A N N U A L
R E P O R T &
A C C O U N T S
T W E N T Y 2 1
www.valirx.com
G R O U P S T R AT E G I C R E P O R T,
R E P O R T O F T H E D I R E C T O R S
AND AUDITED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED
31 DECEMBER 2021
FOR
VALIRX PLC
ValiRx Plc
Contents of the Consolidated Financial Statements
for the year ended 31 December 2021
C O M PA N Y I N F O R M AT I O N
Company Information
S T R AT E G I C R E P O R T
Chairman’s Report
Chief Executive’s Report
Group Strategic Report
G O V E R N A N C E
Corporate Governance
Report of the Directors
Statement of Directors’ Responsibilities
Report of the Independent Auditors
F I N A N C I A L S TAT E M E N T S
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
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COMPANY
INFO RMATION
ValiRx Plc
CONNECTED INNOVATION
Company Information
for the year ended 31 December 2021
D I R E C T O R S :
K J Alexander
G Desler
M Lampshire
Dr S J Dilly
Dr K Cox
S E C R E TA R Y:
K J Alexander
R E G I S T E R E D O F F I C E :
Stonebridge House
Chelmsford Road
Hatfield Heath
Essex
CM22 7BD
R E G I S T E R E D N U M B E R :
03916791 (England and Wales)
A U D I T O R S :
Adler Shine LLP
Chartered Accountants & Statutory Auditor
Aston House
Cornwall Avenue
London
N3 1LF
3
STRATEGIC
REPORT
ValiRx Plc
CONNECTED INNOVATION
Chairman’s Report
for the year ended 31 December 2021
2021 was a year of continued strategy evolution and the transition of ValiRx away from clinical
development towards a pre-clinical development company with a dual purpose to progress pre-clinical
collaborative projects and develop our revenue generating tCRO (translational Contract Research
Organisation). We see this as a continuation of our theme of ‘connected innovation’ with the tCRO
supporting the collaborative projects both financially and scientifically.
The company has made significant progress across three fronts through 2021:
• out-licencing of clinical assets (Letter of Intent (LoI) to sub-license VAL201, active marketing of VAL401)
• building a pre-clinical pipeline of novel technologies in cancer and Women’s Health (three projects under
evaluation)
• creating a revenue generating and profitable tCRO
We were very pleased to sign the LoI for sub-licencing of VAL201 to TheoremRx Inc, a company we believe
will bring the right level of expertise to progress the compound through later stage clinical trials. We also
see TheoremRx as a prospective partner for assets in our pre-clinical pipeline. We continue to support
TheoremRx in their scientific activities and look forward to a successful fund raise in the near future.
The interest in our novel approach to the translation of academic science has been particularly encouraging,
and we are now engaging with a wide range of international institutions to identify new projects. The experience
we have gained through working with academia further exemplified the need to bring industrial thinking to the
challenges of technology translation, and illustrated the importance of collecting pre-clinical data that improves
understanding of the underlying biology of new treatments. We believe the adoption of VAL301 into our
pre-clinical pipeline will serve as an exemplar of our approach to pre-clinical development and provide a
template for future studies.
A combination of factors, including the need for high-quality data generation, data analysis and interpretation,
together with our experience of out-sourcing, led to the realisation that a new approach to pre-clinical
development would benefit our internal collaborative pipeline and provide an opportunity to generate revenue
by offering similar advanced services to the wider biopharmaceutical community. The outcome of this is our
strategy to create a new type of CRO, focused on accelerating the process of translation, a tCRO.
The transition of our strategy has been actively supported by Cenkos and our other advisors. We are pleased
to have been able to benefit from their expertise and extensive relationships with institutional investors, which
has led to a broadening of our investor base and ongoing support in building value in ValiRx for the benefit
of all shareholders.
Kevin Cox
Chairman
Date: 6 June 2022
5
ValiRx Plc
CONNECTED INNOVATION
Chief Executive’s Report
for the year ended 31 December 2021
2021 was a busy year.
For ValiRx, 2021 was a year to consolidate the stability gained over the previous twelve months, to draw
to a close the outstanding clinical activities on the legacy assets, and to further evolve and commence
implementation of our new strategic direction.
During 2021 we completed the evaluation of our first new pre-clinical project, KTH222 from Kalos therapeutics,
but on reviewing the data and commercial prospects decided that was not sufficiently aligned with our
ambitions. We terminated the agreement and have no further input or interest in this programme as
announced on 27 May 2021. Our search for new preclinical projects continued.
Seeking projects in both oncology and diseases associated with Women’s Health has led us to the realisation
that while there is a wealth of early-stage oncology research coming out of universities, there is comparatively
less in Women’s Health.
Our conversations with universities have encompassed institutions from across the world and we were
delighted to have confirmed evaluation agreements entered with both a London University, with a candidate
for triple negative Breast Cancer, announced on 16 September 2021, and Hokkaido University in Japan for a
programme for endometrial, pancreatic and bile duct cancers announced on 16 December 2021. Post-period
we have also confirmed our signature of an evaluation agreement with Barcelona University in Spain for a
KRAS project against uterine and pancreatic cancers announced 10 February 2022.
The global reach of our scientific reviews ensures that we are able to see a wealth of project opportunities
and to seek those that really match our criteria and expertise.
These projects will be progressed throughout 2022 and if the evaluations are successful, the projects will enter
full license agreements with dedicated subsidiary companies of ValiRx.
During 2021 substantial progress was also made towards partnering and moving on from our clinical stage
projects. In January 2021, we submitted the Clinical Study Report from the clinical trial of VAL201 and moved to
a stage of further analysis of the data and commercial development. Further analysis has been completed
from a commercial viewpoint of considering the data with independent Key Opinion Leaders and an expert
team on valuation benchmarking. Further scientific analysis has been carried out in collaboration with
Physiomics, as announced on 15 February 2021, who have been considering the clinical data in conjunction
with the historic preclinical data and the newly generated pre-clinical data generated across the VAL301
and BC201 projects.
Commercial development also advanced for VAL201 throughout the year, culminating in the signature of the
Letter of Intent with TheoremRx Inc to sub-license the oncology use of the VAL201 peptide, announced on
2 November 2021. This detailed that ValiRx would receive near term payments and milestones of $2M USD
with a total of $61M USD after successful launch to the market for the treatment of prostate cancer. $37M USD
is available in milestones for each additional oncology indication developed. A further announcement on the
VAL201 sub-license was made on 20 December 2021 confirming that the license from Cancer Research
technology to ValiRx for VAL201 had been updated to align with the TheoremRx expectations.
Corporate progress has continued, with Cenkos Securities announced as our new corporate broker on
25 August 2021, and substantial work has been carried out between Cenkos and ValiRx in the intervening
period to ensure that the evolving strategy is ready for launch and providing support across all corporate
functions.
6
ValiRx Plc
CONNECTED INNOVATION
Chief Executive’s Report
for the year ended 31 December 2021
Outlook
2021 enabled us to continue building foundations of durability within ValiRx. Completing the VAL201 clinical
trial, entering the Letter of Intent with TheoremRx to sub-license VAL201. The foundations of our renewed
strategy were also strengthened with two evaluation agreements being entered for new pre-clinical projects
and a further evaluation entered post period.
During 2022 we intend to build on these positions of strength by further developing our pipeline of new
pre-clinical projects by bringing further assets into Evaluation, but also, as the first projects complete initial
evaluation we anticipate at least one of these programmes moving to a full license and entering an
appropriate subsidiary company during the year.
Our research strategy mitigates risks by ensuring that multiple programmes are assessed in a rolling
programme of in-licensing, with new projects arriving across a range of oncology and disease associated
with Women’s Health and varying modalities of small molecules and synthetic peptide drug candidates,
creating a risk balanced portfolio. Our strategy to run extensive scientific and commercial evaluations under
resource-limited agreements provides further confidence before full in-licensing is contemplated.
Within 2022, ValiRx also intends to initiate the strategy to build our Translational Contract Research
Organisation (tCRO), offering the Connected Innovation concept as a service to the wider industry.
By acquiring our own laboratory facility and using that as the baseline for integrating further technologies
and services, we will be able to present ourselves as a revenue generating, expert facility for high quality,
high impact science.
We anticipate that the build phase of the tCRO will commence in 2022, and will require additional personnel
to be recruited into ValiRx to ensure the breadth of acquisition and integration skills are available to the
Company. Further project management expertise may also be required to support the subsidiary companies
developing the in-house pipeline should the evaluation projects prove successful.
Financial overview
Our financial results show the total comprehensive loss for the year ended 31 December 2021 of £1,518,212
(2020: £1,443,248) and a loss per share of 2.34p (2020: Loss - 3.81p).
Research and developments costs were £303,789 for the year ended 31 December 2021 as compared to
£230,115 in 2020, an increase of £73,674. In addition, total wage costs of £216,237 (2020: £118,754) were
expended on research and development during the year.
Administrative expenses were £1,216,391 (2020: £1,276,619 before loss on disposal of intangible assets of
£154,968) for the year ended 31 December 2021 a decrease of £60,228.
I would like to thank the staff and Board members for all their contributions and shareholders for their
continued support. We look forward to implementing our evolving strategy while continuing to maintain our
culture of openness and transparency to all stakeholders.
Dr S J Dilly
Director
Date: 6 June 2022
7
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2021
The Directors present the strategic report and financial statements for the year ended 31 December 2021.
Company information and highlights
ValiRx accelerates the development of treatments in cancer and Women’s Health to improve patient lives.
We provide the scientific, financial and commercial framework to enable the rapid translation of innovative
science into clinical development. With our extensive and proven experience in research and drug development,
we select and incubate promising novel drug candidates and guide them through an optimised process of
development, from pre-clinical studies to clinic and investor-ready assets.
Building on our experience in pre-clinical drug development, we have assessed options to create an integrated
translational Contract Research Organisation (tCRO) to offer connected innovation services to the wider
pharmaceutical and biotech industry, as well as supporting in-house programmes.
Strategy and Vision
Our therapeutic focus prioritises cancer, related conditions and diseases associated with Women’s Health.
The pipeline is enriched by robust partnerships with academia and industry, fuelled by our intellectual and
financial resources.
The need for scientific advances in Women’s Health is increasingly recognised and new laboratory and data
handling techniques are becoming available that have the potential to improve our understanding of the
biological differences between men and women and improve clinical development.
Every Datapoint Counts
Experience from ValiRx’s own studies suggests that employing state-of-the-art testing methods, data collection
and analysis will generate a detailed understanding of the activity of a drug candidate in, for example, a cell.
The practical and expert application of the enhanced pre-clinical data output has the potential to significantly
improve clinical trial design and de-risk an asset for external partnering.
Business Structure
Currently operating as a virtual biotech company, ValiRx has assessed options to bring pre-clinical testing
services in-house, possibly through the acquisition of a laboratory facility, and invest in advanced data analysis
and data implementation technologies, operating to optimally process our own pipeline and offering an
integrated service to external parties to generate revenues.
This laboratory, together with new testing services, could serve as the foundation of a novel Translational
Contract Research Organisation (tCRO), enabling our in-house pipeline growth to be supported through both
the revenues generated and the expertise within the laboratory team. The tCRO is anticipated to operate as
a wholly-owned ValiRx subsidiary.
We will continue to seek collaborations with academic innovators in oncology and women’s health and build
a risk-balanced pre-clinical pipeline for future out-licencing.
The Group retains the following divisional companies:
1. ValiPharma
2. ValiSeek: a joint venture company with Tangent Reprofiling Limited (a SEEK group company) holding the
IP for VAL401.
8
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2021
The company listed on the Alternative Investment Market (“AIM”) of the London Stock Exchange in
October 2006.
Impact of coronavirus pandemic on company operations
Despite the profound impact of the coronavirus pandemic on society as a whole and the restrictions placed
on person-to-person interactions, ValiRx has been able to continue operations with minimal impact on core
programmes and processes.
Attending industry partnering conferences virtually has enabled the team to continue to meet academic
teams from across the world, to engage in scientific and commercial discussion unhindered by travel
restrictions.
Although shareholder events have been unable to take place in-person, the Company has embraced the
digital platforms, with shareholder events being held with a range of providers including Investor Meet
Company and BRR Media. Following the successful launch of our shareholder communications programme
last year, feedback was sought on the format for future events, and a schedule of quarterly Live Q&A
sessions now replaces the monthly written Q&A, FAQs remain available and are regularly reviewed and
updated on our website.
9
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2021
THERAPEUTIC AREAS
Women’s Health
Diseases associated with Women’s Health are one of
our key focus areas for in-house pre-clinical research.
The discussions with Universities across the world,
typically identify a wealth of opportunity in oncology,
including female-centric oncology, such as the
gynaecological cancers. However there is a clear
dearth of innovative research ready for translation in
other areas of Women’s Health.
The VAL301 project is a good example of a drug
candidate for Women’s Health. Initially developed
as a subset of the VAL201 programme for the
treatment of men with prostate cancer, the overlap
in biological mechanisms, i.e the prevention of
hormone stimulated cell proliferation, also affords
the potential for the peptide to be a candidate for
the treatment of endometriosis. Endometriosis is
not a cancerous condition, but is characterised by
benign, inappropriate growth of hormone
dependent tissue.
Candidates for the treatment of conditions such as
endometriosis, along with Poly Cystic Ovary Syndrome
(PCOS) and symptoms of menopause clearly all fall
into our target area of Women’s Health. Most drug
candidates are optimised for dose levels, tolerability,
pharmacokinetics and drug metabolism during
early-stage clinical trials, initially in healthy volunteers
for Phase 1 and then typically in carefully selected
patients in Phase 2. The vast majority of patients
recruited for these early-stage trials are either women
who are post-menopausal or men unless there is a
strong rationale explained to the regulators to include
younger women (for example if the disease only occurs
in young women) and a technique to avoid risk to an
unborn child.
Although it is now widely acknowledged that
pre-menopausal women can respond very differently
to drugs in comparison to both men and
post-menopausal women, drugs are still routinely
clinically optimised for men. This results in a higher
than necessary clinical risk during Phase 3 clinical
trials, when the drug is provided and tested in a much
broader range of patient volunteers, as the women
now being included may display unexpected
tolerability or lack of efficacy purely due to the
gender-specific optimisation process.
Although the rationale for these restrictions was well
founded, in particular in the light of the damage to
unborn children of thalidomide, the technologies to
better understand a drug candidate’s potential for
reproductive toxicological impacts, as well as better
1 0
monitoring of women within early-stage clinical trials
– including very early pregnancy detection methods –
enables these restrictions to be reconsidered.
Within our category of research for Women’s Health,
we are considering drug candidates for treatment
of conditions that can affect both men and women,
but that either have a bias towards women (for
example auto-immune conditions such as Lupus
and Auto-immune Hepatitis) or have a recognised
treatment that is optimised for men but remains
sub-optimal for women (such as anti-coagulants
where many persist for longer in women than in men,
causing increased risk of side effects).
