, South Africa, Australia and New Zealand. During the year Starpharma and its partners continued to progress regulatory activities for VivaGel® BV and the VivaGel® condom in multiple regions.SPL7013 highly active against all four WHO's current SARS-CoV-2 ‘Variants of Concern’“It is particularly exciting to see a product with this level of antiviral activity against a Variant of Concern that is much more transmissible than earlier SARS-CoV-2 strains. The latest data are consistent with our previous data showing antiviral and virucidal effects of SPL7013 against the US strain of this highly infectious virus and suggest a mechanism of action that is not affected by mutations in the virus spike proteins.” Internationally recognised virologist Philippe Gallay VivaGel® products are
now registered in >45 countries
Customer reviews
NORTH AMERICA
EUROPE
ON MARKET
AFRICA
ON MARKET
MIDDLE EAST
CY21: Pre-launch
preparations
ASIA
ON MARKET
LATIN AMERICA
CY21: Launched in
South Africa
AUSTRALIA
ON MARKET
NZ
ON MARKET
Could it
be bacterial
vaginosis?
Aspen’s Fleurstat
“Could it be BV?”
campaign was
awarded the 2020
Diamond Award
for “Best Launch
of a Consumer
Healthcare Product”.
These awards are
based on survey
responses from over
1,400 pharmacists
and pharmacy
assistants.
Fleurstat BVgel is for treatment of bacterial vaginosis (BV)
and relief from symptoms, including abnormal vaginal odour
and discharge – helping to normalise vaginal pH and restore
the normal vaginal flora balance. Fleurstat BVgel is available
in pharmacies without prescription.
VISIT FLEURSTAT.COM.AU
ASK YOUR PHARMACIST – THEY MUST DECIDE IF THIS PRODUCT IS RIGHT FOR YOU.
Always read the label. Follow the instructions for use. Do not use for more than 7 days unless a doctor has told you to.
See your doctor if symptoms persist after 7 days or recur within 2 weeks, and if you consider you may be at risk of
an STI. See a doctor if you are diabetic or pregnant/breastfeeding (or plan to be).
Distributed by Aspen Pharmacare Australia Pty Ltd, 34-36 Chandos St, St Leonards NSW 2065 Australia. Trademarks are owned by or licensed to the Aspen Group of companies. © 2020 Aspen Group
of companies or its licensor. All rights reserved. VivaGel® is a registered trademark of Starpharma Pty Ltd, 4-6 Southampton Crescent, Abbotsford, VIC 3067 Australia. August 2020. APSHCH1503.
VivaGel® condom – World-first product
and the only anti-viral condom with
lubricant incorporating SPL7013
During the year, Starpharma continued to
work closely with its marketing partners,
Okamoto and LifeStyles. The VivaGel®
condom was launched in countries in
Europe under the LifeStyles brand name
Absolute™ DUAL PROTECTION. The
company continues to work with its
partners to progress regulatory activities in
other regions.
6 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
VivaGel® BV VivaGel® BV is a novel, non-antibiotic therapy for the treatment of bacterial vaginosis (BV) and prevention of recurrent BV. BV is the most common vaginal infection worldwide and twice as common as thrush. One in three women will experience BV and half of these women will have recurrent BV. VivaGel® BV has been licensed in more than 160 countries to leading global pharmaceutical companies, including Mundipharma and Aspen. During the year, Mundipharma continued its rollout of VivaGel® BV with the launch of Betadine™ BV Gel in the Nordic region and South Africa. VivaGel® BV is now available for sale in the UK, Europe, South East Asia, South Africa, Australia, and New Zealand. The Starpharma and Mundipharma regulatory teams continue to work together to further expand regulatory submissions for VivaGel® BV, with the product now registered in >45 countries. Further regulatory submissions are underway to support additional launches of VivaGel® BV in Mundipharma’s territories. In September 2020, the Therapeutic Goods Administration (TGA) approved an expansion of the marketing authorisation for VivaGel® BV (Fleurstat BVgel) in Australia to include the indication of prevention of recurrent BV. The expanded claims under the marketing authorisation bring the approved indications for VivaGel® BV (Fleurstat BVgel) in line with those in Europe and Asia. This prevention of recurrent BV indication for VivaGel® BV includes prevention of unpleasant vaginal odour and discharge, and helping to maintain normal vaginal pH and vaginal flora balance.In the US, a formal dispute resolution process is ongoing with the FDA as part of the regulatory process for VivaGel® BV, and COVID-19 has had an impact on timing.Starpharma’s partners for VivaGel® BV have experienced some disruption to sales and marketing activities due to COVID-19 lockdowns. VivaGel® BV continues to attract very positive consumer reviews, with patients highlighting a range of benefits.After 18 months on market, 79% of pharmacists are aware of, and 53% most often recommend, Fleurstat.“Life changing. Every woman needs this.”301 global ratings CEO'S REPORT
DEP® cabazitaxel (phase 2) – clinical trial ongoing at sites in the
UK and Australia
The DEP® cabazitaxel clinical trial continues to progress well, with
42 patients now recruited and with multiple patients exhibiting efficacy
signals in prostate cancer, including:
•
Radiological responses, significant reductions in prostate-specific
antigen (PSA) and lack of new bone metastases.
Multiple heavily pre-treated patients also exhibited efficacy signals in
gastro-oesophageal, ovarian, cholangiocarcinoma, lung, thymic and
head and neck cancers.
•
CLINICAL CASE STUDY: DEP® CABAZITAXEL
65-year-old man with late-stage (metastatic)
gastro-oesophageal cancer
• Heavily pre-treated patient treated with >13 cycles and
three different rounds of anti-cancer treatment and cancer
progressed
• Patient received 6 cycles of DEP® cabazitaxel and
achieved a 50% reduction in total tumour size maintained
for >27 weeks
DEP® irinotecan (phase 2) – clinical trial ongoing at sites in
the UK and Australia
DEP® irinotecan clinical trial continues to progress well, with 54
patients now recruited, and multiple patients exhibiting encouraging
efficacy signals, including impressive tumour shrinkage and reductions
in tumour marker levels for multiple tumour types, including breast,
colorectal, ovarian, pancreatic, lung and oesophageal cancer.
•
Prolonged stable disease, impressive tumour shrinkage and
reductions in tumour marker levels for a number of tumour types,
including breast, colorectal, ovarian, pancreatic, lung
and oesophageal cancer.
CLINICAL CASE STUDY: DEP® IRINOTECAN
55-year-old woman with heavily pre-treated metastatic
ovarian cancer, which has a particularly poor prognosis
• Heavily pre-treated with >60 treatment cycles of 6 lines
of prior anti-cancer therapy
• Patient received 10 dose cycles of DEP® irinotecan to date
and achieved 98% reduction in CA-125 tumour marker
from baseline, with stable disease for >27 weeks (lesion
no longer visible)
Clinical case studies and other clinical information given in this document are given for illustrative
purposes only and are not necessarily a guide to product performance and no representation or
warranty is made by any person as to the likelihood of achievement or reasonableness of future
results. Nothing contained in this document, nor any information made available to you is, or shall be
relied upon as, a promise, representation, warranty or guarantee as to the past, present or the future
performance of any Starpharma product.
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 7
DEP® – Dendrimer Enhanced Drug DeliveryStarpharma’s dendrimers can be used to enhance the properties of existing and novel drugs. The approach, known as “drug delivery”, aims to ensure that more of the drug is more effectively delivered to the right part of the body. Starpharma's dendrimer drug delivery technology is based on polylysine dendrimers and known as DEP®.Starpharma’s DEP® platform enhances the commercial and therapeutic value of a wide range of drugs in oncology and beyond, offering exceptional optionality for multiple programs and DEP® licences to run in parallel.Starpharma uses DEP® both in its own drug development pipeline and with partners’ products.Chemotherapeutics: Life-cycle management and improvement of established drugs; New Chemical Entities; Combinations including immuno-oncologyRadiotheranostics: Radiotherapeutic and diagnostic applications, using a variety of different radioisotopes and targeting strategiesAntibody Drug Conjugates (ADCs): Flexible technology; Increased drug antibody ratio; Targeting group agnostic; Site selective payload attachmentNon-oncology: Antiviral; Anti-infective; EndocrinologyInternal DEP® assetsDEP® docetaxel (phase 2) – clinical trials ongoing at UK sitesClinical trials of DEP® docetaxel monotherapy and in combination with other anti-cancer agents continue to progress well, with 50 patients recruited and encouraging efficacy signals observed in lung, pancreatic, oesophageal, cholangiocarcinoma, gastric cancers, and other cancers, including:• Prolonged stable disease and tumour shrinkage in patients with pancreatic, oesophageal, and gastric cancer. These impressive tumour responses include stable disease for up to 40 weeks and significant tumour shrinkage in a heavily pre-treated oesophageal cancer patient, maintained for more than 28 weeks.• Notable lack of bone marrow toxicity (e.g. neutropenia) and other common side effects including hair-loss, mouth ulcers, anaphylaxis, and oedema.• Efficacy signals observed in heavily pre-treated patients (treated with up to 40 cycles and 9 different anti-cancer regimens previously). CLINICAL CASE STUDY: DEP® DOCETAXEL 65-year-old man with metastatic oesophageal cancer• Patient had progressed following four cycles of prior anti-cancer therapy• Patient achieved ~30% reduction of measurable tumours after only three cycles of DEP® docetaxel Starpharma’s DEP® platform delivers product benefits and enhances the commercial value of a wide range of drugs in many therapeutic areas
8 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
DEP® HER2-lutetium is a proprietary targeted dendrimer developed by Starpharma, which incorporates the radioisotope lutetium-177 (177Lu) and a novel HER2 targeting moiety (nanobody). During the year, Starpharma also developed a DEP® radiodiagnostic candidate, DEP® zirconium. Starpharma is in discussions with potential partners interested in licensing DEP® radiopharmaceutical candidates. Radiopharmaceuticals and diagnostics are a rapidly developing area of cancer treatment, and sales in this category are estimated to grow to $12–15 billion by 2030. The area has also seen several significant commercial acquisitions in recent years.DEP® Antibody Drug ConjugatesDuring the year, Starpharma progressed the development of DEP® Antibody Drug Conjugates (ADCs) candidates.DEP® ADCs provide many benefits over existing ADCs, including efficacy improvements. Compared to conventional ADCs and antibody therapies, Starpharma’s DEP® ADCs can overcome many issues faced today by existing approaches to ADCs, including:• Greater homogeneity• Site specific attachment of drug conjugate• High affinity• Delivery of significantly higher payload levels than conventional ADCs• Overcome issues of payload solubility and aggregationThe use of ADCs is an innovative and cutting-edge area in cancer therapy that continues to grow. Targeted DEP® conjugates (DEP® ADC’s) are an exciting and valuable application of Starpharma’s DEP® platform and the basis of internal development activities and a number of partner programs in the area.DEP® gemcitabineStarpharma has progressed key preclinical work on DEP® gemcitabine to facilitate its progression to a phase 1 clinical study.Non-oncology DEP® programsDuring the year, Starpharma also applied its DEP® technology to non-oncology areas (e.g. antiviral; anti-infective). In one of the company’s non-oncology DEP® programs, Starpharma was able to create an enhanced, long-acting version of Gilead's antiviral drug, remdesivir. The DEP® version achieved improved pharmacokinetics and improved solubility. The ability to create more soluble and improved formulations is a key advantage of the DEP® platform and of particular benefit to many drugs on market and in development, whereby solubility is problematic. In some cases, improvements in solubility can enable drugs to be administered in more ‘patient friendly’ ways (e.g. via subcutaneous injection rather than through IV infusion).The company continues to identify additional, high potential DEP® candidates for development and commercialisation.Starpharma has a deep pipelineof preclinical DEP® assets with broad applicability beyond oncologyDEP® products:PreclinicalPhase 1Phase 2DEP® irinotecanDEP® cabazitaxelDEP® docetaxelDEP® radiopharma- ceutical candidatesDEP® HER-2 ADCDEP® gemcitabineDEP® non-oncology candidatesDEP® oncology programsDEP® radiopharmaceuticalsDEP® radiopharmaceutical conjugates have the potential to minimise off-target toxicity, optimise pharmacokinetics and enhance efficacy when used alone or in combination with other therapeutic approaches.In March 2021, Starpharma announced that its second radiopharmaceutical candidate, DEP® HER2-lutetium, achieved complete tumour regression, outperforming Herceptin® (trastuzumab) labelled with lutetium (p<0.0001), in a human breast cancer model (BT474). DEP® HER2-lutetium was extremely well tolerated. CEO'S REPORT
DEP® – Dendrimer Enhanced Drug Delivery
Starpharma’s DEP® platform enhances the commercial and
therapeutic value of a wide range of drugs, creating multiple
potential revenue streams and significant IP leverage.
Starpharma’s DEP® technology represents a valuable platform for
partnering, which has the potential to generate significant revenue
through royalties and milestones.
Starpharma’s DEP® platform provides exceptional optionality and
leverage given that the DEP® technology can be licensed multiple
times, and licences are structured to enable multiple partnered DEP®
programs to run in parallel. Starpharma now has partnered DEP®
programs with multiple large pharmaceutical companies, including
AstraZeneca, Merck & Co., Inc., (MSD), Chase Sun, and other
undisclosed partnerships.
DEP® platform offers
optionality, enabling
multiple licences to run
in parallel
AstraZeneca global expansion of DEP® AZD0466 clinical program
Earlier this year, AstraZeneca advised its intention to expedite and
expand its clinical program for DEP® AZD0466 to include a global
multi-region phase 1/2 study with a focus in haematological tumours
(blood cancers). This trial design will facilitate seamless transition to
phase 2. This expanded program includes a substantial increase in
the number of trial sites globally including in the United States, Asia,
Europe, and Australia, for rapid recruitment. This investment and
expansion are being undertaken to facilitate expedited development
of AZD0466 with the objective of obtaining regulatory approval as
soon as possible for specific indications of high unmet clinical need.
“We are really excited to see the global expansion of the clinical
program for AZD0466 and AstraZeneca’s commitment to bringing this
important medicine to patients in need, as quickly as possible.”
Dr Jackie Fairley, CEO Starpharma
AZD0466 is a highly optimised nanomedicine formulation
of AstraZeneca’s novel dual Bcl-2/xL inhibitor that utilises
Starpharma’s DEP® technology. The development of
AZD0466 is being progressed under its multi-product DEP®
licence whereby Starpharma is eligible to receive significant
development, launch and sales milestones, plus royalties on
net sales of the product.
AZD0466 is described as having the potential to be a ‘best-in-class’
agent with a broad opportunity in solid and haematological tumours
due to its ability to target both Bcl2 and Bcl/xL.
DEP® Research Agreement signed with Merck & Co., Inc., (MSD)
for dendrimer-based DEP® ADCs (Antibody Drug Conjugates)
In February 2021, Starpharma announced a new Research
Agreement with leading global pharmaceutical company MSD,
utilising Starpharma’s proprietary DEP® technology to explore
dendrimer-based ADCs.
DRUG
LINKER
PEG
ANTIBODY
DEP® DENDRIMER
MSD is ranked 4th globally of all pharmaceutical companies
by total sales revenue and is a recognised leader in oncology,
making them an ideal partner for Starpharma’s DEP® platform.
The use of ADCs in cancer therapy continues to grow,
with 2020 global sales of Roche’s Kadcyla® exceeding
US$1.8 billion.
ADCs incorporate the specific cell targeting property of antibodies with
the cell killing properties of chemically conjugated drugs, to provide a
targeted therapeutic with reduced off target toxicities.
DEP® ADCs have the potential to overcome the limitation of low drug
loading (DAR), which is a feature of first-generation ADCs. DEP®
ADCs exploit the unique potential of Starpharma’s DEP® technology
to provide enhanced characteristics to ADCs including greater
homogeneity, site specific attachment, and higher drug antibody ratio
than conventional ADC approaches.
Following the MSD partnership for DEP® ADCs, Starpharma has
initiated a number of new discussions for other DEP® ADC partnerships.
Other DEP® partnerships and collaborations
During the year, Starpharma also progressed other disclosed/
undisclosed partnered programs, including with Chase Sun in DEP®
anti-infectives, and its other DEP® program with AstraZeneca, which
involves developing a DEP® version of one of their major marketed
oncology drugs.
Starpharma is engaged in active discussions with further partners
in relation to DEP® with a number of companies, including leading
pharmaceutical companies.
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 9
Starpharma’s DEP® partneringcreates significant valueand optionality 3 Year Financial Summary
10 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Overview of Financial ResultsTotal revenue and other income for the year was $3.5 million, and included product sales and royalties from VIRALEZE™ and VivaGel® products, as well as $0.9 million of grant funding awarded by the Medical Research Future Fund (MRFF) to expedite development and commercialisation of VIRALEZE™.Starpharma reported a net loss of $19.7 million, compared to $14.7 million last year. The key driver of this movement was the $4.4 million reduction in revenue in FY21 compared to the prior year due to the receipt of a US$3 million milestone payment from AstraZeneca in FY20. There was also a $1.1 million unfavourable foreign exchange movement in FY21, compared to the prior corresponding period on foreign currencies held. The total net investment in R&D programs for the year ended 30 June 2021 was largely consistent with FY20, however there was reduced expenditure on VivaGel® products, and an increased proportion of R&D expenditure on Starpharma’s internal DEP® assets, as well as one-off costs for the development of VIRALEZE™. The development costs of VIRALEZE™ were partially offset by the MRFF grant funding.The net operating cash outflows for the year were $14.8 million, compared to $10.8 million last year. Cash inflows from financing activities for the financial year include net proceeds of $46.9 million resulting from an equity placement and share purchase plan. Starpharma ended the financial year with a strong cash balance of $60.5 million. 2021 $M2020 $M2019 $MRevenue & other income 3.16.61.7Interest revenue0.40.51.0Total revenue and other income3.57.12.7Expenditure(23.2)(21.8)(17.0)Loss for the period(19.7)(14.7)(14.3)Net operating cash outflows(14.8)(10.8)(10.3)Net investing and financing cash inflows (outflows)46.1(0.7)(0.3)Cash and cash equivalents at end of year60.530.141.3 CEO'S REPORT
Review and future outlook
2021 has been a challenging and rewarding year for Starpharma.
Looking back on this past year, I am very proud of our dedicated team
of around 50 people, who have worked diligently while also navigating
through a rapidly changing global pandemic.
Starpharma has accomplished significant achievements and
milestones across the business this year despite the challenges
of COVID-19. This is a testament to the dedication, teamwork and
perseverance of our employees, and we thank all of them for their
extraordinary contribution throughout this year.
In response to the ongoing global pandemic, our team worked fervently
to expedite the development, registration and launch of VIRALEZE™
antiviral nasal spray. In the space of just one year, we successfully
developed and launched VIRALEZE™ and made the product available
to consumers in multiple regions. Our team’s focus is now firmly on
building revenues through rapidly progressing additional registrations
and launches as well as commercial and distribution arrangements in
other countries and regions, such as India, where there is high
demand for a product like VIRALEZE™.
This year, we will also continue to focus on building new and/or
expanded partnerships in DEP® drug delivery – through licensing
our platform to assist partners in developing or improving their drugs,
and to pursue licenses for the DEP® assets in our own expanding
pipeline. The DEP® partnerships that we have already cultivated,
with companies such as AstraZeneca and Merck & Co., Inc., have the
potential to create life-changing products for patients, and significant
revenues for Starpharma by way of milestones and royalties. The
DEP® platform provides exceptional optionality and can be licensed
to multiple partners, and applied to multiple products in parallel, thus
has the potential to generate significant value. In particular, our team
has seen growing international interest in commercial discussions
in the area for DEP® Antibody Drug Conjugates (ADCs) and DEP®
radiopharmaceuticals, and we look forward to progressing these
arrangements in the future.
It has also been pleasing to see the continued positive reviews and
increasing awareness of VivaGel® BV products from consumers and
healthcare professionals around the world. Our team takes great pride
in providing women suffering from bacterial vaginosis with a novel
and effective product to manage this troublesome condition. VivaGel®
BV is now registered in more than 45 countries and available in
the UK, Europe, Japan, South East Asia, South Africa, Australia and
New Zealand. In the year ahead, we look forward to working with our
partners to achieve further approvals and launches in other regions,
and to continue building the brand presence globally.
In the year ahead, we remain focused on leveraging our existing
products by pursuing further registrations, launches and revenue
growth for VIRALEZE™, VivaGel® BV and VivaGel® Condom, while
also pursuing partnerships for our DEP® drug delivery technology and
our DEP® assets. This includes progressing our three DEP® phase 2
trials as quickly as possible, and adding value enhancing combinations
as appropriate.
I want to again thank our dedicated staff, and also our committed
partners and industry stakeholders for their support and contributions.
I also wish to acknowledge the support of our investors and
shareholders, including those who participated in our 2020 capital
raising. This financing further strengthened Starpharma’s balance
sheet and ensured that the company is in an excellent position to
accelerate the clinical development, regulatory, commercialisation
and launch activities across its portfolios. Starpharma’s growing list
of valuable assets and DEP® programs places the company in an
excellent position for growth. With multiple products in the pipeline,
the clinic and on market, Starpharma is staying the course to improve
patient health worldwide and build shareholder value.
Jackie Fairley
Chief Executive Officer
Outlook activities & milestones
Strategy & expected outcomes
DEP®
• Progress and completion of DEP® docetaxel,
• Progress with existing partnered DEP® programs,
DEP® cabazitaxel & DEP® irinotecan phase 2 trials;
progress value-adding combination studies
• AZD0466 clinical progress, expansion of trial sites
recruitment & receipts from milestones
• AstraZeneca: Exercise of Option Agreement &/or
deals for further compounds
including with Merck & Co., Inc., & Chase Sun
• Execute/expand new DEP® partnerships/agreements
• Advance DEP® radiopharmaceuticals, DEP® ADCs
& DEP® antivirals
• Advance value-adding DEP®
combinations in clinic & other
DEP® products
Leveraging the
DEP® platform
to build value
Advancing
internal DEP®
assets builds value
for future licensing
Partnered DEP®
– upfront fees,
milestones,
royalties
VIRALEZE™
• Further roll-out of VIRALEZE™
Antiviral Nasal Spray
• Further distribution & marketing
arrangements with commercial partners
• Further VIRALEZE™ registrations in other regions
• Continued testing of SPL7013 against
• Further VIRALEZE™ launches in other regions
SARS-CoV-2 variants & other
respiratory viruses
VivaGel®
• Commercial roll-out of VivaGel® BV in Europe,
• Further VivaGel® BV licences
Asia & other markets
• Further regulatory approvals & launches for
VivaGel® BV; building revenues – milestones &
sales/royalties
• Ongoing formal FDA review process
• VivaGel® condom approvals/
launch in additional regions
• Further development/
co-development
of SPL7013
Leveraging
existing
approvals for
SPL7013
Commercial outcomes:
products on market –
milestones, product sales,
royalties, revenue share
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 11
FY21
FY20
12 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
'Female representation on Starpharma’s Board has been over 30% for almost a decade, making it one of a handful of Australian companies with this level of longstanding diversity at Board level.We have a highly skilled and specialised workforce. The employees of Starpharma are critical to the company achieving business success. To ensure a positive culture and that Starpharma remains a safe, healthy, and attractive workplace for our employees, Starpharma has well developed workplace policies and practices. Starpharma’s code of conduct reflects the core values of the company and sets out standards of behaviour in matters including equal employment opportunity and best practice in recruitment.At Starpharma, occupational health and safety is key and is considered every employee’s responsibility. Starpharma’s occupational, health and safety program is designed to prevent work related injuries and accidents and the company has an excellent track record in this regard. The company’s zero harm objective is promoted through a culture of safety and hazard reporting and overseen by an active OH&S committee. OH&S is monitored by both lead and lag indicators. Incidents and near misses are reported and investigated in order to understand root causes and prevent recurrence. During FY21 and at least the previous 10 years, Starpharma has had no WorkSafe notifiable incidents.Our PartnersStarpharma has established important business and scientific partnerships with leading global companies, international medical research organisations and key governmental and non-governmental departments and institutions. These relationships offer critical inputs from world experts and provide a pathway for products to enter the market and change daily lives.Product & Patient SafetyStarpharma’s products are developed in accordance with the relevant regulatory requirements, including for the areas of research, clinical trials, and manufacturing.Starpharma takes product quality very seriously and has a comprehensive quality management system with well-developed quality systems processes, including (but not limited to): change control, internal auditing, complaint handling, post market surveillance and supplier management. Starpharma also ensures that its manufacturing suppliers have all the necessary controls in place for quality performance.SuppliersWhile Starpharma’s operations are relatively small in respect to the use of suppliers, the company is conscious of responsible and ethical sourcing. The company’s supplier code includes a wide range of business practices to provide suppliers with clear expectations regarding their conduct. The company reviews the applicable guidance on responsible sourcing and sustainable procurement with the aim of creating greater social and sustainability benefits through its purchasing activities.Environment Starpharma is committed to conducting its operations in an environmentally responsible manner, as healthy people rely on a healthy environment. Reducing our environmental footprint is not only important for human and environmental health – it also leads to the long-term health of economies and our business. The company ensures it has appropriate systems in place to comply with relevant Federal, State and Local regulations, and has adopted documented procedures and processes to ensure all waste products are disposed of in accordance with relevant environmental regulations.The full ESG Report is available at www.starpharma.com. ENVIRONMENT, SOCIAL & GOVERNANCEAs an ASX300 biopharmaceutical company, Starpharma produces positive societal outcomes for its stakeholders, including patients, consumers, shareholders, employees, the broader community and the environment. The very nature of Starpharma's products affords the opportunity of changing lives for the better.Through innovative research and development, Starpharma and its partners are creating therapies which have the potential to profoundly improve patient health worldwide.Starpharma’s 2021 ESG Report illustrates how the company seeks to achieve its strategic objectives, and in doing so, contribute to the broader community and bring important medicines to patients in need.The report outlines Starpharma’s commitment to responsible business practices to ensure its products are being developed safely and ethically, in compliance with the relevant regulatory requirements, including for the areas of research, commercialisation and supply.Starpharma’s ESG Framework comprises Products & Patient Health, Our People, Governance, and the Environment, and is embedded with specific activities and initiatives to achieve high standards in each of these areas.Our People, Our ValuesDeveloping new pharmaceutical and medical products is both challenging and rewarding. Doing so requires a culture where our people have the right balance of both patient-centric and commercially-focussed values.Starpharma prides itself on a strong culture based on innovation, accountability, performance, and ethical behaviour. The company’s core values include teamwork, superior performance, innovation, integrity, and accountability.Working with a sense of urgency, innovative thinking, resilience and collaboration are central to these company values. Our people have a strong sense of how their work benefits the broader community.Starpharma is committed to continued development of its organisational capabilities, including a focus on initiatives that promote diversity and inclusiveness in the workplace. We believe having a diverse workforce drives better outcomes for our business and provides the company with greater breadth of experience and ideas.At 30 June 2021, almost half of our employees were born outside of Australia and approximately half of our employees were female. More than 40% of leadership roles (i.e. CEO minus 2) at Starpharma were held by women, and at Board level, 40% per cent of directors were female (increasing to 60% female from 1 August 2021). Directors’ Report
Your directors have pleasure in presenting this report on the consolidated entity (referred to hereafter as the “group”, “company”, or
“Starpharma”) consisting of Starpharma Holdings Limited (the “Parent Entity”) and the entities it controlled at the end of, or during, the year
ended 30 June 2021.
Directors
The following persons were directors of Starpharma Holdings Limited at the date of this report and during the whole of the financial year:
R B Thomas (Chairman)
D J McIntyre
J K Fairley (Chief Executive Officer)
Z Peach
L Cheng was appointed as a director on 1 August 2021 and continues in office at the date of this report.
P R Turvey was a director for the whole of the financial year until his resignation on 29 July 2021.
R A Hazleton was a director from the beginning of the financial year until his retirement on 20 November 2020.
Information on Directors
experience with US based companies as they progress from
research to commercialisation.
Robert B Thomas AO, BEc, MSAA, SF Fin, FAICD, FRSN
Independent non-executive director (appointed 4 December 2013)
and Chairman from 13 June 2014
Interests in Starpharma Holdings Limited
875,000 ordinary shares
Experience
Mr Thomas has a strong background in financial services and
capital markets and is a non-executive director of several
Australian listed companies. Formerly Mr Thomas was a Partner of
Potter Partners (now UBS) where he was also Head of Research.
Mr Thomas is the former Chief Executive Officer (CEO) of County
NatWest Securities and then became CEO and then Chairman of
Citibank Corporate and Investment Bank in Australia. Mr Thomas
has also held the position of Chairman at Australian Wealth
Management Ltd (ultimately IOOF Ltd), TAL (Australia’s largest life
insurance company) and HeartWare® International Inc, the second
largest global manufacturer of left ventricular assist heart pumps.
Mr Thomas is currently a non-executive director of ASX-listed
Biotron Limited and Clarity Pharmaceuticals Limited. Mr Thomas is
also Chair of AusBio Ltd, Grahger Retail Securities, Co-Chair of
the State Library of NSW Foundation and a director of O’Connell
Street Associates.
For many years Mr Thomas was regarded as one of Australia’s
leading financial analysts and regularly lectured with Financial
Services Institute of Australia (FINSIA). He has considerable
expertise in Mergers & Acquisition (M&A) and capital markets
including advising on the floats of Commonwealth Bank of
Australia and Qantas, and vast experience in Audit and Risk
Management. Mr Thomas is also approved under the NSW
prequalification scheme for Audit and Risk Committee Independent
Chairs and Members for government/public sector agencies and
has previously served as the Chairman of the Audit and Risk
Committee of Virgin Australia Limited (for 11 years), HeartWare®
International Inc, REVA Medical Limited and the State Library of
NSW.
Mr Thomas holds a Bachelor of Economics from Monash
University, a Diploma of Business (Accounting) from Swinburne
and is a fellow of FINSIA. Mr Thomas is also a Master
Stockbroker, a Fellow of the Australian Institute of Company
Directors and a Fellow of the Royal Society of New South Wales.
Committee membership
Member of Remuneration & Nomination Committee;
Member of Audit & Risk Committee.
Other current directorships of ASX listed entities: Biotron
Limited and Clarity Pharmaceuticals Limited.
Directorships of other ASX listed entities within last three
years: REVA Medical Inc.
Specific skills and experience areas
In addition to Mr Thomas’ significant finance and M&A/capital
markets experience, Mr Thomas’ non-executive roles with various
ASX listed companies have deepened his skills and experience in
relation to accounting/corporate finance, audit and risk;
governance; licensing and commercialisation of innovation;
strategy and risk management; occupational health & safety
(“OH&S”); and remuneration. He has also had significant
Starpharma Holdings Limited Annual Report 2021
Jacinth (Jackie) K Fairley BSc, BVSc (Hons), MBA, GAICD,
FTSE
Chief Executive Officer and Director (appointed 1 July 2006)
Experience
Dr Jackie Fairley has more than 30 years of operational
experience in the pharmaceutical and biotechnology industries
working in senior management roles with companies including
CSL Limited (CSL) and Faulding (now Pfizer). In those roles Dr
Fairley had responsibilities which included clinical, regulatory,
business development, product development management and
general management. At Faulding Dr Fairley was responsible for
Global Product Development, Regulatory Affairs and Business
Development for Faulding’s Hospital Business which operated in
more than 60 countries.
Dr Fairley holds first class honours degrees in Science
(pharmacology and pathology) and Veterinary Science from
Melbourne University and was a practicing veterinary surgeon prior
to joining CSL. Whilst at CSL Dr Fairley obtained a Master of
Business Administration from the Melbourne Business School
where she was the recipient of the prestigious Clemenger Medal.
Dr Fairley is also a Graduate of the Australian Institute of
Company Directors.
Dr Fairley is a non-executive director of listed investment company
Mirrabooka Investments Limited and Chairman of the Invest
Victoria Advisory Board. Dr Fairley is a past member of the
Federal Government’s Commonwealth Science Council and
Pharmaceutical Industry Working Group; the Federal Ministerial
Biotechnology Advisory Council and previously served on the
Board of Melbourne Business School for 10 years.
Committees
Attends Board Committee meetings by invitation.
Other current directorships of ASX listed entities: Mirrabooka
Investments Limited.
Directorships of other ASX listed entities within the last three
years: None.
Specific skills and experience areas
With more than 30 years’ experience in executive roles up to and
including as CEO and executive director of ASX listed and unlisted
pharmaceutical and biotechnology companies, Dr Fairley’s
experience covers all key areas described in the Board skills
matrix. In particular, Dr Fairley has significant leadership skills in
healthcare and scientific research; pharmaceutical development;
international experience; licensing and commercialisation of
innovation; business development; strategy and risk management;
and M&A/capital markets.
