Silence Therapeutics Annual Report 2022
SILENCE THERAPEUTICS PLC
Contents
1
Strategic report
2
Governance
Board of Directors
Corporate Governance Report
Audit and Risk Committee Report
Remuneration Committee Report
3
Financial Statements
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
Company Balance Sheet
Company Statement of Changes in Equity
Notes to the Company Financial Statements
Company Information and Advisers
2
22
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35
37
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SILENCE THERAPEUTICS PLC
Strategic Report
Business Overview
Silence Therapeutics plc
is a biotechnology company focussed on
discovering and developing novel molecules incorporating short interfering ribonucleic acid, or siRNA, to inhibit the
expression of specific updated genes thought to play a role in the pathology of diseases with significant unmet medical
specifically binding to and degrading messenger RNA, or mRNA, molecules that encode specific targeted disease-
associated proteins in a cell. By degrading the message that encodes the disease-associated protein, the production of
that protein is reduced and its level of activity is lowered. In the field of RNAi therapeutics, this reduction of disease-
Our proprietary mRNAi GOLD (GalNAc
Oligonucleotide Discovery) platform consists of precision-engineered medicines designed to accurately target and
disease-associated genes in the liver. Using our mRNAi GOLD platform, we have generated siRNA
product candidates both for our internal development pipeline as well as for out-licensed programmes with third-party
collaborators. Our wholly owned pipeline is currently focused in three therapeutic areas of high unmet need:
cardiovascular disease, haematology and rare diseases.
SLN360, an siRNA targeting the LPA gene, is our wholly owned product candidate currently in phase 2 clinical
development (ALPACAR-360 trial), to reduce high levels of lipoprotein(a), or Lp(a), a genetically determined
from the single-ascending dose portion of the APOLLO phase 1 programme evaluating SLN360 in 32 healthy adults
with high
600 mg) had up to 96% and 98% median reduction in Lp(a) levels, respectively, and median reductions of up to 71%
and 81% from baseline persisted at 150 days. Those receiving a placebo saw no change in Lp(a) levels. Further analysis
showed median time-averaged Lp(a) reductions over 150 days exceeded 80% in the SLN360 300 mg and 600 mg dose
groups. At day 365, some participants still exhibited substantial knockdown of Lp(a) to approximately 50% of baseline.
SLN360 was well tolerated with no serious safety concerns reported. The multiple-ascending dose portion of the
APOLLO programme in subjects with high Lp(a) and stable ASCVD is ongoing and expected to readout in the fourth
quarter of 2023. In January 2023, we started dosing in the ALPACAR-360 phase 2 trial evaluating subjects with high
tic cardiovascular disease, or ASCVD, events and we expect to complete
enrolment by the end of 2023. We are engaged in global partnership discussions for this programme to ensure we are
well positioned to scale up SLN360 development and future commercialization.
SLN124, an siRNA targeting the TMPRSS6 gene, is our wholly owned product candidate that has shown the
potential to address a range of haematological conditions by modulating endogenous hepcidin, a peptide hormone that
is the master regulator of systemic iron balance. SLN124 is being evaluated in the SANRECO phase 1/2 trial in patients
with polcythaemia vera, or PV, and the GEMINI II phase 1 trial in patients with non-transfusion dependent, or NTD,
thalassemia. SLN124 demonstrated proof of mechanism in the GEMINI phase 1 trial in healthy volunteers completed in
May 2021, representing the first clinical data from our mRNAi GOLD platform. SLN124 has FDA Fast Track and
orphan drug designations for PV as well as orphan drug and rare paediatric disease designations for beta-thalassaemia.
The European Medical Agency has also granted SLN124 orphan drug designation and rare paediatric disease
designation for beta-thalassaemia.
The potential of our mRNAi GOLD platform has been validated through ongoing research and development
collaborations with leading pharmaceutical companies, such as AstraZeneca, Mallinckrodt and Hansoh. These
collaborations collectively represent up to 16 pipeline programmes and approximately $7.5 billion in potential milestones
plus royalties.
We believe the potential for our mRNAi GOLD platform to address disease-associated genes in the liver is
substantial. Only around one percent of the approximately 14,000 liver expressed genes have been targeted by publicly
known siRNAs. Once in the clinic, early-stage GalNAC-conjugated RNAi programmes have shown a greater likelihood
of advancement from the current phase of development compared to the pharma industry average, according to a 2020
industry analysis based on phase transition success rates. We aim to maximize our mRNAi GOLD platform by
advancing both our proprietary and partnered pipelines.
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Background on siRNA Molecules and RNA Interference
Messenger RNA (mRNA) plays an essential role in the process used by cells to translate genetic information from
DNA to create proteins. Transcription from DNA in the cell nucleus generates different types of RNA, including mRNA,
which carries in the sequence of its nucleotides the genetic information which serves as molecular blueprints required
for translation, or protein synthesis, outside of the nucleus where proteins are made. In some cases, cells produce
mRNA erroneously, resulting in synthesis of too much of a particular protein or a mutated protein variant, which can
lead to disease. Our siRNAs are designed to bind to undesirable mRNA, whereupon a natural process known as RNA
interference, or RNAi, is triggered, resulting in catalytic degradation of the mRNA and reduced production and activity
of the disease-associated protein.
RNAi is a naturally occurring biological pathway within cells for sequence-specific silencing and regulation of gene
expression. RNAi was discovered by Andrew Fire and Craig Mello, and they were awarded the 2006 Nobel Prize in
Physiology or Medicine for the discovery. RNAi therapeutics represent a novel advance in drug development that has
the potential to transform the care of patients with genetic and other diseases. Historically, the pharmaceutical industry
had developed only small molecules or recombinant proteins to inhibit the activity of disease-associated proteins. While
this approach is effective for many diseases, a number of proteins cannot be inhibited by either small molecules or
recombinant proteins. Some proteins lack the binding pockets small molecules require for interaction. Other proteins
are solely intracellular and are therefore inaccessible to recombinant protein-based therapeutics, which are limited to
cell surface and extracellular proteins. The unique advantage of RNAi is that, instead of targeting proteins, RNAi silences
the expression of genes themselves via the targeted destruction of the mRNAs made from the gene. Rather than seeking
to inhibit a protein directly, the RNAi approach works upstream to prevent its creation in the first place.
Once inside a cell, siRNA molecules are recognised by the endogenous RNAi cellular machinery, which removes
one of the strands, referred to as a passenger strand, of the siRNA construct thereby allowing the other strand, referred
to as a guide strand, to find its target mRNA and bind to it through Watson-Crick base pairing. This site-specific binding
triggers the biological process of RNAi interference, by which natural cellular machinery degrades target mRNA bound
by the guide strand and thereby prevents it from being translated into functional proteins.
Our medicines are designed to harness this natural pathway to develop a new generation of therapeutics by
designing tailored siRNA sequences that are able to bind through Watson-Crick base pairing to mRNAs that code for
specific disease-associated genes, or genes that regulate them. Our siRNA molecules are administered by
subcutaneous injection. Once administered, our siRNA molecules are taken up specifically by target liver cells or cleared
from the body within hours. A single siRNA molecule, once in the liver and incorporated into the RNAi cellular machinery,
can degrade large numbers
catalytic activity of the RNAi pathway eventually fades with gradual degradation of the guide strands, RNAi-mediated
protein reduction is not permanent. In our preclinical studies, we have observed a durable, dose-dependent silencing
effect with our product candidates, with the highest dose resulting in reductions of between 50% and 85% or more of
the target protein level over the course of several weeks to months following subcutaneous injection. As a result of the
phase 1 clinical data we have generated in both our SLN360 and SLN124 programmes, we believe that these observed
results suggest that our product candidates could lead to similar results in humans. The graphic below shows the steps
involved in the pairing of our siRNA molecules with the bases contained in the mRNA sequence for a particular target
gene.
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We believe that siRNA molecules can, in theory, be engineered to bind specifically to and silence almost any gene
in the human genome to which siRNA can be delivered. This potentially broad application of siRNA therapeutics could
allow them to become a new major class of drugs. We are currently able to deliver siRNA molecules to liver cells using
N-acetylgalactosamine, or GalNAc, for receptor-mediated targeting. GalNAc is an amino-modified monosaccharide that
binds to asialoglycoprotein receptors, or ASGPRs, with high affinity and specificity. When GalNAc-conjugated siRNA
molecules reach the surface of liver cells, they are internalised in those cells, with those not internalised being excreted.
Once internalised
pathway. This GalNAc-siRNA drug modality is intended to enable precision medicine through the accuracy of Watson-
Crick base pairing of the siRNA to its target gene mRNA, coupled with the specificity of GalNAc-mediated delivery to
the target gene-containing liver cell.
Our mRNAi GOLD platform uses a novel structure of double-stranded RNA with chemical modifications designed
to improve the stability and efficacy of our siRNA molecules as well as to enhance delivery to targeted liver cells. We
incorporate proprietary chemical modifications to enhance drug properties of our siRNA molecules, such as potency,
stability and tissue distribution. We believe this approach results in a powerful modular technology that will be well-
suited to tackle life-changing diseases. Particular siRNA molecules are designed to reduce the levels of a disease-
associated protein directly, such as in the case of SLN360. In preclinical studies and our phase 1 single-ascending dose
study, SLN360 was shown to directly reduce Lp(a) expression. Alternatively, in cases in which a disease-associated
protein is normally subject to inhibition by a regulatory protein, siRNA molecules are designed to increase the levels of
the disease-associated protein by silencing the inhibitory protein, thereby relieving inhibition and indirectly increasing
levels of the protein normally subject to inhibition. In preclinical studies and in a phase 1 study in healthy volunteers,
SLN124 was shown to indirectly up-regulate hepcidin levels by reducing the expression of a specific gene, TMPRSS6,
which normally
anaemia conditions
in which hepcidin expression is typically low. Using these techniques, we believe we can design siRNA molecules to
decrease high protein levels, and in some cases, to increase low protein levels, depending on the particular disease
genes being targeted.
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SILENCE THERAPEUTICS PLC
Our mRNAi GOLD Platform
Our mRNAi GOLD platform comprises elements of our GalNAc-siRNA toolbox, our liver cell targeting technology
and our target selection and screening process.
GalNAc-siRNA Toolbox. Our mRNAi GOLD platform is a toolbox comprising several different elements that can
be incorporated into our double-stranded siRNA structure, known as blunt-ended 19-mers, either singly or in different
combinations depending on individual siRNA sequences. The toolbox elements include:
sugar modifications of one or more select individual nucleotides;
stabilizing modifications of one or more internucleoside linkages in the sense and antisense strands;
stabilizing modifications at one or more of the ends of the siRNA molecules;
a five-
silencing complex, or RISC; and
-induced
a versatile linker chemistry for GalNAc ligand conjugation in various numbers and configurations.
When applying these elements of our toolbox, we also aim to reduce the overall content of the sugar modifications
and the number of undefined stereogenic centres in the siRNA molecule.
Liver Cell Targeting Technology. Blood flow and fenestra, or small openings in the endothelium, result in a large
amount of the injected dose of a conjugated siRNA passing through the liver and reaching the main cell type of the liver
known as a hepatocyte. Hepatocytes are cuboidal epithelial cells that line the liver sinusoids. Individual hepatocytes
have approximately 0.5 to 1.0 million cell surface ASGPRs. GalNAc binds to ASGPRs with high affinity so that when
GalNAc-conjugated siRNA reach the hepatocytes, they are internalised into the cells where siRNA can bind and, as a
thereby silencing the respective gene. Only a small fraction of the initial dose reaches the hepatocyte and the right
compartment of the cell, but once the siRNA is there, it can stay active and intact for several months, allowing a small
number of internalized siRNA molecules to exert a potent effect on the target mRNA. We apply the toolbox elements in
the lead optimization phase to identify candidates that we believe will be potent with a long duration of action and have
a favourable safety profile.
Target Selection and Screening Process. We are able to source potential product candidates through a
proprietary target selection process. The selection of new targets involves a careful analysis of the biology underlying
an indication, disease epidemiology and addressable population, the current standard of care and resulting medical
need, the commercial landscape and the envisaged clinical path.
Our screening process relies on a proprietary in silico algorithm that seeks to predict the most efficacious and
specific siRNAs for any given target. This bioinformatics function is designed to continuously improve in silico predictions
for finding potentially potent and safe siRNA sequences. The highest scoring drug candidates subsequently undergo a
multi-step evaluation process involving several rounds of in vitro screening in cell lines and primary hepatocytes to
identify the most potent molecules. Top candidates identified in vitro are then tested for safety and potential efficacy in
animal models. At this point in the process, additional modification patterns and new chemistries are introduced for
improvement of activity and duration of action while maintaining the desired safety profile. To be selected as a drug
candidate for clinical trials, it further needs to be shown that a molecule is well tolerated, elicits no serious adverse
effects, and achieves strong and long-lasting knockdown of the targeted gene in a study with non-human primates.
Translational Genomics. Our translational genomics team comprises machine learning experts, statistical
geneticists, bioinformaticians and software engineers. The team uses state-of-the-art methods to analyse human
genetic data to identify, characterise and prioritise new disease-causing gene targets, and develops machine learning
models to enable us to continuously fine tune the siRNA design algorithm. By powering the analysis with the flexibility
of cloud computing we are able to scale up our computational work as we grow.
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Our Pipeline
Our pipeline is centred around our liver-targeting mRNAi GOLD
platform and consists of a diversified set of
therapeutic areas, including haematology, cardiovascular disease and rare diseases.
*Silence retains exclusive rights to this programme outside of the China region, which includes Hong Kong, Macau and
Taiwan.
Our siRNA Product Candidates
SLN360
Overview
SLN360 is an siRNA molecule designed for the treatment of cardiovascular disease associated with elevated Lp(a),
a lipoprotein in the blood. Available human data validate Lp(a) as an independent risk factor increasing the chances of
developing premature cardiovascular diseases, including coronary heart disease and unstable angina, as well as
myocardial infarction and ischaemic stroke. SLN360 has the potential to reduce these diseases by specifically binding
to and inducing RNAi-mediated degradation of the mRNAs made from LPA, the gene that encodes apolipoprotein(a), a
product candidate
for several indications for which Lp(a) has been shown to be a causal, independent risk factor.
We believe SLN360 could be beneficial in addressing increased cardiovascular risk associated with raised levels of
Lp(a) greater than 50mg/
Lp(a) is thought to be higher in people with established cardiovascular disease and calcific aortic valvular stenosis.
Additionally, elevated Lp(a) concentrations are associated with an increased risk of myocardial infarction and ischaemic
stroke, particularly in stroke patients 55 years of age and younger. There is a genetic link between plasma Lp(a) level
and cardiovascular risk. Mutations that genetically cause elevated Lp(a) levels have been linked with increases in
myocardial infarction, ischaemic stroke, carotid stenosis, peripheral arterial disease (including femoral artery stenosis),
abdominal aortic aneurysm, obstructed coronary vessels (i.e. coronary atherosclerotic burden), earlier onset of coronary
artery disease, cardiovascular and all-cause mortality, increased risk of heart failure and reduced longevity. Importantly,
these causal relationships are independent of concentrations of other lipids and lipoproteins, including low-density
lipoprotein, or LDL, and conventional cardiovascular disease risk factors. Conversely, a genetically determined decrease
in Lp(a) has been associated with a 29% lower risk of coronary artery disease, 31% lower risk of peripheral vascular
disease, 17% lower risk of heart failure, 13% lower risk of stroke and a 37% lower risk of aortic stenosis.
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SLN360 is administered by subcutaneous injection and was observed to have a long duration of action in the
APOLLO trial, potentially allowing for infrequent dosing, such as every three months or less frequently. In April 2022,
results from the single-ascending dose portion of the APOLLO programme
nmol/L were simultaneously presented in a late-breaking presentation at the American College of Cardiology (ACC)
Annual Meeting and published in The Journal of the American Medical Association, or JAMA. In January 2023, we
started dosing in the ALPACAR-
ASCVD events and we expect to complete enrolment in the fourth quarter of 2023.
Disadvantages of existing treatment options
Lp(a) is not susceptible to lifestyle changes and there are no currently available pharmacological treatments
that cause an appreciable reduction in Lp(a). The only existing treatment to reduce Lp(a) is apheresis, which involves
the removal of blood plasma from the body by the withdrawal of blood, its separation into plasma and cells, and the
reintroduction of the cells, used especially to remove antibodies in treating autoimmune diseases. This process can take
between two and four hours and is performed every one to two weeks. Consequently, it is invasive and burdensome for
patients, and it is only available at limited centres at a high cost. Apheresis is primarily used in Europe and it is not
incorporated in the treatment guidelines in the United States.
There are currently no approved lipid-lowering agents specific to Lp(a). Several non-specific agents, largely
targeting LDL cholesterol, have been observed to have only marginal or modest Lp(a) reductions, including ezetimibe
(7%), niacin therapy (23%), cholesteryl ester transfer protein, or CETP, inhibitors (25-60%), and antisense
oligonucleotide-mediated inhibition of apo(b) by mipomersen (26%). Additionally, two monoclonal antibodies that inhibit
proprotein convertase subtilisin/kexin type 9, or PCSK9, have been observed to reduce Lp(a) levels by 20%-30%.
However, randomisation studies have suggested that to produce a clinically significant reduction in cardiovascular risk,
a larger reduction in Lp(a) may be required, something that we believe may be achieved by targeted RNA-based
approaches such as ours.
Preclinical Data
In a proof of mechanism study in cynomolgus monkeys, non-human primates also known as long-tailed macaques,
administration of SLN360 lowered blood serum Lp(a) levels in a sustained manner. The chart below shows changes
from baseline, or BL, levels with each data plot shown as an arithmetic mean plus or minus one standard deviation, or
SD. As shown in the chart below, over nine weeks following administration of either a single dose of SLN360 (3 mg/kg
or 9 mg/kg) on day 0 or three doses (of 3 mg/kg each) on days 0, 7 and 14, the largest dose resulted in a 95% reduction
in Lp(a) levels. Individual animals observed in the study had their serum Lp(a) normalised to their own baseline levels,
which are expressed as a nominal value of 100 in the chart below.
SLN360-Induced Reduction in Serum Lp(a) in Cynomolgus Monkeys
SLN360 has undergone an extensive nonclinical safety and pharmacokinetic evaluation, including rat biodistribution,
repeat dose toxicity in two animal species (rat and the pharmacologically relevant cynomolgus monkey), including safety
pharmacology investigations, and in vitro and in vivo genetic toxicity studies. SLN360 has displayed a typically short
pharmacokinetic profile, where the compound is almost completely cleared from circulation in the blood after 24 hours.
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SLN360 distribution was largely restricted to the liver and kidney, with levels in other organs (including reproductive
organs) at less than 1% of peak liver levels. SLN360 was shown to be non-genotoxic in the standard battery of genotoxic
tests. In good laboratory practice (GLP) toxicology studies, SLN360 was well tolerated up to the maximum dose
administered. All findings in both species were considered to be non-adverse. In the cynomolgus monkey, the most
relevant species, the No Observed Adverse Effect Level, or NOAEL, was 60 times the pharmacologically active dose,
and no dose-related changes in clinical chemistry, haematology, circulatory and electrocardiography, or ECG,
parameters, respiratory rate, neurobehaviour, plasma cytokines, complement activation or c-reactive protein levels were
noted.
Phase 1 Clinical Programme (APOLLO)
The APOLLO phase 1 clinical programme is a global randomised, double-blind, placebo controlled, single-
ascending dose and multiple-ascending dose study to investigate the safety, tolerability, pharmacodynamic and
pharmacokinetic response of SLN360 administered subcutaneously in up to 88 people total with high Lp(a) levels of
In February 2022, we reported positive results from the single-ascending dose portion of the APOLLO phase
1 programme
APOLLO trial were simultaneously presented in a late-breaking presentation at the ACC Annual Meeting and
published in JAMA. In the APOLLO trial, participants in the top two SLN360 single dose groups (300 mg and 600 mg)
had up to 96% and 98% median reduction in Lp(a) levels, respectively, and median reductions of up to 71% and 81%
from baseline persisted at 150 days. Those receiving a placebo saw no change in Lp(a) levels. Other efficacy
measures included the effects of SLN360 on low-density lipoprotein cholesterol (LDL cholesterol) and apolipoprotein B
(ApoB), both of which are associated with an increased risk of cardiovascular events. The highest doses of SLN360
reduced LDL cholesterol and ApoB by about 25%. SLN360 was well tolerated with no serious safety concerns
reported. In November 2022, we presented a further analysis from the APOLLO trial up to 365 days in a moderated
-
esults from the
averaged Lp(a) reductions over 150 days exceeded 80% in the SLN360 300 mg and 600 mg dose groups. At day 365,
some participants still exhibited substantial knockdown of Lp(a) to approximately 50% of baseline. Additionally,
extension data to day 365 showed no new drug related safety findings. The multiple-ascending dose portion of the
APOLLO study in subjects with high Lp(a) and stable ASCVD is ongoing and expected to readout in the fourth quarter
of 2023.
Phase 2 Clinical Programme (ALPACAR-360)
The ALPACAR-360 phase 2 clinical trial is a randomised, double-blind, placebo-controlled trial enrolling
randomly assigned to receive either two or three doses of SLN360 or placebo administered subcutaneously. The primary
endpoint is time averaged change in Lp(a) from baseline. In January 2023, we announced that we started dosing patients
in the ALPACAR-360 trial and we expect to complete enrolment in the fourth quarter of 2023.
SLN124
Overview
SLN124 is an siRNA molecule designed to treat ineffective erythropoiesis, or the production of red blood cells,
associated with iron overload disorders and with primary or secondary dysregulation of hepcidin synthesis. These
constitute diseases associated with pathologically low hepcidin and diseases in which there is inadequate hepcidin
response for the degree of iron loading, such as beta-thalassaemia and polycythaemia vera (PV). Left untreated, iron
overload disorders cause damage to the heart, liver, pituitary gland, adrenal gland, testes, pancreas, ovaries and kidney
and endocrine organs. Beta-thalassaemia is often accompanied by the destruction of a large number of red blood cells,
which causes the spleen to enlarge and work harder than normal, potentially worsening the anaemia. Beta-thalassaemia
is a rare disease, with an overall prevalence of 1 per 100,000 persons, rising in certain regions (such as Mediterranean
Europe, the Middle East and South East Asia) to 1 per 10,000 persons. Globally, there are over 60,000 new cases of
beta-thalassaemia each year, of which there are approximately 15,000 cases in the United States and the five major
markets in Europe. PV is a chronic myeloproliferative neoplasm, where the body makes too many blood cells. This
increases the thickness of the blood and can lead to an increased risk of thrombosis (blood clots). The disease often
presents later in life (60-65 years) and affects approximately 44 per 100,000 persons in Europe and the United States.
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SLN124 has the potential to reduce systemic iron, prevent organ iron overload and normalize erythropoiesis. It does so
by specifically binding to and inducing RNAi-mediated degradation of mRNAs made from the gene TMPRSS6, a
negative regulator of hepcidin, which is the main hormone controlling iron homeostasis.
SLN124 is administered by subcutaneous injection and has demonstrated a long duration of action in the GEMINI
healthy volunteer trial completed in May 2021. Data from the trial showed that SLN124 was effective in reducing plasma
iron levels and had a long duration of action. In September 2022, we reported preliminary safety data from the single
dose component of the GEMINI II phase 1 trial of SLN124 in patients with NTD thalassaemia. Data showed SLN124
was well tolerated with no serious safety issues identified. The multiple dose component of the GEMINI II trial is ongoing
and expected to readout in the fourth quarter of 2023. SLN124 is also being evaluated in the SANRECO phase 1/2 trial
in polycythaemia vera (PV) patients.
In 2019, the EMA granted SLN124 orphan drug designation for the treatment of beta-thalassaemia. In 2020, the
FDA granted rare paediatric disease designation for the treatment of beta-thalassemia and orphan drug designations
for the treatment of myelodysplastic syndrome (MDS) and adult beta-thalassaemia. In 2022, the FDA granted Fast Track
and orphan drug designations for SLN124 in PV.
Disadvantages of existing treatment options
The cornerstone of treatment for iron loading anaemias, like beta-thalassaemia, is the regular transfusion of
packed red blood cell, or RBC, units. Despite providing immediate symptomatic relief by boosting haemoglobin levels
(therefore reducing anaemia), RBC transfusions are burdensome, require frequent hospital visits (every two to five
weeks) and carry the risk of further iron overload. Iron chelators are the standard of care for the prevention of iron
overload and can be administered by intravenous or subcutaneous twice daily injections (deferoxamine) or taken orally
once (deferasirox) to three times daily (deferiprone). While orally available chelators, particularly Deferasirox (Exjade)
are currently prescribed due to their ease of administration, some patients still need to receive deferoxamine infusions.
Regardless of administration profile, chelator use carries a known risk of severe side effects with several restrictions of
use and black box warnings regarding potential renal, ophthalmic, hepatic and gastrointestinal, or GI, toxicity/failure,
with common acute GI side effects including abdominal pain, diarrhoea, nausea and vomiting. The side effect profile as
well as frequency of administration and perceived bad taste are reported as drivers of poor patient compliance with this
existing treatment option.
Luspatercept (Reblozyl) is approved for the treatment of adults with transfusion-dependent beta-thalassaemia,
and adults with erythropoiesis-stimulating agent (ESA) refractory MDS with ringed sideroblasts. We believe that the
limited response rates observed in the MEDALIST and BELIEVE pivotal studies suggest that there remains a substantial
unmet need among these patients. Lentiglobin (Zynteglo) is a gene therapy approved in the U.S. and Europe for the
treatment of a subset of patients with transfusion-dependent beta-thalassaemia. We believe that outstanding questions
surrounding the cost, safety and durability of gene therapies and their associated pre-conditioning regimens will limit
their uptake, leaving a substantial unmet need for the treatment of beta-thalassaemia.
The primary treatment goal in PV is to reduce the risk of thrombotic events by reducing haematocrit (the number of
blood cells in a given volume) to within target levels. The mainstay of treatment is therapeutic phlebotomy to reduce the
number of blood cells by regularly removing blood from the patient. Phlebotomy results in erratic, suboptimal control of
haematocrit, and regular phlebotomies can be burdensome to the patient. Patients over 60, or those with prior thrombotic
events or additional cardiovascular risk factors are also treated with chemotherapy drugs (cytoreductive agents) to
suppress blood cell production. The majority of these patients are treated with hydroxyurea, which is poorly tolerated
and carries the risk of potential long term side effects. Patients who are resistant or intolerant to hydroxyurea may be
treated with the JAK2 inhibitor ruxolitinib (Jakafi), which carries the risk of thrombocytopenia (low platelet count). Finally,
some patients are treated with synthetic hepcidin mimetic dosed weekly by subcutaneous injection in clinical trials. In
contrast to synthetic hepcidin mimetics, SLN124 elevates endogenous hepcidin produced and secreted by the liver,
avoiding high local concentrations of hepcidin at the injection site. We believe the sustained duration of action will allow
SLN124 to be dosed monthly, or less frequently, bringing additional value to patients.
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Preclinical Data
Preclinical data in a PV transgenic mouse model
A proof-of-concept study was conducted with an inducible PV mouse model to determine if TMPRSS6 siRNA can
raise endogenous hepcidin levels in this condition, restrict iron from erythropoiesis and thereby attenuate disease
progression and severity.
The majority of PV patients have a JAK2 gene gain of function mutation, JAK2V617F. Since JAK-STAT signalling
is involved in the regulation of hepcidin in the liver, it was imperative to create a PV model that restricted the expression
of mutant JAK2 allele to the bone marrow (BM). A pharmacodynamic study was conducted using a tamoxifen inducible
(CreERT2) BM transplant mice model of PV with the human JAK2V617Fallele. Control mice lack the inducible CreERT2.
The model recapitulates human disease with increased red blood cells, haematocrit and haemoglobin compared to
control animals. Importantly, our model has hepcidin levels in line with control animals, recapitulating what has been
previously reported in PV patients.