Endometriosis
Endometriosis is a gynaecological medical condition
in which cells from the lining of the uterus
(endometrium) appear and grow outside the uterine
cavity. This growth fluctuates in a pattern alongside
the menstrual cycle, under the influence of female
hormones.
These misplaced endometrial-like cells are influenced
by hormonal changes and respond in a way that is
similar to the cells found inside the uterus; hence
symptoms often worsen with the menstrual cycle.
The treatments chosen will depend on symptoms,
age, and lifestyle plans, currently centring around
pain relief and hormone suppression; the latter
leading to potential infertility and bone weakening
side effects.
VAL301 in endometriosis
VAL301 presents an opportunity to suppress
hormone-driven cellular growth in the absence of
outright hormone suppression. By interrupting only
the hormone driven cell growth while sparing the
other hormone activities, the infertility and related
side effects are expected to be avoided.
Currently in pre-clinical testing by ValiRx, this theoretical
benefit will be investigated in future trials.
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2021
THERAPEUTIC AREAS
Cancer
ValiRx is focused on developing treatments for
difficult-to-treat types of cancer that extend survival
and improve patient experience. Traditional
approaches, such as chemotherapy, extend patient
survival but also bring high side effect burdens and
complex combination treatment regimens.
Whilst individualised treatments and target therapies
have improved outcomes for some types of cancer,
many types of cancer have insufficient treatment op-
tions and rely on drugs that have remained unchanged
for decades.
By targeting precise biological mechanisms, we aim to
improve the patient experience in terms of both survival
and quality of life.
Clinical Assets (to be out-licenced)
VAL201 in prostate cancer
VAL201 is a short peptide being studied for the treat-
ment of prostate cancer. The peptide structure is
inspired by the structure of the naturally occurring
androgen receptor and is designed to intercept and
prevent the binding of the androgen receptor to SRC
kinase; an enzyme implicated in cancerous cell growth
pathways. By preventing the androgen-mediated ac-
tivation of SRC kinase, VAL201 can prevent cancerous
cell proliferation (or growth) without interfering with
other functions of the androgen receptor or SRC kinase.
This precision method, mimicking a natural process,
proposes a high specificity of cancer treatment, with a
lower side effect profile.
VAL201 has completed a Phase 1/2 clinical trial in the
UK, investigating the effects of different dose levels of
the drug to establish the safety, tolerability and first
indications of disease impact. VAL201 is the subject of
a Letter of Intent to sub-license to TheoremRx Inc. This
sub-license covers the use of the VAL201 peptide for all
oncology usage, and is expected to generate income of
approximately $2M USD over the next two years and up
to $61M USD plus royalties if the project is successfully
launched for the treatment of prostate cancer. Further
milestone payments are expected of over $37M USD
if VAL201 is used for additional oncology indications.
Finalisation of the sub-licence is subject to a successful
fund raise by TheoremRx, targeted to be completed
before end-June 2022.
VAL401 in adenocarcinoma
VAL401 is the reformulation of the established anti-psy-
chotic drug risperidone. Formulated into a lipid-filled
capsule for oral, once daily administration, VAL401
enables an anti-cancer activity, via cancer cell metab-
olism enzyme, Hydroxysteroid-dehydrogenase type 10
(HSD10), not seen with conventional risperidone.
VAL401 has completed a pilot Phase 2 clinical trial,
treating patients with end-stage non-small cell lung
cancer. These patients demonstrated a statistically sig-
nificant improvement in overall survival from diagnosis
over case-matched control patients in the same clinics;
and showed improvements in quality of life during
treatment.
Identifying quality of life improvement in nausea, pain
and appetite, has identified pancreatic adenocarci-
noma to be a preferred disease to assess in the next
clinical trial of VAL401.
VAL401 is currently undergoing a sustained out-licens-
ing effort to identify a partner to complete the clinical
development programme.
1 1
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2021
THERAPEUTIC AREAS
Pre-clinical Projects Under Evaluation
Prior to in-licensing projects in full, ValiRx carries out
a rigorous scientific and commercial evaluation
programme on the project at its own expense.
During the evaluation period (typically 6-12 months)
ValiRx is able to assess whether the project is a good
fit for the pre-clinical pipeline. If the evaluation is a
success, a full license will be executed with the
innovator and the asset will be incorporated into a
dedicated SPV, most likely a ValiRx subsidiary.
The scientific assessment typically consists of a range
of cell-based assays to understand the biology and
demonstrate the mechanism of action of the lead
drug candidate; and to determine the disease area
of highest potential for further development.
The projects currently under evaluation are detailed
below, including 2022.1 agreed as a post period event.
Project
Originator
Disease
Molecule
Date Evaluation
Agreement started
2021.1
2021.2
2022.1
Undisclosed
London University
Triple Negative Breast
Cancer
Undisclosed
16 September 2021
Hokkaido
University (Japan)
Endometrial,Pancreatic
and Bile Duct Cancers
Peptide
16 December 2021
Barcelona
University (Spain)
Uterine and Pancreatic
Cancers
Peptidomimetic
KRAS binder
10 February 2022
BC201 in Covid-19
Coronavirus SARS-CoV2 is the causative pathogenic
virus of Covid-19. This highly contagious virus causes
Acute Respiratory Distress Syndrome (ARDS) in many
patients, which can lead to hospitalisation and death.
The pandemic was declared in March 2020, and the
world is now fully aware of the prevalence and
serious nature of the virus.
Patients displaying ARDS can respond well to
supportive treatment including administration of
positive pressures of oxygen, however, despite this,
a proportion still go on to experience more severe
symptoms.
These symptoms are believed to be caused by the
significant, multi-organ damage that can be caused
by an excessive response of the immune system, even
after the viral infection has reduced. This is known
as a hyperimmune response.
BC201 is a combination of the peptide ingredient
of VAL201/VAL301 with complementary active
components to dampen this excessive immune
response and consequently improve severe
symptoms of Covid-19.
The theoretical action of the peptide is two-fold:
by blocking the Androgen Receptor mediated
activity of SRC Kinase, the peptide is postulated
to down-regulate the expression of TMPRSS2 a
transmembrane protein believed to be required
for Coronavirus cell entry; and by directly
dampening the immune response.
1 2
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2021
SUMMARY OF THE CURRENT DEVELOPMENT PIPELINE
Current Pipeline
Discovery
Optimisation
Pre-clinical
Phase 1
Phase 2
TRIPLE NEGATIVE
BREAST CANCER
HOKKAIDO
UNIVERSITY PEPTIDE
BARCELONA
UNIVERSITY KRAS
VAL301
BC201
Under Evaluaton Agreement
Under Evaluaton Agreement
Under Evaluaton Agreement
Endometriosis
Sepsis and Covid-19 complications
VAL301
Prostate cancer
BC201
Lung/pancreatic cancer
Currently operating as a virtual Biotech Company, ValiRx out-sources all testing of current evaluation and
pre-clinical projects to a wide range of external contract research organisations (CROs). The Company is of
the view that this fragmented approach to early-stage drug development is non-optimal and is assessing
options to acquire capabilities and infrastructure to create a more efficient and effective translational drug
development service.
Strategy - a consolidation opportinity
Data Application
Professional services providing expert
knowledge to guide future development
decisions and reduce risk
Bio-infomatics
Overlay large data collation, curation
and analysis
Data Generation
Acquire advanced data-rich
in-vitro technologies
Core Infrastructure
Established pre-clinical laboratory
facility
ValiRx,
tCRO
Traditional
CRO
Operating as a wholly owned subsidiary company, the integrated services would be used for both in-house
projects and offered to third parties, such as the increasing number of innovative biotechnology companies.
The revenue generated from providing pre-clinical development services would enable continued investment
in advanced testing and analysis technology and support the progression of ValiRx in-house pipeline projects.
Translational Drug Development
Future - broadening to
external service
Service Pipeline
Service Revenues
Collaborative transation
services for academia
Service and collaborative
development piplelines
Licensing Revenues
Today - focussed on
academic collaborations
Advanced preclinical capabilities:
• High content data generation
• Large scale data curation and analysis
• Application of comprehensive biological
insights
• Women’s Health & Oncology specialism
Reducing risk in clinical trials
1 3
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2021
Management Team and Board Overview
ValiRx comprises a multi-disciplinary team of scientists, technologists and business leaders, committed
to providing the framework required for successful drug development. Collaboration is the key to making
this happen; each member of the ValiRx team plays a vital role in the strength and success of company
programmes, which are focused on achieving the improved outcomes and quality of life for patients.,
in the most effective and efficient way.
Board
Dr Suzanne Dilly
Chief Executive Officer (Appointed June 2020)
Suzanne is an experienced entrepreneurial scientist. After commercialising her Chemical
Biology post-doctoral research in the University of Warwick spin-out, a2sp Limited,
Suzanne was awarded a prestigious Royal Society of Edinburgh Enterprise Fellowship,
during which formal commercial and entrepreneurial training completed her transition
from lab to boardroom.
Completing commercial transactions to progress projects through multiple companies,
Suzanne has had executive and leadership roles in biotech companies since 2006.
Dr Kevin Cox
Non-Executive Chairman (Appointed June 2020)
Kevin has over 25 years’ experience in the life science industry. Serving as CEO of high
growth biotechnology businesses, he has extensive experience in strategy, corporate
development, M&A, financing and joint ventures. With a passion for improving
translational science, Kevin has strong links to government, funding bodies and
academia, and has contributed to a number of public sector advisory committees.
Kevin currently has non-executive roles with Biorelate Limited, , the British Neuroscience
Association and Biotaspheric Limited.
Mr Gerry Desler
Chief Financial Officer
Gerry is a chartered accountant, who qualified in 1968 with a City firm, before becoming
a partner (1970) and Senior Partner (1985). During his time in the City, he has specialised
in consultancy work, much of it involving funding and venture capital.
Gerry was previously the Finance Director of Premier Management Holdings plc, an AIM
listed company and is on the board of a number of private companies. Gerry also held
the position as Company Secretary at the AIM listed company Prospex Energy PLC.
Mr Kevin Alexander
Non-Executive Director
Kevin is a qualified solicitor in England and an attorney in New York and he was a
partner at major law firms in both London and the United States for over 25 years.
Since leaving the law he has been involved in forming and managing various
businesses, both private and public. Kevin is a director of ValiRx Plc, and joined the
board in September 2006.
He has an MA in law from Cambridge University.
1 4
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2021
Management Team and Board Overview
Mr Martin Lampshire
Non-Executive Director (Appointed May 2020)
Martin started his career in Lloyds Bank’s Commercial Services division in 1989 after
completing the ACIB qualification. He has over thirty years’ experience in Corporate
Broking, assisting in a variety of equity raises including IPOs, secondary fundraisings,
vendor and private placings across a variety of sectors.
He has also worked in a number of overseas financial centres including Hong Kong,
Singapore, Kuala Lumpur and Dubai. Martin is currently an Executive Director of Global
Resources Investment Trust Plc and a Non-Executive Director of Bould Opportunities Plc.
Mr Mark Treharne
Corporate Development Manager
Mark began his career in the City in 2011 and has worked in Corporate Broking and
Equity sales working for numerous different firms including Daniel Stewart, Northland
Capital Partners and Pello Capital.
His role includes enhancing the reputation of the Company within the City and working
closely with City firms to identify new therapeutic assets to incorporate into the ValiRx
portfolio.
Mr Kumar Nawani
Head of Operations
Kumar has been working over 20 years in international trade, client & vendor
management, business development, brand development, e-commerce, procurement,
IT management & compliance roles with established public and private companies
in the UK and previously in Hong Kong.
Kumar has been with the ValiRx Group since January 2008 as an active member of
the ValiRx management team.
1 5
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2021
Scientific Advisors
ValiRx retains the services of a core team of scientific advisors to provide expert opinions on all pipeline
projects in a wide range of therapeutic areas. A Science Advisory Board (SAB) has been established, which
meets quarterly to critically review all projects and identify future trends in biomedical research, in addition
to holding meetings with individual members of the ValiRx team in between.
The core team of advisors is summarised below, additional consultancy from other individuals is obtained
as required:
Dr Wilson Caparrós-Wanderley
(Independent Consultant)
Dr Wilson Caparrós-Wanderley is a pharmaceutical executive with 25 years’ experience in biomedical R&D.
He obtained a first degree from the University of Barcelona and a PhD from the University of London.
Upon receiving his PhD in the 90’s, he completed postdoctoral fellowships at King’s College London and
Imperial College before moving to industry. During this time, he worked on viral vaccines, gene therapy
vectors, cancer treatments and immunomodulatory therapies.
In the mid 2000’s Dr Caparrós-Wanderley was appointed Chief Scientific Officer of PepTcell Ltd (later the
SEEK Group). During his 11-year tenure as CSO, he oversaw the expansion and progression of the company’s
intellectual property into viable vaccine, respiratory and oncology therapies. At the time of his leaving
SEEK in 2015, the company had two pharmaceutical products in the market and several others in late
stage of development. Dr Caparrós-Wanderley has authored multiple patents, scientific articles and book
chapters and has been an invited speaker at conferences and WHO events.
He is currently acting as a consultant to the biopharmaceutical industry.
Dr Mark Eccleston
(OncoLytika Ltd)
Dr Mark Eccleston is an enthusiastic and passionate biotechnology entrepreneur with over 25 years experience
in the sector, both in academia and industry. He holds a PhD in Polymer Chemistry and worked on a range of
translational research projects focussed mainly on non-viral gene delivery.
Mark is the founder and Managing Director of OncoLytika Ltd. a technical consultancy company operating
mainly in the biotechnology and pharmaceutical sector. Oncolytika has an excellent track record raising soft
funding (UK and EU) for internal projects and client companies including internationally located private and
public limited companies across the diagnostics and therapeutic sectors as well as academia.
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ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2021
Scientific Advisors
Dr Christophe Chassagnole
(Physiomics PLC)
Dr Christophe Chassagnole is a Biochemist and Systems Biologist (Pathway modelling) by training.
After completing his PhD, he had a couple of academic position in metabolic engineering, before joining
Physiomics in 2004, where he is leading the science and overseeing customer projects.
Physiomics provides consulting services in PK/PD and other mathematical modelling including to large
pharmaceutical companies.
For ValiRx, Physiomics have performed two large projects, which have also included working with
Mark Eccleston during his historic position at ValiRx:
- Systems biology project (apoptosis model) to validate potential GeneICE target (Go/No Go decision).
- PK/PD modelling to support VAL201 development, initially pre-clinical modelling and first in man dose
prediction, project has resumed with availability of clinical data.
Professor Paul Taylor
(University of Leeds)
Professor Paul Taylor is part of the Chemical Biology & Medicinal Chemistry research group and a member
of the Astbury Centre for Structural Molecular Biology at the University of Leeds.
Paul is also a Pro-Dean in the Faculty of Engineering & Physical Sciences. He is an experienced leader
in Higher Education where he seeks to build effective, collaborative teams to drive innovation.
Paul’s research career is marked by transdisciplinary, collaborative projects and he has published widely
with colleagues from Biological Sciences, Engineering, Medicine and Social Sciences as well as within
his core discipline of Chemistry. Paul’s current research interests include molecular evolution and cancer
therapy, where he uses a combination of computational and experimental approaches.