Interests in Starpharma Holdings Limited
3,925,434 ordinary shares
5,234,242 employee performance rights
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 13
13
'
Directors’ Report
Zita Peach BSc, GAICD, FAMI
Independent non-executive director (appointed 1 October 2011)
David McIntyre CPA, LL.B., MBA and B. Econs (Acc)
Independent non-executive director (appointed 1 March 2020)
Experience
Ms Peach has more than 25 years of executive commercial
experience in the pharmaceutical, biotechnology, medical devices
and health services industries. She worked for major industry
players such as CSL Limited and Merck Sharp & Dohme, the
Australian subsidiary of Merck Inc. Ms Peach’s most recent
executive position was as the Managing Director for Australia and
New Zealand and Executive Vice President, South Asia Pacific for
Fresenius Kabi, a leading provider of pharmaceutical products and
medical devices to hospitals. Previously, Ms Peach was Vice
President, Business Development, for CSL Limited, a position she
held for ten years.
Ms Peach has substantial international and local expertise in the
areas of pharmaceutical/medical device product development,
commercialisation of products and technologies, marketing and
sales, licensing, M&A and international expansions. She has
overseen manufacturing, logistics, regulatory affairs, quality
assurance, clinical services, human resources, finance,
information technology, public policy, business development,
marketing and sales at Managing Director and CEO level.
Ms Peach is Chairman of Pacific Smiles Group Limited, and a
Non-Executive Director of the ASX-listed Monash IVF Group
Limited, and Visioneering Technologies, Inc. Ms Peach is also a
member of the Hudson Institute of Medical Research Board.
Ms Peach is a Fellow of the Australian Institute of Company
Directors and a Fellow of the Australian Marketing Institute.
Committee membership
Chair of the Remuneration & Nomination Committee.
Member of Audit & Risk Committee.
Other current directorships of ASX listed entities: Monash IVF
Group Limited, Visioneering Technologies, Inc. and Pacific Smiles
Group Limited.
Directorships of other ASX listed entities within the last three
years: AirXpanders, Inc.
Specific skills and experience areas
With over 25 years’ experience in various senior executive roles
within ASX listed and international pharmaceutical and
biotechnology companies, as well as numerous non-executive
directorships in the biotechnology/pharmaceutical sector, Ms
Peach’s experience covers all key areas described in the Board
skills matrix. In particular, Ms Peach has substantial expertise as a
leader in healthcare and scientific research;
pharmaceutical/product development; licensing and
commercialisation of innovation; science and technology; sales,
marketing and business development; strategy and risk
management; remuneration; and M&A/capital markets.
Interests in Starpharma Holdings Limited
48,975 ordinary shares
Experience
Mr McIntyre has more than 20 years of executive experience
including 18 years in the life sciences sector, having held various
C-suite level roles at Tessa Therapeutics, Inc., AVITA
Therapeutics, Inc., HeartWare® International, Inc., and Braeburn,
Inc.
Mr McIntyre’s experience also includes seven years as a Partner
at Apple Tree Partners, a multi-billion-dollar life science venture
capital and growth equity fund, giving him a deep knowledge of,
and extensive contacts, in the US pharma, medical device and
biotech markets. During this time, Mr McIntyre served as a non-
executive director of several United States life science companies.
Prior to entering life sciences, Mr McIntyre practiced as a senior
attorney at Baker & McKenzie and KPMG specialising in M&A,
initial public offerings, and corporate law and also held various
senior finance roles in both multi-national companies and small
growth companies.
Mr McIntyre is based in the United States and brings to the table
an international lens on life science licensing and
commercialisation, marketing and business and development, and
M&A/capital markets. Mr McIntyre has significant experience in the
areas of accounting/corporate finance, audit and risk, strategy and
risk management.
Mr McIntyre holds a Bachelor of Economics (Accounting) from the
University of Sydney, Australia, a Bachelor of Laws from the
University of Technology, Sydney and a Masters of Business
Administration from Duke University Fuqua School of Business
(Fuqua Scholar) from Durham, North Carolina, in the United States
of America. Mr McIntyre is a Certified Practising Accountant and is
also admitted as a legal practitioner of the Supreme Court of New
South Wales and of the High Court of Australia.
Committee membership
Acting Chair of Member of Audit & Risk Committee.
Other current directorships of ASX listed entities: None.
Directorships of other ASX listed entities within the last three
years: Redflex Holdings Limited.
Specific skills and experience areas
With more than 20 years of executive experience including 18
years in the life science sector, Mr McIntyre’s experience covers all
key areas described in the Board skills matrix. In particular, Mr
McIntyre has substantial expertise in accounting/corporate finance,
audit and risk; M&A/capital markets; governance; licensing and
commercialisation of innovation; strategy and risk management,
having held executive roles including Chief Financial Officer and
Chief Operating Officer. He has also had significant experience
with United States based companies in the medical device,
biotechnology and pharmaceutical sector.
Interests in Starpharma Holdings Limited
16,240 ordinary shares
14 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
14
Directors’ Report
Peter R Turvey BA/LLB, MAICD
Independent non-executive director (appointed 19 March 2012)
and Deputy Chairman from 26 November 2019; resigned 29 July
2021)
Richard A Hazleton BSChE, MSChE, MBA, HonDrEng,
HonDrCommSc
Independent non-executive director (appointed 1 December 2006;
retired 20 November 2020)
Experience
Mr Turvey has had more than 30 years of experience in the
biotech/pharmaceutical industry having been former Executive
Vice President Licensing, Group General Counsel and Company
Secretary of global biopharmaceutical company CSL, retiring in
2011.
Mr Turvey played a key role in the transformation of CSL from a
government owned enterprise, through ASX listing in 1994, to a
global plasma and biopharmaceutical company. He also had
responsibility for the protection and licensing of CSL's intellectual
property and for risk management within CSL, which included
management of the internal audit function, reporting to the Audit &
Risk Management Committee of the Board as well as being the
Chairman of the Corporate Risk Management Committee. In his
senior executive role at CSL, Mr Turvey was actively involved in
CSL’s extensive M&A and equity capital raising activities over a 15
year period, including during the time of the float of CSL as a
publicly listed company. This experience has been further
enhanced by Mr Turvey’s non-executive directorships of various
ASX listed biotechnology companies.
In addition to his expertise in corporate finance, audit and risk
management, Mr Turvey has extensive experience in
commercialisation and pharmaceutical product development.
Committee membership (until resignation)
Chair of Audit & Risk Committee
Member of Remuneration and Nomination Committee
Other current directorships of ASX listed entities: None.
Directorships of other ASX listed entities within the last three
years: None.
Specific skills and experience areas
With over 30 years of executive experience in the biotechnology
industry of which 20 years were at CSL, followed by non-executive
directorships at a number of ASX listed pharmaceutical and
biotechnology companies, Mr Turvey has significant leadership
skills and experience in healthcare and/or scientific research;
pharmaceutical/product development; international experience and
skills in regulation/public policy; licensing and commercialisation of
innovation; business development; governance; strategy; risk
management; audit and risk; and M&A/capital markets.
Mr Turvey resigned as a director on 29 July 2021 due to ill health.
Interests in Starpharma Holdings Limited
193,155 ordinary shares
Experience
Mr Hazleton is a former Chairman and CEO of US-based global
corporation Dow Corning. He joined Dow Corning in 1965 and held
numerous positions in engineering, manufacturing and finance,
both in the US and Europe. He was appointed as CEO of the
company in 1993, and Chairman of the Board of Directors and
CEO in 1994. During his career with Dow Corning, Mr Hazleton
performed the roles of European Area Vice President and Director
of Finance, and after returning to the US, Corporate Controller and
Chief Accounting Officer. In this latter global role he was
responsible for the preparation of all public financial reports, and
relationships with financial regulatory agencies and independent
auditors. Mr Hazleton retired from Dow Corning in 2001.
Mr Hazleton is based in the United States and has an international
lens on product development, manufacturing, science and
technology. He has significant experience in the areas of strategy,
accounting/corporate finance and audit and risk.
Mr Hazleton has served on the boards of the American Chemistry
Council and the Chemical Bank and Trust Company (Midland, MI,
USA) as well as several non-profit social service agencies in
Michigan and Belgium.
Committee membership (until resignation)
Member of Audit & Risk Committee;
Member of Remuneration & Nomination Committee.
Other current directorships of ASX listed entities: None.
Directorships of other ASX listed entities within the last three
years: None.
Specific skills and experience areas
Having held various executive roles up to and including as
Chairman and CEO of Dow Corning over a 36 year period as well
as non-executive directorships, Mr Hazleton has significant skills
and experience including international experience;
regulation/public policy, licensing and commercialisation of
innovation, science and technology; governance; strategy and risk
management; accounting/corporate finance, audit and risk; OH&S;
and remuneration.
Mr Hazleton retired as a director on 20 November 2020.
Interests in Starpharma Holdings Limited
208,466 ordinary shares
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 15
15
Directors’ Report Operating & Financial Review
Lynda Cheng B.Com, LLB (Hons), GAICD
Independent non-executive director (appointed 1 August 2021)
Experience
Ms Cheng has a strong background in finance with more than 25
years of experience as a finance executive including more than 15
years at Visy Industries/Pratt Holdings and 10 years in investment
banking. She has significant commercial and international
corporate expertise including experience in financial services,
manufacturing, export finance, infrastructure, education as well as
market entry, growth and technology.
Ms Cheng is currently Director of Corporate Development and
Mergers & Acquisitions at Visy Industries / Pratt Holdings and has
held various other roles in the group including CFO. Ms Cheng’s
earlier roles include as a lawyer at Blake Dawson, before moving
into investment banking with J.P. Morgan in their Melbourne,
Sydney, San Francisco and New York offices.
Ms Cheng is currently a non-executive director of Export Finance
Australia and a member of the Wesley College Council. Ms Cheng
previously served as a member of the Australian Government's
International Development Policy Expert Panel and Deputy Chair
and Chair of the Finance, Audit and Risk Committee of South East
Water.
Ms Cheng holds a Bachelor of Law (Honours) and Commerce
degree, majoring in actuarial studies and economics, from the
University of Melbourne and is a graduate member of the
Australian Institute of Company Directors.
Committee membership
Member of Audit & Risk Committee;
Member of Remuneration and Nomination Committee
Other current directorships of ASX listed entities: None.
Directorships of other ASX listed entities within the last three
years: None
Specific skills and experience areas
With over 25 years’ experience as a finance executive, including
substantial international experience and several non-executive
directorships, Ms Cheng’s experience covers the majority of key
areas described in Starpharma’s Board skills matrix. In particular,
she has substantial expertise in accounting/corporate finance,
audit and risk; M&A/capital markets; strategy and risk
management; governance; as well as business development. Ms
Cheng has had involvement in the commercialisation of new
innovations during her tenure at South East Water and also while
working with disruptive technology companies in Silicon Valley.
Interests in Starpharma Holdings Limited
Nil.
Company Secretary
The Company Secretary is Mr Nigel Baade, holding the position
since 2013. Mr Baade also holds the position of Chief Financial
Officer, which he has held since January 2009. Mr Baade is a
Certified Practising Accountant (CPA) with extensive experience in
the pharmaceutical and biotechnology industries. Prior to joining
Starpharma as Financial Controller in 2006, he has held positions
at Hagemeyer, Cerylid Biosciences, Faulding (now Pfizer) and
UMT (Fonterra). Mr Baade holds qualifications from University of
Tasmania and Monash University.
Mr Baade is a former director of BioMelbourne Network Inc, and
served as its Treasurer and Chairman of the Finance, Audit and
Risk Committee. Mr Baade is a member of the Australian Institute
of Company Directors.
Principal activities
The principal activities of the group consist of research,
development and commercialisation of dendrimer products for
pharmaceutical, life-science and other applications. Activities
within the group are directed towards the development of precisely
defined nano-scale materials, including on the development of
VivaGel® for the management and prevention of bacterial
vaginosis, and as an antiviral condom coating, and VIRALEZE™ -
an antiviral nasal spray. Starpharma is also applying its proprietary
dendrimers to drug delivery to create improved pharmaceuticals
and has developed the valuable DEP® delivery platform.
Result
The financial report for the group for the financial year ended 30
June 2021, and the results herein, have been prepared in
accordance with Australian Accounting Standards.
The consolidated loss after income tax attributable to ordinary
shareholders for the financial year ended 30 June 2021 was
$19,732,000 (2020: $14,678,000). The net operating cash outflows
for the year were $14,808,000 (2020: $10,776,000) with net cash
inflows from financing activities of $46,303,000 (2020: outflows of
$584,000). The cash balance at 30 June 2021 was $60,500,000
(June 2020: $30,054,000).
Dividends and distributions
No dividends were paid or declared during the period and no
dividends are recommended in respect to the financial year ended
30 June 2021 (2020: Nil).
Review of operations
Key activities until the date of this report include:
VIRALEZE™ antiviral nasal spray
Developed VIRALEZE™, a novel antiviral nasal spray using
already approved agent, SPL7013, and undertook scale-up,
manufacturing, and other supply chain activities, ahead of
launch.
Registered VIRALEZE™ in Europe and India, and
progressed regulatory activities for countries in multiple other
regions.
On 25 March 2021, signed a sales and distribution agreement
for VIRALEZE™ with LloydsPharmacy, one of the largest
pharmacy groups in the UK.
LloydsPharmacy launched VIRALEZE™ in the UK online on
30 March 2021 and in-store in April 2021.
Starpharma launched VIRALEZE™ in countries in Europe in
May 2021 via its dedicated product webstore.
Advanced commercial discussions for local distribution
arrangements for VIRALEZE™ in India and in a number of
other countries, including various European countries and
other international regions.
Conducted extensive antiviral testing on the VIRALEZE™
antiviral agent:
o Confirmed SPL7013 is virucidal against important
coronavirus SARS-CoV-21 variants Delta, Alpha,
Gamma, Beta and Kappa, in laboratory studies.
o Demonstrated potent activity of SPL7013 against
respiratory pathogen RSV (respiratory syncytial virus)
and influenza, in laboratory studies, further expanding
the potential uses for VIRALEZE™.
o Confirmed SPL7013 is active against other pandemic
respiratory viruses “SARS” and “MERS”, in laboratory
studies, supporting the potential use of VIRALEZE™ in
future pandemics.
1 SARS-CoV-2 is the virus that causes COVID-19
16 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
16
Directors’ Report Operating & Financial Review
Published extensive antiviral data for SPL7013 (the antiviral
agent in VIRALEZE™) in the prestigious international
scientific journal, Antiviral Research2.
In a SARS-CoV-2 challenge in vivo in a humanised mouse
model of coronavirus infection, VIRALEZE™ administered
nasally reduced viral load by >99.9% (vs. saline control) in
the lungs and trachea of animals challenged with SARS-
CoV-2.
Awarded $1 million in matched funding by the Australian
Government’s Medical Research Future Fund (MRFF)
Biomedical Translation Bridge (BTB) Program to expedite
development and commercialisation of VIRALEZE™.
Successfully completed a clinical safety study in humans, in
which VIRALEZE™ was very well tolerated, with no notable
or serious adverse events reported.
DEP® Drug Delivery Platform
AstraZeneca expedited and expanded its DEP® AZD0466
clinical program, into a multi-region phase 1/2 trial, with an
initial focus on haematological cancers to support rapid
development and registration.
Continued progress and recruitment into DEP® irinotecan
phase 2 trial, with 54 patients now recruited and trial
continued to progress well, with multiple patients exhibiting
encouraging efficacy signals observed, including impressive
tumour shrinkage and reductions in tumour marker levels for
multiple tumour types, including breast, colorectal, ovarian,
pancreatic, lung and oesophageal cancer. Clinical trial
preparations continue for the addition of combinations with
DEP® irinotecan, thereby expanding the potential market
opportunity.
Continued progress and recruitment into DEP® docetaxel
clinical trials with 50 patients now recruited and with multiple
patients exhibiting encouraging efficacy signals observed,
including prolonged stable disease, significant tumour
shrinkage, reductions in tumour marker levels including in
patients with hard-to-treat tumours such as pancreatic,
oesophageal, cholangiocarcinoma, and gastric cancer.
Continued progress and recruitment into DEP® cabazitaxel
phase 2 trial with 42 patients now recruited and with multiple
patients exhibiting efficacy signals in prostate cancer,
including radiological responses, significant reductions in
prostate-specific antigen (PSA) and lack of new bone
metastases. Multiple heavily pre-treated patients also
exhibited efficacy signals in gastro-oesophageal, ovarian,
cholangiocarcinoma, lung, thymic and head and neck
cancers.
Signed a Research Agreement with Merck & Co., Inc (MSD)
to conduct a preclinical research evaluation of dendrimer-
based Antibody Drug Conjugates (ADCs) utilising
Starpharma’s DEP® technology.
Signed and commenced a new DEP® partnership with leading
Chinese pharmaceutical company Chase Sun to develop
several DEP® nanoparticle formulations for an anti-infective
drug.
Starpharma’s second radiopharmaceutical candidate, DEP®
HER2-lutetium, outperformed in a human breast cancer
model.
Progressed development of several internal DEP® candidates
and programs, including DEP® gemcitabine, DEP® ADCs, and
DEP® radiopharmaceutical candidates for both therapeutic
and diagnostic applications.
Starpharma continued to progress its undisclosed DEP®
partnered programs.
Developed and patented a DEP® version of Gilead’s
remdesivir (Veklury®) with improved injection volume and
pharmacokinetic characteristics.
Starpharma was invited to present its DEP® technology at the
prestigious, international Controlled Release Society (CRS)
Virtual Annual Meeting, during a session called ‘Success
Stories from Bench to Trials to Market’.
VivaGel® Portfolio
VivaGel® BV achieved TGA approval for an expansion of the
marketing authorisation for VivaGel® BV (Fleurstat BVgel) to
include prevention of recurrent bacterial vaginosis – bringing
the approved indications for VivaGel® BV (Fleurstat BVgel) in
line with those in Europe and Asia.
VivaGel® BV was launched in the Nordic region, and new
regulatory approvals were also received for countries in Africa
and the Middle East, and further submissions were prepared.
In the US, a formal dispute resolution process is ongoing with
the FDA as part of the regulatory process for VivaGel® BV,
and COVID-19 has had an impact on timing. VivaGel® BV is
not currently approved in the US.
LifeStyles launched the VivaGel® condom in countries in
Europe, marketed under LifeStyles’ Manix and Akuel brands
of condoms as the Absolute™ Dual Protection condom.
Corporate activities
Starpharma completed an oversubscribed A$48.9 million
share placement and share purchase plan.
VIRALEZE™ antiviral nasal spray
After registering VIRALEZE™ in the UK/Europe, Starpharma
signed a sales and distribution agreement with LloydsPharmacy,
one of the largest pharmacy groups in the UK. LloydsPharmacy
launched VIRALEZE™ in the UK in March 2021, and Starpharma
also launched VIRALEZE™ in other countries in Europe in May
2021 via the VIRALEZE™ webstore. VIRALEZE™ was registered
in India in June 2021 and the company advanced discussions for
local distribution arrangements. Starpharma is also pursuing
regulatory approvals, together with distribution and marketing
arrangements, in numerous other countries in multiple regions.
In parallel Starpharma conducted additional antiviral testing on the
antiviral agent in VIRALEZE™ (SPL7013) in laboratory studies,
which demonstrated SPL7013 is virucidal, inactivating more than
99.99% of SARS-CoV-2, the virus that causes COVID 19. As
SARS-CoV-2 variants emerged during the year, Starpharma
continued to undertake further antiviral testing in laboratory studies
which confirmed SPL7013 is virucidal against Delta, Alpha,
Gamma, and Beta coronavirus SARS-CoV-2 – all four variants of
concern, and the Kappa variant of interest. Other viruses were also
tested, and showed that SPL7013 is active against respiratory
syncytial virus (RSV) and influenza, as well as other pandemic
respiratory viruses “SARS” and “MERS”, in laboratory studies.
In a SARS-CoV-2 challenge in vivo in a humanised mouse model
of coronavirus infection, VIRALEZE™ protects against SARS-CoV-
2 challenge in vivo. VIRALEZE™ administered nasally reduced
viral load by >99.9% (vs. saline control) in the lungs and trachea of
animals challenged with SARS-CoV-2.3 The study also
demonstrated protective effects of VIRALEZE™ against SARS-
CoV-2 in animals, consistent with the previously reported in vitro
virucidal activity of SPL7013, which reduces infectious SARS-CoV-
2, including the Delta variant, by >99.9% within 30 seconds of
exposure.
The results of the challenge study (conducted at The Scripps
Research Institute) have been published in the international peer-
reviewed journal, Viruses, in a special issue titled, Medical
Interventions for Treatment and Prevention of SARS-CoV-2
Infections.
A double-blinded, placebo-controlled clinical safety study
completed to support regulatory and marketing activities for
VIRALEZE™.
Starpharma was awarded $1 million in matched funding by the
Australian Government’s Medical Research Future Fund (MRFF)
Biomedical Translation Bridge (BTB) Program to expedite
development and commercialisation of VIRALEZE™.
2 Paull, J.R.A. et al. Virucidal and antiviral activity of astodrimer sodium
against SARS-CoV-2 in vitro (2021). Antiviral Research.
https://doi.org/10.1016/j.antiviral.2021.105089
3 The study used the K18-hACE2 mouse model, which is an in vivo
humanised mouse model that expresses the human angiotensin converting
enzyme (hACE2) receptor, the receptor used by SARS-CoV-2 to infect cells
in the human nasal cavity and respiratory tract.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 17
17
Directors’ Report Operating & Financial Review
VivaGel® Portfolio
During the year, VivaGel® BV was launched in the Nordic region,
and further regulatory submissions were progressed, and
approvals were received for countries in Africa and the Middle
East. Starpharma and Mundipharma continued to progress
regulatory activities in a range of countries, as well as marketing
activities with key opinion leaders in Europe. Starpharma’s
partners for VivaGel® BV have experienced some disruption to
sales and marketing activities due to COVID-19.
VivaGel® BV is currently registered in more than 45 countries. In
the US, the formal FDA review is ongoing, and COVID-19 has
continued to impact on timing. In Australia, VivaGel® BV achieved
TGA approval for an expansion of the marketing authorisation for
VivaGel® BV (Fleurstat BVgel) to include the indication of
prevention of recurrent bacterial vaginosis – bringing the approved
indications for VivaGel® BV (Fleurstat BVgel) in line with those in
Europe and Asia.
LifeStyles launched the VivaGel® condom in countries in Europe,
marketed under LifeStyles’ Manix and Akuel brands of condoms as
the Absolute™ Dual Protection condom.
DEP® Drug Delivery Platform
The partnered DEP® program for AZD0466 continued to make
positive progress with AstraZeneca expanding the clinical program
into a multi-region study in advanced haematological
malignancies, and a transition to a combined phase 1/2 trial. The
adaptive phase 1/2 trial design is aimed at expedited transition to
phase 2, to facilitate marketing approval. Data was also recently
published showing the potent anti-cancer effects of AZD0466 in a
malignant mesothelioma model.4
During the year, Starpharma progressed its three clinical stage
internal DEP® assets - DEP® irinotecan, DEP® docetaxel and DEP®
cabazitaxel. Each of the phase 2 trials continued to progress well,
with encouraging efficacy signals observed, and impressive
tumour responses reported in heavily pre-treated patients who
otherwise would have limited options.
Starpharma also continued to develop several preclinical DEP®
programs, including DEP® gemcitabine, DEP® ADCs and DEP®
radiopharmaceutical candidates for both therapeutic and
diagnostic applications. During the year, Starpharma’s second
radiopharmaceutical candidate, DEP® HER2-lutetium,
outperformed in a human breast cancer model. Starpharma also
applied its DEP® technology to create a long
version of Gilead’s antiviral drug, remdesivir (Veklury®) which is
approved for use in COVID-19. Several patents in relation to DEP®
assets were filed during the year.
acting, water soluble
-
In regard to new partnered DEP® programs, Starpharma signed a
Research Agreement with leading global pharmaceutical company
Merck & Co., Inc (MSD) to conduct a preclinical research
evaluation of dendrimer-based DEP® Antibody Drug Conjugates
(ADCs) utilising Starpharma’s DEP® technology. The company
also signed a DEP® partnership with Chase Sun to develop
several DEP® nanoparticle formulations for an anti-infective drug.
Building on the momentum of these partnered agreements,
Starpharma engaged in a number of new ADC and
radiopharmaceutical commercial discussions, and also continued
to progress its undisclosed partnered programs.
COVID-19 pandemic
During the year, Starpharma’s laboratory and internal operations
continued to operate under a strict COVID safe plan, with minimal
disruption. Starpharma’s partners for VivaGel® BV have
experienced some disruption to sales and marketing activities due
to COVID-19, and in the US, where a formal FDA review process
is ongoing, COVID-19 has impacted timing of that review process
and associated activities. Recruitment and treatment continued in
all DEP® clinical trials during the period, however the impact of
COVID-19 in the UK, where DEP® trials are taking place, has had
an effect on the programs depending on site-specific factors
including the trial site location and type of hospital.
Matters subsequent to the end of the financial year
No matters or circumstances have arisen since 30 June 2021
through the date of this report that have significantly affected, or
may significantly affect:
(a) the consolidated entity’s operations in future financial years, or
(b) the results of those operations in future financial years, or
(c) the consolidated entity’s state of affairs in future financial years.
Strategy, future developments and prospects
Starpharma aims to create value for its shareholders through the
commercial development and exploitation of proprietary products
based on its dendrimer technology in pharmaceutical and
healthcare applications. The company’s key focus is to advance
and broaden its product pipeline, including internal and partnered
DEP® programs and to advance commercial opportunities for
VivaGel® and VIRALEZE™. Starpharma intends to achieve this by
continuing to utilise a combination of internally funded and
partnered programs across its dendrimer portfolio. The company
commercialises its development pipeline with corporate partners
via licencing and sales and distribution agreements at various
stages in a product’s development lifecycle; depending on the
product, patent opportunity, a partner’s commercial strategy and
relative strength of product and market expertise, comparison of
current and future potential returns, and the risks involved in
advancing the product to the next value inflection point or
milestone.
Starpharma’s strategy remains consistent with previous years.
Starpharma has extensive expertise, a strong intellectual property
portfolio, deep product portfolio, a culture and ability to innovate
and develop its technology platform to commercial opportunities,
proven risk management practices, and a strong cash position.
The company will continue using its cash resources and revenues
to invest in selected research and development activities to
achieve its objectives.
Proceedings on behalf of the company
No proceedings have been brought or intervened in on behalf
of the Company with leave of the Court under section 237 of the
Corporations Act 2001.
4 Research paper on AZD0466 published: “A novel BH3-mimetic, AZD0466,
targeting BCL-XL and BCL-2 is effective in a pre-clinical model of malignant
pleural mesothelioma”.
18 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
18
Directors’ Report Operating & Financial Review
Review of Financials
Income statement
Revenue
Cost of goods sold
Other income
Research and product
development expense
Commercial and regulatory
operating expense
Corporate, administration and
finance expense
30 June 2021
$’000
30 June 2020
$’000
2,151
(791)
1,336
6,556
(890)
559
(15,075)
(14,808)
(3,336)
(3,426)
(4,017)
(2,669)
Loss for the period
(19,732)
(14,678)
Income statement
The reported loss for the period was $19,732,000 (2020:
$14,678,000).
Revenue for the year was $2,151,000 (2020: $6,556,000),
comprising $1,798,000 (2020: $6,033,000) for product sales,
royalty, and research revenue from commercial partners, and
interest income of $353,000 (2020: $523,000). Revenue received
from commercial partners during the year were predominately
product sales and royalties from VIRALEZE™ and VivaGel®
products whereas revenue from commercial partners in the prior
year included $4,339,000 from AstraZeneca for a non-recurring
US$3 million development milestone.
Other income of $1,336,000 (2020:$559,000) includes $877,000 of
grant funding received from the Medical Research Future Fund
(MRFF) to expedite development and commercialisation of
VIRALEZE™, as well as a final amount of $376,000 from phase
one of the Australian Government’s COVID-19 JobKeeper
scheme. Despite remaining eligible for further JobKeeper scheme
payments following completion of the company’s successful capital
raising, the company elected not to continue beyond the first
phase of the JobKeeper scheme which ended on 27 September
2020.
Research and product development expense includes the costs of
the internal DEP® drug delivery programs including DEP®
docetaxel, DEP® cabazitaxel, and DEP® irinotecan, the
VIRALEZE™ program and certain VivaGel® related expenditure. A
contra research and development expense of $7,248,000 (2020:
$5,669,000) has been recognised for activities eligible under the
Australian Government’s Research and Development Tax
Incentive program.
Commercial and regulatory operating expense includes the
expenditure related to the commercialisation of VivaGel®,
VIRALEZE™ and the DEP® portfolio, including business
development, regulatory, supply chain and quality assurance
activities.
Corporate, administration and finance expense includes corporate
costs, as well as gains/losses on foreign currency held. The
$1,348,000 increase over the prior corresponding period
predominately reflects an unfavourable foreign currency movement
of $1,059,000, together with increased insurance premiums.
Balance sheet
At 30 June 2021 the group’s cash position was $60,500,000 (June
2020: $30,054,000). Trade and other receivables of $8,534,000
(June 2020: $6,128,000) includes $7,233,000 (June 2020:
$5,670,000) receivable from the Australian Government under the
R&D tax incentive program.
Statement of cash flows
The net operating cash outflows for the year were $14,808,000
(2020: $10,776,000). Cash inflows from financing activities for the
financial year include net proceeds of $46,931,000 (2020: nil)
resulting from an equity placement and share purchase plan.
Earnings Per Share
Basic & diluted earnings/(loss) per
share
2021
2020
($0.05)
($0.04)
Material Business Risks
The group operates in the biotechnology and pharmaceutical
sectors and is in the development and early commercialisation
phase. Any investment in these sectors is considered high-risk.
The group is subject to normal business risks, including but not
limited to interest rate movements, labour conditions, government
policies, reputation, securities market conditions, credit risk,
exchange rate fluctuations and a range of other factors which are
outside the control of the Board and management, including
(without limitation) unforeseeable events such as global
pandemics. More specific material risks of the sector and the
group include, but are not limited to:
Scientific, technical and clinical – product development
requires a high level of scientific rigour, the outcomes of
which cannot be known beforehand. Activities are
experimental in nature, so the risk of failure, unexpected
outcomes or delay is both material. Key development
activities, including clinical trials, are undertaken by specialist
contract research organisations; and there are risks in
designing and completing those activities, including managing
the quality and timelines of these activities.
Regulatory – products and their testing may not be approved,
or may be delayed or withdrawn, by regulatory bodies (e.g.
US Food and Drug Administration) whose approvals are
necessary before products can be sold in market. Breach of
regulations, local or international law, or industry codes of
conduct may subject the company to financial penalty and
reputational damage.
Financial – the group currently, and since inception, does not
receive sufficient recurrent income to cover operating
expenses. Although current cash reserves are sound, there is
no certainty that additional capital funding may not be
required in the future, and no assurance can be given that
such funding will be available, if required.
Intellectual property (IP) – commercial success requires the
ability to develop, obtain and maintain commercially valuable
patents, trade secrets and confidential information. Securing,
defending and maintaining IP across multiple countries and
preventing the infringement of the group’s exclusive rights
involves management of complex legal, scientific and factual
issues. The company must also operate without infringing
upon the IP of others.
Commercialisation – the company predominately relies, and
intends to largely rely, upon corporate partners to market,
distribute and in some cases finalise development and
registration of its products, on its behalf. There are risks in
establishing and maintaining these relationships, and with the
manner in which partners execute on these agreements.
Product supply – the company is required to manufacture and
supply product under certain licencing and distribution
agreements, and under highly stringent quality and regulatory
requirements. The manufacture of product is undertaken by
specialist, regulatory approved, third party contract
manufacturing organisations experienced in the sector.
However, there are quality and supply delays/failure risks
associated with the supply of product.
Product acceptance and competitiveness – a developed
product may not be considered by key opinion leaders (eg.
doctors), reimbursement authorities (eg. Pharmaceutical
Benefits Scheme listing) or the end customer to be an
effective alternative to products already on market, or other
products may be preferred.
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 19
Starpharma Holdings Limited Annual Report 2021
19
Directors’ Report Operating & Financial Review
Meetings of Directors
The number of meetings of the company’s Board of Directors and
of each committee held during the year ended 30 June 2021, and
the numbers of meetings attended by each director were:
Directors
J K Fairley
R A Hazleton1
Z Peach
Board
10 of 10
5 of 5
10 of 10
R B Thomas
10 of 10
P R Turvey2
8 of 10
D J McIntyre
10 of 10
Audit & Risk
Committee
Remuneration
& Nomination
Committee
N/A
1 of 1
0 of 0
2 of 2
2 of 2
2 of 2
N/A
2 of 2
3 of 3
3 of 3
0 of 1
N/A
The table above illustrates the number of meetings attended
compared with the number of meetings held during the period that
the director held office or was a member of the committee. “N/A”
denotes that the director is not a member of the relevant
committee.
1 R A Hazleton retired as a non-executive director at the conclusion of the 2020 AGM,
on 20 November 2020.
2 P R Turvey was granted a special leave of absence during the year for health reasons.
P R Turvey resigned as a non-executive director on 29 July 2021.
