www.valirx.com
A N N U A L
REPORT & ACCOUNTS
T W E N T Y 2 3
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 2023
FOR
VALIRX PLC
ValiRx Plc
Contents of the Consolidated Financial Statements
for the year ended 31 December 2023
C O M P A 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 Profit or Loss and Other 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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0 9
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01
COMPANY INFORMATION
ValiRx Plc
Company Information
for the year ended 31 December 2023
D I R E C T O R S :
Dr S J Dilly
Dr K Cox
M Lampshire
G Desler
A de Courcey
M Gouldstone
S E C R E TA R Y:
G Desler
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
03
STRATEGIC REPORT
ValiRx Plc
Chairman’s Report
for the year ended 31 December 2023
The last few years are widely acknowledged to have been challenging for the biotech industry across
the board and specifically for publicly listed companies. Investor interest has significantly retreated,
most likely driven by a combination of geo-political events and the dramatic rise in interest rates to
tackle high inflation.
Not surprisingly, ValiRx has not been immune to these external factors, further exacerbated by slower
than expected progress in key projects, such as VAL201 out-licencing and, to a lesser extent, protracted
negotiations on university-derived evaluation agreements.
Nevertheless, during 2023 the Company was able to complete a raise of £1.3m (gross) in January for ongoing
strategic development and, in December, commitment to a further £1.8m (gross), received in January 2024.
The funds secured in January 2023 have enabled ValiRx to progress our development pipeline and,
importantly, to initiate the build-and-buy strategy to establish our translational contract research
organisation (tCRO®), branded as Inaphaea Biolabs.
Since its incorporation in January 2023, Inaphaea has leased, equipped and validated a new laboratory in
Nottingham, recruited a highly qualified team and is beginning to build a strong market presence in
translational testing services. Critically, the funding secured earlier in the year also placed ValiRx in a
strong position to respond rapidly to the offer for sale of the liquidated assets of Imagen Therapeutics.
This was a highly competitive process and a quick response was imperative.
The acquired assets comprise a wide range of relevant analytical equipment and a biobank of patient
-derived cancer cells (PDCs) accumulated by Imagen over a number of years. Ownership of the PDC
biobank has given Inaphaea a clear competitive advantage and will become a corner stone of the tCRO®
concept. Work is now underway to identify which cancers are of greatest market interest to be able to
prioritise full characterisation of the appropriate cells for use in the provision of services and product sales.
In addition, all ValiRx in-house development projects have been transferred into Inaphaea and benefitting
from access to the PDCs. This has also resulted in considerable cost savings relative to the use of external
contractors.
After extensive business development activities for VAL401, we were pleased to have entered into a letter
of intent with Ambrose Healthcare for development of this unique compound. With a focus on rare diseases
and patients managed in hospitals, we believe the team at Ambrose have the right skills and experience to
progress VAL401 into clinical studies when the necessary funding has been secured.
In summary, despite significant challenges facing the biotech sector in 2023, we were pleased to have
secured sufficient investment to progress the dual track strategy of developing a risk-balanced pre-clinical
pipeline and building a tCRO®, Inaphaea Biolabs, to generate 3rd party income.
With the recently announced Board changes, we look forward to continuing commercial progress in 2024
and establishing Inaphaea as a leader in the use of PDCs to enhance the translation of novel pre-clinical
assets into clinical development.
Kevin Cox
Chairman
Date: 13 May 2024
05
ValiRx Plc
Chief Executive’s Report
for the year ended 31 December 2023
In this, my final Chief Executive’s Report, I would like to take the opportunity to reflect on progress
by the Group not just over the past year, but to include the context of the previous four years.
With the launch of Inaphaea BioLabs in Q1 of 2023, we progressed the ambitions of the ValiRx group to
move away from a wholly virtual biotech company and towards a balanced, early-stage discovery and
preclinical biotechnology group. Although the virtual model was preferred for the Group as a “single asset”
group, as the expansion and risk diversification of the preclinical pipeline continues, the value of controlling
our own laboratory facility increases proportionally. These early-stage assets need standardised
experimental procedures conducting for initial assessment and for advancing the biological understanding
of the drug candidate molecules. Access to both the expertise within Inaphaea and the facilities enables a
time and cost-efficient turnaround.
The addition of the scientific assets from Imagen Therapeutics provided an opportunity to launch our
translational Contract Research Organisation (tCRO®) with a truly valuable biobank of patient derived
tumour cell models (PDCs) – covering samples from over 500 tissue collections, grown into cell models.
Work continues on the development, characterisation and optimisation of these samples, but within
months of on-boarding the biobank, Inaphaea had secured the first service contract from an external client
to screen a focussed library of drug candidates against a PDC sample to seek anti-cancer activity.
Considerable interest has also been shown in the use of samples from our biobank by other researchers,
and we have developed commercial frameworks to offer these samples under a range of different use
categories, including for preclinical research, for commercial incorporation into medical devices and for
provision in further specialist third party CRO assays.
The PDCs provide the capability to produce experimental procedures in the Inaphaea facility that more
closely model the human disease state compared to fully immortalised cell lines. We minimise the use of
non-human growth factors and optimise selective growth conditions to ensure we retain both the
cancerous cells and, where appropriate, a proportion of the supportive surrounding cells in the samples.
These techniques enable us to provide a differentiated and more translational service.
The tCRO® concept is built on the premise of providing a coherent network of translational science,
bridging a number of technologies to create a more complete picture of the biological activity of a drug
candidate. As part of our process to further build the tCRO® service offering, we have commenced
assembling a range of related services via collaborative services agreements with third party service
providers. These providers have been selected specifically with their relationship to the Inaphaea
services in mind, and are trusted partners with whom we would collaborate (and in many cases have
done so) on our own projects, and hence we recommend them to our clients.
The benefits of the collaborative services approach are many – from the client perspective, the ability
to access all the services seamlessly under a single service agreement creates efficiency and, for Inaphaea,
we can have confidence that the upstream or downstream processes have been conducted in a manner
and with partners that we are confident in working with. Additional synergism is seen through combined
marketing, business development, and of course, our exposure to their established client bases.
So although we are building the Inaphaea customer base from a clean page, we have the advantage
of our collaborators networks to build on.
06
ValiRx Plc
Chief Executive’s Report
for the year ended 31 December 2023
The pipeline of client prospects within Inaphaea is looking strong, with a steady build of prospects
throughout the second half of 2023. Although the nature of our industry is of long-term research budget
planning with associated long lead times, our current pipeline of prospects is progressing well. As the
catalogue of characterised PDCs is developed we expect this to grow further with product license as well
as service opportunities.
The in-house research evaluation pipeline was boosted by two programmes within 2023, with the
Barcelona agreement being expanded to encompass an additional project, as well as an evaluation
project initiated in Q4 on an asset from StingRay Bio. The latter demonstrates our intent to work with
innovators in all capacities; we are not restricted to the university sector to source innovative projects
for development. We look forward to progressing both of these projects to meet the timelines for a
decision on in-licensing within 2024.
Post period two additional programmes from Dundee University and Imperial College London have
been secured into evaluation agreements, with Dundee agreeing to an over-arching agreement to
encompass future projects. On reflection of our current pipeline of new projects, consisting of
Cytolytix plus four active evaluation agreements we have made significant steps towards bringing
a balanced pipeline to the Group.
The assets currently in the new pipeline include a mixture of peptides and small molecules; cover a range
of cancer types, and have a range of characteristics of validated, novel or unknown target activities.
Although all early stage developments, this risk diversification across multiple programmes enables a
genuine scientific assessment of all, and a greater chance of success with subsequent returns of value
to shareholders. With preclinical attrition rates in oncology programmes thought to be as high as 90%,
further growth of the pipeline is required to truly balance the risk and avoid the risks of any single project
being inappropriately prioritised or of being continued beyond the natural point of attrition.
