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Silence Therapeutics Annual Report 2023
SILENCE THERAPEUTICS PLC
Contents
1
Strategic report
2
Governance
Board of Directors
Corporate Governance Report
Audit and Risk Committee Report
Remuneration Committee Report
Directors’ Report
3
Financial Statements
Independent Auditors’ Report to the Members of Silence Therapeutics plc
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
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Strategic Report
Business Overview
Silence Therapeutics plc (“we”, “us”, “our”, “the Company” or “Silence”) 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
need. Our siRNA molecules are designed to harness the body’s natural mechanism of RNA interference, or RNAi, by
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-
associated protein production and activity is referred to as “gene silencing.” Our proprietary mRNAi GOLD™ (GalNAc
Oligonucleotide Discovery) platform consists of precision-engineered medicines designed to accurately target and
‘silence’ specific 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.
Zerlasiran (SLN360), an siRNA targeting the LPA gene, is our wholly owned product candidate in phase 2 clinical
development to reduce high levels of lipoprotein(a), or Lp(a). High Lp(a) is a genetically determined cardiovascular risk
factor affecting up to 20% of the world’s population and is associated with a high risk of heart attack, stroke and aortic
stenosis. There are currently no approved medicines that selectively lower Lp(a). In February 2022, we reported positive
results from the single-ascending dose portion of the APOLLO phase 1 program evaluating zerlasiran in 32 healthy
adults with high Lp(a) ≥150 nmol/L. In the single dose trial, participants in the top two zerlasiran single dose groups (300
mg and 600 mg) were observed to have experienced up to a 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. Further analysis showed
median time-averaged Lp(a) reductions over 150 days exceeded 80% in the zerlasiran 300 mg and 600 mg dose groups.
At day 365, some participants still exhibited substantial knockdown of Lp(a) to approximately 50% of baseline. Zerlasiran
was well tolerated with no serious safety concerns reported. In November 2023, we reported positive topline results
from the multiple dose portion of the APOLLO program in 36 adults with baseline Lp(a) levels ≥150 nmol/L and stable
atherosclerotic cardiovascular disease (ASCVD). In the multiple dose trial, zerlasiran (200 mg, 300 mg and 450 mg)
was administered twice subcutaneously at two different dosing intervals. Data demonstrated a significant reduction from
baseline in Lp(a) of up to 99% at 90 days following injection of repeated doses. Lp(a) levels remained approximately
90% lower than baseline at 201 days (end of treatment period) at the two highest doses. A dose dependent reduction
in low-density lipoprotein cholesterol (LDL cholesterol) and apolipoprotein B (ApoB) was also observed. Zerlasiran was
well tolerated; no clinically important safety concerns were identified. Zerlasiran is currently being evaluated in the fully
enrolled ALPACAR-360 phase 2 study in patients with Lp(a) levels 125 nmol/L at high risk of ASCVD events. We expect
to report topline 36-week data in the first quarter of 2024 (primary endpoint) and topline 48-week data in the second
quarter of 2024. We are currently finalizing the design of our phase 3 Clinical Outcomes Trial. We continue to engage
in global partnership discussions for future zerlasiran development and for potential future commercialization.
Divesiran (SLN124), an siRNA targeting the TMPRSS6 gene, is our wholly owned product candidate that has shown
the potential to address a range of hematological conditions by modulating endogenous hepcidin, a peptide hormone
that is the master regulator of systemic iron balance. Divesiran has FDA Fast Track and orphan disease designations
for polycythemia vera, or PV, and is currently being evaluated in the SANRECO phase 1/2 trial in patients with PV. We
plan to report data from the phase 1 portion of the study in the first half of 2024. Divesiran has demonstrated proof of
mechanism in the GEMINI phase 1 trial in healthy volunteers completed in May 2021. In the GEMINI study, divesiran
was observed to increase average hepcidin approximately four-fold and reduce serum iron by approximately 50% after
a single dose with effects persisting for at least two months. Data were presented at the American Society of Hematology
(ASH) 2021 Annual Meeting and published in the American Journal of Hematology in July 2023.
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 14 pipeline programs and approximately $5.5 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
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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.
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, for which they were awarded the 2006 Nobel Prize
in Physiology or Medicine. 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 recognized 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 of targeted mRNAs due to the catalytic nature of the cell’s RNAi machinery.
Because the 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 zerlasiran and divesiran programs, 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 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 internalized in those cells, with those not internalized being
excreted. Once internalized, the siRNAs specifically bind to their target mRNAs, degrading them through the cell’s
natural RNAi 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 zerlasiran. In preclinical studies and our phase 1 single-
ascending dose study, zerlasiran 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 clinical
trial in healthy volunteers, divesiran was shown to indirectly up-regulate hepcidin levels by reducing the expression of
a specific gene, TMPRSS6, which normally inhibits the production of hepcidin. We will use this approach to address
‘iron loading’ anemia 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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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; and
• 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 centers 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 reaches the hepatocytes, they are internalized into the cells where siRNA can
bind and, as a result, can degrade the target mRNA, which in turn reduces production of the encoded protein and that
protein’s activity, 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 favorable 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 human genetics
evidence, 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.
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.
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*Silence retains exclusive rights to this programme outside of the China region, which includes Hong Kong, Macau and Taiwan.
Our siRNA Product Candidates
Zerlasiran (SLN360)
Overview
Zerlasiran 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 ischemic stroke. Zerlasiran is administered by subcutaneous injection and 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 protein specifically found in Lp(a). Zerlasiran’s mode of
action creates an opportunity to develop this product candidate for several indications for which Lp(a) has been shown
to be a causal, independent risk factor.
Elevated levels of Lp(a) ≥ 125 nmol/L or approximately 50mg/dL is considered to affect up to 20% of the world’s
population. The incidence of elevated 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 ischemic 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, ischemic 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.
In the APOLLO phase 1 program evaluating healthy adults and ASCVD patients with high Lp(a) levels ≥ 150 nmol/L,
zerlasiran was well tolerated and observed to significantly reduce Lp(a) levels up to 99% with strong durability. Zerlasiran
is currently being evaluated in the ALPACAR-360 phase 2 clinical trial in subjects with high Lp(a) ≥ 125 nmol/L at high
risk of ASCVD events.
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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 centers 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 apolipoprotein B (ApoB) 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, randomization 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.
APOLLO Phase 1 Clinical Program
The APOLLO phase 1 clinical program was a global randomized, double-blind, placebo controlled, single-
ascending dose and multiple-ascending dose study investigating the safety, tolerability, pharmacodynamic and
pharmacokinetic response of zerlasiran administered subcutaneously in healthy adults and ASCVD patients with high
Lp(a) levels of approximately ≥ 60mg/dL or ≥ 150 nmol/L.
In February 2022, we reported positive results from the single-ascending dose portion of the APOLLO phase 1
program in 32 healthy adults with high Lp(a) ≥ 150 nmol/L. In April 2022, results were simultaneously presented in a
late-breaking presentation at the ACC Annual Meeting and published in JAMA. In the single dose trial, participants in
the top two dose groups (300 mg and 600 mg) were observed to have experienced up to a 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
zerlasiran on low-density lipoprotein cholesterol (LDL cholesterol) and ApoB, both of which are associated with an
increased risk of cardiovascular events. The highest doses of zerlasiran reduced LDL cholesterol and ApoB by about
25%. Zerlasiran 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 at the American Heart Association 2022 Annual Meeting. The
analysis showed median time-averaged Lp(a) reductions over 150 days exceeded 80% in the zerlasiran 300 mg and
600 mg dose groups. At day 365, some participants still exhibited substantially reduced levels of Lp(a) of
approximately 50% compared to baseline. Additionally, extension data to day 365 showed no new drug related safety
findings.
In November 2023, we reported positive topline results from the multiple-ascending dose portion of the APOLLO
program in 36 adults with stable ASCVD and high Lp(a) ≥150 nmol/L. In the multiple dose trial, zerlasiran (200 mg,
300 mg and 450 mg) was administered twice subcutaneously at two different dosing intervals. Data demonstrated a
significant reduction from baseline in Lp(a) of up to 99% at 90 days following injection of repeated doses. Lp(a) levels
remained approximately 90% lower than baseline at 201 days (end of treatment period) at the two highest doses. A
dose dependent reduction in low-density lipoprotein cholesterol (LDL cholesterol) and apolipoprotein B (ApoB) was
also observed. Zerlasiran was well tolerated; no clinically important safety concerns were identified.
ALPACAR-360 Phase 2 Clinical Program
The ALPACAR-360 phase 2 clinical trial is a randomized, double-blind, placebo-controlled trial enrolling
approximately 160 patients with high Lp(a) ≥ 125nmol/L at high risk of ASCVD events. The primary endpoint is time
averaged change in Lp(a) from baseline. The study is fully enrolled and we expect to report topline 36-week data
(primary endpoint) in the first quarter of 2024 and topline 48-week data in the second quarter of 2024.
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Divesiran (SLN124)
Overview
Divesiran is an siRNA molecule designed for the treatment of genetic hematological conditions, including
polycythemia vera (PV). PV is a myeloproliferative neoplasm characterized by the overproduction of blood cells and
platelets. Elevated hematocrit is a hallmark of the disease, indicating the overproduction of red blood cells. Patients with
hematocrit between 45-50% are four-times more likely to die from cardiovascular causes or major thrombotic events
than those with hematocrit less than 45%. PV is a rare disease affecting approximately 150,000 in the U.S. and around
3.5 million worldwide.
Divesiran is administered subcutaneously and works by specifically binding to and inducing RNAi-mediated
degradation of mRNAs made from the TMPRSS6 gene. TMPRSS6 is a negative regulator of hepcidin, which is the main
hormone controlling iron homeostasis in the body. In PV, red blood cells are over-produced as a form of cancer, causing
an increase in total red blood cell mass and overall blood thickness/stickiness as well as iron deficiency that adversely
affects other cell types. Lowering levels of the TMPRSS6 protein could increase hepcidin production, restricting iron
availability to reduce red cell mass, hemoglobin levels, and hematocrit, as well as reallocate iron to normal functions.
Divesiran demonstrated proof of mechanism in the GEMINI phase 1 trial in healthy volunteers completed in May
2021. In the GEMINI study, divesiran was observed to increase average hepcidin approximately four-fold and reduce
serum iron by approximately 50% after a single dose with effects persisting for at least two months. Data were presented
at the American Society of Hematology (ASH) 2021 Annual Meeting and published in the American Journal of
Hematology in July 2023. Divesiran has FDA Fast Track and orphan disease designations for PV, and is currently being
evaluated in the SANRECO phase 1/2 trial in PV patients.
Disadvantages of existing treatment options
The primary treatment goal in PV is to reduce the risk of thrombotic events by reducing hematocrit (the percent
volume of red blood cells in the blood) 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 hematocrit, 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, divesiran 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 divesiran to be dosed monthly, or less frequently, bringing additional value to patients.
GEMINI Trial
The GEMINI trial was a randomized, double-blind, placebo controlled, single-ascending dose study to investigate
the safety, tolerability, PK and PD response of divesiran (1.0, 3.0 and 4.5 mg/kg doses) administered subcutaneously
in 24 healthy volunteers. 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.
• Divesiran 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. Divesiran plasma concentrations increased in a greater than dose-
linear fashion between dosing groups.
• All divesiran 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.
GEMINI II Phase 1 Program
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The GEMINI II phase 1 trial evaluated divesiran in non-transfusion dependent thalassemia patients. In the study,
divesiran was well tolerated with no safety issues identified. While proof of mechanism has been established in healthy
volunteers, the effects on indicators of iron metabolism were variable in this study population of heterogeneous
thalassemia subjects. We are prioritizing R&D efforts on the ongoing PV program and do not have plans to advance
development in thalassemia at this time.
SANRECO Phase 1/2 Program
The SANRECO phase 1/2 trial is a two-part clinical trial which includes a phase 1 open-label, dose finding trial
followed by a phase 2 randomized, double-blind, placebo-controlled parallel arm study of divesiran in PV patients. The
trial is expected to enroll 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. We plan to report data from the phase
1 portion of the study in the first half of 2024.
Collaborations
AstraZeneca
In March 2020, we entered into a collaboration agreement with AstraZeneca to discover, develop and commercialize
siRNA therapeutics for the treatment of cardiovascular, renal, metabolic and respiratory diseases. Under this agreement,
AstraZeneca made an upfront cash payment to us of $20.0 million in May 2020. AstraZeneca made an additional
unconditional cash payment to us of $40.0 million which was received in May 2021. In March 2020, an affiliate of
AstraZeneca also subscribed for 4,276,580 new ordinary shares for an aggregate subscription price of $20.0 million.
The collaboration covers five targets initially, with AstraZeneca having the option to extend the collaboration to a
further five targets. AstraZeneca has agreed to pay us $10.0 million upon the exercise of each option to collaborate on
an additional target. In May 2023, AstraZeneca nominated the first product candidate under our collaboration, triggering
a $10 million option fee to us to advance development on an undisclosed program. For each target selected, we will be
eligible to receive up to $140.0 million in potential 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 $250.0 million in potential
commercial milestone payments, upon the achievement of specified annual net sales levels, as well as tiered royalties
as a percentage of net sales ranging from the high single digits to the low double digits.
Mallinckrodt
In July 2019, we entered into a collaboration agreement with Mallinckrodt to develop and commercialize RNAi drug
targets designed to silence the complement cascade in complement-mediated disorders. In connection with the
execution of this agreement, Mallinckrodt made an upfront cash payment to us of $20.0 million (equivalent to £16.4
million as of the payment date). Under a separate subscription agreement, Cache Holdings Limited, a wholly owned
subsidiary of Mallinckrodt, concurrently subscribed for 5,062,167 new ordinary shares for an aggregate subscription
price of $5.0 million (equivalent to £4.0 million as of the payment date). Under the agreement, we granted Mallinckrodt
an exclusive worldwide license to our C3 targeting program, SLN501, with options to license two additional undisclosed
complement-mediated disease targets from us. In July 2020, Mallinckrodt exercised options on the two additional
complement targets.
In March 2023, we reacquired exclusive worldwide rights from Mallinckrodt to the two undisclosed preclinical
complement targets. Under the terms of the modified agreement, we did not make any upfront payment to get the two
assets back and will potentially pay future success-based milestones and low single digit royalties on net sales if the
projects advance. SLN501, the C3 targeting program, remained under the original collaboration agreement. In March
2024, Mallinckrodt notified us that they will not pursue further development of SLN501 following the completion of the
phase 1 clinical trial. This will conclude all activities and commitments under the collaboration agreement.
Hansoh
In October 2021, we announced a collaboration agreement with Hansoh, one of the leading biopharmaceutical
companies in China, to develop siRNAs for three undisclosed targets leveraging our proprietary mRNAi GOLD™
platform. Under the terms of the agreement, Hansoh will have the exclusive option to license rights to the first two targets
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in Greater China, Hong Kong, Macau and Taiwan following the completion of phase 1 trials. We will retain exclusive
rights for those two targets in all other territories. We will be responsible for all activities up to option exercise and will
retain responsibility for development outside the China region post phase 1 trials. 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. In 2023, we
achieved two additional preclinical milestones and received $4 million from the collaboration. 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.
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SILENCE THERAPEUTICS PLC
Financial Review
Revenue
Revenue for the year ended December 31, 2023 was £25.4 million (2022: £17.5 million). The increase was primarily
due to the advancement of targets in our AstraZeneca, and Hansoh collaborations which delivered £14.3 million to us
in 2023 and £10.5 million from acquisition of the exclusive worldwide rights to two preclinical siRNA assets under the
Mallinckrodt collaboration which resulted in a contract modification. (2022: £16.9 million).
In March 2023, the Company reacquired exclusive worldwide rights to two preclinical siRNA assets under its Mallinckrodt
collaboration, which resulted in a modification of the agreement. No additional performance obligations were identified
as a result of the modification as there were no additional goods or services to be provided by the Company and the
modification resulted in the partially satisfied performance obligations relating to the two reacquired targets becoming
fully satisfied as the Company was no longer obligated to develop these targets. SLN501, the C3 targeting program,
remained under the original collaboration agreement through March 2024. The Company accounted for the modification
as if it were part of the existing contract as the remaining services to be delivered form part of a single performance
obligation that is partially satisfied at the date of contract modification. The effect of the contract modification was that
the consideration originally received for the two preclinical siRNA assets was reallocated to SLN501. The Company
recognized the effect of the contract modification on the measure of progress towards complete satisfaction of the
SLN501 performance obligation, and recognized an adjustment to revenue at the date of the contract modification on a
cumulative catch-up basis. The Company recognized £8.0 million on the contract modification date. In relation to the
reacquired targets, the two preclinical siRNA assets were recognized at fair value. The fair value of those assets has
been determined to be nil. Under the modification, the Company agreed to pay future success-based milestones and
low single digit royalties on net sales if the projects advance. The Company will recognize these variable success-based
milestones as an intangible asset at cost when triggered. Any royalties payable will be expensed in cost of sales.