Product liability – a claim or product recall may significantly
impact the company. Insurance, at an acceptable cost, may
not be available or be adequate to cover liability claims or any
product recall costs (if any) if a product is found to be unsafe.
Key personnel – the company’s success and achievements
against timelines depend on key members of its highly
qualified, specialised and experienced management and
scientific teams. The ability to retain and attract such
personnel is important.
Grant and R&D incentives – the company may undertake
R&D activities part-funded by incentive programs (eg. R&D
tax credits) and under other competitive grants. There is no
certainty that grants or incentive programs will continue to be
available to the company, and changes in government policy
may reduce their applicability.
Cyber security and data protection – the company recognises
the increasing risk associated with cyber security and the
potential impact on business operations.
In accordance with good business practice in the pharmaceutical
industry, the group’s management actively and routinely employs a
variety of risk management strategies. These are broadly
described in the Corporate Governance Statement (section 7.2
Risk assessment and management).
Health and Safety
The Board, Chief Executive Officer and senior management team
of the group are committed to providing and maintaining a safe
and healthy working environment for the company’s employees
and anyone entering its premises or with connections to the
company’s business operations. Employees are encouraged to
actively participate in the management of occupational health and
safety (OH&S) issues. The company has adopted an OH&S Policy
and has an established OH&S Committee as part of its overall
approach to workplace safety. The OH&S Committee provides a
forum for management and employees to consult on health and
safety matters. The primary role of the OH&S Committee is to
coordinate the development and implementation of OH&S policy
and procedures, to consider any work-related safety matters or
incidents, and to ensure compliance with relevant legislation and
guidelines. The committee includes representatives of
management, and employees from each operational area
generally in proportion to the number of people working in the area
and the perceived safety risks associated with working in that area.
The OH&S Committee meets on a regular basis over the year.
Updates on OH&S matters are provided at Board meetings.
Additional OH&S practices were implemented and monitored since
the emergence of the COVID-19 pandemic, under the guidance of
a specific COVID-19 management response team. Measures
implemented include working from home and social distancing
requirements.
Environment and Regulation
The group is subject to environmental regulations and other
licenses in respect of its research and development facilities.
There are adequate systems in place to ensure compliance with
relevant Federal, State and Local environmental regulations and
the Board is not aware of any breach of applicable environmental
regulations by the group. There were no significant changes in
laws or regulations during the 2021 financial year or since the end
of the year affecting the business activities of the group, and the
Board is not aware of any such changes in the near future.
20 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
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20
Directors’ Report Remuneration Report
The remuneration report for the year ended 30 June 2021 sets out remuneration information for non-executive directors, executive directors and
other key management personnel of the group. The remuneration report is presented under the following sections:
Introduction, including impact of COVID-19 on remuneration
1.
2. Remuneration governance
3. Non-executive director remuneration policy
4. Executive remuneration policy
a) Approach to setting and reviewing remuneration
b) Remuneration principles and strategy
c) Details of executive equity incentive plans
d) Grant of equity incentives to KMP executives in FY21
5. Executive remuneration outcomes, including link to performance
6. Details of remuneration
7. Executive employment agreements
8. Additional disclosures relating to employee equity schemes
1.
Introduction
Remuneration strategy
Starpharma aims to ensure that its remuneration strategy aligns the interests of its executives and employees with those of its shareholders. In
framing its remuneration strategy, the Board is conscious that Starpharma only has a small number of employees (~50) so endeavours to keep
its remuneration relatively straightforward. Starpharma’s staff are required to have specialist knowledge and experience allowing them to
develop products over the medium to long-term. The fact that Starpharma operates in a global pharmaceutical industry environment also
influences its remuneration strategy.
The structure of remuneration comprises fixed remuneration, short-term incentives (“STI”) in both cash and equity, and equity based long-term
incentives (“LTI”). Starpharma’s remuneration structure is transparent and based on Key Performance Indicators (“KPIs”) which are designed to
align with the interests of shareholders and to reward performance across multi-year timeframes related to product development value-adding
milestones. In some cases, the Board may exercise discretion to take account of events and circumstances not envisaged.
Impact of COVID-19 on remuneration
Given the ongoing global uncertainty and evolving situation related to the COVID-19 pandemic, the Board determined not to increase fixed
remuneration for KMP executives for the financial year from 1 July 2020 to 30 June 2021 despite significant additional activities related to
operations under COVID-19, and the development of VIRALEZE™ antiviral nasal spray. In assessing KMP STI performance for FY21 and
FY20, the Board utilised existing KPIs and in some cases took account of major developments during the review period such as , the
development and launch of VIRALEZE™ which was not previously contemplated before the pandemic. Additionally, the Board exercised its
discretion to issue performance rights with a vesting date of 30 June 2021 (subject to continued employment) in lieu of cash bonuses for FY20.
While this initiative resulted in higher share-based payments in FY20 and FY21 than previous years, the Board believed it would conserve cash,
act as a retention incentive and further align executive and shareholder outcomes. The conversion of cash bonuses to equity for FY20 has had
a one-off impact on the KMP executive target remuneration mix for FY21.
In the course of assessing the CEO’s achievement of long term KPIs for the three-year period to 30 June 2021, the Board identified specific
areas where performance measures should be partly amended due to unforeseen circumstances and opportunities, associated with the
persisting COVID-19 conditions, and as such, determined to use its discretion to adjust for appropriate outcomes. The circumstances relate to
the unforeseen development and commercialisation of VIRALEZE™ nasal spray the impact on clinical timelines with pauses on patient
recruitment of the DEP® and potential VivaGel® BV clinical trials due to COVID-19 and the associated impact on partnering opportunities. The
Board carefully exercised independent judgement and discretion in relation to these specific long term KPIs to ensure that the remuneration
outcomes appropriately reflect the overall performance of Starpharma during the period, to align with the experience of shareholders while also
taking into consideration the unforeseen impacts of the global pandemic.
The impacts of COVID-19 on the business are detailed further in the operating and financial report. COVID-19 government incentives, including
JobKeeper, totalled $438,500. Starpharma received payments under the first phase of the JobKeeper scheme to 27 September 2020, and was
able to maintain its staff working through the multiple Victorian lockdowns, with these receipts mitigating some of the increased expense
associated with the management of clinical trials and other COVID-19 related costs. Despite remaining eligible, following the successful capital
raising in September/October, Starpharma elected not to continue beyond the first phase of the JobKeeper scheme which ended on 27
September 2020.
Key management personnel
The remuneration report details the remuneration arrangements for key management personnel (“KMP”) who are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of the group, directly or indirectly including any
director (whether executive or otherwise) of the parent.
The table below outlines the KMP of the group during the financial year ended 30 June 2021. The individuals were KMP for the entire financial
year, except where indicated in the table below. For the purposes of this report, the term “KMP executives” includes the executive director and
other KMP executives of the group. “Other KMP executives” refers to KMP executives excluding the CEO. Profiles for each of the directors and
company secretary can be found at the beginning of the Directors’ Report.
(i) Non-executive directors
(ii) Executive director
R B Thomas
P R Turvey
R A Hazleton
Z Peach
D J McIntyre
L Cheng
Non-executive Chairman
Non-executive Director (Deputy Chairman),
resigned 29 July 2021
Non-executive Director, retired
20 November 2020
Non-executive Director
Non-executive Director
Non-executive Director, appointed
1 August 2021
J K Fairley
Chief Executive Officer & Managing Director
(CEO)
(iii) Other KMP executives
N J Baade
Chief Financial Officer & Company Secretary
A Eglezos
D J Owen
J R Paull
VP, Business Development
VP, Research
VP, Development & Regulatory Affairs
Starpharma Holdings Limited Annual Report 2021
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Directors’ Report Remuneration Report
2. Remuneration governance
The Remuneration and Nomination Committee, consisting of three independent non-executive directors, advises the Board on remuneration
policies and practices generally, and makes specific recommendations on remuneration packages and other terms of employment for
non-executive directors, KMP executives and other senior executives. Where required, external remuneration advice may be sought by the
Remuneration and Nomination Committee or the Board.
Specifically, the Board approves the remuneration arrangements of the CEO including awards made under the STI and LTI plans, following
recommendations from the Remuneration and Nomination Committee. The Board approves, having regard to recommendations made by the
CEO to the Remuneration and Nomination Committee, the level of remuneration, including STI and LTI awards, for executives. The Board also
sets the aggregate fee pool for non-executive directors (which is subject to shareholder approval) and non-executive director fee levels.
The company’s remuneration structure aims to:
Attract and retain exceptional people to lead and manage the group and to support internal development of executive talent within the
group, recognising that Starpharma is operating in a competitive global pharmaceutical industry environment;
Drive sustainable growth and returns to shareholders, as executives are set both short-term and long-term performance targets which are
linked to the core activities necessary to build competitive advantages and shareholder value;
Motivate and reward superior performance by the executive team whilst aligning performance elements/KPIs to the interests of
shareholders; and
Create a respectful culture based on superior performance and innovation through appropriately structured individual assessments.
Benchmarking
Extensive salary and remuneration benchmarking is undertaken by Starpharma each year for executive and non-executive positions.
Starpharma benchmarks fixed and total remuneration against employment positions of comparable specialisation, size and responsibility within
the industry. Fixed remuneration is supplemented by providing incentives (variable remuneration) to reward superior performance.
Performance reviews
At the beginning of a performance period all staff have KPIs set, specific to their role. At the conclusion of the performance period a
performance review against these KPIs is conducted and this feeds into the annual salary review process. The performance reviews consider
behavioural and cultural aspects of performance, as well as objective planning and professional and personal development. The objective of the
salary review is to ensure that all employees are appropriately remunerated based on performance, that remuneration is competitive within the
relevant industry sector, and that increases in employees’ skills and responsibilities are recognised. During the year a performance review of all
staff took place in accordance with this process. As part of the process, each employee’s performance is assessed against their pre-agreed
individual KPIs and/or business unit performance and corporate KPIs and this assessment determines, subject to business considerations such
as cash availability, if an incentive award is payable, and if so, at what level.
Use of remuneration consultants
If remuneration consultants are to be engaged to provide remuneration recommendations as defined in section 9B of the Corporations Act 2001,
they are to be engaged by, and report directly to, the Remuneration and Nomination Committee. No remuneration consultants have been
engaged to provide such remuneration services during the financial year.
Voting at the company’s 2020 Annual General Meeting (AGM)
Of the votes cast on the company’s remuneration report for the 2020 financial year, over 82% were in favour of the resolution.
As part of the group’s commitment to continuous improvement, the Remuneration and Nomination Committee and the Board consider
comments made by shareholders and proxy advisers in respect of remuneration related issues. Members of the Remuneration and Nomination
Committee routinely engage with proxy advisors to discuss a range of governance and remuneration matters.
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Directors’ Report Remuneration Report
Starpharma remuneration process summary
Has overall responsibility for oversight of Starpharma’s remuneration policy and its principles and processes, and ensures
appropriate benchmarking and the group’s ability to pay are considered in remuneration related decision making.
BOARD
Following recommendations from the Remuneration and Nomination Committee, the Board considers and approves:
Starpharma’s executive remuneration policy;
The remuneration packages of the CEO and other senior executives;
The ‘at-risk’ components of executive remuneration packages, including the structure and operation of equity based
plans; and
The remuneration of non-executive directors.
REMUNERATION
CONSULTANTS & OTHER
EXTERNAL ADVISORS
Where required, support the
Remuneration and Nomination
Committee by providing
independent advice on matters
including:
Benchmarking data;
Legal and regulatory
advice on remuneration
related issues for directors
and executives; and
Advice on incentive plans.
Support & Advise
Engage & Oversee
Oversee
&
Approve
Inform &
Recom-
mend
REMUNERATION & NOMINATION COMMITTEE
Reviews and recommends the following to the Board:
Starpharma’s executive remuneration
policies;
Specific remuneration recommendations for
the CEO and other senior executives;
Remuneration for non-executive directors;
Design of incentive plans; and
Impacts of external market factors.
Oversee
&
Approve
Inform &
Recom-
mend
CEO
Reviews and recommends remuneration
arrangements and outcomes of performance
assessments to the Remuneration and Nomination
Committee for senior executives.
Further information on the Remuneration and Nomination Committee’s role, responsibilities and membership is outlined in the charter available
at http://www.starpharma.com/corporate_governance.
Trading in company securities
The trading of shares issued to participants under any of the company’s employee equity plans is governed by the company’s securities dealing
policy. All employees and directors are prohibited from entering into any hedging arrangements over unvested securities and from margin
lending on Starpharma securities. Further information regarding the company’s dealing in securities policy is set out in the Corporate
Governance Statement and the policy is available at http://www.starpharma.com/corporate_governance.
Clawback of remuneration
In the reasonable opinion of the Board, if a KMP executive has acted fraudulently or dishonestly, the Board may determine that any equity right
(including an exercisable, vested right) should lapse.
Starpharma Holdings Limited Annual Report 2021
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Directors’ Report Remuneration Report
3. Non-executive director remuneration policy
Determination of fees and the maximum aggregate fee pool
The Board seeks to set non-executive directors’ fees at a level which provides the group with the ability to attract and retain non-executive
directors of the highest calibre with relevant professional expertise. The fees also reflect the demands which are made on, and the
responsibilities of, the non-executive directors, whilst incurring a cost which is acceptable to shareholders.
Non-executive directors’ fees and the aggregate fee pool are reviewed annually by the Remuneration and Nomination Committee against fees
paid to non-executive directors in a group of comparable peer companies within the biotechnology sector and relevant companies in the broader
ASX-listed market. The Chairman’s fees are determined by the Remuneration and Nomination Committee independently of the fees of non-
executive directors based on the same role, again using benchmarking data from comparable companies in the biotechnology sector. The
Board is ultimately responsible for approving any changes to non-executive director fees, upon consideration of recommendations put forward
by the Remuneration and Nomination Committee.
The company’s constitution and the ASX listing rules specify that the non-executive directors’ maximum aggregate fee pool shall be determined
from time to time by a general meeting of shareholders. The latest determination was at the AGM held on 20 November 2014 when
shareholders approved an aggregate fee pool of $550,000. The Board will not seek any increase in the non-executive directors’ maximum fee
pool at the 2021 AGM.
Fee policy
Non-executive directors’ fees consist of base fees and committee fees. The payment of committee fees recognises the additional time,
responsibility and commitment required by non-executive directors who serve on board committees. The Chairman of the Board is a member of
all committees but does not receive any committee fees in addition to his base fee. From 1 July 2020, the Deputy Chair base fee was increased
to $73,000 to further recognise the additional responsibility, time and commitment of the position, and to ensure the applicable board fees did
not increase in FY21, the Chair reduced his base fee by $5,000.
Non-executive directors did not receive bonuses or forms of equity securities, or any performance-related remuneration during the financial
year. Statutory superannuation contributions are required under the Australian superannuation guarantee legislation to be paid on any fees paid
to Australian directors. There are no retirement allowances paid to non-executive directors. The non-executive directors’ fees reported below
include any statutory superannuation contributions.
Fees paid in FY21
The aggregate amount paid to non-executive directors for the year ended 30 June 2021 was $396,902 (2020: $392,167). The details of
remuneration for each non-executive director for the years ended 30 June 2021 and 30 June 2020 are outlined in the tables in section 6.
Proposed fee adjustments for FY22
From 1 July 2021, the Chair base fee will increase $5,000 to $134,000 (reverting back to the FY20 level), with the base director fees to increase
$2,000 to $70,000 for non-executive directors. Committee chair and member fees will increase $500 to $11,000 for the committee chair and
$5,000 for a committee member. The proposed fees, based on benchmarks, compared to the FY21 levels are outlined in the table below.
Annual Non-Executive Directors’ Fees
Board fees
Chair (no additional fees for serving on Board committees)
Deputy Chair
Base fee for other non-executive directors
Committee fees
Audit and Risk Committee
Remuneration and Nomination Committee
Proposed Fees
from 1 July 2021
Actual Fees to
30 June 2021
$
134,000
73,000
70,000
11,000
5,000
11,000
5,000
$
129,000
73,000
68,000
10,500
4,500
10,500
4,500
Chair
Member
Chair
Member
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Directors’ Report Remuneration Report
4. Executive remuneration policy
a) Approach to setting and reviewing remuneration
The group aims to reward executives with a level and mix of remuneration appropriate to their position, skills, experience and responsibilities,
whilst being market competitive and enabling the company to retain staff whilst structuring awards which conserve cash reserves.
The Remuneration and Nomination Committee, together with the Board, actively reviews the group’s remuneration structure, and benchmarks
the overall package and proportion of fixed remuneration, short-term incentives and long-term incentives against relevant industry comparators
to ensure the policy objectives are met and are in-line with good corporate practice for Starpharma’s size, industry and stage of development.
Remuneration levels are considered annually through the remuneration review, which considers industry benchmarks and the performance of
the group and the individual. Other factors taken into account in determining remuneration include a demonstrated record of performance and
the group’s ability to pay. In the case of executives, the CEO provides recommendations to the Remuneration and Nomination Committee.
At the beginning of FY21, given the global uncertainty and evolving situation related to the COVID-19 pandemic, the Board determined not to
increase fixed remuneration for KMP executives for the year ended 30 June 2021.
Starpharma undertakes remuneration benchmarking each year with reference to multiple industry peers, together with, where appropriate, other
benchmarking reports which apply to specific positions. A group of peer companies are included in the benchmarking exercise, from within the
pharma/biotechnology sector. As the Board determined not to increase fixed remuneration for FY21, the annual benchmarking was not
conducted in respect to the year. In the previous benchmarking conducted, for FY20, the peer companies included Bionomics, Clinuvel,
Immutep, Impedimed, Imugene, Mayne Pharma, Medical Developments International, Mesoblast, Monash IVF, Nanosonics, Neuren,
Pharmaxis, Polynovo, Opthea, Osprey, Telix, and Virtus Health. Starpharma typically reviews and develops this benchmark list of peer
companies annually to add and remove companies based on their current operations; their size; market capitalisation; and the complexity of
their business. For some executive roles it may be necessary to add or modify the composition of the peer group to ensure comparable roles are
benchmarked.
In reviewing the benchmarking data and determining the level of CEO pay, the Board considers the experience and calibre of its CEO in
comparison to Starpharma’s industry peers, ensuring that remuneration is commensurate with talent, skills and experience. There are no
guaranteed base pay increases or bonuses in any executive contracts.
The CEO has a maximum cash bonus entitlement as a component of STI, which for FY21 was $249,775, representing a target of 15% of total
remuneration. Other executives do not have a pre-specified maximum cash bonus entitlement; however, bonuses are awarded from a target
shared pool for executives as a percentage of total fixed remuneration, based on personal and business unit KPIs and subject to cash
availability. The Remuneration and Nomination Committee considers that this approach provides flexibility in rewarding superior executive
performance and is appropriate for the size of the company at this time, enabling it to manage its cash reserves as required. For FY21, the STI
target cash bonus pool for other KMP executives was 27% of fixed remuneration to align with the strategy to balance the STI ‘at risk’ portions of
remuneration for other KMP executives between cash and equity.
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Directors’ Report Remuneration Report
4. Executive remuneration policy (continued)
b) Remuneration principles and strategy
The group’s executive remuneration strategy is designed to attract, motivate and retain high performing individuals and align the interests of
executives with shareholders, recognising it is operating in the international pharmaceutical industry, and is summarised below.
Remuneration strategy linkages to group objectives
Align the interests of executives with shareholders
Attract, motivate and retain high performing individuals
The remuneration framework incorporates “at risk”
components, which are determined by performance, through
STI and LTI
Performance is assessed against a suite of measures
relevant to the success of the group and generating growth
and returns for shareholders
The remuneration offering is competitive for companies of similar
size and complexity within the industry through benchmarking
The mix of short and longer-term remuneration encourages
retention and performance across multiple years as appropriate
for the lifecycle of the group
Component
Vehicle
Purpose
Link to Performance
Fixed remuneration
Base salary, superannuation
contributions and other
benefits (breakdown of fixed
remuneration is at the
executive’s discretion).
To provide competitive fixed
remuneration set with reference
to the role, market and
experience.
Group and individual performance
are considered during the annual
remuneration review.
Short-Term Incentives (STI)
Cash and equity
(Performance period of less
than 3 years)
The equity instrument is
currently performance rights,
which is based on a
performance assessment, with
a one year performance
period and deferred vesting of
a further one year, subject to
continued employment.
Rewards executives for their
contribution to achievement of
business outcomes. Deferred
equity acts as a retention tool
and aligns with interests of
shareholders.
Allocation of cash bonuses and
vesting of equity linked to internal
KPIs, both business unit and
corporate, over the medium term
which are important drivers of value
and typical within the biotechnology
industry. For example, achievement
of specified development, clinical,
regulatory and commercial
milestones.
Long-Term Incentives (LTI)
Equity
(Performance period of
3 years or more)
The equity instrument is
currently performance rights
with a 3-year performance
period.
Rewards executives for their
contribution to the creation of
shareholder value over the
longer term, acts as a retention
tool and aligns with interests of
shareholders.
Vesting of grants are dependent on
internal measures, both business
unit and corporate over the longer
term; and total shareholder return
(TSR) relative to the S&P/ASX300
Index.
The target remuneration mix is outlined in the diagrams below.
Target Remuneration Mix
The STI and LTI components of remuneration are variable and are linked to pre-determined performance conditions, such as KPIs, that are
designed to reward executives based on the company’s performance, the performance of the relevant business unit and demonstrated
individual superior performance. The details are outlined on pages 27 to 30 of this report.
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To achieve the target remuneration mix, the below performance pay structure was adopted in FY21 and is consistent with the prior years. In
FY21 there was additional STI equity awarded related to FY20 performance as no cash bonuses were awarded to KMP executives for the
performance period 1 July 2019 to 30 June 2020, with STI equity awarded in lieu of cash bonuses.
c) Details of executive equity incentive plans
Starpharma Short-Term Incentives (STI) – includes cash bonus and short-term equity
The group operates an annual STI program available to executives and awards cash and equity incentives subject to the attainment of clearly
defined KPIs. The STI is ‘at risk’ remuneration and subject to achieving relevant KPIs.
Who participates?
Executives
How are STIs delivered?
What is the STI opportunity?
Cash bonus and performance rights, both based on a one year performance period, with the
performance rights conditional upon a deferred vesting date of a further one year, subject to continued
employment.
Providing some rights that vest in the short-term allows the company to preserve cash by offering
equity as a short-term incentive in addition to smaller cash bonuses. This is common practice for
companies at a similar stage of their life cycle.
During FY21 the CEO and executives were awarded STI equity with a 1 year performance period
(1 July 2020 to 30 June 2021), with a deferred vesting date of 30 June 2022 dependent on continued
employment to the vesting date. With no cash bonuses awarded to KMP executives for the
performance period 1 July 2019 to 30 June 2020, STI equity was awarded in FY21 in lieu of FY20 cash
bonuses being paid. These rights had a deferred vesting date of 30 June 2021 dependent on continued
employment to the vesting date.
The STI opportunity is a target of ~25% and ~20% of total remuneration for the CEO and other KMP
executives, respectively. The CEO STI opportunity for FY21 was equal to the 25% target, comprising of
a cash component (~60%) and an equity component (~40%). The STI cash opportunity component was
equivalent to 45% of total fixed remuneration.
As outlined above, due to the uncertainties of the impact of COVID-19, no cash bonuses were awarded
to KMP executives for the performance period 1 July 2019 to 30 June 2020, however STI equity was
awarded in lieu of cash bonuses in recognition of KMP executives achieving important milestones in
their pre-determined KPIs, which were described in last year’s report. KMP executives were awarded
STI equity for the 1 July 2020 to 30 June 2021 performance period based on the achievement of their
pre-determined KPIs.
In FY21, other KMP executives had an average target STI opportunity of 29% of total remuneration.
The cash bonuses awarded to other KMP executives in FY21 equated to an average of 12% of total
remuneration or an average of 27% of total fixed remuneration, based on achievements in the year.
The result of STI decisions made in FY20 is that the FY21 reported STI for the CEO was 31% (target
25%) of total remuneration and for other KMP executives an average of 29% (target 20%) of total
remuneration.
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4. Executive remuneration policy (continued)
What are the STI
performance conditions for
FY21?
Actual STI payments awarded to each executive depend on the extent to which they meet specific KPIs
set at the beginning of the period. The KPIs are typical of a biotechnology company at Starpharma’s
stage of development, and may include corporate KPIs and business unit KPIs relating to strategic and
operational objectives. Details of the corporate KPIs for performance, which was assessed during FY21,
are explained in section 5 of the remuneration report. Given the company’s stage of development,
financial metrics (such as earnings per share) are not entirely relevant in linking pay to performance.
The proportion of performance measures applicable in determining STI awards for the CEO and other
executives are noted in the table below:
Corporate KPIs
Business Units KPIs
STI cash bonus
CEO 100%
Other executives 100%
STI performance rights
CEO 100%
Other executives 30%
Other executives 70%
Details regarding LTI performance conditions are contained on page 29.
How is performance
assessed?
At the end of each performance period (typically annually), after consideration of actual performance
against KPIs, the Remuneration and Nomination Committee recommends for Board approval of the
amount of STI to be paid from the maximum entitlement to the CEO.
For executives other than the CEO, the Remuneration and Nomination Committee seeks
recommendations from the CEO, and then makes recommendations to the Board.
When is performance
assessed and when are
awards paid or vest?
The end of the financial year corresponds with the end of each performance period. Performance is
assessed following the end of the financial year to allow for timely disclosure in the annual remuneration
report. This is usually within two months of the end of the financial year.
The STI cash component is paid approximately three months following the end of the financial year and
once the performance assessment review is complete.
For STI equity, a proportion of rights, based on the performance assessment, will remain available
(deferred) to vest on 30 June the following year. Any rights forfeited based on the performance
assessment will be forfeited within the first three months of the new financial year following the
performance assessment.
The vesting of deferred rights on 30 June is subject to the continued employment condition being
satisfied. Once vested, KMP executives can elect to convert vested rights into shares during prescribed
exercise windows throughout future periods. The maximum period for the exercise of vested rights is
15 years from grant date.
Is performance against KPIs
disclosed?
Whilst the company’s policy is not to disclose commercially sensitive information, consistent with best
practice disclosure obligations, it will retrospectively disclose achievement of corporate KPIs to the extent
commercially practicable.
Specific metrics are applied to each KPI to assist in the assessment undertaken for each performance
period. In some cases, the Board may exercise discretion to take account of events and circumstances
not envisaged.
Contractual entitlement?
Only the CEO has a STI cash bonus entitlement whereby the maximum amount achievable is set. There
is no predetermined STI equity entitlement. No other executive service agreements contain any
contractual entitlement to STI cash or equity.
What happens if an
executive leaves?
If an employee ceases employment, all unvested rights lapse except for certain circumstances relating to
a “good leaver”. The “good leaver” provisions allow the Board to determine the accelerated vesting of the
rights if the employee ceases employment due to death, illness, permanent disability, redundancy or any
other circumstance approved by the Board after considering the portion of the performance period that
has elapsed and the extent to which performance conditions have been met.
What happens on a change
of control?
Board discretion, after considering the portion of the performance period that has elapsed and the extent
to which performance conditions have been met.
What happens in the case of
fraud/dishonesty?
If, in the opinion of the Board, an employee has acted fraudulently or dishonestly, the Board may
determine that any unvested right granted to that employee, or any vested right, not exercised, would
lapse.
Re-testing
There is no re-testing of KPIs in subsequent years if performance conditions are not met.
How is the conversion of
performance rights to shares
satisfied?
The conversion of performance rights is currently satisfied by the issue of new shares, rather than a
purchase of shares on market, to conserve the company’s cash reserves. This is common practice for
companies at a similar stage of their life cycle. This is reviewed periodically and purchases of shares on
market may be undertaken in the future if appropriate.
Are performance rights
eligible for dividends?
Performance rights - whether unvested, or vested and not exercised, are not eligible to receive
dividends.
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Starpharma Long-Term Incentives (LTI) – Equity
Participation in these plans is at the Board’s discretion. For key appointments, an initial allocation of long-term equity incentives may be offered
as a component of the initial employment agreement. The LTI is ‘at-risk’ remuneration and subject to achieving the relevant KPIs.
Who participates?
Executives
How are LTIs delivered?
Performance rights with a performance/vesting period of 3 years or more. The LTI performance rights
awarded during FY21 have 3 year performance periods for all executives.
What is the LTI opportunity?
The CEO’s LTI opportunity for FY21 was 41% of total remuneration. For other KMP executives, the LTI
opportunity for FY21 was ~30% of total remuneration. As outlined in section 4 of the remuneration
report, the target LTI opportunity is 40% and 30% of total remuneration for the CEO and other KMP
executives, respectively.
What are the LTI performance
conditions for rights granted
in FY21?
Corporate KPIs reflect long-term (3 year) strategic, operational and financial management objectives.
These relate to key value creating events and significant milestones that are linked to Starpharma’s
business areas. For the performance period to 30 June 2021 these were:
The monetisation of the VivaGel® and Drug Delivery portfolios represented by the completion
of a number of commercial deals that build shareholder value and/or generate income; and
The development of new DEP® candidates and/or the licensing of DEP® candidates.
Due to the commercially sensitive nature of the specific performance metrics within these KPIs,
Starpharma will retrospectively disclose achievement of corporate KPIs to the extent commercially
practicable in the annual report.
In maintaining the link between executive remuneration outcomes and the returns to shareholders,
relative total shareholder return (“TSR”) is considered a relevant performance condition in respect of
LTIs. The relative TSR hurdle reflects Starpharma’s TSR compared to the S&P/ASX300
Accumulation Index (Index), and includes share price growth, and any dividends and capital returns.
The Board has chosen this Index for the TSR comparator group as it provides an external, market-
based performance measure to which the company’s performance can be compared in relative terms.
The Index is considered appropriate as it provides a comparison of shareholder returns that is
relevant to investors, and reflects the aspiration of the company.
The Board considers that the Index is a more appropriate comparator than a customised group of
peer companies due to the inherent volatility of each of these companies, typical within the
biotechnology industry. In the past, the performance of Starpharma’s industry peers has been
particularly volatile, with a number of companies experiencing significant decreases in market
capitalisation, and a number have gone through some type of corporate activity (e.g. takeovers) or
are no longer ASX listed. Given that the relative TSR is measured over a three year period, the Index
is favoured as a more stable and appropriate comparator. Also, the published S&P/ASX 200
Healthcare Index was considered as a possible comparator, however, was determined to be
inappropriate given its concentrated composition including CSL Limited and other large service
oriented companies, such as private hospitals. Each year, the Remuneration and Nomination
Committee, and the Board, review the suitability of the Index as a comparator.
To achieve the full relative TSR performance condition, Starpharma’s TSR must achieve 10% per
annum (or 30% over 3 years) above the Index, which is considered a realistic stretch target.
The table below sets out the percentage of performance rights that will vest depending on the
company’s TSR compared to the Index over the relevant period.
Annualised Starpharma TSR compared
with the Index
Percentage of rights subject to the relative
TSR performance condition which vest
Below Index
Equal to Index
0%
50%
Between Index and Index + 9.99%
Pro rata basis from 51% to 99%
At least 10% per annum above Index
(or ≥ 30% over 3 years)
100%
For example, if the TSR of the Index is 10% per annum, then Starpharma would need to achieve a
TSR of 20% per annum or more for all of the relative TSR related performance rights to vest. The
above hurdle recognises the return that investors expect when investing in the biotechnology sector.
The Board considers an additional return of 10% per annum (or 30% over 3 years) above the Index to
be a realistic stretch target for all relative TSR rights to vest.
Starpharma Holdings Limited Annual Report 2021
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4. Executive remuneration policy (continued)
The performance measures applicable in determining LTI awards for the CEO and other executives
and the relative proportions are noted in the table below:
Corporate KPIs
CEO
Other executives
70%
15%
TSR
30%
15%
Business Unit KPIs
N/A
70%
The Board considers 30% and 15% of LTI equity as the appropriate portion for relative TSR for the
CEO and other executives, respectively. In determining the percentages, the Board considered input
from investors and proxy advisers to arrive at a level that is considered meaningful as a measure of
performance, and sufficient to be relevant.
The relative TSR performance measure does not allow for a portion of the award to vest at below
median performance, which is consistent with good market practice. Additionally, the Board maintains
absolute discretion in finalising remuneration outcomes for incentive-based awards to the CEO and
other executives. The Board may exercise its discretion (either up or down) to take into account the
impacts of external market conditions outside the control of management. The Board is cognisant of
ensuring fairness and that any exercise of discretion reinforces Starpharma’s strategy and
remuneration policy. Accordingly, in the event that the Index has performed particularly poorly, the
Board may exercise its discretion to prevent excessive executive awards in years of poor shareholder
returns.
At the end of each performance period, after consideration of actual performance against KPIs, the
Remuneration and Nomination Committee recommends the amount of LTIs to vest to the CEO for
approval by the Board. For executives other than the CEO, the Remuneration and Nomination
Committee seeks recommendations from the CEO, and then make recommendations to the Board.