The announcement of the Option Agreement for VAL401 with Ambrose Healthcare was a key milestone in
2023, with the maximum Option term concluding within 2024. Ambrose’s commitment to progress VAL401
through remaining clinical development and commercialisation is an exciting development and I am
looking forward to progressing this partnership.
VAL201 remains under the Letter of Intent with TheoremRx and we noted towards the conclusion of
2023 their progression towards a merger with Nasdaq company EUDA, which marked a significant step
forward in publicly revealing their progression towards financing.
07
ValiRx Plc
Chief Executive’s Report
for the year ended 31 December 2023
Outlook
2024 will see another year of significant evolution, with the changes to the Board composition providing an
opportunity to harness new expertise and skills into the Group, enabling further honing of the strategy to
promote growth and development across all strands of the portfolio.
While 2023 witnessed the launch of the Inaphaea BioLabs facility, with the Group shifting from being a
wholly virtual biotech group to have in-house capability to conduct our experiments in-house; we view
2024 as the stepping stone to consolidate that growth. Anticipating conversion of the pipeline of
commercial opportunity into further sales within Inaphaea in 2024 thus demonstrating the value of
Inaphaea for both internal project progression and revenue generation.
The evaluation project pipeline will also continue to expand, with two further evaluation agreements
executed post period, and research on these is already underway in our facility. Further negotiations are
ongoing for additional projects, with a target of 1-2 further within 2024, with some of those
negotiation expected to carry into 2025.
Financial overview
Our financial results show the total comprehensive loss for the year ended 31 December 2023 of £2,037,701
(2022: £2,366,488) and a loss per share of 2.01p (2022: Loss – 3.06p).
Research and developments costs were £383,362 for the year ended 31 December 2023 as compared
to £551,233 in 2022, a reduction of £167,871. In addition, total wage costs of £462,862 (2022: £254,050)
were expended on research and development during the year.
Administrative expenses were £1,886,401 (2022: £1,502,355) for the year ended 31 December 2023 an
increase of £384,046.
Cash at the bank at 31 December 2023 was £174,684 compared to £1,137,477 in 2022.
I would like to thank the staff and Board members for all their contributions and shareholders for their
continued support. With further evolution and progression of the Company strategy under the new
management team; the Company offers potential for change and prospects for Company growth into
the future.
Dr S J Dilly
Director
Date: 13 May 2024
08
ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
The Directors present the strategic report and financial statements for the year ended
31 December 2023.
Company information and highlights
ValiRx operates a dual strategy of building a risk-diversified portfolio pipeline of preclinical therapeutic
assets alongside the operational of a revenue-generating products at services division through
Inaphaea BioLabs.
By providing a scientific, financial and commercial framework around innovative, early-stage science we
can accelerate therapeutic assets through preclinical development to find appropriate partners for the
clinical development pathway.
Through Inaphaea, our expertise in handling patient derived cancer cells (PDCs) is applied to all of our
in-house pipeline programmes in addition to being offered to external service users. Such service users
can access the PDCs via our service offerings, using standard or bespoke protocols to assess their own
therapeutic candidates, or they can purchase the PDCs via a license for use in their own facilities.
Strategy and Vision
We identify, incubate and accelerate innovations that focus on the needs of those who matter most –
patients. With a sense of urgency and determination, we select molecules with the highest potential to
improve patient lives throughout treatment.
We develop treatments derived from diverse and disruptive innovations that have the potential to
progress rapidly upstream and deliver value to all of our stakeholders. Our model and industry expertise
enables us to accelerate the translation of promising new drug candidates to early clinical studies.
Strategic partnering to co-develop and fund later-stage clinical trials, allows ValiRx to continue to build a
risk-balanced pipeline of novel projects.
With Inaphaea’s PDCs now available to provide efficient and humanised assessment therapeutic
candidates at the earliest stages of drug discovery, our capabilities to progress these translational assets
has been greatly enhanced.
Business Structure
Previously operating as a virtual biotech company, ValiRx has assessed options to bring pre-clinical testing
services in-house 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.
In Q4 2022, ValiRx announced intention to lease a UK-based laboratory facility to commence building the
Translational Contract Research Organisation (tCRO®), with options highlighted to buy-in technologies
or acquire companies to facility the differentiation of the tCRO® from industry standard CROs and
wholly-owned ValiRx subsidiary, Inaphaea BioLabs Limited was launched. Headquartered in the ValiRx
laboratory in MediCity (Nottingham, UK), Inaphaea is intended to provide the cornerstone facility from
which to build the tCRO®.
This laboratory, together with new testing services, could serve as the foundation of a novel 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.
09
ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
The Group retains the following divisional companies:
1. ValiPharma Limited: a biopharmaceutical company which holds patents and licences for Valirx in
respect of the development of medicines to bring advanced therapeutic options for the treatment
of cancer.
2. ValiSeek Limited: a joint venture company with Tangent Reprofiling Limited (a SEEK group company)
holding the IP for VAL401.
3. Cytolytix Limited: a majority owned company holding the IP for CLX001.
4. Inaphaea BioLabs Limited: a wholly owned subsidiary providing laboratory facilities to the ValiRx
Group and offering products and services associated with patient derived cells.
The company listed on the Alternative Investment Market (“AIM”) of the London Stock Exchange in
October 2006.
THERAPEUTIC AREAS
Women’s Health
Diseases associated with Women’s Health are one of our key focus areas for in-house preclinical
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 monitoring of women within early-stage clinical trials –
including very early pregnancy detection methods – enables these restrictions to be
reconsidered.
10
ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
Within our category of research for Women’s Health, we are considering drug candidates for treatment
of conditions that can effect 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 preclinical testing by ValiRx, this theoretical benefit will be investigated in future trials.
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 options 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.
11
ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
Establishing a risk-balanced pipeline portfolio
Current Pipeline
Discovery
Optimisation
Pre-clinical
Phase 1
Phase 2
CLX001
TRIPLE NEGATIVE
BREAST CANCER
Under Evaluation Agreements:
BARCELONA
UNIVERSITY
STINGRAY
BIO
DUNDEE
UNIVERSITY
IMPERIAL COLLEGE
LONDON
NOVEL BINDING POCKETS OF KRAS
SCHEDULED TO COMPLETE IN JUNE 2024
SELECTIVE KINASE INHIBITORS
SCHEDULED TO COMPLETE IN NOVEMBER 2024
PRO-SENESCENCE
SCHEDULED TO COMPLETE IN FEBRUARY 2025
DUAL KINASE INHIBITORS
SCHEDULED TO COMPLETE IN MARCH 2025
FURTHER EVALUATIONS
EXPECTED WITHIN 2024
Clinical Stage Assets
VAL401
VAL201
LUNG/PANCREATIC CANCER
PROSTATE CANCER
Clinical Assets (to be out-licenced)
VAL201 in prostate cancer
VAL201 is a short peptide being studied for the treatment 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 activation 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 2024.
12
ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
VAL401 in adenocarcinoma
VAL401 is the reformulation of the established anti-psychotic drug risperidone. Formulated into a
lipid-filled capsule for oral, once daily administration, VAL401 enables an anti-cancer activity, via cancer
cell metabolism 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 significant 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
adenocarcinoma to be a preferred disease to assess in the next clinical trial of VAL401.
VAL401 is subject to an Option Agreement with Ambrose Healthcare which details the proposed
sub-license of the project from ValiSeek to Ambrose. This sub-license is subject to upfront and milestone
payments totalling a value of up to £16 million plus royalties; and covers the period remaining in the
development and commercialisation of VAL401 as a treatment of cancer patients.
CLX001 in triple negative breast cancer
Triple negative breast cancer accounts for 15% of breast cancers. However, this type of cancer requires
new research, as it is more aggressive, harder to treat and more likely to return.