Inducible bone marrow transplant model of polycythaemia vera
A) Red blood cells (RBC), (B) haematocrit, (C) haemoglobin and (D) serum hepcidin in control (n=13) and PV mice
(n=20). Data are presented as mean +/-
Treatment of the PV mice with TMPRSS6 siRNA resulted in an approximately 95% reduction in TMPRSS6 mRNA
levels which also resulted in a 3.1-fold increase in hepcidin levels in comparison to siCTR. The increased hepcidin levels
caused a 25% and 32% reduction in haematocrit and haemoglobin, respectively, in comparison to siCTR
TMPRSS6 siRNA increases hepcidin and decreases the erythron
A) Liver Tmprss6 mRNA, (B) serum hepcidin, (C) haemoglobin and (D) haematocrit of PV mice treated by
subcutaneous injections of PBS (n=12), non-targeting control siRNA, siCTR (n=11) or Tmprss6 siRNA, siTMP (n=13).
Data are presented as mean +/-
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Mice treated with TMPRSS6 siRNA had decreased mean cell volume compared to siCTR siRNA treated mice, which
is indicative of iron restricted erythropoiesis. TMPRSS6 siRNA significantly decreased serum iron levels, however it did
not have an effect on liver iron levels, in comparison to siCTR treated mice.
Figure15 TMPRSS6 siRNA treatment decreases serum iron
(A) Serum iron, (B) Mean cell volume and (C) liver iron in PV mice treated with subcutaneous injections of PBS
(n=12), non-targeting control (siCTR) siRNA (n=11) and Tmprss6 siRNA, siTMP (n=13). Data are presented as mean
+/-
Preclinical data in a beta thalassaemia rodent disease model
In a beta-thalassaemia rodent disease model, SLN124 reduced expression of its target gene, TMPRSS6, in the liver
after 35 days, while also increasing serum hepcidin levels and lowering transferrin saturation. On days 1 and 15 of the
-globin genes, also known as Hbbth3/+, were treated with either
3 mg/kg of SLN124 subcutaneously as monotherapy or with the same dose of SLN124 in combination with 1.25 ng/mL
of deferiprone supplied in drinking water. One cohort of mice was treated with deferiprone alone. The control group
consisted of mice having TMPRSS6 siRNA without a ligand.
TMPRSS6 mRNA levels were assessed by quantitative Reverse Transcription Polymerase Chain Reaction, or qRT-
PCR, a common laboratory technique, and were normalised to the endogenous reference actin relative to their
expression levels in control treated animals. These TMPRSS6 mRNA levels are shown in the left panel of the figure
below. Serum hepcidin levels were determined using an ELISA assay and are shown in the middle panel of the figure
below. Transferrin saturation, a clinical biomarker for serum iron levels, was calculated based on total serum iron and
total iron binding capacity, and the observations from the study are shown in the right panel of the figure below.
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SILENCE THERAPEUTICS PLC
In the figure below, we show the results from administration on individual animals as well as the mean for each
group plus or minus one standard deviation. The figures show that administration of SLN124, either as monotherapy or
in combination with deferiprone, reduced TMPRSS6 mRNA levels as compared to the control group or treatment with
deferiprone alone. The two mouse groups receiving SLN124 also experienced comparatively higher hepcidin levels and
lower transferrin saturation levels than the control group or the deferiprone only group (the deferiprone only control data
being non-statistically significant
be confirmed in human clinical trials.
SLN124 reduced live
-thalassaemic mice compared to deferiprone
-thalassaemic mice compared to deferiprone
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SILENCE THERAPEUTICS PLC
-thalassaemic mice compared to deferiprone
In our preclinical studies of beta-thalassaemic mice, we also observed that administration of SLN124 improved
anaemia, which led to reduced extramedullary erythropoiesis, evident by the reduction in spleen weight shown in the
left panel of the figure below. In these studies, mice were dosed twice over two weeks, following which their spleen
weight and haemoglobin levels were measured over five weeks. As shown in the right panel of the figure below, we
observed a median increase of 2.5 g/dL in haemoglobin levels, or 30% more than the control group, in the mice receiving
SLN124 in this study. Increases of at least 1.5 g/dL are generally considered to be clinically relevant responses, based
on 2018 International Working Group standardized response criteria for showing haematologic improvement in patients
with MDS.
SLN124 reduced spleen weight and improved ana
-thalassaemic mice
Data based on collaboration with Dr. J. Vadolas, Australia, Monash Medical Centre/Melbourne.
SLN124 has undergone an extensive nonclinical safety and pharmacokinetic evaluation including mouse
biodistribution, single and repeat dose toxicity in two relevant animal species (mouse and cynomolgus monkey) including
safety pharmacology investigations, and in vitro genetic toxicity studies. Drug-drug interaction studies have also been
carried out as the initial clinical trial will also be performed in a patient population that may be using concomitant
medications. The toxicological data obtained so far are regarded as adequate to support single and repeated intermittent
monthly treatment in humans.
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SILENCE THERAPEUTICS PLC
In these nonclinical evaluations, SLN124 was highly absorbed within hours, while its pharmacodynamic effects were
sustained over weeks. SLN124 was distributed to the liver and kidney with little or no detectable tissue concentrations
in other tissues, including brain and reproductive organs. The nonclinical safety has been assessed in a series of GLP
pharmacology studies. In these studies, ECG, blood pressure and respiration were assessed in cynomolgus monkeys
without any test-article related observations. Evaluation of SLN124 in weekly repeat dose GLP studies in mouse and
non-human primates has not revealed any unexpected findings. The NOAEL was more than 25 times the predicted
efficacious pharmacological dose in both the mouse and monkey species. In vitro experiments in mammalian assay
systems confirmed the lack of genotoxicity. In drug-drug interaction studies, SLN124 was not a direct or time-dependent
inhibitor of analysed cytochrome enzymes and was neither an inhibitor nor a substrate of analysed transporters under
the conditions examined.
Healthy Volunteer Trial (GEMINI)
The GEMINI phase 1 trial was a randomised, double-blind, placebo controlled, single-ascending dose study to
investigate the safety, tolerability, PK and PD response of SLN124 (1.0, 3.0 and 4.5 mg/kg doses) administered
subcutaneously in 24 healthy volunteers. In May 2021, we reported positive data from the GEMINI Trial, which was the
first clinical data from our mRNAi GOLD platform. In December 2021, we presented further clinical data from the study
at the American Society of Haematology (ASH) Annual Meeting. Key outcomes included:
All 3 dose levels were well tolerated with no serious or severe treatment emergent adverse events, or TEAEs,
leading to withdrawal.
Average hepcidin, a key endogenous regulator of iron balance and distribution, increased up to ~4-fold after a
single dose with effect sustained for at least 2 months.
Serum iron reduced by ~50% after a single dose with effect sustained for at least 2 months.
SLN124 was rapidly distributed (median tmax was 4.0 or 5.0 hours) and largely eliminated from plasma within
24 hours post-dose in all dosing groups. SLN124 plasma concentrations increased in a greater than dose-linear
fashion between dosing groups.
All SLN124 doses induced marked reductions in transferrin saturation, or TSAT; absolute levels of TSAT
achieved (10 16%) are below the level (< 20%) where iron availability to tissue is restricted and at or below that
(< 16%) required to support normal erythropoiesis in health.
Thalassaemia Phase 1 Programme (GEMINI II)
The GEMINI II phase 1 programme is a global, randomized, single-blind, placebo controlled, single-ascending
and multiple-ascending dose studies to investigate the safety, tolerability, PK and PD response of SLN124 in
approximately 24 adults with NTD thalassaemia. In September 2022, we reported preliminary safety results from the
single-ascending dose portion of the trial showing SLN124 was well tolerated with no serious adverse events, or AEs,
no severe TEAEs that were SLN124 related and no TEAEs leading to withdrawal identified. Effects on hepcidin,
serum iron, transferrin saturation and haemoglobin are being evaluated in the ongoing multiple-dose arm expected to
readout in the fourth quarter of 2023.
Polycythaemia Vera Phase 1/2 Programme (SANRECO)
The SANRECO phase 1/2 PV programme is a two-part clinical trial which includes a phase 1 open-label, dose
finding trial followed by a phase 2 randomised, double-blind, placebo-controlled parallel arm study of SLN124 in PV
patients. The study is expected to enrol approximately 65 participants total. The primary endpoint for the phase 1
portion of the trial is safety/tolerability and the assessment of the number of phlebotomies at different intervals. The
phase 2 portion of the trial will evaluate the number of patients who are phlebotomy free after treatment. In January
2023, we announced that sites are open for enrolment.
Collaborations
In July 2019, we announced a strategic collaboration with Mallinckrodt to develop and commercialize RNAi drug
targets designed to silence the complement cascade in complement-mediated disorders. Under the agreement, we
granted Mallinckrodt an exclusive worldwide license to our C3 targeting programme, SLN501, with options to license
additional complement-mediated disease targets from us, with Mallinckrodt exercising the option for two additional
targets in July 2020. We are responsible for preclinical activities, and for conducting each development programme until
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SILENCE THERAPEUTICS PLC
the end of phase 1 clinical trials, after which Mallinckrodt will assume clinical development and responsibility for global
commercialisation. In connection with the execution of the agreement, Mallinckrodt made an upfront cash payment to
us of $20 million (£16.4 million) and purchased $5 million of our ordinary shares. We are eligible to receive up to $10
million in potential research milestone payments, in addition to funding for the phase 1 clinical development of SLN501
including GMP manufacturing. We will fund all other preclinical activities. We received a $2 million (equivalent to £1.6
million based on the exchange rate at the payment date) research milestone payment in October 2019 upon the initiation
of work on the first C3 target. In September 2020, we received another $2 million (£1.4 million) research milestone
payment following the initiation of work on a second complement target. In February 2021, we initiated work on the third
complement target which triggered another $2 million (£1.5 million) research milestone payment. In April 2021, we also
received $2 million (£1.5 million) for the second research milestone related to the SLN501 C3 targeting programme and
triggered another $3 million milestone payment following the submission of the SLN501 clinical trial application in March
2022. The collaboration provides for potential additional development and regulatory milestone payments in aggregate
of up to $100 million for the initial C3 target and up to $140 million for each of the two optioned complement-mediated
disease targets, with such milestones relating to the initiation of specified clinical trials in specified jurisdictions, and
upon the receipt of regulatory approvals by specified authorities, in each case for multiple indications. We are also
eligible to receive potential commercial milestone payments of up to $562.5 million upon the achievement of specified
levels of annual net sales of licensed products for each programme. We are also eligible to receive tiered, low double-
digit to high-teen percentage royalties on net sales for licensed products for each programme.
In March 2020, we announced a strategic collaboration with AstraZeneca to discover, develop and commercialise
siRNA therapeutics for the treatment of cardiovascular, renal, metabolic and respiratory diseases. AstraZeneca made
an upfront cash payment to us of $20 million (equivalent to £17.1 million based on the exchange rate at the payment
date) in May 2020 and an additional cash payment of $40 million (equivalent to £30.8 million based on the exchange
rate at the payment date) in May 2021. AstraZeneca also made an equity investment of $20 million in our company in
March 2020. We anticipate initiating work on five targets within the first three years of the collaboration, with AstraZeneca
having the option to extend the collaboration to a further five targets. AstraZeneca has agreed to pay us $10 million for
each selected target at the point of candidate nomination. For each target selected under the collaboration, we will be
eligible to receive up to $140 million in milestone payments upon the achievement of milestones relating to the initiation
of specified clinical trials, the acceptance of specified regulatory filings and the first commercial sale in specified
jurisdictions. For each target selected, we will also be eligible to receive up to $250 million in milestone payments as
well as tiered royalties as a percentage of net sales ranging from the high single digits to the low double digits.
On October 15, 2021, we announced a collaboration agreement with Hansoh, one of the leading biopharmaceutical
companies in China, to develop siRNAs for three undisclosed targets leveraging Silence's proprietary mRNAi GOLD
platform. Under the terms of the agreement, we retain exclusive rights to the first two targets in all territories except the
China Region (Greater China, Hong Kong, Macau and Taiwan). Hansoh has the exclusive option to license rights to
those two targets in the China Region following the completion of phase 1 studies. Silence will be responsible for all
activities up to option exercise and will retain responsibility for development outside the China region post phase 1
studies. Hansoh will also have the exclusive option to license global rights to a third target at the point of IND filing.
Hansoh will be responsible for all development activities post option exercise for the third target. Hansoh made a $16
million upfront payment to us in December 2021. We achieved our first $2 million research milestone payment in the
Hansoh collaboration in April 2022. We are eligible to receive up to $1.3 billion in additional development, regulatory
and commercial milestones. We will also receive royalties tiered from low double-digit to mid-teens on Hansoh net
product sales. In December 2022, we initiated work on the second target which we retain global rights to outside the
China Region.
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SILENCE THERAPEUTICS PLC
SLN501: Complement Factor C3 Programme
SLN501 is our siRNA partnered with Mallinckrodt that targets C3 and is in development for complement-mediated
diseases. In June 2022, we initiated a phase 1 trial in healthy volunteers.
Overview of the complement system
The complement system plays a pivotal role in both innate and adaptive immune systems. Complement proteins
are produced primar
complement
system may be activated through three principal pathways, known as the classical, lectin and alternative pathways, each
of which requires the C3 protein to enable three principal immune responses: opsonization, inflammation and formation
of the membrane attack complex, or MAC. When C3 is activated, C3 fragments, such as C3b, tag cell surfaces in a
process called opsonization, which marks the cells for removal from tissues or the bloodstream. Two other fragments,
C3a and C5a, are released, contributing to inflammation in the surrounding tissues. Further complement activation
causes MAC formation on cell surfaces, piercing holes and causing cells to lyse, or rupture.
Under conditions of excessive or uncontrolled activation, the complement system is believed to play a key role in
the incidence and progression of several autoimmune and inflammatory diseases. In these diseases, the complement
system acts directly through tissue destruction by the MAC and indirectly by signalling other elements of the immune
system to inappropriately target otherwise healthy tissues. Because the contribution of complement activation to the
development and progression of these diseases is not fully understood, it has been difficult to develop therapeutics that
ameliorate the conditions contributing to these diseases by targeting only one of the complement activation pathways.
Competition
The life sciences industry is characterised by rapidly advancing technologies, intense competition and a strong
emphasis on proprietary products. We face potential competition from many different sources, including major
pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions, governmental agencies
and public and private research institutions. Many of our competitors may have greater experience in research and
development, manufacturing, managing clinical trials and/or regulatory compliance than we do, and may be better
resourced financially. Any product candidates that we successfully develop and commercialise will compete with existing
products and new products that may become available in the future. These competitors also compete with us in recruiting
and retaining qualified scientific and management personnel and establishing clinical study sites and patient registration
for clinical studies, as well as in acquiring technologies complementary to, or necessary for, our programmes.
Companies that complete clinical trials, obtain required regulatory authority approvals and commence commercial
sale of their drugs before their competitors may achieve a significant competitive advantage, and our commercial
opportunity could be reduced or eliminated if competitors develop and commercialise products that are safer, more
effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we
may develop and commercialize. Because our products and many potential competing products are in various stages
of preclinical and clinical development, and given the inherent unpredictability of drug development, it is difficult to predict
which third parties may provide the most competition, and on what specific basis.
In addition to the competition we face from competing drugs in general, we also face competition from other
companies working to develop novel drugs using technology that competes more directly with our own. We are aware
of several other companies that are working to develop RNAi therapeutic products and other companies may develop
alternative treatments for the diseases we have identified as being potentially treated with our siRNA molecules. To the
extent those alternative treatments are more efficacious, less expensive, more convenient or produce fewer side effects,
our market opportunity would be reduced. We anticipate that we will face intense and increasing competition as new
products and therapies enter the market and advanced technologies become available. We expect any treatments that
we develop and commercialise to compete on the basis of, among other things, efficacy, safety, delivery, patient
friendliness, price and the availability of reimbursement from government and other third-party payors.
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SILENCE THERAPEUTICS PLC
Financial Review
Revenue
Revenue for the year ended 31 December 2022 was £17.5 million (2021: £12.4 million). The increase was primarily due
to the advancement of targets in our Mallinckrodt and AstraZeneca collaborations which delivered £16.7 million in 2022
(2021: £11.4 million).
Research and Development Expenses
Research and development expenses for the year ended 31 December 2022 were £35.6 million as compared to £30.8
million for the year ended 31 December 2021. Contract development costs increased by £3.2 million from 2021 as a
result of additional clinical studies and an increase in contract manufacturing activities for our proprietary programmes.
Personnel costs also increased by £1.2 million from 2021 as we increased our capabilities and expertise to further
advance our siRNA platform.
Cost of sales consists of research and development expenditure that is directly related to work carried out on revenue
generating contracts, which increased to £10.9 million for the year ended 31 December 2022 (2021: £7.5 million). The
increase was largely due to the further advancement of our collaboration programmes.
General and Administrative Expenses
General and administrative expenses were £19.6 million for the year ended 31 December 2022 as compared to £20.0
million for the year ended 31 December 2021. While there was an increase in payroll costs of £1.6 million, this was
offset by a reduction in consulting and recruiting costs of £0.6 million as we continue to reduce reliance on consultants.
The remainder of the decrease is due to finance, insurance, internal control, travel and legal costs as we continue to
benefit from efficiencies gained and the monitoring of administrative costs.
Finance and Other Income (Expense)
Finance income represents bank interest and accretion from U.S. Treasury Bills. For December 31, 2022, this was £0.2
million (2021: £10 thousand). The increase of finance income in 2022 can mainly be attributed to purchases of U.S.
Treasury Bills in 2022.
Also included in the Finance and other Income total is foreign exchange gains of £1.0 million and £nil for the years
ended December 31, 2022, and 2021, respectively. Net foreign exchange gains and losses result primarily from foreign
currency (Euro and USD) denominated bank accounts.
Finance expense for the year ended December 31, 2022, was £47 thousand, resulting from interest expense incurred
in connection with lease liabilities, compared to £8 thousand for the prior year.
Also included in the Finance and other expense total is foreign exchange losses of £nil and £44 thousand for the years
ended December 31, 2022, and 2021, respectively. Net foreign exchange gains and losses result primarily from foreign
currency (Euro and USD) denominated bank accounts.
Taxation
During 2022 and 2021, we have recognized U.K. research and development tax credits of £7.8 million and £6.9 million,
respectively in respect of R&D expenditures incurred; the higher tax credit in current year due to an increase in R&D
expenditure compared to previous year. This amount was offset by tax charges in our foreign tax expense.
Liquidity, cash and cash equivalents
As of December 31, 2022, we had cash, cash equivalents and U.S. Treasury Bills of £71.1 million ($86.0 million), which
reflects the registered direct offering, or the Offering, of 5,950,000 ADSs, at a public offering price of $9.50 per ADS, in
August 2022. Our aggregate gross proceeds from this offering were $56.5 million (approximately £46.4 million) before
deducting $4.1 million (approximately £3.3 million) in underwriting discounts, commissions and estimated offering
expenses.
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SILENCE THERAPEUTICS PLC
The Company is a development stage business and does not yet generate revenues or other operating cash inflows
from commercial sales. The Company therefore has primary KPI of cash and short-term investments.
Strategic objective: Availability of financial resources to progress the development of research and development
activities of the Company and its subsidiaries.
Key Performance Indicator: Year-end cash and short-term investments: £71.1 million (2021: £73.5 million)
Principal Risks
We constantly monitor and assess the overall risk of doing business in the biopharmaceutical industry and the particular
risks associated with our current activities and corporate profile. Having carried out a review of the level of risks the
Company and its subsidiaries is taking in pursuit of its strategy, the board of directors
is
satisfied that the level of retained risk is appropriate and commensurate with the financial rewards that should result
from the achievement of its strategy. The main risks have been identified as followed:
The approach we are taking to discover and develop drugs is novel and we may not be successful in our efforts
to identify or discover potential drug product candidates to bring into clinical trials.
If clinical trials of our product candidates fail to commence or, once commenced, fail to demonstrate safety and
efficacy to the satisfaction of regulatory authorities, or do not otherwise produce positive results, we may incur
additional costs or experience delays in completing, or ultimately be unable to complete, the development and
commercialisation of our product candidates.
We have a history of net losses and we anticipate that we will continue to incur significant losses for the
foreseeable future.
We will need to raise additional capital, which may not be available on acceptable terms, or at all.
We face competition from other companies that are working to develop novel drugs and technology platforms
using technologies similar to ours. If these companies compete with us for limited manufacturing supplies, or
for animals critical for preclinical testing, or otherwise develop drugs more rapidly than we do or their
technologies, including delivery technologies, are more effective, our ability to successfully commercialise
drugs may be adversely affected.
We rely on third parties to conduct some aspects of our manufacturing, research and development activities,
and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of
research or clinical testing.
If we are unable to obtain or protect intellectual property rights related to our current or future product candidates,
we may not be able to compete effectively in our markets.
We qualify as a foreign private issuer and, as a result, we will not be subject to U.S. proxy rules and will be
subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than
those of a U.S. domestic public company.
If equity research analysts do not publish research or reports, or publish unfavourable research or reports, about
us, our business or our market, the price and trading volume of our ADSs could decline.
adversely impact our ability to obtain regulatory approvals of our product candidates in the European Union,
result in restrictions or imposition of taxes and duties for importing our product candidates into the European
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SILENCE THERAPEUTICS PLC
Union, and may require us to incur additional expenses in order to develop, manufacture and commercialize
our product candidates in the European Union.
The Ukraine/Russia War could adversely affect our operations, including increases in the prices of the supplies
used in our business, supply chain interruptions and increased cybersecurity risks.
Inflation may adversely affect our operations, including increases in the prices of goods and services required
for our operations.
Corporate Social Responsibility
medicines whilst driving positive change for the communities around us. As part of this we are committed to corporate
social responsibility.
Social, Community & Human Rights
Our aim is to improve global health by bringing transformative treatments to adults and children in need, including for
rare diseases
continued to progress:
SLN360: Announced positive results from the APOLLO phase 1 single-ascending dose study in healthy
volunteers with high Lp(a).
SLN124: Announced preliminary safety results from the single ascending dose portion of the GEMINI II phase
1 study in thalassaemia patients.
We are committed to creating inclusive policies and equal opportunities for our current generation, while encouraging
Throughout 2022, we continued our UK policy initiatives with a successful podcast hosted by the Foundation for Science
and Technology and a white paper stating the case for regulatory and clinical trial reform. The white paper has been
distributed to relevant MPs, policy makers as well as industry fora such as the UK Biotechnology Association. Face to
face meetings were planned but disrupted by changes in government leadership. Silence has participated in initiatives
aiming to enhance the environment for commercial clinical trials in the UK led by Lord O'Shaughnessy as well as
contributing to the agenda and content of an oligonucleotide workshop to be organised by the European Medicines
Agency, due to be held in early 2023. The aim of the workshop will be to issue development guidance for
oligonucleotides which currently fall between guidance for small molecules and biologics.
Employees
W
.K. and Berlin and in 2022 we
achieved certification in the U.S. We foster a culture in which upward communication and feedback is valued and
encouraged. Silence recognises that flexibility positively impacts employee productivity, commitment and loyalty, so we
have focused on building a diverse and inclusive culture and believe in trying to assist staff to achieve a good balance
between their work and home life.
We provide private medical insurance to all employees for acute medical conditions to cover full out-patient treatment,
therapies, mental health support, dentist and optician cashback and extra cancer cover as a taxable benefit.
We have also introduced several new health and wellbeing programmes to our employees in 2022. For example, we
now pay for all employees to have a subscription to the app-based wellbeing programme called Headspace. We also
introduced a new Employee Assistant program with the aim to give people access to 24/7 advice and help in personal
and work-related matters.
Throughout 2022, Silence provided support for patient advocacy partners, including
walk in June where Silence employees collectively walked 10,349 kilometres and raised £10,349 for our partner
charities.
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SILENCE THERAPEUTICS PLC
Environment
We are monitoring our production processes and investigating new ways to increase the efficiency and reduce the mass
and better work-from-home practices.
Gender of Directors and Employees
As of 31 December 2022, we had 122 employees. Of these employees, 93 employees are engaged in research and
development activities and 29 employees are engaged in general and administrative activities. We have no collective
bargaining agreements with our employees and we have not experienced any work stoppages.
Diversity
Appointments within the Group are made on merit accounting to the balance of skills and experiences offered by
prospective candidates. Whilst acknowledging the benefits of diversity, individual appointments are made irrespective
of personal characteristics such as race, disability, gender, sexual orientation, religion or age.
A breakdown of the employment statistics on the basis of employees as at 31 December 2022 is as follows:
Gender Identity
Directors*
Senior Leadership**
Other employees
Female
Male
Non-Binary
-
5
61
6
9
47
-
-
-
Did Not
Disclose
Gender
-
-
-
*Of the Directors, there are two executive directors, that are considered both a director and an employee.
**Senior Leadership includes Department Heads and Vice Presidents.
Human Rights
The Group supports the UN Universal Declaration of Human Rights and recognises the obligation to promote universal
respect for and observance of human rights and fundamental freedoms for all, without distinction. The Group complies
with all applicable human rights laws.
Companies Act 2006, s.172 Compliance
The Company is required to provide information on how the directors have performed their duty under section 172 of
the Companies Act 2006 to promote its success, including how the interests of its stakeholders have been taken into
account in Board discussions and decision-making; stakeholders include:
Investors
The interests of its shareholders have been taken into account on a fair basis. This is described in more detail
in "Relations with shareholders" in the Corporate Governance Report on page 29. The Company has a frequent
and transparent dialogue with its investors throughout the year. Meetings take the form of roadshows, investor
conferences and one-on-one dialogue as required.
Regulators
Good dialogue is maintained with regulatory agencies and the Board ensures our clinical trials are designed
appropriately to allow the maximum potential for our products in development.
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SILENCE THERAPEUTICS PLC
Suppliers
identify suppliers with the right profile and capabilities. Good relationships are kept with suppliers; high
standards are expected in product and service, and the Company reciprocates by paying on a prompt basis,
within agreed terms. We meet with our significant suppliers regularly, monitoring the quality of products and
services on a constant basis to ensure that there is no negative impact or delays on our research programmes.
Employees
The Boa
with employees. Appropriate remuneration and incentive schemes are maintained to align employees'
objectives with those of the Company. As a result, the Company has a high staff retention rate. More detail on
how the board takes into account the interests of employees can be found in the Remuneration Committee
report on page 37.
Community & Environment
Policies are being formulated with emphasis on matters like carbon footprint, for example holding virtual
meetings where possible rather than travelling between our sites in the U.K., Germany and U.S. Diversity in the
workplace is actively encouraged. The Company has policies on anti-slavery and anti-bribery which are actively
promoted.
The Board focuses on maintaining high standards of business conduct. The Company operates a Code of Business
Conduct and Ethics and provides mechanisms for whistle blowing and complaints.
The directors
The strategic report has been approved by the Board and is signed on its behalf by:
Craig Tooman
Chief Executive Officer
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SILENCE THERAPEUTICS PLC
Board of Directors
Our Board is comprised of eight accomplished members, two Executive and six Non-Executive Directors.
Together, they bring highly valuable experience across a variety of relevant disciplines to effectively execute
our business plan.
Iain Ross
Chairman
Appointed April 2019
Iain Ross has over 40
technology sectors and has held significant
roles in multi-national companies including Sandoz, Hoffman La Roche, Reed Business Publishing and Celltech Group
plc. He has completed multiple financing transactions, and has over 30 years experience in cross-border management
as a chairman and CEO. He has led and participated in eight Initial Public Offerings (IPOs) and has direct experience
of M&A transactions in Europe, the United States and the Pacific Rim. Currently he is Executive Chairman of ReNeuron
Group plc (LSE) and Non-Executive Chairman of Kazia Therapeutics Limited (ASX & Nasdaq). In addition, he is a non-
executive director of BiVictriX Therapeutics plc (LSE) and advises a number of private companies in the biotechnology
sector. He is a qualified Chartered Director and Fellow of Royal Holloway, London University.