Relative TSR is calculated independently by a professional services firm with specialist expertise.
How is performance
assessed?
When is performance
assessed and when are
awards paid or vest?
The end of the financial year corresponds with the end of each performance period. Performance is
assessed following the end of the financial year to allow for the timely disclosure in the annual
remuneration report. This is usually within two months of the end of the financial year.
For LTI equity, the rights will vest on 30 September following the performance assessment. Once
vested, KMP executives can elect to convert vested rights into shares during prescribed exercise
windows throughout future periods. The maximum period for the exercise of vested rights is 15 years
from grant date.
Is performance against KPIs
disclosed?
Same as for STI.
Contractual entitlement?
There are no predetermined LTI equity entitlements.
What happens if an executive
leaves?
Same as for STI.
What happens on a change of
control?
Same as for STI.
What happens in the case of
fraud/dishonesty?
Same as for STI.
Re-testing
Same as for STI.
How is the conversion of
performance rights to shares
satisfied?
Same as for STI.
Are performance rights eligible
for dividends?
Same as for STI.
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d) Grant of equity incentives to KMP executives in FY21
In FY21, the Board determined the number of rights granted for STI and LTI equity based on the face value of rights (see below) and the target
remuneration mix as set out on page 26.
Starpharma uses and reports face value for determining the allocation of equity as it provides transparency on the value of the allocations
compared with fair value. This practice reflects the increasingly accepted view by industry that presenting remuneration equity at face value
provides a more accurate representation of the true value of that equity and for users to understand the value of these awards.
The face value of each right is based on the volume weighted average price (“VWAP”) of the company’s shares traded on the ASX over the
3 month period to 30 June 2020, which reflects the beginning of the performance period. The 3 month period has been determined to be the
appropriate duration for the calculation of the VWAP as it limits any unintended consequences of short-term volatility in the company’s share
price and is consistent with the duration used in the calculation of TSR for the relative TSR performance condition. The face value is not
adjusted for changes (increase or decreases) in share price post 30 June, which has been the practice since 2015. The face value for each right
was $1.0669.
The below tables summarise the equity incentives granted in FY21:
Deferred STI equity – in
lieu of FY20 cash
bonus
Deferred STI equity
LTI equity
Performance Period
1 July 2019 to 30 June
2020
1 July 2020 to 30 June
2021
1 July 2020 to 30 June 2023
Deferral Period
12 months from end of
performance period
12 months from end of
performance period
Not applicable
Vesting Date
30 June 2021
30 June 2022
30 September 2023
Face Value per Right
Based on 3 month VWAP to 30 June 2020 of $1.0669
Method for calculating number total
value of grant at face value divided by
the face value per right of rights
Total value of grant at face value divided by the face value per right
J K Fairley
(CEO and Managing
Director)
Face Value of grant
Number of Rights
Fair value per AASB2#
$188,580
176,755
$234,112
$169,950
159,293
$210,984
Performance Conditions
100% Corporate KPIs
100% Corporate KPIs
J Paull
(Other KMP
executives)
Face Value of grant
Number of Rights
Fair value per AASB2†
$80,000
74,984
$109,942
$53,452
50,100
$73,457
Performance Conditions
100% Business Unit
KPIs
70% Business Unit KPIs
30% Corporate KPIs
N J Baade
(Other KMP
executives)
Face Value of grant
Number of Rights
Fair value per AASB2†
$76,000
71,235
$104,445
$48,885
45,820
$67,181
Performance Conditions
100% Business Unit
KPIs
70% Business Unit KPIs
30% Corporate KPIs
A Eglezos
D J Owen
(Other KMP
executives)
Face Value of grant
Number of Rights
Fair value per AASB2†
$70,000
65,611
$96,199
$48,885
45,820
$67,181
Performance Conditions
100% Business Unit
KPIs
70% Business Unit KPIs
30% Corporate KPIs
$679,800
637,173
$773,401
70% Corporate KPIs
30% relative TSR
$213,807
200,400
$285,870
70% Business Unit
KPIs
15% Corporate KPIs
15% relative TSR
$195,541
183,280
$261,448
70% Business Unit
KPIs
15% Corporate KPIs
15% relative TSR
$195,541
183,280
$261,448
70% Business Unit
KPIs
15% Corporate KPIs
15% relative TSR
Other Vesting
Conditions
# The grant date to calculate the fair value of the award under AASB2 is the AGM date when shareholders approved the grant of the rights.
† The grant date to calculate the fair value of the award under AASB2 is the date when the performance rights were offered.
Remains employed until the vesting date and has not engaged in fraud or dishonesty
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5. Executive remuneration outcomes, including link to performance
Given the company’s stage of development, financial metrics (such as profitability) are not necessarily an appropriate measure of executive
performance. The company’s remuneration policy aligns executive reward with the interests of shareholders. The primary focus is on growth in
shareholder value through achievement of development, regulatory and commercial milestones, and therefore performance goals are not
necessarily linked to typical financial performance measures utilised by companies operating in other market segments. However, the Board
recognises that share price performance is clearly relevant to the extent that it reflects shareholder returns, and as such Starpharma’s TSR
relative to the S&P/ASX300 Index is used as a relevant metric for portions of executive equity awards. Details of share price, earnings and the
impact of share price performance on the vesting of certain performance rights over the last 5 years is detailed in the table below. No dividends
have been paid in the last 5 years.
Closing share price 30 June
Share price high
Share price low
Profit/(Loss) for the year ($M)
Number of performance rights forfeited by CEO based
on share price performance for the period ending 30
June (or otherwise in the FY).
% of performance rights forfeited by CEO based on
share price performance (as a percentage of total
performance rights) period ending 30 June, or
otherwise in the FY).
FY21
$1.50
$2.52
$1.02
(19.7)
FY20
$1.13
$1.43
$0.62
(14.7)
22,293
-
FY19
$1.36
$1.66
$0.87
(14.3)
-
FY18
$1.17
$1.67
$0.71
(10.3)
FY17
$0.73
$0.88
$0.59
8.2
-
244,500
3%
0%
0%
0%
13%
Fixed remuneration:
The average increase in KMP executive fixed remuneration for FY21 was 0.0% (FY20: 3.2%). There was no increase in the total fixed
remuneration package for any KMP executive in the year.
Performance related pay:
In the assessment of STI and LTI KPIs, the Board took account of the significant achievements obtained in the performance periods and the
effort and dedication required to accomplish these milestones. These achievements include those listed on pages 34 to 36.
Short-term incentives (STI):
Summary of performance pay related to FY21 for the CEO
Maximum
Available
STI Awarded
% Awarded
STI cash
($)
$249,775
$194,825
78.0%
STI equity
(# of rights)
159,293
124,249
78.0%
The Remuneration and Nomination Committee and the Board determined that the CEO had achieved a performance assessment of 78.0% of
STI awards for the performance period 1 July 2020 to 30 June 2021, based on the annual review of actual performance against
predetermined KPIs. These targets were set by the Remuneration and Nomination Committee and the Board at the beginning of the
performance period and align to the company’s strategic, operational and financial objectives. STI equity awards for the CEO in FY21 were
based on the scorecard measures and weightings as disclosed below.
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Summary of performance pay related to FY21 for Other KMP executives
For STI awards for other KMP executives, the CEO assesses the other KMP executives’ performance against predetermined KPIs relevant
to their business unit. These business unit KPIs relate directly to specific elements of the corporate KPIs, with 30% of STI equity awards based
on the percentage achievement of corporate KPIs as disclosed above. The achievement of corporate KPIs requires significant input and strong
performance from the executive team. The CEO makes recommendations to the Remuneration and Nomination Committee and the Board in
respect of the STI performance assessment and amounts to be awarded.
The Remuneration and Nomination Committee and the Board determined that other KMP executives had achieved an average performance
assessment of 86% of STI awards (between 80% and 90%) for the performance period 1 July 2020 to 30 June 2021. STI equity awards to
Other KMP executives for FY21 were consistent with their performance assessment.
Long-term incentives (LTI):
Summary of performance pay for the CEO for the three years ended 30 June 2021
Maximum Available
LTI Achieved
KPIs for 3 years to 30 June 2021
Relative TSR for 3 years to 30 June 2021
Total LTI Achieved
% Achieved
LTI equity
(# of Rights)
539,921
210,570
139,683
350,253
64.9%
% Achieved
55.7%
86.2%
Performance assessment of relative TSR for the three years ended 30 June 2021
The company’s Total Shareholder Return was benchmarked against the performance of the S&P/ASX300 Index for the three-year performance
period ended 30 June 2021. The company’s TSR over the period was 44.8% compared with an Index TSR over the period of 18.8%. The
company’s annualised TSR for the period was 13.1% compared to the S&P/ASX300 Index annualised TSR of 5.9%. As a result, 86.2% of the
relative TSR component vested based on the prescribed sliding scale as set out on page 29. The TSR calculations were performed by an
independent professional services firm.
The table below provides a summary of the achievement of annualised TSR performance:
Performance Period
Starpharma annualised TSR
Index annualised TSR
Starpharma outperformance of Index (annualised over 3 years)
% of relative TSR awarded
3 years to
30 June 2021
3 years to
30 June 2020
13.1%
5.9%
7.2%
86.2%
14.3%
1.1%
13.2%
100%
Summary of performance pay for other KMP executives for the three years ended 30 June 2021
For LTI awards for Other KMP executives, the CEO assesses their performance against predetermined KPIs relevant to their business unit.
These business unit KPIs relate directly to specific elements of the corporate KPIs, with 15% of LTI equity awards based on the percentage
achievement of corporate KPIs, and the remaining 15% based on relative TSR (as disclosed above). The achievement of corporate KPIs
requires significant input and superior performance from the executive team. The CEO makes recommendations to the Remuneration and
Nomination Committee and the Board in respect of the LTI performance assessment and amounts to be awarded.
The Remuneration and Nomination Committee and the Board determined that other KMP executives had achieved a performance assessment of
between 83% and 90% (average 86%) for business unit KPIs for the performance period 1 July 2018 to 30 June 2021 for determining LTI
awards.
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5. Executive remuneration outcomes, including link to performance (continued)
STI Performance
Assessment
Performance category
Metric
Development, registration
and commercialisation of
VIRALEZE™
Leverage existing regulatory data and supply chain for SPL7013 to
rapidly develop and commercialise antiviral products for other uses, such
as COVID-19
Regulatory and
commercialisation activities
for VivaGel® BV
Advance further VivaGel® BV registrations in multiple countries, with
priority given to major markets and facilitate partners to roll-out and
launch the product in multiple markets; pursue partnerships for remaining
unlicensed countries; whilst optimising returns
Performance period
1 July 2020 to 30 June 2021
Weighting
Satisfied
17%
Partially Met
18%
Partially Met
Other VivaGel® products
Progress with regulatory and commercialisation activities for the VivaGel®
condom
2%
Met
Clinical stage internal DEP®
programs
Progress internal clinical DEP® programs into and through clinical
development (or signing a licence, as appropriate) with a focus on
expediting outcomes and building value which may be through additional
indications and/or combinations
25%
Partially Met
Preclinical DEP®
candidate(s)
Advancing additional internal DEP® product candidates through preclinical
development (or signing a licence, as appropriate)
12%
Partially Met
Partnered-DEP® programs
Support and further develop existing partnered-DEP® programs and/or
expanded field/products and/or progress with new partnering
deals/licences
18%
Partially Met
Capital management,
culture and leadership
Manage company’s capital in a prudent manner to create value, increase
recurrent revenues and maintain and develop a highly results oriented
culture with exceptional leadership
8%
Met
100%
In making this STI assessment, the Remuneration and Nomination Committee and the Board considered the following factors (other
commercially sensitive matters were also taken into account).
Starpharma successfully developed, registered and launched VIRALEZE™ in less than 12 months, and undertook the following key
activities:
-
-
Developed a direct go to market strategy to ensure the product would be available upon registration to facilitate rapid market entry.
Leveraged the extensive regulatory data available on SPL7013 to pursue expedited registration for VIRALEZE™ in Europe via the CE
mark route.
Signed a sales and distribution agreement with LloydsPharmacy. LloydsPharmacy is one of the largest pharmacy chains in the UK
with around 1,400 LloydsPharmacy stores across the UK and is part of the global McKesson group, a leading international
pharmaceutical wholesale and retail pharmacy company.
Starpharma and Lloyds launched VIRALEZE™ in the UK in March 2021, achieving this first product launch ahead of the original
commercialisation timeline. UK sales were paused in June 2021 due to MHRA claim enquiries, which are currently being addressed.
Starpharma launched VIRALEZE™ in Europe in May 2021 through its webstore and has been pursuing pharmacy/retail roll-out in
Europe.
Starpharma registered VIRALEZE™ for sale in India.
Further antiviral testing was conducted at Scripps Institute in the US and elsewhere, including virucidal assays for SPL7013 and
testing against a variety of SARS-CoV-2 variants (Delta, Alpha, Gamma, Beta, Kappa) as well as RSV, SARS and MERS.
Starpharma completed a clinical safety study for VIRALEZE™ in 40 healthy volunteers to support regulatory and commercialisation
activities.
Starpharma awarded $1M in matched funding by the Australian Government’s Medical Research Future Fund (MRFF) Biomedical
Translation Bridge (BTB) Program to expedite development and commercialisation of VIRALEZE™.
Publication of key antiviral data in the prestigious international journal, Antiviral Research.
-
-
-
-
-
-
-
-
Significant VivaGel® BV regulatory activities, including:
-
-
-
-
Starpharma obtained regulatory approvals for numerous countries, including South Africa and multiple countries in the Middle East,
the Philippines and further regulatory submissions were prepared and submitted,
Starpharma facilitated the expedited submission of further regulatory applications in multiple regions [
Starpharma was successful in achieving publication of the BV prevention clinical study in the European Journal of Obstetrics and
Gynecology & Reproductive Biology in January 2021, providing further important support for marketing activities by partners
Mundipharma and Aspen.
Continued to pursue FDA approval for VivaGel® BV, working with a team of expert regulatory advisers, lawyers, and statisticians to
progress a formal review, including detailed submissions. The formal FDA review is ongoing, and COVID-19 has had an impact on
timing.
VivaGel® BV was launched in in five further countries including in Asia, Europe and South Africa during the year. Further launches by
Mundipharma for certain markets have been delayed due to COVID-19.
Extensive support to Mundipharma to achieve multiple launches as rapidly as possible, including critical and comprehensive input for
the training of representatives, marketing materials, regulatory matters, product labelling, finalisation of product claims, manufacturing,
packaging and other elements of supply.
Starpharma’s partner, LifeStyles, launched the VivaGel® condom in Europe marketed under LifeStyles’ Manix and Akuel brands of
condoms as the Absolute™ Dual Protection condom. Ongoing regulatory activities in China.
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Progress with clinical-stage DEP® assets, including:
-
DEP® docetaxel, DEP® cabazitaxel and DEP® irinotecan trials continued to recruit patients and progress well with encouraging
efficacy signals observed in each trial. All three DEP® trials experienced a period of paused or slowed new patient recruitment, with a
greater impact on DEP® docetaxel due to its trial site locations and greater COVID impact on these sites. Recruitment resumed in all
three trials, noting that there were some trial sites including in London where recruitment resumption has been slower than in regional
centres.
DEP® docetaxel + gemcitabine clinical combination study commenced during FY21, having achieved the requisite ethics and
regulatory approvals and completed the preparatory clinical trial activities. Preparations and submissions for DEP® irinotecan
combination arm progressed.
Advanced and expanded the preclinical DEP® pipeline:
-
Progressed the development of DEP® gemcitabine including undertaking the initial toxicology study to inform dose selection for a
clinical study.
Progressed several radiotheranostic candidates – targeted and untargeted, including DEP® lutetium, DEP® HER2-lutetium and DEP®
zirconium (radiodiagnostic candidate). During FY21, Starpharma announced impressive preclinical efficacy data on DEP® HER2-
lutetium which achieved potent and durable anticancer activity, with complete tumour regression, outperforming Herceptin
(trastuzumab) labelled with lutetium, in a human breast cancer model. This data has led to discussions with a commercial partner for
a potential strategic partnership for DEP® radiopharmaceuticals.
Progressed work on Starpharma’s internal DEP® ADC candidates and other preclinical internal candidates.
In response to emerging therapeutics being used for COVID-19, Starpharma rapidly created a DEP® version of remdesivir, achieving
marked improvements in solubility and long-acting characteristics.
Progressed partnered DEP® programs, including:
-
Provided extensive support to AstraZeneca for the clinical and non-clinical programs for AZD0466 including a number of publications
and input into regulatory and CMC documentation. AstraZeneca advised a significant expansion of its clinical program for DEP®
AZD0466, to include a multi-centre global phase 1/2 study with a focus on haematological tumours. The clinical expansion facilitates
patient recruitment and is aimed at rapid development and approval of AZD0466.
Progress with other AstraZeneca DEP® programs, including further development of a DEP® version of one of their major oncology
medicines.
Signed a Research Agreement with Merck & Co., Inc (MSD) to conduct a preclinical research evaluation of dendrimer-based Antibody
Drug Conjugates (ADCs) utilising DEP® technology. This deal has the potential to yield multiple programs.
Signed and commenced a new DEP® partnership with leading Chinese company Chase Sun to develop several DEP® nanoparticle
formulations for an anti-infective drug with the view of enhancing its performance and expanding its therapeutic utility.
Progressed commercial discussions with several major pharmaceutical companies for several partnered DEP® drug delivery programs
in oncology and non-oncology areas, including in ADCs and DEP® radiopharmaceuticals
-
-
-
-
-
-
-
-
Successfully completed a capital raise with net proceeds of $47 million from an equity placement and share purchase plan. Prudent
management of Starpharma’s cash reserves during the COVID-19 pandemic and preserved Starpharma’s stable, highly dedicated and
skilled work-force.
In the assessment of STI KPIs, the Board took account of the significant achievements attained over the performance period and the effort and
dedication required to accomplish these milestones, particularly during the COVID-19 pandemic which posed challenges for trial recruitment
workforce organisation and supply chain continuity. These achievements include the development and launch of VIRALEZE™ in the UK and
Europe, and product registration in India. The Company also supported Mundipharma’s roll-out of VivaGel® BV in further countries and
facilitated further regulatory approvals and submissions. In addition, the company achieved several DEP® milestones, across both the
internal and external portfolio including positive interim clinical trial results for three internal DEP® assets and commencing a new DEP®
research agreement with MSD.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 35
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Directors’ Report Remuneration Report
5. Executive remuneration outcomes, including link to performance (continued)
LTI Performance Assessment
Performance period
1 July 2018 to 30 June 2021
Performance category
Metric
Weighting
Satisfied
VivaGel® BV and Drug Delivery
DEP® Platform
Relative TSR
Monetisation of the VivaGel® and Drug Delivery portfolios
represented by the completion of a number of commercial
deals that build shareholder value and/or generate income.
Development of new DEP® candidates and/or licensing of
DEP® candidates.
Starpharma’s TSR compared to the performance of the
S&P/ASX300 Index over a 3-year period
30%
Partially Met
40%
Partially Met
30%
Partially Met
100%
In making this LTI assessment, the Remuneration and Nomination Committee and the Board considered the following factors (other
commercially sensitive matters not disclosed were also taken into account):
VivaGel® and Drug Delivery:
- Signed a second commercial agreement with AstraZeneca to progress a DEP® version of one of AstraZeneca’s major existing
oncology medicines.
- Successfully developed and signed a sales and distribution agreement with LloydsPharmacy, one of the largest pharmacy groups
in the UK with ~1,400 stores across the UK and part of the McKesson, a leading international pharmaceutical wholesale and retail
pharmacy company.
- Achieved launch of VivaGel® BV in the UK, Europe, Eastern Europe, Nordic region of Europe, South Africa, Asia, Australia and
New Zealand.
Licensed VivaGel® BV to ITF Pharma, Inc. for the US market for US$101M in milestones plus royalties.
-
- Expanded licence with Okamoto to add 11 more Asian countries to its VivaGel® condom agreement.
-
Launch of VIRALEZE™ in the UK and Europe, with onset of revenue receipts from LloydsPharmacy and the VIRALEZE™
webstore.
- Revenue receipts for VivaGel® products from Aspen, Mundipharma and Okamoto.
- Achieved regulatory approvals for VivaGel® BV in several further regions including for countries in Asia and in the Middle East,
South Africa and New Zealand. Achieved approval for a second BV indication, for the prevention of recurrent BV, in both Europe
and Australia.
- VivaGel® condom was approved and launched in Japan and Europe.
- VivaGel® BV NDA prepared, submitted, and subsequently accepted for filing.
- Supported the IND preparation, scale-up and final preclinical work to enable progression of AZD0466 into first human clinical trial in
the US.
- Granted a licence from the TGA allowing in-house manufacture of DEP® products for clinical trials.
DEP® Platform:
- Signed a Research Agreement with Merck & Co., Inc (MSD) to conduct a preclinical research evaluation of dendrimer-based
Antibody Drug Conjugates (ADCs) utilising DEP® technology. This deal has the potential to yield multiple programs.
- Provided extensive support to AstraZeneca for AZD0466 facilitating its progress into the clinic and triggering milestone to
Starpharma of US$3 million. Continued support has facilitated expansion of the clinical program into a phase 1/2 multi-region trial,
aimed at accelerating approval.
- Signed and commenced a new DEP® partnership with leading Chinese company Chase Sun to develop several DEP® nanoparticle
formulations for an anti-infective drug with the view of enhancing its performance and expanding its therapeutic utility.
- Advanced one further DEP® candidate into phase 1 (DEP® irinotecan).
- Advanced two DEP® candidates into phase 2 (DEP® cabazitaxel and DEP® irinotecan).
- Progressed all DEP® clinical programs with recruitment now well advanced for three phase 2 programs for DEP® docetaxel, DEP®
cabazitaxel and DEP® irinotecan with encouraging efficacy signals observed in each trial and multiple new sites opened.
- Commenced DEP® docetaxel + gemcitabine clinical combination study.
- Progressed preparations and submissions for DEP® irinotecan combination arm.
- Partnering discussions underway for internal DEP® candidates with licences to be sought at the most appropriate time to maximise
commercial value.
- Progress with DEP® gemcitabine, towards the clinic, and other new preclinical DEP® candidates have been developed and
advanced into preclinical development, including DEP® radiopharmaceutical candidates (e.g. DEP® lutetium, DEP® zirconium), and
targeted DEP® candidates (e.g. HER-2 Targeted DEP® ADC).
Initiated a number of new DEP® radiopharmaceutical and ADC commercial discussions.
-
Relative TSR:
-
-
The company’s TSR was tested against the performance of the S&P/ASX300 Index for the three-year performance period ended
30 June 2021. The company’s annualised TSR for this period was 13.1% compared to the S&P/ASX300 Index annualised TSR of
5.9%, resulting in 7.2% over the index.
The relative TSR is calculated independently by a professional services firm and more information regarding the relative TSR
hurdle is provided on page 29.
36 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
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Directors’ Report Remuneration Report
6. Details of remuneration
The following tables show details of the remuneration received by the directors and the key management personnel of the group for the current
and previous financial year. As required by the Accounting Standards, the value of performance rights included in the remuneration tables
relates to the fair value of the performance rights (which may include performance rights granted in prior years), rather than their face value.
2021
Name
Short-term benefits
Post-
employment
Cash salary &
fees†
$
Cash bonus# *
$
Non-monetary
benefits
$
Superannuation
$
Long-term
benefits
Long service
leave
$
Share-based
payments
Performance
Rights~#
$
Non-executive directors
R B Thomas
117,808
R A Hazleton^
Z Peach
P R Turvey
D J McIntyre
29,944
72,032
78,767
72,833
–
–
–
–
–
–
–
–
–
–
11,192
–
6,843
7,483
–
–
–
–
–
–
–
–
–
–
–
Total
$
129,000
29,944
78,875
86,250
72,833
Executive director
J K Fairley
Other KMP executives
539,985
194,825
2,901
21,695
9,892
782,453
1,551,751
N J Baade
A Eglezos
D J Owen
J R Paull
Totals
222,785
78,000
37,684
21,695
2,232
282,991
645,387
252,789
80,000
8,166
21,695
14,769
277,403
654,822
239,766
70,000
22,119
227,945
80,000
42,159
21,695
21,695
–
272,367
625,947
5,101
313,348
690,248
1,854,654
502,825
113,029
133,993
31,994
1,928,562
4,565,057
† There were no increases in overall total fixed remuneration packages for KMP executives in the FY21 year. Executives may elect to salary
sacrifice part of their total fixed remuneration package. Cash salary & fees represents gross salary earned less any salary sacrifice amounts.
The two forms of salary sacrifice in FY21 were leasing a motor vehicle under a novation arrangement, and the use of a car park. These amounts
are reported in non-monetary benefits, and these amounts for cash salary & fees may vary from one year to the next, depending on the
elections chosen.
~ Includes the expensing of STI equity awarded in lieu of cash for the FY20 performance period with a vesting date of 30 June 2021.
# All performance related remuneration, including cash bonuses and performance rights granted are determined to be an ‘at risk’ component of
total remuneration.
* The cash bonus reported relates to amounts assessed to be paid for the performance period 1 July 2020 to 30 June 2021. The actual cash
payment of the bonuses will occur in FY22.
^ R A Hazleton retired from the Board on 20 November 2020.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 37
37
Directors’ Report Remuneration Report
6. Details of remuneration (continued)
2020
Name
Short-term benefits
Post-
employment
Cash salary &
fees†
$
Cash bonus#
$
Non-monetary
benefits
$
Superannuation
$
Long-term
benefits
Long service
leave
$
Share-based
payments
Performance
Rights#
$
Non-executive directors
R B Thomas
R A Hazleton
Z Peach
P R Turvey
D J McIntyre
122,374
77,000
71,689
71,689
24,167
Executive director
J K Fairley
519,499
Other KMP executives
N J Baade
A Eglezos
D J Owen
J R Paull
Totals
223,091
253,842
240,458
227,887
1,831,696
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
11,626
–
6,811
6,811
–
–
–
–
–
–
–
–
–
–
–
Total
$
134,000
77,000
78,500
78,500
24,167
24,397
21,003
14,254
868,418
1,447,571
36,664
6,547
22,210
42,495
21,003
21,003
21,003
21,003
2,320
13,199
2,170
8,012
232,505
515,583
227,712
522,303
226,581
512,422
259,653
559,050
132,313
130,263
39,955
1,814,869
3,949,096
† Increases in overall total fixed remuneration packages for KMP executives were under 3.3% in FY20. Executives may elect to salary sacrifice
part of their total fixed remuneration package. Cash salary & fees represent gross salary earned less any salary sacrifice amounts. The two
forms of salary sacrifice in FY20 were leasing a motor vehicle under a novation arrangement, and the use of a car park. These amounts are
reported in non-monetary benefits, and these amounts for cash salary & fees may vary from one year to the next, depending on the elections
chosen.
# All performance related remuneration, including and cash bonuses and performance rights granted, are determined to be an ‘at risk’
component of total remuneration.
The relative proportions of remuneration for FY21 that are linked to performance and those that are fixed are as follows:
CEO
J K Fairley
Other KMP executives
N J Baade
A Eglezos
D J Owen
J R Paull
Fixed
remuneration
At risk - STI
cash
At risk - STI
Equity1
At risk - STI
Total
At risk - LTI
Equity1
Target
Actual
Target
Actual
Actual
Actual
Actual
35%
37%
50%
44%
45%
45%
43%
13%
12%
12%
11%
12%
18%
17%
16%
17%
17%
25%
31%
20%
29%
28%
28%
29%
40%
32%
30%
27%
26%
27%
28%
1 Where applicable, the expenses include negative amounts for expenses reversed during the year due to a failure to satisfy the vesting
conditions.
The actual remuneration mix for the CEO and other KMP executives for FY20 and FY21 has deviated from the target ranges due to the STI
cash bonus not being awarded in FY20 and additional STI equity rights allocated in FY21 in lieu of FY20 cash bonuses, that vest on 30 June
2021.
Non-statutory Executive Remuneration
The non-statutory executive remuneration is the remuneration earned by KMP executives in FY21 and is set out below with calculations of
equity value both at the vesting date and based on the face value at the beginning of the relevant performance period. Starpharma discloses
non-statutory remuneration voluntarily because it includes the face value of equity that vested in FY21. For LTI equity, the reported value
reflects the KMP executive performance over three years including the impact of the increase in the share price over the three year period.
The table differs from the remuneration details prepared above in this section 6 of this report which are prepared in accordance with statutory
obligations and accounting standards, and presents the expensing of the fair value of performance rights over their vesting period, and may
include the expensing of rights that may not ultimately vest into ordinary shares.
38 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
38
Directors’ Report Remuneration Report
2021
Name
Fixed
remuneration
(1)
STI cash
paid in FY21
(2)
STI equity
vested in
FY21 based
on face value
(3)
LTI equity
vested in
FY21 based
on face value
(3)
STI equity
vested in
FY21 based
on share
price at
vesting date
(4)
LTI equity
vested in
FY21 based
on share
price at
vesting date
(4)
Total non-
statutory
remuneration
earned based
on face value
of equity
(3)
Total non-
statutory
remuneration
earned based
on share price
at vesting date
(4)
Total
remuneration
per
Accounting
Standards
(5)
($)
($)
($)
($)
($)
($)
($)
($)
($)
J K Fairley
564,581
N J Baade
282,164
A Eglezos
282,650
D J Owen
J R Paull
283,580
291,799
–
–
–
–
–
382,353
411,551
618,832
1,112,364
1,565,767
2,088,496
1,551,751
142,106
152,958
132,502
334,613
556,772
769,735
645,387
131,959
142,036
132,847
333,260
547,456
757,946
654,822
133,816
144,035
134,229
330,554
551,625
758,169
625,947
152,395
164,033
166,462
378,314
610,656
834,146
690,248
1 Base salary, superannuation and non-monetary benefits such as novated motor vehicle lease and car park benefits.
2 STI cash paid during the financial year. The amount disclosed for FY21 reflects that no cash bonuses were paid for awarded for FY20.
3 Value of equity rights that vested during the year, based on the face value of the performance rights based on the 3 month VWAP prior to the
start of the relevant performance period (1 July). Vested rights will remain as rights in subsequent periods until exercised. The STI equity was
granted in FY20 and FY21 and the LTI equity was granted in FY18.
4 Value of equity rights that vested during the year, based on the opening price on the date of vesting. Vested rights will remain as rights in
subsequent periods until exercised. The STI equity was granted in FY20 and FY21 (for in lieu of cash rights) and the LTI equity was granted in
FY18.
5 In accordance with statutory obligations and accounting standards in section 6 of this report, which includes expensing of rights over their
entire vesting period, and rights that may not ultimately vest into ordinary shares.
Equity awards and share price
The total non-statutory remuneration based on the vesting date share price is higher than the total remuneration per Accounting Standards and
the non-statutory remuneration based on face value. The higher amount is primarily driven by the value attached to the equity awards that
vested in FY21. As illustrated in the graph below, this reflects the strong share price performance over the relevant periods of up to a 100%
increase in share price compared with the face value of those rights at the time of allocation. The 3 year LTI rights are predominately driving the
higher reported value at the vesting date. Alternatively, if the share price were to have significantly decreased, the value of these equity awards
would have reduced accordingly. Furthermore, despite being reported in non-statutory remuneration the STI and LTI rights do not automatically
convert to shares, and no executives have exercised rights, so these values have not yet been realised.
Face value of equity awards granted
(based on 3 month VWAP to 30 June)
Share price at the time of equity awards vesting
(based on share price on vesting date)
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 39
39
Directors’ Report Remuneration Report
6. Details of remuneration (continued)
Details of remuneration: cash bonuses, shares, and performance rights
For each cash bonus and grant of equity included in the tables on pages 37 to 42, the percentage of the available bonus or grant that was paid,
or that vested, in the financial year, and the percentage that was forfeited because the person did not meet the service and performance
objectives is set out below. Performance rights vest over the specified periods provided vesting criteria are met. No rights will vest if the
conditions are not satisfied, hence the minimum value of the rights yet to vest is nil. The maximum value of the rights yet to vest has been
determined as the amount of the grant date fair value of the rights that is yet to be expensed. The CEO was awarded 78% of her maximum cash
bonus entitlement of $249,775 in FY21, with the balance of 22% forfeited as described above in the report. STI cash bonuses for other KMP
executives are paid at the absolute discretion of the Board based on an individual’s performance within the year, hence there is no component
forfeited to report.