CLX001 is a peptide in a nanoparticle formulation and is designed for precision destruction of cancer cells
to avoid excessive side effects. CLX001 is at the pre-clinical trial stage in the drug development process.
The investigation of the candidate peptide with a battery of in vitro and in vivo tests concluded that there
was good evidence of biological activity and a strong rationale for further development.
13
ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
Pre-clinical Projects Under Evaluation
University of Barcelona, KRAS2 Evaluation Project
Building on the relationship initiated with the University of Barcelona in 2022, the KRAS2 project consider
a new series of molecules targeting KRAS (Kirsten RAt Sarcoma) as possible drugs for treating cancer.
The initial KRAS project at Barcelona continues to progress under the grant funding received by the
University and the Company regularly meets with the team to discuss data generated by both Barcelona
and Inaphaea on the projects. The KRAS2 evaluation project by the Company is scheduled to complete
evaluation in June 2024.
StingRay Bio Evaluation Project
Initiated in November 2023, the Company has an agreement with StingRay Bio Limited. This agreement
proposes the evaluation of a lead series of molecules which has been developed using a target-based
drug design approach, to create novel candidate drugs for kinases with well-validated links to cancer.
Under the agreement, the Company will carry out a defined series of preclinical tests on the molecules
over the next twelve months to validate the technology and determine suitability for commercialisation.
University of Dundee Evaluation Project and Over-arching Agreement
Post-period, the first evaluation agreement under a new over-arching agreement has also been signed
with the University of Dundee. This agreement is scheduled to be active for a period of five years, during
which time, the Company will have the opportunity to review research projects from the Dundee Drug
Discovery Unit in areas aligned with the strategy of ValiRx with a view to initiating additional evaluation
projects on pre-defined terms.
The first Evaluation Agreement under the framework focuses on investigating a lead series of therapeutic
candidates in the increasingly important research area of pro-senescence (selectively promoting ageing
of cancer cells to cease growth in tumours). This exciting area of research has potential to be effective
in treating of multiple cancer types, and also many other disease areas, including those associated with
healthy aging. This work builds upon previous ground-breaking research by Dundee and Barts Charity
funded research by Prof Cleo Bishop, Professor of Senescence and Director of the Queen Mary University
London Phenotypic Screening Facility.
Imperial College London
Initiated post-period, the Agreement specifically focuses on investigating a lead series of dual-kinase
inhibitor candidates that show promise in reversing resistance to current standard of care therapeutics
in ovarian and other types of cancer. Importantly, a similar approach has already been validated in
clinical studies with other assets across a range of tumour types and it holds significant potential as
a novel combination treatment.
This project builds upon previous ground-breaking research led by Dr Paula Cunnea, Group Leader at
the Ovarian Cancer Action Research Centre, Division of Cancer, Faculty of Medicine, Imperial College
London and the previous Imperial College Drug Discovery Centre.
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 conducted predominantly
at Inaphaea 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. Success at
Evaluation stage indicates that we have achieved a high level of confidence in progression of the drug
candidate into pre-clinical studies.
14
ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
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.
15
ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
Consolidating the Translational Research Organisation (tCRO)®
Previously operating as a virtual Biotech Group, ValiRx out-sourced 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 access capabilities and infrastructure to create a more efficient
and effective translational drug development service. Such capabilities may be accessed via acquisition
and on-boarding of technologies, as is the case for the patient derived cells acquired from the
administrators of Imagen Therapeutics; and via collaborative services agreements, which we have
in place with an increasing number of industry partners. These service agreements enable our clients
to access a wider range of services through a single point of contact. Comparably, Inaphaea benefits by
access to clients of our partners.
Operating as a wholly owned subsidiary company, within Inaphaea BioLabs Limited, the integrated
services are 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 will enable continued investment in advanced testing and analysis technology and support
the progression of ValiRx in-house pipeline projects.
Strategy - a consolidation opportunity
Data Application
Bio-informatics
Professional services providing expert
knowledge to guide future development
decisions and reduce risk
Professional services to guide future development
provided to Inaphaea users through collaborations
between experts at ValiRx, Physiomics and OncoBone
Overlay large data collation, curation
and analysis
Data collation, curation and analysis initiated within
collaborations with Physiomics, Ignota and OncoBone
Inaphaea
BioLabs
tCRO®
Data Generation
Acquire advanced data-rich
in-vitro technologies
Data-rich technologies are accessed by Inaphaea users
from experiments run within Inaphaea’s facilities, or at
any of our collaborative partners, including DefiniGen,
Inspiralis, Histologix and Agility
Traditional
CRO
Core Infrastructure
Established pre-clinical laboratory
facility
MediCity Laboratory facility launched to house core
Inaphaea facility
Dual model Strategy - providing internal and external capabilities
Third Party clients can access our capabilities
through cell based services and products
Service Pipeline
Service Revenues
Collaborative translational
services for academia
Service and collaborative
development pipelines
Licensing Revenues
The ValiRx internal pipeline uses
the same cell based resources as
provided to clients
Advanced pre-clinical capabilities:
• High content data generation
• Large scale data curation and analysis
• Application of comprehensive biological
insights
• Women’s Health & Oncology specialism
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ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
The Collaborative Services model that Inaphaea is developing with partners presents the opportunity
for clients to access a wider range of services seamlessly through a single master services agreement.
These partner companies have agreed to collaborate by offering their services to Inaphaea clients and
by introducing their established clients to Inaphaea’s cell based assays.
This enables the implementation of the tCRO® to commence through collaborative methods, whereby
the clients benefit from the continuity provided by one service provider, but accessing the breadth of
highly specialised expertise of the group.
Agility Life Sciences
Agility develops formulations to overcome the problematic properties of the molecule making sure that
these products are fit for the current and future purpose. These formulation specialisms include oral,
ocular, intravenous, intranasal, topical and subcutaneous products.
DefiniGEN
DefiniGEN is a game-changing company headquartered in Cambridge, UK, with a mission to navigate drug
development programs through uncertain terrain, minimising risk while reducing costs and paving the way
for a more efficient and effective future in the field of drug discovery. The technology is revolutionising liver
models for efficacy and toxicology screening, utilising a platform that enables the large-scale generation of
hepatocyte-like cells (Opti-Heps) with functional relevance comparable to human primary cells.
Histologix
Histologix is a leading provider of professional histology services immunohistochemistry and contract
histopathology in a range of species from early discovery and regulatory preclinical toxicology through
to clinical trials. The Histologix team is experienced in taking samples from wet or frozen tissue through to
slide, ensuring optimum presentation of regions of interest.
Ignota
Ignota Labs specialises in AI toxicity prediction. Their services combine the best of technology and
people with expert scientists operating world-leading AI tools. Their tools provide complex machine-
learning outputs, which are distilled by expert scientists into powerful insights and guidance to support
your drug discovery programme.
Inspiralis
Inspiralis’s aim is to provide pharmaceutical companies, academic researchers and others involved in
drug development, with the necessary tools to aid in the preclinical development of novel anti-infective
and anti-cancer compounds. Either through the use of their easy-to-use assay kits or through their contract
research services. These services include compound screening (hit identifications), IC50s to evaluate the
outcomes of hit-to-lead and lead optimisation endeavours, mode of action studies and custom protein
production.
OncoBone
OncoBone representatives have a long history of working in CRO business and a large global network of
high-quality CRO partners. OncoBone now offers this expertise to our clients as a Virtual CRO combining
services that stretch further into the drug development pathway than Inaphaea’s in-house capabilities.