Commerical Advisors
ValiRx has also formed a Commercial Advisory (CAB) which considers the strategic direction of the Company.
The make up of this board is not fixed and additional members will be included as required.
Current CAB members are:
Dr Andrew Carnegie (Infinity BiologiX)
Mr Jerry Randall (Venture Life Group)
Dr Mark Eccleston (OncoLytika Limited)
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ValiRx Plc
CONNECTED INNOVATION
Stakeholder Engagement and Communications
ValiRx maintains a strong communication process to standardise and improve shareholders’ experience
of communicating with the Company.
The Board recognises the importance of effective and timely communication with all stakeholders, including
shareholders, investors, innovators and staff. The business and science of biomedical development can be
complex and difficult to articulate in a clear and concise way through regulated channels. The Company
understands and encourages the desire of shareholders to ask questions about scientific or corporate
progress and is mindful of the need to ensure all shareholders have fair and equal access to information
about the Company, as required by the AIM Rules and the Market Abuse Regulations.
During 2021, shareholders were consulted on their preferred method of communication, and expressed
a preference for quarterly webinar-based Q&A sessions, replacing the previous written monthly
Q&A publications.
These quarterly events are scheduled to continue during 2022.
ValiRx also maintains a current list of Frequently asked Questions (FAQs) on the Company website.
A link to the latest FAQs can be found here: www.valirx.com/shareholder-communications
1 8
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2021
SECTION 172(1) STATEMENT
Each Director is required by the Companies Act 2006 to act in the way they consider, in good faith, would be
most likely to promote the success of the Company for the benefit of its members as a whole and in doing so
are required to have regard for the following:
- the likely long-term consequences of any decision;
- the interests of the Company’s employees;
- the need to foster the Company’s business relationships with suppliers, customers and others;
- the impact of the Company’s operations on the community and the environment;
- the desirability of the Company maintaining a reputation for high standards of business conduct; and
- the need to act fairly as between shareholders of the Company.
In 2018, the Company adopted the Corporate Governance Code for Small and Mid-Sized Quoted Companies
from The Quoted Companies Alliance (the “QCA Code”). The QCA Code is an appropriate code of conduct for
the Company’s size and stage of development. In the Corporate Governance Report, on page 24 are comments
regarding the application of the ten principles of the QCA Code. Some s.172 considerations are addressed in
more detail in the Corporate Governance Report.
The Board considers the Company’s major stakeholders to include employees, suppliers, partners and
shareholders. When making decisions, the interest of each stakeholder group individually and collectively is
considered. Certain decisions require more weight attached to some stakeholders than others and while
generally seeing the long-term interest of the shareholders is of primary importance, the Directors consider
those interests are best served by having regard to the interests of the other key stakeholder groups and,
in fact, to all the s. 172 considerations.
Long-term value
The aim of all business resources allocation is to create long-term value through the management of a
balanced but dynamic portfolio of pre-clinical projects for development towards clinical readiness
and partnering.
The Chief Executive’s Report on page 6 describes the Company’s activities, strategy and future prospects.
Some s. 172 considerations are also addressed in the Chief Executive’s Report, including the considerations
for long term strategic development.
Our people
It is imperative that the core team has the right breadth of experience to manage all facets of early drug
development, including scientific, commercial and operational considerations. The Company has and will
continue to ensure appropriate training and engagement of employees to ensure successful delivery of the
strategy. Effective project management processes will be employed so that all employees are clearly aware
of the role they play in achieving the business objectives. As the number of employees grows, potentially
through acquisition, the Company will ensure that relevant processes and procedures will be extended for
the benefit of all staff.
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ValiRx Plc
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for the year ended 31 December 2021
Business relationships
As ValiRx evolves from a wholly virtual drug developer to an integrated translational CRO, it is essential the
Company continues to maintain good relationships with its suppliers by taking a collaborative approach and
abiding by commercially acceptable business terms that benefit all parties.
Community and environment
At present, the Group’s impact on the community and the environment is modest but the Board endeavours
to ensure that the business and suppliers act in an ethically and in an environmentally conscious manner.
The Board intends to continue to minimise unnecessary travel as restrictions are lifted.
The Company is also committed to the 3R’s principles in all its pre-clinical studies.
Business conduct
The Board recognises its responsibility for setting and maintaining a high standard of behaviour and
business conduct. The Company operates within the QCA Code framework and complies with all relevant
regulatory requirements for developing new treatments for human use. The Company maintains a suite
of standard operating procedures (SOPs) that describe the management system. All employees are trained
regularly on these procedures. All material information is disseminated through appropriate channels and
is available to all stakeholders through the Company’s corporate presentations, news releases and website,
www.ValiRx.com. This is described in more detail in the Corporate Governance Report Principle 8.
Shareholders
The Directors are committed to treating all shareholders equally. As part of its decision-making process,
the Board considers the interests of shareholders as a whole. All shareholders are provided with equivalent
information through RNS announcements, and the ValiRx website. The Company has also introduced a
quarterly Q&A process with shareholders to help improve clarity of business activities in a timely manner.
For more information see Principles 2 and 3 in the Corporate Governance Report.
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ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2021
PRINCIPAL RISKS AND UNCERTAINTIES
ValiRx is a biopharmaceutical development Company and, in common with other companies operating in this
field, is subject to a number of risks and uncertainties. The principal risks and uncertainties identified by ValiRx
for the year ended 31 December 2021 are below.
Risk Area
Description
Mitigation
Research and
development
The Company has embarked on a new
R&D strategy to develop pre-clinical assets
and may not be successful in building a
balanced pipeline of product candidates
for subsequent out-licencing.
Creating the
tCRO
Commercial
(current clinical
programmes)
The Company’s strategy has recently evolved
to include the creation of a tCRO with high
growth potential to generate income and
(in-part) provide financial support to progress
the internal pre-clinical development pipeline.
It is intended that the tCRO will be built largely
through a buy and build strategy.
The Company recognises the specific risks
associated with creating the tCRO, which
include:
- An inability to raise funds to acquire
relevant companies and technologies
- A lack of suitable acquisition candidates
Ineffective integration of acquired
-
companies
- Failure to achieve the desired growth rates
- Longer than expected time scales to
generate income and cover the cost of the
internal development pipeline
Failure to complete out-licencing of current
clinical projects on acceptable commercial
terms. The strategic shift towards projects
at an earlier stage means that ValiRx will
no longer lead and fund clinical studies.
VAL201 and VAL401 will require out-licencing
partners for continued development. The cash
required to continue development of the
pre-clinical pipeline is greater than can be
generated from the tCRO.
2 1
High levels of business development activity
to identify a range of promising candidates.
Rigorous assessment and selection processes
for any candidate entering the development
pipeline. Effective project management
processes and stage-gates to review
suitability for further development and
eventual out-licencing The Company utilises
a range of external scientific, regulatory and
clinical experts to help guide its development
programmes. The progress of the development
programmes and identification of commercial
partners for clinical development represents
the best indicator of performance.
ValiRx will only seek to acquire companies
and technologies that add value to the tCRO
concept and offer the opportunity for
synergistic growth. The Company will employ
experienced advisors when necessary to
support all stages of the acquisition,
including fund raising, deal structuring,
integration, and growth delivery.
The ValiRx core team will also be strengthened
to support the growth strategy alongside
development of the collaborative development
pipeline.
The Company is vigorously pursuing all
business development avenues to identify
out-licencing options.
It is expected that out-licencing of VAL201
and VAL401 will provide additional reserves
to support the new strategy. The Company
will maintain an efficient overhead structure
to minimise non-productive costs. Creation of
the TRO provides an opportunity for service
revenues to enter the ValiRx cash flow.
The pre-clinical development pipeline will be
balance to ensure cash demands are
commensurate with that generated from
the tCRO.
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2021
Risk Area
Description
Mitigation
The Company manages its regulatory risk by
working closely with its expert regulatory
advisors and, where appropriate, seeking
advice from bodies on regulatory risk relevant
to the Company’s programmes and activities.
The Company invests in maintaining and
protecting it’s intellectual property to reduce
risks over the enforceability and validity of
patents. The Company works closely with its
legal advisors and obtains where necessary
opinions on the intellectual property
landscape relevant to all programmes and
activities.
The Company has invested in its management
team at all levels. The Directors also believe
that the senior management team is
appropriately structured for the Company’s
size and is not overly dependent upon any
particular individual. The Company has
entered into contractual arrangements with
these individuals with the aim of retaining
their ongoing commitment.
The Group recognises its responsibility
towards the environment and in the way it
conducts its business. It works closely with
all its expert scientific advisors to ensure its
compliance with environmental legislation
and to ensure that all emissions including the
disposal of gaseous, liquid and solid waste
products are controlled in accordance with
applicable legislation and regulations.
Regulatory
The Company’s operations are subject to
laws, regulatory approvals and certain
governmental directives, recommendations
and guidelines relating to, amongst other
things, product health claims, occupational
safety, laboratory practice, the use and
handling of hazardous materials, prevention
of illness and injury, environmental protection
and human clinical studies. There can be
no assurance that future legislation will not
impose further government regulation, which
may adversely affect the business or financial
condition of the Company.
Intellectual
property
The Company’s success depends on its ability
to obtain and maintain protection for its in-
tellectual and proprietary information. Patent
applications may not be granted, and existing
patent rights may be successfully challenged
and revoked.
Operational
Environmental
matters
The Company’s development and future
prospects depend to a significant degree on
the experience, performance and continued
service of its senior management team,
including the Directors.
The unplanned loss of the services of any of
the Directors or other members of the senior
management team and the costs of recruiting
replacements may have a material adverse
effect on the Group and its commercial and
financial performance.
The Board is committed to minimising the
Group’s impact on the environment and
ensuring compliance with environmental
legislation. The Board considers that its
activities have a low environmental impact.
The Group strives to ensure that all emissions
including the disposal of gaseous, liquid and
solid waste products are controlled in
accordance with applicable legislation and
regulations. Disposal of hazardous waste is
handled by specialist agencies.
ON BEHALF OF THE BOARD:
G Desler
Director, Chair Audit and Risk Committee
Date: 6 June 2022
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GOVERNANC E
ValiRx Plc
CONNECTED INNOVATION
Corporate Governance
for the year ended 31 December 2021
The Board recognises that good corporate governance is essential to building a successful business that
is sustainable for the long term.
The Corporate Governance Statement that follows, explains how our governance framework works and how
the Company has applied the 10 principles of the QCA Code this year.
Corporate Governance Statement
The Board has adopted the Quoted Companies Alliance Corporate Governance Code (QCA Code). The Board
believes that this Code provides an appropriate and suitable governance framework for a Group of our size
and complexity.
We believe the Company is in full compliance with each of the 10 principles of the Quoted Companies Alliance
Corporate Governance Code (QCA Code) and that our governance framework ensures that the Company
operates effectively and with integrity. In 2021, the Company continued a number of organisational and
strategic changes that re-defined its purpose, values and culture. All changes were implemented in full
compliance with the principles of the QCA Code.
Principle
How Company complies
1. Establish a strategy
and business model
which promote
long-term value for
shareholders
ValiRx is a biopharmaceutical company focused on developing novel medicines to
bring more advanced therapeutic options for the treatment of cancer and improve
patient experience.
Long term value for shareholders is driven by the development of an in-house
pipeline of pre-clinical drug candidates in the areas of oncology and Women’s Health.
By developing these to clinic-ready status and seeking a partner, ValiRx aims for early
value creation and minimisation of risk through our diversified pipeline. This strategy is
now developing further to consider acquiring pre-clinical testing capabilities that will
benefit the in-house pipeline and also generate income from external drug developers
by creating a translational Contract Research Organisation (tCRO). Longer term,
we expect this strategy will lead to higher growth and reduced cash requirements.
2. Seek to understand
and meet shareholder
needs and
expectations
The Board is accountable to shareholders and other stakeholders and is ultimately
responsible for the implementation of sound corporate governance practices
throughout the Group. Our Board of Directors is committed to ensuring that the
Group adheres to high standards of corporate governance in the conduct of its
business.
The Board attaches considerable importance to providing shareholders with clear
and transparent information on the Group’s activities, strategy, and financial
position. Details of all shareholder communications are provided on the Company’s
website – www.valirx.com.
Private shareholders currently constitute the main body of investors in ValiRx.
As such, the Board regards regular and interactive meetings as a good opportunity
for shareholders to seek clarity on the Group’s activities. Virtual Q&A sessions are
now held on a regular basis. The annual general meeting provides an additional
opportunity for shareholders to meet and discuss the Group’s business with the
Directors. Announcements on the Group’s half and full-year results are found on the
website and present all shareholders with an assessment of the Group’s position
and prospects. Shareholders vote on each resolution, by way of a poll. For each
resolution we announce the number of votes received for, against and withheld and
subsequently publish them on our website.
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ValiRx Plc
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Corporate Governance
for the year ended 31 December 2021
Principle
How Company complies
The Directors actively seek to build a mutual understanding of objectives with
institutional shareholders. The Chairman and Chief Executive Officer make
presentations to institutional shareholders and analysts immediately following the
release of the full-year and half-year results. We communicate with institutional
investors frequently through a combination of formal meetings, roadshows and
informal briefings with management.
The majority of meetings with shareholders and potential investors are arranged
by the Company’s broker. Following meetings, the broker provides feedback to the
Board from all fund managers met, from which sentiments, expectations and
intentions may be gleaned.
In addition, we review analysts’ notes to achieve a wide understanding of
investors’ views.
3. Take into account
wider stakeholder and
social responsibilities
and their implications
for long-term success
The Board recognises its prime responsibility under UK corporate law is to promote
the success of the Company for the benefit of its members as a whole. The Board
also understands that it has a responsibility towards employees, partners, customers,
suppliers, and the patients who ultimately benefit from its research and drug
development programmes. Our corporate social responsibility approach continues
to meet these expectations. The Board also understands that it has a responsibility
to take into account, where practicable, the social, environmental and economic
impact of its approach.
Responsibility for the Company’s corporate activities lies with the Senior
Management Team (‘SMT’) who set the Group’s strategic approach and develop
key policies. The Company engages with stakeholders through a number of channels,
which include shareholder communications via the Regulatory News service (‘RNS’),
the Company’s website and its Annual Report & Accounts, results presentations
and the Annual General Meeting and via interviews in the broadcast media and
attendance at investor shows around the country.
Corporate communication and shareholder engagement through these channels
not only gives shareholders a deeper insight into and understanding of the
Company’s activities and of its development, but it also invites feedback, either
face-to-face at such meetings or via email, on how the Company can improve its
communications with stakeholders to better support their needs. By so doing,
such engagement enables the SMT to more effectively work with stakeholders in
the future to their mutual advantage. The Board receives formal feedback from the
SMT on a quarterly basis on the nature of interaction with the stakeholders they
meet during each period.