Grant date
fair value of rights
granted during
20211,2
$
1,218,506
Name
J K Fairley
N J Baade
433,074
A Eglezos
424,828
D J Owen
424,828
J R Paull
469,268
Financial
year
granted
Vested
Forfeited
Performance rights
Maximum
fair value yet to
vest
Financial
years in which
rights may
vest
2021
2021
2021
2020
2020
2019
2018
2021
2021
2021
2020
2020
2019
2018
2021
2021
2021
2020
2020
2019
2018
2021
2021
2021
2020
2020
2019
2018
2021
2021
2021
2020
2020
2019
2018
%
100%*
-
-
75%
-
-
82%
100%*
-
-
83%
-
-
87%
100%*
-
-
79%
-
-
86%
100%*
-
-
82%
-
-
86%
100%*
-
-
85%
-
-
89%
%
-
22%
-
25%
-
35%
18%
-
17%
-
17%
-
18%
13%
-
14%
-
21%
-
19%
14%
-
21%
-
18%
-
20%
14%
-
14%
-
15%
-
16%
11%
30/06/2021
30/06/2022
30/06/2024
30/06/2021
30/06/2023
30/06/2022
30/06/2021
30/06/2021
30/06/2022
30/06/2024
30/06/2021
30/06/2023
30/06/2022
30/06/2021
30/06/2021
30/06/2022
30/06/2024
30/06/2021
30/06/2023
30/06/2022
30/06/2021
30/06/2021
30/06/2022
30/06/2024
30/06/2021
30/06/2023
30/06/2022
30/06/2021
30/06/2021
30/06/2022
30/06/2024
30/06/2021
30/06/2023
30/06/2022
30/06/2021
$
-
82,284
535,588
-
239,009
38,274
-
-
27,847
181,053
-
64,394
11,923
-
-
29,023
181,053
-
64,394
11,870
-
-
26,671
181,053
-
64,394
11,589
-
-
31,733
197,965
-
70,400
13,401
-
* Relates to rights granted in lieu of FY20 cash bonus. The FY20 cash bonus award was based on percentage achievement of KPIs and was
therefore not further discounted when converted to equity.
1 The value at grant date calculated in accordance with AASB 2 Share-based Payments of performance rights granted during the year as part of
remuneration.
2 The maximum value of performance rights is determined at grant date and is amortised over the applicable vesting period. The amount which
will be included in a given KMP executive’s remuneration for a given year is consistent with this amortised amount. No performance rights will
vest if the conditions are not satisfied, hence the minimum value yet to vest is nil.
40 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
40
Directors’ Report Remuneration Report
7. Executive employment agreements
Remuneration and other terms of employment for executives are formalised in employment agreements which set out duties, rights and
responsibilities, and entitlements on termination. All executives also have a formal position description for their role.
Major provisions of the agreements relating to remuneration are set out below for those KMP executives who are employed at the date of this
report.
CEO and Managing Director (J K Fairley)
No fixed term of agreement.
Base salary, inclusive of superannuation, per annum as at 30 June 2021 of $561,680, to be reviewed annually by the Remuneration and
Nomination Committee.
A cash bonus up to $249,775 for the year to 30 June 2021 allocated proportionately on the achievement of predetermined KPIs.
The CEO is entitled to participate in a STI and LTI equity plan, subject to receiving any required or appropriate shareholder approval.
Fringe benefits consist of on-site car parking.
The CEO’s termination provisions are as follows:
Notice Period
Payment in lieu
of notice
Treatment of equity STI
Treatment of LTI
Resignation
12 months
Termination for cause
None
N/A
None
Unvested awards forfeited
Unvested awards forfeited
Unvested awards (including an
exercisable, vested right)
forfeited
Unvested awards (including an
exercisable, vested right)
forfeited
Termination without cause,
including redundancy
12 months
6 months
payment in lieu
of notice with 6
month notice
period
Unvested awards lapse unless
the Board determines otherwise
after considering the portion of
the performance period that has
elapsed and the extent to which
performance conditions have
been met. Vesting of the rights
may be accelerated in this case.
Termination in cases of death,
disablement or other cause
approved by the Board
N/A
N/A
Unvested awards lapse, unless
the Board determines otherwise
after considering the portion of
the performance period that has
elapsed and the extent to which
performance conditions have
been met. Vesting of the rights
may be accelerated in this case.
Unvested awards lapse unless
the Board determines
otherwise after considering the
portion of the performance
period that has elapsed and
the extent to which
performance conditions have
been met. Vesting of the rights
may be accelerated in this
case.
Unvested awards lapse,
unless the Board determines
otherwise after considering the
portion of the performance
period that has elapsed and
the extent to which
performance conditions have
been met. Vesting of the rights
may be accelerated in this
case.
Other KMP executives
Standard executive termination provisions are as follows:
Notice Period
Payment in lieu
of notice
Treatment of equity STI
Treatment of LTI
Resignation
Termination for cause
Termination without cause,
including redundancy
3 months
None
Typically 3
months
(range 3-6
months)
N/A
None
3 months
(3-6 months)
Same as for CEO
Same as for CEO
Same as for CEO
Same as for CEO
Same as for CEO
Same as for CEO
Termination in cases of death,
disablement, or other cause
approved by the Board
N/A
N/A
Same as for CEO
Same as for CEO
There are no loans, or other transactions, to the CEO or Other KMP executives.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 41
41
Directors’ Report Remuneration Report
8. Additional disclosures relating to employee equity schemes
Ordinary shares
The number of ordinary shares in the company provided as remuneration during the financial year to any of the directors or the key
management personnel of the group, including their close family members and entities related to them, are set out below. The table may also
reflect changes to shareholdings which are unrelated to remuneration.
2021
Name
Directors
R B Thomas
J K Fairley
R A Hazleton#
Z Peach
P R Turvey
D J McIntyre
Other KMP executives
N J Baade
A Eglezos
D J Owen
J R Paull
Balance at the
start of the year
Granted during
the year as
compensation
On exercise of
performance rights
during the year
Other changes
during the year*
Balance at the
end of the year
825,000
3,905,434
208,466
48,975
179,821
16,240
494,079
322,542
579,802
231,103
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
50,000
20,000
–
–
13,334
–
(139,779)
(25,000)
(327,716)
(190,000)
875,000
3,925,434
208,466
48,975
193,155
16,240
354,300
297,542
252,086
41,106
* Other changes relate to market transactions and purchases under the Share Purchase Plan undertaken in the year.
# Retired as a non-executive director on 20 November 2020, balance at the end of the year reflects his shareholding as at 20 November 2020.
Performance rights
The number of rights over ordinary shares in the company provided as remuneration during the financial year to any of the executive directors
and the KMP executives, including their close family members and entities related to them, are set out below. No non-executive director held
performance rights in FY21 or the prior year.
2021
Name
Directors
Balance at the
start of the
year
Granted during
the year as
compensation
Exercised
during the year
Other changes
during the year#
Balance at the
end of the year
Vested and
exercisable at
the end of the
year Total Unvested
J K Fairley
4,453,114
973,221
Other KMP executives
N J Baade
1,161,491
A Eglezos
1,163,171
D J Owen
1,163,223
300,335
294,711
294,711
J R Paull
# Other changes during the year relate to the forfeiture of rights.
1,320,183
325,484
-
-
-
-
-
(192,093)
5,234,242
3,361,058
1,873,184
(40,887)
(43,539)
(43,980)
(35,812)
1,420,939
1,414,343
1,413,954
883,039
876,443
876,054
1,609,855
1,021,755
537,900
537,900
537,900
588,100
The market value at vesting date of performance rights that vested during 2021 was $3,503,718 (2020: $2,222,235). The increase in market
value reflects a higher share price at date of vesting as well as the STI equity awarded in lieu of cash bonuses for FY20. No other shares were
issued on the vesting of performance rights provided as remuneration to any of the directors or any KMP of the group in the current year.
The market value is calculated using the opening share price on the respective vesting/exercise date or forfeit date.
Dilutionary impact of performance rights on issue
As at 30 June 2021 there were 17,472,497 performance rights on issue, representing 4.3% of the 406,078,026 shares on issue (SOI) at 30 June
2021. There were 11,093,333 rights which were held by KMP, representing 2.7% of SOI, of which 5,234,242 (1.3% of SOI) were approved by
shareholders.
42 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
42
Directors’ Report Remuneration Report
The terms and conditions of the grant of performance rights to the directors or the key management personnel of the group in the current year or
which impact future years are as follows:
Grant date
Vesting date
Performance measure
Number
of rights
granted
Fair value per right
at grant date % vested
10 August 2017
30 September 2020 890,800
Achievement of KPIs
10 August 2017
30 September 2020 157,200
TSR
29 November 2017
30 September 2020 535,816
Achievement of KPIs
29 November 2017
30 September 2020 360,063
TSR
16 August 2018
30 June 2020 158,000
Achievement of KPIs
16 August 2018
30 September 2021 537,200
Achievement of KPIs
16 August 2018
30 September 2021 94,800
TSR
29 November 2018
30 June 2020 134,980
Achievement of KPIs
29 November 2018
30 September 2021 377,945
Achievement of KPIs
29 November 2018
30 September 2021 161,976
TSR
17 October 2019
30 June 2021 158,000
Achievement of KPIs
17 October 2019
30 September 2022 537,200
Achievement of KPIs
17 October 2019
30 September 2022 94,800
TSR
21 November 2019
30 June 2021 134,199
Achievement of KPIs
21 November 2019
30 September 2022 375,758
Achievement of KPIs
21 November 2019
30 September 2022 161,039
30 October 2020
30 June 2021 277,441
TSR
N/A
30 October 2020
30 June 2022 187,560
Achievement of KPIs
30 October 2020
30 September 2023 637,704
Achievement of KPIs
30 October 2020
30 September 2023 112,536
20 November 2020
30 June 2021 176,755
TSR
N/A
20 November 2020
30 June 2022 159,293
Achievement of KPIs
20 November 2020
30 September 2023 446,021
Achievement of KPIs
20 November 2020
30 September 2023 191,152
TSR
$0.77
$0.54
$1.29
$1.23
$1.26
$1.26
$0.85
$1.48
$1.48
$1.13
$1.15
$1.15
$0.71
$1.29
$1.29
$0.85
$1.47
$1.47
$1.47
$1.20
$1.32
$1.32
$1.32
$0.96
85
100
70
100
87
Nil
Nil
83
Nil
Nil
82
Nil
Nil
75
Nil
Nil
100
Nil
Nil
Nil
100
Nil
Nil
Nil
Information of the performance measures:
Achievement of KPIs:
The achievement of certain key business performance indicators linked to matters which the Board believes
are key drivers of shareholder value.
Relative TSR (TSR):
As set out on page 29 of the remuneration report.
- end of remuneration report -
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 43
43
Directors’ Report
Shares under rights
Insurance of officers
Unissued ordinary shares of Starpharma Holdings Limited under
the Employee Performance Rights Plan at the date of this report
are as follows:
Grant date
Vesting date
Number of
rights granted
Balance of rights
at date of report
11 Nov 2015
30 Sep 2018
2,076,800
1,051,794
11 Nov 2015
30 Jun 2017
19 Nov 2015
30 Sep 2018
19 Nov 2015
30 Jun 2017
13 Oct 2016
30 Jun 2018
519,200
893,851
219,395
594,450
245,625
836,260
181,001
277,314
13 Oct 2016
30 Sep 2019
2,377,800
1,323,372
29 Nov 2016
30 Jun 2018
29 Nov 2016
30 Sep 2019
10 Aug 2017
30 Jun 2019
223,022
876,978
694,120
172,842
846,281
409,980
10 Aug 2017
30 Sep 2020
2,776,480
1,741,547
29 Nov 2017
30 Jun 2019
29 Nov 2017
30 Sep 2020
16 Aug 2018
30 Jun 2020
16 Aug 2018
30 Sep 2021
2 Nov 2018
30 Jun 2020
224,121
895,879
203,500
814,000
259,147
2 Nov 2018
30 Sep 2021
1,036,587
29 Nov 2018
30 Jun 2020
29 Nov 2018
30 Sep 2021
17 Oct 2019
30 Jun 2021
134,980
539,921
459,767
197,226
736,665
170,356
814,000
97,600
780,609
112,708
539,921
379,034
17 Oct 2019
30 Sep 2022
1,839,067
1,701,175
21 Nov 2019
30 Jun 2021
21 Nov 2019
30 Sep 2022
30 Oct 2020
30 Jun 2021
30 Oct 2020
30 Jun 2022
134,199
536,797
567,083
548,270
101,320
536,797
561,459
536,878
30 Oct 2020
30 Sep 2023
2,193,080
2,147,512
20 Nov 2020
30 Jun 2021
20 Nov 2020
30 Jun 2022
20 Nov 2020
30 Sep 2023
176,755
159,293
637,173
176,755
159,293
637,173
Performance rights and the resultant shares are granted for nil
consideration.
Shares issued on the exercise of vested rights
The following ordinary shares of Starpharma Holdings Limited
were issued during the year to the date of this report on the
exercise of vested performance rights granted under the Employee
Performance Rights Plan. The shares are issued for nil
consideration.
Date rights granted
Issue price of shares
(Exercise price of right)
Number of shares
issued
11 Nov 2015
13 Oct 2016
10 Aug 2017
2 Nov 2018
$ -
$ -
$ -
$ -
70,000
190,362
523,735
113,227
During the financial year, Starpharma Holdings Limited paid a
premium to insure the directors and executive officers of the
company and related bodies corporate, against certain liabilities
and expenses.
In accordance with normal commercial practice, the disclosure of
the amount of premium payable, and the nature of the liabilities
and expenses covered by the policy, is prohibited by a
confidentiality clause in the relevant insurance contract.
Audit & non-audit services
The company may decide to employ the auditor on assignments
additional to their statutory audit duties where the auditor’s
expertise and experience with the company and/or the group are
important. Details of the amounts paid or payable to the auditor
(PricewaterhouseCoopers) for audit services provided during the
year is set out below. There were no non-audit services provided
by the auditor during the financial year.
During the year, the following fees were paid or payable for
services provided by the auditor (PricewaterhouseCoopers) of the
company, its related practices and non-related audit firms.
Assurance Services
Audit or review of financial reports of the
entity or any entity in the group under the
Corporations Act 2001
2021
$
2020
$
146,462
146,462
No other assurance services, taxation or advisory services have
been provided by the auditor in either the current or prior year.
Auditor’s Independence Declaration
A copy of the auditor’s independence declaration as required
under section 307C of the Corporations Act 2001 is set out on
page 45.
Rounding of amounts
The company is of a kind referred to in ASIC Corporations
(Rounding Financial/Directors' Reports) Instrument 2016/191,
issued by the Australian Securities and Investments Commission,
relating to the “rounding off’’ of amounts in the directors’ report.
Amounts in the directors’ report have been rounded off in
accordance with that Instrument to the nearest thousand dollars, or
in certain cases, the nearest dollar.
Auditor
PricewaterhouseCoopers continues in office in accordance with
section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of the
Directors.
Robert B Thomas AO
Chairman
Melbourne, 26 August 2021
44 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
44
Auditor’s Independence Declaration
Independent auditor’s report
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
Auditor’s Independence Declaration
users taken on the basis of the financial report.
To the members of Starpharma Holdings Limited
As lead auditor for the audit of Starpharma Holdings Limited for the year ended 30 June 2021, I
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
declare that to the best of my knowledge and belief, there have been:
opinion on the financial report as a whole, taking into account the geographic and management
Report on the audit of the financial report
structure of the Group, its accounting processes and controls and the industry in which it operates.
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
Our opinion
The Group operates in the biotechnology industry, undertaking development of dendrimer technology
for pharmaceutical, life science and other applications. The Group owns a portfolio of proprietary
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
In our opinion:
technology with applications in different stages between development and commercialisation.
This declaration is in respect of Starpharma Holdings Limited and the entities it controlled during the
The accompanying financial report of Starpharma Holdings Limited (the Company) and its controlled
period.
entities (together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its
financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
Materiality
Audit scope
Key audit matters
Our audit focused on where the
Amongst other relevant topics, we
communicated the following key
audit matters to the Audit and Risk
Committee:
the consolidated balance sheet as at 30 June 2021
●
For the purpose of our audit we used
the consolidated statement of comprehensive income for the year then ended
●
Group made subjective judgements;
overall Group materiality of $0.76
the consolidated statement of changes in equity for the year then ended
●
for example, significant accounting
million, which represents approximately
the consolidated statement of cash flows for the year then ended
●
estimates involving assumptions
5% of the Group’s adjusted loss before
Melbourne
Brad Peake
and inherently uncertain future
tax.
the consolidated income statement for the year then ended
●
26 August 2021
Partner
events.
PricewaterhouseCoopers
the notes to the consolidated financial statements, which include significant accounting policies
●
We applied this threshold, together with
and other explanatory information
qualitative considerations, to determine
the directors’ declaration.
the scope of our audit and the nature,
timing and extent of our audit procedures
and to evaluate the effect of
misstatements on the financial report as a
whole.
All audit procedures are performed
by PwC Australia, consistent with
the location of Group management
and financial records.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
These are further described in the
Key audit matters section of our
report.
Research and development tax
Basis for opinion
Disposal of Starpharma
Agrochemicals
incentive
●
We tailored the scope of our audit
taking into account the accounting
processes and controls, and the
industry in which the Group
operates.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We chose Group adjusted loss before tax
because, in our view, it is the benchmark
against which the performance of the
Group is most commonly measured. We
adjusted for the impact of the gain on
disposal of Starpharma Agrochemicals as
the financial statement line item is not
expected to reoccur and has a
disproportionate impact on the earnings
result for the period.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We utilised a 5% threshold based on our
professional judgement, noting it is
within the range of commonly acceptable
profit related thresholds in the
biotechnology industry.
PricewaterhouseCoopers, ABN 52 780 433 757
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331 MELBOURNE VIC 3001
T: +61 3 8603 1000, F: +61 3 8603 1999, www.pwc.com.au
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Page 80 of 88
Liability limited by a scheme approved under Professional Standards Legislation.
Starpharma Holdings Limited Annual Report 2021
Liability limited by a scheme approved under Professional Standards Legislation.
45
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 45
Corporate Governance Statement
Starpharma Holdings Limited (“the company”) and the Board are
committed to achieving and demonstrating the highest standards
of corporate governance. The Board guides and monitors the
company’s activities on behalf of the shareholders. In developing
policies and setting standards, the Board considers the Australian
Securities Exchange (“ASX”) Corporate Governance Principles
and Recommendations (4th Edition) (“the 4th Edition CGC
Recommendations”).
This Corporate Governance Statement sets out and describes the
company’s current corporate governance principles and practices
which the Board considers to comply with the 4th Edition CGC
Recommendations. This Corporate Governance Statement is
available on the company’s website. The company and its
controlled entity together are referred to as “the group” in this
statement. This report is current as at 26 August 2021 and was
approved by the Board on that date.
Principle 1: Lay solid foundations for management and oversight
Relationship between the Board and management
The relationship between the Board and senior management is
critical to the group’s long-term success. The directors are
responsible to the shareholders for the performance of the group in
both the short and long term, and they seek to balance sometimes
competing objectives in the best interests of the group.
Their focus is to enhance the interests of shareholders and other
key stakeholders and to ensure the group is properly managed.
1.1 Responsibilities of the Board
The responsibilities of the Board include oversight, accountability
and approval in relation to certain:
-
-
-
-
-
-
Strategic issues;
Shareholding items;
Financial items;
Expenditure items;
Audit related items; and
Board and senior management, delegation and succession.
Other Board responsibilities include:
-
Enhancing and protecting the reputation and culture of the
group;
Overseeing the operation of the group, including its systems
for control, accountability, and risk management;
-
- Monitoring financial performance;
-
-
Liaising with the company’s auditors;
Ensuring there are effective management processes in place
and approving major corporate initiatives;
Setting company values and code of conduct;
Satisfying itself regarding the risk management framework
and setting risk appetite;
Overseeing the process for timely and balanced disclosure of
material information; and
Reporting to shareholders.
-
-
-
-
Further details regarding the responsibilities of the Board are
detailed in the Board charter. The Board’s conduct is governed by
the company’s constitution. Both documents are available at
www.starpharma.com/corporate_governance
1.2 Director/senior management appointment and director
election
Before appointing a director or senior management, and before
putting forward a director candidate to shareholders for election,
the Remuneration and Nomination Committee will undertake
appropriate background checks. The Remuneration and
Nomination Committee will also provide all material information
which is relevant to whether or not a person should be elected or
re-elected as a director to the Board for provision to shareholders
(including in relation to independence and a recommendation
regarding support or otherwise to the candidate’s appointment or
election).
The other commitments of non-executive directors are routinely
reviewed by the Board in addition to being considered by the
Remuneration and Nomination Committee prior to their
appointment to the Board, and are reviewed at least annually. Prior
to appointment or being submitted for re-election, each non-
executive director is required to specifically acknowledge that they
have and will continue to have the time available to discharge their
responsibilities to the company.
The company’s constitution specifies that all non-executive
directors must retire from office no later than three years or the
third annual general meeting (“AGM”) following their last election
(whichever is longer), and that an election of directors must take
place each year. Any director, excluding the Managing Director
(CEO of the group), who has been appointed during the year, must
stand for election at the next AGM.
46 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
In relation to director tenure, the Board charter provides that it is
anticipated that non-executive directors would generally hold office
for up to ten years, and shall serve a maximum of fifteen years
from date of first election by shareholders.
The Board, on its initiative and on an exceptional basis, may
exercise discretion to extend this maximum term where it
considers that such an extension would benefit the company.
Starpharma’s policy on non-executive director tenure is consistent
with ASX guidance which acknowledges that shareholders are
likely to be served well by a mix of directors, including some with a
longer tenure who have accumulated experience and developed a
‘corporate memory’ over a substantial period.
Director
R B Thomas
R A Hazleton
Z Peach
P R Turvey
J K Fairley
D J McIntyre
L Cheng
Date first elected by shareholders
November 2014
November 2007
(retired 20 November 2020)
November 2011
November 2012
(resigned 29 July 2021)
N/A, appointed by the Board in 2006
November 2020
Appointed by the Board on 1 August
2021 and standing for election at
November 2021 AGM
1.3 Written agreements with Directors and Senior Executives
New directors receive a letter of appointment, which outlines the
company’s expectations of the director in relation to their
participation, time commitments and compliance with policies and
regulatory requirements.
Senior executives and all employees are required to sign
employment agreements which set out the key terms of their
employment. All roles have formal position descriptions.
1.4 Responsibilities of the Company Secretary
The Company Secretary supports the effective functioning of the
Board and its committees. The Company Secretary is accountable
directly to the Board, through the Chair, on all matters related to
the proper functioning of the Board. The specific responsibilities of
the Company Secretary are detailed in the Board charter, which is
available at www.starpharma.com/corporate_governance
1.5 Diversity objectives and achievement
The company is committed to workplace diversity, and the Board
values the level of diversity already present within the organisation,
believing that continuing to promote diversity is in the best
interests of the company, its employees and its shareholders.
The Board last revised its Diversity Policy in May 2021, which
operates alongside the Code of Conduct (including Anti-
Discrimination, Bullying and Harassment) policy, and it provides a
framework for Starpharma to achieve several diversity objectives.
The Diversity Policy is available at
www.starpharma.com/corporate_governance
Independent of external corporate governance initiatives, the
company has embraced a culture of inclusion and equal
opportunity across diversity areas recognised as potentially
impacting upon equality in the workplace, with a focus on gender
but without limiting other aspects of diversity.
The company recognises the corporate benefits of diversity of its
workforce and the Board, and realises the importance of being
able to attract, retain and motivate employees from the widest
possible pool of available talent. In accordance with the Diversity
46
Corporate Governance Statement
Policy, the Board has established measurable objectives for
achieving gender diversity and has conducted an assessment of
the objectives and progress in achieving them.
Objectives set by the Board for the 2021 financial year, and
progress against these objectives is set out below:
Objective
Measurement
FY21 Performance
Female participation/talent
pipeline
Achieve greater than 40% female
participation for direct reports to the CEO
or senior executives (“CEO minus 2”).
Actively support and encourage training,
networking and development opportunities
for high potential employees.
Equal opportunity employer
Remuneration parity
Inclusion of female candidates in
recruitment process for each role with
female applicants, including for Board
appointments.
Consistent and merit-based selection
criteria and recruitment processes used
when choosing successful candidates in
all cases.
Ensure no significant remuneration
difference for individuals in similar roles,
based on gender.
50% of CEO minus 2 positions are held by females.
Professional development opportunities and options
that are aligned with the group’s needs and the
individual’s role are considered for all employees as
part of the group’s annual performance review process
and as needed during the year. Investments in
formal/external development programs are made
where appropriate and in FY21, 44 professional
development programs including conferences were
attended by female employees across all levels of the
organisation.
The group also continues to support participation of all
female staff in a biotech industry networking initiative,
which included presentations by industry role models.
In FY21 this event was not run due to COVID-19
restrictions.
Female candidates participated in all recruitment
processes throughout FY21. 60% of the positions were
filled with female candidates.
50% of the internal promotions that occurred in FY21
were female employees.
100% of successful candidates were selected on
merit-based criteria after taking part in Starpharma’s
selection process.
Analysis was completed of pre- and post-remuneration
review “remuneration differentials to benchmarks” by
gender, and confirmed there were no significant
gender differences in remuneration relative to role
benchmarks.
Flexible working arrangements
Employees working under flexible working
arrangements (including part time).
16% of employees work under flexible working
arrangements, unrelated to the COVID-19 restrictions.
Granting a majority of requests for flexible
work arrangements for family
responsibilities.
Mutually satisfactory flexible work arrangements were
reviewed and agreed between the requesting
employee and the company in 100% of cases during
FY21.
Support for return to work after
parental leave
Target a return to work following primary
care parental leave of 75%.
Three employees were on primary care parental leave
during FY21. Of the two who were due to return to
work in FY21, both (100%) returned to work.
Slightly under half (47%) of Starpharma’s employees are female,
maintaining a similar gender representation to that of previous
years. As captured in Starpharma’s diversity objectives (above),
the group strives to put in place measures, such as flexible
working arrangements, specifically to encourage participation by
all. The table below sets out the proportion of female employees in
the whole organisation, in leadership/management roles (“CEO
minus 2”), in senior executive positions and on the Board as at 30
June 2021.
Starpharma continues to have a high level of both gender and
general diversity, however given the relatively small number of
total employees, a change of one or few employees may have a
significant impact on the group’s performance in respect of the
measurable diversity objectives.
Starpharma is also proud of the ethnic diversity of our employee
population, with 45% of all employees born outside Australia in 17
different countries.
Starpharma continues to improve its range of objectives to support
workplace diversity. For FY22, the group has expanded its
objectives, adding a measurement for awareness of unconscious
bias, and also plans to broaden its measurement of diversity.
% Female (at 30 June)
2021
2020
Whole organisation (staff and
Board)
47%
49%
Leadership/management roles
42%
Senior executive (CEO &
direct reports)
43%
50%
43%
Board
40%#
33%
# 60% at the date of this report.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 47
47
Corporate Governance Statement
1.6 Board, committee and director performance
The performance of the Board and its committees are reviewed
each year by the Chairman based on the completion of a formal
feedback questionnaire by each director. The summarised results
are then reported back to and discussed by the Board. This
performance evaluation took place in FY21.
1.7 CEO and senior executive performance
Performance assessments for senior executives take place
annually and took place during the year. Performance review
timing of executives occur throughout July/August in respect of the
prior financial year. The process for these assessments is
described in the remuneration report under the heading
“Remuneration governance” on page 22 of this report.
As part of the Board discussion on senior executive performance,
directors give consideration to succession planning and
development to ensure continuity and a smooth leadership
transition in the event of senior executive movements. Separate
succession planning discussions are also held as appropriate
during the year.
Principle 2: Structure the Board to be effective and add value
2.1 Board committees
The Board has established two committees to assist in the
execution of its duties and to allow detailed consideration of
complex issues. The appropriateness of the committee structure
and membership is reviewed on an annual basis. Board
committees are chaired by an independent director other than the
Chairman of the Board. Where applicable, matters determined by
committees are submitted to the full Board as recommendations
for Board decisions.
The committees established by the Board are:
-
-
Remuneration and Nomination Committee; and
Audit and Risk Committee.
Each committee’s charter sets out its role, responsibilities,
composition and structure. The committee charters are reviewed
annually and were last reviewed in May 2021. Committee charters
are available at www.starpharma.com/corporate_governance
Both committees report regularly to the Board and minutes of
committee meetings are provided to the Board.
2.1.1 Remuneration and Nomination Committee
For the entire reporting period to 30 June 2021, the Remuneration
and Nomination Committee comprised of at least three
independent non-executive directors.
At the date of this report, the Remuneration and Nomination
Committee is comprised of three independent non-executive
directors, consisting of the following:
Ms Z Peach (Chairman)
Mr R B Thomas
Ms L Cheng
Details of these directors’ qualifications and attendance at
committee meetings are set out in the directors’ report on pages
13 to 20.
The charter of the Remuneration and Nomination Committee deals
with items, to the extent delegated by the Board, related to
reviewing and making recommendations to the Board in respect of
the following:
-
Board and director candidate identification, appointments,
elections, composition, independence, tenure and
succession;
Remuneration and incentive policies and practices generally;
Remuneration packages and other terms of employment for
executive directors, other senior executives and non-
executive directors;
The succession of the CEO and other senior executives;
Diversity related items;
Board skills matrix;
Background checks for director candidates;
Provision and oversight of induction and training development
opportunities for directors; and
-
-
-
-
-
-
-
- Minimum shareholding requirements for non-executive
directors (if any).
2.1.2 Audit and Risk committee
For the entire reporting period to 30 June 2021, the Audit and Risk
Committee comprised of at least three independent non-executive
directors.
At the date of this report, the Audit and Risk Committee is
comprised of four independent non-executive directors consisting
of the following:
Mr D McIntyre (Acting Chair)
Mr R B Thomas
Ms Z Peach
Ms L Cheng
Details of these directors’ qualifications and attendance at
committee meetings are set out in the directors’ report on pages
13 to 20.
Each member of the Audit and Risk Committee is financially
literate, and jointly possess a number of relevant finance
qualifications and experience. As a collective, the members of the
Audit and Risk Committee between them have substantial
financial, accounting and risk management related/technical
expertise, as well as a sufficient understanding of the
biotechnology industry, to be able to discharge the committee’s
mandate effectively. Members have held relevant senior positions
in companies and organisations, including in finance and risk
management and are or have been members of other ASX-listed
company audit committees. Such positions include chief financial
officer, head of risk management and Chairman of Corporate Risk
Management Committee, M&A director, and broker/analyst roles.
Mr McIntyre is a CPA, and Mr Thomas is approved under the NSW
prequalification scheme for Audit and Risk Committee Independent
Chairs and Members for government/public sector agencies.
Ms Cheng was appointed to the Audit and Risk Committee on
1 August 2021. Ms Cheng has a strong background in finance with
more than 25 years of experience as a finance executive and
having previously served as Chair of an audit and risk committee
for a large organisation.
The Board continually reviews committee membership to ensure
the appropriate qualifications, skills and experience, which are
currently optimal.
The committee meets at least twice a year, and has direct access
to the company’s auditor.
The charter of the Audit and Risk Committee deals with items, to
the extent delegated by the Board, related to reviewing and
making recommendations to the Board in respect of the following:
-
Annual report, half-year financial report and financial
forecasts or guidance given to the market;
Systems of risk management and internal controls and review
and recommendations on certain material exposure;
All aspects related to the external auditor;
Related party transactions;
-
-
-
- Material incidents; and
-
Insurance.
The Remuneration and Nomination Committee charter is available
at www.starpharma.com/corporate_governance
The Audit and Risk Committee charter is available at
www.starpharma.com/corporate_governance
48 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
48
Corporate Governance Statement
2.2 Board skills
Part of the role of the Remuneration and Nomination Committee is
to assist the Board to review the Board’s composition and
succession planning. Both the Board and the Remuneration and
Nomination Committee work to ensure that the Board continues to
have the right balance and mix of diversity (including gender),
skills, experience, background and independence necessary to
discharge its responsibilities.
The current composition of Starpharma’s Board includes directors
with core industry experience, as well as senior finance, legal and
risk management experience, essential for the Audit and Risk
Committee.
A skills and experience matrix is used to review the combined
capabilities of the Board. A mix of general and specialty skills and
experience areas critical to the success of the company are
selected for directors to assess themselves against. Each area is
closely linked to the company’s core objectives and strategy.
The directors rated the depth of their skill and experience in each
of the following areas:
Leadership in Healthcare and/or Scientific Research;
1.
2. Pharmaceutical/Product Development and Supply
Licensing and commercialisation of innovation;
Chain;
3.
International experience;
4. Regulation/Public Policy;
5.
6. Science and Technology
7. Sales, Marketing and Business Development;
8. Governance;
9. Strategy & Risk Management;
10. Accounting/Corporate Finance;
11. Health, Safety & Environment;
12. Remuneration;
13. M&A/Capital Markets; and
14. Audit and Risk.
The results of the matrix show that there are three or more
directors with intermediate to deep skills and experience in each of
the fourteen areas above. The Board reviews the matrix at least
annually to ensure it covers the skills needed to serve the existing
and emerging areas of Starpharma’s business.