Cost of Sales
Cost of sales consists of research and development expenditure that is directly related to work carried out on revenue
generating contracts, which decreased to £10.3 million for the year ended December 31, 2023 (2022: £10.9 million).
There were no costs associated with revenue recognized as a result of the Mallinckrodt collaboration contract
modification. The remaining change is due to activity associated with our collaboration agreements, which fluctuate
based on the timing of activities and project progression.
Research and Development Expenses
Research and development costs for the year ended December 31, 2023 were £44.0 million as compared to £35.6
million for the year ended December 31, 2022. Contract development costs increased by £8.4 million from 2022 as a
result of additional clinical trials and an increase in contract manufacturing activities for our proprietary programs.
Personnel costs also increased by £1.2 million from 2022 associated with the increase of headcount related to the
addition of new R&D programs.
General and Administrative Expenses
General and administrative expenses were £20.6 million for the year ended December 31, 2023 as compared to £19.6
million for the year ended December 31, 2022. The increase is mainly due to a £2.8 million increase in equity-based
compensation related to new grants in the current period offset by a reduction of other general and administrative costs
including severance, insurance, and legal costs as we continue to benefit from efficiencies gained and the monitoring
of administrative costs.
Finance and Other Income (Expense)
Finance income primarily relates to accretion from U.S. Treasury Bills. For the year ended December 31, 2023 this was
£1.4 million compared with £0.2 million for the same period in 2022. There were no related foreign exchange gains in
the year ended December 31, 2023 compared with a gains of £1.0 million in the same period in 2022. Net foreign
exchange gains and losses result primarily from foreign currency (Euro and USD) denominated bank accounts.
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SILENCE THERAPEUTICS PLC
Finance expense for the year ended December 31, 2023 primarily relates to foreign exchange losses of £2.1 million
compared with nil for the same period in 2022.
Taxation
During 2023 and 2022, we have recognized U.K. research and development tax credits of £7.8 million and £7.4 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, 2023, we had cash and cash equivalents of £54.0 million ($68.8 million). In 2023, we raised net
proceeds of approximately $32 million (approximately £25.5 million), before deducting £1.0 million in placement agent
fees and other expenses from its open market sale agreement.
In January 2024, we raised additional proceeds of £15.7 million ($20 million) before deducting £0.5 million ($0.6 million)
in placement agent fees and other expenses, from sales of ADSs under our Sales Agreement.
On February 5, 2024 we announced a private placement of 5,714,286 of our ADSs, each representing three ordinary
shares, at a price of US $21.00 per ADS, with new and existing institutional and accredited investors (the “Private
Placement”). The aggregate gross proceeds of the Private Placement was US $120 million (approximately £94.5 million)
before deducting approximately £5.7 million in placement agent fees and other expenses.
Key performance Indicators (“KPIs”)
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: £54.0 million (2022: £71.1 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 of the Company (the “Board”) 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:
• We will require additional financial resources to continue the ongoing development of our product candidates
and pursue our business objectives. If we are unable to obtain these additional resources when needed, we
may be forced to delay or discontinue our planned operations, including clinical testing of our product
candidates.
• 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.
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SILENCE THERAPEUTICS PLC
• 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.
Inflation may adversely affect our operations, including increases in the prices of goods and services required
for our operations.
Corporate Social Responsibility
Our vision is to transform peoples’ lives around the world by silencing diseases through our precision engineered
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 for which there are currently limited or no treatments. During 2023, Silence’s potential treatments
continued to progress:
• Zerlasiran: Announced positive results from the APOLLO phase 1 multiple-ascending dose study and fully
enrolled patients in the ALPACAR-360 phase 2 study in patients with high Lp(a) at high risk of ASCVD events.
• Divesiran: Initiated enrolment in the SANRECO phase 1/2 study in polycythaemia vera patients.
We are committed to creating inclusive policies and equal opportunities for our current generation, while encouraging
the future generation of scientists who will deliver tomorrow’s medical breakthroughs.
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SILENCE THERAPEUTICS PLC
Greenhouse Gas Report
Period
Year ended December 31, 2023
Year ended December 31, 2022
metric tons of CO2 equivalent
emissions
metric tons of CO2 equivalent
emissions
Estimated greenhouse gas emissions from
our own activities, including the
combustion of fuel and the operation of
our facilities
Estimated greenhouse gas emissions from
our own activities, including the
combustion of fuel and the operation of
our facilities
Total estimated greenhouse gas
emissions
Intensity ratio: Total greenhouse gas
emissions per employee on the basis
of the average number of 115 full-
time equivalent employees during the
year ended 2023 (2022: 116)
-
112
112
0.97
-
224
224
1.93
We have used the most recent estimates provided by our energy supply partners to generate our disclosures of
emissions for the period. These include the purchase of electricity, heat, steam, or cooling. Standard emissions factors
from the “UK Government CHG Conversion Factors for Company Reporting 2023” guidance was applied in order to
estimate emissions. The group considers the intensity ratio of tonnes of carbon dioxide per full time equivalent
employees is a suitable metric for its operations.
Electricity usage at our leased facilities in the United States, Germany, and the United Kingdom drive the majority of our
gas emissions. The Group’s estimated electricity usage for the reporting period is 543,000 kWh (an estimated 112 metric
tons of CO2 equivalent emissions), with 13% of that estimated usage occurring in the United Kingdom.
As a matter of course, the group actively looks to minimise indirect areas of emissions by enabling remote working and
promoting online conferencing facilities to reduce business travel.
Employees
We are proud to say that in 2023 Silence maintained its ‘Great Place to Work’ status in the UK and Berlin and was
certified in the United States. We have focused on building a diverse and inclusive culture in which upward
communication and feedback is valued and encouraged. Silence recognizes that flexibility positively impacts employee
productivity, commitment, and loyalty and believes 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 also provide several other health and wellbeing programmes to our employees. For example, we provide for all
employees to have a subscription to the app-based wellbeing programme called Headspace. We also provide an
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SILENCE THERAPEUTICS PLC
Employee Assistance program with the aim to give people access to 24/7 advice and help in personal and work-related
matters.
Environment
We are monitoring our production processes and investigating new ways to increase the efficiency and reduce the mass
intensity. In addition, we have issued company recommendations to reduce individual employee’s environmental impact
and better work-from-home practices.
Gender of Directors and Employees
As of 31 December 2023, we had 109 employees. Of these employees, 82 employees are engaged in research and
development activities and 27 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 2023 is as follows:
Gender Identity
Directors*
Senior Leadership**
Other employees
Female
Male
Non-Binary
-
6
50
1
7
46
Did Not
Disclose
Gender
-
-
-
-
-
-
*Of the Directors, there is one executive director, that is 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 23. The Company has a frequent
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SILENCE THERAPEUTICS PLC
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.
• Suppliers
The Company’s supply chain is crucial to the project work that is being undertaken; policies are in place to
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.
This ensures that the Company’s and our significant suppliers’ interests are aligned.
• Employees
The Board has a good relationship with the Company’s employees. The Board maintains productive interactions
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 32.
• 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 continue to review and improve on the Company’s engagement with its stakeholders.
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 six accomplished members, one Executive and five 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 served as our Non-Executive Chairman since September 2020 after serving as Executive Chairman
from December 2019 to September 2020. He previously served as our Non-Executive Chairman from April 2019 to
December 2019 and as our Chairman from 2004 to 2010. Mr. Ross has experience in the international life sciences
and 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). He also 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
Craig Tooman
Executive Director
Appointed February 2022
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. 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 program. He
earned his MBA in finance from the University of Chicago.
Areas of Expertise
Leadership, Global Commercialisation, Strategy, Business Development, Biotech build
Dave Lemus
Non-Executive Director
Appointed June 2018
Dave Lemus has served as a member of our Board since June 2018. He also currently serves as a non-executive
director of Scilex Holding Company (Nasdaq: SCLX), Sorrento Therapeutics Inc. (OTC: SRNEQ), BioHealth
Innovation, Inc., and miRecule Inc., where he also presently serves as the Chief Operating Officer & Chief Financial
Officer. Additionally, he is currently the Chief Executive Officer of LEMAX LLC since 2017. Positions prior to this
include serving as Chief Executive Officer of Ironshore Pharmaceuticals Inc, Chief Financial Officer and Chief
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SILENCE THERAPEUTICS PLC
Operating Officer of Medigene AG, Chief Executive Officer of Sigma Tau Pharmaceuticals, Inc., and Chief Financial
Officer of MorphoSys AG, where he launched Germany’s first biotech IPO in 1999. Prior to these positions he served
as the Treasurer of Lindt & Spruengli AG, and in various management positions within F. Hoffman-LaRoche AG. Mr.
Lemus received an M.S. from the Massachusetts Institute of Technology and a B.S. in accounting from the University
of Maryland College Park. He is also presently an active certified public accountant licensed in the State of Maryland.
Areas of Expertise
Drug Commercialisation, Strategic Partnerships, Corporate Financing
James Ede-Golightly
Non-Executive Director
Appointed April 2019
James Ede-Golightly has served as a member of our board of directors since April 2019. Mr. Ede-Golightly is currently
Chairman of Oxehealth Ltd, Oxeco Ltd and ORA Global Ltd. Among other directorships, Mr. Ede-Golightly is also
Non-Executive Director of Sarossa plc. 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
Alistair Gray
Senior Independent Non-Executive Director
Appointed November 2015
Alistair Gray has served as a member of our board of directors since November 2015 and was appointed as Senior
Independent Director in December 2019. Mr. Gray currently serves as non-executive director/chair of the Edrington
Group’s Employee Benefit Trust, chair of the Scottish Enterprise’s Pension Trustee Board and Life Assurance
Scheme Trustee Board and Forumm (448 Studio) as well as a 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 Management Consultants (now EY) 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 a Visiting
Professor at the University’s Design Manufacturing and Engineering Management department. He is also a Visiting
Professor at Loughborough University London, University of Liverpool and the University of Stirling.
Areas of Expertise
Strategic management, Organisation Performance and Governance
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SILENCE THERAPEUTICS PLC
Michael Davidson, MD
Non-Executive Director
Appointed January 2021
Michael H. Davidson, M.D. FACC, FNLA, has served as a member of our board of directors since January 2021. Dr.
Davidson is Professor of Medicine and Director of the Lipid Clinic at the University of Chicago. He also serves as the
Chief Executive Officer of New Amsterdam Pharma Company N.V. (Nasdaq: NAMS) which was listed on Nasdaq in
November 2022. Dr. Davidson is a leading expert in the field of Lipidology. He has conducted over 1,000 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. He is also an independent director of Nasdaq-listed
Tenax Therapeutics, Inc. (Nasdaq: TENX) and serves on the board of two private biotech companies, Sonothera and
NanoPhoria Bioscience. 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
years and “Father of the Year” by the American Diabetes Association, 2010.
Areas of Expertise
Lipidology and Clinical Development
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SILENCE THERAPEUTICS PLC
Chairman’s Statement
Introduction
The Group’s strategy 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 made excellent progress advancing both our wholly owned and partnered portfolios, positioning
Silence for multiple clinical data readouts in 2024.
mRNAi GOLD™ Proprietary Programmes
Zerlasiran for cardiovascular disease
Zerlasiran is our lead wholly owned siRNA in phase 2 development for high lipoprotein(a), also known as “Lp(a)”,
a key cardiovascular risk factor that is almost entirely genetically determined. This means that unlike other cardiac risk
factors, Lp(a) can’t be modified by diet or exercise. High Lp(a) is considered to affect up to 1.4 billion people
worldwide, or around 20% of the world’s population. It’s associated with a high risk of heart attack, stroke and aortic
stenosis. You need pharmacological intervention to manage high Lp(a) and currently there are no approved therapies
that selectively lower Lp(a). We believe zerlasiran has the potential to address this major unmet need in
cardiovascular disease.
APOLLO Phase 1 Clinical Programme
In November 2023, we reported positive topline results from the multiple-ascending dose portion of the APOLLO
study in 36 adults with stable ASCVD and high Lp(a) ≥150 nmol/L. In the multiple dose trial, zerlasiran (200 mg, 300
mg and 450 mg) was administered twice subcutaneously at two different dosing intervals. Data demonstrated a
significant reduction from baseline in Lp(a) of up to 99% at 90 days following injection of repeated doses. Lp(a) levels
remained approximately 90% lower than baseline at 201 days (end of treatment period) at the two highest doses. A
dose dependent reduction in low-density lipoprotein cholesterol (LDL cholesterol) and apolipoprotein B (ApoB) was
also observed. Zerlasiran was well tolerated; no clinically important safety concerns were identified. These data
supported results from the single dose portion of the APOLLO study which we presented in 2022.
ALPACAR-360 Phase 2 Clinical Programme
In January 2023, we started dosing subjects in the ALPACAR-360 phase 2 study evaluating zerlasrian in subjects
with high Lp(a) ≥125 nmol/L at high risk of ASCVD events. We completed enrollment within four months, highlighting
the medical community’s strong interest in and the potential impact of zerlasiran. We expect to report topline 36-week
data (primary endpoint) in the first quarter of 2024.
The clinical data we’ve generated to-date support our firm belief that zerlasiran is poised to be a major player in
the emerging Lp(a) space with multi-billion-dollar potential. The multiple dose data triggered new interest from
partners, and we are continuing to evaluate best options for future development and potential commercialization. Our
priority is to ensure we maximize the value of this important asset for Silence shareholders and patients.
Divesiran for haematological diseases
Divesiran is our second wholly owned siRNA that has shown pre-clinical potential in several haematological
diseases. What we really like about this program is we’re targeting a pathway that’s central to the production of
hepcidin – the master regulator of iron in the body. Divesiran works by ‘silencing’ TMPRSS6, a negative regulator of
hepcidin, to modulate endogenous hepcidin. This has a range of potential therapeutic benefits. We’ve demonstrated
proof of mechanism in healthy volunteers and are currently focused on polycythaemia vera.
PV is a rare blood disorder with significant unmet needs, affecting around 3.5 million worldwide. Elevated
hematocrit is a hallmark of the disease, which indicates the overproduction of red blood cells. Patients with hematocrit
between 45-50% are four-times more likely to die from cardiovascular causes or major thrombotic events than those
with hematocrit less than 45%. Phlebotomy is the current standard of care, but this is burdensome, and most patients
are iron deficient at diagnosis – repeated phlebotomy exacerbates this. Cytoreductive therapies are also used but may
not be effective at reaching control and can be associated with significant adverse effects. We believe divesiran has
the potential to maintain hematocrit levels at less than 45% and may reduce or even eliminate the need for
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SILENCE THERAPEUTICS PLC
phlebotomy. Additionally, we believe the sustained duration of action may allow divesiran to be dosed monthly, or less
frequently, potentially bringing additional value to patients. Divesiran has FDA Fast Track and orphan disease
designations for PV and is currently being evaluated in the SANRECO phase 1/2 trial in PV patients.
SANRECO Phase 1/2 Programme
In 2023, we initiated the SANRECO phase 1/2 trial of divesiran in polycythemia vera patients and made great
progress with enrollment in the phase 1 portion of the study throughout the year. This is a two-part clinical trial which
includes a phase 1 open-label, dose finding study followed by a phase 2 study. We expect to enroll approximately 65
participants total. The nice thing about this programme is even in phase 1 we’re looking at well-defined clinical
outcomes, including the maintenance of hematocrit and phlebotomies. Since the first part is an open label study, we
can see the data and, to-date, the emerging data are very encouraging. We look forward to presenting these data
publicly sometime before the end of June 2024.
GEMINI II Phase 1 Programme
In 2023, we completed the GEMINI II phase 1 trial of divesiran in non-transfusion dependent thalassemia patients.
In the study, divesiran was well tolerated with no safety issues identified. While proof of mechanism has been
established in healthy volunteers, the effects on indicators of iron metabolism were variable in this study population of
heterogeneous thalassemia subjects. We are prioritizing R&D efforts on the ongoing PV program and do not have
plans to advance development in thalassemia at this time.
mRNAi GOLD™ Partnered Programmes
AstraZeneca
In May 2023, we achieved a $10.0 million research milestone payment from AstraZeneca following the nomination
of the first product candidate under our collaboration focused on cardiovascular, renal, metabolic and respiratory
diseases. This continues to be a very productive collaboration, and we look forward to AstraZeneca progressing the
first product candidate into the clinic in 2024.
Mallinckrodt
In March 2023, we reacquired exclusive worldwide rights from Mallinckrodt to two undisclosed preclinical
complement targets that have shown promising potential. We look forward to advancing these assets as part of our
proprietary pipeline. SLN501, the C3 targeting program, remained under the original collaboration agreement through
March 2024. In March 2024, Mallinckrodt notified us that they will not pursue further development of SLN501 following
the completion of the phase 1 clinical trial. This will conclude all activities and commitments under the collaboration
agreement.
Hansoh
We also continued to advance the three undisclosed targets under our Hansoh collaboration and achieved $4
million in development milestones from two of the programmes in 2023. As a reminder, 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.