The SMT comprises the Chief Executive Officer and the Chief Financial Officer who
take leading roles in key strategic areas such as Gender, HR, and Environmental
Management. The SMT is also responsible for ensuring global compliance with key
internal and external policies including:
• Anti-human trafficking and slavery policy
• Diversity policy
• Anti-corruption and bribery policy
• Whistleblowing policy
• UK modern slavery act
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ValiRx Plc
CONNECTED INNOVATION
Corporate Governance
for the year ended 31 December 2021
Principle
How Company complies
4. Embed effective
risk management,
considering both
opportunities and
threats, throughout
the organisation
An important aspect of risk management is to put in place and consistently work
according to unambiguous Standard Operating Procedures (SOPs). A SOP is a
compulsory instruction to carry out a series of operations correctly and always in
the same manner, avoiding deviations or non-conformances to ensure that the
integrity of scientific investigations and drug manufacture are consistently
maintained.
ValiRx operates an internal Quality Management System (QMS) comprising 14 SOPs
to comply with the most stringent quality standards expected of a drug development
company. Furthermore, the Company regularly audits its suppliers to ensure the
manufacturing process, quality process, and the drug’s shipment process all conform
to the standard required.
5. Maintain the board
as a well-functioning,
balanced team led by
the chair
Board Composition
The Board currently consists of one Executive Director, a Non-Executive Chairman,
the Chief Executive Officer and two Non-Executive Directors. Collectively the Board
has broad scientific, financial, legal, and business experience necessary to advance
the Company and apply corporate governance best practices.
The Board is satisfied with its composition and the balance between Executive
and Non-Executive Director(s). These are:
Dr Kevin Cox (Non-Executive Chairman)
Dr Suzanne Dilly (Chief Executive Officer)
Gerry Desler (Executive Chief Financial Officer)
Kevin Alexander (Independent Non-Executive Director)
Martin Lampshire (Non-Executive Director)
Role of the CEO
• Leads and manages the day-to-day running of the Group’s business in
accordance with the business plans and within the budgets approved by the
Board;
• Leads the management to ensure effective working relationships with the Board
by meeting or communicating on a regular basis to review key developments,
issues, opportunities and concerns;
• Develops and proposes the Group’s strategies and policies for the Board’s
consideration;
• Implements, with the support of the management team, the strategies and policies
as approved by the Board and its committees in pursuit of the Group’s objectives;
• Maintains regular dialogue with the Chairman on important and strategic issues
facing the Group, and ensures bringing these issues to the Board’s attention;
• Ensures that the management gives appropriate priority to providing reports to
the Board which contain relevant, accurate, timely and clear information necessary
for the Board to fulfil its duties;
• Ensures that the Board is alerted to forthcoming complex, contentious or sensitive
issues affecting the Group;
• Leads the communication programme with stakeholders including shareholders;
• Conducts the affairs of the Group in accordance with the practices and
procedures adopted by the Board and promotes the highest standards of
integrity, probity and corporate governance within the Group.
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ValiRx Plc
CONNECTED INNOVATION
Corporate Governance
for the year ended 31 December 2021
Principle
How Company complies
Role of the Non-Executive Directors
As members of the Board, all Non-Executive directors have key accountabilities,
which include the following:
• Provision of leadership of the Company within a framework of prudent and
effective controls, which enable risk to be assessed and managed;
• Setting the Company’s strategic aims, ensure that the necessary financial and
human resources are in place for the Company to meet its objectives, and review
management performance;
• Setting the Company’s values and standards and ensure that its obligations to
shareholders are understood and met;
• Constructively challenge and help develop strategy, participate actively in the
decision-making process of the Board, and scrutinise the performance of
management in meeting agreed goals and objectives.
Independence
As recommended in the UK Corporate Governance Code, the Board will identify in
the annual report each Non-Executive Director it considers to be independent.
The Board will determine whether the Director is independent in character and
judgement and whether there are relationships or circumstances which are likely
to affect, or could appear to affect, the Director’s judgement. The Board will state
its reasons if it determines that a Director is independent notwithstanding the
existence of relationships or circumstances which are relevant to its determination,
including if the Director:
• Has been an employee of the Company or group within the last five years;
• Has, or has had within the last three years, a material business relationship with
the Company either directly, or as a Director or senior employee of a body that has
such a relationship with the Company;
• Has received or receives additional remuneration from the Company apart from a
Director’s fee;
• Has close family ties with any of the Company’s advisers, directors or senior
employees;
• Holds cross-directorships or has significant links with other directors through
involvement in other companies or bodies; or
• Has served on the Board for more than nine years form the date of their first
election.
Role of the Board Committees
The Board has established three committees: Remuneration, Audit and Risk and
Nomination and Governance. All of these committees have terms of reference,
which set out clearly their role, stating whether it is to take decisions or make
recommendations to the Board of Directors. These are available on the Company’s
website (see below).
Biographical details of the Directors & Management can be found on the Company’s
website at https://www.valirx.com/board-directors-and-management-team
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ValiRx Plc
CONNECTED INNOVATION
Corporate Governance
for the year ended 31 December 2021
Principle
How Company complies
6. Ensure that between
them the Directors
have the necessary
up-to-date experience,
skills and capabilities
ValiRx seeks to recruit the best candidates at Board level and considers candidates
on merit and against objective criteria and with due regard for the benefits of
diversity on the Board (including gender), taking care that appointees have the
necessary experience and time available to allocate to the position. Each Director
appointed by the Board is subject to election by the shareholders at the first AGM
after their appointment. Following advice from the Nomination and Governance
Committee, the Board has concluded that each Director is qualified for election or
re-election.
The current Board members are individuals with extensive industry-specific
experience as well as professionals that bring to the Board the skill sets required
to meet its strategic, operational and compliance objectives. Their suitability as
Directors has therefore been determined largely on the basis of their ability to
deliver outcomes in accordance with the Company’s short and longer-term
objectives and thus add value to shareholders.
7. Evaluate board
performance based
on clear and relevant
objectives, seeking
continuous
improvement
ValiRx considers that assessments of the performance of the Board, the Board
committees, the Chief Executive, the Company Secretary and each of the individual
Non-Executive Directors are pivotal to good corporate governance, bringing
significant benefits and performance improvements on three levels: organisational;
board and individual member level. Establishing an effective process for board
evaluation sends a positive signal to the organisation that board members are
committed to acting professionally.
Performance assessments are conducted annually across the board, applying a
matrix of key areas of focus to identify collective and individual strengths and
weaknesses within the Company for continuous improvement.
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ValiRx Plc
CONNECTED INNOVATION
Corporate Governance
for the year ended 31 December 2021
Principle
How Company complies
Board Composition
• Appropriate ratio between Executive and Independent Directors;
• Awareness of social, professional and legal responsibilities at individual, company
and community level; ability to identify independence conflicts; applies sound
professional judgement; identifies when external counsel should be sought;
upholds Board confidentiality; respectful in every situation.
• Effective in working within defined corporate communications policies; makes
constructive and precise contribution to the Board both verbally and in
written form;
• Negotiation skills to engender stakeholder support for implementing Board
decisions; and
• Experienced with the mechanisms, controls and channels to deliver effective
governance and manage risks.
Effectiveness of the Board of Directors in:
• Monitoring financial performance against agreed financial objectives;
• Monitoring the implementation of the strategy approved by the Board;
• Appointing, removing and monitoring the performance of the Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer and Company Secretary;
• Ensuring appropriate succession planning for Board members and senior
management via the Nomination and Governance Committee;
• Approving and monitoring financial and other reporting;
• Approving and monitoring major capital expenditure, capital management,
funding, acquisitions and divestments;
• Overseeing risk management, control, accountability and compliance systems;
• Setting standards of behaviour to enhance the reputation of the Company in the
market and the community;
• Ensuring proper organisation and management so as to achieve conformity goals
across all aspects of the business;
• Setting appropriate delegated powers between CEO and Board of Directors;
• Ensuring quality and continuity of relations with the Group CEO, members of
Committees, managers and heads of control functions; and
• Setting clear strategy for the Company reflecting goals short to mid-long term.
Effectiveness of Executive Management in:
• Implementing the strategic objectives set by the Board;
• Operating within the risk parameters set by the Board;
• Operational and business management of the Company;
• Managing the Company’s reputation and operating performance in accordance
parameters set by the Board;
• The day-to-day running of the Company;
• Providing the Board with accurate, timely and clear information to enable the
Board to perform its responsibilities;
• Interfacing with shareholders and stakeholders, Nomad and Broker; and
• Approving capital expenditure (except acquisitions) within delegated
authority levels.
Structure and competency of Committees to:
• Advise the Board on the suitability of external auditors and critical accounting
policies for financial reports, in particular YE audited accounts, and the Company’s
risk management and internal control systems;
• Provide independent and transparent pay arrangements linked to achievements
over a given period; and
• Lead the Board appointment and succession planning process considering the
requirements of the Company
2 9
ValiRx Plc
CONNECTED INNOVATION
Corporate Governance
for the year ended 31 December 2021
Principle
How Company complies
8. Promote a corporate
culture that is based
on ethical values and
behaviours
The Board understands the importance of setting the right culture for a
biotechnology oncology-focused company specialising in developing novel
treatments for cancer that will provide a breakthrough into human health and
wellbeing through the early detection of cancer and its therapeutic intervention.
Moreover, it ensures that the Company’s strategies and requirements for excellence
and good governance are instilled into the culture of our business. The Executive
Directors interface regularly with all personnel within ValiRx. In this way we
encourage them to take responsibility for advancing their projects within
parameters and controls set by the Board. This approach creates a culture that
motivates and enables our personnel to develop and express their talents and
skills. Moreover, in the performance of its duties the Board listens to the views of
key stakeholders, including scientists, clinicians, regulators and suppliers and is
mindful of the potential impacts of decisions it makes.
9. Maintain governance
structures and
processes that are
fit for purpose and
support good
decision-making by
The Board of Directors, with the support of the Executive Management and
Committees, is ultimately responsible for establishing and maintaining good
standards of governance. This can be achieved by creating conditions that enhance
overall Board’s and individual Directors’ effectiveness in order that all key issues are
addressed and sound decisions are taken in a timely manner.
the board
Other responsibilities of the Board of Directors include:
• Promoting effective relationships and open communication, and creating an
environment that allows constructive debates and challenges, both inside and
outside the boardroom, between Non-Executive Director(s) and the management;
• Ensuring that the Board as a whole plays a full and constructive part in the
development and determination of the Group’s strategies and policies, and that
Board decisions taken are in the Group’s best interests and fairly reflect Board’s
consensus;
• Setting, in consultation with the Chief Executive and Company Secretary, the Board
meeting schedule and agenda to take full account of the important issues facing
the Group and the concerns of all Directors, and ensuring that adequate time is
available for thorough discussion of critical and strategic issues;
• Ensuring that the strategies and policies agreed by the Board are effectively
implemented by the Chief Executive and the management; and
Ensuring that there is effective communication with shareholders, and that each
Director develops and maintains an understanding of the stakeholders’ views.
The Board recognises the importance of sound corporate governance.
The Board is satisfied with its composition. The Non-Executive Directors)bring a
wide range of skills and experience to the Company, as well as independent
judgment on strategy, risk and performance. The independence of each
Non-Executive Director is assessed at least annually, and all are considered to
be independent at the date of this report.
Attendance at Board meetings
A minimum of ten (10) Board meetings are held each year at which it is expected that
all Directors attend in addition to relevant Committee meetings, General Meetings
and the Annual General Meeting.
Where Directors are unable to attend meetings due to conflicts in their schedules,
they will receive the papers scheduled for discussion in the relevant meetings, giving
them the opportunity to relay any comments to board members in advance of the
meeting. Directors are required to leave the meeting where matters relating to them,
or which may constitute a conflict of interest to them, are being discussed.
3 0
ValiRx Plc
CONNECTED INNOVATION
Corporate Governance
for the year ended 31 December 2021
Principle
How Company complies
The following table shows the Directors’ attendance at scheduled Board meetings,
which they were eligible to attend in the 12-month period to December 2021:
Kevin Alexander: 10/10
Gerry Desler: 10/10
Martin Lampshire: 10/10
Dr Suzy Dilly: 10/10
Dr Kevin Cox: 10/10
Matters reserved for the Board
• Approval of the Group vision, values and overall governance framework;
• Approval of the Company’s Annual Report and Accounts and Half Yearly Financial
Statements;
• Approval of Group financial policy;
• Approval to enter into discussions with Biotech companies reference potential
joint-partnering projects or licensing of Company’s pre-clinical and clinical assets;
• Approval of the Company’s long-term finance plan and annual capital budget;
• Approval of any significant change in Group accounting policies or practices;
• Approval of all circulars, listing particulars, resolutions and corresponding
documentation sent to shareholders;
• Establishing committees of the Board, approving their terms of reference (including
membership and financial authority), reviewing their activities and, where
appropriate, ratifying their decisions;
• Approval of this schedule of Matters Reserved to the Board.
The Board is responsible to the Company’s shareholders with its main objective to
increase the value of assets and long-term sustainability of the Company. The Board
reviews business opportunities and determines the risks and control framework.
It also makes decisions on budgets, Group strategy and major capital expenditure.
The day-to day management of the business is delegated to the Executive Directors.
The Board meets monthly with agendas, Committee papers and other appropriate
information distributed prior to each meeting to allow the Board to meet its duties.
Effective procedures are in place to deal with conflicts of interest. The Board knows
other interests and commitments of Directors and any changes to their commitments
are reported.
In addition to the Executive Committee, the Board has established a Remuneration
Committee, an Audit and Risk Committee, and a Nomination and Governance
Committee, which also report into ValiRx’s Board.
The Executive Committee is in charge of the daily management of the Group and is
mandated to prepare and plan the overall policies and strategies of the Company for
approval by the Board. It may approve intra-group transactions, provided that they are
consistent with the consolidated annual budget of the Company, as well as specific
transactions with third parties provided that the cost per transaction is within specified
spending limits. It informs the Board at its next meeting on each such transaction.
Prior to the beginning of each fiscal year, the Executive Committee submits to the
Board those measures that it deems necessary to be taken in order to meet the
objectives of the Company and a consolidated budget for approval. This committee
comprises:
Dr Suzy Dilly (Chief Executive Officer)
Gerry Desler (Executive Chief Financial Officer)
The Audit and Risk Committee meets at least twice per annum and is responsible for
assisting the Board in carrying out its oversight responsibilities in relation to corporate
policies, risk management, internal control, internal and external audit and financial
and regulatory reporting practices. The Committee has an oversight function,
providing a link between the external auditors and the Board; it also determines the
terms of engagement of the Company’s auditors. The current members of the Audit
and Risk Committee are:
3 1
ValiRx Plc
CONNECTED INNOVATION
Corporate Governance
for the year ended 31 December 2021
Principle
How Company complies
Gerry Desler (Executive Chief Financial Officer)
Kevin Alexander (Non-Executive Director)
The Remuneration Committee meets at least twice per annum to determine
and agree with the Board the framework or broad policy for the remuneration of
Executive Directors of the Company and advises on the overall remuneration
policies applied throughout the Company. The objective of this committee is to
attract, retain and motivate executives capable of delivering the Company’s
objectives. Agreed personal objectives and targets including financial and
non-financial metrics are set each year for the Executive Directors and other
personnel and performance measured against these metrics. The committee is
made up of Non-Executive Directors, namely:
Kevin Alexander (Non-Executive Director)
The Chief Executive Officer is consulted on remuneration packages and policy but
does not attend discussions regarding her own package. The Board determines
the remuneration and terms and conditions of the appointment of Non-Executive
Directors.