Physiomics
Provided by our collaboration partner Physiomics, data generated by Inaphaea may be seamlessly inte-
grated into the Physiomics modelling capability for biological modelling and advanced data interpretation
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ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
Lead optimisation through
enzyme assays
In silico toxicology with
cell efficacy optimisation
Cellular Immunohistopathology
In vitro Opti-Heps for liver toxicology
and liver disease efficacy
Virtual CRO
Provides preclinical service provision
surrounding and beyond Inaphaea
Is it formulated correctly for cells?
Does the formulation work in cells?
Understanding the data generated
Biological interpretation through
bioinformatics
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ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
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. Having served 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 is currently a non-executive director of the British Neuroscience Association
and former Chair of Biorelate Limited.
Mr Gerry Desler (Appointed May 2006)
Chief Financial Officer and Company Secretary
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 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 Hamak Gold Ltd and
Boston International Holdings Plc.
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ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
MANAGEMENT TEAM AND BOARD OVERVIEW
Stella Panu
Non-Executive Director (resigned 15 April 2024)
With over 20 years’ experience in corporate finance and investment management,
Stella’s expertise will support the ValiRx Board and senior management team to unlock
investment potential and accelerate and manage business growth for the Company.
In her role, she will oversee ValiRx’s M&A activity, advising on corporate structure and
governance, risk management, and shareholders’ rights.
Adrian de Courcey
Non-Executive Director (appointed 22 April 2024)
Adrian is a seasoned business executive with experience in both corporate and
entrepreneurial environments in the UK and internationally. He began his career with
KPMG and held strategy roles with Shell and Johnson & Johnson. Adrian has experience
within the SME sector and helped transform a transport business to become the
fastest-growing company in its sector and introduced the first fast-charging electric
buses to the UK.
Martin Gouldstone
Non-Executive Director (appointed 22 April 2024)
Martin has over 30 years experience in the Pharmaceutical sector with senior
commercial roles across drug discovery, clinical CROs, and corporate Finance M&A.
Martin is currently CEO of Oncimmune Holdings Plc, an AIM listed Biotech company,
as well as sitting on the Board of hVIVO Plc, a viral challenge business which is also
AIM listed.
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.
20
ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
MANAGEMENT TEAM AND BOARD OVERVIEW
Dr Cathy Tralau-Stewart
Chief Scientific Officer
Cathy is an experienced therapeutics development scientist and pharmacologist.
Working within some of the world’s leading pharma and academic research
establishments she has developed a broad knowledge of drug discovery and
the translation of early research innovation into developable drug discovery
programs.
Zai Ahmad
Pre-clinical Project Manager
Zai has over 25 years’ experience in the life science industry. Originally in Neuroscience,
looking at synaptic junctions associated with memory and neurotransmitter release and
pathways associated with Parkinson’s Disease and cardiovascular regulation. Zai moved
to oncology as an opportunity to be closer to patients and to have a direct impact on
patient survival.
Working at the Institute of Cancer Research (ICR) for 14 years, Zai established a specialism
in xenograft and transgenic models for use in drug development.
Dr Andrew Carnegie
Head of Strategic Commercial Development
Andrew has been working in the area of business development since 2006, after
finishing a Ph.D. in Cell & Molecular Biology and a PostDoc studying Dopamine
Receptors. During his career, he has worked for companies in the R&D space, pre-clinical
and biomarkers for clinical support, winning multiple back to back sales awards in several
companies. Company history includes: Organovo for 3D cell technologies, Aptuit for
pre-clinical services projects and Millipore for early-stage screening studies.
Since moving into Business Development, Andrew has never lost his passion for science
and science-based technologies, and that forms the basis of his approach when talking
with project partners.
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ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
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 Impe-
rial 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 Ltd 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.
Dr Christophe Chassagnole (Physiomics PLC)
Christophe 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 targe t (Go/No Go decision).
- PK/PD modelling to support VAL201 development, initially preclinical modelling and first in man dose
prediction, project has resumed with availability of clinical data.
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ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
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.
Dr Gareth Griffiths
Gareth holds a PhD in Immunology/oncology from the University of Birmingham and is now a scientific
specialist in the isolation and growth of patient derived tumour cells. He has several years postdoctoral
experience at the University of Manchester which was followed by a role as a specialist in high content
imaging assay development at AstraZeneca.
Following this, he cofounded Imagen Therapeutics, a company providing a CRO service to pharma and
biotech. An entrepreneurial driven scientist, he developed Imagen successfully over a 14 year period.
He has proven expertise at every level of developing a company, encompassing commercial activities
all the way to scientific project delivery. Combining his knowledge of advanced cell image analysis,
patient derived tumour development and expertise in Immunology, he is now working to support
Inaphaea as a scientific consultant.
23
ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
STAKEHOLDER ENGAGEMENT AND COMMUNICATION
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 2022, 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 2024.
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ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
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 preclinical projects for development towards clinical readiness
and partnering.
The Chief Executive’s Report on page 6 describes the Group’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
Group Strategic Report
for the year ended 31 December 2023
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 Company is also committed to the 3R’s principles in all its preclinical 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 though 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.
26
ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
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 2023 are below.
Risk Area:
Research and development
Description:
The Company has embarked on a new R&D strategy to develop preclinical assets and may not
be successful in building a balanced pipeline of product candidates for subsequent out-licencing.
Mitigation:
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.
Risk Area:
Creating the tCRO®
Description: 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
preclinical development pipeline. It intended 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.
Mitigation:
The Company recognises the specific risks associated with creating the tCRO®, which include:
- Failure to achieve the desired growth rates
- Longer than expected time scales to generate income and cover the cost of the internal
development pipeline
- An inability to raise funds to acquire relevant companies and technologies
- A lack of suitable acquisition candidates
- Ineffective integration of acquired companies
Risk Area:
Commercial (current clinical programmes)
Description: 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.
Mitigation:
The Company is vigorously pursuing all business development avenues to identify out-licencing
options. for clinical development represents the best indicator of performance.
27
ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
Risk Area:
Commercial (Inaphaea sales and revenue risks)
Description: Building a customer base from the ground up carries risks of slow uptake, customer retention,
reputational risks from experimental science; and commercial risks of slow payment from success
fully completed projects.
Product development risks include maintenance of quality of products provided.
Mitigation:
Extensive study of the competitive landscape and intensive marketing campaigns are enabling
outreach. Use of industry standard platforms such as scientist.com and our collaborators network.
Ensuring products are developed and tested to industry standard, with our in-house and advisors
being appropriately.
Risk Area:
Cash flow
Description: The cash required to continue development of the preclinical pipeline is greater than can be
generated from the tCRO®.
Mitigation:
Extensive study of the competitive landscape and intensive marketing campaigns are enabling
outreach. Use of industry standard platforms such as scientist.com and our collaborators network.
Ensuring products are developed and tested to industry standard, with our in-house and advisors
being appropriately trained to monitored and control quality. 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 tCRO® provides an opportunity for service revenues to enter the ValiRx
cashflow.
The preclinical development pipeline will be balanced to ensure cash demands are
commensurate with that generated from the tCRO®.
Risk Area:
Regulatory
Description:
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.
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.
Risk Area:
Intellectual Property
Description:
The Company’s success depends on its ability to obtain and maintain protection for its
intellectual and proprietary information Patent applications may not be granted, and existing
patent rights may be successfully challenged and revoked.
Mitigation:
The Company invests in maintaining and protecting this 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.
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ValiRx Plc
Group Strategic Report
for the year ended 31 December 2023
Risk Area:
Operational
Description:
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.
Mitigation:
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.
Risk Area:
Environmental Matters
Description:
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.
Mitigation:
The Group recognises its responsibility towards the environment and in the way it conduct 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.
ON BEHALF OF THE BOARD:
G Desler
Director, Chair Audit and Risk Committee
Date: 13 May 2024
29
GOVERNANCE
ValiRx Plc
Corporate Governance
for the year ended 31 December 2023
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 2023, the Company continued a number of organisational and
strategic changes that re-defined our purpose, values and culture. All changes were implemented in full
compliance with the principles of the QCA Code.