Great Place to Work certified
We are proud to say that in 2023 Silence maintained its ‘Great Place to Work’ status in the UK and Berlin and was
certified in the United States. We have focused on building a diverse and inclusive culture in which upward
communication and feedback is valued and encouraged. Silence recognizes that flexibility positively impacts
employee productivity, commitment, and loyalty and believes in trying to assist staff to achieve a good balance
between their work and home life.
Organizational change
In 2023, Giles Campion, MD, retired as our Chief Medical Officer (CMO) and Head of R&D. We appointed Steven
Romano, MD, as our Head of R&D and promoted Curtis Rambaran, MD, formerly our VP, Head of Clinical Science, to
CMO. We also promoted Marie Wikström Lindholm, PhD, previously our SVP, Head of Molecular Design, to Chief
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SILENCE THERAPEUTICS PLC
Scientific Officer and appointed J.P. Gabriel as our Chief Technical Operations Officer. We believe we have the right
leadership team in place to execute on our corporate objectives and deliver on our commitment to patients.
Outlook
2023 was marked by strong execution across Silence. We advanced our proprietary pipeline in the clinic,
achieved key milestones in our collaborations and invested strategically in early-stage projects where we see clear
opportunity to drive additional value. Silence is increasingly being recognized as a platform company and we expect
that to continue with more clinical data unfolding in the coming year. Our ultimate goal is to maximize the value of our
mRNAi GOLD™ platform for Silence shareholders and patients.
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 (1)
Number of meetings
11
6
4
0
(1) During 2023, no new board members were recruited or selected.
All Board and Audit and Risk Committee and Renumeration Committee meetings were fully attended by the relevant
Directors throughout the year either in person or virtually. 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.
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
The Board has a clear strategy, which is set out in the Chairman’s statement on page 20.
To support the execution of this strategy, the Board performs the following key tasks:
• setting the Company’s values and standards;
• 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, quarterly 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 May, 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
The Board considers the Company’s ability to help patients and their caregivers to be highly important and critical to the
long-term success of Silence. For more information on how the Company’s lead drug candidates, SLN124 and SLN360,
can help patients, refer to pages 6 to 8. Our Sustainable Development Goals including goals related to community,
health and environment, are set out on page 13.
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 12 where mitigating activities are also explained.
Additionally, the Audit and Risk Committee report on page 29 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 one Executive and five Non-Executive
Directors. The Board’s composition
its current stage of development and priorities.
The skillsets of the Board include extensive knowledge of the pharmaceutical and biotechnology industries, strategic
consultancy and corporate finance.
is geared
towards
The Nomination Committee is chaired by the Chairman of the Board, Iain Ross.
Details of each of the Directors’ experience and background are given in their biographies on pages 17 to 19.
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 one other Non-Executive Director. All of the Board Committees are authorised to obtain, at the Company’s
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.
24
SILENCE THERAPEUTICS PLC
Board Structure
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 (until March 31, 2023)
Nomination Committee
Iain Ross (Chair)
Alistair Gray
Dr. Steven Romano (until March 31, 2023)
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 Company’s Executive and Non-Executive Directors
and identifying suitable candidates, assisted where appropriate by recruitment consultants;
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.
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.
The Director is then eligible to stand for re-appointment by the shareholders.
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SILENCE THERAPEUTICS PLC
The annual performance evaluation for 2022, 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 its performance and recognises that board evaluation is a useful tool for enhancing a board’s
effectiveness.
A review of the CEO was initiated and concluded in December 2023. The CEO reviewed the performance of the CFO
for 2023. 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, are responsible for evaluating the Chairman’s
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 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 2024 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.
The Nomination Committee is responsible for succession planning and making recommendations to the Board in this
respect, as set out above.
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SILENCE THERAPEUTICS PLC
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 13.
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 2023 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 12 and 13.
Internal control and risk management procedures can only provide reasonable and not absolute assurance against
material misstatement.
Financial and Business Reporting
The Board seeks to present a balanced and understandable assessment of the Company’s position and prospects in
all quarterly, 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 Company’s 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
the quorum. A process has been developed to identify any of the Directors’ potential or actual conflicts of interest.
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
Board procedures and applicable regulations under the Company’s Articles of Association or otherwise are complied
with. Each Director is entitled, if necessary, to seek independent professional advice at the Company’s expense. The
Company maintains Directors’ and officers’ liability insurance.
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.
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
financial statements is a key communication document and is available on the Company’s website.
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SILENCE THERAPEUTICS PLC
Iain Ross
Chairman
28
SILENCE THERAPEUTICS PLC
Audit and Risk Committee Report
Commensurate with Silence’s Nasdaq listing allowing substantially greater investor access will be the Committee’s
heightened focus on all aspects related to company financings, internal controls and additional financial reporting
requirements.
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 six times during 2023, including prior to results announcements.
The Committee interacts primarily with Silence management, external auditors, and internal audit consultants.
What does the Audit and Risk Committee do?
• Monitors the integrity of the Company’s financial and narrative reporting
• 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-appointment and removal of the Company’s external auditors
• 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
How does the Committee monitor the Company’s financial reporting?
The Committee monitors the integrity of the Company’s financial statements, preliminary announcements and any other
formal announcements relating to the Company’s financial performance. In 2023, the Committee reviewed the 2022
annual report and the 2023 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?
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SILENCE THERAPEUTICS PLC
To assess the appropriateness and completeness of internal controls, the Committee reviews changes to the detailed
risk matrix which identifies high level control issues classified as critical under the Company’s risk matrix that require, or
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?
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 2023, EisnerAmper was engaged as
the Company’s internal audit consultants used to review and test the 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
reviewed the auditors’ independence and performance, the Committee is recommending that PricewaterhouseCoopers
LLP be re-appointed as the Company’s auditors at the next Annual General Meeting.
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 November 2023. 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
value of Silence Therapeutics plc’s investment in Silence Therapeutics GmbH management assessed it as being based
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SILENCE THERAPEUTICS PLC
on its estimated “value in use” (which utilizes an NPV methodology). In doing this the Company has had to estimate the
value and timing of future milestone cash inflows, which is however a standard industry practice.
Through constant communication and interaction with management and the Company’s auditors, the Audit and Risk
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
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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,
On behalf of the Remuneration Committee (the “Committee”), I am pleased to present our Directors’ remuneration report
for the year ended 31 December 2023.
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. 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. 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. Steven Romano was a member
of the board of directors until April 1, 2023 when he was appointed interim Chief Medical Officer. Dr. Romano was then
appointed Head of R&D on October 1, 2023. Dr. Romano is a board-certified psychiatrist with over 28 years of drug
development experience across a wide range of therapeutic and disease areas.
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
amounts based on the previous year’s achievement against pre-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 ; 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, we have adopted a new
compensation strategy for Non-Executive Directors (“NEDs”) that reduces fees and introduces a share options award
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
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SILENCE THERAPEUTICS PLC
Directors’ Remuneration Policy
This part of the remuneration report sets out the Directors’ remuneration policy proposed to apply to the Company’s
Executive and Non-Executive Directors and has been prepared in accordance with the Large and Medium-sized
Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013, the Companies (Miscellaneous
Reporting) Regulations 2018, and the Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report)
Regulations 2019 (the “policy”).
The proposed policy includes several changes for shareholders to consider from that approved by shareholders on 15
June 2021. However, the focus of the changes made is to ensure the policy remains sufficiently flexible as the Company
changes and grows over time. As part of the policy review process, the Committee considered from the views of our
major shareholders and major proxy advisory firms, broader corporate governance standards in the United States and
the United Kingdom, and the competitive landscape amongst our peer group.
The policy will be put forward for approval by shareholders in a binding shareholder vote at the forthcoming AGM on 17
May 2024. If approved, it is intended that the policy will take effect from the date of approval and apply for a maximum
period of three years (or until a revised policy is approved by shareholders).
The scenario charts reflect the intended application of the new policy (assuming it is approved) for the 2024 financial
year. A copy of the previously approved policy is in the 2020 Annual Report, which is available at: Silence Therapeutics
- Investors - Financials - Annual Reports (silence-therapeutics.com).
The policy is designed to align to the Company’s strategy and business model and to reflect the Committee’s
remuneration philosophy, as summarised below.
Philosophy: Support value creation for shareholders over the longer term and create alignment with shareholders
Variable Remuneration
Annual Bonus
Fixed Remuneration
Base Salary
Element
Pension
Benefits
EIP
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.
Determined by corporate
and individual targets that
support Silence’s annual
goals and its overall
strategy.
The more significant
element of the package
linked to longer-term share
performance.
Under the Silence
Therapeutics plc 2023
Equity Incentive Plan with
Non-Employee Sub-Plan
and CSOP Sub-Plan (the
“EIP”), equity awards, can
be issued with
performance and/or time
based criteria.
In developing its policy, the Committee has regard to the policy for remuneration of employees across the
Company. The Directors’ remuneration policy was set considering the pay and conditions for other employees and the
Committee 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 eligible to participate in Silence’s EIP. Internal
reviews are carried out to ensure that levels of remuneration for all key employees are up to date and
competitive within the sector.
• The bonus arrangements 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
shareholders expressed in respect of Directors’ remuneration were considered when formulating the
Directors’ remuneration policy. 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
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SILENCE THERAPEUTICS PLC
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 Directors’ Remuneration Policy can be found on the Company’s intranet.
Remuneration Policy Table
The table in the following pages sets out, for each element of pay, a summary of how remuneration is structured and
how it supports the Company’s strategy.
Executive Directors
Purpose and
Link
to Strategy
Base Salary
To attract and
retain executives
of the highest
calibre who are
capable of
delivering the
Company’s
strategic
objectives,
reflecting the
individual’s
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.
Operation
Maximum Opportunity
Performance Metrics
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, but not
limited to:
•
•
•
•
•
business
performance;
salary increases
awarded to the overall
employee population;
skills and experience
of the individual over
time;
scope of the
individual’s
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.
•
The Company aims to offer
benefits that are in line with
market practice.
The main benefits currently
provided include private health
insurance, dental, life insurance
and retirement plan. The
Company may make a cash
payment to provide a gross up
where penalty taxes are
payable under section 280G of
the US Internal Revenue code
of 1986, as amended in
connection with a change of
No formal metrics, although any
increases take account of Company
performance and Executive Director
appraisal against objectives.
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.
Where there has been a change in
the role or, if the individual is new
to the role, initial base salary may
be set at a lower level and/or future
increases could be higher.
Subsequent
demonstration of strong
performance may also result in
a salary increase that is
higher than that awarded to
the wider workforce.
There is no defined maximum value
for benefits, but the Committee will
consider the aggregate value of
any such benefits when
determining what should be
offered.
Not performance related.
No claw-back will be applied in relation
to benefits.
34
SILENCE THERAPEUTICS PLC
control. The Committee will
consider whether this is
appropriate taking into account
the circumstances of the
transaction.
In addition, the Company will
pay for (i) the preparation and
submission of annual tax
returns in the UK and USA up
to a maximum of USD$10,000
per year, and (ii) reasonable
attorney’s fees for the review of
an Executive Director’s
employment agreement and
related documents, up to a
maximum of USD$10,000.
Under certain circumstances
the Company may offer
relocation allowances or
assistance.
Travel, accommodation and
any reasonable business-
related expenses (including tax
thereon) may be reimbursed.
Executive Directors may
become eligible for other
benefits in future where the
Committee deems it
appropriate. Where additional
benefits are introduced for the
wider workforce, Executive
Directors may participate on
broadly similar terms.
Executive Directors are eligible
to participate in the Company’s
all-employee share plans from
time to time on the same terms
as other employees in the
jurisdiction in which they are
engaged.
The Company operates a
defined contribution scheme
and all employees, including
Executive Directors, are invited
to participate. Payments are
made directly to a nominated
pension scheme or, where
payments are made in cash,
delivered monthly through
payroll.
Cash payments in lieu of
pension contributions may be
made.
Pensions
The Company
aims to provide
market-
competitive
retirement
benefits, as a
retention tool
and to reward
sustained
contribution.
Not performance related.
No claw-back will be applied in relation
to pensions.
Employee contributions are
matched two-fold by employer
contributions up to a maximum
employer contribution of 10%.
Employees may contribute more
than 5% themselves, but the
Company will not provide any
further employer contributions
above this level.
Annual Performance Bonus
An annual cash
bonus rewards
the achievement
of objectives that
support the
Company’s
corporate goals
and delivery of
the business
strategy.
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 during the year if it
considers that objectives are no
longer appropriate.
Different performance
measures and weightings may
Annual cash bonuses have a target
of up to 60% of base salary and a
maximum payout for “stretch”
performance of up to 100% 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.
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.
35
The Board can exercise discretion
in setting contractual target bonus
rates for new Executive Directors
above 60%, with discretion
exercised with respect to total
compensation.
The bonus is performance based
and the final payout is entirely at
the discretion of the Company.
The Committee may, in appropriate
circumstances, waive the maximum
target bonus opportunity for
Executive Directors where an
additional bonus payout is made to
reflect overall business
performance, individual contribution
or the achievement of separate
targets, such as the completion of a
transaction.
Individual goals set are specific,
measurable and are linked to the
Company’s longer-term strategy.
The Committee may, in appropriate
circumstances, disapply any
performance measures or award a
bonus without such performance
measures or apply different
performance criteria, such as the
completion of a transaction, should
they not, in the view of the Committee,
reflect overall business performance
or individual contribution.
The amount of erroneously awarded
compensation resulting from an
accounting restatement due to the
material noncompliance with any
financial reporting requirement under
United States securities laws will be
subject to clawback under the
Company’s clawback policy.
SILENCE THERAPEUTICS PLC
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. A deferral period
may be applied to bonuses.
Bonuses are normally paid in
cash (but may be paid in the
form of an equity award).
The Committee may, in
appropriate circumstances,
override the formulaic
outcome to amend the
bonus payout or provide
for an additional bonus
payment, should this not,
in the view of the
Committee, reflect overall
business performance or
individual contribution or in
connection with a corporate
transaction such as a change of
control. If the Committee
provides for additional bonus
payments, the Committee has
the discretion to set the terms
and value of such bonus
payment.
Equity Based Awards (EIP or any successor equity incentive plan)
The
Remuneration
Committee
believes that a
key component
of the overall
remuneration
package is the
provision of
equity awards to
senior
executives
through an EIP,
which is
designed to
develop a culture
which
encourages
strong corporate
performance on
an absolute and
relative basis to
align with
shareholder
interests.
EIP awards granted to
Executive Directors have
typically taken the form of
market value options vesting
over time, although different
forms of awards may also be
granted in accordance with the
EIP rules. The Committee may
also vary the vesting schedule
of awards as it considers
appropriate.
The Committee has
discretion to decide
whether and to what extent
any deferral or holding
period applies to awards or
to the shares acquired
following the vesting of
awards.
With the approval of the
Company’s shareholders, the
Committee may
unilaterally modify the
terms of share options, in
particular to reprice
underwater options to
There is no defined
maximum opportunity
under the EIP. The value of
Executive Director awards under
the EIP are approved by the
Committee and reflect the role,
duties and responsibilities currently
being undertaken by the individual.
The Committee can exercise
discretion when setting the value of
EIP awards for new Executive
Directors taking into account such
Executive Director’s total
compensation package.
The Committee seeks to establish
equity-based remuneration
competitive to that offered
by a set of comparable
companies with whom the
Company
may compete for talent.
Vesting of EIP awards is generally
subject to continued employment and
may also be subject to the achievement
of performance conditions aligned with
the Company’s strategic plan. Whether
performance measures shall apply, and
if so, 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
EIP 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.
The Committee has flexibility to vary the
mix of measures or introduce new
measures for each subsequent award
36
SILENCE THERAPEUTICS PLC
provide for a lower
exercise price.
Chair and Non-Executive Directors
taking into account business priorities at
the time of grant. The Committee may
amend, relax or waive performance
conditions if it considers that they have
become unfair or impractical. This will
help ensure that vesting reflects overall
Company performance during the
period.
Further details, including the vesting
terms and any performance targets
attached to the EIP in respect of each
year, will be disclosed in the relevant
Annual Report on Remuneration.
The amount of erroneously awarded
compensation resulting from an
accounting restatement due to the
material noncompliance with any
financial reporting requirement under
United States securities laws will be
subject to clawback under the
Company’s clawback policy.
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
Operation
Maximum opportunity
Performance Metrics
Non-Executive Directors receive an annual retainer
paid in cash, comprising a base fee plus additional
fees for Committee Chairpersonship or membership.
Such fees are set based on peer group comparator
data.
Non-Executive Directors who participate and serve
on any membership committee or advisory board of
or for the Company may also receive a retainer paid
in cash annually or for each meeting attended. Such
fees are set based on peer group comparator data.
The Chair’s fee is reviewed annually by the
Committee (without the Chair present). Fee levels for
the Non-Executive Directors are determined by
directors upon the recommendation of the
Committee.
When reviewing fee levels, account is taken of
market movements in fee levels, Board committee
responsibilities, ongoing time commitments and the
general economic environment.