The Nomination Committee is a sub-committee of the whole Board responsible
for the selection and proposal to the Board of suitable candidates for appointment
as Executive and Non-Executive Director(s). The Committee may engage external
search consultants to identify candidates for Board vacancies before recommending
a preferred candidate to the Board for consideration. The Committee comprises:
Kevin Alexander (Non-Executive Director)
Gerry Desler (Executive Chief Financial Officer)
10. Communicate how
the Company is
governed and is
performing by
maintaining a
dialogue with
shareholders and
other relevant
stakeholders
ValiRx maintains a strong communication process to standardise and improve
shareholders’ experience of communicating with the Company.
The Board recognises the importance of effective and timely communication
with all stakeholders, including shareholders, investors, innovators and staff.
The business and science of biomedical development can be complex and
difficult to articulate in a clear and concise way through regulated channels.
The Company understands and encourages the desire of shareholders to ask
questions about scientific or corporate progress and is mindful of the need to
ensure all shareholders have fair and equal access to information about the
Company, as required by the AIM Rules and the Market Abuse Regulations.
During 2021, shareholders were consulted on their preferred method of
communication, and expressed a preference for quarterly webinar-based
Q&A sessions, replacing the previous written monthly Q&A publications.
These quarterly events are scheduled to continue during 2022.
ValiRx also maintains a current list of Frequently asked Questions (FAQs) on
the Company website.
A link to the latest FAQs can be found here:
www.valirx.com/shareholder-communications
3 2
ValiRx Plc
CONNECTED INNOVATION
Report of the Directors
for the year ended 31 December 2021
The Directors present their report and financial statements for the year ended 31 December 2021.
DIVIDENDS
No dividends will be distributed for the year ended 31 December 2021.
RESEARCH AND DEVELOPMENT
The Group will continue its policy of investment in research and development. In accordance with
International Financial Reporting Standards (IFRS), during the year the Group expensed to the income
statement £303,789 (2020: £230,115) on research and development. Further details on the Group’s research
and development are included in the Chief Executive’s Report on page 6.
FUTURE DEVELOPMENTS
Details of future developments can be found in the Strategic Report on pages 8 to 17.
DIRECTORS
The Directors shown below have held office during the whole of the period from 1 January 2021 to the date
of this report.
K J Alexander
G Desler
M Lampshire
Dr S J Dilly
Dr K Cox
DIRECTORS SHAREHOLDINGS
The Directors of the Company held the following beneficial interests in the ordinary shares of the Company at the
balance sheet date:
K J Alexander
G Desler
M Lampshire
Dr S Dilly
Dr K Cox
2021
No. of shares
250,833
103,668
44,000
316,668
272,333
2020
No. of shares *
167,500
81,667
-
233,335
250,333
DIRECTORS’ SHARE OPTIONS
The Directors of the Company held share options granted under the Company share option scheme,
as indicated below. No share options were exercised during the year. Full details of the share options
held are disclosed in note 25 to the financial statements.
K J Alexander
G Desler
M Lampshire
Dr S Dilly
Dr K Cox
2021
No. of shares
23,950
28,334
-
4,512
-
2020
No. of shares *
24,334
28,718
-
4,512
-
3 3
ValiRx Plc
CONNECTED INNOVATION
Report of the Directors
for the year ended 31 December 2021
DIRECTORS’ WARRANTS
The Directors of the Company held warrants to subscribe for shares in the Company. Full details of the warrants
held are disclosed in note 25 to the financial statements.
K J Alexander
G Desler
M Lampshire
Dr S Dilly
Dr K Cox
2021
No. of shares
-
-
-
-
-
2020
No. of shares *
83,333
-
-
83,333
-
*During the year, K Alexander and Dr S Dilly exercised their warrants.
COMPANY SHARE PRICE
The market value of the Company’s shares at 31 December 2021 was 37.00p and the high and low share prices
during the period were 55.25p and 17.75p respectively.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Note 26 to the financial statements gives details of the Group’s objectives and policies for risk management
of financial instruments.
SIGNIFICANT SHAREHOLDERS
As at 23 May 2022, so far as the Directors are aware, the following shareholders held more than 3% of the
Company’s issued share capital:
Nicholas Slater
Monecor (London) Limited
Adam Hargreaves
% of issued share capital held
5.40%
6.87%
8.15%
DIRECTORS’ INSURANCE
The Directors and officers of the Company are insured against any claims against them for any wrongful
act in their capacity as a Director, officer or employee of the Group, subject to the terms and conditions
of the policy.
CREDITOR PAYMENT POLICY
The Company’s current policy concerning the payment of trade creditors is to:
• settle the terms of payment with suppliers when agreeing the terms of each transaction;
• ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in
contracts; and
• pay in accordance with the Company’s contractual and other legal obligations.
On average, trade creditors at the year-end represented 30 days’ purchases.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the Directors are aware, there is no relevant audit information (as defined by Section 418 of the
Companies Act 2006) of which the Group’s auditors are unaware, and each Director has taken all the steps
that he or she ought to have taken as a Director in order to make himself or herself aware of any relevant
audit information and to establish that the Group’s auditors are aware of that information.
AUDITORS
The auditors, Adler Shine LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.
ON BEHALF OF THE BOARD:
G Desler
Director, Chair Audit and Risk Committee
Date: 6 June 2022
3 4
ValiRx Plc
CONNECTED INNOVATION
Report of the Independent Auditors to the Members
of ValiRx Plc
The Directors are responsible for preparing the Strategic Report, Directors’ Report, Corporate Governance
Statement and the Group and Parent Company financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare Group and Parent Company financial statements for each
financial year. The Directors are required by the AIM Rules of the London Stock Exchange to prepare
Group financial statements in accordance with UK adopted International Accounting Standards (“IAS”) and
have elected under company law to prepare the Parent Company financial statements in accordance with
UK adopted International Accounting Standards (“IAS”) in conformity with the requirements of the
Companies Act 2006.
The Group financial statements are required by law and IAS to present fairly the financial position and
performance of the Group; the Companies Act 2006 provides in relation to such financial statements that
references in the relevant part of that Act to financial statements giving a true and fair view are references
to their achieving a fair presentation.
Under company law the Directors must not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Group and Parent Company and of the profit or
loss of the Group for that period. In preparing each of the Group and Parent Company financial statements
the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• for the Group financial statements, state whether they have been prepared in accordance with UK adopted
International Accounting subject to any material departures disclosed and explained in the financial
statements;
• for the Parent Company financial statements, state whether they have been prepared in accordance with
UK adopted International Accounting subject to any material departure disclosed and explained in the
Parent Company financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group and the Parent Company will continue in business; and
• prepare the financial statements in accordance with the rules of the London Stock exchange for companies
trading securities on AIM.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of
the Parent Company and enable them to ensure that the financial statements comply with the requirements
of the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the
Parent Company and hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
Website publication
The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the financial statements contained therein. The Directors
are responsible for ensuring the annual report and the financial statements are made available on a website.
Financial statements are published on the Company’s website in accordance with legislation in the
United Kingdom governing the preparation and dissemination of financial statements, which may vary from
legislation in other jurisdictions.
3 5
ValiRx Plc
CONNECTED INNOVATION
Report of the Independent Auditors to the Members
of ValiRx Plc
Opinion
We have audited the financial statements of ValiRx Plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’)
for the year ended 31 December 2021 on pages 41 to 68. The financial reporting framework that has been applied
in their preparation is applicable law and UK adopted International Accounting Standards and as regards to the
Parent Company financial statements, as applied in accordance with section 408 of the Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs
as at 31 December 2021 and of the Group’s loss for the year then ended;
• the Group’s financial statements have been prepared in accordance with UK adopted International Accounting
Standards;
• the Parent Company financial statements have been properly prepared in accordance with UK adopted
International Accounting Standards; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit
of the financial statements section of our report. We are independent of the group in accordance with the
ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty relating to going concern
We draw attention to note 2 “Going concern” in the financial statements, which indicates that the ability of
the Group and Parent Company to continue as a going concern is subject to a material uncertainty in relation
to its ability to raise the required funds in the future. As stated in note 2, this represents a material uncertainty
that may cast significant doubt on the Group and Parent Company’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our 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) we identified, 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 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.
The key audit matters identified were:
Impairment of goodwill and intangibles
Area of focus
The Group has goodwill of £1.6 million and intangible assets of £1.1 million.
IAS 36 requires at least annual impairment assessments in relation to goodwill, indefinite-lived intangible assets
and intangible assets that are not yet ready for use, with more regular assessment should an impairment trigger
be identified.
The determination of recoverable amount, being the higher of value-in-use and fair value less costs of disposal,
requires judgement on the part of management in identifying and then estimating the recoverable amount for
the relevant CGUs.
3 6
ValiRx Plc
CONNECTED INNOVATION
Report of the Independent Auditors to the Members
of ValiRx Plc
Recoverable amounts are based on management’s view of future cash flow forecasts and external market
conditions such as future pricing and the most appropriate discount rate.
Management utilised the work of experts to assist them in performing an annual impairment assessment which
included the assumptions and estimates around the success of the future development and commercialisation
of its products VAL 201, VAL301 and VAL 401. Changes in these assumptions might give rise to a change in the
carrying value of intangibles and goodwill.
How our audit addressed the area of focus
We obtained the report and forecasts prepared by the experts and gained an understanding of the key
assumptions and judgements underlying the assessment. We assessed the appropriateness of the methodology
applied and tested the mathematical accuracy of the models.
We obtained an understanding of the stage of product development and management’s expected timelines
for product commercialisation, including updates on the achievement of expected milestones.
We determined the judgement made by the Directors that no impairment was required, and that the
disclosures made in the financial statements to be reasonable.
Going concern
Area of focus
We refer to note 2 of the financial statements for the Directors’ disclosures of related accounting policies,
judgements and estimates. The Directors have concluded that they have a reasonable expectation that the
Group will have sufficient cash resources and cash inflows to continue its activities for not less than twelve
months from the date of approval of these financial statements and have therefore prepared these financial
statements on a going concern basis.
The Group had cash and cash equivalents of £593,672 as at 31 December 2021.
Management produces a cash flow forecast based on the board plans.
The key judgements within the cash flow forecast that we particularly focused on were:
• Potential future fund raising requirements.
• The likely recovery of other receivables.
• Cash flows expected from research and development tax credits.
• Flexibility of development programme.
How our audit addressed the area of focus
We assessed the reasonableness and support for the judgments underpinning management’s forecast,
as well as the sensitivity of projections to these judgements.
We reviewed management’s financing plans and as the Company is reliant on its ability to raise funds in the
future to continue as a going concern this represents a material uncertainty as disclosed further in note 2 of
the financial statements.
We considered the reasonableness of the assumptions within management’s proposed cost reduction actions,
should future fund raisings be lower than anticipated.
Our conclusion on management’s use of the going concern basis of accounting is included in the material
uncertainty relating to going concern section of the report above.
3 7
ValiRx Plc
CONNECTED INNOVATION
Report of the Independent Auditors to the Members
of ValiRx Plc
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature,
timing and extent of our audit procedures and to evaluate the effects of misstatements, both individually and
on the financial statements as a whole. During planning we determined a magnitude of uncorrected
misstatements that we judge would be material for the financial statements as a whole (FSM). FSM was
calculated as £117,000 for the Group financial statements which was based on an average of 8% of adjusted
loss before tax and £72,000 for the Parent Company financial statements based on 1% of net assets.
The rationale for the benchmark applied to Group materiality is that we believe that underlying loss before tax,
adjusted for amortisation of intangible assets, provides a consistent basis for determining materiality as it
eliminates the impact of non-underlying items which fluctuate year on year and can have a disproportionate
impact on the consolidated income statement. The rationale for the benchmark applied for Parent Company
materiality is that net assets are an appropriate basis for determining materiality as the Parent Company is
not a profit orientated entity.
An overview of the scope of our audit
The audit was scoped to ensure that the audit team obtained sufficient and appropriate audit evidence in
relation to significant operations of the Group during the year ended 31 December 2021. This included the
performance of full statutory audits on each of the subsidiary undertakings. As part of our planning, we
assessed the risk of material misstatement including those that required significant auditor consideration at
the component and group level. Procedures were designed and performed to address the risk identified and
for the most significant assessed risks of material misstatement, the procedures performed are outlined above
in the key audit matters section of this report.
Other information
The Directors are responsible for the other information. The other information comprises the information in the
Annual Report but does not include the financial statements and our Report of the Auditors thereon.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion 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 such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in 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 in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Group Strategic Report and the Report of the Directors for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
• the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report
or the Report of the Directors.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
• the Parent Company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
3 8
ValiRx Plc
CONNECTED INNOVATION
Report of the Independent Auditors to the Members
of ValiRx Plc
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities set out on page 35, the Directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the Directors determine necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or
the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes
our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud,
is detailed below.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry
in which it operates and considered the risk of acts by the Company that were contrary to applicable laws and
regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not
detecting 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.