Areas of Expertise
Corporate Strategy, M&A, Business Development and Governance
Current External Roles
ReNeuron Group plc, Kazia Therapeutics Limited and BiVictriX Therapeutics plc
Craig Tooman
Executive Director
Appointed February 2022
Craig Tooman has served as our President, Chief Executive Officer and as a member of our Board since February 2022
and previously served as our Chief Financial Officer from January 2021 until February 2022. Mr. Tooman has experience
in the biopharmaceutical industry spanning more than 30 years, including 15 years of experience as a public company
CEO and CFO. Prior to joining us, from September 2019 to January 2021, he served as CFO and COO at Vyome
Therapeutics, Inc. and prior to his tenure at Vyome, from November 2013 to July 2019, Mr. Tooman served as CFO,
and then subsequently as CEO and Board Director of Aratana Therapeutics, Inc., where he successfully negotiated a
merger with Elanco. Before Aratana, from 2005 to 2010, Mr. Tooman served as the CFO of Enzon Pharmaceuticals,
Inc. until its acquisition by Sigma Tau, and prior to that led the $1.1 billion M&A initiative and integration of ILEX
Oncology, Inc. and Genzyme Corporation. Mr. Tooman has also held key positions at Pharmacia, and Upjohn. Mr.
Tooman currently serves on the Supervisory Board, and the Audit and Remuneration Committees of CureVac. He also
serves on the Board of Directors of Ondine Biomedical Inc. and Verté Therapeutics. Mr. Tooman received a BA degree
in Economics from Kalamazoo College and studied at Waseda University in Tokyo as part of that programme. He earned
his MBA in finance from the University of Chicago.
Areas of Expertise
Leadership, Global Commercialisation, Strategy, Business Development, Biotech build
Current External Roles
CureVac and Ondine Biomedical Inc.
Giles Campion
Executive Director
Appointed May 2020
Giles Campion, M.D. is our Head of R&D and Chief Medical Officer, having joined Silence in June 2019.
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SILENCE THERAPEUTICS PLC
He is an expert in translational medicine and a highly experienced biotech and pharmaceutical professional across many
therapeutic areas, most recently in orphan neuromuscular disorders. He has held senior global research and
development roles in several large pharmaceutical, diagnostics and biotech companies, including responsibilities at the
board level. Dr. Campion served as Chief Medical Officer for Albumedix Ltd from January 2017 to July 2018. He
previously served as Group Vice President, Neuromuscular Franchise at BioMarin Pharmaceutical Inc., or BioMarin,
Prosensa Holding N.V., or Prosensa. Dr.
Campion served as Chief Medical Officer and Senior Vice President of Research and Development at Prosensa from
2009 until its acquisition by BioMarin. Dr. Campion has also served as medical advisor to MyoTherix Inc and is a co-
founder of PepGen Ltd. Dr. Campion hold bachelors and doctorate degrees in medicine from the University of Bristol
and is listed on the General Medical Council (UK) Specialist Register (Rheumatology).
Areas of Expertise
Pharmaceutical Research and Development, Rare Disease Development, Translational medicine
Current External Roles
Co-Founder of PepGen Ltd.
Dave Lemus
Non-Executive Director
Appointed June 2018
Dave Lemus currently serves as non-executive director of Sorrento Therapeutics Inc. (NASDAQ: SRNE), Scilex Holding
Company (NASDAQ: SCLX) and BioHealthInnovation, Inc. Mr. Lemus was previously the Chief Executive Officer of
Ironshore Pharmaceuticals Inc. and prior to this, Mr. Lemus served as Chief Operating Officer and Chief Financial Officer
of Medigene AG. From 2011 to 2015, he served as Chief Executive Officer of Sigma Tau Pharmaceuticals, Inc. Mr.
Lemus was also Chief Financial Officer and Executive Vice President of MorphoSys AG from 1998 to 2011, during which
t
Mr. Lemus received an M.S. from the Massachusetts Institute of Technology and received a B.S. in accounting from the
University of Maryland College Park. Mr. Lemus is also a Certified Public Accountant in the United States.
Areas of Expertise
Drug Commercialisation, Strategic Partnerships, Corporate Financing
Current External Roles
Lemax LLC (CEO), Sorrento Therapeutics Inc., Scilex Holding company, and BioHealth Innovation Inc.
James Ede-Golightly
Non-Executive Director
Appointed April 2019
James Ede-Golightly is currently chairman of Oxehealth Ltd, East Balkan Properties Plc and Oxford Advanced Surfaces
Ltd. Among other directorships, Mr. Ede-Golightly is non-executive director of Sarossa plc, Serendipity Capital Ltd and
Plant Health Care plc, and has extensive experience as a non-executive director of AIM-quoted companies with
international business interests. Mr. Ede-Golightly was a founder of ORA Capital Partners in 2006, having previously
worked as an analyst at Merrill Lynch Investment Managers and Commerzbank. Mr. Ede-Golightly is a CFA
Charterholder and holds an M.A. degree in economics from Cambridge University. In 2012, he was awarded New
Chartered Director of the Year by the Institute of Directors.
Areas of Expertise
Investment and Corporate Finance
Current External Roles
Dunheved Limited, East Balkan Properties plc, Oxehealth Limited, Oxford Advanced Surfaces Limited, Sarossa plc,
and Serendipity Capital Limited
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SILENCE THERAPEUTICS PLC
Alistair Gray
Senior Independent Non-Executive Director
Appointed November 2015
Alistair Gray currently serves as non-
-executive
director of Scottish Golf Ltd. Mr. Gray is also a founder and director of Renaissance & Company, a strategic management
consultancy firm. Mr. Gray previously held senior management positions with Unilever and John Wood Group PLC, and
he also chaired the Audit and Remuneration committees of AorTech International PLC and Highland Distillers PLC. Mr.
Gray entered strategic management consulting at Arthur Young (now EY) Management Consultants and PA Consulting
Group, where he served as a director for over ten years. Mr. Gray also served as a Fellow of the Institute of Directors
and Institute of Consultants. He graduated from the University of Edinburgh in Mathematics and Economics, following
this with a management accounting qualification. He is a member of the faculty of Strathclyde Business School and
Manufacturing and Engineering Management department. He is also
a Visiting Professor at Loughborough University London and the University of Stirling.
Areas of Expertise
Strategic management, Organisation Performance and Governance
Current External Roles
Non-
Board and Scottish Golf Ltd. Founder/Director of Renaissance & Company. He is a member of the faculty of Strathclyde
department. He is also a Visiting Professor at Loughborough University London and the University of Stirling.
Dr. Steven Romano
Non-Executive Director
Appointed July 2019
Dr. Romano is a pharmaceutical executive and board-certified psychiatrist with over 28 years of drug development
experience across a wide range of therapeutic and disease areas. Dr. Romano most recently served as executive vice
president and chief scientific officer at Mallinckrodt plc, where he had responsibility for research and development,
regulatory, safety sciences and medical affairs. Prior to joining Mallinckrodt, Dr. Romano spent 16 years at Pfizer, Inc.
where he held a series of senior research and development and medical roles of increasing responsibility, culminating
in his most recent position as SVP, Head, Global Medicines Development, Global Innovative Pharmaceuticals Business.
He has recently served as Chairman of the National Pharmaceuticals Council, a health policy research organization,
and is a past president of the International Society for CNS Clinical Trials and Methodology, an independent organization
focused on enhancing therapeutic development of central nervous system therapeutics. Dr. Romano graduated from
University of Missouri-Columbia School of Medicine and completed his psychiatry and fellowship at Weill Cornell Medical
Center, where he held academic and clinical positions prior to entering the industry.
Areas of Expertise
Research and Development, Regulatory, and Medical Affairs
Current External Roles
Non-executive director of Evolution Research Group.
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SILENCE THERAPEUTICS PLC
Michael Davidson, MD
Non-Executive Director
Appointed January 2021
Michael H. Davidson, MD, FACC, FNLA, is Professor of Medicine and Director of the Lipid Clinic at the University of
Chicago. He also serves as Chief Executive Officer of New Amsterdam Pharma. Dr. Davidson is a leading expert in the
field of Lipidology. He has conducted over 1000 clinical trials, published more than 350 medical journal articles and
written three books on Lipidology. His research background encompasses both pharmaceutical and nutritional clinical
trials including extensive research on statins, novel lipid-lowering drugs, and omega-3 fatty acids. Dr. Davidson is a
serial biotech entrepreneur, founding three companies, the Chicago Center for Clinical Research, which became the
largest investigator site in the United States and was acquired by Pharmaceutical Product Development in 1996,
Omthera Pharmaceuticals in 2008, which was acquired by AstraZeneca in 2013 for $440 million, and most recently, he
was the founding CEO/CSO of Corvidia Therapeutics, which was acquired by Novo Nordisk for up to $2.1 billion in 2020.
In August 2020, he became the founding CEO of New Amsterdam Pharma based in Amsterdam and Adventura, Florida.
New Amsterdam was listed on Nasdaq (NAMS) in November 2022. He is also in independent director of Nasdaq-listed
Tenax Therapeutics and serves on the board of two private biotech companies, Sonothera and NanoPhoria Biocience.
Dr. Davidson is board-certified in internal medicine, cardiology, and clinical lipidology. He was President (2010-2011)
of the National Lipid Association, named as one The Best Doctors in America for the past 20
Diabetes Association, 2010.
Areas of Expertise
Lipidology and Clinical Development
Current External Roles
NewAmsterdam Pharma B.V., SonoThera, Inc., Tenax Therapeutics and NanoPhoria srl
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SILENCE THERAPEUTICS PLC
Introduction
continues to be to maximize the potential of our proprietary mRNAi GOLD platform by building
a pipeline of both wholly owned and partnered programmes. Our wholly owned programmes focus and leverage our
internal expertise in specific areas with the most opportunity while our partnered programmes provide collaboration for
a broader reach and potential source for non-dilutive capital. We believe this hybrid business model balances risk and
creates more opportunities.
During the year, we continued to expand our institutional shareholder base, a key priority for us following the November
2021 AIM delisting. In December 2022, institutional ownership accounted for 44% of our total ADSs outstanding vs. only
27% in December 2021. This growing institutional interest was highlighted during our August 2022 $56.5 million
registered direct offering - an oversubscribed deal led by new U.S. healthcare investment funds. During the year, we
also made steady progress towards improving our liquidity profile - average ADS trading volume more than doubled in
2022 vs. 2021. We expect this positive momentum to continue into 2023 as we advance in the clinic.
mRNAi GOLD Proprietary Programmes
SLN360 for cardiovascular disease
SLN360 is our lead wholly owned siRNA in phase 2 development for high lipoprotein(a), a genetic cardiovascular risk
In December 2022, SLN360's INN (international non-proprietary
name) was approved
zerlasiran.
Phase 1 programme (APOLLO)
In February 2022, we reported positive results from the single-ascending dose portion of the APOLLO phase 1
programme
the top two SLN360 single dose groups (300 mg and 600 mg) had up to 96% and 98% median reduction in Lp(a)
levels, respectively, and median reductions of up to 71% and 81% from baseline persisted at 150 days. Those
receiving a placebo saw no change in Lp(a) levels. In April 2022, results from the APOLLO single dose study were
simultaneously presented at the American College of Cardiology (ACC) Annual Meeting and published in The Journal
of the American Medical Association (JAMA). In November 2022, we presented a further analysis up to 365 days from
the APOLLO single dose study in a moderated poster session at the American Heart Association (AHA) Annual
Meeting. The assessment showed participants who received a single dose of SLN360 maintained median Lp(a)
reductions over 80% over a five-month period. Additionally, extension data to day 365 showed no new drug related
safety findings. We expect data from the multiple dose portion of the APOLLO programme in the fourth quarter of
2023.
Phase 2 programme (ALPACAR-360)
After the end of the year, on January 12, 2023, we announced that the first subjects have been dosed in the
ALPACAR-360 phase 2 study of
expect to complete enrolment in the study in the fourth quarter of 2023.
-risk of ASCVD events. We
We plan to partner SLN360 prior to initiation of a phase 3 cardiovascular outcomes study and potential
commercialization. These partnering discussions are ongoing and remain a top priority.
SLN124 for hematological diseases
SLN124 is our second wholly owned siRNA that has shown potential in several hematological diseases. SLN124 is
currently in clinical development for polycythemia
TMPRSS6
In March 2022, SLN124 was granted FDA orphan drug designation in PV. In September 2022, the FDA granted
SLN124 Fast Track Designation for PV. SLN124 has FDA orphan drug designation and rare pediatric disease
designation for beta-thalassemia. The European Medical Agency also granted SLN124 orphan drug designation and
rare pediatric disease designation for beta-thalassemia.
Polycythemia Vera
SANRECO phase 1/2 programme
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SILENCE THERAPEUTICS PLC
GEMINI II phase 1 programme
After the end of the year, on January 12, 2023, we announced that sites were open for enrolment in the SLN124
phase 1/2 PV study. The SLN124 PV study is a two-part study which includes a phase 1 open-label, dose finding
study followed by a phase 2 randomized, double-blind, placebo-controlled parallel arm study.
Thalassemia
In September 2022, we announced positive preliminary safety results from the single-ascending dose portion of the
GEMINI II study in non-transfusion dependent thalassemia patients. SLN124 was well tolerated with no serious AEs,
no severe TEAEs that were SLN124 related and no TEAEs leading to withdrawal. No dose limiting toxicity or drug
related liver injury was observed. Effects on hepcidin, serum iron, transferrin saturation and hemoglobin are being
evaluated in the ongoing multiple-dose arm expected to readout in the fourth quarter of 2023.
mRNAi GOLD Partnered Programmes
AstraZeneca
During the year, we continued work with AstraZeneca on two undisclosed targets. We started our collaboration in
March 2020 and received an upfront cash payment of $60 million. We have the potential to receive up to $4 billion in
potential milestones plus royalties for a total of 10 targets.
Mallinckrodt
In March 2022, we achieved a $3.0 million milestone payment from Mallinckrodt following the submission of the
clinical trial application for SLN501, our siRNA targeting C3 for complement-mediated diseases. In June 2022, we
started dosing in the SLN501 phase 1 study in healthy volunteers. We are working with Mallinckrodt on two other
undisclosed complement targets which are progressing on-track. We started our collaboration in July 2019 and
received an upfront cash payment of $20 million. We have the potential to receive up to $2 billion in potential
milestones plus royalties for the 3 targets.
Hansoh
In April 2022, we achieved our first $2 million research milestone in our Hansoh Pharma collaboration. In this
partnership, we have exclusive rights to two targets in all territories except the China Region (Greater China, Hong
Kong, Macau and Taiwan) and Hansoh has global rights to a third target. We started our collaboration in October
2021 and received an upfront payment of $16 million. We have the potential to receive up to $1.3 billion in potential
milestones plus royalties. In December 2022, we initiated work on the second target which we retain global rights to
outside the China Region.
Great Place to Work certified
certified in the United States. We foster a culture in which upward communication and feedback is valued and
encouraged. Silence recognizes that flexibility positively impacts employee productivity, commitment, and loyalty, so
we have focused on building a diverse and inclusive culture and believe in trying to assist staff to achieve a good
balance between their work and home life.
Organizational change
In February 2022, we were pleased to appoint Craig Tooman who previously served as our Chief Financial Officer as
President, Chief Executive Officer and Board member. We were also pleased to appoint Rhonda Hellums, previously
our VP, Finance, as Chief Financial Officer.
Commitment to sustainability and high standards of governance
RNAi continues to be an exciting space with huge potential to disrupt the treatment of multiple genetic diseases and I
believe Silence will play a key role in the future of this important therapeutic area. To maximise this opportunity, we
recognise the critical importance of promoting a culture of inclusion and diversity. Currently at the Board level, we
have one self-identified member of the LGBTQ+ community and another Silence director identified as a member of the
Latinx community. Good science depends upon recruiting a mix of patients into our clinical trials reflective of the
overall population and good business depends upon diverse representation across our organisation, especially in
leadership positions.
The Board is also committed to Corporate Social Responsibility, ensuring that we continue to make a positive impact
on the world. We have made great strides in three areas in which we will aim to pursue our ambition to drive positive
change for the communities around us: Social, Community & Human Rights, Employees and Environment. More
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SILENCE THERAPEUTICS PLC
details on our Corporate Social Responsibility initiatives can be found in the Corporate Social Responsibility section of
this Annual Report
Iain Ross
Chairman
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SILENCE THERAPEUTICS PLC
Corporate Governance Report
The Directors remain committed to maintaining high standards of transparency, ethics and corporate
governance.
What corporate governance standards does the Company follow?
In July 2018, the Board approved the application of The Quoted Companies Alliance (QCA) Corporate Governance
Code (2018 edition) (the QCA Code). While the Company is no longer required to comply with the QCA code as the
Company is no longer listed on AIM, the Company has voluntarily continued to comply, where applicable, through the
reporting period. The QCA Code is a practical, outcome-oriented approach to corporate governance that is tailored for
small and mid-size quoted companies in the UK. The Board views this as an appropriate corporate governance
framework for Silence Therapeutics plc and consideration has been given below to each of the ten principles set out in
the QCA Code.
How frequently does the Board meet?
The Board holds four scheduled meetings per year, aligned with quarterly management reporting; regular monthly Board
update calls and additional meetings and Board calls when circumstances and urgent business dictate. In the 12-month
period under review, there were 12 meetings. The high number of Board meetings was driven by the introduction of
regular monthly Board update calls to keep Board members fully updated on business developments.
Type of meeting
Board
Audit and Risk Committee
Remuneration Committee
Nomination Committee*
Number of meetings
12
8
4
0
Craig Tooman appointment as CFO were both discussed and agreed upon at Meetings of the full Board
All Board and Audit and Risk Committee meetings were fully attended by the relevant Directors throughout the year
either in person or virtually; two Remuneration Committee meetings were not attended by Dr. Michael Davidson. All
Directors receive the agenda and Board papers in advance of Board meetings to enable them to make an effective
contribution. Between Board meetings, the Chairman maintains regular informal contact with Non-Executive Directors.
The Board continues to meet on a regular basis in order to review progress and agree strategy.
The Board reviews the strategy and at each meeting evaluates the progress of the Company towards achieving its
annual objectives. It also analyses the risk of potential activities and monitors financial progress against budget.
-Executive Director and
How does the Board apply the ten principles set out in the QCA Code?
1. Establish a strategy and business model which promote long-term value for shareholders
To support the execution of this strategy, the Board performs the following key tasks:
statement on page 26.
approval of long-term objectives and strategy;
approval of revenue, expense and capital budgets and plans;
approval for therapeutic candidate progression through key development and clinical stages;
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SILENCE THERAPEUTICS PLC
oversight of operations ensuring that adequate systems of internal controls and risk management are in place,
ensuring maintenance of accounting and other records, and compliance with statutory and regulatory obligations;
review of performance in light of strategy and budgets ensuring that any necessary corrective actions are taken;
review progress towards and consider options and terms of business development and corporate collaboration and
development deals;
approval of the annual report and financial statements, half year results, material contracts and major projects;
changes to structure, size and composition of the Board;
determining remuneration policy for the Directors and approval of the remuneration of the Non-Executive Directors;
and
approval of communications with shareholders and the market.
2. Seek to understand and meet shareholder needs and expectations
Contact with major shareholders has been principally maintained by the CEO and the Chairman during the reporting
period, and they have ensured that their views are communicated to the Board as a whole. The Board believes that
appropriate steps have been taken during the reporting period to ensure that the members of the Board, and in particular
the Non-Executive Directors, develop an understanding of the views of major shareholders about the Company.
Whilst we are aiming to hold our Annual General Meeting in April, a Notice of Annual General Meeting will be issued in
due course and will be available on our website. Separate resolutions will be provided on each issue so that they can
be given proper consideration. Proxy votes are counted and the level of proxies lodged on each resolution reported after
it has been dealt with by a show of hands.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term
success
ability to help patients and their caregivers to be highly important and critical to the
The Board considers the
long-term success of Silence. For more information on how the
lead drug candidates, SLN124, SLN360 and
SLN501, can help patients, refer to pages 6 to 16. Our Sustainable Development Goals including goals related to
community, health and environment, are set out on page 19.
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation
A Risk Register is maintained for regular review by the Audit and Risk Committee and the Board. Principal risks are set
out on page 18 where mitigating activities are also explained.
Additionally, the Audit and Risk Committee report on page 35 sets out how risks are reviewed.
5. Maintain the Board as a well-functioning, balanced team led by the Chairman
Currently the Board has a majority of Non-Executive Directors, consisting of two Executive and six Non-Executive
Directors
The skillsets of the Board include extensive knowledge of the pharmaceutical and biotechnology industries, strategic
consultancy and corporate finance.
The Nomination Committee is chaired by the Chairman of the Board, Iain Ross.
Craig Tooman was appointed as CEO on February 21, 2022
background are given in their biographies on pages 22 to 25.
The Chairman is responsible for leading the Board and ensuring its effectiveness and is responsible for the operational
management of the Company and implementation of Board strategy and policy.
The Board delegates certain activities to the Committees, with terms of reference which are available on the Company
website (www.silence-therapeutics.com). Membership of all three Board Committees comprises a Non-Executive Chair
and at least two other Non-
expense, professional advice on any matter within their terms of reference and to have access to sufficient resources in
order to carry out their duties.
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SILENCE THERAPEUTICS PLC
Board Structure
Following the appointment of Craig Tooman as CEO in February 2022, the Board Committee memberships are as
follows:
Audit and Risk Committee
Dave Lemus (Chair)
Alistair Gray
James Ede-Golightly
Dr. Michael Davidson
Remuneration Committee
James Ede-Golightly (Chair)
Dr. Michael Davidson
Dave Lemus
Dr. Steven Romano
Nomination Committee
Iain Ross (Chair)
Alistair Gray
Dr. Steven Romano
Craig Tooman
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
The Board has delegated the tasks of reviewing Board composition, searching for appropriate candidates and making
recommendations to the Board on candidates to be appointed as Directors, to the Nomination Committee.
The Nomination Committee chair is held by the Chairman of the Company.
The main duties of the Nomination Committee are set out in its terms of reference and include:
regularly reviewing the structure, size and composition (including the skills, knowledge, experience and
diversity) required of the Board compared to its current position and making recommendations to the Board
with regard to any changes;
determining the qualities and experience required of the
and identifying suitable candidates, assisted where appropriate by recruitment consultants;
Executive and Non-Executive Directors
formulating plans for succession for both Executive and Non-Executive Directors and in particular for the key
roles of Chair and Chief Executive Officer;
assessing the re-appointment of any Non-Executive Director at the conclusion of their specified term of office,
having given due regard to their performance and ability to continue to contribute to the Board in the light of
the knowledge, skills and experience required; and
assessing the re-election by shareholders of any Director, having due regard to their performance and ability
to continue to contribute to the Board in the light of the knowledge, skills and experience required and the
need for progressive refreshing of the Board.
Craig Tooman was appointed as CEO and Executive Director in February 2022. With regard to the re-election of
Directors, the Company is governed by its Articles of Association (the Articles). Under the Articles, the Board has the
power to appoint a Director during the year, but any person so appointed must stand for election at the next Annual
General Meeting. Any Director who has been a Director at each preceding two Annual General Meetings and has not
been appointed or re-appointed since, must retire from office at the next Annual General Meeting.
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SILENCE THERAPEUTICS PLC
The Director is then eligible to stand for re-appointment by the shareholders. Steven Romano will stand for re-election
at the 2023 Annual General Meeting.
The annual performance evaluation for 2021, resulted in recommendations, which are being implemented by the Board,
to allocate more time at Board meetings to consider business development and opportunities to grow the business.
Silence is committed to diversity in all aspects of its mission and activities and at all levels of the organisation, including
its Board of Directors. The Board understands the value in having directors of diverse gender, race, and ethnicity, along
with varied skills, perspectives and experiences. We are constantly looking for opportunities to improve our diversity
and inclusion practices.
7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The Silence Therapeutics plc Board remains mindful that it needs to continually monitor and identify ways in which it
might improve i
effectiveness.
A review of the CEO was initiated and concluded in January 2023. The CEO reviewed the performance of the CFO for
2022. Any performance-related remuneration is determined by the Remuneration Committee and recommended to the
Board.
The Directors, led by the Senior Independent Non-Executive Director,
performance.
In conducting the formal annual evaluation, the Board undertakes a rigorous assessment of its own performance,
balance of skills, experience, independence, diversity (including gender diversity) and other factors relevant to its
effectiveness (and also that of its Committees) and the performance of its individual Directors. In late 2022 the Board
commenced a formal evaluation of its performance which was concluded in Q1 2023. In conducting this review, the
Chairman and the Senior Independent Director undertook discussions with each of the other Directors regarding the
In preparation, the Chairman and the Senior Independent Non-Executive Director, solicited the views of the other
Directors, including the completion by each Director of a confidential questionnaire in respect of the Board, the Audit
and Remuneration Committee and one specifically relating to the performance of the Chairman. The Senior Independent
Non Executive Director had individual discussions with the Directors about the performance of the Chairman. In the
case of the Directors, all questionnaires were returned to the Senior Independent Non-Executive Director, who
summarised the overall assessment of each director.
Following the reviews, the Chairman and the Senior Independent Non-Executive Director, shared their observations
with the other Directors at a Board Meeting in Q1 2023 during which an open feedback session was held in an executive
session of the Non-Executive Directors. The individual director evaluations were aimed to confirm that each Director
continues both to contribute effectively and to demonstrate commitment to the role (including the allocation of necessary
time for preparation and attendance at Board and Committee meetings and any other duties).
The results of the review were satisfactory overall, actions emerged which can be summarised as follows:
Strategy and Contingency Planning - As
in-house
capabilities and corresponding operational infrastructure globally, it was agreed that there should be more emphasis
at Board meetings on strategic discussions and risk analysis and in addition that the annual strategy session for the
Board of Directors should be expanded to include external and professional input. External environment we are
likely to face should also be considered, both metric based and qualitative. Also, the Board and its Committees
should pro-actively consider, review and assess contingency scenarios on a regular basis.
the Company expands
its development pipeline,
Succession Planning - as the Company expands it was agreed that the Board needs to formalise its approach to
Board & Management succession planning in terms of skills, geography and diversity. The Chairman is committed
to lead this initiative in liaison with the CEO. In addition, be open and transparent around any concern about conflict
of interest if, and when, that exists.
Non-Executive Directors ongoing training and development and interaction with senior management -
Following a concerted effort led by the Chairman and the Senior Independent Non-Executive Director, this will be
implemented to introduce a more structured approach to the induction and broader development of Directors and
interaction with the Senior Management on a more frequent basis to enhance their knowledge and understanding
of the business as it evolves. Further, each Committee should be given the challenge to modernize, in light of
changes in regulation and capital markets and other external issues which many include potential changes in scope
of the committee.
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SILENCE THERAPEUTICS PLC
The Nomination Committee is responsible for succession planning and making recommendations to the Board in this
respect, as set out above.
8. Promote a corporate culture that is based on ethical values and behaviours
Ethical values and behaviours are important to the Company and the Company is dedicated to driving positive change
for communities around the world. The policies to implement this are explained on page 19.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by
the Board
The Board is supported by the Committees, explained above, in the task of maintaining good practice governance
processes and structures. Furthermore, the following governance matters support good decision-making by the Board.
Internal Controls and Risk Management
The Company has in place a system of internal financial controls commensurate with its current size and activities,
which is designed to ensure that the possibility of misstatement or loss is kept to a minimum. These procedures include
the preparation of management accounts, variance analysis, controls in place for one-off accounting items and other ad
hoc reports. In 2022 the Group engaged EisnerAmper as consultants to test ICFR (Internal controls over financial
reporting). As a result, the Group was able to build up of evidence from an internal control perspective and allow
management to attest over the ICFR as required under the Sarbanes-Oxley Act 2002.
Risks throughout the Company are considered and reviewed on a regular basis. Risks are identified and mitigating
actions put into place as appropriate. Principal risks and uncertainties identified are set out in the strategic report on
pages 18 and 19.
Internal control and risk management procedures can only provide reasonable and not absolute assurance against
material misstatement.
Financial and Business Reporting
position and prospects in
The Board seeks to present a balanced and understandable assessment of the
all half year, full year and price-sensitive reports and other information required to be presented by statute. The Board
receives a number of reports to enable it to monitor and clearly understand the
financial position. The
Company maintains a Disclosure Policy to enhance the process for ensuring that price-sensitive information is identified
effectively and all communications with the market are released in accordance with expected timescales.
Conflicts of Interest
Under the Articles of Association, the Directors may authorise any actual or potential conflict of interest a Director may
have and may impose any conditions on the Director that are felt to be appropriate. Directors are not able to vote in
respect of any contract, arrangement or transaction in which they have a material interest and they are not counted in
This includes declaring any new conflicts at the start of each Board meeting.