In exceptional circumstances, if there is a temporary
yet material increase in the time commitments for
Non-Executive Directors, the Board may pay
additional fees to recognise that additional workload.
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.
Not performance related.
No claw-back applies in
relation to fees.
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 benefits.
When reviewing benefits,
account is taken of market
movements in the fees of
Non-Executive Directors,
Board Committee
responsibilities and ongoing
time commitments.
37
SILENCE THERAPEUTICS PLC
Set a level that is
sufficient to attract and
retain high-calibre non-
executives who contribute
to
the business.
Non-Executive Directors may receive equity awards
under the EIP (or options, share appreciation rights,
restricted shares, restricted share units or such other
form as may be permitted by any other equity
incentive plan operated by the Company from time to
time),
with careful consideration being made with respect to
ensuring their independence. The Committee may, in
its sole discretion, provide for deferred settlement of
RSUs awarded to a Non-Executive Director.
With the approval of the Company’s shareholders,
the Committee may
unilaterally modify the
terms of share options, in
particular to reprice
underwater options to
provide for a lower
exercise price.
There is no maximum award
level for equity awards to Non-
Executive Directors.
The size of the equity awards
is determined by the full
Board, upon recommendation
of the Committee.
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.
No claw-back applies in
relation to Non-Executive
Director equity-based awards.
Notes to the policy table
Legacy arrangements
For the duration of this policy, the Company will honour any commitments made in respect of current or former directors
before the date on which either: (i) the policy becomes effective; or (ii) an individual becomes a director, even when not
consistent with the policy set out in this report or prevailing at the time such commitment is fulfilled, in each case subject
to the terms of any prior policy in place at the time such awards or commitments were granted or made, if applicable.
Performance conditions
The choice of annual bonus performance metrics reflects the Committee’s belief that any incentive remuneration should
be appropriately challenging and tied to the delivery of key strategic objectives intended to ensure that Executive
Directors are incentivised to deliver across a range of objectives for which they are accountable. The Committee has
retained flexibility on the specific measures which will be used to ensure that any measures are fully aligned with the
strategic imperatives prevailing at the time they are set.
The bonus targets for the forthcoming year will be set out in general terms, subject to limitations with regards to
commercial sensitivity. The full details of the targets will be disclosed when they are in the public domain and are no
longer considered commercially sensitive.
Where used, performance conditions applicable to EIP awards (or other equity incentive plans operated by the Company
from time to time) will be aligned with the Company’s objective of delivering superior levels of long-term value to
shareholders. Prior to each award, the Committee has flexibility to select measures that are fully aligned with the strategy
prevailing at the time awards are granted.
The Committee will review the calibration of targets applicable to the annual bonus, and the EIP in years where
performance measures apply, annually to ensure they remain appropriate and sufficiently challenging, taking into
account the Company’s strategic objectives and the interests of shareholders.
Recovery and withholding
On 8 November 2023, the board of directors of the Company adopted a new incentive compensation recoupment policy
providing for the Company’s recoupment of recoverable incentive compensation that is received by certain executive
officers of the Company under certain circumstances. Such clawback policy is designed to comply with, and shall be
interpreted to be consistent with, Section 10D of the Exchange Act, Rule 10D-1 promulgated thereunder and Nasdaq
Listing Rule 5608.
The Committee retains the discretion to update or amend the clawback policy from time to time in order to maintain
compliance with applicable laws, regulatory requirements and best practice from time to time.
38
SILENCE THERAPEUTICS PLC
Differences in remuneration policy between Executive Directors and other employees
The overall approach to reward for employees across the workforce is a key reference point when setting the
remuneration of the Executive Directors. When reviewing the salaries of the Executive Directors, the Committee pays
close attention to pay and employment conditions across the wider workforce and in normal circumstances (excluding
promotions) the increase for Executive Directors will be no higher than the average increase for the general workforce.
The key difference between the remuneration of Executive Directors and that of our other employees is that, overall, at
senior levels, remuneration is increasingly long-term, and ‘at risk’ with an emphasis on performance-related pay linked
to business performance and share-based remuneration. This ensures that remuneration at senior levels will increase
or decrease in line with business performance and provides alignment between the interests of Executive Directors and
shareholders.
Discretions retained by the Committee
The Committee will operate annual bonus arrangements and the EIP according to their respective rules (if any) and in
accordance with any applicable legislation where relevant.
The Committee retains discretion, consistent with market practice, over a number of areas relating to the operation and
administration of these arrangements and the policy in general. This includes, but is not limited to, the following:
• The participants in incentive arrangements;
• The timing of any awards or payments;
• The size of any awards or payments and the vehicle with which they are delivered;
• The treatment of outstanding awards on a change of control or other corporate events;
• The treatment of leavers based on the rules of the plan (where applicable), the internal policies of the Company
and appropriate treatments described therein;
• Adjustments in certain circumstances (such as a rights issue, corporate restructuring or payment of a special
dividend);
• The applicability and selection of performance measures and targets applying each year;
• Any adjustments to performance measures and targets to reflect changes in circumstances that are expected
to have a material impact on the intended difficulty of the targets; and
• Whether malus and/or clawback shall be applied to any award in the relevant circumstances and, if so, the
extent to which it shall be applied.
The Committee retains the discretion to award ad hoc bonus payments in addition to annual bonus, or to adjust
annual bonus and/or equity incentive awards, if an event or circumstance occurs which means outcomes do not
reflect the overall business performance, individual contribution or external factors which impacts the workforce
such as in connection with a corporate event such as a change of control. Any use of the above discretion would,
where relevant, be explained in the Annual Report on Remuneration and may, as appropriate, be the subject of
consultation with the Parent Company’s major shareholders.
The Committee will consider formulaic outcomes of incentive arrangements and will have the discretion to override
these where appropriate, taking into account a holistic view of performance and/or wider stakeholder experience,
such as in connection with a corporate event such as a change of control. Any use of the above discretions would,
where relevant, be explained in the annual report on remuneration and may, as appropriate, be the subject of
consultation with the Company’s major shareholders.
The Committee may make minor amendments to the policy (for regulatory, exchange control, tax or administrative
purposes or to take account of a change in legislation) without obtaining shareholder approval for that amendment.
Shareholder views
The Committee will consider shareholder feedback received following the AGM, as well as any additional feedback
and guidance received from time to time when considering any significant changes to the Company’s remuneration
arrangements. This feedback will be considered by the Committee as it develops the Company’s remuneration
framework and practices going forward. Assisted by its independent adviser, the Committee also actively monitors
developments in the expectations of institutional investors and their representative bodies.
39
SILENCE THERAPEUTICS PLC
Employment conditions
The Committee is regularly updated throughout the year on pay and conditions applying to Company employees.
Where significant changes are proposed to employment conditions and salary levels elsewhere in the Company
these are highlighted for the attention of the Committee at an early stage and the Committee will take such
employment considerations into account when setting directors’ remuneration.
Whilst the Committee does not currently consult directly with employees regarding its policy for directors, the
Committee is considering the best method of bringing the employee voice to the boardroom.
Other Remuneration Policies
Executive Directors’ Service Contracts
Executive Directors have rolling service agreements (entered into with the Company or a subsidiary thereof) which may be terminated in
accordance with the terms of these agreements. The period of notice for Executive Directors (to be given by the employer or the Executive Director)
will not normally exceed 12 months’ notice. Executive Directors’ service agreements are available for inspection at the Company’s registered office
during normal business hours and will also be available to the public if required to be filed by the Parent Company with the SEC. The terms of the
current Executive Director’s service contract are:
Name
Position
Date of amended and
restated employment
agreement
Craig Tooman
Chief Executive Officer
5 March 2022
Notice period for the
Executive
No notice period for the
Company
45 days’ for the Executive
Director
The Executive Director 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.
Executive Director Termination and Loss of Office Payments
The Company’s policy on remuneration for Executive Directors who leave the Company is set out below. The Committee will exercise its
discretion when determining amounts that should be paid to leavers (other than in respect of the relevant leaver’s contractual entitlements which will
be respected), taking into account the facts and circumstances of each case. If and where applicable, the Company may elect to make a payment in
lieu of notice (“PILON”) equivalent in value to basic salary and contractual benefits for any unexpired portion of the notice period (but excluding any
annual bonus or holiday entitlement that would have otherwise accrued during the notice period).
Where the Executive Director is terminated by the Company without “Cause” (as defined in the service agreement) or by the Executive
Director for “Good Reason” (as defined in the service agreement), provided the Executive Director is not in breach of the restrictive covenants
(including post-termination) applicable to them, severance pay and any entitlements in respect of the year to the date of termination in accordance
with the applicable terms shall be paid to an Executive Director as set out below, subject to the Executive Director signing a release and waiver of
claims:
Element of pay / benefit
Salary
Bonus
Termination other than within
12 months
after a relevant “Change of
Control” (as
defined in the service agreement)
Termination within 12 months
after a
relevant “Change of Control” (as
defined in
the service agreement)
Monthly payments equal to base
salary in accordance with normal
payroll practices, less any applicable
taxes and withholdings for a period
of 12 months
Monthly payments equal to base
salary in accordance with normal
payroll practices, less any applicable
taxes and withholdings for a period
of 18 months
Any unpaid short-term bonus for any
completed performance period and a
pro rata bonus for the year in which
Any unpaid short-term bonus for any
completed performance period and a
pro rata bonus for the year in which
40
SILENCE THERAPEUTICS PLC
Element of pay / benefit
Benefits
Equity awards
Termination other than within
12 months
after a relevant “Change of
Control” (as
defined in the service agreement)
Termination within 12 months
after a
relevant “Change of Control” (as
defined in
the service agreement)
the termination occurs based on the
achievement of applicable
performance goals
the termination occurs based on the
achievement of applicable
performance goals
Provided continuation coverage is
elected, payment of the amount of
COBRA premiums that exceeds the
monthly amount that would have
been paid prior to termination, less
any applicable taxes and
withholdings until the earliest of (i)
12 months post termination; (ii) the
date the executive first becomes
eligible for healthcare benefits with a
subsequent employer; and (iii) the
date the executive is no longer
eligible for COBRA benefits
Awards treated in accordance with
plan rules.
Provided continuation coverage is
elected, payment of the amount of
COBRA premiums that exceeds the
monthly amount that would have
been paid prior to termination, less
any applicable taxes and
withholdings until the earliest of (i)
18 months post termination; (ii) the
date the executive first becomes
eligible for healthcare benefits with a
subsequent employer; and (iii) the
date the executive is no longer
eligible for COBRA benefits
Awards vest in full on a Change of
Control.
Where the Executive Director’s employment is terminated due to their incapacity or death, the Executive Director or
their estate will be entitled to any unpaid short-term bonus for any completed performance period in such amount as
may be earned and payable, if any, and a pro rata bonus for the year in which their termination occurs based on
achievement of applicable performance goals. With respect to all vested equity awards, the Executive Director’s
termination will be deemed a “Good Leaver Reason” or they will be deemed a “Good Leaver”, under the equity plan
rules, as applicable.
The Company is against rewards for failure; the circumstances of any departure, including the individual’s performance,
would be taken into account in every case. Statutory redundancy payments may be made. Service agreements may be
terminated for cause and in certain circumstances, such as gross misconduct or any other material breach of the
obligations under their employment contract without payment in lieu of notice if applicable or severance benefits. The
Company may require the individual to work during their notice period (if applicable) or may place them on garden leave
during which they would be entitled to full pay and benefits.
Except in the case of dismissal for cause or gross misconduct or resignation, the Company may at its absolute discretion
reimburse for reasonable professional fees relating to the termination of employment and, where an Executive Director
has been required to re-locate, to pay reasonable repatriation costs, including possible tax exposure costs and/or settle
any other amount the Committee considers reasonable including any statutory entitlements or sums to settle or
compromise claims or potential claims in connection with a termination (including, at the discretion of the Committee,
reimbursement for legal advice and provision of outplacement services). If post-termination services are to be provided
by the Executive Director, the Company may also enter into a consultancy agreement with such Executive Director on
such terms as may be agreed between the Company and the Executive Director at the time.
Non-Executive Directors’ Terms of Engagement
41
SILENCE THERAPEUTICS PLC
All Non-Executive Directors have specific terms of engagement which may be terminated on not less than three months’
notice by either party. The Chairman’s terms of engagement may be terminated on not less than six months’ notice by
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. The dates of
appointment of each of the Non-Executive Directors serving at 31 December 2023 are summarised in the table below.
Non-Executive Directors
Date of appointment
Date of appointment letter
Michael Davidson
James Ede-Golightly
Alistair Gray
Dave Lemus
Iain Ross
6 January 2021
25 April 2019
12 November 2015
21 June 2018
25 April 2019
5 January 2021
3 August 2020
3 August 2020
3 August 2020
21 September 2020
Non-Executive Directors’ terms of engagement are available for inspection at the Company’s registered office during
normal business hours and will be available for inspection at the AGM.
On termination of a Non-Executive Director’s appointment, the Company may enter into a consultancy agreement with
such Non-Executive Director on such terms as may be agreed between the Company and the Non-Executive Director
at the time.
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
Director and the individual’s level of experience.
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
newly appointed Director, even though this may involve increases in excess of inflation and the increases awarded to
the wider workforce.
The Committee may 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 EIP or any successor plan.
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.
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SILENCE THERAPEUTICS PLC
Remuneration scenario for Executive Director
The charts below show an estimate of the 2024 remuneration package for the Executive Director under three assumed performance scenarios and
these scenarios are based on the policy set out above which will be applicable if it is approved. No performance obligations apply to equity-based
awards so they are not included.
Minimum (comprising fixed pay only)
Base salary as of 1 January 2024 of $619k.
Target
Fixed pay as above.
Assumes target bonus of 60% of base salary.
Maximum
Fixed pay as above.
Assumes maximum bonus payout of 100% of base salary.
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 experience in the industry and relevant geographies via a tender process. 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 2023,
fees charged by AON Solutions UK Ltd amounted to approximately £4k (2022: £71k).
The current members of the Committee are Michael Davidson, James Ede-Golightly, and Dave Lemus. Michael
Davidson, James Ede-Golightly and Dave Lemus are deemed to be independent.
The Company’s Chief Executive Officer and Chief Financial Officer provide updates to 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.
43
SILENCE THERAPEUTICS PLC
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 2023.
Director
James Ede-Golightly
Michael Davidson
Dave Lemus
Meetings attended
4/4
4/4
4/4
Role
The Committee’s principal function is to support the Company’s strategy by ensuring that those individuals responsible
for delivering the strategy are appropriately incentivised through the operation of the Company’s remuneration policy.
In determining the Company’s 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
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,
including pension rights and any compensation payments, and review the on-going appropriateness
and relevance of the remuneration policy;
• ensuring that the remuneration of the Executive Director 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 Director and senior executives,
including recruitment and retention terms, whilst having regard to pay and employment conditions
across the Company or group;
• ensuring that contractual terms on termination, and any payments made, are fair to the individual, and
the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognized;
• approving the design and performance targets of any annual incentive arrangements that include the
Executive Director 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 incentive arrangements;
• determining each year whether awards will be made under the incentive arrangements, and if so, the
overall amount of such awards;
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 Director, and the potential split
between different elements of remuneration under two performance scenarios: “Earned” and “Minimum”.
44
SILENCE THERAPEUTICS PLC
Craig Tooman
Compensation
1000
900
800
700
600
500
400
300
200
100
0
£-
425
1
24
473
1
24
473
Earned
Minimum - Fixed
Salary
Benefits
Pension
Bonus
EIP
Giles Campion
Compensation
500
450
400
350
300
250
200
150
100
50
0
£-
132
56
3
269
35
9
350
Earned
Minimum - Fixed
Salary
Benefits
Pension
Bonus
EIP
Amounts are shown in thousands (GBP).
The EIP award amounts shown represents the face value. Face value is calculated as the market value of underlying shares at the date of grant, less the applicable exercise
price.
45
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 2023, and how it will be implemented during the year ending 31 December 2024.
This report splits certain information into that for Executive Directors and that for Non-Executive Directors.
Audited Information
Directors’ Remuneration – financial year ended 31 December 2023
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 2023.
Year Basic Salary(a) Benefits (b)
Bonus (c) EIP (d)
Pension (e)
Total
remuneration
Total fixed
remuneration
Total Variable
remuneration
£000s
£000s
£000s
£000s
£000s
£000s
£000s
£000s
Executive Directors
Craig Tooman (f)
2023
473
2022
408
Giles Campion (g)
2023
269
2022
350
Non-Executive Directors
Iain Ross (h)
Alistair Gray
Dave Lemus
2023
94
2022
90
2023
56
2022
54
2023
47
2022
46
James Ede-GoLightly
2023
45
2022
44
Michael Davidson
2023
41
2022
40
Steve Romano (I)
2023
10
2022
37
1
12
3
9
-
-
-
-
-
-
-
-
-
-
-
-
425
222
132
158
50
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24
1
56
35
-
-
-
-
-
-
-
-
-
-
-
-
923
643
460
552
144
90
56
54
47
46
45
44
41
40
10
37
498
421
328
394
94
90
56
54
47
46
45
44
41
40
10
37
425
222
132
158
50
-
-
-
-
-
-
-
-
-
-
-
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.