This Corporate Governance Statement addresses how the Group complies with each of the 10 principles of
the QCA Code.
Principle:
How the 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.
The Company’s business model focuses on in-licensing early-stage therapeutic
candidates, conducting preclinical research and out-licensing therapeutic candidates
ready for clinical development. By aiming for early-stage value creation, the Company
reduces costs considerably while increasing the potential for realising value.
In addition, the development of Inaphaea to provide nearer term revenue
opportunities promotes the value to shareholders by internalising the R&D spend
on in-house projects and bringing in service and product driven revenues to
supplement shareholder funds.
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 Group’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 Company’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 presenting all
shareholders with an assessment of the Group’s position and prospects are found
on the website. 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.
The Directors actively seek to build a mutual understanding of objectives with
institutional shareholders. The Chair and CEO 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.
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ValiRx Plc
Corporate Governance
for the year ended 31 December 2023
Principle:
How the Company complies
3. Take into account
wider stakeholder and
social responsibilities
and their implications
for long-term success
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.
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 of 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.
32
ValiRx Plc
Corporate Governance
for the year ended 31 December 2023
Principle:
How the 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 s 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 also 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 two Executive Directors, a Non-
Executive Chairman, and three Non-Executive Directors. Collectively the Board has 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 Directors. These are:
Dr Kevin Cox (Independent Non-Executive Chairman)
Dr Suzanne Dilly (Chief Executive Officer)
Gerry Desler (Executive Chief Financial Officer)
Martin Lampshire (Independent Non-Executive Director)
Stella Panu (Independent Non-Executive Director) - resigned 15 April 2024
Adrian de Courcey (Independent Non-Executive Director) - appointed 22 April 2024
Martin Gouldstone (Independent Non-Executive Director) - appointed 22 April 2024
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.
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;
33
ValiRx Plc
Corporate Governance
for the year ended 31 December 2023
Principle:
How the Company complies
• 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
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.
6. Ensure that
between them the
directors have the
necessary up-to-date
experience, skills and
capabilities
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.
34
ValiRx Plc
Corporate Governance
for the year ended 31 December 2023
Principle:
How the Company complies
7. Evaluate board
performance based
on clear and relevant
objectives, seeking
continuous
improvement (Cont)
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.
35
ValiRx Plc
Corporate Governance
for the year ended 31 December 2023
Principle:
How the 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 group 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
10. Communicate
how the company is
governed and is
performing by
maintaining a
dialogue with
shareholders and
other relevant
stakeholders
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.
Other responsibilities of the Board of Directors include:
• Promoting effective relationships and open communication, and creates 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 ensures 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 both 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.
The number of Board Meetings attended by each Director during the year was:
36
ValiRx Plc
Corporate Governance
for the year ended 31 December 2023
Principle:
How the Company complies
10. Communicate
how the company
is governed and is
performing by
maintaining a
dialogue with
shareholders and
other relevant
stakeholders
Director
Number of meetings held
whilst a board member
Number of meetings
attended
Gerry Desler
Martin Lampshire
Dr Suzy Dilly
Dr Kevin Cox
Stella Panu
12
12
12
12
12
9
12
12
12
11
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 preclinical 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:
37
ValiRx Plc
Corporate Governance
for the year ended 31 December 2023
Principle:
How the Company complies
• 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:
• Gerry Desler (Executive Chief Financial Officer)
• Dr Suzy Dilly (Chief Executive Officer)
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 Director(s), namely:
• Dr Kevin Cox (Non-Executive Chairman)
• Martin Lampshire (Non-Executive Director)
• Gerry Desler (Executive Chief Financial Officer)
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:
• Dr Kevin Cox (Non-Executive Chairman)
• Gerry Desler (Executive Chief Financial Officer)
• Martin Lampshire (Non-Executive Director)
38
ValiRx Plc
Report of the Directors
for the year ended 31 December 2023
The Directors present their report and financial statements for the year ended 31 December 2023.
DIVIDENDS
No dividends will be distributed for the year ended 31 December 2023.
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 £383,362
(2022: £551,233) on research and development. In addition wage costs of £462,862 (2022: £254,050) were
expended 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 5 to 29.
DIRECTORS
The Directors shown below have held office during the whole of the period from 1 January 2023 to the date
of this report.
G Desler
M Lampshire
Dr S J Dilly
Dr K Cox
S Panu (resigned 15 April 2024)
Since the year end the following directors have been appointed.
A de Courcey (appointed 22 April 2024)
M Gouldstone (appointed 22 April 2024)
DIRECTORS’ SHAREHOLDINGS
The Directors of the Company held the following beneficial interests in the ordinary shares of the Company
at the balance sheet date:
G Desler
M Lampshire
Dr S J Dilly
Dr K Cox
S Panu (resigned 15 April 2024)
2023
No. of shares
128,668
144,000
416,668
372,333
-
2022
No. of shares
128,668
144,000
416,668
372,333
-
The Directors appointed since the year end held shares at their date of appointment as follows:
A De Courcey
M Gouldstone
871,036
-
-
-
39
ValiRx Plc
Report of the Directors
for the year ended 31 December 2023
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.
G Desler
M Lampshire
Dr S J Dilly
Dr K Cox
S Panu (resigned 15 April 2024)
2023
No. of shares
228,334
150,000
604,752
500,000
150,000
2022
No. of shares
228,334
150,000
604,752
500,000
150,000
The Directors appointed since the year end held warrants at their date of appointment as follows:
A De Courcey
M Gouldstone
22,955
-
-
-
COMPANY SHARE PRICE
The market value of the Company’s shares at 31 December 2023 was 5.90p and the high and low share prices
during the period were 14.13p and 5.40p 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.
40
ValiRx Plc
Report of the Directors
for the year ended 31 December 2023
SIGNIFICANT SHAREHOLDERS
As at 13 May 2024, so far as the Directors are aware, the following shareholders held more than 3% of the
Company’s issued share capital:
Number of shares
% of issued share capital held
Monecor (London) Limited
Sanderson Capital Partners Limited
Adam Hargreaves
4,466,969
5,000,000
7,749,163
3.37%
3.78%
5.89%
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
Date: 13 May 2024
41
ValiRx Plc
Statement of Directors’ Responsibilities
for the year ended 31 December 2023
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”) in
conformity with the requirements of the Companies Act 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 UK adopted 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 Standards in conformity with the requirements of the Companies Act, 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 Standards in conformity with the requirements of the Companies Act,
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.
42
ValiRx Plc
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 2023 which comprise the Group Statement of Comprehensive Income, the
Group and Company Statements of Financial Position, the Group Statement of Cash Flows, the Group and
Company Statements of Changes in Equity and the related notes, including a summary of significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable law and UK
adopted International Accounting Standards, in conformity with the requirements 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 2023 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 in conformity with the requirements of the Companies Act 2006;
- the Parent Company financial statements have been properly prepared in accordance with UK adopted
International Accounting Standards in conformity with the requirements of the Companies Act 2006; 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 and Parent Company 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 as applied to listed entities, 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.
Emphasis of Matter
We draw attention to the value of goodwill in the Consolidated Statement of Financial Position and the value of
investments in the Company Statement of Financial Position. The value of investments represents the historic cost
of acquisition of investments less provisions for impairment. The value of goodwill arises on consolidation and
represents the excess between the value of the underlying subsidiary on acquisition and the cost of investment,
less provisions for impairment.
Management’s assessment of impairment includes a review of the net present value of future potential cashflows
of the underlying assets. The basis of these valuations include a number of variables within the calculations that
are subjective and based on professional judgments of expectations and estimates. This also includes the
expected potential around the success of the future development and commercialisation of the Group’s products,
VAL 201 and VAL 401.