Board Advice
All the Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring that
with. Each Director is
Company
10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders
and other relevant stakeholders
Contact with major shareholders is principally maintained by the Chairman and CEO, and additionally as necessary the
Senior Independent Non-Executive Director is available to discuss governance and other matters directly with major
shareholders, both private and institutional.
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SILENCE THERAPEUTICS PLC
The Company uses its corporate website (www.silence-therapeutics.com) to communicate with institutional
shareholders and private investors, and the website also contains the latest announcements, press releases, published
financial information, current projects and other information about the Company. The annual report which includes the
Iain Ross
Chairman
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SILENCE THERAPEUTICS PLC
Audit and Risk Committee Report
heightened focus on all aspects related to company financings, internal controls and additional financial reporting
requirements.
asdaq
Dave Lemus
Chair of the Audit and Risk Committee
Who are the members and who do they interact with?
Dave Lemus is Chair of the Audit and Risk Committee.
Dave currently also serves as audit committee chair of Sorrento Therapeutics, Inc. (Nasdaq: SRNE) and Scilex Holding
Company (Nasdaq: SCLX), and previously served on multiple public and private company boards as a non-executive
board member in his more than 25 years of experience in the biopharmaceutical industry. Most recently he was CEO
of Ironshore Pharmaceuticals, Inc., and has been previously a CEO, COO and CFO in several public and private
companies in the U.S and in Europe. Dave is also a Certified Public Accountant in the USA
In addition to Dave, the members of the committee comprise Alistair Gray, James Ede-Golightly and Dr. Michael
Davidson. The Committee met eight times during 2022, including prior to results announcements.
What does the Audit and Risk Committee do?
Monitors enterprise and systemic risks
Reviews accounting policies and key estimates and judgements
Reviews the appropriateness and completeness of the internal controls
Makes recommendations to the Board, to be put to shareholders for approval at the Annual General Meeting,
in relation to the appointment, re-
Meets with the external auditors, ensuring that they report to it on all relevant matters to enable the Committee
to carry out its oversight responsibilities
?
financial statements, preliminary announcements and any other
In 2022, the Committee reviewed the 2021
annual report and the 2022 interim announcements. The Committee reviews and challenges where necessary any
changes to, and the consistency of, accounting policies, advising whether the Company has followed appropriate
accounting standards and made appropriate estimates and judgements (notably in respect to the adoption of any new
accounting pronouncements, the accounting of the partnership agreements and financings, and the impairment of
investments in subsidiaries), taking into account the views of the external auditors, the going concern assumption and
all material information presented with the financial statements.
What does the Committee do to review risks?
To assess the appropriateness and completeness of internal controls, the Committee reviews changes to the detailed
risk matrix which identifies high level control issues classifi
are subject to, remedial action. The Committee considers whether the necessary actions are being taken to remedy any
significant failings or weaknesses.
Is there an internal audit function?
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SILENCE THERAPEUTICS PLC
At present the Company does not have an internal audit function. Given the Nasdaq listing, the Company will need to
be compliant with additional Sarbanes-Oxley requirements over a period of time, this will initially be achieved by in-
house initiatives supported by external specialists. However, the Committee will review the need for an internal audit
function at least annually. With the Nasdaq listing, the Committee has a new responsibility to review the system of
internal financial control and compliance with the US Sarbanes Oxley Act 2002. In 2022, EisnerAmper was appointed
he ICFR (Internal controls over financial reporting).
As a result, the Group was able to acquire sufficient evidence from an internal control perspective and allow
management to attest over the ICFR as required under the Sarbanes Oxley Act 2002.
Who are the external auditors and how long have they been appointed?
PricewaterhouseCoopers LLP were appointed as the external auditors in 2014. The Committee reviews industry
comparables for audit services and evaluates the overall service provided by the external auditors each year. Having
LLP be re-
How does the Audit and Risk Committee assess the effectiveness of the external audit
process?
The Committee oversees the relationship with the external auditors, including approval of their remuneration, approval
of their terms of engagement, annual assessment of their independence and objectivity, taking into account relevant
professional and regulatory requirements, and the relationship with the auditors, as a whole, including the provision of
any non-audit services. The breakdown of fees between audit and non-audit services is provided in note 5 to the financial
statements. The auditors prepare an Audit Plan for the audit of the full year financial statements, which was presented
to the Committee and discussed in August 2022. The Audit Plan sets out the scope of the audit, areas to be targeted
and the audit timetable. Following the audit, the auditors present their findings to the Committee for discussion.
Review of Accounting and Financial Reporting Matters and Matters of Significance and
Judgement
The Committee received reports from management and the external auditor setting out the significant accounting and
financial reporting matters and judgements applicable to the following key areas. Following discussion and challenge,
the Committee reviewed management's conclusions on certain significant company accounting policies, which included
but were not limited to:
R&D costs related to CROs including associated accruals and prepayments
In determining the R&D expense in relation to contract research organisations (CROs) management have estimated the
total percentage of completion of each contract to date and included consideration of future costs to be incurred. These
estimates have also been used in determining accruals and prepayments at the year end.
Accounting for Revenue (collaboration agreements)
In determining the revenue recognised for collaboration agreements, management have calculated the revenue
recognised for the period based on the percentage of completion of each performance obligation, by determining the
proportion of costs incurred to date in comparison to the total expected costs (both internal and external).
Carrying value of the investment in Silence Therapeutics GmbH (to parent company)
Different methodologies can be used to determine the carrying value of this investment. In determining the carrying
erapeutics GmbH management assessed it as being based
the Company has had to estimate the
value and timing of future milestone cash inflows, which is however a standard industry practice.
Committee aims to ensure appropriate corporate compliance with all accounting, internal controls, risk management
and financial reporting requirements and in order to best ensure the Committee is carrying out its oversight
responsibilities to the fullest extent possible.
Dave Lemus
Chair of the Audit and Risk Committee
36
SILENCE THERAPEUTICS PLC
Remuneration Committee Report
Having the right team to execute on an internationally competitive strategy in the fast-moving field of RNAi is
a key priority for the Board and the Company.
James Ede-Golightly
Chair of the Remuneration Committee
Dear Shareholder,
for the year ended 31 December 2022.
Having the right team to execute on an internationally competitive strategy in the fast-moving field of RNAi is a key issue
for the Board and the Company. Craig Tooman has served as our President, Chief Executive Officer and as a member
of our board of directors since February 2022 and previously served as our Chief Financial Officer from January 2021
until February 2022. Craig was instrumental in expanding the shareholder base with new US investors as well as leading
the delisting of the Company from AIM in November 2021. Craig has experience in the biopharmaceutical industry
spanning more than 30 years, including 15 years of experience as a public company CEO and CFO. In February 2022
we also appointed Rhonda Hellums as our Chief Financial Officer. She previously served as our Vice President, Finance
since joining in April 2021. Rhonda has over 25 years of corporate finance, accounting, strategic planning, M&A, treasury
management, investor and public relations experience, largely in the biopharmaceutical industry. Though she is not
listed as a U.K director, she sits in on all board meetings.
We continue to deliver a remuneration programme that rewards both achievement of short-term goals and fulfilment of
our longer-term objectives, linked with the ultimate exploitation of our platform and its application in generating novel
RNAi medicines. We recognise the need to retain and motivate Executive Directors and the senior management team
and avoid making remuneration decisions solely based on shorter-term volatility. Accordingly, we include two
performance-based elements in our remuneration programme: a shorter-term annual bonus programme, with payment
-set goals for that year; and a longer-term equity-based
programme of share options, vesting over four years and directed towards the achievement of substantial, longer-term
strategic objectives. The short-term programme and the long-term incentive programme are providing a balance
designed to incentivise Executive Directors and senior management to work toward achievement of the corporate
strategy.
During the year, share options were awarded to Craig Tooman, Rhonda Hellums and Giles Campion; vesting dates for
these options are detailed later in this report.
In light of our de-listing from AIM and the transition to a Nasdaq-focused company, in 2022 we have adopted a new
compensation strategy for Non-
in order to attract and retain top international talent.
This remuneration policy has the intention of ensuring that Silence is in line with biotech industry best practices.
James Ede-Golightly
Chair of the Remuneration Committee
37
SILENCE THERAPEUTICS PLC
Remuneration Policy
This part of the remuneration report sets out the D
The remuneration policy was approved by shareholders in a binding vote at the AGM on 15 June 2021. Thereby, as
intended the remuneration policy will remain in effect from the date of approval and apply for a maximum period of three
years (or until a revised policy is approved by shareholders).
Remuneration report were approved at the AGM with 98% votes for / 2% votes against / 0% votes withheld.
was
Philosophy: Support value creation for shareholders over the longer term and create alignment with shareholders
Fixed Remuneration
Variable Remuneration
Element
Base Salary
Benefits
Pension
Annual Bonus
LTIP
How it is influenced
by the remuneration
philosophy
Assessed with
reference to industry
compensation
benchmarks
Assessed with
reference to industry
compensation
benchmarks
Assessed with
reference to industry
compensation
benchmarks
Set considering industry
benchmarking data and
consistent with positions
held.
The more significant
element of the package
linked to longer-term
share performance.
Determined by corporate
and individual targets that
goals and its overall
strategy.
Under the Silence
Therapeutics plc 2018
employee LTIP, share
options can be issued with
performance criteria under
this scheme.
In developing its policy, the Committee has regard to the policy for remuneration of employees across the Company.
The D
does not engage in a wider consultation with employees on the policy. Remuneration across the Company is
implemented in the following ways:
All employees are rewarded with a remuneration package that includes certain key benefits such as life assurance,
private medical insurance, 401(k) matching, access to pension benefits (or cash in lieu), and eligibility to receive a
bonus. All employees are e
to ensure that levels of remuneration for all key employees are up to date and competitive within the sector.
The bonus scheme for our Executive Directors and employees are designed to reward performance, and all
individuals work towards challenging corporate and individual goals.
In setting the remuneration policy for Directors, the pay and conditions of other employees are taken into account,
including any base salary increases awarded. The Committee is provided with data on the remuneration structure
for management level tiers below the level of Executive Director and uses this information to ensure consistency of
approach throughout the Company. The views of share
shareholders in advance of making any material future changes to remuneration arrangements for Executive
Directors.
The remuneration of senior executives below Board level is reviewed by the Committee on an annual basis.
The remuneration packages of these executives are broadly consistent with the policy outlined above, with the overall
impact of the role and the individual being considered as well as relevant market comparative data, save that lower
bonus percentages and lower share option opportunities are applicable.
A copy of the
can be found on the Com
38
SILENCE THERAPEUTICS PLC
Remuneration Policy Table
Executive Directors
Purpose and
Link to Strategy Operation
Base Salary
To attract and
The Committee aims to set base
salary at levels that are broadly
aligned with the mid-points for
equivalent roles in comparable
global companies, adjusted to
reflect Company size and
complexity.
Salaries are normally reviewed
annually, and changes are
generally effective from 1
January.
The annual salary review of the
Executive Directors takes into
consideration a number of factors,
including:
business performance;
salary increases awarded to
the overall employee
population;
skills and experience of the
individual over time;
responsibilities;
changes in the size and
complexity of the Company;
market competitiveness and
UK, European and US
market practice; and
the underlying rate of
inflation.
retain executives
of the highest
calibre who are
capable of
delivering the
Company
strategic
objectives,
reflecting the
experience and
role within
the Company.
Base salary is
designed to
provide an
appropriate level
of fixed income to
avoid an over-
reliance on
variable pay
elements that
could encourage
excessive risk
taking.
Benefits
Benefits in kind
offered to
Executive
Directors are
provided on a
market-
competitive basis,
to assist with their
recruitment and
retention.
Pensions
Maximum Opportunity
Performance Metrics
No formal metrics, although any increases
take account of Company performance and
Executive Director appraisal
against objectives.
No clawback will be applied in relation to
salaries.
Executive Director level salaries are
determined considering industry
benchmarking data.
Base salary increases are awarded at the
discretion of the Committee; however,
salary increases will normally be no
greater than the inflationary pay rises
awarded to the wider workforce.
Executive Director level salaries are
approved by the Committee in line with
corporate performance and are consistent
with the role currently being undertaken by
the individual.
The Company aims to offer
benefits that are in line with
market practice.
The value of each benefit is not
predetermined and is based upon the
taxable value to the individual.
Not performance related.
No claw-back will be applied in relation to
benefits.
39
SILENCE THERAPEUTICS PLC
Executive Directors
Purpose and
Link to Strategy Operation
Maximum Opportunity
Performance Metrics
The Company operates a defined
contribution scheme and all
employees, including Executive
Directors, are invited to
Employee contributions are matched two-
fold by employer contributions up to a
maximum employer contribution of 10%.
Employees may contribute more than 5%
participate.
Cash payments in lieu of pension
contributions may be made.
themselves, but the Company will not
provide any further employer contributions
above this level.
Not performance related.
No claw-back will be applied in relation to
pensions.
The Company
aims to provide
market-
competitive
retirement
benefits, as a
retention tool and
to reward
sustained
contribution.
Annual cash bonuses are limited to a
target of 50% or 60% of base salary for the
Executive Directors.
Executive Director level bonuses are
approved by the Board in line with
corporate performance and are consistent
with the role currently being undertaken by
the individual.
The Board can exercise discretion in
setting contractual bonus rates for new
Executive Directors above 60%, with
discretion exercised with respect to total
compensation.
Corporate goals typically include
development of pipeline and platform,
partnering successes, revenue generation,
strengthening of intellectual property and
control of cash expenditure, although the
Committee has the discretion to set other
targets.
Individual goals set are specific,
measurable and are linked to the
-term strategy.
Company
Under the rules of the scheme, the
Committee can claw-back up to 100% of
the bonus awarded in the event of material
results, an error in assessing the
performance conditions to which an award
is subject or for any other matter which
it deems relevant. There is no claw-back
time limit in the policy.
Annual Performance Bonus
An annual cash
bonus rewards
the achievement
of objectives that
support the
Objectives are agreed with the
Committee, and the Board, at the
start of each financial year
although the Committee retains
the discretion to amend objectives
Company
corporate goals
and delivery of the
business strategy.
during the year if it considers that
objectives are no longer
appropriate.
Different performance measures
and weightings may be used each
year, as agreed with the
Committee, to consider changes
in the business strategy.
Bonuses are paid at the discretion
of the Committee. The Committee
considers overall corporate
performance and individual
performance when determining
the final bonus amount to be
awarded and the Committee may
adjust any formulaic outcomes
accordingly.
Bonuses are normally paid in
cash (but may be paid in the form
of an equity award) typically
in January or February.
Long Term Incentive Plan (LTIP)
40
SILENCE THERAPEUTICS PLC
Executive Directors
Purpose and
Link to Strategy Operation
LTIP awards granted to Executive
Directors have typically taken the
form of nominal cost options
vesting according to performance
conditions measured over at least
three years, although different
forms of awards may also be
granted in accordance with the
LTIP rules.
The
Remuneration
Committee
believes that a
key component of
the overall
remuneration
package is the
provision of equity
awards to senior
executives
through an LTIP,
which is designed
to develop a
culture which
encourages
strong corporate
performance on
an absolute and
relative basis to
align with
shareholder
interests.
Maximum Opportunity
Performance Metrics
Aggregate options outstanding will vest at
up to a maximum of 300% of annual salary
within a single financial year.
Vesting of LTIP awards is generally subject
to continued employment and may also be
subject to the achievement of performance
Executive Director level LTIP awards are
approved by the Committee in line and are
consistent with the role currently being
undertaken by the individual.
The Committee can exercise discretion in
setting contractual LTIP awards for new
Executive Directors above 250% of annual
salary with discretion exercised with
respect to total compensation.
strategic plan. Measures, their weightings
and the period over which performance is
tested will be determined by the Committee.
The Committee has the discretion to utilise
differing types of performance criteria,
measures and performance periods for future
option grants, should it believe they are more
relevant.
The Committee may adjust the formulaic
LTIP outcome to ensure it takes account of
any major changes to the Company (e.g. as
a result of M&A activity) and is a fair
reflection of the underlying financial
performance of the Company over the
performance period.
Further details, including the performance
targets attached to the LTIP in respect of
each year, will be disclosed in the relevant
Annual Report on Remuneration.
Awards will be subject to claw-back where
there has been a misstatement of the
property, an error in assessing the
performance conditions to which an award is
subject or for any other matter which the
Committee deems relevant. There is a two-
year claw back time limit in the policy.
41
SILENCE THERAPEUTICS PLC
Chair and Non-Executive Directors
Purpose and Link
to Strategy
Cash Fees
Set at a level that is
sufficient to attract and
retain high-calibre non-
executives who
contribute to
the business.
Benefits
Set at a level that is
sufficient to attract and
retain high-calibre non-
executives who
contribute to
the business.
Equity Based Awards
Set a level that is
sufficient to attract and
retain high-calibre non-
executives who
contribute to
the business.
Operation
Maximum opportunity
Performance Metrics
The Chair and the Non-Executive Directors receive
fees paid in cash.
Fees are paid monthly and reviewed annually.
When reviewing fee levels,
account is taken of market
movements in the fees of Non-
Executive Directors, Board
Committee responsibilities and
ongoing time commitments.
Not performance related.
No claw-back applies in
relation to fees.
Since 1 January 2018 Non-Executive Directors do not
receive any benefits in connection with their roles
other than Company life insurance and
reimbursement of travel costs for attendance at
Board meetings. This may be reviewed in the future.
When reviewing benefits,
account is taken of market
movements in the fees of Non-
Executive Directors, Board
Committee responsibilities and
ongoing time commitments.
Not performance related.
No claw-back applies in
relation to benefits.
The Non-Executive Directors may be offered the
opportunity to participate in the Silence Therapeutics
plc 2018 Non-Employee LTIP in the form of non-
performance restricted stock units or other equity
awards under the terms of such plan with careful
consideration being made with respect to ensuring
their independence.
When reviewing equity-based
awards, account is taken of
market movements in the fees
of Non-Executive Directors,
Board Committee
responsibilities and ongoing
time commitments.
Not performance related.
Claw-back applies in relation
to equity-based awards.
42
SILENCE THERAPEUTICS PLC
Other Remuneration Policies
Termination and Loss of Office Payments
The
policy on remuneration for Executive Directors who leave the Company is consistent with general
market practice and is set out below. The Committee will exercise its discretion when determining amounts that should
be paid to leavers, considering the facts and circumstances of each case. When calculating termination payments, the
Committee will consider a variety of factors, including individual and Company performance, the length of service of the
Executive Directors in question and, where appropriate, the obligation for the Executive Directors to mitigate loss. In
the event of a change of control and ownership, the Committee may exercise its discretion to provide for additional
remuneration and/or benefits for Executive Directors who leave the company in connection with such change of control
and will take into account all relevant circumstances when making any such determination.
notice period of six months unless contractually longer, and pension and contractual benefits, or payment in lieu of
notice;
statutory redundancy payments will be made, as appropriate;
executives have no entitlement to a bonus payment in the event that they cease to be employed by the Company;
however, they may be considered for a pro-rated award by the Committee in good leaver circumstances;
any share-
contracts or share option plans will be determined based upon the relevant individual share option contracts or plan
rules; and performance conditions or hurdles; and
the Committee may also provide for the leaver to be reimbursed for a reasonable level of legal fees in connection
with a settlement agreement, to be paid ex gratia amounts in settlement of claims and in respect of other ancillary
matters such as amounts in respect of outplacement services, relocation, and health benefits (continuation or cash
in lieu).
Service Contracts
It is the Company
The Executive Directors may accept outside appointments, with prior Board approval, provided that these opportunities
do not negatively impact on their ability to fulfil their duties to the Company. Whether any related fees are retained by
the individual or are remitted to the Company will be considered on a case-by-case basis.
Non-
Terms of Engagement
All Non-Executive Directors
notice by either party.
either party.
The remuneration of Non-Executive Directors is determined by the Board within the limits set by the Articles and based
on a review of fees paid to Non-Executive Directors of similar companies.
A Board evaluation has been performed and the results of this exercise confirmed that all Non-Executive Directors were
independent.
Remuneration for New Appointments
Where it is necessary to recruit or replace an Executive Director, the Committee has determined that the new Executive
Director will receive a compensation package in accordance with the provisions of the Policy.
In setting base salaries for new Executive Directors, the Committee will consider the existing salary package of the new
In setting the annual performance bonus, the Committee may wish to set different performance metrics (to those of
other Executive Directors) in the first year of appointment. Where it is appropriate to offer a below-median salary on
initial appointment, the Committee will have the discretion to allow phased salary increases over a period of time for a
43
SILENCE THERAPEUTICS PLC
newly appointed Director, even though this may involve increases in excess of inflation and the increases awarded to
the wider workforce.
The Committee wishes to retain the ability to make buy out awards to a new Executive Director to facilitate the
recruitment process. The amount of any such award would not exceed the expected value being forfeited and, to the
extent possible, would mirror the form of payment, timing and degree of conditionality. Where awards are granted subject
to performance conditions, these would be relevant to Silence Therapeutics plc. Any such award would only be made
in exceptional circumstances and shareholders would be informed of any such payments at the time of appointment.
Share-based awards would be made under the LTIP.
In respect of internal appointments, any commitments entered in respect of a prior role, including variable pay elements,
may be allowed to pay out according to their prior terms.
For external and internal appointments, the Committee may consider it appropriate to pay reasonable relocation or
incidental expenses, including reasonable legal expenses. Tax equalisation may be considered if a Director is adversely
affected by taxation due to their employment or engagement with the Company.
The terms of appointment for a Non-Executive Director would be in accordance with the remuneration policy for
Non-Executive Directors as set out in the policy table.
Remuneration Committee (the Committee)
Governance
In its decision-making process, the Committee takes account of information from both internal and independent sources
and AON Solutions UK Ltd surveys. AON Solutions UK Ltd were appointed as remuneration consultants by the
Committee based on their expertise in the field. AON Solutions UK Ltd advises the Committee on all aspects of senior
executive remuneration and has kept the Committee up to date on remuneration trends and corporate governance best
practice. AON Solutions UK Ltd does not have any other connection with the Company and is considered to be
independent by the Committee. During the year ended 31 December 2022, fees charged by AON Solutions UK Ltd
amounted to approximately £71k (2021: £79k).
The current members of the Committee are Michael Davidson, James Ede-Golightly, Dave Lemus and Steven Romano.
Michael Davidson, James Ede-Golightly and Dave Lemus are deemed to be independent.
The Company
the Committee, as required, to ensure that the Committee is fully
informed about pay and performance issues throughout the Company. The Committee takes these factors into account
when determining the remuneration of the Executive Directors and senior executives.
No Executive Director or employee can participate in any discussion directly relating to their own personal conditions of
service or remuneration.
No conflicts of interest have arisen during the year and none of the members of the Committee has any personal financial
interest in the matters discussed, other than as option holders. The fees of the Non-Executive Directors are approved
by the Board on the joint recommendation of the Committee and the Chief Executive Officer.
The Committee met 4 times in 2022.
Director
James Ede-Golightly
Michael Davidson
Dave Lemus
Steven Romano
Role
Meetings attended
4/4
4/4
4/4
3/4
strategy by ensuring that those individuals responsible
remuneration policy.
for delivering the strategy are appropriately incentivised through the operation of the
In determining the
current policy, and in constructing the remuneration arrangements for Executive Directors
and senior employees, the Board, advised by the Committee, aims to provide remuneration packages that are
44
SILENCE THERAPEUTICS PLC
competitive and designed to attract, retain and motivate Executive Directors and senior employees of the highest calibre,
and align incentives with shareholder interest.
The Committee is responsible for:
setting a remuneration policy that is designed to promote the long-term success of the Company;
ensuring that the remuneration of the Executive Directors and other senior executives reflects both their individual
performance and their contribution to the overall Company results;
determining the terms of employment and remuneration of the Executive Directors and senior executives, including
recruitment and retention terms;
approving the design and performance targets of any annual incentive schemes that include the Executive Directors
and senior executives;
approving the design and performance targets, where applicable, of all share incentive plans requiring shareholder
approval;
rigorously assessing the appropriateness and subsequent achievement of the performance targets related to any
share incentive plans;
recommending to the Board the fees to be paid to the Chair. The Chair is excluded from this process;
gathering and analysing appropriate data from comparator companies in the biotech sector; and
the selection and appointment of the external advisers to the Committee to provide independent remuneration advice
where necessary.
Pay-for-Performance Scenario Analysis
The charts below provide an estimate of the potential reward opportunities for the Executive Directors, and the potential
split between different elements of remuneration under two
Earned
45
SILENCE THERAPEUTICS PLC
Craig Tooman
Compensation
7000
6000
5000
4000
3000
2000
1000
0
£5,290
222
1
12
408
Earned
1
12
408
Minimum - Fixed
Salary
Benefits
Pension
Bonus
LTIP
Giles Campion
Compensation
1800
1600
1400
1200
1000
800
600
400
200
0
£1,017
158
35
9
350
Earned
35
9
350
Minimum - Fixed
Salary
Benefits
Pension
Bonus
LTIP
Mark Rothera (Executive Director term ending February 21, 2022)
46
SILENCE THERAPEUTICS PLC
Compensation
4500
4000
3500
3000
2500
2000
1500
1000
500
0
£3,254
167
15
47
554
Earned
15
47
554
Minimum - Fixed
Salary
Benefits
Pension
Bonus
LTIP
Amounts are shown in thousands (GBP).
The LTIP award amounts shown represents the aggregate grant date fair value of option awards granted in 2022 measured using the Black Scholes model.
47
SILENCE THERAPEUTICS PLC
Annual Report on Remuneration
This section of the Remuneration report provides details of how our remuneration policy was implemented during the
financial year ended 31 December 2022, and how it will be implemented during the year ending 31 December 2023.
This report splits certain information into that for Executive Directors and that for Non-Executive Directors.
Audited Information
financial year ended 31 December 2022
The total remuneration of the individual Directors who served during the period is shown below. Total remuneration is the
sum of emoluments for the period in service as a director plus Company pension contributions, and the value of long-term
incentive awards vesting by reference to performance in the twelve months to 31 December 2022.
Basic
Salarya
Benefits
b
Bonusc
LTIPd
Pension
e
Total
remuneratio
n
Total fixed
remuneratio
n
Year
£000s
£000s
£000s
£000s £000s
£000s
£000s
Total
variable
remuneratio
n
£000s
Executive
Directors
Craig Tooman (f)
2022
408
12
222
5,290
1
5,910
421
5,489
Mark Rothera (g)
Giles Campion
Non-Executive
Directors
Iain Ross
Alistair Gray
Dave Lemus
James Ede-
Golightly
Dr Steven Romano
Dr Michael
Davidson
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
426
554
321
350
153
47
-
9
204
167
129
158
375
3,254
975
1017
54
15
32
35
1,212
4,037
1,457
1,569
120
90
55
54
55
46
55
44
55
37
54
40
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
840
458
-
244
-
244
-
244
-
244
-
244
-
-
-
-
-
-
-
-
-
-
-
-
960
548
55
298
55
290
55
288
55
281
54
284
633
616
353
394
120
90
55
54
55
46
55
44
55
37
54
40
579
3,421
1,104
1,175
840
458
-
244
-
244
-
244
-
244
-
244
Notes to the Remuneration Table
(a) This is the amount earned in respect of the financial period.
(b) This is the taxable value of benefits paid or payable in respect of the financial period. For Non-Executive Directors,
the taxable benefits comprise travel costs (and the gross-up for associated income tax and
National
Insurance Contributions which will be settled on behalf of the Non-Executive Directors) for attendance at Board
meetings.
(c) For 2022, this is the total bonus earned under the annual bonus scheme in respect of the financial year (despite
being paid in the following financial year, following determination of final outcomes).
(d) For 2022, the amount shown represents the aggregate grant date fair value of option awards granted in 2022
measured using the Black Scholes model. For a description of the assumptions used in valuing these awards, see
note 24 to our Annual Consolidated Financial Statements included elsewhere in this Annual Report. For 2021, the
amount shown relates to the market value of the LTIP awards vesting during the year using the Co
48
SILENCE THERAPEUTICS PLC
closing price at the end of the quarter in which the award vested less associated exercise price. Total option award
compensation expense for the year ended December 31, 2022 for all key management personnel including the
former CEO and non-executive directors was £3.5 million.