(c) For 2023, 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) There were no performance obligations linked to the equity-based awards.
(e) The amount shown relates to company contributions to the defined contribution scheme, plus any cash in lieu.
(f) Mr. Tooman 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.
46
SILENCE THERAPEUTICS PLC
(g) Mr. Campion served as an executive director until his resignation from the board of directors on July 1, 2023 and
Head of R&D until his retirement on September 1, 2023. His bonus was prorated for his service in 2023.
(h) Mr. Romano served as a non-executive director until he became an employee of the company on April 1, 2023. His
compensation is prorated for the time he was a non-executive director.
Annual Performance Bonus - 2023
In 2023, 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.
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 2023 for all staff (other than the Executive Director and Non-Executive Directors) the percentage attributable to
individual goals for employees ranged from 30% to 150% depending on level (excluding the Executive Director).
The achievement against the scorecard of corporate goals was as follows:
Target
Weighting
SLN 124 milestone delivery
SLN 360 milestone delivery
SLN501 milestone delivery
Manufacturing processes
New GalNAc target identification
Achieve planned targets for the development of SLN 124
Achieve planned targets for the development of SLN 360
Achieve planned targets for the development of SLN 501
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
Execution and operations
Maintain a cash runway and reporting on KPIs
Total
%
20.0
12.0
8.0
8.0
5.0
17.0
25.0
5.0
100.0
2023
achievement
%
21.0
13.0
8.0
8.0
5.0
18.0
20.0
5.0
98.0
Achievement against objectives is given careful consideration by the Committee prior to finalisation. Each objective is
reviewed for overall achievement. For some objectives, further entitlement was approved as the goals were
overachieved. The Committee acknowledged the team's significant progress in advancing our clinical-stage
programmes in 2023, further financing key programmes, and expanding the US investor base. Therefore, the board
determined an achievement score of 98% was fair and justifiable.
In relation to the Directors, Craig Tooman’s bonus was calculated as 60% of his salary. It was approved by the board of
directors and paid at 150% of the entitlement due to significant strategic accomplishment and effort during the year.
Giles Campion’s on-target bonus for 2023 was calculated as 50% of salary granted at 98% achievement of his target
for 2023 and pro-rated for his time in service.
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:
Craig Tooman (a)
Giles Campion (b)
Bonus Scorecard
Outcome
Maximum opportunity
% of salary
Cash amount
% of salary
£000s
425
132
90 %
37 %
£000s
425
132
90 %
37 %
(a) Craig Tooman’s bonus was calculated as 60% of his salary. It was approved by the board of directors and paid at 150% of the entitlement due to significant strategic
accomplishment and effort during the year.
(b) Giles Campion’s on-target bonus for 2023 was calculated as 50% of salary granted at 98% achievement of his target for 2023 and pro-rated for his time in service.
47
SILENCE THERAPEUTICS PLC
Scheme Interests
During the year ended 31 December 2023 Craig Tooman was awarded share option awards under the EIP scheme,
details of which are summarised in the table below. EIP awards were granted under the Silence Therapeutics plc 2023
Employee Incentive Plan and were based on an industry peer analysis.
Directors share awards
Individual
Iain Ross
Alistair Gray
Dave Lemus
James Ede-
GoLightly
Dr Steven
Romano
Michael
Davidson
Craig Tooman
Date of
Grant
At 1 Jan,
2023
Awarded Exercised Cancelled
At 31
Dec 2023
Exercise
price
($/share)
Gain on
exercises
during
the year
(£000s)
10/06/2019
10/06/2019
21/05/2020
21/05/2020
06/01/2022
14/09/2023
6/01/2022
14/09/2023
6/01/2022
14/09/2023
14/09/2023
250,000
250,000
150,000
350,000
90,000
-
48,000
-
48,000
-
-
-
-
-
-
-
90,000
-
48,000
-
48,000
20,001
06/01/2022
48,000
-
14/09/2023
-
48,000
06/01/2022
48,000
-
14/09/2023
48,000
06/01/2022
48,000
-
14/09/2023
-
48,000
06/01/2021
06/01/2022
21/02/2022
16/09/2022
05/01/2023
14/09/2023
579,999
264,999
375,000
900,000
-
-
-
-
-
-
2,100,000
216,960
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000
250,000
150,000
350,000
90,000
90,000
48,000
48,000
48,000
48,000
20,001
48,000
48,000
48,000
48,000
$2.53
$0.80
$0.07
$5.87
$7.87
$5.13
$7.87
$5.13
$7.87
$5.13
$5.13
$7.87
$5.13
$7.87
$5.13
48,000
$7.87
48,000
$5.13
579,999
264,999
375,000
900,000
2,100,000
216,960
$7.02
$7.87
$6.33
$3.86
$5.13
$3.33
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Earliest
date of
exercise
01/06/20
01/06/20
25/04/22
21/08/20
06/02/22
15/09/23
Last date
of exercise
10/06/29
10/06/29
20/05/30
20/05/30
06/01/32
12/09/33
06/02/22
15/09/23
06/01/32
12/09/33
06/02/22
15/09/23
15/09/23
06/01/32
12/09/33
12/09/33
06/02/22
06/01/32
15/09/23
12/09/33
06/02/22
06/01/32
15/09/23
12/09/33
06/02/22
06/01/32
15/09/23
12/09/33
06/01/22
06/02/22
21/03/22
16/10/22
06/01/23
15/09/23
06/01/31
06/02/32
21/03/32
16/10/32
03/01/33
03/01/33
Giles Campion
06/03/2019
200,000
- 90,000
- 110,000
$0.07
£144
06/02/22
06/02/29
10/06/2019
15,000
10/06/2019
228,083
10/06/2019
456,917
23/04/2021
160,002
06/01/2022
199,998
-
-
-
-
-
-
- 15,000
$2.44
-
- 228,083
$0.80
-
- 456,917
$2.53
-
- 160,002
$7.34
-
- 199,998
$7.87
05/01/2023
- 257,598
214,716
42,882
$5.13
-
-
-
-
-
-
10/06/22
10/06/29
01/06/20
10/06/29
01/06/20
10/06/29
23/05/21
23/04/31
06/02/22
06/01/32
06/01/23
01/10/24
48
SILENCE THERAPEUTICS PLC
Scheme interests awarded in 2023
Name
Date of grant
Number
awarded
Exercise
Price
Face Value
(1) £000s
Vesting
Schedule
Craig Tooman
Craig Tooman
Giles Campion
Iain Ross
Alistair Gray
Dave Lemus
James Ede-GoLightly
Michael Davidson
Steve Romano
05/01/2023
2,100,000
14/09/2023
05/01/2023
14/09/2023
14/09/2023
14/09/2023
14/09/2023
14/09/2023
14/09/2023
216,960
257,598
90,000
48,000
48,000
48,000
48,000
48,000
$5.13
$3.33
$5.13
$5.13
$5.13
$5.13
$5.13
$5.13
$5.13
-
-
-
-
-
-
-
-
-
Note 2
Note 2
Note 2
Note 3
Note 3
Note 3
Note 3
Note 3
Note 3
1. Face value is calculated as the market value of underlying shares at the date of grant, less the applicable exercise price. For the CEO and Non-Executive Directors this
was nil because the exercise price is equal to or above the market value of the underlying shares at the date of grant.
2. Share options vest in 48 equal monthly vesting tranches starting from the month of grant. These awards are not subject to any performance conditions.
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. These grants
were grants at the strike price applicable to when they were approved on January 5, 2023. This price was in excess of the of the market price at the grant date of $3.33
per share.
Directors' interests in shares at December 31, 2023
Director
Current directors
Craig Tooman
Giles Campion
Iain Ross
Alistair Gray
Dave Lemus
James Ede-Golightly
Dr. Steven Romano
Dr. Michael Davidson
Total shares owned
outright plus vested
options
Shares Owned
outright
Percentage of
issued share
capital
Options: Vested but
not exercised
Options:
Unvested but
subject to
performance
Options: Unvested
and not subjected to
performance
1,437,342
1,122,939
1,129,934
44,535
42,159
49,632
47,625
47,625
33,486
90,000
64,941
9,903
7,527
15,000
12,993
12,993
1.21%
0.94%
0.95%
0.04%
0.04%
0.04%
0.04%
0.04%
1,403,856
1.032,939
1,064,993
34,632
34,632
34,632
34,632
34,632
-
-
-
-
-
-
-
-
3,033,102
-
205,000
61,368
61,368
61,368
61,368
61,368
Unaudited Information
Performance Graph and Table
The following graph shows Silence’s cumulative Total Shareholder Return (TSR) over the last five financial years relative
to the Nasdaq Biotech Index.
TSR is defined as the return on investment obtained from holding a company’s shares over a period. It includes
dividends paid, the change in capital value of the shares and any other payment made to or by shareholders within the
period.
49
SILENCE THERAPEUTICS PLC
Aligning Pay with Performance
CEO remuneration compared with annual growth in TSR:
The total 2023 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.
2023
Total remuneration
Actual bonus as a % of the remuneration
Actual share award as % of the remuneration
2022
Total remuneration
Actual bonus as a % of the remuneration
Actual share award vesting as % of the remuneration
Craig Tooman
£000s
923
46%
0%
Craig Tooman
£000s
643
35%
0%
*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
the Directors and the Company’s employees. Only Directors in office during any part of the 2023 year have been
included below. Former director, Dr. Steven Romano is not included in the table above as he served as a Director until
31 March 2023 and therefore the prior period is not comparable.
Salary % Change
2022 vs 2023
Benefits % Change
2022 vs 2023
Bonus % Change
2022 vs 2023
Giles Campion
Craig Tooman (4)
Iain Ross
Alistair Gray
Dave Lemus
James Ede-Golightly
Dr. Steven Romano
Dr. Michael Davidson
All employees excl. directors
3 %
16 %
4 %
4 %
4 %
2 %
%
2 %
3 %
26 %
94 %
Note 2
Note 3
Note 3
Note 3
Note 3
Note 3
3 %
(17) %
92 %
Note 2
Note 3
Note 3
Note 3
Note 3
Note 3
10 %
50
98.89999.299.499.699.8100100.2100.41/3/20232/3/20233/3/20234/3/20235/3/20236/3/20237/3/20238/3/20239/3/202310/3/202311/3/202312/3/2023SLNNBI
SILENCE THERAPEUTICS PLC
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 Ross’ consultancy company (Gladstone Consulting Partnership) in January
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. In 2023, he was paid a bonus of £50 thousand.
3. Non-executive directors were not entitled to a bonus in any year, which the exception of Iain Ross. They were not entitled to benefits in any year, with the exception of
Alistair Gray and Dave Lemus who were paid benefits of £13 thousand and £2 thousand, respectively in 2019.
4. Craig Tooman was appointed was appointed as a Director (Chief Executive Officer) on 21 February 2022 and therefore prior year data is not available.
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
2022
£000
26,875
116
17,501
35,605
2023
£000
30,426
115
25,375
44,025
Change
£000
13 %
Nil
45 %
24 %
51
SILENCE THERAPEUTICS PLC
No dividends distributions or share buyback transactions occurred in either 2022 or 2023.
Statement of Implementation of Policy in 2024
Base Salary: The January 2024 target base salary increase was and average of 5% for all eligible employees. There
was a 5% increase in Craig Tooman’s base salary.
Pension and Benefits: In 2024, Executive Director is eligible for the same benefits as provided to all senior employees.
The Executive Director is entitled to a 100% match of 401k contributions up to 6% of their respective base salary or
maximum allowed by IRS rules.
Annual Performance Bonus: For 2024, the Executive Directors’ annual cash bonus target pay-outs will be 60% of
annual base salary for Craig Tooman. 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. The Company’s 2024 corporate objectives are weighted as follows:
The following tables sets out the Company’s performance objectives for 2024.
Objective
1 SLN 360 milestone delivery
2 SLN 124 milestone delivery
3 Manufacturing processes
4 New business development deals
5 Achievement of financial targets
6 Candidate selection
7 Compliance and Quality
8
TOTAL
Weighting
20 %
15 %
15 %
15 %
12.5 %
10 %
12.5 %
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 2023.
James Ede-Golightly
Chair of the Remuneration Committee
52
SILENCE THERAPEUTICS PLC
Directors’ Report
The Directors present their report and the audited financial statements of the Group for the year ended 31 December
2023.
Principal Activities
The Company has full control and ownership of the following subsidiaries:
• Silence Therapeutics GmbH
• Silence Therapeutics (London) Ltd
•
• Silence Therapeutics Inc.
Innopeg Ltd
The Company, Silence Therapeutics GmbH, Silence Therapeutics (London) Ltd, Innopeg Ltd and Silence Therapeutics
Inc. are collectively referred to as the “Group”.
The principal activity of the Group is focused on the discovery, delivery and development of RNA therapeutics.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors
have prepared the group financial statements in accordance with UK-adopted international accounting standards and
the company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure Framework”, and applicable law).
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
Group’s and Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the financial statements comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
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SILENCE THERAPEUTICS PLC
Directors’ confirmations
In the case of each Director in office at the date the Directors’ report is approved:
•
•
so far as the Director is aware, there is no relevant audit information of which the Group’s and Company’s
auditors are unaware; and
they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of
any relevant audit information and to establish that the Group’s and Company’s auditors are aware of that
information.
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
the communities within which the Group operates and also minimising the impact of the Group’s operations on the
environment; see detailed statement in the Corporate Social Responsibility section of the Strategic Report. The Group’s
estimated electricity usage for the reporting period is 543,120 kWh (an estimated 112 metric tons of CO2 equivalent
emissions), with 13% of that estimated usage occurring in the United Kingdom. The Group’s 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 (2022: nil). The Group
made total charitable donations of £nil during the year (2022: £75 thousand).
Research and Development
In 2023, the Group spent £44.0 million on research and development (2022: £35.6 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 £50.3 million (2022: £47.4 million). The loss after tax for the
year was £43.3 million (2022: £40.5 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.
54
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 2023 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
Giles Campion (resigned as Director: 1 July 2023)
Alistair Gray
Dave Lemus
James Ede-Golightly
Dr. Steven Romano (resigned as Director: 1 April 2023)
Dr. Michael Davidson
Job title
Chairman
Chief Executive Officer
Executive Director
Non-Executive
Non-Executive
Non-Executive
Non-Executive
Non-Executive
The interests of the Directors in the share options of the Company are set out in the Directors’ remuneration report.
Substantial Interests
At 31 December 2023 the Company had been informed of the following substantial interests of over 3% in the issued
share capital of the Company:
Shareholder
Richard Griffiths
Compagnie Odier SCA
Robert Keith
Invus Public Equities Advisors, LLC
TCG Crossover Management, LLC
Deep Track Capital LP
Mallinckrodt
AstraZeneca UK Limited
BVF Partners L.P.
Aquilo Capital Management LLC
This report was approved by the Board of Directors and signed on its behalf by:
Craig Tooman
Chief Executive Officer
8 April 2024
Percentage of
issued share
capital
Number of shares
28,722,255
22,505,532
12,291,528
7,500,000
6,314,625
5,854,740
5,063,859
4,399,452
4,525,248
3,936,699
24.2%
18.9%
10.3%
6.3%
5.3%
4.9%
4.3%
3.7%
3.8%
3.3%
55
SILENCE THERAPEUTICS PLC
3
Financial statements
Independent auditors’ report to the members 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
56
SILENCE THERAPEUTICS PLC
Independent auditors’ report to the members
of Silence Therapeutics Plc
Report on the audit of the financial statements
Opinion
In our opinion:
•
• Silence Therapeutics Plc’s group financial statements and company financial statements (the “financial statements”)
give a true and fair view of the state of the group’s and of the company’s affairs as at 31 December 2023 and of the
group’s loss and the group’s cash flows 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 Practice (United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure
Framework”, and applicable law); and
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 2023; 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 not es to the
financial statements, which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements
in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements.
Our audit approach
Context
Silence Therapeutics plc is a public limited company incorporated under the laws of England and Wales and is listed on NASDAQ.
Overview
Audit scope
• The Group’s headquarters are in the United Kingdom, which is where Group management resides
• 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 consolidation, financial
statement disclosures and a number of complex items, prepared by the head office finance function. These included
goodwill, current and deferred taxes, going concern and central adjustments recorded as part of the consolidation
process.
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SILENCE THERAPEUTICS PLC
• 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
• Accuracy of management’s percentage of completion assessment of revenue recognition under collaboration
agreements (group and parent)
• Accuracy of management’s assessment of costs related to third party research and development (“R&D”) contracts
including associated accruals and prepayments (group and parent)
• Carrying value of the investment in Silence Therapeutics GmbH (parent)
Materiality
• Overall group materiality: £2,515,000 (2022: £2,368,000) based on 5% of Loss before tax.