The breadth and depth of the desired skills and experience
represented by the directors is notable considering the size of the
Board, and no existing or projected competency gaps have been
identified. This process provides an important input to succession
planning for the Board.
Having regard to the current and future activities of the group, the
Board considers that collectively it has the appropriate skills and
experience in each area listed above.
2.3 Board members
Details of the members of the Board, their experience,
qualifications, term of office and independence status are set out in
the directors’ report under the heading “Information on Directors”.
There are four non-executive directors, all of whom are deemed
independent under the principles set out below, and one executive
director, at the date of signing the directors’ report. The Board
seeks to ensure that:
– at any point in time, its membership represents an appropriate
balance between directors with experience and knowledge of the
group and directors with an external or fresh perspective; and
– the size of the Board is appropriate for the company and
conducive to effective discussion and efficient decision-making.
The Board reviews the commitments of each non-executive
director, such as other directorships, to consider each director’s
capacity to dedicate sufficient time to the company.
Starpharma’s CEO also sits on the board of listed small-cap
investment company Mirrabooka as a non-executive director. This
external post exposes both Dr Fairley and Starpharma to insights
from institutional investors and further extends the company’s
network and provides her with a different vantage point. Dr Fairley
remains fully committed to her CEO role at Starpharma and the
Board has carefully considered the time commitment to ensure her
leadership of Starpharma is not impacted.
The Remuneration and Nomination Committee and Board
assessed the executive and non-executive roles held by David
McIntyre and Lynda Cheng in relation to their time commitment,
and determined there was no question as to their time commitment
to serve on Starpharma’s Board.
2.4 Directors’ independence
The Board charter contains guidelines for assessing the materiality
of directors’ relationships that may affect their independence.
These guidelines are aligned with the 4th Edition CGC
Recommendations. The Board charter is available at
www.starpharma.com/corporate_governance
The Board reviews the independence of directors before they are
appointed, on an annual basis and at any other time where the
circumstances of a director change such as to require
reassessment. The Board has determined that all non-executive
directors are independent at the date of this report.
The CEO is not considered independent by virtue of being an
executive director and a member of management.
2.5 Chairman and Chief Executive Officer (CEO)
The current Chairman, Mr Thomas, is an independent non-
executive director appointed in 2013 and Chairman in June 2014.
The CEO, Dr Jackie Fairley, was appointed as a director and CEO
on 1 July 2006. The Chairman is responsible for leading the Board,
ensuring directors are properly briefed in all matters relevant to
their role and responsibilities, facilitating Board discussions and
managing the Board’s relationship with the group’s senior
executives. The Board has established the functions delegated to
the CEO. The CEO is responsible for implementing company
strategies and policies, and for the day-to-day business operations
of the group in accordance with the strategic objectives of the
group as approved by the Board from time to time.
In accordance with current practice, the company’s policy is for the
roles of Chairman and CEO to be undertaken by separate people.
2.6 Director induction and professional development
The Remuneration and Nomination Committee oversees, reviews
and makes recommendations to the Board in relation to the
induction, training and development of non-executive directors, to
ensure they have access to appropriate learning and development
opportunities to develop and maintain the skills and knowledge
required to effectively perform in their role as a director.
The Board receives regular updates at Board meetings and Board
workshops which assist directors in keeping up to date with
relevant market and industry developments.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 49
49
Corporate Governance Statement
Principle 3: Instil a culture of acting lawfully, ethically and responsibly
3.1 Values
Starpharma prides itself on a strong culture based on
accountability, performance, and ethical behaviours. The
company’s core values are disclosed in its Diversity Policy and its
Code of Conduct, as well as its Environmental, Social and
Governance (“ESG”) Report.
3.3 Whistleblower policy
Starpharma has a whistleblower policy which sets out the
procedures for reporting of instances of illegal, fraudulent, or
undesirable behaviour to ensure that Starpharma’s code of
conduct and other policies are promoted and implemented, and
that compliance with the law is maintained.
3.2 Code of conduct
The Board is committed to the principles underpinning best
practice in corporate governance, with a commitment to the
highest standards of legislative compliance and financial and
ethical behaviour. The company has established a code of conduct
reflecting the core values of the company and setting out the
standards of ethical behaviour expected of directors, officers and
employees in all dealings and relationships including with
shareholders, contractors, customers and suppliers, and with the
group. The code of conduct is provided to new starters as part of
their induction and behaviour is continually monitored to ensure
compliance.
The code of conduct is reviewed periodically and was last updated
in May 2021. The code of conduct covers employment practices,
equal opportunity, harassment and bullying, conflicts of interest,
use of group assets and disclosure of confidential information.
Principle 4: Safeguard the integrity of corporate reports
4.1 Audit and Risk Committee
The company has established an Audit and Risk Committee
consisting of four independent non-executive directors. Details
regarding composition, meetings and charter are set out in
sections 2.1 and 2.1.2 of this Corporate Governance Statement.
External auditors
The company’s policy is to appoint an external auditor who clearly
demonstrates quality and independence. The performance of the
external auditor is reviewed annually. The current auditor,
PricewaterhouseCoopers, has been the external auditor of the
company since it commenced operations. It is
PricewaterhouseCoopers’ policy to rotate audit engagement
partners on listed companies at least every five years.
Starpharma’s audit engagement partner was last appointed in
FY20. An analysis of fees paid to the external auditor is provided in
note 19 to the FY21 financial statements in this annual report.
It is the policy of the external auditor to provide an annual
declaration of their independence to the Audit and Risk
Committee. The external auditor attends each AGM and is
available to answer questions shareholders may have in relation to
the Auditor’s Report and the conduct of the audit
Principle 5: Make timely and balanced disclosures
5.1. Continuous disclosure policy
The company has developed a continuous disclosure and
shareholder communication policy to ensure compliance with the
ASX Listing Rules and to facilitate effective communication with
shareholders.
The Board has appointed the Company Secretary as the person
responsible for disclosure of information to the ASX. The CEO and
Company Secretary are responsible for ensuring that all
announcements made by Starpharma to the ASX are accurate,
balanced and comply with legal and ASX requirements, and are
expressed in a clear and objective manner that allows an investor
or its professional advisers to understand its ramifications and to
assess its impact on the price or value of Starpharma securities.
The policy also sets out the requirements for ensuring compliance
with the continuous disclosure requirements of the ASX Listing
Rules and overseeing and co-ordinating disclosure to the ASX,
analysts, brokers, shareholders, the media and the public.
3.4 Anti-bribery and corruption policy
Starpharma has an anti-bribery and corruption policy which sets
out responsibilities in relation to key areas of fraud, corruption, and
bribery; gifts and entertainment; and political donations. Breaches
of this policy may result in disciplinary action up to and potentially
including dismissal.
The group has not had any material breaches in relation to its code
of conduct, whistleblower policy or anti-bribery and corruption
policy, and if such an event were to occur, Starpharma’s directors
would be appropriately informed. Starpharma’s policies, including
the code of conduct, whistleblower policy and anti-bribery and
corruption policy are available at
www.starpharma.com/corporate_governance.
4.2 CEO and CFO declarations for financial statements
Before the Board approves the company’s financial statements for
the half year or full year, the CEO and the CFO are required to
provide a declaration that, in their opinion, the financial records of
the entity have been properly maintained and that the financial
statements comply with the appropriate accounting standards and
give a true and fair view of the financial position and performance
of the entity and that the opinion has been formed on the basis of a
sound system of risk management and internal control which is
operating effectively.
These declarations have been provided by the CEO and CFO to
the Board in respect of the 2021 half year financial statements and
the 2021 full year financial statements which are included in this
annual report.
4.3 Verification process for unaudited reports
The company has established processes for management to
review, and verify the accuracy of information and ensure the
appropriate balance of information in its corporate reporting. For
example, the group’s management has procedures in place with
relevant staff to allow the CEO and CFO to make appropriate
certifications prior to approval of Starpharma’s quarterly cashflow
and activities report. Where appropriate, the company uses a
documented verification process for the information and data
contained in other reports, such as the ESG report.
Procedures have been established for reviewing whether there is
any price sensitive information that should be disclosed to the
market or whether any price sensitive information may have been
inadvertently disclosed.
Except in exceptional circumstances, all ASX announcements
(other than standard compliance announcements or newsletters
with no new material information) require the approval of the
Chairman, or another non-executive director in his absence.
A copy of the policy is available on the company’s website at
www.starpharma.com/corporate_governance
5.2. Board promptly receives material announcements
To ensure directors have visibility of Starpharma’s market
disclosures, the Board receives copies of all ASX announcements
promptly as they are lodged with the ASX.
50 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
50
Corporate Governance Statement
5.3. Investor presentations
AGM presentations and any investor presentations containing
material new information are disclosed, in accordance with ASX
listing rule 3.1. From time to time, the company will participate in
investor, industry and scientific conferences, and for those events
would typically publish an accompanying presentation on its
website, or lodge it on the ASX announcements platform, as
appropriate.
Principle 6: Respect the rights of shareholders
6.1 Information on website
The company provides ready access to its shareholders and
members of the public to information about the company and its
governance on its website at www.starpharma.com
6.2 Communication with investors
The company recognises that shareholders may not be aware of
all group developments at all times, notwithstanding the release of
information to the ASX in accordance with the company’s
continuous disclosure policy and the law. In addition to ensuring
that all ASX announcements and company reports are available on
the company’s website as soon as possible following confirmation
by the ASX of receipt of the announcement, the company will send
to each shareholder who has so requested, either by post or email
to their nominated address, annual reports.
ASX announcements are also posted on the OTCQX website
(www.otcqx.com) in order to provide timely disclosure to US
investors trading in the company’s Level One ADRs
(OTCQX:SPHRY). The company’s website also has an option for
shareholders to register their email address for direct email
updates which the company may send for material company
matters to, where they have previously been released to ASX and
OTCQX.
6.3 Participation at Annual General Meetings
The AGM is generally held in November each year. The Notice of
Meeting and related Explanatory Notes are distributed to
shareholders in accordance with the requirements of the
Corporations Act 2001 (Cth).
The AGM provides an opportunity for the Board to communicate
with shareholders through the Chairman’s address and the CEO’s
presentation.
Principle 7: Recognise and manage risk
7.1. Audit and Risk Committee
The company has established an Audit and Risk Committee
consisting of at least three independent non-executive directors.
Details regarding its composition, meetings and charter are set out
in section 2.1 and 2.1.2 of this Corporate Governance Statement.
7.2 Risk assessment and management
The Board, through the Audit and Risk Committee, is responsible
for ensuring there are adequate policies in relation to risk
management, compliance and internal control systems. The
company operates in a challenging and dynamic environment, and
risk management is viewed as integral to realising new
opportunities as well as identifying issues that may have an
adverse effect on the company’s existing operations and its
sustainability. The company is committed to a proactive approach
towards risk management throughout its entire business
operations. The Board aims to ensure that effective risk
management practices become embedded in the company’s
culture and in the way activities are carried out at all levels of the
group. The Board and management recognise the importance that
risk management plays in ensuring the business is able to fully
capitalise on the opportunities available to it, as well as mitigating
potential loss.
Health and safety are considered to be of paramount importance
and are the focus of significant risk management activities within
the group. Other risk areas that are addressed include product
liability, business continuity, cyber-security, reputation, intellectual
property, product development and clinical trials. Adherence to the
code of conduct is required at all times and the Board actively
promotes a culture of quality and integrity. The Board has required
management to design and implement a risk management and
internal control system to manage the group’s material business
risks. The risk management policy sets out policies for the
Shareholders are given the opportunity, through the Chairman, to
ask general questions of the Board. Shareholders who are unable
to attend the meeting in person may submit written questions
together with their proxy form, to be addressed in the Chairman’s
address, the CEO’s presentation or put to the meeting by the
Chairman. For the 2020 AGM, the company used technology to
conduct a virtual AGM, which included the ability for shareholders
to ask questions. The external auditor attends each AGM and is
available to answer questions shareholders may have in relation to
the Auditor’s Report and the conduct of the audit.
6.4 Voting by poll
All resolutions at Starpharma’s shareholder meetings are voted on
by poll rather than by show of hands.
6.5 Electronic communication with the company and its share
registry
Shareholders and other interested parties are able to subscribe to
Starpharma news via the company’s website or to certain
information via the company’s share registry. Significant ASX
announcements and financial reports are emailed to subscribers
promptly following confirmation by the ASX of receipt of the
relevant report or announcement.
Shareholders are also able to contact the company or submit
questions or comments to the company’s investor relations email
address, and where appropriate, a response will be provided. No
price sensitive information will be provided unless previously
released to the ASX.
oversight of material business risks, and describes the
responsibilities and authorities of the Board, the Audit and Risk
Committee, the CEO, CFO & Company Secretary, and the senior
management team. A summary of the policy is available on the
company’s website at
www.starpharma.com/corporate_governance
The CEO and CFO & Company Secretary are responsible to the
Board through the Audit and Risk Committee for the overall
implementation of the risk management program. During the
financial year management has reported to the Board as to the
effectiveness of the group’s management of its material risks.
7.3 Internal audit function
Given the size of the company, there is no internal audit function.
As detailed in section 7.2 of this Corporate Governance Statement,
detailed risk assessments are carried out in respect of a wide
range of items, and where appropriate and possible, risk mitigation
strategies are implemented to minimise the chance of the risks
occurring, and to minimise any impact where a risk eventuates.
7.4 Sustainability risks and management
The company’s key economic, environmental and social
sustainability risks are outlined on pages 19 to 20 of the directors’
report under the heading ‘Material Business Risks’.
In addition to the risk assessment and management strategies
outlined in section 7.2 of this Corporate Governance Statement
and set out in the ESG section on page 12 of the annual report, as
well as in the ESG Report available on Starpharma’s website, the
company utilises a number of risk mitigation strategies including
employing qualified staff and consultants, external advisors,
maintaining a portfolio/pipeline of products and applications, and
holding insurance in a number of areas.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 51
51
Corporate Governance Statement
Principle 8: Remunerate fairly and responsible
8.1 Remuneration and Nomination Committee
The company has established a Remuneration and Nomination
Committee consisting of three independent non-executive
directors. Details regarding composition, meetings and charter are
set out in sections 2.1 and 2.1.1 of this Corporate Governance
Statement.
8.2 Non-executive and executive remuneration
Each member of the senior executive team has signed a formal
employment contract covering a range of matters including their
duties, rights, responsibilities and any entitlements on termination.
Each role has a position description which is reviewed by the CEO
(or the committee in the case of the CEO) and relevant executive.
Further information on directors’ and executives’ remuneration,
including principles used to determine remuneration, is set out in
the remuneration report on pages 21 to 43.
Executive directors and senior management receive a mix of fixed
and variable pay, comprising both cash and equity incentives.
Non-executive directors receive fees only and do not receive
bonus payments or equity incentives. Non-executive directors do
not receive termination/retirement benefits, whereas executive
directors and senior management are entitled to termination
payments in accordance with the terms of their contracts (detailed
on page 41).
8.3 Prohibition on hedging of unvested/restricted entitlements
Employees are prohibited from entering into transactions in
products which limit the economic risk of any equity granted under
an employee incentive scheme which are unvested or subject to a
disposal restriction. Details in relation to this policy are contained
in the securities dealing policy which is available at
www.starpharma.com/corporate_governance
52 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
52
Annual Financial Report for the year ended 30 June 2021
Contents
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Audit Report to the Members
54
55
56
57
58
59
81
82
These financial statements are the consolidated financial statements for the consolidated entity consisting of Starpharma Holdings Limited and
its subsidiaries (collectively, “the group”). The financial statements are presented in dollars denominated in Australian currency. Starpharma
Holdings Limited is a public company limited by shares, incorporated and domiciled in the State of Victoria, Australia.
Its registered office and principal place of business is:
Starpharma Holdings Limited
4-6 Southampton Crescent
Abbotsford, Victoria, 3067
Australia
A description of the nature of the group’s operations and its principal activities is included in the Chief Executive Officer’s Report on pages 3 to
11 and in the operating and financial review in the Directors’ Report on pages 16 to 20, which are not part of this financial report.
The financial statements were authorised for issue by the directors on 26 August 2021. The directors have the power to amend and reissue the
financial report.
Through the use of the internet, Starpharma ensures that corporate reporting is timely and complete. All recent press releases, financial reports
and other information are available on the group’s website (www.starpharma.com), as well as ASX announcements and releases available via
the Australian Securities Exchange (www2.asx.com.au/markets/trade-our-cash-market/historical-announcements).
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 53
53
Consolidated Income Statement for the year ended 30 June 2021
30 June 2021
30 June 2020
Continuing operations
Revenue
Cost of goods sold
Other income
Research and product development expense
(net of R&D tax incentive)
Commercial and regulatory operating expense
Corporate, administration and finance expense
Loss before income tax
Income tax expense
Loss from continuing operations attributable to equity holders
of the company
Loss per share for loss from continuing operations attributable
to the ordinary equity holders of the company
Basic loss per share
Diluted loss per share
Notes
5
5
6
6
6
7
25
25
$'000
2,151
(791)
1,336
(15,075)
(3,336)
(4,017)
(19,732)
-
(19,732)
$
($0.05)
($0.05)
The above consolidated income statement should be read in conjunction with the accompanying notes.
$'000
6,556
(890)
559
(14,808)
(3,426)
(2,669)
(14,678)
-
(14,678)
$
($0.04)
($0.04)
Starpharma Holdings Limited Annual Report 2021
54 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
54
Consolidated Statement of Comprehensive Income for the year ended 30 June 2021
Loss for the period
Other comprehensive income (loss)
Items that may be reclassified to profit or loss
Other comprehensive income (loss) for the period
Total comprehensive income (loss) for the period
30 June 2021
30 June 2020
$'000
(19,732)
$'000
(14,678)
-
-
-
-
(19,732)
(14,678)
The above statement of consolidated comprehensive income should be read in conjunction with the accompanying notes.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 55
55
Consolidated Balance Sheet as at 30 June 2021
30 June 2021
30 June 2020
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total Current Assets
Non-Current Assets
Property, plant and equipment
Right-of-use assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Lease liabilities
Provision for employee benefits
Deferred income
Total Current Liabilities
Non-Current Liabilities
Lease liabilities
Provision for employee benefits
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed capital
Reserves
Accumulated losses
Total Equity
Notes
8
9
10
11
13
12
13
14
5
13
14
15
16
17
$'000
60,500
8,534
1,721
70,755
1,373
1,110
2,483
73,238
7,954
692
1,371
412
10,429
475
34
509
10,938
62,300
$'000
30,054
6,128
494
36,676
877
1,525
2,402
39,078
4,472
604
1,184
437
6,697
970
85
1,055
7,752
31,326
240,630
24,077
(202,407)
62,300
193,661
20,340
(182,675)
31,326
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Starpharma Holdings Limited Annual Report 2021
56 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
56
Consolidated Statement of Changes in Equity for the year ended 30 June 2021
Contributed
capital
Reserves
Accumulated
losses
Notes
$'000
$'000
$'000
193,621
16,775
(167,997)
Total
equity
$'000
42,399
Balance at 1 July 2019
Loss for the year
Other comprehensive income (loss)
Total comprehensive income (loss) for the year
Transactions with owners, recorded directly in equity
Employee share plans
Employee performance rights plan
Total transactions with owners
Balance at 30 June 2020
Loss for the year
Other comprehensive income (loss)
Total comprehensive income (loss) for the year
Transactions with owners, recorded directly in equity
Contributions of equity, net of transaction costs
Employee share plans
Employee performance rights plan
Total transactions with owners
Balance at 30 June 2021
15
16
15
16
-
-
-
40
-
40
-
-
-
-
3,565
3,565
-
-
-
46,931
38
-
46,969
-
-
-
-
-
3,737
3,737
(14,678)
(14,678)
-
-
(14,678)
(14,678)
-
-
-
-
-
-
-
40
3,565
3,605
31,326
46,931
38
3,737
50,706
62,300
193,661
20,340
(182,675)
(19,732)
(19,732)
-
-
(19,732)
(19,732)
240,630
24,077
(202,407)
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Starpharma Holdings Limited Annual Report 2021
57
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 57
Consolidated Statement of Cash Flows for the year ended 30 June 2021
Cash Flows from Operating Activities
Receipts from trade and other debtors (inclusive of GST)
Grant income and R&D tax incentives (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest paid
30 June 2021
30 June 2020
Notes
$'000
$'000
2,436
7,103
(24,652)
362
(57)
7,229
5,261
(23,749)
562
(79)
Net cash outflows from operating activities
24
(14,808)
(10,776)
Cash Flow from Investing Activities
Payments for property, plant and equipment
Proceeds from sale of available-for-sale financial assets
Net cash outflows from investing activities
Cash Flow from Financing Activities
Proceeds from issue of shares
Share issue transaction costs
Lease repayments
Net cash inflows (outflows) from financing activities
Net increase (decrease) in cash and cash equivalents held
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the year
(246)
-
(246)
48,862
(1,931)
(628)
46,303
31,249
30,054
(803)
60,500
(125)
-
(125)
-
-
(584)
(584)
(11,485)
41,251
288
30,054
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Starpharma Holdings Limited Annual Report 2021
58 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
58
Notes to the Consolidated Financial Statements 30 June 2021
Contents
1.
2.
3.
4.
5.
6.
7.
8.
9.
Significant Accounting Policies
Financial Risk Management
Critical Accounting Estimates and Judgements
Segment Information
Revenue and Other Income
Expenses
Income Tax Expense
Current Assets – Cash and Cash Equivalents
Current Assets – Trade and Other Receivables
10.
Current Assets – Inventories
11.
Non-Current Assets – Property, Plant and Equipment
12.
Current Liabilities – Trade and Other Payables
13.
Current and Non-Current Assets/Liabilities – Leases
14.
Current and Non-Current Liabilities – Provision for Employee Benefits
15.
Contributed Equity
16.
Reserves
17.
Accumulated Losses
18.
Related Party Transactions
19.
Remuneration of Auditors
20.
Events Occurring After the Balance Sheet Date
21.
Commitments
22.
Contingencies
23.
Subsidiaries
24.
Reconciliation of Profit After Income Tax to Net Cash Inflow from Operating Activities
25.
Earnings Per Share
26.
Share-Based Payments
27.
Parent Entity Financial Information
60
64
65
65
65
66
67
68
69
69
70
71
71
71
72
73
73
73
74
74
74
74
74
75
75
76
80
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 59
59
Notes to the Consolidated Financial Statements 30 June 2021
1. Significant Accounting Policies
The principal accounting policies adopted in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all the years presented,
unless otherwise stated. The financial statements are for the
consolidated entity consisting of Starpharma Holdings Limited (“the
company” or “parent entity”) and its subsidiaries (collectively, “the
group” or “the consolidated entity”).
(a) Basis of preparation
These general purpose financial statements have been prepared
in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards
Board and the Corporations Act 2001. Starpharma Holdings
Limited is a for-profit entity for the purpose of preparing the
financial statements.
(i) Compliance with IFRS
(vi) Going Concern
For the year ended 30 June 2021, the group has incurred losses
from continuing operations of $19,732,000 (2020: $14,678,000)
and experienced net cash outflows of $14,808,000 from operations
(2020: $10,776,000), as disclosed in the income statement and
statement of cash flows, respectively. The group is in the
development and early commercialisation phase, and given the
entity’s strategic plans, the directors are satisfied regarding the
availability of working capital for the period up to at least 31 August
2022. Accordingly, the directors have prepared the financial report
on a going concern basis in the belief that the consolidated entity
will realise its assets and settle its liabilities and commitments in
the normal course of business and for at least the amounts stated
in the financial report.
(b) Principles of consolidation
(i) Subsidiaries
The consolidated financial statements of the group also comply
with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB).
The consolidated financial statements incorporate the assets and
liabilities of all subsidiaries of the group as at 30 June 2021 and
the results of all subsidiaries for the year then ended.
(ii) New and amended standards adopted by the group
The group has applied the following standards and amendments
for the first time for the annual reporting period commencing 1 July
2020:
AASB 2018-7 Amendments to Australian Accounting
Standards – Definition of Material [AASB 101 and AASB 108]
AASB 2018-6 Amendments to Australian Accounting
Standards – Definition of a Business [AASB 3]
AASB 2019-3 Amendments to Australian Accounting
Standards – Interest Rate Benchmark Reform [AASB 9,
AASB 139 and AASB 7]
AASB 2019-5 Amendments to Australian Accounting
Standards – Disclosure of the Effect of New IFRS Standards
Not Yet issued in Australia [AASB 1054]
Conceptual Framework for Financial Reporting and AASB
2019-1 Amendments to Australian Accounting Standards –
References to the Conceptual Framework.
The amendments listed above did not have any impact on the
amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.
(iii) Early adoption of standards
The group has not elected to apply any pronouncements before
their operative date in the annual reporting period beginning
1 July 2020.
(iv) Historical cost convention
These financial statements have been prepared under the
historical cost convention, as modified by the revaluation of
available-for-sale financial assets, financial assets and liabilities
(including derivative instruments) at fair value through profit or
loss, certain classes of property, plant and equipment and
investment property.
(v) Critical accounting estimates
The preparation of financial statements requires the use of certain
critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the group’s
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements are disclosed
in note 3.
Subsidiaries are all entities (including structured entities) over
which the group has control. The group controls an entity when the
group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control
is transferred to the group. They are deconsolidated from the date
that control ceases. The group has one subsidiary, Starpharma
Pty Limited.
Intercompany transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the group.
(c) Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Chief Executive Officer.
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the group’s
entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’).
The consolidated financial statements are presented in Australian
dollars, which is the company’s functional and presentation
currency.
(ii) Transactions and balances
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 profit or loss.
Foreign exchange gains and losses that relate to borrowings are
presented in the income statement, within finance costs. All other
foreign exchange gains and losses are presented in the income
statement on a net basis within other income or other expenses.
60 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
60
Notes to the Consolidated Financial Statements 30 June 2021
(e) Revenue recognition
The accounting policies for the group’s revenue from contracts
with customers are explained in note 5.
(f) Government grants
Grants from the Australian government are recognised at their fair
value where there is a reasonable assurance that the grant will be
received and the group will comply with all relevant conditions.
Government grants relating to costs are deferred and recognised
in the income statement over the period necessary to match them
with the costs that they are intended to compensate. All
government grants, with the exception of the Australian
Government Research & Development Tax Incentive (note 3(ii)),
are recorded in the income statement within Other Income (note
5).
(g) Income tax
The income tax expense or revenue for the period is the tax
payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by
changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses. Deferred tax
assets and liabilities are recognised for temporary differences at
the tax rates expected to apply when the assets are recovered or
liabilities are settled, based on those tax rates which are enacted
or substantively enacted for each jurisdiction. The relevant tax
rates are applied to the cumulative amounts of deductible and
taxable temporary differences to measure the deferred tax asset or
liability. An exception is made for certain temporary differences
arising from the initial recognition of an asset or a liability. No
deferred tax asset or liability is recognised in relation to these
temporary differences if they arose in a transaction, other than a
business combination, that at the time of the transaction did not
affect either accounting profit or taxable profit or loss. Deferred tax
assets are recognised for deductible temporary differences and
unused tax losses only if it is probable that future taxable amounts
will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary
differences between the carrying amount and tax bases of
investments in controlled entities where the parent entity is able to
control the timing of the reversal of the temporary differences and
it is probable that the differences will not reverse in the foreseeable
future. Current and deferred tax balances attributable to amounts
recognised directly in other comprehensive income or equity are
also recognised directly in other comprehensive income or equity,
respectively. The company and its wholly-owned Australian
controlled entity, Starpharma Pty Limited, are not consolidated for
tax purposes.
(i) Investment allowances and similar tax incentives
Companies within the group may be entitled to claim special tax
deductions for investments in qualifying assets or in relation to
qualifying expenditure (eg. investment allowances). The group
accounts for such allowances as tax credits, which means that the
allowance reduces income tax payable and current tax expense. A
deferred tax asset is recognised for unclaimed tax credits that are
carried forward as deferred tax assets.
(h) Leases
The group’s leasing policy is described in note 13.
(i) Impairment of assets
Goodwill and intangible assets that have an indefinite life are not
subject to amortisation. They are tested annually for impairment or
more frequently if events or changes in circumstances indicate that
they might be impaired. Other assets are tested for impairment
whenever events or changes in circumstance indicate that the
carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs of disposal and value in
use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash
inflows from other assets or groups of assets (cash generating
units).
(j) Cash and cash equivalents
For the purpose of presentation in the statement of cash flows,
cash and cash equivalents include cash on hand, deposits held
with financial institutions, and other short-term, highly liquid
investments that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
The amount of significant cash and cash equivalents not available
for use is disclosed in note 8.
(k) Trade receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit loss. Trade
receivables are generally due for settlement within 30 to 60 days.
They are presented as current assets unless collection is not
expected for more than 12 months after the reporting date.
Collectability of trade receivables is reviewed on an ongoing basis.
The group applies the AASB 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss
allowance for all trade receivables and contract assets. To
measure the expected credit losses, trade receivables and
contract assets are grouped based on shared credit risk
characteristics and the days past due. An expected credit loss is
recognised when there is objective evidence that the group will not
be able to collect the relevant receivable.
(l) Inventories
Raw materials, work in progress and finished goods are stated at
the lower of cost and net realisable value. Cost includes
expenditure incurred in acquiring the inventories and bringing them
to their existing condition and location. Costs are assigned to
individual items of inventory on the basis of weighted average.
costs. Costs of purchased inventory are determined after
deducting rebates and discounts. Net realisable value is the
estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary
to make the sale.
(m) Investments and other financial assets
(i) Classification
The group classifies its financial assets in the following
measurement categories:
those to be measured subsequently at fair value, and
those to be measured at amortised cost.
The classification depends on the each entity’s business model for
managing the financial assets and the contractual terms of the
cash flows.
The group reclassifies debt investments when and only when its
business model for managing those assets changes.
(ii) Loans and other receivables
Loans and other receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for
those with maturities greater than 12 months after the reporting
date which are classified as non-current assets. Loans and
receivables are included in trade and other receivables (note 9) in
the balance sheet.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 61
61
Notes to the Consolidated Financial Statements 30 June 2021
1. Significant Accounting Policies (continued)
(n) Property, plant and equipment and leasehold
improvements
Property, plant and equipment is stated at historical cost less
depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Subsequent costs are
included in the asset’s carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the group
and the cost of the item can be measured reliably. The carrying
amount of any component accounted for as a separate asset is
derecognised when replaced. All other repairs and maintenance
are charged to profit or loss during the financial period in which
they are incurred. Depreciation is calculated using the straight-line
method to allocate their cost or revalued amounts, net of the
residual values, over their estimated useful lives. The expected
useful lives are 2 to 20 years. The assets’ residual values and
useful lives are reviewed, and adjusted if appropriate, at each
balance sheet date. An asset’s carrying amount is written down
immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount. Gains
and losses on disposals are determined by comparing proceeds
with the carrying amount. These are included in profit or loss.
The cost of improvements to or on leasehold properties is
amortised over the remaining notice period under the premises
lease (being 1.5 years at the reporting date) or the estimated
useful life of the improvement to the group, whichever is shorter.
(o) Intangible assets
(i) Patents and licenses
Costs associated with patents are expensed as incurred. Licenses
and acquired patents with a finite useful life are carried at cost less
accumulated amortisation and impairment losses. Amortisation is
calculated using the straight-line method to allocate the cost of
licenses and patents over the period of the expected benefit, which
is up to 20 years. As at the reporting date no patents or licenses
are recognised as intangible assets.
(iii) Research and development
Research and development expenditure is expensed as incurred
except that costs incurred on development projects, relating to the
design and testing of new or improved products, are recognised as
intangible assets when it is probable that the project will, after
considering its commercial and technical feasibility, be completed
and generate future economic benefits and its costs can be
measured reliably. To date no research and development costs
have been recognised as intangible assets.
(p) 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 usually paid
within 30 to 45 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within 12
months from the reporting date.
(q) Provisions
Provisions for legal claims, service claims and make good
obligations are recognised when the group has a present legal or
constructive obligation as a result of past events, and it is more
probable than not that an outflow of resources will be required to
settle the obligation and the amount has been reliably estimated.
Provisions are not recognised for future operating losses. Where
there are a number of similar obligations, the likelihood that an
outflow will be required in settlement is determined by considering
the class of obligations as a whole. A provision is recognised even
if the likelihood of an outflow with respect to any one item in the
same class of obligations may be small. Provisions are measured
at the present value of management’s best estimate for the
expenditure required to settle the present obligation at the balance
date. The discount rate used to determine the present value
reflects current market assessment of the time, value of money,
62 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
and the risks specific to the liability. The increase of the provision
due to the passage of time is recognised as interest expense.
(r) Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits,
annual and long-service leave expected to be settled within 12
months after the end of the period in which the employees render
the related service are recognised in respect of employees’
services up to the period and are measured at the amounts
expected to be paid when the liabilities are settled. The liability for
annual and long service leave is recognised in the provision for
employee benefits. All other short-term employee benefit
obligations are presented as payables.