We focused on laws and regulations which could give rise to a material misstatement in the financial
statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included
agreeing the financial statements disclosures to underlying supporting documentation and enquiries with
management. There are inherent limitations in the audit procedures described above and, the further removed
non-compliance with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely we would become aware of it. We did not identify any key audit matters relating to
irregularities, including fraud. As in all our audits, we also addressed the risk of management override of
internal controls, including testing journals and evaluating whether there was evidence of bias by the directors
that represented a risk of material misstatement due to fraud.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our
Report of the Auditors.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members
those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Christopher Taylor (Senior Statutory Auditor)
for and on behalf of Adler Shine LLP
Chartered Accountants & Statutory Auditor
Aston House
Cornwall Avenue
London
N3 1LF
Date: 6 June 2022
3 9
FINANC IAL
STATEMENTS
ValiRx Plc (Registered number: 03916791)
CONNECTED INNOVATION
Consolidated Statement of Profit or Loss and Other Comprehensive
Income for the year ended 31 December 2021
Continuing Operations
Other operating income
Research and developments
Administrative expenses
Share-based payment charge
Operating Loss
Write back of equity swap debt
Finance costs
Loss Before Income Tax
Income tax credit
Loss After Income Tax
Non-controlling interest
Notes
2021
£
2020
£
24
6
7
8
26,952
(303,789)
(1,216,391)
(184,611)
11,077
(230,115)
(1,431,587)
-
(1,677,839)
(1,650,625)
-
(2,765)
122,000
(14,880)
(1,680,604)
(1,543,505)
133,413
75,182
(1,547,191)
(1,468,323)
28,979
25,075
Total Comprehensive Loss For The Year
(1,518,212)
(1,443,248)
Loss Per Share - Basic And Diluted
10
(2.34p)
(3.81p)
4 1
ValiRx Plc (Registered number: 03916791)
CONNECTED INNOVATION
Consolidated Statement of Financial Position
31 December 2021
ASSETS
ASSETS
NON-CURRENT ASSETS
NON-CURRENT ASSETS
Goodwill
Goodwill
Intangible assets
Intangible assets
Property, plant and equipment
Property, plant and equipment
Right-of-use assets
Right-of-use assets
CURRENT ASSETS
Trade and other receivables
Tax receivable
Cash and cash equivalents
TOTAL ASSETS
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital
Share premium
Merger reserve
Reverse acquisition reserve
Share-based payment reserve
Retained earnings
Non-controlling interests
TOTAL EQUITY
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Lease liabilities
CURRENT LIABILITIES
Trade and other payables
Borrowings
Lease liabilities
TOTAL LIABILITIES
Notes
11
12
13
20
2021
£
1,602,522
1,108,116
-
13,278
2020
£
1,602,522
1,329,188
-
20,995
2,723,916
2,952,705
15
16
72,925
133,413
593,672
66,735
71,346
1,846,901
800,010
1,984,982
3,523,926
4,937,687
17
9,669,995
24,490,618
637,500
602,413
491,219
(32,292,507)
9,669,828
24,380,356
637,500
602,413
540,803
(30,919,728)
3,599,238
(184,867)
4,911,172
(155,888)
3,414,371
4,755,284
19
20
35,654
5,681
44,486
13,439
41,335
57,925
18
19
20
50,835
9,627
7,758
68,220
109,555
111,342
5,514
7,622
124,478
182,403
TOTAL EQUITY AND LIABILITIES
3,523,926
4,937,687
The financial statements were approved by the Board of Directors on 6 June 2022 and were signed on its behalf by:
G Desler - Director
4 2
ValiRx Plc (Registered number: 03916791)
CONNECTED INNOVATION
Company Statement of Financial Position
31 December 2021
ASSETS
NON-CURRENT ASSETS
Intangible assets
Property, plant and equipment
Right-of-use assets
Investments
CURRENT ASSETS
Trade and other receivables
Tax receivable
Cash and cash equivalents
TOTAL ASSETS
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital
Share premium
Merger reserve
Share-based payment reserve
Retained earnings
TOTAL EQUITY
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Lease liabilities
CURRENT LIABILITIES
Trade and other payables
Borrowings
Lease liabilities
TOTAL LIABILITIES
Notes
12
13
20
14
2021
£
2020
£
60,000
-
13,278
3,615,863
80,000
-
20,995
3,617,838
3,689,141
3,718,833
15
16
3,327,416
133,413
592,046
3,263,551
62,151
1,846,288
4,052,875
5,171,990
7,742,016
8,890,823
17
9,669,995
24,490,618
637,500
491,219
(28,101,166)
9,669,828
24,380,356
637,500
540,803
(26,931,101)
7,188,166
8,297,386
19
20
35,654
5,681
44,486
13,439
41,335
57,925
18
19
20
495,130
9,627
7,758
512,515
553,850
522,376
5,514
7,622
535,512
593,437
TOTAL EQUITY AND LIABILITIES
7,742,016
8,890,823
The financial statements were approved by the Board of Directors on 6 June 2022 and were signed on its behalf by:
G Desler - Director
4 3
ValiRx Plc
CONNECTED INNOVATION
Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
Share capital
£
Share premium
£
Notes
Merger
reserve
£
Reserve
acquisition
reserve
£
Balance at 1 January 2020
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Exercise of warrants
Lapse of share options and warrants
Movement in year
9,417,225
20,596,143
637,500
602,413
-
252,603
-
-
-
-
-
3,993,579
(245,675)
50,447
-
(14,138)
-
-
-
-
-
-
-
-
-
-
-
-
Balance at 31 December 2020
9,669,828
24,380,356
637,500
602,413
Changes in equity
Loss for the year
Issue of shares
Lapse of share options and warrants
Movement in year
17
-
167
-
-
-
21,500
88,762
-
-
-
-
-
-
-
-
-
Balance at 31 December 2021
9,669,995
24,490,618
637,500
602,413
Balance at 1 January 2020
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Exercise of warrants
Lapse of share options and warrants
Movement in year
Share based
payment
reserve
£
Non-
controlling
interest
£
Retained
earnings
£
Total
£
830,449
(130,813)
(29,729,817)
2,223,100
-
-
-
(50,447)
(253,337)
14,138
(25,075)
-
-
-
-
-
(1,443,248)
-
-
-
253,337
-
(1,468,323)
4,246,182
(245,675)
-
-
-
Balance at 31 December 2020
540,803
(155,888)
(30,919,728)
4,755,284
Changes in equity
Loss for the year
Issue of shares
Lapse of share options and warrants
Movement in year
-
-
(234,195)
184,611
(28,979)
-
-
-
(1,518,212)
-
145,433
-
(1,547,191)
21,667
-
184,611
Balance at 31 December 2021
491,219
(184,867)
(32,292,507)
3,414,371
4 4
ValiRx Plc
CONNECTED INNOVATION
Company Statement of Changes in Equity
for the year ended 31 December 2021
Balance at 1 January 2020
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Exercise of warrants
Lapse of share options
Movement in year
Notes
Share capital
£
Share premium
£
Merger
reserve
£
9,417,225
20,596,143
637,500
-
252,603
-
-
-
-
-
3,993,579
(245,675)
50,447
-
(14,138)
-
-
-
-
-
-
Balance at 31 December 2020
9,669,828
24,380,356
637,500
Changes in equity
Loss for the year
Issue of shares
Lapse of share options and warrants
Movement in year
17
-
167
-
-
-
21,500
88,762
-
-
-
-
-
Balance at 31 December 2021
9,669,995
24,490,618
637,500
Balance at 1 January 2020
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Exercise of warrants
Lapse of share options
Movement in year
Share based
payment
reserve
£
Retained
earnings
£
Total
£
830,449
(26,119,974)
5,361,343
-
-
-
(50,447)
(253,337)
14,138
(1,064,464)
-
-
-
253,337
-
(1,064,464)
4,246,182
(245,675)
-
-
-
Balance at 31 December 2020
540,803
(26,931,101)
8,297,386
Changes in equity
Loss for the year
Issue of shares
Lapse of share options and warrants
Movement in year
-
-
(234,195)
184,611
(1,315,498)
-
145,433
-
(1,315,498)
21,667
-
184,611
Balance at 31 December 2021
491,219
(28,101,166)
7,188,166
Share capital
The nominal value of the issued share capital.
Share premium account
Amounts received in excess of the nominal value on the issue of share capital less any costs associated with the issue of shares.
Merger reserve
The difference between the nominal value of the share capital issued by the Company and the fair value of ValiRx Bioinnovation
at the date of acquisition.
Share option reserve
The fair value of the share-based payment, determined at the grant date, and expensed over the vesting period.
Retained earnings
Accumulated comprehensive income for the year and prior periods.
4 5
CONNECTED INNOVATION
Consolidated Statement of Cash Flows
for the year ended 31 December 2021
Cash flows from operations
Cash outflow from operations
Interest paid
Tax credit received
Notes
1
2021
£
2020
£
(1,331,136)
(782)
71,346
(2,200,088)
(6,252)
295,623
Net cash outflow from operating activities
(1,260,572)
(1,910,717)
Cash flows from investing activities
Proceeds from sale of intangible fixed assets
Purchase of intangible fixed assets
Net cash outflow from investing activities
-
-
-
2,000
(93,287)
(91,287)
Cash flows from financing activities
Loan repayments
Bank loan (repayment)/received
Repayment of lease liabilities
Share issue
Costs of shares issued
-
(5,324)
(9,000)
21,667
-
(80,000)
50,000
(2,500)
4,132,714
(245,675)
Net cash inflow from financing activities
7,343
3,854,539
(Decrease)/increase in cash and cash equivalents
(1,253,229)
1,852,535
Cash and cash equivalents at beginning of year
Cash an cash equivalents at end of year
2
2
1,846,901
(5,634)
593,672
1,846,901
4 6
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Statement of Cash Flows
for the year ended 31 December 2021
1. Reconciliation Of Operating Loss To Cash Generated From Operations
Operating loss
Amortisation and impairment of intangible assets
Depreciation of right-of-use assets
(Increase)/decrease in trade and other receivables
Decrease in trade and other payables
Loss on disposal of intangible fixed assets
Share-based payments charge
2021
£
2020
£
(1,677,839)
221,072
7,717
(6,190)
(60,507)
-
184,611
(1,650,625)
227,338
2,157
23,348
(957,274)
154,968
-
Net cash outflow from operations
(1,331,136)
(2,200,088)
2. Cash And Cash Equivalents
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in
respect of these Statement of Financial Position amounts:
Cash and cash equivalents
593,672
1,846,901
31 December
2021
£
1 January
2021
£
Cash and cash equivalents
1,846,901
(5,634)
31 December
2020
£
1 January
2020
£
4 7
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
1. STATUTORY INFORMATION
ValiRx Plc is a company incorporated in the United Kingdom under the Companies Act 2006, which is listed on
the AIM market of the London Stock Exchange Plc. The address of its registered office is Stonebridge House,
Chelsmford Road, Hatfield Heath, CM22 7BD.
The registered number of the Company is 03916791.
The principal activity of the Group is the development of oncology therapeutics and companion diagnostics.
The presentation currency of the financial statements is the Pound Sterling (£).
2. ACCOUNTING POLICIES
Basis of preparation
The Group’s financial statements have been prepared in accordance with UK adopted International
Accounting Standards as they apply to the financial statements of the Group for the year ended
31 December 2021. The Company’s financial statements have been prepared in accordance with UK adopted
International Accounting Standards in conformity with the requirements of the Companies Act 2006 as they
apply to the financial statements of the Company for the year ended 31 December 2021 and as applied in
accordance with the provisions of the Companies Act 2006. The principal accounting policies adopted by
the Group and by the Company are set out in note 2. The Group financial statements have been prepared
under the historical cost convention or fair value where appropriate.
Going concern
As part of their going concern review the Directors have followed the guidelines published by the Financial
Reporting Council entitled “Guidance on the Going Concern Basis of Accounting and Reporting on Solvency
Risks - Guidance for directors of companies that do not apply the UK Corporate Governance Code”.
The Group and Parent Company are subject to a number of risks similar to those of other development stage
pharmaceutical companies. These risks include, amongst others, generation of revenues in due course from the
development portfolio and risks associated with research, development, testing and obtaining related
regulatory approvals of its pipeline products. Ultimately, the attainment of profitable operations is dependent
on future uncertain events which include obtaining adequate financing to fulfil the Group’s commercial and
development activities and generating a level of revenue adequate to support the Group’s cost structure.
The current economic environment is challenging, and the Group has reported an operating loss for the year.
These losses will continue in the current accounting year to 31 December 2022.
The Directors have prepared detailed financial forecasts and cash flows looking beyond 12 months from the
date of the approval of these financial statements. In developing these forecasts, the Directors have made
assumptions based upon their view of the current and future economic conditions that are expected to prevail
over the forecast period. The Directors have concluded that the ability of the Company to raise funds in the
future represents a material uncertainty which may cast significant doubt on the group’s ability to continue
as a going concern. The Board is confident that shareholder approval will be obtained and therefore has
reasonable expectation that the Group has adequate resources to continue in operational existence for a
period being at least the next twelve months from the date of approval of the Annual Report and Accounts.
On this basis, the Directors continue to adopt the going concern basis in preparing these accounts.
Accordingly, these accounts do not contain any adjustments to the carrying amount of classification of
assets and liabilities that would result if the Group were unable to continue as a going concern.
4 8
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
2. ACCOUNTING POLICIES - continued
Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and all its subsidiaries
(“the Group”). Subsidiaries include all entities over which the Group has the power to govern financial and
operating policies. The existence and effect of potential voting rights that are currently exercisable or
convertible are considered when assessing whether the Group controls another entity. Subsidiaries are
consolidated from the date on which control commences until the date that control ceases. Intra-group
balances and any unrealised gains and losses on income or expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
On 3 October 2006, ValiRx Bioinnovation Limited (‘Bioinnovation’) acquired 60.28% of the issued share
capital of ValiPharma Limited (‘ValiPharma’) in exchange for shares in Bioinnovation. Concurrently, the
Company, (“ValiRx”), acquired the entire issued share capital of Bioinnovation in a share for share transaction.
As a result of these transactions, the former shareholders of ValiPharma became the majority shareholders in
ValiRx. Accordingly, the substance of the transaction was that ValiPharma acquired ValiRx in a reverse
acquisition. Under IFRS 3 “Business Combinations”, the acquisition of ValiPharma has been accounted for as
a reverse acquisition.
In May 2008 the Company acquired the remaining 39.72% of the issued share capital of ValiPharma, which
is now wholly owned by the Group. This acquisition was accounted for using the acquisition method of
accounting.
In November 2013 ValiSeek Limited was formed to enable the company to enter into a joint venture agreement.
The company has a 55.5% holding in the issued share capital of ValiSeek.
Goodwill
Goodwill on acquisition of subsidiaries represents the excess of the cost of acquisition over the fair value of
the Group’s share of the identifiable net assets and contingent liabilities acquired. Identifiable assets are
those which can be sold separately, or which arise from legal rights regardless of whether those rights are
separable. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is not amortised
but is tested annually, or when trigger events occur, for impairment and is carried at cost less accumulated
impairment losses.
Other intangible assets
Acquired licences, trademarks and patents and directly associated costs are capitalised at cost and are
amortised on a straight-line basis over their useful life. Patents are amortised over 11 years and licences
between 10 and 20 years.
Impairment of non-current assets
At each reporting date, the Directors review the carrying amounts of property, plant and equipment assets,
goodwill and other intangible assets to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Directors estimate the recoverable amount of the
cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to
sell and value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable
amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised as an expense immediately.
4 9
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
2. ACCOUNTING POLICIES - continued
Property, plant and equipment
Property, plant and equipment are stated at cost less depreciation.
Depreciation is provided at the following rates per annum to write off the cost of property, plant and
equipment, less estimated residual value, on a straight-line basis from the date on which they are brought
into use:
Plant and machinery
Computer equipment
33% per annum straight line
33% per annum straight line
Leases and right-of-use assets
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group
recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in
which it is the lessee, except for short-term leases (leases with a lease term of 12 months or less) and leases
of low value assets (e.g. tablets and personal computers, small items of office furniture). For these leases,
the Group recognises the lease payments as an operating expense on a straight-line basis over the term of
the lease.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily
determined, the Group uses its incremental borrowing rate. The lease liability is subsequently measured by
increasing the carrying amount to reflect interest on the lease liability (using the effective interest method)
and by reducing the carrying amount to reflect the lease payments made.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments
made at or before the commencement day, less any lease incentives received, initial direct costs and the
estimated costs of removing or dismantling the underlying asset per the conditions of the contract. They are
subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are
depreciated over the shorter period of lease term and useful life of the right-of-use asset.