• Overall company materiality: £2,263,000 (2022: £2,132,000) based on 5% of Loss before tax.
• Performance materiality: £1,886,000 (2022: £1,776,000) (group) and £1,697,000 (2022: £1,599,000) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Material uncertainty related to going concern (group and parent), which was a key audit matter last year, is no longer included because of
the group and parent now having additional liquidity following the recent private placement. Otherwise, the key audit matters below are
consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Accuracy of management’s percentage of completion
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
options for exclusive licence to certain of Silence’s
patents and know-how (“IP”) for specific gene targets.
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
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 and challenged management’s assessment of
percentage of completion for the targets including “actual
cost incurred to date” and “future cost to complete”. These
costs comprise of both non-third party costs (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;
- In testing the internal costs incurred in the year we
considered the reasonableness of the proportion of these
to the total internal cost recharges which have been
invoiced in the year. The invoiced cost recharges are then
58
SILENCE THERAPEUTICS PLC
completion of each performance obligation, by using the
input method based on cost to complete, 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 2023 is £24.8m (2022: £16.9m).
(Please see note 3 for further details). During the year
Silence reacquired exclusive worldwide rights to two
preclinical siRNA assets under its Mallinckrodt
collaboration, which resulted in a modification of the
agreement.
Accuracy of management’s assessment of costs related
to third party research and development (“R&D”)
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 to
third-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.
Outsourcing to third parties restricts Silence’s visibility
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 2023, third party R&D contracts totalled £6.8m
in prepayments and £4.4m in accruals.
Please see notes 16 and 18 for further details.
agreed to the Workplans (see Key Audit Matter relating to
third party research and development contracts below).
Tested the external “future cost to complete” per the
programme Workplans, We also performed a retrospective
review of management’s ability to appropriately forecast
these costs; and
- Tested the mathematical accuracy of the calculations. For
the modification under the Mallinckrodt collaboration in the
year we;
(i) considered the appropriateness of management's
accounting treatment over the modification, including
possible alternate accounting treatments
(ii) recalculated management's reallocation of the
transaction price
(iii) recalculated the income recognised based on the
percentage of completion of the one remaining asset under
the collaboration.
All of the testing above has been performed to obtain a
high level of assurance. Other elements of revenue
calculations, such as, “non-third party related actual costs
incurred to date” and the “transactions price” were
designated as having a normal risk of material
misstatement and have been tested to obtain a normal
level of assurance. The testing approach for “third party
related actual costs incurred to date” is described in the
Key Audit Matter below for “Accuracy of management’s
assessment of costs related to third party research and
development (“R&D”) contracts including associated
accruals and prepayments. We concluded that
management’s revenue recognition 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:
- Obtained and challenged management’s calculations of
the expense and associated accruals and prepayments
positions as at 31 December 2023, 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 from the third party. 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.
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SILENCE THERAPEUTICS PLC
Carrying value of the investment in Silence Therapeutics
GmbH (parent)
As at 31 December 2023 the parent company held an
investment in its wholly owned subsidiary Silence
Therapeutics GmbH (‘GmbH’) of £23.3m as well as a
long-term receivable from GmbH of £15.1m. 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 investment in accordance with IAS 36 (Impairment
of assets) and on the receivable in accordance with IFRS
9 (Financial instruments) and determined that £0.8m of
impairment was necessary in the current year. Judgement
is required in the impairment assessment, specifically in
forecasting the timing and probability of future contractual
milestone receipts.
Please see note C.6 for further details.
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. We concluded that management’s
recording of the research costs through the year and the
related accruals and prepayments are appropriate.
We performed the following audit procedures to address
the risk:
We obtained management’s impairment analysis for the
investment amount (under IAS 36) and the loan receivable
amount (under IFRS 9) and gained an understanding of the
key assumptions and judgements underlying the
assessments. 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
- Confirming that the timing of future receipts is consistent
with our review of board minutes and project status
meetings.
We concluded that management’s assessments that no
impairment is required in relation to the carrying value of
the investment and a provision of £0.8m is required against
the loan receivable 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.
The Group’s accounting process is structured around local finance functions in each of the Group’s reporting entities. These functions
maintain their own accounting records and controls (although transactional processing and certain controls for some repor ting 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
financial information (“full scope”). 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
because both individually contribute more than 15% of the Group’s loss before tax.
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
60
SILENCE THERAPEUTICS PLC
review procedures. Those not subject to analytical review procedures were individually, and in aggregate, immaterial. This gave 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 disclosur es 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 group’s and
company’s financial statements, and we remained alert when performing our audit procedures for any indicators of the impact of climate
risk. Our procedures did not identify any material impact as a result of climate risk on the group’s and company’s financial statements.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on
the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate
on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall
materiality
How we
determined it
Rationale for
benchmark
applied
Financial statements - group
Financial statements - company
£2,515,000 (2022: £2,368,000).
£2,263,000 (2022: £2,132,000).
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 materialit y. The range of
materiality allocated across components was £1,509,000 to £2,263,000. 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% (2022: 75%%) of overall materiality, amounting to £1,886,000 (2022: £1,776,000) for the group financial
statements and £1,697,000 (2022: £1,599,000) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during our audit above £12 5,000
(group audit) (2022: £118,000) and £113,000 (company audit) (2022: £107,000) as well as misstatements below those amounts that, in our
view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group's and the company’s ability to continue to adopt the going concern b asis of
accounting included:
61
SILENCE THERAPEUTICS PLC
• Testing the mathematical accuracy of the cash flow forecasts
• Comparing the current year actual results to previous cash flow forecasts
• Challenging management on any notable year-on-year changes in the forecasts, including the assumptions used in
the forecasts
• 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
• Using our understanding of the Group and the company and the industry in which they operate to assess the
possibility of additional risks arising and their potential impact
• Evaluating the disclosures within the financial statements
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group's and the company’s ability to continue as a going concern for a period of at least twelve
months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group's and the company's
ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our audit ors’ report
thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information
and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures
to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based
on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors' report, we also considered whether the disclosures required by the UK Companies Act
2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as
described below.
Strategic report and Directors' report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' report for
the year ended 31 December 2023 is consistent with the financial statements and has been prepared in accordance with applicable legal
requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we did not
identify any material misstatements in the Strategic report and Directors' report.
Annual Report On Remuneration
In our opinion, the part of the Annual Report on Remuneration to be audited has been properly prepared in accordance with the Companies
Act 2006.
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SILENCE THERAPEUTICS PLC
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also
responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accoun ting 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.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when 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 the Companies Act 2006 and UK Tax Legislation, and we considered the extent to which non-compliance might have a material
effect on the financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls), and determined that the principal risks were related to 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.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Ch 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
63
SILENCE THERAPEUTICS PLC
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
• certain disclosures of directors’ remuneration specified by law are not made; or
•
the company financial statements and the part of the Annual Report on Remuneration to be audited are not in
agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
64
SILENCE THERAPEUTICS PLC
Consolidated income statement
year ended 31 December 2023
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
2023
£000s
25,375
(10,318 )
15,057
(44,025 )
(20,636 )
(49,604 )
(2,152 )
1,446
(50,310 )
7,043
(43,267 )
2022
£000s
17,501
(10,880 )
6,621
(35,605 )
(19,609 )
(48,593 )
(47 )
1,272
(47,368 )
6,879
(40,489 )
Loss per ordinary equity share (basic and diluted)
10 (38.9) pence
(41.9) pence
Consolidated statement of comprehensive income
year ended 31 December 2023
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
2023
£000s
(43,267 )
2022
£000s
(40,489 )
(134)
(134)
(43,401 )
544
544
(39,945 )
The accompanying accounting policies and notes form an integral part of these financial statements.
65
SILENCE THERAPEUTICS PLC
Consolidated balance sheet
at 31 December 2023
Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Other long-term 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
Capital and reserves attributable to the owners of the parent
Share capital
Capital reserves
Translation reserve
Accumulated losses
Total shareholders equity
Note
11
12
13
17
31 December
2023
£000s
1,813
7,840
284
2,580
284
12,801
14
54,031
15 -
17,627
10
9,135
16
228
17
81,021
19
20
20
18
19
(93)
(58,910 )
(59,003 )
(5,161 )
(12,429 )
(179 )
(17,769 )
17,050
2022
£000s
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
22 (5,942)
(313,769)
24
(1,951)
304,612
(17,050)
5,390
277,860
2,085
(263,263 )
22,072
The financial statements on pages 65 to 100 were approved by the Board on 8 April 2024 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.
66
SILENCE THERAPEUTICS PLC
Consolidated statement of changes in equity
year ended 31 December 2023
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
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 2023
Note
22
22
24 / 22
Share
capital
£000s
4,489
-
-
901
Capital
Reserves
£000s
225,462
10,252
(192)
42,338
Translation
reserve
£000s
1,541
-
-
-
Accumulated
losses
£000s
(222,966 )
-
192
-
Total
equity
£000s
8,526
10,252
-
43,239
901
-
52,398
-
-
-
192
(40,489 )
53,491
(40,489 )
-
-
-
-
5,390
277,860
13,050
-
- (1,918)
24,777
552
24
24
24 / 22
544
544
-
(40,489 )
2,085 (263,263)
-
1,918
-
-
-
-
552
-
35,909
-
-
-
1,918
(43,267 )
544
(39,945 )
22,072
13,050
-
25,329
38,379
(43,267 )
-
-
-
5,942
-
-
313,769
(134)
(134)
1,951
-
(43,267 )
(304,612 )
(134)
(43,401 )
17,050
The accompanying accounting policies and notes form an integral part of these financial statements.
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SILENCE THERAPEUTICS PLC
Consolidated statement of cash flows
year ended 31 December 2023
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/(increase) in other long term current assets
Decrease in derivative financial instrument
Increase in trade and other payables
Increase in contract liabilities
Cash generated/(spent) on operations
Tax paid
R&D tax credits received
Net cash (outflow)/inflow from operating activities
Cash flow from investing activities
Redemption of financial assets at amortised cost – term deposits
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
Year ended 31 December
2023
£000s
(50,310 )
462
36
13,050
2,157
2,152
(1,446 )
314
610
(1,772)
(2,580)
-
44
(8,278)
(45,561)
(642)
6,853
(39,350)
36,183
(20,666)
958
(45)
-
16,430
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 )
(174 )
25,329
25,155
(190 )
43,239
43,049
2,235 (18, 949 )
73,537
228
54,816
54,816
(3,020)
54,031
The accompanying accounting policies and notes form an integral part of these financial statements.
68
SILENCE THERAPEUTICS PLC
Notes to the consolidated financial statements
year ended 31 December 2023
1.
General information
1.1
Group
Silence Therapeutics plc and its subsidiaries (together the ‘Group’) are primarily involved in the discovery, delivery and
development of RNA therapeutics. Silence Therapeutics plc, a public Company limited by shares registered in England
and Wales, with company number 02992058, is the Group’s ultimate parent Company. The Company’s registered office
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 UK adopted International Accounting
Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those
standards. 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 and amended standards applicable in year adopted
During the year ended December 31, 2023 we adopted, beginning January 1, 2023, amendments to IAS12 'Income
taxes' on deferred tax assets and liabilities arising from a single transaction and international tax reform - pillar two
model rules. This did not have a material impact on the Company's results of operations or financial position.
New standards issued but not yet effective and not early adopted
Certain new accounting standards and interpretations have been published that are not mandatory for December 31,
2023 reporting periods and have not been early adopted by the Group. These include amendments to IAS1 'Presentation
of financial statements' on classification of liabilities. The remaining standards are not applicable to the entity in the
current or future reporting periods and on foreseeable future transactions.
New standards issued but not yet effective and early adopted
There were no standards early adopted.
2.2
Basis of consolidation
The Consolidated financial statements consolidate those of the Company and its controlled subsidiary undertakings
drawn up to 31 December 2023. 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.
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SILENCE THERAPEUTICS PLC
2.3
Going concern
The Group has incurred recurring losses since inception, including net losses of £43.3 million for the year ended
December 31, 2023. As of December 31, 2023, the Group had accumulated losses of £304.6 million and cash outflows
from operating activities for the year ended 31 December 2023 of £39.4 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 upfront payments
in respect of the AstraZeneca plc ("AstraZeneca") collaboration, $45.0 million from a private placement of American
Depositary Shares ("ADSs") (approximately $42.0 million / £30.8 million, net of expenses) and an approximately $16.0
million (£10.7 million) upfront payment (net of taxes withheld, based on the exchange rate at the payment date), related
to the Hansoh Pharmaceutical Group Company Limited ("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 placement agent
fees and other expenses. In 2023, the Group received a $10.0 million (approximately £7.9 million) milestone from the
AstraZeneca collaboration and $4 million (approximately £3.2 million) in milestones from the Hansoh collaboration. The
Group also raised gross proceeds of approximately $32.2 million (approximately £25.5 million), before deducting £1.0
million in placement agent fees and other expenses from its open market sale agreement. As of December 31, 2023,
the Group had cash and cash equivalents of £54.0 million ($68.8 million).
In January 2024, we raised additional proceeds of £15.7 million ($20 million) before deducting £0.5 million ($0.6 million)
in placement agent fees and other expenses, from sales of ADSs under our Sales Agreement.. On February 5, 2024
the Group announced a private placement of 5,714,286 of the Company’s American Depositary Shares (“ADSs”), each
representing three ordinary shares, at a price of US $21.00 per ADS, with new and existing institutional and accredited
investors (the “Private Placement”). The aggregate gross proceeds of the Private Placement was US $120 million
(approximately £94.5 million) before deducting approximately £5.7 million in placement agent fees and other expenses.
The financing syndicate included 5AM Ventures, Frazier Life Sciences, Logos Capital, Nextech Invest Ltd (on behalf of
one or more funds managed by it), Redmile Group, TCGX and Vivo Capital.
The Group believes that its current cash and cash equivalents are sufficient to fund its operating expenses for at least
the next twelve months from the issuance date of these consolidated financial statements. For this reason, the Company
continues to adopt the going concern basis in preparing the financial statements.
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 from existing
collaboration agreements which will extend the ability to fund operations. However, these future milestone payments
are dependent on achievement of certain development or regulatory objectives that may not occur. The inability to obtain
future funding could impact; the Group’s financial condition and ability to pursue its business strategies, including being
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.
2.4
Research and development
The Group recognise expenditure incurred in carrying out its research and development activities in line with
management’s best estimation of the costs incurred to date for each separately contracted study or activity. This includes
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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SILENCE THERAPEUTICS PLC
2.5
Revenue recognition
The Group’s revenue for the year ended 31 December 2023 consists of royalty income and revenue from collaboration
agreements.
Royalty income
The Group’s royalty income is generated by a settlement and license agreement with Alnylam. Under this contract,
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 mule 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 Group’s effort under the contracts continues throughout their entire duration. On this basis revenue is recognised
over the contract period based on costs to completion.
Revenue has been calculated on the following ongoing basis for the year ended 31 December 2023:
•
•
•
Total contract costs which includes actual FTE and direct costs incurred up to 31 December 2023 and forecast
FTE and direct costs for the remainder of the contract
Actual costs incurred up until 31 December 2023 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 2023 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).
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional
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.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign
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 2022 or 2023.
All goodwill is attributed to an acquisition that occurred in 2005. Goodwill represents the excess of the cost of the
acquisition over the Group’s interest in 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
of a subsidiary represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the
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
or the asset’s cash generating unit may be impaired. At least annually or if there is such an indication, the recoverable
amount of the asset or asset’s cash generating unit is compared to the carrying amount.
The recoverable amount of the asset or asset’s cash generating unit is the higher of the fair value less costs to sell and
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
a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying
asset) for a period of time in exchange for consideration’. To apply this definition, the Group assesses whether the
contract meets two key evaluations, which are whether:
•
•
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 using the Group’s incremental borrowing rate. Lease payments included in the measurement
of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index
or rate, amounts expected to be payable under a residual value guarantee and payments arising from options
reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made
and increased for interest.
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 23). 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
used in the model have been adjusted, based on management’s best 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
In the process of applying the entity’s accounting policies, management makes estimates and judgments that have an
effect on the amounts recognised in the financial statements. Although these estimates are based on management’s
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 0.8% decrease 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 identified as the Group’s 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 2023 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 (2022: £0.6 million) and £24.8 million of Research collaboration
income (2022: £16.9 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 – Other
Research collaboration – total
Royalties
Total revenue from contracts with customers
2023
£000s
10,544
13,682
580
24,806
569
25,375
2022
£000s
11,658
5,081
184
16,923
578
17,501
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. No milestone
payments under this agreement were achieved (2022: £2.2 million) during the year ended December 31, 2023. We
recognize 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 December 31, 2023, we recognized
a total of £10.5 million in revenue under this agreement (2022: £11.7 million).