(iii) Superannuation and Pension Benefits
Group companies make the statutory superannuation guarantee
contribution in respect of each employee to their nominated
complying superannuation or pension fund. In certain
circumstances pursuant to an employee’s employment contract the
group companies may also be required to make additional
superannuation or pension contributions and/or agree to make
salary sacrifice superannuation or pension contributions in addition
to the statutory guarantee contribution. The relevant entities legal
or constructive obligation is limited to the above contributions.
Contributions to the employees’ superannuation or pension plans
are recognised as an expense as they become payable. Prepaid
contributions are recognised as an asset to the extent that a cash
refund or reduction in future payments is available.
(iv) Share-based payments
Share-based compensation benefits are offered to employees via
an Employee Performance Rights Plan and an Employee Share
Plan ($1,000 Plan). Information relating to these plans is set out in
note 26 and in the remuneration report under the directors’ report.
The fair value of performance rights granted is recognised as an
employee benefit expense with a corresponding increase in equity.
The fair value of employee services received, measured by
reference to the grant date fair value, is recognised over the
vesting period. Depending on the performance measure of the
right vesting, the fair value at grant date represents either a
volume weighted average price (VWAP) of shares leading up to
the grant date, or a value calculated using a hybrid Monte-Carlo-
trinomial option pricing model taking into account the absolute total
shareholder return (TSR) target, the term of the right, the share
price at grant date, the risk free rate, the expected dividend yield,
expected share price volatility, the volatility of the relevant index,
and the correlation between the share price and that index. The
fair value excludes the impact of any non-market vesting
conditions (for example, profitability and sales growth targets).
Non-market vesting conditions are included in assumptions about
the number of performance rights that are expected to become
exercisable. At each reporting date, the entity revises its estimate
of the number of performance rights that are expected to become
exercisable. The employee benefit expense recognised in each
period takes into account the most recent estimate. The impact of
the revision to original estimates, if any, is recognised in the
income statement with a corresponding adjustment to equity.
Under the Employee Share Plan ($1,000 Plan) shares are issued
to employees for no cash consideration and vest at the earlier of
three years or cessation of employment. On this date, the market
value of the shares issued is recognised as an employee benefits
expense with a corresponding increase in equity.
(v) Bonus payments
The group recognises a liability and an expense for employee
bonuses based on a formula that takes into consideration
performance criteria that have been set. The group recognises a
provision where contractually obliged or where there is a past
practice that has created a constructive obligation.
For non-cash incentives where equity is granted, please refer to
note 26 and the remuneration report under the directors’ report.
62
Notes to the Consolidated Financial Statements 30 June 2021
(vi) Termination benefits
Termination benefits are payable when employment is terminated
before the normal retirement date, or when an employee accepts
voluntary redundancy in exchange for these benefits. The group
recognises termination benefits when it is demonstrably committed
to either terminating the employment of current employees
according to a detailed formal plan without possibility of withdrawal
or providing termination benefits as a result of an offer made to
encourage voluntary redundancy. Benefits falling due more than
12 months after the end of the reporting period are discounted to
present value.
(s) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or performance rights are
shown in equity as a deduction, net of tax, from the proceeds.
Incremental costs directly attributable to the issue of new shares or
performance rights, for the acquisition of a business, are not
included in the cost of the acquisition as part of the purchase
consideration.
(t) Dividends
Provision is made for the amount of any dividend declared, being
appropriately authorised and no longer at the discretion of the
entity, on or before the end of the reporting period but not
distributed at the end of the reporting period.
(u) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to owners of the company, excluding any costs of
servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares
issued during the year and excluding treasury shares.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares and the weighted
average number of additional ordinary shares that would have
been outstanding assuming the conversion of all dilutive potential
ordinary shares.
(v) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount
of associated GST, unless the GST incurred is not recoverable
from the taxation authority. In this case it is recognised as part of
the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of
GST receivable from, or payable to, the taxation authority and are
included with other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis. The GST components
of cash flows arising from investing or financing activities which are
recoverable from, or payable to the taxation authority, are
presented as operating cash flows.
(w) Rounding of amounts
The company is of a kind referred to in ASIC Corporations
(Rounding Financial/Directors' Reports) Instrument 2016/191,
issued by the Australian Securities and Investments Commission,
relating to the ‘rounding off’ of amounts in the financial statements.
Amounts in the financial statements have been rounded off in
accordance with that Instrument to the nearest thousand dollars, or
in certain cases, the nearest dollar.
(x) Parent entity financial information
The financial information for the parent entity disclosed in note 27
has been prepared on the same basis as the consolidated financial
statements, except as set out below.
(i) Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities
are accounted for at cost in the financial statements of the parent
entity. Dividends received from associates are recognised in the
parent entity’s profit or loss when its right to receive the dividend is
established.
(ii) Share-based payments
The grant by the parent entity of rights over its equity instruments
to the employees of subsidiary undertakings in the group is treated
as a capital contribution to that subsidiary undertaking. The fair
value of employee services received, measured by reference to
the grant date fair value, is recognised over the vesting period as
an increase to investment in subsidiary undertakings, with a
corresponding credit to equity.
Starpharma Holdings Limited Annual Report 2021
63
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 63
Notes to the Consolidated Financial Statements 30 June 2021
2. Financial Risk Management
The group’s activities expose it to a variety of financial risks;
including market risk, credit risk and liquidity risk. The group’s
overall financial risk management program focuses on the
unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the group.
The Chief Executive Officer, and Chief Financial Officer &
Company Secretary, under the guidance of the Audit and Risk
Committee and the Board, have responsibility for the financial risk
management program.
(a) Market risk
(i) Foreign Exchange Risk
Foreign exchange risk arises when future commercial transactions
and recognised assets and liabilities are denominated in a
currency that is not the entity’s functional currency. The group
operates internationally and is exposed to foreign exchange risk
arising from currency exposures to major currencies including
United States dollars (US$) and Great British pounds (£).
On the basis of the nature of these transactions, the group does
not use derivative financial instruments to hedge such exposures
but maintains cash and deposits in Australian dollars, United
States dollars and Great British pounds. The directors regularly
monitor the potential impact of movements in foreign exchange
exposure.
The exposure to foreign currency risk at the reporting date
calculated using the closing exchange rate as at 30 June 2021 for
US$ of $0.7518 and for £ of $0.5429 was as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
30 June 2021
US$
$’000
30 June 2020
US$
$’000
30 June 2021
£
£’000
30 June 2020
£
£’000
4,461
255
469
6,317
17
331
955
253
1,678
1,518
-
1,426
Group Sensitivity
The group is mainly exposed to US$ and £ on foreign currencies held, receivable and payable. The following table details the group’s sensitivity
to a 10% increase and decrease in the Australian dollar against the US$ or £. A positive number indicates a favourable movement; that is an
increase in profit or reduction in the loss.
Impact on profit / (loss) on a movement of
Australian dollar strengthens (increases) against
the foreign currency by 10%
Australian dollar weakens (decreases) against
the foreign currency by 10%
(ii) Cash Flow Interest Rate Risk
30 June 2021
$’000
30 June 2020
$’000
30 June 2021
£’000
30 June 2020
£’000
US$
(514)
628
US$
(795)
972
£
79
(96)
£
(15)
18
The group holds interest bearing assets and therefore the income and operating cash flows are exposed to market interest rates.
At the end of the reporting period, the group had the following value of term and at call deposits. Refer to note 8 for additional information.
Term Deposits and deposits at call
Group Sensitivity
30 June 2021
$’000
57,299
30 June 2020
$’000
25,984
At 30 June 2021, if interest rates changed by 50 basis points (0.50%) either higher or lower from the year end rates with all other variables held
constant, group profit for the year would have been $193,000 higher or lower (2020 - change of 50 bps: $131,000 higher/lower) due to either
higher or lower interest income from cash or cash equivalents.
(b) Credit risk
Credit risk is managed on a group basis. Credit risk arises from
cash and cash equivalents with banks and financial institutions, as
well as credit exposures from sales and distribution, product
supply, licensing and royalty agreements. Credit risk for cash and
deposits with banks and financial institutions is managed by
maximising deposits held under major Australian banks. All cash
and deposits are held with major Australian banks, with the
majority being held with the National Australia Bank and
Commonwealth Bank of Australia. Other than government grants,
tax incentives and taxes receivable, third party receivables largely
consist of customer receivables from leading, multinational
organisations.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash reserves and marketable securities. The directors regularly
monitor the cash position of the group, giving consideration to the
level of expenditure and future capital commitments.
(d) Fair value estimation
The fair value of financial assets and financial liabilities must be
estimated for recognition and measurement for disclosure
purposes. The carrying value less impairment provision of trade
receivables and payables are assumed to approximate their fair
values due to their short-term nature. The fair value of financial
liabilities for disclosure purposes is estimated by discounting the
future contractual cash flows at the current market interest rate
that is available to the group for similar financial instruments.
64 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
64
Notes to the Consolidated Financial Statements 30 June 2021
3. Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future
events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the
related actual results. The estimates and assumptions that have a significant risk of causing material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
i) Income Taxes
The group is subject to income taxes in Australia. There are transactions and calculations undertaken during the ordinary course of business for
which the ultimate tax determination may be uncertain. Where the final tax outcome of these matters is different from the amounts that were
initially recorded, such differences will impact the current and deferred tax provisions in the period in which such determination is made. The
group has not recognised deferred tax assets or liabilities, including from carried forward losses, due to the realisation of such benefits being
uncertain. The utilisation of tax losses also depends on the ability of the entity to satisfy certain tests at the time the losses are sought to be
recouped.
ii) Australian Government Research & Development Tax Incentives
The group’s research and development activities are eligible under an Australian Government tax incentive for eligible expenditure from 1 July
2011. Management has assessed these activities and expenditure to determine which are likely to be eligible under the incentive scheme. For
the period to 30 June 2021 the group has recorded a contra research and development expense of $7,248,000 (2020: $5,669,000). The total
R&D Tax Incentive receivable recorded at 30 June 2021 is $7,233,000 (2020: $5,670,000).
4. Segment Information
The group has determined that on the basis of internal reporting and monitoring to the Chief Executive Officer, who is the chief operating
decision maker, the group operates in one business segment, being the discovery, development and commercialisation of dendrimers for
pharmaceutical, life science and other applications.
5. Revenue and Other Income
Revenue and other income from continuing operations
30 June 2021
$’000
30 June 2020
$’000
Revenue from contracts with customers
Interest revenue
Total revenue from continuing operations
Other income
Total revenue and other income from continuing operations
1,798
353
2,151
1,336
3,487
6,033
523
6,556
559
7,115
Disaggregation of revenue from contracts with customers
Revenue from contracts with customers includes licensing revenue, products sales, royalties, and research revenue from partners.
Total revenue from contracts with customers for the year was $1,798,000 (2020: $6,033,000) which is predominately product sales and royalties
on VIRALEZE™ and VivaGel® products. Revenue from contracts with customers in the prior year included A$4,339,000 on AstraZeneca
triggering a non-recurring US$3 million milestone for the first dose of AZD0466 administered in the phase 1 trial of its first DEP® product.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 65
65
Notes to the Consolidated Financial Statements 30 June 2021
5. Revenue and Other Income (continued)
Assets and liabilities related to contracts with customers
The group has recognised the following current assets and current liabilities related to contracts with customers:
Trade and other receivables
Contract liabilities
30 June 2021
$’000
30 June 2020
$’000
488
(1,141)
40
(437)
Customer trade and other receivables as at 30 June 2021 are $488,000. The movement from the prior year reflects VIRALEZE™ and VivaGel®
BV product sales within standard terms of settlement of up to 60 days.
Contract liabilities include $399,000 for potential VivaGel® BV product discounts, that are dependent on product registrations in certain
countries, and $729,000 for VIRALEZE™ product sales returns from LloydsPharmacy following the decision to temporarily pause commercial
sales of VIRALEZE™ following the UK Medicines and Healthcare products Regulatory Agency (MHRA) review of the product promotional
claims. A corresponding right to the returned goods from LloydsPharmacy has been recognised in inventories, see note 10.
Performance obligations
Revenue is recognised when the company satisfies a performance obligation by transferring control of the promised good or service to a
customer at an amount that reflects the consideration to which the company expects to be entitled in exchange for the goods or services.
Information about the company’s performance obligations are summarised below:
(i) Licensing revenue and royalties
Typically, a licence granted by the company provides the customer with the right to use, but not own, the company’s intellectual property as it
exists at the point in time the licence is granted. The company may receive signature payments, milestone payments for specific development
(such as clinical or regulatory) or commercial based outcomes, and/or sales-based royalties as consideration for the licence. The performance
obligation(s) for a licence are usually satisfied upon, or soon after, the granting of the licence to the partner. Signature payments are normally
fixed, where-as development and commercial milestones are variable consideration as they are dependent on the achievement of certain events
in the future. The company’s estimate of variable consideration will only be recognised to the extent it is highly probable that a significant
revenue reversal will not occur in future periods.
Royalties based on sales of product are recognised when the customer's sales of product occur. Where consideration includes guaranteed
minimum royalties, they are recognised when the licence is granted or when they are no longer subject to constraint.
Milestones payments are generally due within 30 to 60 days from timing of the milestone event. Royalties are generally due 30 to 60 days after
the end of the defined royalty reporting period.
(ii) Product sales
The performance obligation is satisfied upon delivery of the goods and payment is generally due within 30 to 60 days from delivery. Some
contracts provide customers with a right of return for product non-conformance, or discounts based on product shelf-life, which may give rise to
variable consideration subject to constraint.
(iii) Research revenue
The performance obligation is satisfied over-time upon completion of outlined deliverables and payment is generally due within 30 to 60 days of
achievement of each deliverable.
Other income
Other income of $1,336,000 (2020: $559,000) includes grant funding awarded by the Medical Research Future Fund (MRFF) to expedite
development and commercialisation of VIRALEZE™ ($877,000), as well as the final payment from phase one of the Australian Government’s
JobKeeper Payment scheme ($376,000). Despite remaining eligible to receive additional monies following the successful completion of the
company’s capital raising, the group elected not to pursue additional monies under the JobKeeper Payment scheme which ended on 27
September 2020. There are no unfulfilled conditions or other contingencies attaching to any grants.
6. Expenses
Loss from continuing operations before income tax expense
includes the following items:
30 June 2021
$’000
30 June 2020
$’000
R&D tax incentive (contra expense)1
Employee benefits expenses (including share-based payments)
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
(7,248)
11,094
298
636
1 Included within the research and product development expense line item in the consolidated income statement.
66 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
(5,669)
10,275
275
636
66
Notes to the Consolidated Financial Statements 30 June 2021
7. Income Tax Expense
(a) Income tax expense/(credit)
Current Tax / Deferred Tax
Total income tax expense
Income tax attributable to continuing operations
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
Tax at the Australian tax rate of 30% (2020: 30%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Eligible expenses claimed under R&D tax incentive
Share-based payments
Sundry items
Future income tax benefits not brought to account
Income tax expense
(c) Tax losses
Unused tax losses for which no deferred tax asset has been
recognised (as recovery is currently not probable)
Potential tax benefit
(d) Unrecognised temporary differences
Temporary differences for which no deferred tax asset has been
recognised (as recovery is currently not probable)
Unrecognised deferred tax relating to the temporary differences
(e) Deferred tax liabilities
Unrecognised deferred tax liabilities relating to the above temporary
differences:
Lease right-of-use assets
Property, plant and equipment
Sundry items
Total deferred tax liabilities
Set-off of deferred tax assets pursuant to set-off provisions
Net deferred tax liabilities
30 June 2021
$’000
30 June 2020
$’000
–
–
–
(19,732)
(5,920)
2,814
1,133
109
1,864
–
126,175
37,852
5,722
1,717
333
201
4
538
(538)
–
–
–
–
(14,678)
(4,403)
2,209
1,081
(287)
1,400
–
119,974
35,992
3,439
1,032
457
-
5
462
(462)
–
Deferred tax assets and deferred tax liabilities have been set-off as there is a legally recognised right to set-off current tax assets and liabilities,
and the deferred tax assets and liabilities relate to income taxes levied by the relevant tax authority. Deferred tax assets are mainly attributable
to unused tax losses. Potential future income tax benefits attributable to tax losses carried forward have not been brought to account at 30 June
2021 because the directors do not presently believe that it is appropriate to regard realisation of the future income tax benefit as probable.
Similarly, future benefits attributable to net temporary differences have not been brought to account as the directors do not regard the realisation
of such benefits as probable.
Realisation of the benefit of tax losses would be subject to the group satisfying the conditions for deductibility imposed by tax legislation and no
subsequent changes in tax legislation adversely affecting the group. The group has made an assessment as to the satisfaction of deductibility
conditions at 30 June 2021 which it believes will be satisfied.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 67
67
Notes to the Consolidated Financial Statements 30 June 2021
8. Current Assets – Cash and Cash Equivalents
Cash at bank and on hand
Term Deposits and deposits at call
30 June 2021
$’000
3,201
57,299
60,500
30 June 2020
$’000
4,070
25,984
30,054
Cash at bank and on hand
The cash is bearing floating interest rates based on current
bank rates.
Term deposits and deposits at call
The term deposits have maturities of 3 months or less. Funds in
deposits at call allow the group to withdraw funds on demand.
Deposits not available
There is $1,159,000 (2020: $558,000) of term deposits not
available for use due to funds being utilised as security for a bank
guarantee on the company’s property lease, and for a finance
lease facility.
Interest rate risk
Current receivables are non-interest bearing.
30 June 2021
Floating
Interest
rate
Fixed interest maturing Non-interest
bearing
Notes
$’000
1 year or less
$’000
1 to 5 years
$’000
Total
$’000
Contractual
cash flows
Financial Assets
Cash & deposits
Receivables
8
9
51,214
6,373
–
51,214
–
–
–
Weighted average interest rate
0.7%
Financial Liabilities
Payables
Lease liabilities
12
13
–
–
–
$’000
2,913
8,534
60,500
8,534
11,447
69,034
–%
–%
–
475
475
7,954
–
7,954
7,954
1,167
9,121
–
6,373
0.2%
–
692
692
Weighted average interest rate
–%
4.3%
3.9%
–%
30 June 2020
Floating
Interest
rate
Fixed interest maturing Non-interest
bearing
Financial Assets
Cash & deposits
Receivables
Notes
$’000
1 year or less
$’000
1 to 5 years
$’000
8
9
4,571
21,655
–
–
4,571
21,655
–
–
–
$’000
3,828
6,128
30,054
6,128
9,956
36,182
Total
$’000
Contractual
cash flows
Weighted average interest rate
0.8%
0.7%
–%
–%
Financial Liabilities
Payables
Lease liabilities
12
13
–
–
–
–
604
604
–
970
970
4,472
–
4,472
4,472
1,574
6,046
Weighted average interest rate
–%
4.4%
4.4%
–%
68 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
68
N/A
8,534
8,534
7,954
1,167
9,121
N/A
6,128
6,128
4,472
1,574
6,046
Notes to the Consolidated Financial Statements 30 June 2021
9. Current Assets – Trade and Other Receivables
Trade and grant receivables
Interest receivables
Prepayments
Other receivables
30 June 2021
$’000
30 June 2020
$’000
7,905
2
95
532
8,534
5,905
10
41
172
6,128
Trade and grant receivables
Trade and grant receivables primarily comprise of $7,233,000 (2020: $5,670,000) of expenditure reimbursable under the Australian
Government’s Research & Development tax incentive scheme, with the balance related to other government grants receivable, and customer
receivables from VIRALEZE™ and VivaGel® BV partners. Customer receivables are subject to normal terms of settlement within 30 to 60 days.
Other receivables
Other receivables comprise sundry debtors and GST/VAT claimable and are subject to normal terms of settlement within 30 to 90 days.
Credit risk
The group considers that there is no significant credit risk with respect to trade and other receivables. Grant receivables are with government
bodies and trade receivables are from large companies.
Impaired receivables
As at 30 June 2021, there were no material trade and grant receivables that were past due (2020: nil). The group applies the accounting policy
in note 1(k) to trade receivables. Under the expected credit loss model, no receivables are considered impaired at 30 June 2021 (2020: nil).
10. Inventories
Current Assets
Raw materials
Work in progress
Finished goods
Finished goods – right to recover products (see note 5)
30 June 2021
$’000
30 June 2020
$’000
909
68
618
126
1,721
494
-
-
-
494
Assigning costs to inventories
The costs of individual items of inventory are determined using the weighted average cost method. See note 1(l) for detail on the group’s
accounting policy for inventories.
Amounts recognised in profit or loss
Inventories recognised as an expense during the year ended 30 June 2021 amounted to $791,000 (2020: $890,000). These were included in
cost of goods sold.
Write-downs of inventories to net realisable value amounted to $67,000 (2020: Nil). These were included in cost of goods sold.
Finished goods
Finished goods are products that are subject to a customer purchase order, have completed production, or are awaiting delivery to the
customer. The group has recognised a right to recover products of $126,000 for VIRALEZE™ product held by LloydsPharmacy at 30 June
2021.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 69
69
Notes to the Consolidated Financial Statements 30 June 2021
11. Non-Current Assets – Property, Plant and Equipment
Plant and Equipment
$’000
Leasehold
improvements
$’000
At 30 June 2019
Cost
Accumulated depreciation
Net book amount
Year ended 30 June 2020
Opening net book amount
Adjustment for change in accounting policy
Restated opening net book amount
Additions
Disposals
Depreciation
Closing net book amount
At 30 June 2020
Cost
Accumulated depreciation
Net book amount
Year ended 30 June 2021
Opening net book amount
Additions
Disposals
Depreciation
Closing net book amount
At 30 June 2021
Cost
Accumulated depreciation
Net book amount
70 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
3,607
(2,728)
879
879
(22)
856
126
(1)
(225)
756
3,620
(2,864)
756
756
792
-
(249)
1,299
4,412
(3,113)
1,299
656
(485)
171
171
-
171
-
-
(50)
121
656
(535)
121
121
3
-
(50)
74
659
(585)
74
Total
$’000
4,263
(3,213)
1,050
1,050
(22)
1,028
126
(1)
(275)
877
4,276
(3,399)
877
877
795
-
(299)
1,373
5,071
(3,698)
1,373
70
Notes to the Consolidated Financial Statements 30 June 2021
12. Current Liabilities – Trade and Other Payables
Trade payables and accruals
Other payables
30 June 2021
$’000
30 June 2020
$’000
6,711
1,243
7,954
4,394
78
4,472
Trade payables and accruals
The majority of trade payables are related to expenditure associated with the group’s research and product development programs, and the
contract liability to LloydsPharmacy for VIRALEZE™ product sales returns (refer to note 5).
13. Current and Non-Current Assets/Liabilities – Leases
The balance sheet shows the following amounts relating to leases:
Right-of-use assets
Premises
Plant and equipment
Lease liabilities
Current
Non-current
30 June 2021
$’000
30 June 2020
$’000
915
195
1,110
692
475
1,167
1,525
-
1,525
604
970
1,574
The group leases premises (laboratory and offices space) until 19 December 2022, with an extension option. Payments associated with the
option period are not included in the initial measurement of lease assets and liabilities as the exercise of the relevant option is uncertain.
The group also leases scientific equipment generally over a three to five year term.
The consolidated income statement includes the following amounts relating to leases:
Depreciation charge of right-of-use assets
Premises
Plant and equipment
Depreciation charge of right-of-use assets
Interest expense on lease liabilities
Expense relating to leases of low-value assets
30 June 2021
$’000
30 June 2020
$’000
610
26
636
57
7
70
685
610
26
636
79
8
68
664
Expense relating to variable lease payments not included in lease liabilities
Total cash outflow for leases
14. Current and Non-Current Liabilities – Provision for Employee Benefits
Leave obligations
Current
Non-current
30 June 2021
$’000
30 June 2020
$’000
1,371
34
1,405
1,184
85
1,269
The leave obligations represent the group’s liability for employee long service leave and annual leave. The current portion of this liability
includes all of the accrued annual leave, and the unconditional entitlements to long service leave where employees have completed the required
period of service. However, based on past experience, the group does not expect all employees to take the full amount of current accrued leave
or require payment of the entire amount within 12 months from the reporting date. Current leave obligations expected to be settled after the date
which is 12 months from the reporting date is $1,015,000 (2020: $843,000).
Refer to note 1(r) for further information.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 71
71
Notes to the Consolidated Financial Statements 30 June 2021
15. Contributed Equity
(a) Share capital
Share Capital
2021
Shares
2020
Shares
2021
$’000
2020
$’000
Ordinary shares – fully paid
406,078,026
372,562,687
240,630
193,661
(b) Movements in ordinary share capital
Date
Details
1 Jul 2020
23 Sep 2020 Employee performance rights plan share issue
30 Oct 2020
Employee performance rights plan share issue
6 Oct 2020
Share placement
4 Nov 2020
Share purchase plan
Less transaction costs for share placement and
share purchase plan
27 Jan 2021 Employee share plan ($1,000) issue
9 Apr 2021
Employee performance rights plan share issue
Balance at 30 June 2021
Date
Details
1 Jul 2019
29 Jul 2019
Employee performance rights plan share issue
1 Oct 2019
Employee performance rights plan share issue
17 Oct 2019
Employee performance rights plan share issue
4 Dec 2019
Employee performance rights plan share issue
24 Jan 2020 Employee share plan ($1,000) issue
24 Jan 2020 Employee performance rights plan share issue
20 Mar 2020 Employee performance rights plan share issue
Number of shares
Issue Price
372,562,687
188,281
689,543
30,000,000
2,574,701
24,814
38,000
406,078,026
$ –
$ –
$ 1.50
$ 1.50
$ 1.53
$ –
Number of shares
Issue Price
371,694,347
26,196
233,730
33,600
495,895
32,920
25,600
20,399
$ –
$ –
$ –
$ –
$1.22
$ –
$ –
$’000
193,661
–
–
45,000
3,862
(1,931)
38
–
240,630
$’000
193,621
–
–
–
–
40
–
–
Balance at 30 June 2020
372,562,687
193,661
(c) Ordinary shares
As at 30 June 2021 there were 406,078,026 issued ordinary
shares. Ordinary shares entitle the holder to participate in
dividends and the proceeds on winding up of the company in
proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a
duly convened shareholder meeting in person or by proxy, is
entitled to one vote, and upon a poll each share is entitled to one
vote. Ordinary shares have no par value and the company does
not have authorised capital. There is no current on-market share
buy-back.
(d) Employee Share Plan ($1,000 Plan)
Information relating to the Employee Share Plan, including details
of shares issued under the plan, is set out in note 26.
(e) Employee Performance Rights Plan
Information relating to the Employee Performance Rights Plan,
including details of rights issued under the plan, is set out in note
26.
(f) Capital risk management
The group’s and the parent entity’s objectives when managing
capital are to safeguard their ability to continue as a going
concern, so that they can continue to provide returns for
shareholders and benefits for other stakeholders. In order to
maintain or adjust the capital structure, the group may adjust the
amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets.
72 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
72
Notes to the Consolidated Financial Statements 30 June 2021
16. Reserves
(a) Reserves
Share-based payments reserve
(b) Movement in reserves
Share-based payments reserve
Balance at 1 July
Performance right expense
Balance at 30 June
30 June 2021
$’000
24,077
24,077
30 June 2020
$’000
20,340
20,340
30 June 2021
$’000
30 June 2020
$’000
20,340
3,737
24,077
16,775
3,565
20,340
(c) Nature and purpose of reserves
The share-based payments reserve is used to recognise the fair value of options and performance rights granted.
17. Accumulated Losses
Accumulated losses balance at 1 July
Application of AASB 16 Leases
Net loss for the year
Accumulated losses balance at 30 June
30 June 2021
$’000
(182,675)
-
(19,732)
(202,407)
30 June 2020
$’000
(168,001)
4
(14,678)
(182,675)
18. Related Party Transactions
(a) Parent entity and subsidiaries
The parent entity of the group is Starpharma Holdings Limited. Interests in subsidiaries are set out in note 23.
(b) Transactions with related parties
There are related party transactions within the group between the parent and subsidiaries. Transactions include funds advanced to/from entities
and the associated interest charge; and management and services fees. All transactions were made on an arm’s length basis.
(c) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
30 June 2021
$
30 June 2020
$
2,470,508
133,993
31,994
1,928,562
4,565,057
1,964,009
130,263
39,955
1,814,869
3,949,096
Detailed remuneration disclosures are provided in the remuneration report on pages 21 to 43.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 73
73
Notes to the Consolidated Financial Statements 30 June 2021
19. Remuneration of Auditors
The company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and
experience with the company and/or the consolidated group are important. Details of the amounts paid or payable to the auditor
(PricewaterhouseCoopers) for audit and non-audit services provided during the year are set out below. During the year the following fees were
paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms:
30 June 2021
$
30 June 2020
$
Statutory audit services
Audit or review of financial reports of the entity or any entity in the
consolidated entity
PricewaterhouseCoopers
Total remuneration for statutory audit services
No other non-audit services were performed in the current or prior year.
20. Events Occurring After the Balance Sheet Date
146,462
146,462
146,462
146,462
No matters or circumstances have arisen since 30 June 2021 that have significantly affected, or may significantly affect:
(a) the consolidated entity’s operations in future financial years; or
(b) the results of those operations in future financial years; or
(c) the consolidated entity’s state of affairs in future financial years.
21. Commitments
(a) Capital Commitments
There is no material capital expenditure contracted not recognised as liabilities at the reporting date (2020: nil).
(b) Termination Commitments
The service contracts of key management personnel include benefits payable by the group on termination of the employee’s contract. Refer to
the remuneration report for details of these commitments.
22. Contingencies
Starpharma has licensed VivaGel® BV in the United States to ITF Pharma and is eligible to receive up to US$101M in regulatory approval and
commercialisation milestones, plus royalties on net sales. Upon receipt of cash proceeds under the licence, Starpharma is required to pay a
small proportion of its receipts to an investment bank which advised on the competitive licence process, up to a maximum of US$1.35M over the
life of the licence (2020: US$1.35M).
Starpharma engaged a number of service providers to develop and assist with the implementation of a full direct to market commercialisation
plan for VIRALEZE™ antiviral nasal spray. In order to preserve capital, Starpharma negotiated to defer a majority of the fee to a service provider
until such time that the group begins recognising VIRALEZE™ sales and licensing proceeds. Pursuant to this arrangement, the maximum
remaining amount payable by the group to the service provider is A$1.2M (30 June 2020: A$Nil), subject to VIRALEZE™ sales performance
and licensing proceeds.
The company has no contingent assets at 30 June 2021 (2020: nil).
23. Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the
accounting policy described in note 1(b).
Name of entity
Country of
Incorporation
Class of Shares
Equity Holding
2021
%
2020
%
Starpharma Pty Limited
Australia
Ordinary
100.00%
100.00%
74 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
74
Notes to the Consolidated Financial Statements 30 June 2021
24. Reconciliation of Profit After Income Tax to Net Cash Inflow from Operating Activities
Operating profit/(loss) after tax
Depreciation and amortisation
Foreign exchange (gain)/loss
Non-cash employee benefits: share-based payments
Net gain/(loss) on sale of property, plant and equipment
Change in operating assets and liabilities, net of effects of acquisitions and
disposals of entities:
Decrease/(increase) in receivables and other assets
(Increase)/decrease in inventories
Increase/(decrease) increase in trade creditors
Increase in employee provisions
Increase/(decrease) in deferred income
Net cash outflows from operating activities
25. Earnings Per Share
Basic earnings/(loss) per share / Diluted earnings/(loss) per share
Total earnings/(loss) per share attributable to the ordinary equity holders of the
company ($)
Reconciliations of earnings/(loss) used in calculating earnings per share
Profit/(loss) attributable to the ordinary equity holders of the company used in
calculating basic earnings/(loss) per share: ($’000)
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings/(loss) per share
30 June 2021
$’000
(19,732)
30 June 2020
$’000
(14,678)
935
803
3,737
-
(2,369)
(1,227)
2,934
136
(25)
911
(288)
3,605
(1)
31
(95)
(445)
175
9
(14,808)
(10,776)
30 June 2021
30 June 2020
(0.05)
(0.04)
(19,732)
(14,678)
396,875,857
372,231,992
As at 30 June 2021 the company had on issue 17,472,497 (30 June 2020: 14,780,525) performance rights. The rights are not included in the
determination of basic earnings per share. The rights are also not included in the determination of diluted earnings per share. They are not
considered dilutive as their conversion would not increase loss per share from continuing operations.
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 75
75
Notes to the Consolidated Financial Statements 30 June 2021
26. Share-Based Payments
Performance Rights
(a) Employee Performance Rights Plan
In 2010 the Board approved the introduction of the Employee Performance Rights Plan (Plan), which was subsequently approved by
shareholders at the 2011, 2014, 2017 and 2020 annual general meetings. All executives and staff, including the Chief Executive
Officer, are eligible to participate in the Plan. The Plan allows for the issue of performance rights (being rights to receive fully paid
ordinary shares subject to continued employment with the company and the satisfaction of certain performance hurdles over a specified
period). Performance rights are granted under the Plan for no consideration. The objective of the Plan is to assist in the recruitment,
reward, retention and motivation of employees of the company.