(e) The amount shown relates to company contributions to the defined contribution scheme, plus any cash in lieu.
(f) Mr. Tooman served as our Chief Financial Officer during 2021 and became our President and Chief Executive
Officer on February 21, 2022. His compensation including, salary, bonus, pension and benefits, is prorated from the
time of his appointment to Chief Executive Officer.
(g) Mark Rothera, our former President and Chief Executive Officer, stepped down on February 21, 2022. His salary is
inclusive of severance payments, paid in instalments from his separation date for an additional 12 months in line
with his severance agreement and his bonus payment was prorated from the start of the year until six months after
his separation date in line with his severance agreement.
Annual Performance Bonus - 2022
In 2022, all employees were eligible for an annual discretionary cash bonus, whereby performance objectives are
established at the beginning of the financial year by reference to suitably challenging corporate goals.
In relation to the Directors, Craig To
for 2022 was 50% of salary, with a maximum potential of 60%.
2022.
-target bonus
For all other staff (other than the Executive Directors and Non-Executive Directors) the maximum bonus opportunities
ranged from 8% to 40% of salary, depending on grade. Bonus payments are not pensionable.
For 2022 for all staff (other than the Executive Directors and Non-Executive Directors) the percentage attributable to
individual goals for employees ranged from 30% to 70% depending on level (excluding the Executive Directors).
In 2022, for Craig Tooman and Giles Campion 100% of their annual bonus was by reference to corporate goals. The
achievement against the scorecard of corporate goals was as follows:
Target
Weighting
SLN 124 milestone delivery
SLN 360 milestone delivery
Advance collaboration programmes
Manufacturing processes
New GalNAc target identification
Achieve planned targets for the development of SLN 124
Achieve planned targets for the development of SLN 360
Advance collaboration targets into clinical development
Increase capacity and build process optimisation
capabilities for manufacturing
Achieve planned activity and identification of new targets
Achievement of financial targets
Maintain a cash runway and adherence to budget
New business development deal
Secure high value business development deal
Secure additional funding
Bring in new US investors and non-dilutive funding
Total
2022
achievement
%
14.0
19.0
6.0
12.0
%
15.0
20.0
5.0
10.0
10.0
10.0
5.0
6.0
30.0
17.0
5.0
100.0
6.0
90.0
Achievement against objectives is given careful consideration by the Committee prior to finalisation. The Committee
acknowledged the team's significant progress in advancing our clinical-stage programmes in 2022, further financing key
programmes, securing additional manufacturing capacity, and expanding the US investor base. Therefore, the board
determined an achievement score of 90% was fair and justifiable.
The Committee reviewed the formulaic outcome of the scorecard and concluded that the scorecard outcome, as shown
above, reflected the performance of the Executive Directors in the year. The resulting annual bonus awards under the
Policy, i.e. bonus awards of up to 60% of salary payable in cash, are as follows:
49
SILENCE THERAPEUTICS PLC
Bonus Scorecard
Outcome
Maximum opportunity
% of salary
Cash amount
% of salary
£000s
222
158
54 %
45 %
£000s
245
210
60 %
60 %
Craig Tooman
Giles Campion
Scheme Interests
During the year ended 31 December 2022 Craig Tooman and Giles Campion were awarded share awards under the
LTIP scheme, details of which are summarised in the table below. LTIP awards were granted under the Silence
Therapeutics plc 2018 Employee Long Term Incentive Plan and were based on an industry peer analysis.
Directors share awards
Individual Date of Grant At 1 Jan, 2022
Awarded At 31 Dec 2022
Exercise price
($/share))
Gain on
exercises
during
the year
(£000s)
Earliest date of
exercise
Last date of
exercise
Iain Ross
10/06/2019
10/06/2019
21/05/2020
21/05/2020
06/01/2022
250,000
250,000
150,000-
350,000-
-
-
-
-
90,000
250,000
250,000
150,000
350,000
90,000
$2.53
$0.80
$0.07
$5.87
$7.87
-
-
-
-
-
01/06/2020
01/06/2020
25/04/2022
21/08/2020
06/02/2022
10/06/2029
10/06/2029
20/05/2030
20/05/2030
06/01/2032
Alistair
Gray
06/01/2022
Dave Lemus
06/01/2022
James Ede-
GoLightly
06/01/2022
06/01/2022
06/01/2022
Dr Steven
Romano
Michael
Davidson
Craig
Tooman
Giles
Campion
48,000 48,000
$7.87
06/02/2022
06/01/2032
48,000 48,000
$7.87
06/02/2022
06/01/2032
48,000 48,000
$7.87
06/02/2022
06/01/2032
48,000 48,000
$7.87
06/02/2022
06/01/2032
48,000 48,000
$7.87
06/02/2022
06/01/2032
06/01/2021
579,999
-
579,999
$7.02
-
06/01/2022
06/01/2031
06/01/2022
21/02/2022
16/09/2022
06/03/2019
10/06/2019
10/06/2019
10/06/2019
23/04/2021
06/01/2022
264,999
375,000
900,000
264,999
375,000
900,000
200,000
15,000
228,083
456,917
160,002
-
-
200,000
-
-
-
-
199,998
15,000
228,083
456,917
160,002
199,998
$7.87
$6.33
$3.86
$0.07
$2.44
$0.80
$2.53
$7.34
$7.87
06/02/2022
21/03/2022
16/10/2022
06/02/2032
21/03/2032
16/10/2032
-
-
-
-
-
06/02/2022
06/02/2029
10/06/2022
01/06/2020
01/06/2020
23/05/2021
06/02/2022
10/06/2029
10/06/2029
10/06/2029
23/04/2031
06/01/2032
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SILENCE THERAPEUTICS PLC
Scheme interests awarded in 2022
Date of grant Number awarded
Exercise Price
Iain Ross
Alistair Gray
Dave Lemus
James Ede-
GoLightly
Dr Steven
Romano
Michael Davidson
Craig Tooman
Craig Tooman
Craig Tooman
Giles Campion
06/01/2022
06/01/2022
06/01/2022
90,000
48,000
48,000
06/01/2022
48,000
06/01/2022
06/01/2022
06/01/2022
21/02/2022
16/09/2022
06/01/2022
48,000
48,000
264,999
375,000
900,000
199,998
$7.87
$7.87
$7.87
$7.87
$7.87
$7.87
$7.87
$6.33
$3.86
$7.87
Face value (2)
(£000s)
-
-
-
-
-
-
-
-
£908
-
Vesting Schedule
Note 3
Note 3
Note 3
Note 3
Note 3
Note 1
Note 1
Note 1
Note 4
Note 1
1. Share options vest in 48 equal monthly vesting tranches starting from the month of grant. These awards are not subject to any performance conditions.
2. Face value is equal to the share price at December 31, 2022 less that exercise price.
3. Share options vest in 36 equal monthly vesting tranches starting from the month of grant. These awards are not subject to any performance conditions.
4. Share options vest in 60 equal monthly vesting tranches starting from the month of grant. These awards are not subject to any performance conditions.
Directors' interests in shares at 31 December 2022
Options: Total
shares owned
outright plus
vested options
606,267
1,056,807
1,070,766
28,569
26,193
28,569
31,659
31,659
Director
Current directors
Craig Tooman
Giles Campion
Iain Ross
Alistair Gray
Dave Lemus
James Ede-
Golightly
Dr. Steven
Romano
Dr. Michael
Davidson
Former director
Mark Rothera (2)
Shares Owned
outright
Percentage of
issued share
capital
Options: Vested
but not exercised
Options: Unvested
but subject to
performance
31,986
23,943
64,941
9,903
7,527
9,903
12,993
12,993
0.56%
0.98%
0.99%
0.03%
0.02%
0.03%
0.03%
0.03%
574,281
1,032,864
1,005,825
18,666
18,666
18,666
18,666
18,666
Options:
Unvested and
not subjected to
performance1
3,645,717
484,791
174,168
77,334
77,334
77,334
77,334
77,334
-
-
-
-
-
-
-
-
-
-
331,111
1. Options unvested and not subject to performance exclude those options that will only vest if a floor condition is met
2.
The options expired in February 2023.
Unaudited Information
Performance Graph and Table
to the Nasdaq Biotech Index.
cumulative Total Shareholder Return (TSR) over the last five financial years relative
ncludes
dividends paid, the change in capital value of the shares and any other payment made to or by shareholders within the
period.
51
SILENCE THERAPEUTICS PLC
160
140
120
100
80
60
40
Aligning Pay with Performance
CEO remuneration compared with annual growth in TSR:
SLN
NBI
The total 2022 remuneration figure for the CEO (Craig Tooman) is shown in the table below, along with the value of
bonuses paid in respect of the year, and fair value of options granted, as a percentage of the total remuneration.
2022
Total remuneration
Actual bonus as a % of the remuneration
Actual share award as % of the remuneration
2021
Total remuneration
Actual bonus as a % of the remuneration
Actual share award vesting as % of the remuneration
Craig Tooman
£000s
5,910
4%
90%
Mark Rothera
£000s
1,212
17%
31%
*As 2021 was the first year reported since listing on NASDAQ and therefore the first year for which this disclosure is required, it is not possible to provide
meaningful comparative data. However, full disclosure of the year-on-year movement will be provided in future remuneration reports.
Percentage Change in Remuneration of the Directors and Employees
Set out below is the change over the prior period in base salary, benefits, pension and annual performance bonus for
included below. The current CEO, Craig Tooman, is not included in the able above as he was appointed as a Director
(Chief Executive Officer) on 21 February 2022 and therefore prior year data is not available. Former CEO, Mark Rothera
52
SILENCE THERAPEUTICS PLC
Is not included in the table above as he served as a Director until 21 February 2022 and therefore the prior period is not
comparable.
Giles Campion
Iain Ross
Alistair Gray
Dave Lemus
James Ede-Golightly
Dr. Steven Romano
Dr. Michael Davidson
All employees excl. directors
Giles Campion
Iain Ross
Alistair Gray
Dave Lemus
James Ede-Golightly
Dr. Steven Romano
Michael Davidson
All employees excl. directors
Giles Campion
Iain Ross
Alistair Gray
Dave Lemus
James Ede-Golightly
Dr. Steven Romano
Michael Davidson
All employees excl. directors
Salary % Change
2021 vs 2022
Benefits % Change
2021 vs 2022
Bonus % Change
2021 vs 2022
9 %
-25 %
2 %
-16 %
-20 %
-26 %
-33 %
3 %
Salary % Change
2020 vs 2021
Note 1
Note 2
22 %
22 %
22 %
22 %
N/A
4 %
Salary % Change
2019 vs 2020
Note 1
Note 2
13 %
13 %
13 %
13 %
N/A
4 %
100 %
Note 2
Note 3
Note 3
Note 3
Note 3
Note 3
3 %
Benefits % Change
2020 vs 2021
Note 1
-100 %
Note 3
Note 3
Note 3
Note 3
N/A
3 %
Benefits % Change
2019 vs 2020
Note 1
100 %
-100 %
-100 %
Note 3
Note 3
N/A
3 %
22 %
Note 2
Note 3
Note 3
Note 3
Note 3
Note 3
4 %
Bonus % Change
2020 vs 2021
Note 1
Note 2
Note 3
Note 3
Note 3
Note 3
N/A
4 %
Bonus % Change
2019 vs 2020
Note 1
Note 2
Note 3
Note 3
Note 3
Note 3
N/A
4 %
1. Giles Campion was appointed as a Director (Executive Vice President, Head of R&D and CMO) on 9 June 2020, therefore there is not a comparable change from 2020
or prior.
2. Iain Ross was appointed as Executive Chairman on 17 December 2019. Base salary included additional remuneration of £9 thousand (exclusive of VAT) relating to
duties undertaken in December 2019 as Executive Chairman. This amount was billed by Iain
2020. Iain Ross was paid £15 thousand (exclusive of VAT) on a monthly basis until one month following the appointment of a new CEO. In 2020, in recognition of the
additional Executive responsibilities and in addition to his monthly Chairman/Director fees of £10 thousand per month Mr Ross was paid an additional remuneration of
£15k per month invoiced through his consultancy firm Gladstone Consultancy Partnership for the period 1 January to - 31 May 2020. In the absence of a permanent CEO
appointment, on 1 June Mr Ross signed an employment contract immediately terminable 1 month following the appointment of a new CEO. For the period 1 June - 14
October 2020 Mr Ross was paid £30 thousand per month plus benefits including a contribution to pension and private healthcare insurance of £3 thousand. On 14
September 2020 Mr Ross reverted to his role as Non-executive Chairman and from 1 month after this date reverted to his monthly fees of £10 thousand per month. On
signing the employment agreement effective 1 June 2020 Mr Ross was paid a one-off bonus of £75 thousand in respect of services rendered 17 December 2019 - 31 May
2020. Upon completion of his time as Interim Executive Chairman Mr Ross was paid a further one-off bonus of £80 thousand in respect of services rendered during the
remainder of his time in this Executive role. Throughout 2021, Iain maintained a salary of £10 thousand per month. He was not paid a bonus or benefits in either 2021 or
2022.
3. Non-executive directors were not entitled to a bonus in any year. They were not entitled to benefits in any year, with the exception of Alistair Gray and Dave Lemus
53
SILENCE THERAPEUTICS PLC
who were paid benefits of £13 thousand and £2 thousand, respectively in 2019.
Relative Importance of Spend on Pay
Total revenue and research and development expenditure have been selected as comparators for the employee costs
as these two financial measures are strong indicators of the activity within the Company and of its performance.
Total employee remuneration
Average number of employees
Revenue
Research and development expenditure
2021
£000
21,279
92
12,415
30,765
2022
£000
26,875
116
17,501
35,605
Change
£000
26 %
26 %
41 %
16 %
No dividends distributions or share buyback transactions occurred in either 2021 or 2022.
Statement of Implementation of Policy in 2022
Base Salary: The January 2023 target base salary increase was and average of 3% for all eligible employees. There
base salary.
Pension and Benefits: In 2023, Executive Directors are eligible for the same benefits as provided to all senior
employees. The Executive Directors are each entitled to the maximum employer pension contribution of 10% of their
respective base salary which is paid into a defined contribution pension scheme / paid in cash in lieu of pension
contributions (where applicable).
Annual Performance Bonus: For 2023
target pay-outs will be 60% and
50% per cent. of annual base salary for Craig Tooman (60%) and Giles Campion (50%) with maximum pay-outs of 90%
and 60% respectively. The Committee considers overall corporate performance and individual performance when
determining the final bonus amount to be awarded to an Executive Director. Performance will be tested against targets
set by the Committee at the start of the year and will comprise 100% corporate goals for Craig Tooman and Giles
Campion
3 corporate objectives are weighted as follows:
objectives for 2023.
Objective
1 SLN 360 milestone delivery
2 SLN 124 milestone delivery
3 SLN 501 milestone delivery
4 Manufacturing processes
5 New business development deals
6 Achievement of financial targets
7 Candidate selection
8 Execution/Operations
TOTAL
Weighting
12 %
20 %
8 %
8 %
25 %
17 %
5 %
5 %
100 %
Specific targets are commercially sensitive and therefore are not disclosed in advance. However, full details of the
targets and performance against them will be disclosed when they are no longer considered commercially sensitive.
Payments for Loss of Office (audited information)
There was no loss of office payments in 2022.
James Ede-Golightly
Chair of the Remuneration Committee
54
SILENCE THERAPEUTICS PLC
Report
The Directors present their report and the audited financial statements of the Group for the year ended 31 December
2022.
Principal Activities
The Company has full control and ownership of the following subsidiaries:
Silence Therapeutics GmbH
Silence Therapeutics (London) Ltd
Innopeg Ltd
Silence Therapeutics Inc.
The Company, Silence Therapeutics GmbH, Silence Therapeutics (London) Ltd, Innopeg Ltd and Silence Therapeutics
The principal activity of the Group is focused on the discovery, delivery and development of RNA therapeutics.
Responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors
have prepared the group financial statements in accordance with UK-adopted international accounting standards and
the company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United
Under company law, Directors must not approve the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the group and company and of the profit or loss of the group for that period. In
preparing the financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
state whether applicable UK-adopted international accounting standards have been followed for the group
financial statements and United Kingdom Accounting Standards, comprising FRS 101 have been followed for
the company financial statements, subject to any material departures disclosed and explained in the financial
statements;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group
and Company will continue in business.
The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
transactions and disclose with reasonable accuracy at any time the financial position of the
and
Group and Company and enable them to ensure that the financial statements comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the
website. Legislation in the United
Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
55
SILENCE THERAPEUTICS PLC
confirmations
In the case of each Director in office at the date the
report is approved:
so far as the Director is aware, there is no relevant audit information of which the Gro
auditors are unaware; and
and
they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of
auditors are aware of that
any relevant audit information and to establish that the
information.
and
Review of the Business and Future Developments
The strategic report describes research and development activity during the year as well as outlining future planned
developments. Details of the financial performance, including comments on the cash position and research and
development expenditure, are given in the financial review. Principal risks and uncertainties are given in the strategic
report.
Health, Safety and Environment
The Directors are committed to ensuring the highest standards of health and safety, both for their employees and for
environment; see detailed statement in the Corporate Social Responsibility section of the Strategic Report.
estimated electricity usage for the reporting period is 518,500 kWh (an estimated 224 metric tons of CO2 equivalent
emissions), with 2.5% of that estimated usage occurring in the United Kingdom.
premises are located in
shared facilities so energy consumption is estimated based on space leased.
Employees
The Directors are committed to continuing involvement and communication with employees on matters affecting both
employees and the Group. Management conducts regular meetings with all employees on site.
Political and charitable contributions
The Group did not make any political donations or incur any political expenditure during the year (2021: nil). The Group
made total charitable donations of £75 thousand during the year (2021: £75 thousand).
Research and Development
In 2022, the Group spent £35.6 million on research and development (2021: £30.8 million).
Subsequent Events
The Group has no subsequent events.
Financial Risk Management
A description of financial risk management is set out in note 28 to the financial statements.
Results and Dividends
The Group recorded a loss for the year before taxation of £47.4 million (2021: £45.8 million). The loss after tax for the
year was £40.5 million (2021: £39.4 million). Further details are given in the financial review. The Group is not yet in a
position to pay a dividend and the loss for both periods has been added to accumulated losses.
56
SILENCE THERAPEUTICS PLC
Indemnification of Directors
Qualifying third party indemnity provisions (as defined in the Companies Act 2006) are in force for the benefit of Directors
and former Directors who held office during 2022 and up to the signing of the annual report.
Directors
The Directors who served at any time during the year or since the year end were:
Director
Iain Ross
Craig Tooman (appointed as a Director: 21 February 2022)
Mark Rothera (resigned as Director: 21 February 2022)
Giles Campion
Alistair Gray
Dave Lemus
James Ede-Golightly
Dr. Steven Romano
Dr. Michael Davidson
The interests of the Directors in the share
Substantial Interests
Job title
Chairman
Chief Executive Officer
Former Chief Executive
Officer
Executive Director
Non-Executive
Non-Executive
Non-Executive
Non-Executive
Non-Executive
At 31 December 2022 the Company had been informed of the following substantial interests of over 3% in the issued
share capital of the Company:
Shareholder
Richard Griffiths
Robert Keith
Compagnie Odier SCA
Mallinckrodt plc and affiliated entities
AstraZeneca UK Limited
Deep Track Capital LP
TCG Crossover Management, LLC.
BVF Partners L.P.
Aquilo Capital Management, LLC
Percentage of
issued share
capital
23.9%
11.3%
19.7%
4.7%
4.1%
5.4%
5.9%
4.2%
3.6%
Number of shares
25,799,271
12,199,473
21,281,802
5,062,167
4,418,022
5,854,740
6,314,625
4,525,248
3,852,399
Material Uncertainty Related to Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Group will continue as a
going concern. As discussed in Note 2.3 to the consolidated financial statements, the Group has incurred recurring
losses and cash outflows from operations and has stated that these events or conditions indicate that a material
plans in regard to these matters are also described in Note 2.3. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
This report was approved by the Board of Directors and signed on its behalf by:
Craig Tooman
Chief Executive Officer
23 March 2023
57
SILENCE THERAPEUTICS PLC
3
Financial statements
of Silence Therapeutics plc
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Company balance sheet
Company statement of changes in equity
Cash flow statements
Notes to the financial statements
Company information and advisers
58
SILENCE THERAPEUTICS PLC
of Silence Therapeutics Plc
Report on the audit of the financial statements
Opinion
In our opinion:
for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards as applied
in accordance with the provisions of the Companies Act 2006;
the company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
December
ue and fair
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report, which comprise: The consolidated and company balance sheets
as at 31 December 2022; the consolidated income statement, the consolidated statement of comprehensive income, the consolidated
statement of cash flows, and the consolidated and company statements of changes in equity for the year then ended; and the notes to the
financial statements, which include a description of the significant accounting policies.
Basis for opinion
under ISAs (UK) are further described in
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
onsibilities
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements
as applicable to listed entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements.
Material uncertainty related to going concern
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note
2 to the group financial statemen
continue as a going concern. The Directors believe that, based on existing cash facilities and on their current forecasts and plans for raising
additional financing from new and existing investors, the Group and Company will have sufficient funds to meet their cash requirements for
at least the next 12 months. However, there is no guarantee that attempts to raise adequate additional financing on a timely basis will be
successful. These conditions, along with the other matters explained in those notes to the financial statements, indicate the existence of a
continue as a going concern. The
financial statements do not include the adjustments that would result if the group and the company were unable to continue as a going
concern.
of the going concern basis of accounting in the preparation of
the financial statements is appropriate.
accounting included:
asis of
59
SILENCE THERAPEUTICS PLC
Testing the mathematical accuracy of the cash flow forecasts.
Comparing the current year actual results to cash flow forecasts.
Gaining and understanding from management on any notable year-on-year changes in the forecasts, including the assumptions used in
the forecasts, and obtaining an update on the sources of funding options being sought, as set out in note 2 to the group financial
statements and note C.2 in the company financial statements and we considered whether there were additional risks that ne eded to be
reflected in the forecasts.
Using our understanding of the group and the company and the industry in which they operate to assess the possibility of additional risk
arising and their potential impact.
Evaluating the disclosures within the financial statements.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Our audit approach
Context
Silence Therapeutics plc is a public limited company incorporated under the laws of England and Wales and is listed on the NASDAQ.
Overview
Audit scope
There are 5 reporting units and we identified 2 units which, in our view, required a full scope audit based on their size and risk
All of the work was performed by the Group audit engagement team including the Group finance consolidation, financial statement
disclosures and a number of complex items, prepared by the head office finance function. These included goodwill, current and deferred
taxes, derivatives, going concern and central adjustments recorded as part of the consolidation process.
Taken together, the Group companies, as well as the consolidation adjustments, over which we performed our audit procedures
accounted for 100% of the loss before tax and 100% of revenue. Our audit scope provided sufficient appropriate audit evidence as a
basis for our opinion on the Group financial statements as a whole.
Key audit matters
Material uncertainty related to going concern (group and parent)
parent)
associated accruals and prepayments (group and parent)
Carrying value of the investment in Silence Therapeutics GmbH (parent)
Materiality
Overall group materiality: £2,368,000 (2021: £2,089,000) based on 5% of Loss before tax.
Overall company materiality: £2,132,000 (2021: £1,754,000) based on 5% of Loss before tax.
Performance materiality: £1,776,000 (2021: £1,565,000) (group) and £1,599,000 (2021: £1,315,614) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
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SILENCE THERAPEUTICS PLC
In addition to going concern, described in the Material uncertainty related to going concern section above, we determined the matters
described below to be the key audit matters to be communicated in our report. This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
assessment of revenue recognition under collaboration
agreements (group and parent)
The Group has entered into collaboration agreements
with third parties, who obtain research services and
patents and know-
The Directors (management) have assessed the
agreements include a mixture of fixed and variable
consideration relating to the achievement of future
milestones. They have previously been assessed to
determine the separability of performance obligations,
with the transaction price allocated to performance
obligations based on their relative standalone selling
price. The agreements overlap between different
reporting periods and the timing of invoicing and cash
receipts does not match with the progress of performance
obligations.
At each period end management calculate the revenue
recognised for the period based on the percentage of
completion of each performance obligation, by using the
input method based on cost to cost, whereby
management determines the proportion of programme
and personnel costs incurred to date in comparison to the
total expected costs (both internal and external). Total
revenue recognised from collaborations during the year
ended 31 December 2022 is £16.9m (2021: £12.0m).
(Please see note 3 for further details)
We performed the following audit procedures to address
the risk:
- Leveraged the previous assessment of the collaboration
contracts and obtained an update from management to
confirm no changes in this assessment which would impact
the accounting treatment;
- Obtained managemen
of both internal costs and costs from third parties (external
costs);
- Where applicable, we confirmed that these costs are
aligned to the collaboration plan and agreed by all parties;
-
confirmed these are consistent with approved budgets. We
further performed a sensitivity analysis over the budgeted
internal FTE rates ( i.e. Full time employee cost per head)
to evaluate how changes to the 2023 budget would affect
the average rates, and ultimately determined whether this
would have a material impact on revenue. Additionally, on
a sample basis we tested the underlying inputs ( i.e.
salaries) of the budgeted payroll costs and recalculated
budget;
-
programme Workplans, by splitting these future costs into
elements that are already contracted or committed (i.e.
Non-judgemental) and elements which are based on
of contingent costs);
- On a sample basis, we matched the committed costs with
contracts or quotations from the third parties. For the
estimated costs, we held discussions with relevant project
managers to challenge and assess the reasonableness of
these estimates. We also performed a retrospective review
costs; and
- Tested the mathematical accuracy of the calculations.
All of the testing above has been performed to obtain a
high level of assurance. Other elements of revenue
non-third party related actual costs
designated as having a normal risk of material
misstatement and have been tested to obtain a normal
related a
assessment of costs related to third party research and
accruals and prepayments.
61
SILENCE THERAPEUTICS PLC
contracts including associated accruals and prepayments
(group and parent)
There is an inherent risk of error as a result of estimates
that involve identifying the progress of research projects,
which considers the progress of external costs and feeds
into the risk around the estimation of completion for
revenue over collaboration agreements.
As the majority of research and development expenditure
arises from the outsourcing of studies and clinical trials
tothird-parties, management are required to calculate the
expense and the associated accruals and prepayments
based on the progress of the R&D contract versus the
amounts billed to date at the end of each period.
and ability to monitor the progression of a piece of
research, or a trial's stage of completion. As a result, it
can be difficult for management to measure what costs
have been incurred in relation to a trial at a specific point
in time and, as such, based on the billings received,
whether the project accruals and prepayments recorded
are appropriately estimated. Our audit risk focuses on
whether the research projects are being appropriately
recognised in expenses and whether associated accruals
and prepayments are being correctly recorded. As at 31
December 2022, third party R&D contracts totalled £3.8m
in accruals and £6.7m in prepayments.
Please see notes 16 and 18 for further details.
We concluded that m
under collaboration agreements is appropriate.
We performed the following audit procedures to address
the risk:
- Tested a sample of research projects over £100k
performing the following procedures:
-
associated accruals and prepayments positions as at 31
December 2022, based on progress assessments from
project managers;
- Tested the mathematical accuracy of the calculations;
- Obtained the underlying contracts and understood the
basis on which the project managers assessed the
progress, and that management had recognised the costs;
- Verified the progress of projects by reviewing the support
available, such as reading the minutes of meetings held
between Silence and the third parties where the progress
of the sampled projects was discussed. We confirmed that
there was no contradictory evidence;
- Verified that the assessment of progress confirmed by
internal project managers was consistent with that provided
by the third parties; and
- Performed look-back procedures to assess the outcome
of prior year accruals with no matters noted.
The testing above has been performed to obtain a
moderate level of assurance. Other elements of the
calculations, such as the completeness of accruals and
prepayments and the completeness of expenses were
designated as having a normal risk of material
misstatement and have been tested to obtain a lower level
of assurance.
For projects under £100k we tested a sample of invoices to
a low level of assurance to ensure that the expense was
accurately recorded and that the accruals or prepayments
were reasonable.
research costs through the year and the related accruals
and prepayments are appropriate.