In March 2023, the Company reacquired exclusive worldwide rights to two preclinical siRNA assets under its Mallinckrodt
collaboration, which resulted in a modification of the agreement. No additional performance obligations were identified
as a result of the modification as there were no additional goods or services to be provided by the Company and the
modification resulted in the partially satisfied performance obligations relating to the two reacquired targets becoming
fully satisfied as the Company was no longer obligated to develop these targets. SLN501, the C3 targeting program,
remains under the original collaboration agreement. The Company accounted for the modification as if it were part of
the existing contract as the remaining services to be delivered form part of a single performance obligation that is partially
satisfied at the date of contract modification. The effect of the contract modification was that the consideration originally
received for the two preclinical siRNA assets was reallocated to SLN501. The Company recognized the effect of the
contract modification on the measure of progress towards complete satisfaction of the SLN501 performance obligation
and recognized an adjustment to revenue at the date of the contract modification on a cumulative catch-up basis. The
Company recognized £8.0 million on the contract modification date. In relation to the reacquired targets, the two
preclinical siRNA assets were recognized at fair value. The fair value of those assets has been determined to be nil.
Under the modification, the Company agreed to pay future success-based milestones and low single digit royalties on
net sales if the projects advance. The Company will recognize these variable success-based milestones as an intangible
asset at cost when triggered. Any royalties payable will be expensed in cost of sales.
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 recognize the
upfront payment and milestone payments over time, in accordance with IFRS 15 para 35 c). During the year ended
December 31, 2023, the Company achieved a milestone payment of approximately £7.9 million ($10.0 million) (2022:
nil). During the year ended December 31, 2023, we recognized a total of £13.7 million in revenue under this agreement
(2022: £5.1 million).
We entered into a collaboration agreement with Hansoh on October 15, 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, 2023, the Company
achieved milestone payments totaling £3.2 million ($4.0 million) (2022: £1.5 million). We recognize the upfront payment
and milestone payments over time, in accordance with IFRS 15 para 35 c). During the year ended December 31, 2023,
we recognized a total of £0.6 million in revenue under this agreement (2022: £0.2 million).
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 were 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 recognized based on the level of sales when the related sales occur. During the year ended December 31,
2023, we recognized a total of £0.6 million in royalty income from Alnylam (2022: £0.6 million).
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SILENCE THERAPEUTICS PLC
4.
Segment reporting
In 2023, 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 2022 and
2023, 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 Group’s assets and revenues by location is shown below:
U.S.A.
£000s
U.K.
£000s
Germany
£000s
Non-current assets
As at 31 December 2022
As at 31 December 2023
Revenue analysis for the year ended 31 December 2022
Research collaboration
Royalties
Revenue analysis for the year ended 31 December 2023
Research collaboration
Royalties
5.
Operating loss
This is stated after charging/(crediting):
-
-
-
-
-
-
-
-
1,166
3,508
9,648
9,293
16,923
-
16,923
-
578
578
Total
£000s
10,814
12,801
16,923
578
17,501
24,806
-
24,806
-
569
569
24,806
569
25,375
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
2023
£000s
462
36
13,050
481
576
222
6.
Directors and staff costs
Staff costs, including Directors’ remuneration, during the year for the Group were as follows:
Wages and salaries
Social security costs
Other pension costs
Share-based payments charge
Total aggregate remuneration
2023
£000s
15,363
1,524
489
13,050
30,426
2022
£000s
478
4
10,252
410
463
150
2022
£000s
14,760
1,434
429
10,252
26,875
Remuneration and share based payments detail for all Directors is presented in the Remuneration Committee report.
See page 32 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
2023
Number
86
29
115
2022
Number
88
28
116
2023
£000s
34
2,118
2,152
2023
£000s
67
1,379
-
1,446
2022
£000s
47
-
47
2022
£000s
23
203
1,046
1,272
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 25% (2022: 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
2023
£000s
(50,310 )
12,578
207
(13,177 )
15
7,793
(373 )
7,043
2022
£000s
(47,368 )
9,000
544
(9,948 )
(401)
7,836
(152)
6,879
Estimated tax losses of £199.0 million (2022: £167.8 million) are available for relief against future profits.
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SILENCE THERAPEUTICS PLC
The deferred tax asset not recognized in these financial statements on the estimated losses and the treatment of the
equity settled share- based payments, net of any other temporary differences is detailed in note 23. During the year, the
Group had not yet received a research and development tax credit related to the prior year (2022: £7.8 million). The
Group has accrued £7.8 million (2022: £7.8 million) recognizing a current tax asset in respect of 2023 research and
development tax credits. Research and development tax credit in respect of the current year includes amounts for
unfunded projects that are permissible to claim under the Small or Medium Enterprise ('SME') R&D tax scheme. In
addition to this we have also recognised £0.9 million of income from the RDEC scheme in the income statement within
research and development costs. The company had a foreign tax expense of £0.4 million. (2022: £0.4 million).
The corporation tax main rate during 2023 was 25% (2022: 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 recognized any
related deferred tax assets as at 31, December 2023, 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. In 2021
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 2023 the Group received a milestone
payment of £3.2 million ($4.0 million), which required withholding tax of £0.4 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 and on the weighted
average of 111,277,250 (2022: 96,584,512; 2021: 88,950,441) ordinary shares in issue during the year.
The options outstanding at December 31, 2023, December 31, 2022 and December 31, 2021 are considered to be anti-
dilutive as the Group is loss-making.
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SILENCE THERAPEUTICS PLC
11
Property, plant and equipment
Cost
At 1 January 2022
Additions
Disposals
Translation adjustment
At 31 December 2022
At 1 January 2023
Additions
Translation adjustment
At 31 December 2023
Accumulated depreciation
At 1 January 2022
Charge for the year
Eliminated on disposal
Translation adjustment
At 31 December 2022
At 1 January 2023
Charge for the year
At 31 December 2023
Net book value
As at 31 December 2022
As at 31 December 2023
12. Goodwill
Balance at start of year
Translation adjustment
Balance at end of year
Equipment and
furniture
£000s
Right-of-use
asset
£000s
5,112
140
(506)
240
4,986
4,986
45
24
5,055
3,293
306
(506 )
144
3,237
3,237
296
3,533
1,749
1,522
345
499
(346 )
-
498
498
-
5
503
220
172
(346 )
-
46
46
166
212
452
291
Total
£000s
5,457
639
(852 )
240
5,484
5,484
45
29
5,558
3,513
478
(852 )
144
3,283
3,283
462
3,745
2,201
1,813
2023
£000s
8,009
(169)
7,840
2022
£000s
7,592
417
8,009
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 2023
•
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 capitalization at December 31, 2023, which was £540.5 million (2022:£453.3 million), with
share price not dropping significantly below its December 31, 2023 value at any point so far in 2024, and therefore a
sensitivity analysis has not been presented.
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SILENCE THERAPEUTICS PLC
13. Other intangible assets
Cost
At 1 January 2022
Additions
Translation adjustment
At 31 December 2022
At 1 January 2023
Additions
Translation adjustment
At 31 December 2023
Accumulated depreciation
At 1 January 2022
Charge for the year
Translation adjustment
At 31 December 2022
At 1 January 2023
Charge for the year
Translation adjustment
At 31 December 2023
Net book value
As at 31 December 2022
As at 31 December 2023
Licenses &
software
£000s
130
300
-
430
430
-
-
430
106
4
-
110
110
36
146
320
284
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
2023
£000s
24,993
29,038
-
54,031
2022
£000s
41,986
12,376
454
54,816
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 £nil (2022: £16.3 million).
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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
2023
£000s
-
-
284
284
2022
£000s
16,328
16,328
284
16,612
2023
£000s
8,157
978
9,135
2022
£000s
8,200
1,545
9,745
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SILENCE THERAPEUTICS PLC
17.
Trade receivables
Trade receivables
2023
£000s
228
2022
£000s
915
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 (2022: £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
2023
£000s
2,629
577
8,850
373
12,429
2022
£000s
3,186
467
8,391
589
12,633
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
2023
£000s
179
93
272
2022
£000s
183
263
446
The lease liability recognised on the face of the balance sheet comprises of the Group’s London 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, 2023, was £0.2 million (2022: £0.2
million).
There are two short-term leases in Berlin, Germany and seven 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.
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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, 2023
Contract liabilities:
Current
Non-current
Total contract liabilities
Contract liabilities:
At 1 January 2022
Additions during period
Revenue unwound during period
At 31 December 2022
At 1 January 2023
Additions during period
Revenue unwound during period
At 31 December 2023
21. Deferred tax
2022
£000s
8,864
63,485
72,349
31 December,
2023
£000s
5,161
58,910
64,071
Total
£000s
76,748
12,519
(16,918 )
72,349
72,349
16,528
(24,806 )
64,071
The Group has the following unrecognised deferred tax assets as at 31 December 2023:
Total unrecognised deferred tax assets are calculated based on the main corporate tax rate of 25% (25% for 2022) 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 2023 (2022: nil).
88
20232022GrossGross£000s£000sTrading losses198,422167,828Share based payments7,6798,995Capital losses78737,873Total unrecognised deferred tax asset213,974184,696December 31,
SILENCE THERAPEUTICS PLC
22. Share capital
Authorised, allotted, called up and fully paid ordinary shares, par value £0.05
Number of shares in issue
Number of ADS in issue
2023
£000s
5,942
2022
£000s
5,390
Number
118,846,966
39,615,655
Number
107,808,472
35,936,157
The Group has only one class of share. All ordinary shares have equal voting rights and rank pari passu for the
distribution of dividends.
On February 5, 2021 the Group announced a private placement of 2,022,218 of the Company’s American Depositary
Shares (“ADSs”),, each representing three ordinary shares, at a price of $22.50 per ADS, with new and existing
institutional and accredited investors (the “Private Placement”). The aggregate gross proceeds of the Private Placement
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 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 (the “Offering”) of 5,950,000 of the Company’s
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.
On October 15, 2021, we entered into an Open Market Sale Agreement (the "Sales Agreement"), with Jefferies LLC
("Jefferies"), under which Jefferies, as our exclusive agent, at our discretion and at such times that we may determine
from time to time, may sell over a three-year period from the execution of the Sales Agreement up to a maximum of
$100.0 million of ADSs. Under the terms of the Sales Agreement, Jefferies may sell the ADSs at market prices by any
method that is deemed to be an "at the market offering" as defined in Rule 415 under the Securities Act of 1933, as
amended. The ADSs offered under the Sales Agreement are being offered pursuant to a registration statement on Form
F-3 that became effective on October 22, 2021. We may offer and sell up to $300.0 million of our shares, represented
by ADSs, from time to time in one or more offerings. During the year ended December 31, 2023, we sold 3.4 million
ADSs for net proceeds of approximately $32.2 million (approximately £25.5 million), before deducting £1.0 million in
placement agent fees and other expenses. As of this filing, approximately $67.8 million of ADSs remained available
under the Sales Agreement.
Details of the shares issued during the current and previous year are as follows:
89
SILENCE THERAPEUTICS PLC
Number of shares in issue at 1 January 2022
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
Shares issued during the year
Options exercised at $0.20/ADS or $0.07/ordinary share
Options exercised at $2.40/ADS or $0.80/ordinary share
Options exercised at $3.76/ADS or $1.25/ordinary share
Options exercised at $7.60/ADS or $2.53/ordinary share
Options exercised at $15.38/ADS or $5.13/ordinary share
Number of shares in issue at 31 December 2023
Number of equivalent ADS in issue at 31 December 2023
89,784,720
17,850,000
84,835
16,968
12,951
24,000
15,000
19,998
107,808,472
10,230,567
583,857
39,999
27,498
154,386
2,187
118,846,966
39,615,655
At 31 December 2023, there were options outstanding over 15,853,459 (2022: 11,571,487) unissued ordinary shares.
Details of the options outstanding are as follows:
Year of issue
Weighted average
Exercise price (£)
Weighted
average
Exercise price
($)
At 1 January
2023
Options
granted
Options
forfeited
Options
expired
Options
exercised
At 31
December,
2023
Weighted
average years to
expiry date
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
3.39
3.39
4.12
6.46
0.16
4.30
6.60
17.94
14.83
11.13
4.23
4.23
5.14
8.05
0.20
5.36
8.23
22.37
18.49
13.88
4,000
3,333
9,857
49,165
44,422
725,518
603,440
822,984
1,594,443
-
-
-
-
-
-
-
-
-
-
2,567,942
-
-
(9,166)
(7,826)
(147,820)
(303,000) (39,233)
(71,819) (24,286) (64,535)
-
(44,517)
(729)
(130,063)
(289,599)
(8,025)
4,000
3,333
9,857
39,999
36,596
577,698
261,207
662,344
1,419,863
2,269,589
0.67
1.51
2.35
3.90
4.24
2.83
6.43
7.12
8.09
9.14
3,857,162 2,567,942
(491,481) (379,828) (269,309)
5,284,486
Number of equivalent ADS
11,571,487 7,703,826 (1,474,443)
(1,139,
484)
(807,927)
15,853,459
90
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
1.334058 sterling pounds to 1 US Dollar.
The market price of Company shares at the year-end was $17.37/ADS or ($5.79 or 464 pence/share). (2022:
$15.25/ADS ($5.08 or 420 pence/share)). During the year the minimum and maximum prices were $4.61 and $17.67
per ADS (123 pence and 472 pence per ordinary share), respectively (2022: 215 pence and 680 pence).
23. Equity-settled share-based payments
The Group has issued share options under the 2018 Long Term Incentive Plan (EIP), 2018 Non-Employee Long Term
Inventive Plan (Non-Employee EIP), 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 2023). Under the EIP, Non-Employee EIP, 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.
2023
2022
Number of
Weighted
Weighted
Number
of shares
Weighted
ADSs
Average
Exercise
price
Average
Exercise
price
000s
$
Pence
000s
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
3,857,162
2,567,942
(871,309)
(269,309)
0
5,284,486
2,420,614
15.10
14.01
18.50
1.89
0.00
14.80
14.34
Average
Exercise
price
Pence
197.19
600.74
787.96
86.20
2,684,233
1,940,377
(709,531)
(57,917)
403.63
374.49
494.51
50.52
0
0
0.00
395.61
3,857,162
383.31
1,889,460
406.78
356.67
91
SILENCE THERAPEUTICS PLC
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 7.68 years (2022: 8.2
years). The weighted average share price at the time of exercise during the year was 274 pence per ordinary share or
$10.26 per ADS (2022: 318.31 pence).
The Group granted 7,703,826 share options during the year (2022: 5,821,131). The fair value of options granted were
calculated using Black Scholes model for 2023 and 2022. Prior to January 1, 2022, the fair value of options granted
were calculated using a Binomial or Monte Carlo model. Inputs into the model were as follows:
2023
2022
Inputs and assumptions for options granted in the year
Weighted average share price (pence)
Weighted average ADS price ($)
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
375.0
14.0
375.0
14.0
537.4
19.5
n/a n/a
673.8
24.4
8.9
56%-74%
1.16%-3.57%
nil
6.0
72%-79%
3.16%-4.43%
nil
The Group recognized total charges of £13.1 million (2022: £10.3 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 £0.2 million (2022: £0.4
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.
92
SILENCE THERAPEUTICS PLC
At 1 January 2022
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
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 2023
Share
Premium
account
£000s
184,332
45,533
-
153
(3,348)
42,338
226,670
25,411
-
381
(1,015)
24,777
251,447
25. Capital commitments and contingent liabilities
There were no capital commitments at 31 December 2023 (2022: nil).
Merger
reserve
£000s
22,248
-
-
-
Share-based
Payment
reserve
£000s
13,688
-
10,252
(192 )
Capital
redemption
reserve
£000s
5,194
-
-
-
-
-
22,248
-
-
-
-
-
22,248
-
10,060
23,748
-
13,050
(1,918 )
-
11,132
34,880
-
-
5,194
-
-
-
Total
£000s
225,462
45,533
10,252
(39 )
(3,348)
52,398
277,860
25,411
13,050
(1,537 )
-
-
5,194
(1,015)
35,909
313,769
93
SILENCE THERAPEUTICS PLC
26. Commitments under short leases
At 31 December 2023, the Group had a gross commitment on its office rental and service charge in Berlin, Germany
and the Hoboken, U.S. lease equal to £0.4 million (2022: £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
The Group’s financial instruments comprise primarily cash and other financial assets and various items such as
receivables and trade payables which arise directly from its operations. The main purpose of these financial instruments
is to provide working capital for the Group’s operations. The Group assesses counterparty risk on a regular basis. Board
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.
Credit quality of financial assets (loans and receivables)
2023
£000s
228
54,031
-
284
54,543
2022
£000s
915
54,816
16,328
284
72,343
2023
£000s
12,429
272
12,701
2022
£000s
12,166
446
12,612
94
SILENCE THERAPEUTICS PLC
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
2023
£000s
228
284
-
512
2022
£000s
915
284
16,328
17,527
Cash and cash equivalents and U.S. Treasury Bills are not considered to be exposed to significant credit risk due to the
fact they are held in a financial institution with an “A” rating. The Group considers the possibility of significant loss in 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 potential revenue from existing partnerships and ongoing licensing activities. The Group’s objective when managing
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
The nature of the Group’s activities and the basis of funding are such that the Group has significant 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
to, or above, the main U.K. clearing banks. The Group’s liquid resources are invested having regard to the timing of
payments to be made in the ordinary course of the Group’s activities. All financial liabilities are payable in the short term
(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.