While we have assessed management’s judgements and application of estimates in their calculations and
consider these to be reasonable, as set out in the key audit risks below, there are several factors that could result
in a material change in the valuation of the underlying investments which could result in an impairment of the
investments and associated goodwill.
Our opinion is not modified in respect of this matter.
43
ValiRx Plc
Report of the Independent Auditors
to the Members of ValiRx Plc
Conclusions relating to going concern
Material uncertainty relating to going concern
We draw your attention to the policy on Going Concern within note 2 to the financial statements, which
indicates that the accounts have been prepared on the going concern basis. The Board has referred to
the fact that the Group and Parent Company are reliant on future fund raisings to continue their activities
as budgeted. Should future fund raisings be unsuccessful, this 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.
44
ValiRx Plc
Report of the Independent Auditors
to the Members of ValiRx Plc
The key audit matters identified were:
Impairment of goodwill and intangibles
Area of focus
The Group has goodwill of £1.60 million and intangible assets of £0.72 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 assessments 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.
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 engaged an expert 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 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 prepared by the expert 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
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 £174,684 as at 31 December 2023.
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:
- The continued availability of funding.
- 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 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 going
concern section of the report above.
45
ValiRx Plc
Report of the Independent Auditors
to the Members of ValiRx Plc
We reviewed management’s financing plans and 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 going concern
section of the report above.
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.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the
economic decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce the probability that any misstatement exceeds materiality to an appropriately low level, we
use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly,
misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their
effect of the financial statements as a whole.
Based on our professional judgment, we determined materiality for the financial statements as a whole and
performance materiality as follows:
Group and Parent Company materiality were set at £168,200 and £125,000 respectively, based on 8% of loss
before tax and amortisation. In our professional judgement, this benchmark is considered appropriate as it
reflects the ongoing operational requirements of the business to develop and build the business.
Group and Parent Company performance materiality were set at £126,200 and £93,700 respectively, based on
75% of materiality. In setting the level of performance materiality, we consider a number of factors including
the control environment, our testing strategy, the total value of known and likely misstatement (based on past
experience and other factors) and management’s attitude towards proposed adjustments.
Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant component of the Group
based on a percentage of Group materiality, dependent on the size and our assessment of the risk of material
misstatement of that component.
Reporting thresholds
We agreed with the Audit Committee that we would report to them all unadjusted audit differences in excess of
£5,000, as well as differences below this threshold that, in our view, warranted reporting on qualitative grounds.
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 2023. In particular, we looked at areas
involving significant accounting estimates and judgement by the Directors. We also addressed the risk of
management override of internal controls, including an evaluation of whether there was evidence of bias by the
Directors that represented a risk of material misstatement due to fraud.
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.
46
ValiRx Plc
Report of the Independent Auditors
to the Members of ValiRx Plc
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.
47
ValiRx Plc
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 42, 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 are not responsible for preventing irregularities. The primary responsibility for the prevention and detection of
fraud rest with both those charged with governance of the entity and management.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including
fraud and non-compliance with laws and regulations included, but was not limited to, the following:
- the engagement partner ensured that the engagement team collectively had the appropriate competence,
capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
- we identified the laws and regulations applicable to the company through discussions with the Directors and
other management, and from our commercial knowledge and experience of the medical research and
development sector;
- we focused on specific laws and regulations which we considered may have a direct material effect on the
financial statements or the operations of the company, including the Companies Act 2006, taxation legislation
and data protection, anti-bribery, employment and health and safety legislation;
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries
of management and inspecting legal correspondence; and
- identified laws and regulations were communicated within the audit team regularly and the team remained alert
to instances of non-compliance throughout the audit.
We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining
an understanding of how fraud might occur, by:
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge
of actual, suspected and alleged fraud; and
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and
regulations.
To address the risk of fraud through management bias and override of controls, we:
- performed analytical procedures to identify any unusual or unexpected relationships;
- tested journal entries to identify unusual transactions;
- assessed whether judgements and assumptions made in determining the accounting estimates were indicative
of potential bias; and
- investigated the rationale behind significant or unusual transactions.
48
ValiRx Plc
Report of the Independent Auditors
to the Members of ValiRx Plc
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures
which included, but were not limited to:
- agreeing financial statement disclosures to underlying supporting documentation;
- reading the minutes of meetings of those charged with governance;
- enquiring of management as to actual and potential litigation and claims; and
- reviewing correspondence with HMRC, relevant regulators including the Health and Safety Executive, and
the company’s legal advisors.
Due to the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those
leading to a material misstatement in the financial statements or non-compliance with regulation. This risk
increases the more that compliance with a law or regulation is removed from the events and transactions
reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional
concealment, forgery, collusion, omission or misrepresentation.
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..
Alexander Chrysaphiades FCA (Senior Statutory Auditor)
for and on behalf of Adler Shine LLP
Chartered Accountants & Statutory Auditor
Aston House
Cornwall Avenue
London
N3 1LF
Date: 13 May 2024
49
FINANCIAL STATEMENTS
ValiRx Plc
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2023
Continuing Operations
Turnover
Cost of sales
Gross profit
Research and developments
Administrative expenses
Share-based payment charge
Operating Loss
Finance costs
Loss Before Income Tax
Income tax credit
Loss After Income Tax
Non-controlling interest
Total Comprehensive Loss For The Year
Attributable To Shareholders
Notes
4
6
7
8
2023
£
9,600
(1,440)
2022
£
-
-
8,160
-
(383,362)
(1,886,401)
(36,936)
(551,233)
(1,502,355)
(539,791)
(2,298,539)
(2,593,379)
(4,419)
(5,456)
(2,302,958)
(2,598,835)
175,173
192,671
(2,127,785)
(2,406,164)
90,084
39,676
(2,037,701)
(2,366,488)
Loss Per Share - Basic And Diluted
10
(2.01p)
(3.06p)
51
ValiRx Plc (Registered number: 03916791)
Consolidated Statement of Financial Position - continued
31 December 2023
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
Inventory
Trade and other receivables
Tax receivable
Cash and cash equivalents
Notes
11
12
13
20
15
16
2023
£
1,602,522
718,814
242,625
-
2022
£
1,602,522
903,900
-
5,561
2,563,961
2,511,983
69,002
147,618
175,173
174,684
-
133,815
192,671
1,137,477
566,477
1,463,963
TOTAL ASSETS
3,130,438
3,975,946
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital
Share premium
Merger reserve
Reverse acquisition reserve
Share option 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
17
19
20
18
19
20
9,707,266
27,870,548
637,500
602,413
1,082,163
(36,681,340)
9,695,120
26,772,630
637,500
602,413
986,816
(34,643,639)
3,218,550
(314,623)
4,050,840
(224,539)
2,903,927
3,826,301
11,857
-
22,070
-
11,857
22,070
204,441
10,213
-
111,933
9,962
5,680
214,654
226,511
127,575
149,645
TOTAL EQUITY AND LIABILITIES
3,130,438
3,975,946
The financial statements were approved by the Board of Directors on 13 May 2024 and were signed on its behalf by:
G Desler - Director
52
ValiRx Plc (Registered number: 03916791)
Company Statement of Financial Position
31 December 2023
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 option reserve
Retained earnings
TOTAL EQUITY
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Lease liabilities
CURRENT LIABILITIES
Trade and other payables
Borrowings
Lease liabilities
TOTAL LIABILITIES
Notes
2023
£
12
13
20
14
20,000
-
-
3,615,969
2022
£
40,000
-
5,561
3,615,869
3,635,969
3,661,430
15
16
4,201,355
140,534
164,584
3,455,835
192,671
1,134,289
4,506,473
4,782,795
8,142,442
8,444,225
17
9,707,266
27,870,548
637,500
1,082,163
(31,803,431)
9,695,120
26,772,630
637,500
986,816
(30,241,768)
7,494,046
7,850,298
19
20
11,857
-
22,070
-
11,857
22,070
18
19
20
626,326
10,213
-
556,215
9,962
5,680
636,539
648,396
571,857
593,927
TOTAL EQUITY AND LIABILITIES
8,142,442
8,444,225
The financial statements were approved by the Board of Directors on 13 May 2024 and were signed on its behalf by:
G Desler - Director
53
ValiRx Plc
Consolidated Statement of Changes in Equity
for the year ended 31 December 2023
Share capital
£
Share premium
£
Notes
Merger
reserve
£
Reserve
acquisition
reserve
£
Balance at 1 January 2022
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Lapse of share options and warrants
Movement in year
9,669,995
24,490,618
637,500
602,413
-
25,125
-
-
-
-
2,462,250
(209,076)
28,838
-
-
-
-
-
-
-
-
-
-
-
Balance at 31 December 2022
9,695,120
26,772,630
637,500
602,413
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Movement in year
17
-
12,146
-
-
-
1,323,854
(167,525)
(58,411)
-
-
-
-
-
-
-
-
Balance at 31 December 2023
9,707,266
27,870,548
637,500
602,413
Balance at 1 January 2022
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Lapse of share options and warrants
Movement in year
Share based
payment
reserve
£
Non-
controlling
interest
£
Retained
earnings
£
Total
£
491,219
(184,867)
(32,292,507)
3,414,371
-
-
-
(44,194)
539,791
(39,676)
-
-
-
4
(2,366,488)
-
-
15,356
-
(2,406,164)
2,487,375
(209,076)
-
539,795
Balance at 31 December 2022
986,816
(224,539)
(34,643,639)
3,826,301
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Movement in year
-
-
-
95,347
(90,084)
-
-
-
(2,037,701)
-
-
-
(2,127,785)
1,336,000
(167,525)
36,936
Balance at 31 December 2023
1,082,163
(314,623)
(36,681,340)
2,903,927
Reverse acquisition reserve
The reverse acquisition reserve exists as a result of the method of accounting or the acquisition
of ValiRx Bioinnovation Limited and ValiPharma Limited.