Carrying value of the investment in Silence Therapeutics
GmbH (parent)
As at 31 December 2022 the parent company held an
investment in its wholly owned subsidiary Silence
We performed the following audit procedures to address
the risk:
long-term receivable from GmbH of £14.2m. A provision
of £20.2m had been recorded against the investment
balance in previous years, resulting in a net investment in
GmbH of £3.1m, plus the loan balance.
Management has performed an impairment assessment
on the net investment in accordance with IAS 36
(Impairment of assets) and determined that no
impairment was necessary in the current year. Judgement
is required in the impairment assessment, specifically in
forecasting the timing and probability of future contractual
sensitivity on key assumptions within the model does not
s impairment analysis and
gained an understanding of the key assumptions and
judgements underlying the assessment. We assessed the
appropriateness of the methodology applied and tested the
mathematical accuracy of the models, with no exceptions
identified. We assessed and challenged the key
assumptions, including the timing and probability of future
milestones receipts by:
- Discussing the status of projects with the project
managers
- Comparing the expected size and timing of milestone
payments to the original collaboration agreements; and
62
SILENCE THERAPEUTICS PLC
result in a different conclusion, thus no impairment is
deemed necessary.
- confirming that the timing of future receipts is consistent
with our review of board minutes and project status
meetings.
Please see note C.6 for further details
impairment is required in relation to the carrying value of
the investment and no provision against the loan are
appropriate.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial sta tements as a
whole, taking into account the structure of the group and the company, the accounting processes and controls, and the industry in which they
operate.
ting entities. These functions
maintain their own accounting records and controls (although transactional processing and certain controls for some reporting units are
performed by the head office finance team) and report to the head office finance team through an integrated consolidation system.
In establishing the overall Group audit strategy and plan, we determined all of the work that needed to be performed at the reporting units
could be performed by the Group engagement team. For each reporting entity we determined whether we required an audit of their reported
The two reporting entities where a full scope audit was required included Silence Therapeutics plc
(incorporated in the UK) and Silence Therapeutics GmbH (incorporated in the UK) were determined as individually financially significant
In addition to the work performed at the in-scope reporting entities, there is work performed at head office by the Group audit engagement
team. The Group consolidation, financial statement disclosures and a number of complex items, prepared by the head office finance function,
were audited by the Group engagement team. These included goodwill, current and deferred taxes, going concern and central adjustments
recorded as part of the consolidation process.
Reporting units where audit procedures were performed accounted for 100% of Group revenue and 100% of Group total losses before tax.
As a result of its structure and size, the Group also has a number of small reporting entities that make up a trivial portion of the key coverage
metrics. These small reporting units are covered by the work performed by the Group audit engagement team, where we perform analytical
review procedures. Those not subject to analytical review procedures were individually, and in aggregate, immaterial. This ga ve us the
evidence we needed for our opinion on the financial statements as a whole.
The Company's accounting process is performed by the head office finance team, who maintain the Company's own accounting records and
controls.
All of the work is performed at the head office by the group engagement team. This includes the financial statement disclosures and complex
items, prepared by the head office finance function such as investments and intercompany.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the
and
f climate
nancial statements.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on
the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate
on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
63
SILENCE THERAPEUTICS PLC
Overall
materiality
How we
determined it
Rationale for
benchmark
applied
Financial statements - group
Financial statements - company
£2,368,000 (2021: £2,089,000).
£2,132,000 (2021: £1,754,000).
5% of Loss before tax
5% of Loss before tax
The group is loss making, as expected given its
status as an early stage biotech company which
has not yet commercialised its products. As such,
loss before tax is deemed to be the most
appropriate benchmark on which to calculate
materiality, as this is the metric on which the
group's financial performance is assessed.
The company is loss making, as expected given
its status as an early stage biotech company
which has not yet commercialised its products. As
such, loss before tax is deemed to be the most
appropriate benchmark on which to calculate
materiality, as this is the metric on which the
company's financial performance is assessed.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range of
materiality allocated across components was £1,205,000 to £2,132,000. Certain components were audited to a local statutory audit materiality
that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature
and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our
performance materiality was 75% (FY2021: 75%) of overall materiality, amounting to £1,776,000 (2021: £1,565,000) for the group financial
statements and £1,599,000 (2021: £1,315,614) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during our audit above £118,000
(group audit) (2021: £10,000) and £107,000 (company audit) (2021: £87,700) as well as misstatements below those amounts that, in our
view, warranted reporting for qualitative reasons.
Reporting on other information
The other in
thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information
and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures
to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based
on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors' report, we also considered whether the disclosures required by the UK Companies Act
2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as
described below.
Strategic report and Directors' report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' report for
the year ended 31 December 2022 is consistent with the financial statements and has been prepared in accordance with applicable legal
requirements.
64
SILENCE THERAPEUTICS PLC
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we did not
identify any material misstatements in the Strategic report and Directors' report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the statement
Responsibilities, the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also
responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
ontinue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors
either intend to liquidate the group or the company or to cease operations, or have no realistic alternative but to do so.
Audito
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when i t exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations
related to patent protection, data privacy, product safety and regulatory compliance, and we considered the extent to which non-compliance
might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the
financial statements such as the Companies Act 2006
of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting
inappropriate journal entries to manipulate financial results, misappropriation of cash and potential management bias in accounting estimates.
Audit procedures performed by the engagement team included:
Discussions with management and internal legal counsel including consideration of known or suspected instances of non-compliance
with laws, regulations and fraud
Review of minutes of meeting with the Board of Directors
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations and journals posted by
senior management
Challenging assumptions made by management in their significant accounting estimates, in particular in relation to the recognition of
revenue related to collaboration agreements
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of no n-compliance
with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not
detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques.
However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to
target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a
conclusion about the population from which the sample is selected.
www.frc.org.uk/auditorsresponsibilities. This description
65
SILENCE THERAPEUTICS PLC
Use of this report
apter 3 of
Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our
prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
we have not obtained all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches
not visited by us; or
the company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Sam Taylor (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Reading
23 March 2023
66
SILENCE THERAPEUTICS PLC
Consolidated income statement
year ended 31 December 2022
Revenue
Cost of sales
Gross profit
Research and development costs
Administrative expenses
Operating loss
Finance and other expenses
Finance and other income
Loss for the year before taxation
Taxation
Loss for the year after taxation
Note
3
5
7
8
9
2022
£000s
17,501
(10,880 )
6,621
(35,605 )
(19,609 )
(48,593 )
(47 )
1,272
(47,368 )
6,879
(40,489 )
2021
£000s
12,415
(7,456 )
4,959
(30,765 )
(20,008 )
(45,814 )
(52 )
10
(45,856 )
6,446
(39,410 )
Loss per ordinary equity share (basic and diluted)
10 (41.9) pence
(44.3) pence
Consolidated statement of comprehensive income
year ended 31 December 2022
Loss for the year after taxation
Other comprehensive expense, net of tax:
Items that may subsequently be reclassified to profit and
loss:
Foreign exchange differences arising on consolidation of foreign
operations
Total other comprehensive income/(expense) for the year
Total comprehensive expense for the year
2022
£000s
(40,489 )
2021
£000s
(39,410 )
544
544
(39,945 )
(677 )
(677 )
(40,087 )
The accompanying accounting policies and notes form an integral part of these financial statements.
67
SILENCE THERAPEUTICS PLC
Consolidated balance sheet
at 31 December 2022
Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Financial assets at amortised cost
Current assets
Cash and cash equivalents
Financial assets at amortised cost
R&D tax credit receivable
Other current assets
Trade receivables
Non-current liabilities
Lease liability
Contract liabilities
Current liabilities
Contract liabilities
Trade and other payables
Lease liability
Net assets
Note
31 December
2022
£000s
11
12
13
17
14
15
10
16
17
19
20
20
18
19
2,201
8,009
320
284
10,814
54,816
16,328
14,882
9,745
915
96,686
(263)
(63,485 )
(63,748 )
(8,864 )
(12,633 )
(183 )
(21,680 )
22,072
2021
£000s
1,944
7,592
24
301
9,861
73,537
-
6,945
5,520
331
86,333
-
(72,501 )
(72,501 )
(4,247 )
(10,783 )
(137 )
(15,167 )
8,526
Capital and reserves attributable to the owners of the parent
Share capital
Capital reserves
Translation reserve
Accumulated losses
Total shareholders equity
22 5,390
277,860
24
2,085
(263,263 )
22,072
4,489
225,462
1,541
(222,966 )
8,526
The financial statements on pages 67 to 100 were approved by the Board on 23 March 2023 and signed on its behalf.
Craig Tooman
Chief Executive Officer
Company number: 02992058
The accompanying accounting policies and notes form an integral part of these financial statements.
68
SILENCE THERAPEUTICS PLC
Consolidated statement of changes in equity
year ended 31 December 2022
Note
22
22
24 / 22
24
24
24 / 22
At 31 December 2020
Recognition of share-based payments
Options exercised in the year
Proceeds from shares issued
Transactions with owners recognised
directly in equity
Loss for year
Other comprehensive income
Foreign exchange differences arising on
consolidation of foreign operations
Total comprehensive expense for the year
At 31 December 2021
Recognition of share-based payments
Options exercised in the year
Proceeds from shares issued
Transactions with owners recognised
directly in equity
Loss for year
Other comprehensive income
Foreign exchange differences arising on
consolidation of foreign operations
Total comprehensive expense for the year
At 31 December 2022
Capital
reserves
£000s
Share
capital
£000s
4,165 186,891
8,632
(659 )
30,598
-
-
324
Translation
reserve
£000s
2,218
-
-
-
Accumulated
losses
£000s
(184,215 )
-
659
-
324
-
38,571
-
-
-
659
(39,410 )
-
-
-
-
4,489 225,462
10,252
(192 )
42,338
-
-
901
(677)
(677)
1,541
-
-
-
-
(39,410 )
(222,966 )
-
192
-
901
-
52,398
-
-
-
192
(40,489 )
Total
equity
£000s
9,059
8,632
-
30,922
39,554
(39,410 )
-
(677)
(40,087 )
8,526
10,252
-
43,239
53,491
(40,489 )
-
-
-
-
-
5,390 277,860
544
544
2,085
-
(40,489 )
(263,263 )
544
(39,945 )
22,072
The accompanying accounting policies and notes form an integral part of these financial statements.
69
SILENCE THERAPEUTICS PLC
Consolidated statement of cash flows
year ended 31 December 2022
Cash flow from operating activities
Loss before tax
Depreciation charges
Amortisation charges
Charge for the year in respect of share-based payments
Net foreign exchange (gain)/loss
Finance and other expenses
Finance and other income
(Increase)/decrease in trade and other receivables
Increase in other current assets
(Increase) in R&D Tax Credit Receivable
Decrease in derivative financial instrument
Increase in trade and other payables
Increase in contract liabilities
Cash generated/(spent) on operations
R&D tax credits received
Net cash (outflow)/inflow from operating activities
Cash flow from investing activities
Redemption of financial assets at amortised cost
Purchase of financial assets at amortized cost
Interest received
Purchase of property, plant and equipment
Purchase of intangible assets
Net cash inflow/(outflow) from investing activities
Cash flow from financing activities
Repayment of lease liabilities
Proceeds from issue of share capital
Net cash inflow from financing activities
Increase in cash and cash equivalents
Cash and cash equivalents at start of year
Effect of exchange rate fluctuations on cash and cash equivalents held
Cash and cash equivalents at end of year
term deposits
Year ended 31 December
2022
£000s
(47,368 )
478
4
10,252
713
-
(1,272 )
(584)
(4,225 )
(502)
-
1,447
(4,399)
(45,456)
-
(45,456)
-
(16,125)
23
(140 )
(300 )
(16,542)
(190 )
43,239
43,049
(18,949)
73,537
228
54,816
The accompanying accounting policies and notes form an integral part of these financial statements.
2021
£000s
(45,856 )
411
16
8,632
305
52
(10 )
27,483
(904 )
-
1,492
2,405
8,369
2,395
4,411
6,806
10,000
-
10
(1,311 )
(23 )
8,676
(211 )
30,922
30,711
46,193
27,449
(105 )
73,537
70
SILENCE THERAPEUTICS PLC
Notes to the consolidated financial statements
year ended 31 December 2022
1.
General information
1.1
Group
development of RNA therapeutics. Silence Therapeutics plc, a public Company limited by shares registered in England
and Wales, with company number 02992058
is 27 Eastcastle Street, London, W1W 8DH and the principal place of business is 72 Hammersmith Road, London, W14
8TH.
2.
Principal accounting policies
2.1
Basis of preparation
The consolidated financial statements have been prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006, as applicable to companies using IFRS. The consolidated
financial statements have been prepared under the historical cost convention as modified by revaluation to fair value of
the derivative financial instrument. The accounting policies set out below have, unless otherwise stated, been prepared
consistently for all periods presented in these consolidated financial statements. The financial statements are prepared
in sterling and presented to the nearest thousand pounds.
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December
2022 reporting periods and have not been early adopted by the Group. These include amendments to IAS1 'Presentation
of financial statements' on classification of liabilities. These standards are not expected to have a material impact on the
entity in the current or future reporting periods and on foreseeable future transactions.
2.2
Basis of consolidation
The Consolidated financial statements consolidate those of the Company and its controlled subsidiary undertakings
drawn up to 31 December 2022. The Group controls an entity when the Group is expected to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring accounting policies into line
with those used for reporting the operations of the Group. All intra Group transactions, balances, income and expenses
are eliminated on consolidation.
71
SILENCE THERAPEUTICS PLC
2.3
Going concern
The Group has incurred recurring losses since inception, including net losses of £40.5 million for the year ended
December 31, 2022. As of December 31, 2022, the Group had accumulated losses of £263.3 million and cash outflows
from operating activities for the year ended 31 December 2022 of £45.5 million. The Group expects to incur operating
losses for the foreseeable future as it continues its research and development efforts, seeks to obtain regulatory
approval of its product candidates and pursues any future product candidates the Group may develop.
To-date, the Group has funded its operations through upfront payments and milestones from collaboration agreements,
equity offerings and proceeds from private placements, as well as management of expenses and other financing options
to support its continued operations.
During 2021, the Group received $40.0 million (£30.8 million) of the upfront payments in respect of the AstraZeneca
collaboration, $45 million from a private placement of ADSs (approximately $42.0 million / £30.8 million, net of expenses)
and approximately $16.0 million (£10.7 million) of the upfront payment, (net of taxes withheld, based on the exchange
rate at the payment date), related to the Hansoh Pharmaceutical Group Company Limited or Hansoh, collaboration
executed on October 14, 2021. In August 2022 the Group raised additional funds through a registered direct offering
with aggregate gross proceeds of $56.5 million (approximately £46.4 million) before deducting $4.1 million
(approximately £3.3 million) in underwriting discounts, commissions and estimated offering expenses. As of December
31, 2022, the Group had cash and cash equivalents and U.S. Treasury Bills of £71.1 million ($86.0 million).
The Group has the responsibility to evaluate whether conditions and/or events raise material uncertainty about its ability
to meet its future financial obligations as they become due within one year after the date that the financial statements
are issued. The forecast for evaluating the going concern basis of the Group includes continued investment in our
technology platform and product pipeline. The forecast does not include collaboration milestones which have not been
fully achieved or other assumptions for potential future non-dilutive or dilutive funding sources. Based on this evaluation,
the Group believes that its current cash and cash equivalents are only sufficient to fund its operating expenses through
the first quarter of 2024. This indicates that a material uncertainty exists that may cast sign
ability to continue as a going concern and therefore the Group may be unable to realize assets and discharge liabilities
in the normal course of business.
The Group will need to raise additional funding to fund its operation expenses and capital expenditure requirements in
relation to its clinical development activities. The Group may seek additional funding through public or private financings,
debt financing or collaboration agreements. Specifically, the Group may receive future milestone payments of up to $14
million from existing collaboration agreements in the next 12 months which will extend the ability to fund operations
beyond the first quarter of 2024. However, these future milestone payments are dependent on achievement of certain
development or regulatory objectives that may not occur. The Group has an authorized open market sale agreement
and can potentially raise funds through the sale of ADSs. However, there is no assurance that we will be successful in
obtaining sufficient funding on terms acceptable to us, or if at all. The inability to obtain future funding could impact; the
eliminate some of its research and development programs, or being unable to continue operations or unable to continue
as a going concern.
These consolidated financial statements have been prepared assuming that the Group will continue as a going concern
which contemplates the continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary
course of business and do not include adjustments that would result if the Group were unable to continue as a going
concern.
2.4
Research and development
The Group recognise expenditure incurred in carrying out its research and development activities in line with
the calculation of research and development accruals at each period to account for expenditure that has been incurred.
This requires estimations of the full costs to complete each study or activity and also estimation of the current stage of
completion. In all cases, the full cost of each study or activity is expensed by the time the final report or, where applicable,
product, has been received. Further details on research and development can be found in note 2.11.
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2.5
Revenue recognition
agreements.
Royalty income
December 2022 consists of royalty income and revenue from collaboration
Alnylam is obliged to pay royalties to the Group on the net sales of ONPATTRO in the EU in a manner commensurate
with the contractual terms. Invoices are raised in arrears on a quarterly basis based on sales information provided by
Alnylam no later than 75 days after the quarter end.
The royalty exemption under IFRS 15 requires sales-based data. Royalty revenue is recognised when sales data is
received, based on the level of sales when the related sales occur.
Revenue from collaboration agreements
We have considered the Mallinckrodt, AstraZeneca, and Hansoh contracts and assessed whether the research and
development services and license of the IP in respect of each target are distinct.
For all contracts we have concluded the license of the intellectual property and the R&D services are not distinct, as
Mallinckrodt, AstraZeneca, and Hansoh cannot benefit from the intellectual property absent the R&D services, as those
R&D services are used to discover and develop a drug candidate and to enhance the value in the underlying intellectual
property, and these services could not be performed by another party, indicating that the two are highly interrelated. On
this basis, we have concluded that there is a single performance obligation covering both the R&D services and the
license of the intellectual property in respect of each target. We recognise revenue over the duration of the contract
based on an input method based on cost to cost.
The contracts have multiple elements of consideration (some or all of the following), namely:
Upfront payments (fixed);
Subsequent milestone payments (variable);
FTE costs rechargeable (variable);
Recharges of direct costs for certain research activities (variable).
The
over the contract period based on costs to completion.
continues throughout their entire duration. On this basis revenue is recognised
Revenue has been calculated on the following ongoing basis for the year ended 31 December 2022:
Total contract costs which includes actual FTE and direct costs incurred up to 31 December 2022 and forecast
FTE and direct costs for the remainder of the contract
Actual costs incurred up until 31 December 2022 are calculated as a percentage of total contract costs (actual
and forecast)
This percentage is then multiplied by the transaction price allocated to the performance obligation in question,
thus calculating the cumulative revenue which is then used to calculate the revenue to be recognised in that
period. In the case of the upfront and milestones, the consideration that is multiplied is in relation to the upfront
and completed milestones only. Consideration in relation to milestones not yet achieved is excluded from the
calculation.
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SILENCE THERAPEUTICS PLC
Forecast costs are monitored each period, with revenue recognised reflecting any changes in forecast or over/under
spend in actuals.
Further details of the revenue amounts recognised in the year ended 31 December 2022 can be found in note 3.
2.6
Foreign currency translation
The consolidated financial statements are presented in sterling. The individual financial statements of each Group entity
are prepared in the currency of the primary economic environment in which the entity operates (its functional currency).
al
currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each
balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the
balance sheet date.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are
included in the income statement for the year.
operations (including comparatives) are translated into sterling using exchange rates prevailing on the balance sheet
date. Income and expense items (including comparatives) are translated at the average exchange rates for the year
unless individually significant to the Group at which point they are translated at spot rate. Exchange differences arising,
if any, are recognised in equity.
2.7
Defined contribution pension funds
The contributions payable to defined contribution retirement schemes are recognised as an expense in the period to
which they relate. On the payment of the contribution the Group has no further liability.
2.8
Business combinations
There were no new business combinations as defined by IFRS 3 during 2021 or 2022.
All goodwill is attributed to an acquisition that occurred in 2005. Goodwill represents the excess of the cost of the
recognised amount (generally fair value) of the identifiable assets, liabilities
and contingent liabilities of the acquiree.
2.9
Property, plant and equipment
The Group holds no property assets other than leased property assets classified as right-of-use assets. See note 2.14
for further details.
All equipment and furniture is stated in the financial statements at its cost of acquisition less a provision for
depreciation.
Depreciation is charged to write off the cost less estimated residual values of furniture and equipment on a straight-
line basis over their estimated useful lives. All equipment and furniture is estimated to have a useful economic life of
between three and ten years. Estimated useful economic lives and residual values are reviewed each year and
amended if necessary.
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SILENCE THERAPEUTICS PLC
2.10 Goodwill
Goodwill is stated at cost less any accumulated impairment losses; it is allocated to the cash generating unit or operating
segment that is expected to benefit from synergies of the related business combination and represent the lowest level
within the Group at which management controls the related cash flows. Goodwill is not amortised but is tested for
impairment annually, or sooner when an indication of impairment has been identified. Goodwill arising on the acquisition
identifiable assets, liabilities and contingent liabilities of the subsidiary at the date of acquisition. On disposal of a
subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
2.11 Other intangible assets
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and less
accumulated impairment losses.
Amortisation
Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible
assets unless such lives are indefinite. Intangible assets with an indefinite useful life and goodwill are systematically
tested for impairment at each balance sheet date. Other intangible assets are amortised from the date they are available
for use. The estimated useful lives are as follows:
Licences and software 10
15 years.
Capitalisation of research and development costs
Costs associated with research activities are treated as an expense in the period in which they are incurred.
Costs that are directly attributable to the development phase of an internal project will only be recognised as intangible
assets provided they meet the following requirements:
an asset is created that can be separately identified;
the technical feasibility exists to complete the intangible asset so that it will be available for sale or use and the
Group has the intention and ability to do so;
it is probable that the asset created will generate future economic benefits either through internal use or sale;
sufficient technical, financial and other resources are available for completion of the asset; and
the expenditure attributable to the intangible asset during its development can be reliably measured.
Careful judgment by management is applied when deciding whether recognition requirements for development costs
have been met. This is necessary as the economic success of any product development is uncertain and may be subject
to future technical problems at the time of recognition. Judgements are based on the information available at each
balance sheet date.
To date, no development costs have been capitalised in respect of the internal projects on the grounds that the costs to
date are either for the research phase of the projects or, if relating to the development phase, then the work so far does
not meet the recognition criteria set out above. In most cases recognition would not occur until regulatory approval.
2.12
Impairment testing of goodwill, other intangible assets and property, plant and equipment
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SILENCE THERAPEUTICS PLC
At each balance sheet date non-financial assets are assessed to determine whether there is an indication that the asset
At least annually or if there is such an indication, the recoverable
amount of the
value in use.
Impairment losses recognised for cash generating units to which goodwill has been allocated are credited initially to the
carrying amount of goodwill. Any remaining impairment loss is charged pro rata to the other assets in the cash generating
unit.
2.13
Financial instruments
Financial assets and financial liabilities are recognised on the balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
For the periods presented in these financial statements, financial assets were classified in the following categories:
derivative financial instruments, and financial assets at amortised cost. Currently other categories of financial asset are
not used. Management determines the classification of its financial assets at initial recognition.
The de-recognition of financial instruments occurs when the rights to receive cash flows from investments expire or are
transferred and substantially all of the risks and rewards of ownership have been transferred.
Derivative financial instruments
The Group uses forward contracts to manage exposure to risks from foreign exchange movements. Derivatives are
initially recognised at fair value at the date that the contract is entered into and subsequently remeasured at each
balance sheet date. The resulting gain or loss is recognised in the income statement.
Financial assets at amortised cost
Financial assets at amortised cost include trade receivables held in order to collect contractual cash flows, U.S. Treasury
Bills, and a term deposit held to collect solely payment of the principal and interest, and deposits on property operating
leases and for the procurement of materials. These are measured at initial recognition at fair value plus, if appropriate,
directly attributable transaction costs and are subsequently measured at amortised cost using the effective interest
method, less provision for impairment. Premiums and discounts, if any, are amortised or accreted as interest expense
or income over the life of the related asset using the effective interest method. Any impairment is assessed using the
Expected Credit Losses (ECL) model. The Group applies the IFRS 9 simplified approach to measuring expected credit
losses which uses a lifetime expected loss allowance for trade receivables. Any impairment is recognised in the income
statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits with original maturities of three months or
less that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Financial liabilities and equity
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SILENCE THERAPEUTICS PLC
Financial liabilities and equity instruments issued are classified according to the substance of the contractual
arrangements entered into and the definitions of a financial liability and an equity instrument. A financial liability is a
contractual obligation to either deliver cash or another financial asset to another entity or to exchange a financial asset
or financial liability with another entity, including obligations which may be settled using its equity instruments. An equity
instrument is any contract that evidences a residual interest in the assets after deducting all of its liabilities. The
accounting policies adopted for specific financial liabilities and equity instruments are set out below.
Financial liabilities
At initial recognition, financial liabilities are measured at their fair value minus, if appropriate, any transaction costs that
are directly attributable to the issue of the financial liability. After initial recognition, all financial liabilities are measured
at amortised cost using the effective interest method.
Equity instruments
Equity instruments issued by the Group are recorded as the proceeds received, net of direct issue costs.
2.14
Leased assets
For any new contracts entered into on or after 1 January 2019, the Group considers whether a contract is, or contains
asset) for a per
contract meets two key evaluations, which are whether:
the contract contains an identifiable asset;
the Group has the right to obtain substantially all of the economic benefits from use of the identified asset
throughout the period of use
Measurement and recognition
At lease commencement date, the Group recognises a right-of-use asset (as part of the appropriate underlying class of
assets in property, plant and equipment) and a lease liability on the balance sheet.
The right-of-use asset is measured at cost comprising the following: the amount of the initial measurement of lease
liability, any lease payments made at or before the commencement date less any lease incentives received, any initial
direct costs, and restoration costs. The Group depreciates the right-of-use assets on a straight-line basis from the lease
commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The
Group also assesses the right-of-use asset for impairment when such indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid
at that date, discounted u
of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index
or rate, amounts expected to be payable under a residual value guarantee and payments arising from options
reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made
and increased for interest.
The Group has elected to account for short-term leases (leases with a duration of less than 12 months) and leases of
low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the
payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term.
The interest payments for leases are recognised in the statement of cashflows under finance and other expenses.
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SILENCE THERAPEUTICS PLC
Lease break clauses and extension options
When the Group has the option to extend a lease, management uses its judgment to determine whether or not an option
would be reasonably certain to be exercised. Management considers all facts and circumstances including past practice
and any cost that will be incurred to change the asset if an option to extend is not taken, to help determine the lease
term.
Similarly, when a break clause exists in the lease agreement, management must consider the likelihood of this option
to curtail the lease being exercised.
2.15
Share-based payments
Historically the Group has issued equity settled share-based payments to certain employees (see note 25). Equity
settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions)
at the date of grant. The fair value so determined is expensed on a straight-line basis over the vesting period, based on
the Group of the number of shares that will eventually vest and adjusted for the effect of non-market-based vesting
conditions.
The value of the charge is adjusted to reflect expected and actual levels of award vesting, except where failure to vest
is as a result of not meeting a market condition.
Cancellations of equity instruments are treated as an acceleration of the vesting period and any outstanding charge is
reversed in full immediately.
Fair value is measured using a Black Scholes model, binomial pricing model or Monte Carlo model. The key assumptions
estimate, for the effects of non-transferability,
exercise restrictions and behavioural considerations.
Any payment made to a counterparty on the cancellation or settlement of a grant of equity instruments (even if this
occurs after the vesting date) should be accounted for as a repurchase of an equity interest (that is, as a deduction from
equity). But, if the payment exceeds the fair value of the equity instruments repurchased (measured at the repurchase
date), any such excess should be recognised as an expense.
2.16
Equity
Share capital is determined using the nominal value of shares that have been issued.
The share premium account includes any premiums received on the initial issuing of the share capital. Any transaction
costs associated with the issuing of shares are deducted from the share premium account, net of any related income
tax benefits.
The merger reserve represents the difference between the nominal value and the market value at the date of issue of
shares issued in connection with the acquisition by the Group of an interest in over 90% of the share capital of another
company.
Equity settled share-based payments are credited to a share-based payment reserve as a component of equity until
related options or warrants are exercised.