95
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)
2023
£000s
3,254
(1,541 )
1,713
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)
2023
£000s
54,664
(3,290 )
51,374
2022
£000s
2,302
(1,279 )
1,023
2022
£000s
53,086
(2,947 )
50,139
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 2% (2022: 1%) against the euro. The table shows the impact of an additional weakening
or strengthening of sterling against the euro by 20%.
2023
Group result for the year
Euro denominated net financial liabilities
Total equity at 31 December 2023
As reported
£000s
If sterling
rose 20%
£000s
(43,267 )
1,713
17,050
(40,221 )
1,428
16,765
If sterling
fell 20%
£000s
(47,836 )
2,141
17,478
96
SILENCE THERAPEUTICS PLC
2022
Group result for the year
Euro denominated net financial liabilities
Total equity at 31 December 2022
(40,489 )
1,023
22,072
(37,572 )
853
21,902
(44,865 )
1,279
22,328
97
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 5% (2022: 10% decrease) against the US dollar. The table shows the impact of an
additional weakening or strengthening of sterling against the US dollar by 20%.
2023
Group result for the year
U.S. dollar denominated net financial assets
Total equity at 31 December 2023
2022
Group result for the year
U.S. dollar denominated net financial assets
Total equity at 31 December 2022
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
(43,267 )
51,374
17,050
(42,958 )
42,812
8,488
If sterling
fell 20%
£000s
(43,730 )
64,218
29,894
(40,489 )
50,139
22,072
(37,013 )
41,783
13,716
(45,703 )
62,674
34,607
1 January
Cash flows from
financing
activities
2023
£000s
446
446
Repayments
£000s
(174 )
(174 )
Non-cash flows
New lease
liabilities
£000s
-
-
31
December
2023
£000s
272
272
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, the Company agreed to pay Gladstone Consultancy Partnership, a company controlled by the Company’s Non-
Executive Chairman, Iain Ross, £60 thousand (plus any applicable value added tax) for consulting and advisory services
provided by Mr. Ross. Gladstone Consulting Partnership is no longer being engaged by the Company in 2023.
Key management are considered to be Directors of the Group. Directors’ compensation is discussed in the
Remuneration Committee Report.
30. Post Balance Sheet Events
In January 2024, we raised proceeds of $20 million before deducting $0.6 million in placement agent fees and other
expenses, from sales of ADSs under our Sales Agreement.
On February 5, 2024 the Group announced a private placement of 5,714,286 of the Company’s American Depositary
Shares (“ADSs”), each representing three ordinary shares, at a price of US $21.00 per ADS, with new and existing
institutional and accredited investors (the “Private Placement”). The aggregate gross proceeds of the Private Placement
was US $120 million (approximately £94.5 million) before deducting approximately £5.7 million in placement agent fees
98
SILENCE THERAPEUTICS PLC
and other expenses. The financing syndicate included 5AM Ventures, Frazier Life Sciences, Logos Capital, Nextech
Invest Ltd (on behalf of one or more funds managed by it), Redmile Group, TCGX and Vivo Capital.
In March 2024, Mallinckrodt notified us that they will not pursue further development of SLN501 following the
completion of the phase 1 clinical trial. This will conclude all activities and commitments under the collaboration
agreement.
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 2023 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
therapeutics
England Dormant
England 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 2023
Non-current assets
Property, plant and equipment
Other intangible assets
Other long term assets
Investment in subsidiaries
Financial assets at amortised cost
Current assets
Cash and cash equivalents
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
Capital and reserves attributable to the Company’s equity holders
Share capital
Capital reserves
Accumulated losses
Total equity
Note
C.5
C.5
C.9
C.6
C.8
C.7
C.8
C.9
C.10
C.12
C.13
C.13
C.11
C.12
C.14
2023
£000s
360
284
2,580
18,082
284
21,590
53,456
-
17,627
8,895
6,212
86,190
(93)
(58,910 )
(59,003 )
(5,161 )
(24,792 )
(179 )
(30,132 )
18,645
18,645
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
5,942
313,585
(300,882 )
18,645
5,390
277,676
(261,572 )
21,494
The Company made a loss of £40.5 million in the year ended 31 December 2023 (2022: £43.4 million).
The financial statements on pages 101 to 113 were approved by the Board on 8 April 2024 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 2023
At 1 January 2022
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 2022
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 2023
Note
C.14
C.14
C.14
Share
capital
£000s
4,489
-
-
901
901
5,390
-
-
552
552
-
5,942
Capital
reserves
£000s
225,278
10,252
(192 )
42,338
52,398
277,676
13,050
(1,918 )
24,777
35,909
-
313,585
Accumulated
losses
£000s
(218,410 )
-
192
-
192
(43,354 )
(261,572 )
-
1,918
-
1,918
(41,228 )
(300,882 )
The accompanying accounting policies and notes form an integral part of these financial statements.
Total
equity
£000s
11,357
10,252
-
43,239
53,491
(43,354 )
21,494
13,050
-
25,329
38,379
(41,228 )
18,645
102
SILENCE THERAPEUTICS PLC
Notes to the Company Financial Statements
Year ended 31 December 2023
C.1
General information
Silence Therapeutics plc (“the Company”), is a public Company limited by shares registered in England and Wales,
with company number 02992058. The Company’s registered office is 27 Eastcastle Street, London, W1W 8DH.C.2
Basis of preparation
These financial statements are prepared in accordance with Financial Reporting Standard 101 ‘Reduced Disclosure
Framework’. This applies 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 £41.2 million for the year ended
December 31, 2023. As of December 31, 2023, the Company had accumulated losses of £300.9 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.
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SILENCE THERAPEUTICS PLC
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 upfront payments in respect of the AstraZeneca plc ("AstraZeneca") collaboration, $45.0 million from a private
placement of American Depositary Shares ("ADSs") (approximately $42.0 million / £30.8 million, net of expenses) and
an approximately $16.0 million (£10.7 million) upfront payment (net of taxes withheld, based on the exchange rate at
the payment date), related to the Hansoh Pharmaceutical Group Company Limited ("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 placement agent fees and other expenses. In 2023, the Company received a $10.0 million (approximately
£7.9 million) milestone from the AstraZeneca collaboration and $4 million (approximately £3.2 million) in milestones from
the Hansoh collaboration. The Company also raised net proceeds of approximately $32 million (approximately £25.5
million), before deducting £1.0 million in placement agent fees and other expenses from its open market sale agreement.
As of December 31, 2023, the Company had cash and cash equivalents of £54.0 million.
In January 2024, we raised an additional proceeds of $20 million net proceeds before deducting £0.6 million in placement
agent fees and other expenses, from sales of ADSs under our Sales Agreement. On February 5, 2024 the Company
announced a private placement of 5,714,286 of the Company’s American Depositary Shares (“ADSs”), each
representing three ordinary shares, at a price of US $21.00 per ADS, with new and existing institutional and accredited
investors (the “Private Placement”). The aggregate gross proceeds of the Private Placement was US $120 million
(approximately £94.5 million) before deducting approximately £5.7 million in placement agent fees and other expenses.
The financing syndicate included 5AM Ventures, Frazier Life Sciences, Logos Capital, Nextech Invest Ltd (on behalf of
one or more funds managed by it), Redmile Group, TCGX and Vivo Capital.
The Company believes that its current cash and cash equivalents are sufficient to fund its operating expenses for at
least the next twelve months. For this reason, the Company continues to adopt the going concern basis in preparing the
financial statements.
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
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
In the process of applying the entity’s accounting policies, management makes estimates and judgements that have an
effect on the amounts recognised in the financial statements. Although these estimates are based on management’s
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 (Refer to note 2.18
in the notes to the consolidated financial statements):
o
the determination of the number of performance obligations (judgement);
104
SILENCE THERAPEUTICS PLC
o
o
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.
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
Staff costs, including Directors’ remuneration, during the year for the Company were as follows:
Wages and salaries
Social security costs
Share-based payments charge
Other pension costs
2023
£000s
10,247
823
13,050
420
24,540
2022
£000s
10,249
743
10,252
415
21,659
Remuneration detail for all Directors is presented in the Remuneration Committee report. See page 32 for further
details. The total remuneration of the highest paid director was £0.9 million (2022: £0.6 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
2023
Number
26
16
42
2022
Number
26
16
42
105
SILENCE THERAPEUTICS PLC
C.5
Property, plant and equipment
Cost
At 1 January 2022
Additions
Disposals
At 31 December 2022
At 1 January 2023
Additions
Disposals
At 31 December 2023
Accumulated depreciation
At 1 January 2022
Charge for the year
Eliminated on disposal
At 31 December 2022
At 1 January 2023
Charge for the year
Eliminated on disposal
At 31 December 2023
Net book value
As at 31 December 2022
As at 31 December 2023
Intangible Assets
Cost
At 1 January 2022
Additions
Disposals
Translation adjustment
At 31 December 2022
At 1 January 2023
Additions
Disposals
Translation adjustment
At 31 December 2023
Accumulated depreciation
At 1 January 2022
Charge for the year
Eliminated on disposal
Translation adjustment
At 31 December 2022
At 1 January 2023
Charge for the year
Eliminated on disposal
Translation adjustment
At 31 December 2023
Net book value
As at 31 December 2022
As at 31 December 2023
Equipment and
Right-of-use
furniture
£000s
asset
£000s
Total
£000s
748
61
(70)
739
739
-
-
739
670
34
(70)
634
634
36
(-)
670
105
69
346
499
(346)
499
499
-
-
499
216
171
(346)
41
41
167
(-)
208
458
291
1,094
560
(416)
1,238
1,238
-
-
1,238
886
205
(416)
675
675
203
(-)
878
563
360
Licenses and
Software
£000s
Total
£000s
130
300
-
-
430
430
-
-
-
430
106
4
-
-
110
110
36
-
-
146
320
284
130
300
-
-
430
430
-
-
-
430
106
4
-
-
110
110
36
-
-
146
320
284
106
SILENCE THERAPEUTICS PLC
C.6
Investments in subsidiaries
Company
Investment in subsidiary undertakings
2023
£000s
18,082
2022
£000s
17,519
The investment in subsidiary undertakings is made up as follows:
Shares and loans in subsidiary undertakings
At 1 January 2022
Movement in the year
At 31 December 2022
Movement in the year
At 31 December 2023
Investment
Quasi-equity
at cost
£000s
23,713
-
23,713
-
23,713
loan
£000s
35,476
1,132
36,608
897
37,505
Impairment
provision
(Investment)
£000s
Impairment
provision
(Loan)
£000s
Net total
£000s
(20,360 )
-
(20,360 )
-
(20,360 )
(22,442 )
-
(22,442 )
-
(22,442 )
16,387
1,132
17,519
897
18,416
107
SILENCE THERAPEUTICS PLC
Investments at cost total of £23.7 million (2022: £23.7 million) are analysed as follows:
•
•
•
£23.3 million (2022: £23.3 million) relating to Silence Therapeutics GmbH.
£0.2 million (2022: £0.2 million) relating to Silence Therapeutics Inc.
The balance of the investments at cost of £0.2 million (2022: £0.2 million) relates to Innopeg Limited (2022: £0.1
million) and Silence Therapeutics (London) Limited (2022: £0.1 million).
Quasi-equity loans total of £37.5 million (2022: £36.6 million) are analysed as follows:
•
•
At 31 December 2023, an interest-bearing unsecured loan of £14.7 million (2022: £14.2 million) was outstanding
from Silence Therapeutics plc to Silence Therapeutics GmbH. The movement in the year includes a foreign
exchange loss of £0.3 (2022: £0.7 million) and accrued interest of £0.9 million (2022: £0.4 million).
At 31 December 2023, a non-interest-bearing unsecured loan of £22.4million (2022: £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 (2022: 42.8 million) is analysed as follows:
•
•
•
•
£20.2 million (2022: £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
15.38% and resulting headroom was £12.5 million. Management has assessed that, if no milestones were to
be achieved in 2024 or 2025, this would result a reduction the headroom by of £0.8 million.
£0.2 million (2022: £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 (2022: £22.4 million) as they are not deemed to be recoverable.
In considering the recoverability of the loan with Silence Therapeutics GmbH, management have calculated the
expected credit loss using the 3 stage model methodology under IFRS 9 and recognised a lifetime credit loss.
Management assess credit loss as the present value of the difference between: a) the contractual cash flows
that are due to an entity under the contract; and b) the cash flows that the entity expects to receive. As a result
of this, management has determined that a provision of £30 thousand is required (2022: £30 thousand). In their
assessment, management have netted the intercompany trading balances against this loan receivable as
allowed under the loan contract.
108
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 Group’s financial statements:
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
therapeutics
England Dormant
England 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
2023
£000s
24,418
29,038
-
53,456
2022
£000s
41,237
12,376
454
54,067
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 £nil (2022: 16.3 million).
Current financial assets at amortised cost – U.S.Treasury Bills
Financial assets at amortised cost - non-current
Total financial assets at amortised cost
C.9
Other current assets
2023
£000s
-
284
284
2022
£000s
16,328
284
16,612
109
SILENCE THERAPEUTICS PLC
Prepayments
VAT receivable
Total other current assets
Prepayments
Other long term assets
C.10 Trade and other receivables
Trade receivables
Amount receivable from subsidiary undertaking
Total trade and other receivables
2023
£000s
8,033
862
8,895
2,580
2,580
2023
£000s
228
5,984
6,212
2022
£000s
8,064
1,441
9,505
-
-
2022
£000s
915
19
934
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.
In considering the recoverability of the amount receivable from Silence Therapeutics GmbH, management have
calculated the expected credit loss using the 3 stage model methodology under IFRS 9 and recognised a lifetime credit
loss. Management assess credit loss as the present value of the difference between: a) the contractual cash flows that
are due to an entity under the contract; and b) the cash flows that the entity expects to receive. As a result of this,
management has determined that a provision of £0.8 million is required (2022: £nil). In their assessment, management
have netted the intercompany trading balances against the loan receivable as allowed under the loan contract.
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
2023
£000s
2,770
14,176
155
7,691
24,792
2022
£000s
3,105
9,356
379
7,274
20,114
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.
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SILENCE THERAPEUTICS PLC
C.12 Lease liability
Lease liability - current
Lease liability – non-current
Total lease liability
2023
£000s
179
93
272
2022
£000s
183
263
446
In 2023 the lease liability recognised on the face of the balance sheet comprises of the Group’s London office. The
repayment of the principal portion of these lease liabilities for the year-ending 31 December 2023 was £0.2 million (2022:
£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 – current
Contract liabilities – non-current
2023
£000s
5,161
58,910
64,071
2022
£000s
8,864
63,485
72,349
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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
184,332
45,533
-
153
(3,348)
42,338
226,670
25,411
-
381
(1,015)
24,777
251,447
Merger
reserve
Share-based
payment reserve
Capital
redemption
reserve
£000s
22,064
-
-
-
-
22,064
-
-
-
-
-
22,064
£000s
13,688
-
10,252
(192 )
10,060
23,748
-
13,050
(1,918 )
£000s
5,194
-
-
-
-
5,194
-
-
-
11,132
34,880
-
5,194
Total
£000s
225,278
45,533
10,252
(39 )
(3,348)
52,398
277,676
25,411
13,050
(1,537 )
(1,015)
35,909
313,585
At 1 January 2022
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
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 2023
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, the Company agreed to pay Gladstone Consultancy Partnership, a company controlled by the Company’s
Non-Executive Chairman, Iain Ross, £60 thousand (plus any applicable value added tax) for consulting and advisory
services provided by Mr. Ross. Gladstone Consulting Partnership is no longer being engaged by the Company in
2023.
We have no related party transactions in 2023.
Post balance sheet events
C.16
In January 2024, we raised proceeds of $20 million before deducting $0.6 million in placement agent fees and other
expenses, from sales of ADSs under our Sales Agreement.
On February 5, 2024 the Group announced a private placement of 5,714,286 of the Company’s American Depositary
Shares (“ADSs”), each representing three ordinary shares, at a price of US $21.00 per ADS, with new and existing
institutional and accredited investors (the “Private Placement”). The aggregate gross proceeds of the Private Placement
was US $120 million (approximately £94.5 million) before deducting approximately £5.7 million in placement agent fees
and other expenses. The financing syndicate included 5AM Ventures, Frazier Life Sciences, Logos Capital, Nextech
Invest Ltd (on behalf of one or more funds managed by it), Redmile Group, TCGX and Vivo Capital.
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SILENCE THERAPEUTICS PLC
In March 2024, Mallinckrodt notified us that they will not pursue further development of SLN501 following the
completion of the phase 1 clinical trial. This will conclude all activities and commitments under the collaboration
agreement.
113
SILENCE THERAPEUTICS PLC
Company Information and Advisers
Secretary
Rhonda Hellums
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
St John’s Innovation Park
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