Details of the remaining reserves are set out on the Company Statement of Changes in Equity.
54
ValiRx Plc
Company Statement of Changes in Equity
for the year ended 31 December 2023
Balance at 1 January 2022
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Lapse of share options and warrants
Movement in year
Balance at 31 December 2022
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Movement in year
Notes
Share capital
£
Share premium
£
Merger
reserve
£
9,669,995
24,490,618
637,500
-
25,125
-
-
-
-
2,462,250
(209,076)
28,838
-
-
-
-
-
-
9,695,120
26,772,630
637,500
17
-
12,146
-
-
-
1,323,854
(167,525)
(58,411)
-
-
-
-
Balance at 31 December 2023
9,707,266
27,870,548
637,500
Balance at 1 January 2022
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Lapse of share options and warrants
Movement in year
Balance at 31 December 2022
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Movement in year
Share based
payment
reserve
£
Retained
earnings
£
Total
£
491,219
(28,101,166)
7,188,166
-
-
-
(44,194)
539,791
(2,155,958)
-
-
15,356
-
(2,155,958)
2,487,375
(209,076)
-
539,791
986,816
(30,241,768)
7,850,298
-
-
-
95,347
(1,561,663)
-
-
-
(1,561,663)
1,336,000
(167,525)
36,936
Balance at 31 December 2023
1,082,163
(31,803,431)
7,494,046
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.
55
ValiRx Plc
Consolidated Statement of Cash Flows
for the year ended 31 December 2023
Cash flows from operations
Cash outflow from operations
Interest paid
Tax credit received
Notes
1
2023
£
2022
£
(1,961,697)
(3,325)
192,671
(1,841,443)
(4,215)
133,413
Net cash outflow from operating activities
(1,772,351)
(1,712,245)
Cash flows from investing activities
Purchase of intangible fixed assets
Purchase of property, plant and equipment
Net cash inflow from financing activities
Cash flows from financing activities
Bank loan repayment
Repayment of lease liabilities
Share issue
Costs of shares issued
(15,000)
(291,181)
(306,181)
-
-
-
(9,962)
(6,774)
1,300,000
(167,525)
(13,249)
(9,000)
2,487,375
(209,076)
Net cash inflow from financing activities
1,115,739
2,256,050
(Decrease)/Increase in cash and cash equivalents
(962,793)
543,805
Cash and cash equivalents at beginning of year
Cash an cash equivalents at end of year
2
2
1,137,477
593,672
174,684
1,137,477
56
ValiRx Plc
Notes to the Consolidated Statement of Cash Flows
for the year ended 31 December 2023
1. RECONCILIATION OF OPERATING LOSS TO CASH GENERATED FROM OPERATIONS
Operating loss
Amortisation and impairment of intangible assets
Depreciation of right-of-use assets
Depreciation of property, plant and equipment
Increase in inventory
Increase in trade and other receivables
Increase in trade and other payables
Share-based payments charge
Net cash outflow from operations
2023
£
2022
£
(2,298,539)
200,086
5,561
48,556
(69,002)
(13,803)
128,508
36,936
(2,593,379)
204,216
7,717
-
-
(60,886)
61,098
539,791
(1,961,697)
(1,841,443)
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
174,684
1,137,477
31 December
2023
£
1 January
2023
£
Cash and cash equivalents
1,137,477
593,672
31 December
2022
£
1 January
2022
£
57
ValiRx Plc
Notes to the Consolidated Financial Statements
for the year ended 31 December 2023
1. STATUTORY INFORMATION
ValiRx Plc is a public company limited by shares incorporated in the United Kingdom, which is listed on the
AIM market of the London Stock Exchange Plc. The address of its registered office is Stonebridge House,
Chelmsford 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 (£), rounded to the nearest £1.
2. ACCOUNTING POLICIES
Basis of preparation
The Group’s financial statements have been prepared in accordance with International Accounting
Standards in conformity with the requirements of the Companies Act 2006 as they apply to the financial
statements of the Group for the year ended 31 December 2023. 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 are expected to continue in the current accounting year to 31 December 2024.
The Directors have prepared detailed financial forecasts and cashflows 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 estimate that the cash of £174,684 held by the Group as at 31 December
2023 together with cash receivable in January 2024 (see below) will be sufficient to support the current level
of activities for at least the next 12 months. The Directors are continuing to explore sources of finance available
to the Group and based upon initial discussions with a number of existing and potential investors they have
a reasonable expectation that they will be able to secure sufficient cash inflows for the Group to continue its
activities beyond the 12 months from the date of approval of these financial statements.
The Company carries out regular fund-raising exercises in order that it can provide the necessary working
capital for the Group. Further funds may be required to finance the Group’s work programme. The Board expects
to continue to raise additional funding as and when required to cover the Group’s development, primarily from
the issue of further shares.
In January 2024, the Company raised approximately £1.8m, before expenses, through the issue of new ordinary
shares.
In the event that additional financing is not secured when it is required, the Group would need to consider:
• reducing and/or deferring discretionary spending on one or more research and development programmes;
and/or
• restructuring operations to change its overhead structure.
58
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
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.
In October 2023 the Company acquired 60% of the issued share capital of Cytolytix Limited.
Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates,
value added tax and other sales taxes. The Group generates revenue from the provision of research and
preclinical development services under contracts. Revenue from contracts with customers is recognised at
an amount that reflects the consideration to which the Group is expected to be entitled in exchange for
transferring goods or services to a customer. Where the Group provides ongoing services, revenue in respect
of this element is recognised over the duration of those services.