Financial assets
The Company classifies its financial assets in the following categories:
- financial assets at fair value through profit or loss;
- loans and receivables;
- held-to-maturity investments; and
- available-for-sale financial assets.
Management determines the classification of its investments at initial recognition.
Loans and receivables
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. The principal financial assets of the Company are loans and receivables. They are included
in current assets, except for maturities greater than twelve months after the balance sheet date. These are
classified as non-current assets.
The Group’s loans and receivables are recognised and carried at the lower of their original amount less a
provision for impairment. A provision is made when collection of the full amount is no longer considered
possible.
The Group’s loans and receivables comprise trade and other receivables and cash and cash equivalents.
Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand and short-term deposits with an original
maturity of three months or less. The Company considers overdrafts (repayable on demand) to be an integral
part of its cash management activities and these are included in cash and cash equivalents for the purposes
of the cash flow statement.
Derivative financial instruments
Derivative financial instruments are initially recognised at fair value on the date a derivative contract is
entered into and are subsequently carried at fair value with the changes in fair value recognised in the
Income Statement.
5 0
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
2. ACCOUNTING POLICIES - continued
Financial liabilities
The Group does not have any financial liabilities that would be classified as fair value through the profit or loss.
Therefore, all financial liabilities are classified as other financial liabilities.
The Group’s financial liabilities include borrowings, trade and other payables and are recognised at their
original amount.
Finance income and finance costs
Finance income is recognised when it is probable that the economic benefits will flow to the company and
the amount of income can be measured reliably. It is accrued on a time basis by reference to the principal
outstanding and at the effective interest rate applicable.
Borrowing costs are recognised as an expense in the period in which they are incurred.
Taxation
The taxation charge represents the sum of current tax and deferred tax.
The tax currently payable is based on the taxable profit for the period using the tax rates that have been
enacted or substantially enacted by the balance sheet date. Taxable profit differs from the net 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.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the Group financial statements. Deferred tax is
determined using tax rates that have been enacted or substantially enacted at the balance sheet date and
are expected to apply when the related deferred income tax asset is realised of the deferred tax liability
is settled.
Deferred tax assets are only recognised to the extent that it is probable that future taxable profit will be
available against which the asset can be utilised.
Deferred tax is charged or credited in the income statement, except when it relates to items charged or
credited to equity, in which case the deferred tax is also dealt with in equity.
Research and development
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
All on-going development expenditure is currently expensed in the period in which it is incurred. Due to the
regulatory and other uncertainties inherent in the development of the Group’s programmes, the criteria for
development costs to be recognised as an asset, as prescribed by IAS 38, ‘Intangible assets’, are not met
until the product has been submitted for regulatory approval, such approval has been received and it is
probable that future economic benefits will flow to the Group. The Group does not currently have any such
internal development costs that qualify for capitalisation as intangible assets.
Development costs are capitalised when the related products meet the recognition criteria of an internally
generated intangible asset, the key criteria being as follows:
- technical feasibility of the completed intangible asset has been established;
- it can be demonstrated that the asset will generate probable future economic benefits;
- adequate technical, financial and other resources are available to complete the development;
- the expenditure attributable to the intangible asset can be reliably measured; and
- the Group has the ability and intention to use or sell the asset.
Expenses for research and development include associated wages and salaries, material costs, depreciation
on non-current assets and directly attributable overheads.
All research and development costs, whether funded by third parties under licence and development
agreements or not, are included within operating expenses and classified as such.
Share capital
Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the
definition of a financial liability. The Group’s ordinary and deferred shares are classified as equity instruments.
5 1
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
2. ACCOUNTING POLICIES - continued
Foreign currencies
Items included in the Financial Statements are measured using the currency of the primary economic
environment in which the Company and its subsidiaries operate (the functional currency) which is
UK sterling (£). The Financial Statements are accordingly presented in UK sterling.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions or at an average rate for a period if the rates do not fluctuate significantly.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the Consolidated Statement of Comprehensive income. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated.
Share-based payments
IFRS 2 “Share-based Payments” requires that an expense for equity instruments granted is recognised in the
financial statements based on their fair values at the date of the grant. This expense, which is in relation to
employee share options, is recognised over the vesting period of the scheme. The fair value of employee
services is determined by reference to the fair value of the awarded grant calculated using the
Black Scholes model.
At the year-end date, the Group revises its estimate of the number of share incentives that are expected to
vest. The impact of the revisions of original estimates, if any, is recognised in the Statement of Comprehensive
Income, with a corresponding adjustment to equity, over the remaining vesting period.
When options expire or are cancelled the expensed value of these lapsed options is transferred from the
share-based payment, reserve to retained earnings.
New and amended standards and interpretations
As at the date of approval of these financial statements, the following standards were in issue but not yet
effective. These standards have not been adopted early by the Company as they are not expected to have
a material impact on the financial statements other than requiring additional disclosure or alternative
presentation.
IFRS 1
IFRS 9
IFRS 16
IAS 41
IAS 16
IFRS 3
IAS 37
IFRS 17
IFRS 4
IAS 1
IAS 1, IFRS
Practice Statement 2
IAS 8
IAS 12
Amendments - First-Time Adoption of International Financial
Reporting Standards - Subsidiary as a first-time adopter
Amendment - Financial Instruments - Fees in the ‘10 per cent’
test for derecognition of financial liabilities
Leases - Lease incentives
Agriculture - Taxation in fair value measurements.
Amendments - Property, Plant and Equipment -
Proceeds before Intended Use
Amendments - Reference to the Conceptual Framework
Onerous Contracts - Cost of Fulfilling a Contract
Insurance contracts
Amendments - Applying IFRS 9 ‘Financial Instruments’
with IFRS 4 ‘Insurance Contracts’
Amendment - Correction of Liabilities as Current and Non-Current
Amendment - Disclosure of accounting policies
Amendment - Definition of Accounting estimates
Amendment - Deferred Taxation related to Assets and Liabilities
arising from a Single Transaction
IFRS 17, IFRS 9
Amendment - Comparative Information
5 2
Effective date (period
beginning on or after)
01/01/2022
01/01/2022
01/01/2022
01/01/2022
01/01/2022
01/01/2022
01/01/2022
01/01/2023
01/01/2023
01/01/2023
01/01/2023
01/01/2023
01/01/2023
01/01/2023
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
2. ACCOUNTING POLICIES - continued
The International Financial Reporting Interpretations Committee has also issued interpretations which the
Company does not consider will have a significant impact on the financial statements
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the financial statements in conformity with IFRS requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting period. Although these estimates
are based on management’s best knowledge of the amounts, events or actions, actual results ultimately may
differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the estimate is revised. The material
areas in which estimates and judgements are applied as follows:
Goodwill and other intangible assets impairment
The Group is required to test, on an annual basis, whether goodwill and other intangible assets have suffered
any impairment. Determining whether there has been any impairment requires an estimation of the value in
use of the cash-generating units. The value in use calculation requires the Directors to estimate the future
cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate
the present value.
Share-based payments
The estimates of share-based payments costs require that management selects an appropriate valuation
model and makes decisions on various inputs into the model, including the volatility of its own share price,
the probable life of the options before exercise, and behavioural consideration of employees. A significant
element of judgement is therefore involved in the calculation of the charge.
Capitalisation of development costs
Capitalisation of development costs requires analysis of the technical feasibility and commercial viability of
the project concerned. Capitalisation of the costs will be made only where there is evidence that an economic
benefit will accrue to the Group. To date no development costs have been capitalised and all costs have been
expensed in the income statement as Research and Development costs.
4. REVENUE
Segmental reporting
The Directors are of the opinion that under IFRS 8 - “operating segment” there are no identifiable business
segments that are subject to risks and returns different to the core business of drug development.
The information reported to the Directors, for the purposes of resource allocation and assessment of
performance is based wholly on the overall activities of the Group. Therefore, the Directors have determined
that there is only one reportable segment under IFRS8.
5 3
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
5. EMPLOYEES AND DIRECTORS
Number of employees:
The average monthly number of employees, including Directors, during the year was:
Directors
Staff
Employment costs
Wages and salaries
Social security costs
Other pension costs
Compensation for loss of office
Details of Directors’ remuneration can be found in note 25.
6. FINANCE COSTS
Bank interest
Lease interest
Interest on overdue tax
Deferral fees on equity swap
7. LOSS BEFORE INCOME TAX
After charging:
Research and development
Other operating leases
Amortisation - intangible fixed assets
Depreciation - right-of-use assets
Loss on disposal of intangible fixed assets
Auditors remuneration
Foreign exchange differences
Share-based payment charge
After crediting:
Rates grant
Write back of equity swap debt
5 4
2021
Number
5
2
7
2021
£
436,396
41,543
12,890
-
2020
Number
7
3
10
2020
£
407,710
36,240
15,275
72,000
490,829
531,225
2021
£
2020
£
1,307
1,378
80
-
719
409
5,533
8,219
2,765
14,880
2021
£
2020
£
303,789
-
221,072
7,717
-
31,000
4,171
184,611
230,115
29,637
227,338
2,157
154,968
30,000
14,569
-
-
-
(10,000)
(122,000)
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
8. INCOME TAX
Domestic current year tax
Tax credits on research and development - current year
Tax credits on research and development - prior years
Current tax credit
Factors affecting the tax charge for the year:
2021
£
2020
£
(133,413)
-
(71,346)
(3,836)
(133,413)
(75,182)
Loss before income tax
(1,680,604)
(1,543,505)
Loss before income tax multiplied by effective rate of
UK corporation tax of 19.00% (2020: 19.00%)
(319,315)
(293,266)
Effects of
Non-deductible expenses
Capital allowances for the year in deficit of depreciation and amortisation
Tax losses not utilised
Research and development expenditure
Adjustment to prior years
Discount on settlement of financial liability
Loss on disposal of intangible fixed assets
Current tax charge
35,467
5,246
202,594
(57,405)
-
-
-
2,702
3,775
238,448
(29,649)
(3,836)
(23,180)
29,824
185,902
218,084
(133,413)
(75,182)
No corporation tax arises on the results for the year ended 31 December 2021 due to the losses incurred
for tax purposes.
The deferred tax asset, arising from tax losses of £21.8 million (2020: £20.7 million) carried forward, has
not been recognised but would become recoverable against future trading profits, subject to agreement
with HM Revenue and Customs. The main UK Corporation tax rate increases to 25% with effect from
1 April 2023.
9. LOSS OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the statement of comprehensive income of
the Parent Company is not presented as part of these financial statements. The Parent Company’s loss
for the financial year was £1,315,498 (2020: £1,064,464).
5 5
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
10.LOSS PER SHARE
The loss and number of shares used in the calculation of loss per ordinary share are set out below:
Loss for the financial period
Non-controlling interest
2021
£
2020
£
(1,547,191)
28,979
(1,468,323)
25,075
Loss attributable to owners of Parent Company
(1,518,212)
(1,443,248)
Basic:
Weighted average number of shares
Loss per share
65,004,957
(2.34p)
37,898,019
(3.81p)
The loss and the weighted average number of shares used for calculating the diluted loss per share
are identical to those for the basic loss per share. The outstanding share options and share warrants
(note 24) would have the effect of reducing the loss per share and would therefore not be dilutive
under IAS 33 ‘Earnings per Share’.
11. GOODWILL
Group
COST
At 1 January 2020 and 2021 and 31 December 2021
Net book value
At 31 December 2021
At 31 December 2020
The goodwill arising on the acquisitions of ValiRx Bioinnovation Limited, ValiPharma Limited,
Valisrc Limited and ValiSeek Limited is not being amortised but is reviewed on an annual basis
for impairment, or more frequently if there are indications that goodwill might be impaired.
The impairment review comprises a comparison of the carrying amount of the goodwill with its
recoverable amount (the higher of fair value less costs to sell and value in use). ValiRx Plc has
used the value in use method, applying a 15% discount rate.
Goodwill per cash generating unit
ValiPharma Limited
ValiRx Bioinnovation Limited
Valisrc Limited
ValiSeek Limited
£
1,602,522
1,602,522
1,602,522
£
772,230
394,613
-
435,679
Sensitivity analysis is not required as a reasonably possible change in assumptions would not result
in an impairment
5 6
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
12. INTANGIBLE ASSETS
Group
COST
At 1 January 2020
Additions
Disposals
At 31 December 2020
Additions
Patents
£
Brands and
licences
£
Total
£
2,375,491
93,287
(179,225)
375,000
-
-
2,750,491
93,287
(179,225)
2,289,553
-
375,000
-
2,664,553
-
At 31 December 2021
2,289,553
375,000
2,664,553
AMORTISATION
At 1 January 2020
Amortisation for year
Eliminated on disposal
At 31 December 2020
Amortisation for year
976,810
200,138
(22,257)
153,474
27,200
-
1,130,284
227,338
(22,257)
1,154,691
183,622
180,674
37,450
1,335,365
221,072
At 31 December 2021
1,338,313
218,124
1,556,437
NET BOOK VALUE
At 31 December 2021
951,240
156,876
1,108,116
At 31 December 2020
1,134,862
194,326
1,329,188
Company
COST
At 1 January 2020, 31 December
2020 and 2021
AMORTISATION
At 1 January 2020
Amortisation for year
At 31 December 2020
Amortisation for year
At 31 December 2021
NET BOOK VALUE
At 31 December 2021
At 31 December 2020
5 7
Brands and
licences
£
Total
£
200,000
200,000
100,000
20,000
100,000
20,000
120,000
20,000
120,000
20,000
140,000
140,000
60,000
60,000
80,000
80,000
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
13. PROPERTY, PLANT AND EQUIPMENT
Group and Company
COST
Plant and
machinery
£
Total
£
At 1 January 2020 and 2021 and 31 December 2021
31,670
31,670
DEPRECIATION
At 1 January 2020 and 2021 and 31 December 2021
31,670
31,670
NET BOOK VALUE
At 31 December 2021
At 31 December 2020
14.INVESTMENTS
Company
COST
-
-
-
-
Shares in group
undertakings
£
Total
£
At 1 January 2020 and 2021 and 31 December 2021
3,617,838
3,617,838
PROVISIONS
At 1 January 2020 and 2021
Charge for the year
At 31 December 2021
NET BOOK VALUE
At 31 December 2021
At 31 December 2020
The Company’s investments at the Statement of Financial Position
date in the share capital of companies include the following:
Subsidiaries
ValiRx Bioinnovation Limited
Registered office: England & Wales
Nature of business: Intermediate holding company
Class of shares:
Ordinary shares
5 8
-
1,975
1,975
-
1,975
1,975
3,615,863
3,615,863
3,617,838
3,617,838
% Holding
100.00
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
14.INVESTMENTS - continued
Subsidiaries
ValiPharma Limited
Registered office: England & Wales
Nature of business: Therapeutic research & development
Class of shares:
Ordinary shares
60.28% is owned by ValiRx Bioinnovation Limited and 39.72% by the Company.