(b) Fair value of performance rights granted
The weighted average assessed fair value at grant date of performance rights granted during the year ended 30 June 2021 was $1.41
per right (2020: $1.14). There were 4,281,654 performance rights granted in the current year (2020: 2,969,830).
The estimated fair value at grant date of rights with a Total Shareholder Return (TSR) performance measure have been valued using a
hybrid Monte-Carlo-trinomial option pricing model taking into account the absolute TSR target, the term of the right, the share price at
grant date, the risk free rate, the expected dividend yield, expected share price volatility, the volatility of the relevant index, and the
correlation between the share price and that index. All other rights incorporate Key Performance Indicator (KPI) measures, and the fair
value at grant date of these rights represents a volume weighted average price (VWAP) of shares leading up to the grant date.
Set out below are summaries of performance rights:
2021
Grant Date
Vesting
Date
11 Nov 2015
30 Jun 20171
Balance
at start of
the year
Number
251,625
11 Nov 2015
30 Sep 20181
1,115,794
19 Nov 2015
30 Jun 20171
19 Nov 2015
30 Sep 20181
13 Oct 2016
30 Jun 20181
181,001
836,260
281,314
13 Oct 2016
30 Sep 20191
1,528,234
29 Nov 2016
30 Jun 20181
29 Nov 2016
30 Sep 20191
10 Aug 2017
30 Jun 20191
172,842
846,281
434,260
10 Aug 2017
30 Sep 20201
2,451,673
29 Nov 2017
30 Jun 20191
29 Nov 2017
30 Sep 20201
16 Aug 2018
30 Jun 20201
197,226
895,879
170,356
16 Aug 2018
30 Sep 2021
814,000
2 Nov 2018
30 Jun 20201
210,827
2 Nov 2018
30 Sep 2021
833,409
29 Nov 2018
30 Jun 20201
112,708
29 Nov 2018
30 Sep 2021
539,921
17 Oct 2019
30 Jun 20211
448,344
17 Oct 2019
30 Sep 2022
1,787,575
21 Nov 2019
30 Jun 20211
134,199
21 Nov 2019
30 Sep 2022
536,797
Granted
during
the year
Number
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
30 Oct 2020
30 Jun 20211
–
567,083
Converted
during
the year
Number
6,000
64,000
–
–
4,000
204,862
–
–
24,280
Forfeited
during
the year
Number
–
–
–
–
–
–
–
–
–
Balance
at end of
the year
Number
245,625
1,051,794
181,001
836,260
277,314
1,323,372
172,842
846,281
409,980
499,455
210,671
1,741,547
–
–
–
–
113,227
–
–
–
–
–
–
–
–
–
197,226
159,214
736,665
–
–
–
170,356
814,000
97,600
52,800
780,609
–
–
112,708
539,921
69,310
379,034
86,400
1,701,175
32,879
101,320
–
536,797
5,624
561,459
76 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
76
Notes to the Consolidated Financial Statements 30 June 2021
30 Oct 2020
30 Jun 2022
30 Oct 2020
30 Jun 2023
20 Nov 2020
30 Jun 20211
20 Nov 2020
30 Jun 2022
20 Nov 2020
30 Jun 2023
–
–
–
–
–
548,270
2,193,080
176,755
159,293
637,173
–
–
–
–
–
11,392
536,878
45,568
2,147,512
–
–
–
176,755
159,293
637,173
Total
14,780,525
4,281,654
915,824
673,858
17,472,497
1 The balance of rights at end of the year have vested and remain available for employees to exercise into shares.
2020
Grant Date
Vesting
Date
11 Nov 2015
30 Jun 20171
Balance
at start of
the year
Number
299,325
11 Nov 2015
30 Sep 20181
1,364,555
19 Nov 2015
30 Jun 20171
19 Nov 2015
30 Sep 20181
13 Oct 2016
30 Jun 20181
181,001
836,260
351,084
13 Oct 2016
30 Sep 20191
1,990,600
29 Nov 2016
30 Jun 20181
29 Nov 2016
30 Sep 20191
10 Aug 2017
30 Jun 20191
172,842
876,978
595,950
10 Aug 2017
30 Sep 2020
2,546,080
29 Nov 2017
30 Jun 20191
197,226
29 Nov 2017
30 Sep 2020
895,879
16 Aug 2018
30 Jun 20201
203,500
16 Aug 2018
30 Sep 2021
814,000
2 Nov 2018
30 Jun 20201
236,747
2 Nov 2018
30 Sep 2021
946,987
29 Nov 2018
30 Jun 20201
134,980
29 Nov 2018
30 Sep 2021
539,921
Granted
during
the year
Number
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
17 Oct 2019
30 Jun 2021
17 Oct 2019
30 Sep 2022
21 Nov 2019
30 Jun 2021
21 Nov 2019
30 Sep 2022
–
–
–
–
459,767
1,839,067
134,199
536,797
Converted
during
the year
Number
47,700
248,761
–
–
69,770
Forfeited
during
the year
Number
–
–
–
–
–
Balance
at end of
the year
Number
251,625
1,115,794
181,001
836,260
281,314
307,499
154,867
1,528,234
–
–
–
172,842
30,697
846,281
161,690
–
434,260
–
–
–
–
–
–
–
–
–
–
–
–
–
94,407
2,451,673
–
–
197,226
895,879
33,144
170,356
–
814,000
25,920
210,827
113,578
833,409
22,272
112,708
–
539,921
11,423
448,344
51,492
1,787,575
–
–
134,199
536,797
Total
13,183,915
2,969,830
835,420
537,800
14,780,525
1 The balance of rights at end of the year have vested and remain available for employees to exercise into shares.
Starpharma Holdings Limited Annual Report 2021
77
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 77
Notes to the Consolidated Financial Statements 30 June 2021
26. Share-Based Payments (continued)
Information used in assessing the fair value of performance rights granted during the year ended 30 June 2021 is as follows:
Right grant date
Number of rights granted
Vesting date
Performance Measure
Expected price volatility of the company's
shares
Risk-free interest rate
Expected dividend yield
Share price at grant date
Assessed fair value
Right grant date
Number of rights granted
Vesting date
Performance Measure
Expected price volatility of the company's
shares
Risk-free interest rate
Expected dividend yield
Share price at grant date
Assessed fair value
30 October 2020
30 October 2020
30 October 2020
30 October 2020
567,083
548,270
2,048,142
144,938
30 June 2021
30 June 2022
30 September 2023
30 September 2023
KPIs
60%
0.04%
–
$1.47
$1.47
KPIs
60%
0.04%
–
$1.47
$1.47
KPIs
60%
0.10%
–
$1.47
$1.47
TSR
60%
0.10%
–
$1.47
$1.20
20 November 2020
20 November 2020
20 November 2020
20 November 2020
176,755
159,293
446,021
191,152
30 June 2021
30 June 2022
30 September 2023
30 September 2023
KPIs
60%
0.04%
–
$1.32
$1.32
KPIs
60%
0.04%
–
$1.32
$1.32
KPIs
60%
0.10%
–
$1.32
$1.32
TSR
60%
0.10%
–
$1.32
$0.96
Information used in assessing the fair value of performance rights granted during the year ended 30 June 2020 is as follows:
Right grant date
Number of rights granted
Vesting date
Performance Measure
Expected price volatility of the company's
shares
Risk-free interest rate
Expected dividend yield
Share price at grant date
Assessed fair value
Right grant date
Number of rights granted
Vesting date
Performance Measure
Expected price volatility of the company's
shares
Risk-free interest rate
Expected dividend yield
Share price at grant date
Assessed fair value
17 October 2019
17 October 2019
17 October 2019
459,767
1,716,967
122,100
30 June 2021
30 September 2022
30 September 2022
KPIs
50%
0.61%
–
$1.15
$1.15
KPIs
50%
0.75%
–
$1.15
$1.15
TSR
50%
0.75%
–
$1.15
$0.71
21 November 2019
21 November 2019
21 November 2019
134,199
375,758
161,039
30 June 2021
30 September 2022
30 September 2022
KPIs
50%
0.57%
–
$1.29
$1.29
KPIs
50%
0.70%
–
$1.29
$1.29
TSR
50%
0.70%
–
$1.29
$0.85
Share price volatility and the risk-free interest rate are obtained through an independent valuation.
78 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
78
Notes to the Consolidated Financial Statements 30 June 2021
Shares
(a) Employee Share Plan ($1,000 Plan)
All staff are eligible to participate in the Starpharma Employee Share Plan ($1,000 Plan). The objective of the $1,000 Plan is to assist in
the reward, retention and motivation of employees of the group. An annual allocation of up to $1,000 of shares may be granted and
taxed on a concessional basis. Shares are granted under the $1,000 Plan for no consideration and are escrowed for 3 years whilst
participants are employed by the group.
(b) Fair value of shares granted
The weighted average fair value at grant date of shares granted under the $1,000 Plan during the year ended 30 June 2021 was $1.53
(2020: $1.22 per share). The fair value at grant date is determined by the share price on the date of grant. These shares were granted
for no consideration. There was no allocation of shares under the plan to key management personnel.
Information used in assessing the fair value of shares granted during the year ended 30 June 2021 is as follows:
Share grant date
Number of shares granted
Share price at grant date
Assessed fair value
Information used in assessing the fair value of shares granted during the year ended 30 June 2020 is as follows:
Share grant date
Number of shares granted
Share price at grant date
Assessed fair value
27 January 2021
24,814
$1.53
$1.53
24 January 2020
32,920
$1.22
$1.22
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period were as follows:
Employee shares issued
Employee performance rights
30 June 2021
$’000
30 June 2020
$’000
38
3,737
3,775
40
3,565
3,605
Starpharma Holdings Limited Annual Report 2021
79
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 79
Notes to the Consolidated Financial Statements 30 June 2021
27. Parent Entity Financial Information
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Balance Sheet
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Contributed equity
Reserves
Accumulated losses
Loss for the year
Total comprehensive income
(b) Contingencies of the parent entity
The parent entity has no contingent assets or liabilities at 30 June 2021 (2020: nil).
30 June 2021
$'000
Parent Entity
30 June 2020
$'000
56,244
56,244
797
797
240,630
23,568
(208,751)
(20,481)
(20,481)
25,514
25,514
691
691
193,661
19,433
(188,270)
(15,651)
(15,651)
80 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
80
Directors’ Declaration for the year ended 30 June 2021
In the directors’ opinion:
(a) the financial statements and notes set out on pages 53 to 80 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of its performance for the financial year
ended on that date; and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the Corporations
Act 2001.
This declaration is made in accordance with a resolution of the directors.
Robert B Thomas AO
Chairman
Melbourne, 26 August 2021
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 81
81
Independent Audit Report to the Members of Starpharma Holdings Limited
[Page 1]
Independent auditor’s report
Independent auditor’s report
To the members of Starpharma Holdings Limited
To the members of Starpharma Holdings Limited
How our audit addressed the key audit matter
Key audit matter
Report on the audit of the financial report
Report on the audit of the financial report
Research and development tax incentive (Refer
to note 3 critical accounting estimates)
Our opinion
Our opinion
In our opinion:
In our opinion:
The accompanying financial report of Starpharma Holdings Limited (the Company) and its controlled
The accompanying financial report of Starpharma Holdings Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
entities (together the Group) is in accordance with the Corporations Act 2001, including:
We tested management’s estimate of the R&D Tax
Incentive receivable to assess the amount accrued as at
30 June 2017. As part of our procedures we:
(a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its
(a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its
Compared the estimate recorded in the
Starpharma’s research and development (R&D)
activities are eligible for a refundable tax offset under an
Australian Government tax incentive. Management has
assessed these activities and expenditure to determine
their eligibility under the incentive scheme. The R&D
financial performance for the year then ended
financial performance for the year then ended
Tax Incentive receivable recorded for the year ended 30
June 2017 was $3.5 million.
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
financial statements as at 30 June 2016 to the
amount of cash received after lodgement of the
R&D Tax Incentive claim to assess historical
accuracy of the estimate.
What we have audited
What we have audited
The Group financial report comprises:
The Group financial report comprises:
●
●
●
●
●
●
●
●
●
●
●
●
This is a key audit matter due to the fact that the
amount accrued in the financial statements is material
and there is a degree of judgement and interpretation of
the consolidated balance sheet as at 30 June 2021
the R&D tax legislation required by management to
the consolidated balance sheet as at 30 June 2021
the consolidated statement of comprehensive income for the year then ended
assess the eligibility of the R&D expenditure under the
the consolidated statement of comprehensive income for the year then ended
scheme.
the consolidated statement of changes in equity for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated income statement for the year then ended
the consolidated income statement for the year then ended
the notes to the consolidated financial statements, which include significant accounting policies
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
and other explanatory information
the directors’ declaration.
the directors’ declaration.
Compared the nature of the R&D expenditure
included in the current year estimate to the
prior year estimate.
Assessed the nature of the expenses against the
eligibility criteria of the R&D Tax Incentive
programme.
Agreed the eligible expenditure in the estimate
to the general ledger.
●
●
Basis for opinion
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
those standards are further described in the Auditor’s responsibilities for the audit of the financial
Obtained copies of correspondence with the
report section of our report.
report section of our report.
company’s external tax specialist and agreed
the advice to the current calculation and the
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
2016 lodgement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
our opinion.
Obtained copies of correspondence with the
ATO related to the claim and agreed the
assessment to management’s estimate.
Assessed the classification of the amount in the
Independence
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
fulfilled our other ethical responsibilities in accordance with the Code.
financial statements.
PricewaterhouseCoopers, ABN 52 780 433 757
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Starpharma Holdings Limited Annual Report 2021
Liability limited by a scheme approved under Professional Standards Legislation.
Liability limited by a scheme approved under Professional Standards Legislation.
Page 82 of 88
82
82 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Independent Audit Report to the Members of Starpharma Holdings Limited
[Page 2]
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
How our audit addressed the key audit matter
Key audit matter
Research and development tax incentive (Refer
to note 3 critical accounting estimates)
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
We tested management’s estimate of the R&D Tax
structure of the Group, its accounting processes and controls and the industry in which it operates.
Incentive receivable to assess the amount accrued as at
30 June 2017. As part of our procedures we:
Starpharma’s research and development (R&D)
activities are eligible for a refundable tax offset under an
Australian Government tax incentive. Management has
assessed these activities and expenditure to determine
their eligibility under the incentive scheme. The R&D
Tax Incentive receivable recorded for the year ended 30
June 2017 was $3.5 million.
This is a key audit matter due to the fact that the
amount accrued in the financial statements is material
and there is a degree of judgement and interpretation of
the R&D tax legislation required by management to
assess the eligibility of the R&D expenditure under the
scheme.
Materiality
Compared the estimate recorded in the
financial statements as at 30 June 2016 to the
amount of cash received after lodgement of the
R&D Tax Incentive claim to assess historical
accuracy of the estimate.
Compared the nature of the R&D expenditure
included in the current year estimate to the
prior year estimate.
Assessed the nature of the expenses against the
eligibility criteria of the R&D Tax Incentive
programme.
Audit scope
● For the purpose of our audit we used overall
● Our audit focused on where the Group made
Agreed the eligible expenditure in the estimate
Group materiality of $984,000, which represents
approximately 5% of the Group’s loss before
income tax.
● We applied this threshold, together with
qualitative considerations, to determine the scope
of our audit and the nature, timing and extent of
our audit procedures and to evaluate the effect of
misstatements on the annual financial report as a
whole.
● We chose Group loss before income tax because,
in our view, it is the benchmark against which the
performance of the Group is most commonly
measured.
● We utilised a 5% threshold based on our
professional judgement, noting it is within the
range of commonly acceptable thresholds.
to the general ledger.
subjective judgements; for example, significant
accounting estimates involving assumptions and
inherently uncertain future events.
Obtained copies of correspondence with the
ATO related to the claim and agreed the
assessment to management’s estimate.
Australia, consistent with the location of Group
management and financial records.
● All audit procedures are performed by PwC
● We tailored the scope of our audit taking into
Obtained copies of correspondence with the
company’s external tax specialist and agreed
the advice to the current calculation and the
2016 lodgement.
account the accounting processes and controls,
and the industry in which the Group operates.
Assessed the classification of the amount in the
financial statements.
Starpharma Holdings Limited Annual Report 2021
Page 82 of 88
83
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 83
Independent Audit Report to the Members of Starpharma Holdings Limited
[Page 3]
Key audit matters
Key audit matter
How our audit addressed the key audit matter
Research and development tax incentive (Refer
to note 3 critical accounting estimates)
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context.
Starpharma’s research and development (R&D)
activities are eligible for a refundable tax offset under an
Australian Government tax incentive. Management has
Research and Development Tax Incentive
assessed these activities and expenditure to determine
(Refer to note 3 critical accounting estimates and
their eligibility under the incentive scheme. The R&D
judgements, note 6 expenses and note 9 current
Tax Incentive receivable recorded for the year ended 30
assets - trade and other receivables)
June 2017 was $3.5 million.
We tested management’s estimate of the R&D Tax
Incentive receivable to assess the amount accrued as at
How our audit addressed the key audit matter
30 June 2017. As part of our procedures we:
Compared the estimate recorded in the
Key audit matter
We have performed the following procedures to assess
the Group’s estimate of the R&D Tax Incentive
receivable as at 30 June 2021:
financial statements as at 30 June 2016 to the
amount of cash received after lodgement of the
R&D Tax Incentive claim to assess historical
accuracy of the estimate.
The Group’s research and development (R&D)
This is a key audit matter due to the fact that the
●
activities are eligible for a refundable tax offset
amount accrued in the financial statements is material
under an Australian Government Tax Incentive. The
and there is a degree of judgement and interpretation of
Group has assessed these activities and related
the R&D tax legislation required by management to
expenditure to determine their eligibility under the
assess the eligibility of the R&D expenditure under the
incentive scheme.
scheme.
The R&D Tax Incentive receivable recorded as at 30
June 2021 was $7.23 million and $7.23 million was
recognised as contra R&D expense in the income
statement for the period ended 30 June 2021.
This is a key audit matter due to:
●
●
the significance of the amount receivable as at
30 June 2021; and
the degree of judgement and interpretation of
the R&D tax legislation required by the Group
to assess the eligibility of the R&D expenditure
under the scheme.
compared the estimate recorded in the financial
statements as at 30 June 2020 to the amount of
cash received after lodgement of the R&D Tax
Incentive claim to assess historical accuracy of the
estimate
Compared the nature of the R&D expenditure
included in the current year estimate to the
prior year estimate.
compared the nature of the underlying R&D
expenditure included in the current year estimate
to the prior year estimate
Assessed the nature of the expenses against the
eligibility criteria of the R&D Tax Incentive
programme.
assessed the nature of the expenses against the
eligibility criteria of the R&D Tax Incentive
programme
Agreed the eligible expenditure in the estimate
to the general ledger.
assessed the treatment of the JobKeeper receipts
within the eligible R&D expenditure calculation
Obtained copies of correspondence with the
ATO related to the claim and agreed the
agreed the eligible expenditure in the estimate to
assessment to management’s estimate.
the general ledger or other underlying accounting
records
Obtained copies of correspondence with the
company’s external tax specialist and agreed
the advice to the current calculation and the
2016 lodgement.
obtained copies of correspondence with the
company’s external tax advisor and agreed the
advice to the R&D Tax Incentive calculation for the
current financial year
Assessed the classification of the amount in the
evaluated the reasonableness of the disclosure
against the requirements of Australian Accounting
Standards.
financial statements.
●
●
●
●
●
●
Starpharma Holdings Limited Annual Report 2021
84 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Page 82 of 88
84
Independent Audit Report to the Members of Starpharma Holdings Limited
[Page 4]
Key audit matter
How our audit addressed the key audit matter
Key audit matter
Revenue recognition under AASB 15
Revenue from Contracts with Customers
(Refer to note 1 Significant Accounting Policies and
note 5 revenue and other income)
Research and development tax incentive (Refer
to note 3 critical accounting estimates)
How our audit addressed the key audit matter
We have performed the following procedures to assess
the Group’s revenue recognition for the period ended
30 June 2021:
●
The Group recognises licensing, product sales,
Starpharma’s research and development (R&D)
royalty and research revenues from arrangements
with commercial partners.
activities are eligible for a refundable tax offset under an
Australian Government tax incentive. Management has
assessed these activities and expenditure to determine
their eligibility under the incentive scheme. The R&D
Tax Incentive receivable recorded for the year ended 30
June 2017 was $3.5 million.
The Group has recognised $1.80 million of revenue
from contracts with customers for the period ended
30 June 2021.
●
This is a key audit matter due to the nature of the
Group’s contractual arrangements and complexity of
applying the accounting standard to those
contractual arrangements.
This is a key audit matter due to the fact that the
●
amount accrued in the financial statements is material
and there is a degree of judgement and interpretation of
the R&D tax legislation required by management to
assess the eligibility of the R&D expenditure under the
scheme.
obtained an understanding of the Group’s
We tested management’s estimate of the R&D Tax
contractual arrangements with commercial
Incentive receivable to assess the amount accrued as at
partners, focusing on the identification of
performance obligations, license arrangements
30 June 2017. As part of our procedures we:
and the associated recognition of fixed and
variable consideration, royalty income, product
Compared the estimate recorded in the
sales and product sales returns
tested a selection of transactions to the underlying
supporting documentation
financial statements as at 30 June 2016 to the
amount of cash received after lodgement of the
R&D Tax Incentive claim to assess historical
accuracy of the estimate.
evaluated the reasonableness of the disclosure
against the requirements of Australian Accounting
Standards
Compared the nature of the R&D expenditure
included in the current year estimate to the
prior year estimate.
Other information
Assessed the nature of the expenses against the
eligibility criteria of the R&D Tax Incentive
programme.
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2021, but does not include the
financial report and our auditor’s report thereon.
Agreed the eligible expenditure in the estimate
to the general ledger.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
Obtained copies of correspondence with the
ATO related to the claim and agreed the
assessment to management’s estimate.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
Obtained copies of correspondence with the
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
company’s external tax specialist and agreed
the advice to the current calculation and the
If, based on the work we have performed on the other information that we obtained prior to the date of
2016 lodgement.
this auditor’s report, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Assessed the classification of the amount in the
financial statements.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
Starpharma Holdings Limited Annual Report 2021
Page 82 of 88
85
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 85
Independent Audit Report to the Members of Starpharma Holdings Limited
[Page 5]
In preparing the financial report, the directors are responsible for assessing the ability of the Group 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 to cease
operations, or have no realistic alternative but to do so.
Key audit matter
How our audit addressed the key audit matter
Auditor’s responsibilities for the audit of the financial report
Research and development tax incentive (Refer
to note 3 critical accounting estimates)
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
Starpharma’s research and development (R&D)
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
activities are eligible for a refundable tax offset under an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
Australian Government tax incentive. Management has
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
assessed these activities and expenditure to determine
if, individually or in the aggregate, they could reasonably be expected to influence the economic
their eligibility under the incentive scheme. The R&D
decisions of users taken on the basis of the financial report.
Tax Incentive receivable recorded for the year ended 30
June 2017 was $3.5 million.
We tested management’s estimate of the R&D Tax
Incentive receivable to assess the amount accrued as at
30 June 2017. As part of our procedures we:
Compared the estimate recorded in the
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf.
This is a key audit matter due to the fact that the
This description forms part of our auditor's report.
amount accrued in the financial statements is material
and there is a degree of judgement and interpretation of
Report on the remuneration report
the R&D tax legislation required by management to
assess the eligibility of the R&D expenditure under the
scheme.
Compared the nature of the R&D expenditure
included in the current year estimate to the
prior year estimate.
Our opinion on the remuneration report
We have audited the remuneration report included in pages 21 to 43 of the directors’ report for the
year ended 30 June 2021.
Assessed the nature of the expenses against the
eligibility criteria of the R&D Tax Incentive
programme.
financial statements as at 30 June 2016 to the
amount of cash received after lodgement of the
R&D Tax Incentive claim to assess historical
accuracy of the estimate.
In our opinion, the remuneration report of Starpharma Holdings Limited for the year ended 30 June
2021 complies with section 300A of the Corporations Act 2001.
to the general ledger.
Agreed the eligible expenditure in the estimate
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
Obtained copies of correspondence with the
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
company’s external tax specialist and agreed
Australian Auditing Standards.
the advice to the current calculation and the
2016 lodgement.
Obtained copies of correspondence with the
ATO related to the claim and agreed the
assessment to management’s estimate.
PricewaterhouseCoopers
Brad Peake
Partner
Starpharma Holdings Limited Annual Report 2021
86 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2020
Assessed the classification of the amount in the
financial statements.
Melbourne
26 August 2021
Page 82 of 88
86
Shareholder Information
The shareholder information set out below was applicable as at 10 August 2021.
Supplementary information as required by ASX listing requirements.
A. Distribution of Equity Shareholders
Analysis of numbers of equity security holders by size of holding
1 –1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
There were 970 holders of less than a marketable parcel of ordinary shares.
B. Equity Security Holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
HSBC Custody Nominees (Australia) Limited
JP Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
National Nominees Limited
BNP Paribas Noms Pty Ltd
T & N Argyrides Investments P/L
BNP Paribas Nominees Pty Ltd ACF Clearstream
Mirrabooka Investments Limited
Applecross Secretarial Services Pty Ltd
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Ms Jacinth Fairley
11.
Mr Kingsley Bryan Bartholomew
12.
Mr Peter Murray Jackson
13.
BNP Paribas Nominees Pty Ltd
14.
15.
BNP Paribas Nominees Pty Ltd
di DRP A/C
DRP A
HSBC Custody Nominees (Australia) Limited - A/C 2
L
16.
Dollar Coin Investments Pty Ltd
17.
18.
Peppertree Custodian Services Pty Ltd
A/C M ill L
h (A t
li ) N i
Merrill Lynch (Australia) Nominees Pty Limited
Pt Li
it d
19.
Commonwealth Scientific and Industrial Research Organisation
20.
Mr David Michael Hosey + Mrs Andrea Jane Hosey
Class of equity security
Shares
Performance rights
2,761
3,303
1,356
1,821
268
9,509
–
–
–
22
23
45
Number held
125,584,383
49,079,638
23,997,000
11,486,806
9,955,488
4,970,000
4,408,891
4,067,044
3,361,550
3,252,386
3,054,025
3,020,000
2,950,611
2,766,480
2,484,209
1,990,030
1,669,950
1,540,474
1,448,798
1,429,422
Ordinary shares
Percentage
of issued shares
30.93
12.09
5.91
2.83
2.45
1.22
1.09
1.00
0.83
0.80
0.75
0.74
0.73
0.68
0.61
0.49
0.41
0.38
0.36
0.35
262,517,185
64.65
Starpharma Holdings Limited Annual Report 2021
STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021 87
87
Shareholder Information
Name
Employee Performance Rights
C. Substantial Holders
Unquoted equity securities over ordinary shares
Number on issue
17,472,497
Number of holders
45
Substantial shareholders with a shareholding greater than 5% as shown in substantial shareholder notices received by the company as at 10
August 2021:
Name
Allan Gray Australia Pty Ltd
Allianz SE
FIL Limited
M&G Plc
UIL Limited
D. Voting Rights
Number held
43,597,242
36,910,063
33,514,716
31,889,780
19,046,000
Ordinary shares
Percentage of
issue shares
10.82
9.09
8.32
7.85
5.12
The voting rights attached to each class of equity securities are set out below:
(a) Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and on a poll
each share shall have one vote.
(b) Performance Rights
No voting rights.
88 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2020
Starpharma Holdings Limited Annual Report 2021
88
Intellectual Property Report
The Starpharma patent portfolio currently has around 20 active patent families with over 200 granted patents and more than 70 patent
applications pending.
Key patents within the Starpharma portfolio as at 31 July 2021:
Title
VivaGel® Patent Portfolio
Agents for the Prevention &
Treatment of Sexually
Transmitted Diseases
Priority Date &
Publication
Number
30 March 2001
WO02/079299
Microbicidal Dendrimer
Composition Delivery System
(Condom related)
18 October 2005
WO2007/045009
Method of Treatment or
Prophylaxis of Bacterial
Vaginosis
16 May 2011
WO2012/000891
Patents Granted
Applications Pending
Australia, Brazil, Canada, China,
Europe, Hong Kong, Japan,
Mexico, New Zealand,
Singapore, South Korea, USA
Australia, Canada, Europe,
Hong Kong, India, Japan,
Malaysia, Mexico, New Zealand,
Russian Federation, South
Korea, Taiwan, USA
Australia, Canada, China,
Europe, Hong Kong, Israel,
Japan, Mexico, Russia, South
Korea, USA
Brazil, China, Hong Kong, India
Method of Treatment or
Prophylaxis of Infection of the
Eye
13 September 2012
WO2014/043576
Canada, China, Europe, Hong
Kong, Japan, USA
China, India, USA
Drug Delivery Patent Portfolio (includes DEP® Patents)
Macromolecules Compounds
having Controlled Stoichiometry
25 October 2005
WO2007/048190
Australia, Canada, Europe, USA
Modified Macromolecules
20 January 2006
WO2007/082431
Australia, Canada, China, Hong
Kong, India, Japan, USA
Europe
Targeted Polylysine Dendrimer
Therapeutic Agent
11 August 2006
WO2008/017125
China, Europe, India, USA
Macromolecules
(Drug linkers)
6 June 2011
WO2012/167309
Australia, Canada, China,
Europe, Hong Kong, Japan,
South Korea, USA
Brazil, China, India, USA
Dendrimer Drug Conjugates
(DEP-Insulin/GLP1)
6 June 2014
WO 2015/184510
Therapeutic Dendrimer
(DEP-Cabazitaxel)
19 July 2018
WO2020/014750
Dendrimer for Therapy and
Imaging
(DEP-radiotheranostic)
29 November 2018
WO2020/107078
Therapeutic Dendrimer
(DEP-Irinotecan)
20 November 2018
WO2020/102852
Therapeutic Dendrimer
(DEP-GEM)
26 September 2019
WO2021/056077
Targeted Dendrimer Conjugates
(DEP-targeted)
28 August 2019
WO2021/035310
Europe, USA
India,
Australia, Brazil, Canada, China, Europe,
India, Indonesia, Japan, Malaysia, Mexico,
Saudi Arabia, Singapore, South Africa,
South Korea, USA
Australia, Brazil, Canada, China, Europe,
India, Indonesia, Israel, Japan, Malaysia,
Mexico, Saudi Arabia, Singapore, South
Africa, South Korea, USA
Australia, Brazil, Canada, Chile, China,
Europe, India, Indonesia, Israel, Japan,
Malaysia, Mexico, Saudi Arabia, Singapore,
South Africa, South Korea, UAE, USA
International Patent Cooperation Treaty
(PCT) application
International Patent Cooperation Treaty
(PCT) application
Starpharma actively protects its trademark rights with filings and registrations in key markets. The primary marks protected are STARPHARMA,
VIVAGEL, DEP and VIRALEZE.
Starpharma Holdings Limited Annual Report 2021
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89
Corporate Directory
Company name
Starpharma Holdings Limited
ABN 20 078 532 180
Directors
R B Thomas AO – Chairman
J K Fairley – Chief Executive Officer and Managing Director
Z Peach
D J McIntyre
L Cheng
Solicitors
DLA Piper
80 Collins Street
Melbourne VIC 3000 Australia
Stock exchange listing
ASX Limited
Level 4, North Tower, Rialto, 525 Collins Street,
Melbourne VIC 3000 Australia
ASX Code: SPL
Starpharma’s American Depositary Receipts (ADRs) trade under
the code SPHRY (CUSIP number 855563102). Each Starpharma
ADR is equivalent to ten ordinary shares of Starpharma as traded
on the ASX. The Bank of New York Mellon is the depositary bank.
Starpharma’s ADRs are listed on OTCQX International
(www.otcmarkets.com), a premium market tier in the U.S. for
international exchange-listed companies, operated by OTC
Markets Group.
Website address
www.starpharma.com
Company Secretary
Nigel Baade
Registered office
4-6 Southampton Crescent
Abbotsford, Victoria 3067 Australia
Telephone +61 3 8532 2700
Postal address
PO Box 2022
Preston VIC 3072 Australia
Share register
Computershare Investor Services Pty Limited
452 Johnston Street, Abbotsford VIC 3067
GPO Box 2975
Melbourne, VIC 3001
1300 850 505 (within Australia)
+613 9415 4000 (outside Australia)
www.computershare.com
Auditor
PricewaterhouseCoopers
2 Riverside Quay
Southbank VIC 3006 Australia
90 STARPHARMA HOLDINGS LIMITED | ANNUAL REPORT 2021
Starpharma Holdings Limited Annual Report 2021
90
STARPHARMA HOLDINGS LIMITED ABN 20 078 532 1804-6 Southampton Crescent Abbotsford VIC 3067 AustraliaTelephone +61 3 8532 2700 www.starpharma.com