Foreign currency translation differences are included in the translation reserve.
Profit and loss account (deficit) includes all current and prior period results as disclosed in the income statement.
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SILENCE THERAPEUTICS PLC
2.17
Taxation
Current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income
statement because it excludes items of income or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. Current tax liabilities are calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Tax receivable arises from the U.K. legislation regarding the treatment of certain qualifying research and development
costs, allowing for the surrender of tax losses attributable to such costs in return for a tax rebate. Research and
development tax credits are recognised when the receipt is probable.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary difference arises from initial recognition of goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries except
where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference
will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is
no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the
asset realised. Deferred tax is charged or credited to the income statement, except when it relates to items charged or
credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends
to settle its current tax assets and liabilities on a net basis.
Withholding tax is payable on gross income from dividends, interest, lease of property, royalties, and other China-source
passive income since the Group does not have an establishment or place of business in China.
2.18 Critical accounting estimates and judgements and key sources of estimation uncertainty
effect on the amounts recognised
best knowledge of current events and actions, actual results may ultimately differ from those estimates.
The critical judgments concerning the future, and other key sources of estimation uncertainty at the balance sheet date,
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year, are described below:
Application of IFRS 15 in determining revenue from contracts with customers specifically:
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SILENCE THERAPEUTICS PLC
o
o
The determination of the numbers of performance obligations. Judgement was previously required in
determining whether the license and the R&D activities are distinct performance obligations or not at the
time the collaboration agreements were executed. It is considered the license of the IP and the R&D
activities are not distinct as the R&D services are essential to discover and develop a drug candidate and
enhance the value in the underlying IP. In addition, the gene targets are highly specialised such that only
the Group has the specialist knowledge to apply the IP to the specific target. On this basis, it was concluded
that there is only one single performance obligation covering both the R&D services and licenses of the IP
in respect of each target at the time the agreements were executed;
The allocation of the upfront payments between performance obligations (judgement). Mallinckrodt paid
the Group $20 million in 2019, AstraZeneca have paid the Group $60 million in 2020 and 2021, and Hansoh
paid $16 million upfront under their respective contracts, which is in 2021. A judgment was required to
determine how this should be allocated across the contracted targets. In 2019, due to the compounds being
at similar stages of development at the time of contract execution, the $20 million paid by Mallinckrodt was
allocated evenly, on the basis of a benchmarking exercise considering the standalone selling price per
target of past deals announced to the market by comparable companies; similarly it was concluded that the
$60 million amount to be paid by AstraZeneca was allocated evenly across target options for AstraZeneca.
The Hansoh $16 million upfront payment was allocated $4 million for each of the two targets in Greater
China, Hong Kong, Macau and Taiwan and $8 million for the global target based on the benchmarking
exercise, as well as consideration for geography licensed and other contractual terms. These initial
transaction amounts are recognized as revenue over the life of the performance obligations for each
contract.
The estimate of future costs to be incurred to determine percentage of completion of revenue contracts:
o
In determining the percentage of completion of the revenue projects, the Group estimated the total future
costs expected to be incurred through the life of the performance obligations per the contract. An increase
in future costs could arise as a result of a requested change in scope by the collaboration partner or through
higher than anticipated internal costs incurred by Silence. The impact of a change in scope would be largely
neutral on revenue recognition because there would be consequential increases in revenue to match the
additional costs. There is no experience of internal costs being higher than anticipated to date, but if this
were the case then a 10% increase in future estimated costs would lead to a 0.4% increase in revenue.
2.19
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Board. The chief
operating decision maker (CODM), who is responsible for allocating resources and assessing performance of the
operating segments, has been i
Chief Executive Officer. The Group has a single reportable
segment (see note 4).
3.
Revenue
Revenue from collaboration agreements for the year ended 31 December 2022 relates to the Research collaboration
agreements the Group entered into with Mallinckrodt plc in July 2019, AstraZeneca plc in March 2020, and Hansoh in
October 2021.
Revenue comprised £0.6 million of royalty income (2021: £0.4 million) and £16.9 million of Research collaboration
income (2021: £12.0 million). Disaggregation of Revenue from Contracts with Customers is as follows:
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SILENCE THERAPEUTICS PLC
Revenue from Contracts with Customers
Research collaboration - Mallinckrodt plc
Research collaboration - AstraZeneca
Research collaboration
Research collaboration
Royalties
Other
total
Total revenue from contracts with customers
2022
£000s
11,658
5,081
184
16,923
578
17,501
2021
£000s
8,748
2,652
623
12,023
392
12,415
Under our collaboration agreement with Mallinckrodt, we received an upfront cash payment of £16.4 million ($20 million)
in 2019 and are eligible to receive specified development, regulatory and commercial milestone payments. We received
milestone payments totalling £2.2 million or $3 million (2021: £2.9 million) during the year ended 31 December 2022. In
addition to these payments, Mallinckrodt has agreed to fund some of our research personnel and preclinical
development costs. We recognise the upfront payment, milestone payments, payments for personnel costs and other
research funding payments over time, in accordance with IFRS 15 para 35 c). During the year ended 31 December
2022, we recognised a total of £11.7 million in revenue under this agreement. (2021: £8.7 million)
Under our collaboration agreement with AstraZeneca, we received an upfront cash payment of £17.1 million ($20 million)
in 2020 with a further amount of £30.8 million ($40 million) received in May 2021. We are also eligible to receive specified
development and commercial milestone payments as well as tiered royalties on net sales, if any. We recognise the
upfront payment and milestone payments over time, in accordance with IFRS 15 para 35 c). During the year ended 31
December 2022, we recognised a total of £5.1 million in revenue under this agreement. (2021: £2.7 million)
We entered into a collaboration agreement with Hansoh on 15 October 2021. We received a $16 million (equivalent to
approximately £11.9 million based on the exchange rate at the payment date and $14.4 million or £10.7 million, net of
taxes) upfront payment to us in December 2021. We are eligible to receive development, regulatory and commercial
milestones as well as royalties on Hansoh net product sales. During the year ended December 31, 2022, the Company
triggered milestone payments totaling $2.0 million (£1.5 million) (2021: £nil). We recognize the upfront payment and
milestone payments over time, in accordance with IFRS 15 para 35 c). During the year ended December 31, 2022, we
recognized a total of £0.2 million in revenue under this agreement to date. (2021: £32 thousand)
In December 2018, we entered into a settlement and license agreement with Alnylam Pharmaceuticals Inc., or Alnylam,
pursuant to which we settled outstanding patent litigation with Alnylam related to its RNAi product ONPATTRO. As part
of the settlement, we license specified patents to Alnylam, and Alnylam pays us a tiered royalty of up to one percent of
net sales of ONPATTRO in the European Union. We are eligible to receive these royalties through December 2023. We
invoice Alnylam quarterly in arrears based on sales data for that quarter as reported to us by Alnylam. Royalty revenue
is recognised based on the level of sales when the related sales occur. During the year ended 31 December 2022, we
recognised a total of £0.6 million in royalty income from Alnylam. (2021: £0.4 million)
4.
Segment reporting
In 2022, the Group operated in the specific technology field of RNA therapeutics.
Business segments
The Group has identified the Chief Executive Officer as the CODM. For the 12 months ended 31 December 2021 and
2022, the CODM determined that the Group had one business segment, the development of RNAi-based medicines.
This is in line with reporting to senior management. The information used internally by the CODM is the same as that
disclosed in the financial statements.
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SILENCE THERAPEUTICS PLC
An analysis of the G
assets and revenues by location is shown below:
Non-current assets
As at 31 December 2021
As at 31 December 2022
Revenue analysis for the year ended 31 December 2021
Research collaboration
Royalties
Revenue analysis for the year ended 31 December 2022
Research collaboration
Royalties
.
5.
Operating loss
This is stated after charging/(crediting):
U.S.A.
£000s
U.K.
£000s
Germany
£000s
17
-
516
1,166
9,328
9,648
Total
£000s
9,861
10,814
-
-
-
-
-
-
12,023
-
12,023
-
392
392
12,023
392
12,415
16,923
-
16,923
-
578
578
16,923
578
17,501
Depreciation of property, plant and equipment
Amortisation of intangibles
Share-based payments charge
Short lease payments on premises
Fees payable to the Company's auditors for the audit of the Company and the consolidation:
- audit fees
- other assurance services
6.
Directors and staff costs
Wages and salaries
Social security costs
Other pension costs
Share-based payments charge
Total aggregate remuneration
2022
£000s
478
4
10,252
410
463
150
2021
£000s
411
16
8,632
332
403
180
follows:
2022
£000s
14,760
1,434
429
10,252
26,875
2021
£000s
10,837
1,491
319
8,632
21,279
Remuneration and share based payments detail for all Directors is presented in the Remuneration Committee report.
See page 37 for further details.
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SILENCE THERAPEUTICS PLC
Research and development and related support services
Administration
Total average number of employees
7.
Finance and other expenses
Lease liability interest expense
Net foreign exchange losses
Total Finance and other expenses
8.
Finance and other income
Bank interest receivable
Accreditation on U.S. Treasury Bills
Net foreign exchange gains
Total Finance and other income
9.
Taxation
2022
Number
88
28
116
2021
Number
66
26
92
2022
£000s
47
-
47
2022
£000s
23
203
1,046
1,272
2021
£000s
8
44
52
2021
£000s
10
-
-
10
The entire tax credit of £6.9m relates to current tax as shown below. No deferred tax was recognised in the year.
The deferred tax charge in 2022 was nil (2021: nil). Reconciliation of tax credit at standard rate of U.K. corporation tax
to the current tax credit:
Loss before tax
Tax credit at the standard rate of U.K. corporation tax of 19% (2021: 19%; 2020:
19%)
Effect of overseas tax rate
Impact of unrelieved tax losses not recognised
Adjustment in respect of prior year
Research and development tax credit in respect of current year
Effect of overseas taxes
2022
£000s
(47,368 )
9,000
544
(9,948 )
(401)
7,836
(152 )
6,879
2021
£000s
(45,856 )
8,713
(264 )
(8,639 )
875
6,945
(1,184)
6,446
Estimated tax losses of £167.8 million (2021: £154.1 million) are available for relief against future profits.
83
SILENCE THERAPEUTICS PLC
The deferred tax asset not recognised in these financial statements on the estimated losses and the treatment of the
equity settled share- based payments, net of any other temporary timing differences is detailed in note 23. During the
year, the Group had not yet received a research and development tax credit of related to the prior year (2021: £4.4
million). The Group has accrued £7.8 million (2021: £6.95 million) recognising a current tax asset in respect of 2022
research and development tax credits. The company had a foreign tax expense of £0.4 million. (2021: £0.2 million).
The corporation tax main rate during 2022 was 19% (2021: 19%). In the Spring Budget 2021, the U.K. Government
announced that from 1 April 2023 the corporation tax rate will increase to 25%. As the company has not recognised and
related deferred tax assets as at 31 December 2022, the tax rate increase has no impact.
Since the Group does not have an establishment or place of business in China, the Group is subject to withholding tax
on gross income from dividends, interest, lease of property, royalties, and other China-source passive income. The
Group entered into a collaboration agreement with Hansoh, a biopharmaceutical company in China and received a $16
million upfront payment, which required withholding tax of $1.6 million. In 2022 the Group received a milestone payment
of £1.5 million ($2.0 million), which required withholding tax of £0.2 million.
10.
Loss per ordinary equity share (basic and diluted)
The calculation of the loss per share is based on the loss for the financial year after taxation of £40.5 million (2021: loss
of £39.4 million) and on the weighted average of 96,584,512 (2021: 88,950,441) ordinary shares in issue during the
year.
The options outstanding at 31 December 2021 and 31 December 2022 are considered to be anti-dilutive as the Group
is loss-making.
84
SILENCE THERAPEUTICS PLC
11
Property, plant and equipment
Cost
At 1 January 2021
Additions
Disposals
Translation adjustment
At 31 December 2021
At 1 January 2022
Additions
Disposals
Translation adjustment
At 31 December 2022
Accumulated depreciation
At 1 January 2021
Charge for the year
Eliminated on disposal
Translation adjustment
At 31 December 2021
At 1 January 2022
Charge for the year
Eliminated on disposal
Translation adjustment
At 31 December 2022
Net book value
As at 31 December 2021
As at 31 December 2022
12. Goodwill
Balance at start of year
Translation adjustment
Balance at end of year
Equipment and
furniture
£000s
Right-of-use
asset
£000s
4,066
1,311
(46)
(219)
5,112
5,112
140
(506 )
240
4,986
3,274
238
(46 )
(173)
3,293
3,293
306
(506 )
144
3,237
1,819
1,749
456
-
(111 )
-
345
345
499
(346 )
-
498
121
173
(74 )
-
220
220
172
(346 )
-
46
125
452
Total
£000s
4,522
1,311
(157 )
(219 )
5,457
5,457
639
(852 )
240
5,484
3,395
411
(120 )
(173)
3,513
3,513
478
(852 )
144
3,283
1,944
2,201
2022
£000s
7,592
417
8,009
2021
£000s
8,125
(533)
7,592
The recoverable amount is based on fair value less cost of disposal.
The key assumptions used in the valuation models to determine the fair value less cost of disposal are as follows:
Fair value has been determined as market capitalisation (share price x number of shares in issue) at 31
December 2022
Disposal costs have been estimated to be minimal
Goodwill is assessed at a segment level. As there is only one operating segment, we have considered the fair value of
the entire business as market capitalisation at 31 December 2022, which was £453.3 million (2021: £528.8 million), with
share price not dropping significantly below its 31 December 2022 value at any point so far in 2023, and therefore a
sensitivity analysis has not been presented.
85
SILENCE THERAPEUTICS PLC
13. Other intangible assets
Cost
At 1 January 2021
Additions
Translation adjustment
At 31 December 2021
At 1 January 2022
Additions
Translation adjustment
At 31 December 2022
Accumulated depreciation
At 1 January 2021
Charge for the year
Translation adjustment
At 31 December 2021
At 1 January 2022
Charge for the year
Translation adjustment
At 31 December 2022
Net book value
As at 31 December 2021
As at 31 December 2022
Licenses &
software
£000s
107
23
-
130
130
300
-
430
90
16
-
106
106
4
-
110
24
320
The intangible assets included above have finite useful lives estimated to be of 10 15 years from the date of acquisition,
over which period they are amortised or written down if they are considered to be impaired. Internally generated patent
costs are only recorded where they are expected to lead directly to near-term revenues, none have been capitalised to
date.
14. Cash and cash equivalents
Cash at bank and in hand
U.S. Treasury Bills
Short term bank deposits
Total Cash and cash equivalents
2022
£000s
41,986
12,376
454
54,816
2021
£000s
73,537
-
-
73,537
Cash at bank comprises balances held by the Group in current, U.S. Treasury Bills and short-term bank deposits with
an original maturity of three months or less. The carrying amount of these assets approximates to their fair value.
15.
Financial assets at amortised cost
Non-current financial assets at amortized cost primarily relate to deposits for properties.
Current financial assets at amortized cost, other than trade receivables as disclosed in note 17, include U.S. Treasury
Bills (with maturities from purchase date over three months) of £16.3 million (2021: nil).
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SILENCE THERAPEUTICS PLC
Financial assets at amortised cost U.S. Treasury Bills
Total current financial assets at amortised cost
Non-current financial assets at amortised cost
Total financial assets at amortised cost
16. Other current assets
Prepayments
VAT receivable
Total other current assets
2022
£000s
16,328
16,328
284
16,612
2022
£000s
8,200
1,545
9,745
2021
£000s
-
-
301
301
2021
£000s
4,309
1,211
5,520
87
SILENCE THERAPEUTICS PLC
17.
Trade receivables
Trade receivables
2022
£000s
915
2021
£000s
331
The Directors consider that the carrying amount of trade receivables approximates to their fair value.
No interest is charged on outstanding receivables. There were no overdue trade receivables balances.
The Group has applied an expected credit loss model to the balance and determined that £nil (2021: £nil) provision is
required.
18.
Trade and other payables
Trade payables
Social security and other taxes
Accruals and other payables
Corporate income tax payable
Total trade and other payables
2022
£000s
3,186
467
8,391
589
12,633
2021
£000s
4,065
318
6,215
185
10,783
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
19.
Lease liability
Lease liability current
Lease liability non-current
Total lease liability
2022
£000s
183
263
446
2021
£000s
137
-
137
The lease liability recognis
office, which was
renegotiated upon completion of the original term, with the new term beginning in September 2022. The repayment of
the principal portion of these lease liabilities for the year-ending December 31, 2022, was £0.2 million (2021: £0.2
million).
There are 2 short-term leases in Berlin, Germany and three leases in Hoboken, U.S., not included in the lease liability
above. Both leases in Berlin are on a rolling contract basis with either party being able to end the lease with a cancellation
notice period of 11.5 months, while the leases in the U.S. are on a rolling contract basis with a notice period of three
months, thus allowing exemption using the practical expedient, without significant cost.
88
SILENCE THERAPEUTICS PLC
20. Contract liabilities
Contract liabilities comprise entirely deferred revenue in respect of the Mallinckrodt, AstraZeneca plc, and Hansoh
research collaborations. The current contract liabilities represent the amount of estimated revenue to be reported in the
next 12 months related to amounts invoiced to our partners. Current and non-current contract liabilities include future
revenue from collaboration recharged expenses, upfront payments, and milestones achieved to December 31, 2022
Contract liabilities:
Current
Non-current
Total contract liabilities
Contract liabilities:
At 1 January 2021
Additions during period
Revenue unwound during period
At 31 December 2021
At 1 January 2022
Additions during period
Revenue unwound during period
At 31 December 2022
21. Deferred tax
2021
£000s
4,247
72,501
76,748
31 December,
2022
£000s
8,864
63,485
72,349
Total
£000s
68,379
20,392
(12,023 )
76,748
76,748
12,519
(16,918 )
72,349
The Group has the following unrecognised deferred tax assets as at 31 December 2022:
Trading losses
Share based payments
Capital losses
Total unrecognised deferred tax asset
2022
2021
Gross
£000s
167,828
8,995
7,873
184,696
Net
£000s
44,136
2,249
1,968
48,353 176,558
Gross
£000s
152,060
16,625
7,873
Net
£000s
33,909
3,159
1,496
38,564
To total unrecognised deferred tax assets are calculated based on the main corporate tax rate of 25% (19% for 2021)
as this is the rate applicable to when we expect to utilise these deferred tax assets. Unrecognised deferred tax assets
from foreign trading losses are calculated at the tax rate applicable to the related jurisdiction.
Deferred tax assets are recognised where it is probable that future taxable profit will be available to utilise losses. Due
to the uncertainty of future capital gains, a deferred tax asset in respect of capital losses was not recognised at 31
December 2022 (2021: nil).
89
SILENCE THERAPEUTICS PLC
22.
Share capital
Authorised, allotted, called up and fully paid ordinary shares, par value £0.05
Number of shares in issue
2022
£000s
5,390
2021
£000s
4,489
Number
107,808,472
Number
89,784,720
The Group has only one class of share. All ordinary shares have equal voting rights and rank pari passu for the
distribution of dividends.
Depositary
$22.50 per ADS, with new and existing
was US $45 million (approximately £33 million) before deducting approximately £2.4 million in placement agent fees
and other expenses. The financing syndicate included Adage Capital Management LP, BVF Partners L.P., Consonance
Capital, Great Point Partners, LLC, and other investors.
On October 15, 2021, the Company filed a registration statement on Form F-3 with the SEC to cover the offering,
issuance and sale of securities from time to time in one or more offerings of up to $300,000,000 in aggregate, which
includes a sale of up to $100,000,000 of ADSs that may be issued and sold under an Open Market Sale Agreement,
dated October, 15, 2021, with Jefferies LLC.
On November 30, 2021, the Company completed delisting from AIM. As a result, the Company converted the existing
employee share options to ADSs which represents three ordinary shares and the exercise price was also converted to
represent an ADS price at an exchange rate equal to the average of the last five business trading days currency
conversion of sterling pounds to US dollars, which was 1.334058 sterling pounds to 1 US dollar. This is not a modification
of the existing share option grants, as the value or timing of the grants was unchanged.
On August 11, 2022, the Group announced a registered direct offering (t
ADSs, each representing three ordinary shares, at a price of $9.50 per ADS, with new and existing institutional and
accredited investors. The aggregate gross proceeds of the Offering was $56.5 million (approximately £46.4 million)
before deducting $4.1 million (approximately £3.3 million) in underwriting discounts, commissions and estimated offering
expenses.
Details of the shares issued during the current and previous year are as follows:
90
SILENCE THERAPEUTICS PLC
Number of shares in issue at 1 January 2021
Shares issued during the year
Options exercised at £0.05
Options exercised at £0.85
Options exercised at £1.00
Options exercised at £1.28
Options exercised at £1.90
Number of shares in issue at 31 December 2021
Shares issued during the year
Options exercised at $0.20/ADS or $0.07/ordinary share
Options exercised at $4.16/ADS or $1.39/ordinary share
Options exercised at $5.12/ADS or $1.72/ordinary share
Options exercised at $5.88/ADS or $1.96/ordinary share
Options exercised at $7.32/ADS or $2.44/ordinary share
Options exercised at $7.60/ADS or $2.53/ordinary share
Number of shares in issue at 31 December 2022
Number of equivalent ADS in issue at 31 December 2022
83,306,259
6,066,654
66,114
121,854
25,000
720
198,119
89,784,720
17,850,000
84,835
16,968
12,951
24,000
15,000
19,998
107,808,472
35,936,157
At 31 December 2022, there were options outstanding over 11,571,487 (2021: 8,052,699) unissued ordinary shares.
Details of the options outstanding are as follows:
Year of issue
Weighted average
Exercise price (£)
Weighted average
Exercise price ($)
At 1 January
2022
Options
granted
Options
forfeited
Options
expired
Options
exercised
At 31
December,
2022
Weighted average
years to expiry date
2014
2015
2016
2017
2018
2019
3.50
3.50
4.25
6.00
0.18
4.31
2020
2021
18.38
17.33
2022
18.44
Total
4.23
4.23
5.14
7.25
0.21
5.21
22.22
20.95
22.30
4,000
3,333
19,832
46,240
70,233
763,260
1,040,023
737,312
-
-
-
-
-
-
-
-
-
-
(9,973)
(8,000)
(14,876)
4,000
3,333
9,859
38,240
55,357
(12,666 )
(25,068)
725,526
(316,573 )
(36,839 )
-
-
723,450
700,473
1.67
2.52
3.35
4.83
5.22
6.73
7.58
8.27
-
1,940,377
(343,453 )
-
1,596,924
9.28
2,684,233 1,940,377
(709,531)
(57,917)
3,857,162
Number of equivalent ADS
8,052,699 5,821,131
(2,128,593)
(173,752)
11,571,487
91
SILENCE THERAPEUTICS PLC
ADSs represent three ordinary shares and the exercise price was also converted to represent an ADS price at an
exchange rate equal to the closing current year currency conversion of sterling pounds to US dollars, which was
1.208971 sterling pounds to 1 US Dollar.
The market price of Company shares at the year-end was $15.25/ADS or ($5.08 or 420 pence/share). (2021:
$23.89/ADS ($7.96 or 590 pence/share); 2020: 514 pence). During the year the minimum and maximum prices were
$7.80 and $24.66 per ADS (215 pence and 680 pence per ordinary share), respectively (2021: 443 pence and 680
pence; 2020: 304 pence and 515 pence).
23.
Equity-settled share-based payments
The Group has issued share options under the 2018 Long Term Incentive Plan (LTIP), 2018 Non-Employee Long Term
Inventive Plan (Non-Employee LTIP), and individual share option contracts, open to all employees of the Group, as well
as EMI shares (none of which remain outstanding at 31 December 2022). Under the LTIP, Non-Employee LTIP,
individual contracts and schemes available, the options typically vest after 3 years, with the exception of some options
granted to certain members of key management personnel. The vesting period for these options ranges from 3 to 33
months. The options usually lapse after one year following the employee leaving the Group.
2022
Number
of
ADSs
000s
Weighted
Average
Exercise
price
$
Weighted
Average
Exercise
price
Pence
2,684,233
1,940,377
(709,531 )
(57,917 )
0
3,857,162
1,889,460
7.32
22.30
29.25
3.20
0
15.10
13.24
605.63
1,844.41
2,419.76
265.05
0
1,248.95
1,095.01
Options
Outstanding at the beginning of the year
Granted during the year
Lapsed or forfeited during the year
Exercised during the year
Outstanding at the year-end (ordinary shares/pence)
Outstanding at the year-end (ADS/$)
Exercisable at the year-end
2021
Weighted
Average
Exercise
price
Pence
Number
of shares
000s
6,768,894 226.83
2,259,153 554.60
(563,541 ) 146.02
(411,807 ) 116.62
8,052,699 329.74
7.32
2,684,233
2,503,504 263.45
The table above shows the number of options in relation to ordinary shares and equivalent ADSs outstanding and
exercisable at year end, on the conversion ratio of three ordinary share options to one ADS as disclosed in Note 24.
The options outstanding at the year-end have a weighted average remaining contractual life of 8.2 years (2021: 8.3
years). The weighted average share price at the time of exercise during the year was 318.31 pence per ordinary share
or $10.91 per ADS (2021: 575 pence).
The Group granted 5,465,478 ADS options during the year (2021: 2,259,153). The fair value of options granted were
calculated using Black Scholes model for 2022. Prior to January 1, 2022, the fair value of options granted were
calculated using a Binomial or Monte Carlo model. Inputs into the model were as follows:
92
SILENCE THERAPEUTICS PLC
Inputs and assumptions for options granted in the year
Weighted average share price (pence)
Weighted average ADS price ($)
Weight average hurdle price (pence)
Weighted average exercise price (pence)
Weighted average ADS price ($)
Option life (years)
Expected volatility
Risk free rate
Expected dividend yield
2022
537.4
19.5
2021
586.0
n/a n/a
520.0
673.8
24.4
8.9
56%-74%
1.16%-3.57%
nil
10.0
65%-70%
0.28%-1.04%
nil
The Group recognised total charges of £10.3 million (2021: £8,6 million) related to equity settled share-based payment
transactions during the year.
Fair value of the grants has been calculated using volatility assumptions between 56% and 74%, based on the three
year historical volatility as at the respective date of grant.
The Group does not bear any responsibility to settle any employee tax obligations that arise on the exercise of share
options. The estimated employer tax obligation on outstanding options at the year-end was £0.4 million (2021: £0.6
million).
24. Capital reserves
The capital redemption reserve was created in 2012 following the reduction of nominal share capital to 0.1p per share.
It is required under Section 733 of the Companies Act 2006, held to maintain the capital of the Company when shares
are bought back and subsequently cancelled without court approval.
Due to the size of the deficit on the accumulated losses account, the Company has no distributable reserves.
The share premium account reflects the premium to nominal value paid on issuing shares less costs related to the issue.
The merger reserve was created on issuance of shares relating to the acquisition of Silence Therapeutics GmbH.
The share-based payments reserve reflects the cost to issue share-based compensation, primarily employee share
options.
At 1 January 2021
Shares issued
On options in issue during the year
On options exercised during the year
Costs capitalised in respect of issuance of shares during the
period.
Movement in the year
At 31 December 2021
Shares issued
On options in issue during the year
On options exercised during the year
Costs capitalised in respect of issuance of shares during the
period.
Movement in the year
At 31 December 2022
Capital
redemption
Merger
reserve
£000s
22,248
-
-
-
Share-based
Payment
reserve
£000s
5,715
-
8,632
(659 )
Share
Premium
account
£000s
153,734
32,585
-
460
(2,447)
30,598
184,332
45,533
-
153
-
-
22,248
-
-
-
-
7,973
13,688
-
10,252
(192 )
-
10,060
23,748
(3,348)
42,338
226,670
-
-
22,248
reserve
£000s
5,194
-
-
-
-
-
5,194
-
-
-
Total
£000s
186,891
32,585
8,632
(199 )
(2,447)
38,571
225,462
45,533
10,252
(39 )
-
-
5,194
(3,348)
52,398
277,860
93
SILENCE THERAPEUTICS PLC
25. Capital commitments and contingent liabilities
There were no capital commitments at 31 December 2022 (2021: nil).