Valisrc Limited
Registered office: England & Wales
Nature of business: Dormant
Class of shares:
Ordinary shares
ValiSeek Limited
Registered office: England & Wales
Nature of business: Therapeutic research & development
Class of shares:
Ordinary shares
% Holding
100.00
% Holding
100.00
% Holding
55.55
15. TRADE AND OTHER RECEIVABLES
GROUP
COMPANY
Current
2021
£
2020
£
2021
£
2020
£
Amounts owed by Group undertakings
Other debtors
Rent deposit
VAT
Prepayments and accrued income
-
26,714
1,500
5,303
39,408
-
21,600
1,500
11,079
32,556
3,230,321
26,642
1,500
29,545
39,408
3,174,627
19,553
1,500
35,315
32,556
72,925
66,735
3,327,416
3,263,551
In the Directors’ opinion, the carrying amounts of receivables is considered a reasonable approximation
of fair value.
16. CASH AND CASH EQUIVALENTS
GROUP
COMPANY
2021
£
2020
£
2021
£
2020
£
Bank accounts
593,672
1,846,901
592,046
1,846,288
5 9
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
17. CALLED UP SHARE CAPITAL
GROUP
COMPANY
Allotted, called up and fully paid
Ordinary shares of 0.1p each
Deferred shares of 0.5p each
Deferred shares of 0.9p each
Deferred shares of 12.4p each
2021
Number
2020
Number
2021
£
2020
£
65,049,156
58,378,365
157,945,030
42,455,832
64,882,490
58,378,365
157,945,030
42,455,832
65,049
2,918,918
1,421,505
5,264,523
64,882
2,918,918
1,421,505
5,264,523
9,669,995
9,669,828
In February 2021, the Company raised £21,667 through the issue of shares to warrant holders, who exercised
their warrants over 166,666 shares, at a price of 13 pence per share.
The deferred shares have no rights to vote, attend or speak at general meetings of the Company or to receive
any dividend or other distribution and have limited rights to participate in any return of capital on a winding-up
or liquidation of the Company.
18. TRADE AND OTHER PAYABLES
GROUP
COMPANY
Current
2021
£
2020
£
2021
£
Trade creditors
Amounts owed to Group undertakings
Social security and other taxes
Other payables
Accruals and deferred income
13,056
-
4,887
2,892
30,000
72,356
-
6,107
2,879
30,000
13.056
447,187
4,887
-
30,000
2020
£
39,082
447,187
6,107
-
30,000
50,835
111,342
495,130
522,376
In the Directors’ opinion, the carrying amounts of payables is considered a reasonable approximation of
fair value.
19. FINANCIAL LIABILITIES - BORROWINGS
GROUP
COMPANY
Current:
Bank loan
Non-current:
Bank loan:
1-2 years
2-5 years
More than 5 years
2021
£
2020
£
2021
£
9,627
5,514
9,627
2020
£
5,514
9,627
5,514
9,627
5,514
GROUP
COMPANY
2021
£
2020
£
2021
£
2020
£
9,871
25,783
-
9,647
30,429
4,410
9,871
25,783
-
9,647
30,429
4,410
35,654
44,486
35,654
44,486
6 0
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
19. FINANCIAL LIABILITIES - BORROWINGS - continued
Total bank loan
Current
Non-current
20.LEASES
Right-of-use assets
Group and Company
COST
At 1 January 2020
Additions
GROUP
COMPANY
2021
£
2020
£
2021
£
2020
£
9,627
35,654
5,514
44,486
9,627
35,654
5,514
44,486
45,281
50,000
45,281
50,000
Leasehold
property
£
-
23,152
Total
£
-
23,152
At 31 December 2020 and 2021
23,152
23,152
AMORTISATION
At 1 January 2020
Amortisation for year
At 31 December 2020
Amortisation for year
-
2,157
2,157
7,717
-
2,157
2,157
7,717
At 31 December 2020 and 2021
9,874
9,874
NET BOOK VALUE
At 31 December 2021
At 31 December 2020
Lease liabilities
Group and Company
Set out below is the movement in lease liabilities during the period.
13,278
13,278
20,995
20,995
At 1 January 2020
Addition
Interest expense
Repayments
At 31 December 2020
Interest expense
Repayments
At 31 December 2021
6 1
-
23,152
409
(2,500)
21,061
1,378
(9,000)
13,439
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
20.LEASES - continued
Group and Company
Current
Non-current
Non-current
Lease liability
1-2 years
2-5 years
2021
£
2020
£
7,758
5,681
7,622
13,439
13,439
21,061
5,681
-
7,758
5,681
5,681
13,439
21. OTHER FINANCIAL COMMITMENTS
As a result of the adoption of IFRS 16, from 1 July 2019, all leases, except those classified as either
low-value assets or short-term, have been recognised on the balance sheet as a right-of-use asset
and lease liability and are no longer included in this non-cancellable operating lease disclosure.
At the year end, neither the Group nor the Company had no non-cancellable operating leases
22.RELATED PARTY DISCLOSURES
During the year the Director, G Desler, provided the Company and its subsidiaries with bookkeeping
services totalling £18,450 (2020: £18,450).
At the year end, the amounts owed to Directors were as follows:
K Alexander
G Desler
M Lampshire
Dr S Dilly
Dr K Cox
2021
£
2020
£
-
13
-
2,879
-
-
-
-
2,879
-
23. ULTIMATE CONTROLLING PARTY
The Directors consider that there is no ultimate controlling party.
6 2
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
24.SHARE-BASED PAYMENT TRANSACTIONS
Share option
At 31 December 2021 outstanding awards to subscribe for ordinary shares of 0.1p each in the Company,
granted in accordance with the rules of the ValiRx share option schemes, were as follows:
2020
Brought forward
Lapsed during the year
Number of
shares
139,100
(64,216)
Weighted average
remaining contractual
life (years)
Weighted average
exercise price (pence)
7.53
-
1,458.71
1,440.37
Carried forward
74,884
6.51
1,474.44
2021
Brought forward
Lapsed during the year
Carried forward
Number of
shares
Weighted average
remaining contractual
life (years)
Weighted average
exercise price (pence)
74,884
(1,120)
73,764
6.51
-
1,474.44
11,718.75
5.60
1,318.90
All options were exercisable at the year end. No options were exercised during the year.
The following share-based payment arrangements were in existence at the balance sheet date.
Options
Number
Expiry
date
Exercise
price
Fair value at
grant date
1 Granted 19 January 2014
2 Granted 21 October 2014
3 Granted 26 June 2015
4 Granted 9 February 2018
3,392
4,032
3,940
62,400
19/01/2024
21/10/2024
26/06/2025
09/02/2028
5,391.25p
5,625.00p
6,375.00p
500.00p
625.00p
468.75p
505.00p
348.75p
The fair value of the remaining share options has been calculated using the Black-Scholes model. The assumptions used
in the calculation of the fair value of the share options outstanding during the year are as follows:
Options
1 Granted 19 January 2014
2 Granted 21 October 2014
3 Granted 26 June 2015
4 Granted 9 February 2018
Grant date
share price
Exercise
price
Expected
volatility
Expected
option life
(years)
Risk-free
interest rate
5,391.25p
5,625.00p
6,312.50p
500.00p
5,391.25p
5,625.00p
6,375.00p
500.00p
17.00%
17.00%
16.00%
196.00%
3.00
3.00
3.00
3.00
0.99%
1.00%
0.38%
0.88%
The fair value has been calculated assuming that there will be no dividend yield.
Volatility was determined by reference to the standard deviation of expected share price returns based on a statistical
analysis of daily share prices over a 3-year period to grant date. All of the above options are equity settled.
All of the share options are equity settled and the charge for the year is £nil (2020: £nil)
6 3
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
24.SHARE-BASED PAYMENT TRANSACTIONS - continued
Warrants
At 31 December 2021 outstanding warrants to subscribe for ordinary shares of 0.1p each in the Company,
granted in accordance with the warrant instruments issued by ValiRx, were as follows.
2020
Brought forward
Granted during the year
Lapsed during the year
Number of
shares
720,607
10,794,733
(10,820,117)
Weighted average
remaining contractual
life (years)
Weighted average
exercise price (pence)
2.11
-
-
491.58
12.92
13.05
Carried forward
695,223
0.59
507.01
2021
Number of
shares
Weighted average
remaining contractual
life (years)
Weighted average
exercise price (pence)
Brought forward
Granted during the year
Exercised during the year
Lapsed during the year
695,223
3,902,949
(166,666)
(461,891)
0.59
-
-
-
507.01
22.00
13.00
747.62
Carried forward
3,969,615
4.57
22.89
All warrants were exercisable at the year end.
The following warrants were in existence at the balance sheet date.
Warrants
Number
Expiry
date
Exercise
price
Fair value at
grant date
1 Granted 28 February 2019
2 Granted 25 August 2021
66,666
3,902,949
28/02/2022
24/08/2026
75.00p
22.00p
43.75p
16.85p
The fair value of the remaining warrants has been calculated using the Black-Scholes model. The assumptions used
in the calculation of the fair value of the share options outstanding during the year are as follows:
Warrants
Grant date
share price
Exercise
price
Expected
volatility
Expected
option life
(years)
Risk-free
interest rate
1 Granted 28 February 2019
2 Granted 25 August 2021
76.25p
21.25p
75.00p
22.00p
133.60%
301.00%
3.00
3.00
0.86%
0.33%
The fair value has been calculated assuming that there will be no dividend yield.
Volatility was determined by reference to the standard deviation of expected share price returns based on a statistical
analysis of daily share prices over a 3-year period to grant date.
The warrants issued during 2021 are exercisable from 25 August 2022. The remaining warrants are equity settled and
the charge for the year is £184,611 (2020: £14,138).
As the warrants relating to the charge in 2020 were all in consideration of shares issued during the year, the charge
has been taken directly to equity and charged against the share premium as costs in respect of the issue of shares.
6 4
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
25.KEY MANAGEMENT PERSONNEL COMPENSATION
Key management personnel are those persons having authority and responsibility for planning,
directing and controlling activities of the Group, and are all Directors of the Company.
Salaries and other short-term employee benefits
Compensation for loss of office
Post-employment benefits
2021
£
2020
£
286,875
-
9,183
238,162
72,000
7,076
296,058
317,238
K Alexander
G Desler
M Lampshire
Dr S Dilly
Dr K Cox
G Morris (Resigned 14/04/20)
S Vainikka (Ceased to be director 14/04/20)
l
e
m
p
o
y
m
e
n
t
b
e
n
e
f
i
t
s
P
o
s
t
-
£
2021
£
Salary
£
Bonus
£
25,625
-
-
25,625
48,000
25,000
-
-
-
-
48,000
25,000
120,000
30,000
9,183
159,183
38,250
-
-
-
-
-
-
-
-
38,250
-
-
2020
£
65,625
65,037
16,667
22,917
21,000
57,969
68,023
256,875
30,000
9,183
296,058
317,238
Details of fees paid to Directors are shown in note 22 above.
The number of Directors for whom retirement benefits are accruing under money purchase pension schemes
amounted to 1 (2020: 3).
6 5
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
25.KEY MANAGEMENT PERSONNEL COMPENSATION - continued
The Directors interests in share options as at 31 December 2021 are as follows:
Number of
options
Exercise
price
Date of
grant
First date of
exercise
Final date of
exercise
K Alexander
K Alexander
K Alexander
K Alexander
1,280
1,280
1,390
20,000
23,950
5,390.63p
5,625.00p
6,750.00p
500.00p
19/01/2014
21/10/2014
26/06/2015
07/02/2018
19/01/2014
21/10/2014
26/06/2015
07/02/2018
19/01/2024
21/10/2024
25/06/2025
07/02/2028
G Desler
G Desler
G Desler
G Desler
1,408
1,408
1,518
24,000
5,390.63p
5,625.00p
6,750.00p
500.00p
19/01/2014
21/10/2014
26/06/2015
07/02/2018
19/01/2014
21/10/2014
26/06/2015
07/02/2018
19/01/2024
21/10/2024
25/06/2025
07/02/2028
28,334
Dr S Dilly
Dr S Dilly
512
4,000
5,625.00p
500.00p
21/10/2014
07/02/2018
21/10/2014
07/02/2018
21/10/2024
07/02/2028
4,512
During the year, K Alexander and Dr S Dilly both exercised their share warrants and both subscribed for
83,333 ordinary shares at a price of 13p per share. As a consequence, there are no outstanding share warrants
for Directors at 31 December 2021 (2020 – 166,666).
6 6
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
26.FINANCIAL INSTRUMENTS
The principal financial instruments used by the Group, from which financial instrument risk arises are
as follows:
• derivative financial assets;
• trade and other receivables;
• cash and cash equivalents; and
• trade and other payables.
The main purpose of these financial instruments is to finance the Group’s operations.
Financial assets
Loans and receivables
Trade and other receivables
Cash and cash equivalents
Total loans and receivables
Total financial assets
Financial liabilities
Trade and other payables
Cash and cash equivalents
Lease liabilities
Total financial liabilities
2021
£
2020
£
72,925
593,672
66,735
1,846,901
666,597
1,913,636
666,597
1,913,636
2021
£
2020
£
45,948
45,281
13,439
105,235
50,000
21,061
104,668
176,296
6 7
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2021
26.FINANCIAL INSTRUMENTS - continued
The Directors consider that the carrying value for each class of financial asset and liability, approximates to
their fair value.
Financial risk management
The Group’s activities expose it to a variety of risks, including market risk (foreign currency risk and interest
rate risk), credit risk and liquidity risk. The Group manages these risks through an effective risk management
programme, and, through this programme, the Board seeks to minimise potential adverse effects on the
Group’s financial performance.
The Board provides written objectives, policies and procedures with regards to managing currency and
interest risk exposures, liquidity and credit risk including guidance on the use of certain derivative and
non-derivative financial instruments.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations. The Group’s credit risk is primarily attributable to its receivables and its
cash deposits. It is Group policy to assess the credit risk of new customers before entering contracts.
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings
assigned by international credit-rating agencies. The maximum exposure is the asset recognised.
Liquidity risk and interest rate risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter
difficulty in meeting its financial obligations as they fall due. The Board regularly receives cash flow projections
for a minimum period of twelve months, together with information regarding cash balances monthly.
The Group is principally funded by equity and invests in short-term deposits, having access to these funds at
short notice. The Group’s policy throughout the period has been to minimise interest rate risk by placing funds
in risk free cash deposits but also to maximise the return on funds placed on deposit.
All cash deposits attract a floating rate of interest. The benchmark rate for determining interest receivable
and floating rate assets is linked to the UK base rate.
Foreign currency risk
The Group’s exposure to foreign currency risk is limited as most of its invoicing and payments are
denominated in Sterling. Accordingly, no sensitivity analysis is presented in this area as it is considered
immaterial.
6 8
ValiRx Plc
Eliot Park Innovation Centre
4 Barling Way Nuneaton,
CV10 7RH UK
Tel: +44 (0)2476 796496
Email: info@valirx.com
www.valirx.com