94
SILENCE THERAPEUTICS PLC
26. Commitments under short leases
At 31 December 2022, the Group had a gross commitment on its office rental and service charge in Berlin, Germany
and the Hoboken, U.S. lease equal to £0.3 million (2021: £0.3 million) in the next year. No amounts are payable after
more than one year.
In addition, the Group enters into contracts in the normal course of business with contract research organisations to
assist in the performance of research and development activities and other services and products for operating
purposes. These contracts generally provide for termination on notice, and therefore are cancellable contracts and not
reflected in the disclosure above.
27.
Financial instruments and risk management
receivables and trade payables which arise directly from its operations. The main purpose of these financial instruments
approval is required for adoption of any new financial instrument or counterparty. The primary focus of the treasury
function is preservation of capital.
The Directors consider that the carrying amount of these financial instruments approximates to their fair value.
Financial assets by category
The categories of financial assets included in the balance sheet and the heading in which they are included are as
follows. The measurement of financial assets is at amortised cost unless otherwise stated:
Trade receivables
Cash and cash equivalents
Other current assets at amortised cost
Non-current financial assets at amortised cost
Financial liabilities by category
Trade and other payables
Lease liability
All amounts are short-term.
2022
£000s
915
54,816
16,328
284
72,343
2021
£000s
331
73,537
-
301
74,169
2022
£000s
12,166
446
12,612
2021
£000s
10,464
137
10,601
95
SILENCE THERAPEUTICS PLC
Credit quality of financial assets (loans and receivables)
The maximum exposure to credit risk at the reporting date by class of financial asset was:
Trade receivables
Financial assets at amortised cost non-current
Financial assets at amortised cost current
2022
£000s
915
284
16,328
17,527
2021
£000s
331
301
-
632
Cash and cash equivalents and U.S. Treasury Bills are not considered to be exposed to significant credit risk due to the
the
event of non-performance by a financial counterparty to be unlikely.
The Group regularly monitors the creditworthiness of its customers and at the reporting date, no financial assets are
credit impaired.
Capital management
The Group considers its capital to be equal to the sum of its total equity. The Group monitors its capital using a number
of measures including cash flow projections, working capital ratios, the cost to achieve pre-clinical and clinical milestones
and pote
its capital is to ensure it obtains sufficient funding for continuing as a going concern. The Group funds its capital
requirements through the issue of new shares to investors, milestone and research support payments received from
existing licensing partners and potential new licenses.
Interest rate risk
ificant liquid resources.
The Group uses these resources to meet the cost of future research and development activities. Consequently, it seeks
to minimize risk in the holding of its bank deposits while maintaining a reasonable rate of interest. The Group is not
financially dependent on the income earned on these resources and therefore the risk of interest rate fluctuations is not
significant to the business. Nonetheless, the Directors take steps to secure rates of interest which generate a return for
the Group.
Credit and liquidity risk
Credit risk is managed on a Group basis. Funds are deposited with financial institutions with a credit rating equivalent
o the timing of
(between zero and three months) and the Group maintains adequate bank balances in either instant access or short-
term deposits to meet those liabilities as they fall due.
The Group only enters into collaboration agreements with large, reputable companies and the creditworthiness of
customers is monitored on an ongoing basis.
96
SILENCE THERAPEUTICS PLC
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected
loss allowance for all trade receivables. Expected loss rates are based on payment profiles of past receivables and the
aging profiles of outstanding balances at the reporting period end date. The historical loss rates are adjusted to reflect
current and forward-looking information on macroeconomic factors affecting the ability of the customer to settle the
receivables. At the year-end there were no debts that were past due or are expected to be past due. It was therefore
concluded on this basis that there were no expected credit losses for the trade receivable.
Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery includes, but is not limited to, a failure to engage in a repayment plan with the Group.
Currency risk
The Group operates in a global market with revenue possibly arising in a number of different currencies, principally in
US dollars, sterling or euros. The majority of the operating costs are incurred in euros with the rest predominantly in
sterling. Additionally, to a lesser extent, a number of operating costs are incurred in US dollars. The Group makes use
of forward contracts to reduce its exposure to foreign currency risk where the existence, timing and quantum of future
cash inflows can be accurately predicted.
Financial assets and liabilities denominated in euros and translated into sterling at the closing rate were:
Financial assets
Financial liabilities
Net financial assets/(liabilities)
2022
£000s
2,302
(1,279 )
1,023
Financial assets and liabilities denominated in US dollars and translated into sterling at the closing rate were:
Financial assets
Financial liabilities
Net financial assets/(liabilities)
2022
£000s
53,086
(2,947 )
50,139
2021
£000s
1,918
(3,278 )
(1,360 )
2021
£000s
11,248
(876 )
10,372
The following table illustrates the sensitivity of the net result for the year and the reported financial assets of the Group
in regard to the exchange rate for sterling against the euro.
During the year sterling rose by 1% (2021: 4%) against the euro. The table shows the impact of an additional weakening
or strengthening of sterling against the euro by 20%.
2022
Group result for the year
Euro denominated net financial liabilities
Total equity at 31 December 2022
As reported
£000s
If sterling
rose 20%
£000s
(40,489 )
1,023
22,072
(37,572 )
853
21,902
If sterling
fell 20%
£000s
(44,865 )
1,279
22,328
97
SILENCE THERAPEUTICS PLC
2021
Group result for the year
Euro denominated net financial liabilities
Total equity at 31 December 2021
(39,410 )
(1,360 )
8,526
(35,618 )
(1,133 )
8,753
(45,099 )
(1,700 )
8,186
98
SILENCE THERAPEUTICS PLC
The following table illustrates the sensitivity of the net result for the year and the reported financial assets of the Group
in regard to the exchange rate for sterling against the U.S. dollar.
During the year sterling rose by 10% (2021: 7%) against the US dollar. The table shows the impact of an additional
weakening or strengthening of sterling against the US dollar by 20%.
2022
Group result for the year
U.S. dollar denominated net financial assets
Total equity at 31 December 2022
2021
Group result for the year
U.S. dollar denominated net financial assets
Total equity at 31 December 2021
28. Notes to the cash flow statement
Changes in liabilities arising from financing activities
Lease liabilities
Total liabilities from financing activities
29. Related party transactions
As reported
£000s
If sterling
rose 20%
£000s
(40,489 )
50,139
22,072
(37,013 )
41,783
13,716
If sterling
fell 20%
£000s
(45,703 )
62,674
34,607
(39,410 )
10,372
8,526
(36,308 )
8,643
6,797
(44,063 )
12,965
11,119
Cash flows from
financing
activities
1 January
2022
£000s
137
137
Repayments
£000s
(190 )
(190 )
Non-cash flows
New lease
liabilities
£000s
499
499
31
December
2022
£000s
446
446
We have engaged in the following transactions with our directors, executive officers or holders of more than 10% of our
outstanding share capital and their affiliates, which we refer to as our related parties.
In 2022, we paid Gladstone Consultancy Partnership, a company controlled by our Non-Executive Chairman, £60
thousand for consulting and advisory services to be provided by Iain Ross (2021:nil). The amounts payable were settled
before the relevant year ends.
Key management are considered to be Directors of the Group.
Remuneration Committee Report.
compensation is discussed in the
30. Post Balance Sheet Events
There were no post balance sheet events as of the filing date.
99
SILENCE THERAPEUTICS PLC
31. Group companies
In accordance with Section 409 of the Companies Act 2006, a full list of subsidiaries, the address of the registered
offices and effective percentages of equity owned as at 31 December 2022 are disclosed below.
All subsidiaries are wholly owned.
Name
Silence Therapeutics GmbH
Silence Therapeutics (London) Ltd
Innopeg Ltd
Silence Therapeutics Inc.
Name
Silence Therapeutics GmbH
Silence Therapeutics (London) Ltd
Innopeg Ltd
Silence Therapeutics Inc.
Registered office address
Place of
incorporation
and operation
Principal
technology
area
Proportion of
ownership
interest
Robert-Rössle-Strasse 10, 13125 Berlin, Germany
27 Eastcastle Street, London, W1W 8DH
27 Eastcastle Street, London, W1W 8DH
0c/o Harvard Business Services Inc., 16192
Coastal Hwy, Lewes, DE 19958
RNA
Germany
England
England
therapeutics
Dormant
Dormant
RNA
100 %
100 %
100 %
USA
therapeutics
100 %
Exempt from
audit
Exempt from
filing financial
statements
Yes
Yes
Yes
Yes
No
No
No
No
100
SILENCE THERAPEUTICS PLC
Company balance sheet
at 31 December 2022
Non-current assets
Property, plant and equipment
Other intangible assets
Investment in subsidiaries
Financial assets at amortised cost
Current assets
Cash and cash equivalents
Derivative financial instrument
Financial assets at amortised cost term deposit
R&D tax credit receivable
Other current assets
Trade and other receivables
Non-current liabilities
Lease liability
Contract liabilities
Current liabilities
Contract liabilities
Trade and other payables
Lease liability
Total assets less liabilities
Net assets
Share capital
Capital reserves
Accumulated losses
Total equity
Note
C.5
C.5
C.6
C.8
C.7
C.8
C.9
C.10
C.12
C.13
C.13
C.11
C.12
C.14
2022
£000s
563
320
17,519
284
18,686
54,067
-
16,328
14,882
9,505
934
95,716
(263)
(63,485 )
(63,748 )
(8,864 )
(20,113 )
(183 )
(29,160 )
21,494
21,494
2021
£000s
208
24
16,387
284
16,903
73,272
-
-
6,945
5,214
843
86,274
-
(72,501 )
(72,501 )
(4,247 )
(14,960 )
(112 )
(19,319 )
11,357
11,357
5,390
277,676
(261,572 )
21,494
4,489
225,278
(218,410 )
11,357
The Company made a loss of £43.4 million in the year ended 31 December 2022 (2021: £42.3 million).
The financial statements on pages 101 to 113 were approved by the Board on 23 March 2023 and signed on its
behalf.
Craig Tooman
Chief Executive Officer
Company number: 02992058
The accompanying accounting policies and notes form an integral part of these financial statements.
101
SILENCE THERAPEUTICS PLC
Company statement of changes in equity
year ended 31 December 2022
At 1 January 2021
Recognition of share-based payments
Options exercised in the year
Proceeds from shares issued
Transactions with owners recognised directly in equity
Loss for the year
At 31 December 2021
Recognition of share-based payments
Options exercised in the year
Proceeds from shares issued
Transactions with owners recognised directly in equity
Loss for the financial year
At 31 December 2022
Note
C.14
C.14
C.14
Share
capital
£000s
4,165
-
-
324
324
4,489
-
-
901
901
-
5,390
Capital
reserves
£000s
186,707
8,632
(659 )
30,598
38,571
225,278
10,252
(192 )
42,338
52,398
-
277,676
Accumulated
losses
£000s
(176,788 )
-
659
-
659
(42,281 )
(218,410 )
-
192
-
192
(43,354 )
(261,572 )
The accompanying accounting policies and notes form an integral part of these financial statements.
Total
equity
£000s
14,084
8,632
-
30,922
39,554
(42,281 )
11,357
10,252
-
43,239
53,491
(43,354 )
21,494
102
SILENCE THERAPEUTICS PLC
Notes to the Company Financial Statements
Year ended 31 December 2022
C.1
General information
103
SILENCE THERAPEUTICS PLC
C.2
Basis of preparation
These financi
the recognition, measurement and presentation requirements of international accounting
standards in conformity with the requirements of the Companies Act 2006, but it makes amendments where necessary
in order to comply with the Act and take advantage of the FRS 101 disclosure exemptions.
As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions in relation to:
Business combinations
Share-based payment
Financial Instruments
Fair value measurement
Presentation of a Cash Flow Statement
Standards not yet effective
Impairment of assets
Related Party Transactions
The financial statements have been prepared under the historical cost convention as modified by revaluation to fair
value of the derivative financial instrument and on the going concern basis (see note 2 in the consolidated financial
statements). The financial statements are prepared in sterling, which is also the functional currency of the Company,
and presented to the nearest thousand pounds.
The principal accounting policies, which have been applied consistently, are as set out in note 2 of the consolidated
financial statements except those that are Company specific and noted below.
Going Concern
The Company has incurred recurring losses since inception, including net losses of £43.4 million for the year ended
December 31, 2022. As of December 31, 2022, the Company had accumulated losses of £261.6 million. The Company
expects to incur operating losses for the foreseeable future as it continues its research and development efforts, seeks
to obtain regulatory approval of its product candidates and pursues any future product candidates the Company may
develop.
To-date, the Company has funded its operations through upfront payments and milestones from collaboration
agreements, equity offerings and proceeds from private placements, as well as management of expenses and other
financing options to support its continued operations.
During 2021, the Company received $40.0 million (£30.8 million) of the upfront payments in respect of the AstraZeneca
collaboration, $45 million from a private placement of ADSs (approximately $42.0 million / £30.8 million, net of expenses)
and approximately $16.0 million (£10.7 million) of the upfront payment, (net of taxes withheld, based on the exchange
rate at the payment date), related to the Hansoh Pharmaceutical Group Company Limited or Hansoh, collaboration
executed on October 14, 2021. In August 2022 the Company raised additional funds through a registered direct offering
with aggregate gross proceeds of $56.5 million (approximately £46.4 million) before deducting $4.1 million
(approximately £3.3 million) in underwriting discounts, commissions and estimated offering expenses. As of December
31, 2022, the Company had cash and cash equivalents and U.S. Treasury Bills of £70.4 million.
104
SILENCE THERAPEUTICS PLC
The Company has the responsibility to evaluate whether conditions and/or events raise material uncertainty about its
ability to meet its future financial obligations as they become due within one year after the date that the financial
statements are issued. The forecast for evaluating the going concern basis of the Company includes continued
investment in our technology platform and product pipeline. The forecast does not include collaboration milestones
which have not been fully achieved or other assumptions for potential future non-dilutive or dilutive funding sources.
Based on this evaluation, the Company believes that its current cash and cash equivalents are only sufficient to fund its
operating expenses through the first quarter of 2024. This indicates that a material uncertainty exists that may cast
significant doubt on the Company
Company may be unable to
realize assets and discharge liabilities in the normal course of business.
The Company will need to raise additional funding to fund its operation expenses and capital expenditure requirements
in relation to its clinical development activities. The Company may seek additional funding through public or private
financings, debt financing or collaboration agreements. Specifically, the Company may receive future milestone
payments of up to $14 million from existing collaboration agreements in the next 12 months which will extend the ability
to fund operations beyond the first quarter of 2024. However, these future milestone payments are dependent on
achievement of certain development or regulatory objectives that may not occur. The Company has an authorized open
market sale agreement and can potentially raise funds through the sale of ADSs. However, there is no assurance that
we will be successful in obtaining sufficient funding on terms acceptable to us, or if at all. The inability to obtain future
funding could impact;
required to delay, reduce or eliminate some of its research and development programs, or being unable to continue
operations or unable to continue as a going concern.
These consolidated financial statements have been prepared assuming that the Company will continue as a going
concern which contemplates the continuity of operations, realization of assets and the satisfaction of liabilities in the
ordinary course of business and do not include adjustments that would result if the Company were unable to continue
as a going concern.
Investments in subsidiaries
Investments in subsidiaries comprise shares in the subsidiaries and quasi-equity loans from the Company. Investments
in shares of the subsidiaries are stated at cost less provisions for impairment in line with IAS 27 (Separate Financial
Statements). Quasi-equity loans are stated at amortised cost, net of expected credit losses in line with IFRS 9
(Classification and Measurement of Financial Instruments).
Critical accounting judgements and key sources of estimation uncertainty
best knowledge of current events and actions, actual results may ultimately differ from those estimates.
The critical judgements concerning the future, and other key sources of estimation uncertainty at the balance sheet
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are those relating to the following:
the application of IFRS 15 in determining revenue from contracts with customers specifically:
o
o
o
the determination of the number of performance obligations (judgement);
the allocation of the upfront payments between the performance obligations (judgement);
the estimate of the future costs to be incurred;
the carrying value of the investment in subsidiary undertakings as detailed in note C.6.
105
SILENCE THERAPEUTICS PLC
C.3
Income statement
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own income
statement in these financial statements.
C.4
Directors and staff costs
remuneration, during the year for the Company were as follows:
Wages and salaries
Social security costs
Share-based payments charge
Other pension costs
2022
£000s
10,249
743
10,252
415
21,659
2021
£000s
7,414
947
8,632
319
17,312
Remuneration detail for all Directors is presented in the Remuneration Committee report. See page 37 for further
details. The total remuneration of the highest paid director was £5.9 million (2021: £1.5 million)
The monthly average number of employees of the Company was as follows:
Research and development and associated support services
Administration
Total average number of employees
2022
Number
26
16
42
2021
Number
18
17
35
106
SILENCE THERAPEUTICS PLC
C.5
Property, plant and equipment
Cost
At 1 January 2021
Additions
Disposals
At 31 December 2021
At 1 January 2022
Additions
Disposals
At 31 December 2022
Accumulated depreciation
At 1 January 2021
Charge for the year
Eliminated on disposal
At 31 December 2021
At 1 January 2022
Charge for the year
Eliminated on disposal
At 31 December 2022
Net book value
As at 31 December 2021
As at 31 December 2022
Intangible Assets
Cost
At 1 January 2021
Additions
Disposals
Translation adjustment
At 31 December 2021
At 1 January 2022
Additions
Disposals
Translation adjustment
At 31 December 2022
Accumulated depreciation
At 1 January 2021
Charge for the year
Eliminated on disposal
Translation adjustment
At 31 December 2021
At 1 January 2022
Charge for the year
Eliminated on disposal
Translation adjustment
At 31 December 2022
Net book value
As at 31 December 2021
As at 31 December 2022
Equipment and
Right-of-use
furniture
£000s
asset
£000s
721
27
-
748
748
61
(70)
739
637
33
-
670
670
34
(70)
634
78
105
346
-
-
346
346
499
(346)
499
43
173
-
216
216
171
(346)
41
130
458
Licenses and
Software
£000s
Total
£000s
107
23
-
-
130
130
300
-
-
430
90
16
-
-
106
106
4
-
-
110
24
320
107
23
-
-
130
130
300
-
-
430
90
16
-
-
106
106
4
-
-
110
24
320
Total
£000s
1,067
27
-
1,094
1,094
560
(416)
1,238
680
206
-
886
886
205
(416)
675
208
563
107
SILENCE THERAPEUTICS PLC
C.6
Investments in subsidiaries
Company
Investment in subsidiary undertakings
2022
£000s
17,519
2021
£000s
16,387
The investment in subsidiary undertakings is made up as follows:
Shares and loans in subsidiary undertakings
At 1 January 2021
Movement in the year
At 31 December 2021
Movement in the year
At 31 December 2022
Investment
Quasi-equity
at cost
£000s
loan
£000s
Impairment
provision
(Investment)
£000s
Impairment
provision
(Loan)
£000s
Net total
£000s
23,713
-
23,713
-
23,713
36,058
(582)
35,476
1,132
36,608
(20,360 )
-
(20,360 )
-
(20,360 )
(22,442 )
-
(22,442 )
-
(22,442 )
16,969
(582 )
16,387
1,132
17,519
108
SILENCE THERAPEUTICS PLC
Investments at cost total of £23.7 million (2021: £23.7 million) are analysed as follows:
£23.3 million (2021: £23.3 million) relating to Silence Therapeutics GmbH.
£0.2 million (2021: £0.2 million) relating to Silence Therapeutics Inc.
The balance of the investments at cost of £0.2 million (2021: £0.2 million) relates to Innopeg Limited (2021: £0.1
million) and Silence Therapeutics (London) Limited (2021: £0.1 million).
Quasi-equity loans total of £36.6 million (2021: £35.5 million) are analysed as follows:
At 31 December 2022, an interest-bearing unsecured loan of £14.2 million (2021: £13.0 million) was outstanding
from Silence Therapeutics plc to Silence Therapeutics GmbH. The movement in the year includes a foreign
exchange gain of £0.7 million (2021: £0.6 million) and accrued interest of £0.4 million (2021: £0.3 million).
At 31 December 2022, a non-interest-bearing unsecured loan of £22.4million (2021: £22.4 million) was
outstanding from Silence Therapeutics plc to Silence Therapeutics (London) Ltd. This quasi-equity loan has
been fully provided for.
Impairment provision totalling £42.8 million (2021: 42.8 million) is analysed as follows:
£20.2 million (2021: £20.2 million) relating to Silence Therapeutics GmbH. In accordance with IAS 36
Impairment of Assets, the carrying value of the net investment in Silence Therapeutics GmbH of £3.4 million
(£3.4 million) has been assessed by comparing its carrying value to its recoverable amount. The recoverable
amount is based on value in use. A discounted cash flow model has been used to make this assessment and
management determined that there was no impairment. The model is prepared based on a 10 year forecast
which management consider to be an accurate measure of further cash flows. The discount rate used was
10.72% and resulting headroom was £12.9 million. Management has assessed that, if no milestones were to
be achieved in 2023 or 2024, this would result a reduction the headroom by of £2.4 million.
£0.2 million (2021: £0.2 million) relating to the investments held in Silence Therapeutics (London) Ltd and
Innopeg Ltd and they are not deemed to be recoverable.
Silence Therapeutics plc has recorded an impairment provision against the quasi-equity loans in Silence
Therapeutics (London) Ltd and Innopeg Ltd (2021: £22.4 million) as they are not deemed to be recoverable.
In considering the recoverability of the loan with Silence Therapeutics GmbH, management have applied an
expected credit loss methodology under IFRS 9 and calculated that a provision of £30 thousand is required
(2021: £30 thousand).
109
SILENCE THERAPEUTICS PLC
Subsidiary companies
The principal activity of all subsidiaries is the research and development of pharmaceutical products. All subsidiary
companies are consolidated in the
Name
Silence Therapeutics GmbH
Silence Therapeutics (London) Ltd
Innopeg Ltd
Silence Therapeutics Inc.
Name
Silence Therapeutics GmbH
Silence Therapeutics (London) Ltd
Innopeg Ltd
Silence Therapeutics Inc.
Registered office address
Place of
incorporation
and operation
Principal
technology
area
Proportion of
ownership
interest
RNA
Robert-Rössle-Strasse 10, 13125 Berlin, Germany
27 Eastcastle Street, London, W1W 8DH
27 Eastcastle Street, London, W1W 8DH
Germany
England
England
therapeutics
Dormant
Dormant
100 %
100 %
100 %
16192 Coastal Highway, Lewes, DE 19958, U.S.A.
USA
therapeutics
100 %
RNA
Exempt from
audit
Yes
Yes
Yes
Yes
Exempt from
filing financial
statements
No
No
No
No
C.7
Cash and cash equivalents
Cash at bank comprises balances held by the company in current and short-term bank deposits with an original maturity
of three months or less. The carrying amount of these assets approximates to their fair value.
Cash at bank and in hand
U.S. Treasury Bills
Short term bank deposits
Total Cash and cash equivalents
2022
£000s
41,237
12,376
454
54,067
2021
£000s
73,272
-
-
73,272
C.8
Financial assets at amortised cost
Non-current financial assets at amortized cost primarily relate to deposits for properties.
Current financial assets at amortized cost, other than trade receivables as disclosed in C.12, include U.S. Treasury
Bills (with maturities from purchase date over three months) of £16.3 million (2021: nil).
Current financial assets at amortised cost
Financial assets at amortised cost - non-current
Total financial assets at amortised cost
U.S.Treasury Bills
2022
£000s
16,328
284
16,612
2021
£000s
-
284
284
110
SILENCE THERAPEUTICS PLC
C.9
Other current assets
Prepayments
VAT receivable
Total other current assets
C.10 Trade and other receivables
Trade receivables
Amount receivable from subsidiary undertaking
Total trade and other receivables
2022
£000s
8,064
1,441
9,505
2022
£000s
915
19
934
2021
£000s
4,206
1,008
5,214
2021
£000s
331
512
843
The Directors consider that the carrying amount of trade receivables approximates to their fair value.
No interest is charged on outstanding receivables. There were no overdue trade receivables balances.
The Group has applied an expected credit loss model to the balance and determined that £nil (2021: £nil) provision is
required.
111
SILENCE THERAPEUTICS PLC
C.11 Trade and other payables
Trade payables
Amount payable to subsidiary undertaking
Social security and other taxes
Accruals and other payables
Total trade and other payables
2022
£000s
3,105
9,356
379
7,274
20,114
2021
£000s
3,535
5,978
254
5,193
14,960
The Directors consider that the carrying amount of trade and other payables approximates to their fair value. Amounts
payable to subsidiary undertakings are interest free and unsecured.
C.12 Lease liability
Lease liability - current
Lease liability non-current
Total lease liability
2022
£000s
183
263
446
2021
£000s
112
-
112
In 2022 the lease liability recognised on the face of the balance sheet comprises of the
repayment of the principal portion of these lease liabilities for the year-ending 31 December 2022 was £0.2 million (2021:
£0.2 million).
C.13 Contract liabilities
Contract liabilities comprise entirely deferred revenue in respect of the Mallinckrodt, AstraZeneca plc, and Hansoh
research collaborations.
Contract liabilities
Contract liabilities
current
non-current
2022
£000s
8,864
63,485
72,349
2021
£000s
4,247
72,501
76,748
112
SILENCE THERAPEUTICS PLC
C.14 Capital reserves
The capital redemption reserve was created in 2012 following the reduction of nominal share capital to 0.1p per share.
It is required under Section 733 of the Companies Act 2006, held to maintain the capital of the Company when shares
are bought back and subsequently cancelled without court approval.
Due to the size of the deficit on the accumulated losses account, the Company has no distributable reserves.
The share premium account reflects the premium to nominal value paid on issuing shares less costs related to the issue.
The merger reserve was created on issuance of shares relating to the acquisition of Silence Therapeutics GmbH.
Share
premium
account
£000s
153,734
32,585
-
460
(2,447)
30,598
184,332
45,533
-
153
Merger
reserve
Share-based
payment reserve
Capital
redemption
reserve
£000s
22,064
-
-
-
-
22,064
-
-
-
£000s
5,715
-
8,632
(659 )
£000s
5,194
-
-
-
7,973
13,688
-
10,252
(192 )
-
5,194
-
-
-
(3,348)
42,338
226,670
-
-
22,064
10,060
23,748
-
5,194
Total
£000s
186,707
32,585
8,632
(199 )
(2,447)
38,571
225,278
45,533
10,252
(39 )
(3,348)
52,398
277,676
At 1 January 2021
Shares issued
On options in issue during the year
On options exercised during the year
Costs capitalised in respect of issuance of shares during the
period.
Movement in the year
At 31 December 2021
Shares issued
On options in issue during the year
On options exercised during the year
Costs capitalised in respect of issuance of shares during the
period.
Movement in the year
At 31 December 2022
C.15 Related party transactions
We have engaged in the following transactions with our directors, executive officers or holders of more than 10% of our
outstanding share capital and their affiliates, which we refer to as our related parties.
In 2022, we paid Gladstone Consultancy Partnership, a company controlled by our Non-Executive Chairman, £60
thousand for consulting and advisory services to be provided by Iain Ross (2021: nil). The amounts payable were settled
before the relevant year ends.
C.16
Post balance sheet events
There were no post balance sheet events as of the filing date.
113
SILENCE THERAPEUTICS PLC
Company Information and Advisers
Secretary
Sarah Murphy
Registered Office
27 Eastcastle Street
London W1W 8DH,
United Kingdom
Registered Number
02992058
Registrar
Link Asset Services
65 Gresham Street
London EC2V 7NQ,
United Kingdom
Independent Auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
The Maurice Wilkes Building
Cambridge CB4 0DS
United Kingdom
Legal Adviser
Cooley (UK) LLP
22 Bishopsgate
London EC2N 4BQ
United Kingdom
Silence Trademarks
Silence
Silence Therapeutics
The Silence Therapeutics logo
AtuRNAi
mRNAi GOLD
114
SILENCE THERAPEUTICS PLC
Silence Therapeutics plc
United Kingdom
72 Hammersmith Road
London, W14 8TH
+44(0)20 3457 6900
Germany
Robert-Rossle-Str.10
D-13125 Berlin
+49 30 9489 2800
United States
221 River Street
9th Floor
Hoboken, NJ 07030
www.silence-therapeutics.com