Performance obligations for research and preclinical development services are satisfied over time as services
are rendered. Invoices are presented monthly. Consideration is made up of multiple elements, being an agreed
full-time equivalent (‘FTE’) charge out rate and recharges of direct costs, both of which are variable based on
the amount of time and cost incurred. Revenue is recognised over the duration of the contract based on the
delivery of FTE services and actual incurrence of rechargeable costs.
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.
59
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
2. ACCOUNTING POLICIES - continued
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.
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.
Investments
Investments in subsidiaries are stated at cost less any provisions for impairment. An impairment is recognised
when the recoverable amount of the investment is less than the carrying amount.
Investments are presented in Valirx Plc company figures, not in the consolidated financial statements.
60
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
2. ACCOUNTING POLICIES - continued
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.
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.
61
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
2. ACCOUNTING POLICIES - continued
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.
62
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
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.
General requirements for Disclosure of Sustainability-related
Financial Information
Climate-related Disclosures
Effective date (period
beginning on or after)
01/01/2024
01/01/2024
Amendment - Classification of Liabilities as Current or Non-Current
01/01/2024
Amendment - Lease Liability in a Sale and Leaseback
Amendment - Non-current Liabilities with Covenants
IAS 7, IFRS 7
Amendment - Supplier Finance Arrangements
IAS 21
Amendment - Lack of Exchangeability
01/01/2024
01/01/2024
01/01/2024
01/01/2025
SASB Standards
Amendment - To enhance SASB standards international applicability
01/01/2025
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.
63
IFRS S1
IFRS S2
IAS 1
IFRS 16
IAS 1
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
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.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the statement of financial position
cannot be measured based on quoted prices in active markets, their fair value is measured using valuation
techniques including the Black-Scholes model. The inputs to these models are taken from observable markets
where possible, but where this is not feasible, a degree of judgement is required in establishing fair values.
Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in
assumptions relating to these factors could affect the reported fair value of financial instruments.
See Note 26 for further disclosures.
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.
The geographic information analyses the Group’s revenue and non-current assets by the company’s country
of domicile and all other countries. In presenting the geographic information, segment revenue has been
based on the geographic location of customers and segment assets based on the geographic location of
the assets. All revenue and assets are based in the UK (2022: UK). The Group has one customer (2022: nil).
Analysis of revenue:
Research and predevelopment clinical services
2023
£
9,600
2022
£
-
64
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
5. EMPLOYEES AND DIRECTORS
Number of employees:
The average monthly number of employees, including Directors, during the year was:
2023
Number
5
11
16
2023
£
2022
Number
6
2
8
2022
£
734,022
60,957
63,792
36,936
496,925
52,169
18,624
10,932
895,707
578,650
2023
£
2022
£
686
1,094
58
2,581
950
1,241
3,265
-
4,419
5,456
2023
£
2022
£
383,362
200,086
5,561
48,556
41,000
829
36,936
551,233
204,216
7,717
-
32,000
(1,533)
539,791
Directors
Staff
Employment costs
Wages and salaries
Social security costs
Other pension costs
Share-based payments
Details of Directors’ remuneration can be found in note 25.
6. FINANCE COSTS
Bank interest
Lease interest
Interest on overdue tax
Other interest payable
7. LOSS BEFORE INCOME TAX
After charging:
Research and development
Amortisation of intangible assets
Depreciation of right-of-use assets
Depreciation of property, plant and equipment
Auditors remuneration
Foreign exchange differences
Share-based payment charge
65
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
8. INCOME TAX
Domestic current year tax
2023
£
2022
£
Tax credits on research and development - current year
(175,173)
(192,671)
Current tax credit
(175,173)
(192,671)
Factors affecting the tax charge for the year:
Loss before income tax
(2,302,958)
(2,598,835)
Loss before income tax multiplied by effective rate of
UK corporation tax of 19.00% (2021: 19.00%)
(575,740)
(493,779)
Effects of
Non-deductible expenses
Capital allowances for the year in deficit of depreciation and amortisation
Tax losses not utilised
Research and development expenditure
Current tax charge
10,072
(54,110)
443,952
653
700
5,250
378,062
(82,904)
400,567
301,108
(175,173)
(192,671)
No corporation tax arises on the results for the year ended 31 December 2023 due to the losses incurred
for tax purposes.
With effect from 1 April 2023, the main UK corporation rate changed from 19% to 25%.
The deferred tax asset, arising from tax losses of £26.0 million (2022: £24.0 million) carried forward,
has not been recognised as the Group does not anticipate sufficient taxable profits in the foreseeable
future to fully utilise them. The losses would become recoverable against future trading profits,
subject to agreement with HM Revenue and Customs.
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 £1,561,663 (2022: £2,155,958).
66
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
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
2023
£
2022
£
(2,127,785)
90,084
(2,406,164)
39,676
Loss attributable to owners of Parent Company
(2,037,701)
(2,366,488)
Basic:
Weighted average number of shares
Loss per share
101,570,021
(2.01p)
77,301,896
(3.06p)
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 2022
At 31 December 2022
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022
£
1,602,522
1,602,52
1,602,522
1,602,522
1,602,522
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
£
772,230
394,613
-
435,679
Sensitivity analysis is not required as a reasonably possible change in assumptions
would not result in an impairment.
67
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
12. INTANGIBLE ASSETS
Group
COST
Patents
£
Brands and
licences
£
Total
£
At 1 January 2022
2,289,553
375,000
2,664,553
At 31 December 2022
Additions
2,289,553
15,000
375,000
-
2,664,553
15,000
At 31 December 2023
2,304,553
375,000
2,679,553
AMORTISATION
At 1 January 2022
Amortisation for year
At 31 December 2022
Amortisation for year
1,338,313
174,215
218,124
30,001
1,556,437
204,216
1,512,528
166,086
248,125
34,000
1,760,653
200,086
At 31 December 2023
1,678,614
282,125
1,960,739
NET BOOK VALUE
At 31 December 2023
625,939
92,875
718,814
At 31 December 2022
777,025
126,875
903,900
Company
COST
At 1 January 2022
At 31 December 2022
31 December 2023
AMORTISATION
At 1 January 2022
Amortisation for year
At 31 December 2022
Amortisation for year
At 31 December 2023
NET BOOK VALUE
At 31 December 2023
At 31 December 2022
Brands and
licences
£
Total
£
200,000
200,000
200,000
200,000
200,000
200,000
140,000
20,000
140,000
20,000
160,000
20,000
160,000
20,000
180,000
180,000
20,000
20,000
40,000
40,000
68
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
13. PROPERTY, PLANT AND EQUIPMENT
Group
COST
At 1 January 2022
At 31 December 2022
Additions
At 31 December 2023
DEPRECIATION
At 1 January 2022
At 31 December 2022
Charge for the year
At 31 December 2023
NET BOOK VALUE
At 31 December 2023
At 31 December 2022
Company
COST
At 1 January 2022
AT 31 December 2022
At 31 December 2023
DEPRECIATION
At 1 January 2022
At 31 December 2022
At 31 December 2023
NET BOOK VALUE
At 31 December 2023
At 31 December 2022
Plant and
machinery
£
Total
£
31,670
31,670
31,670
291,181
31,670
291,181
322,851
322,851
31,670
31,670
31,670
48,556
31,670
48,556
80,226
80,226
242,625
242,625
-
-
Plant and
machinery
£
31,670
31,670
31,670
31,670
31,670
Total
£
31,670
31,670
31,670
31,670
31,670
31,670
31,670
-
-
-
-
69
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
14.INVESTMENTS
Company
COST
At 1 January 2022
Additions
At 31 December 2022
Additions
Disposals
At 31 December 2023
PROVISIONS
At 1 January 2022
At 31 December 2022
Written back on disposals
At 31 December 2023
NET BOOK VALUE
At 31 December 2022
At 31 December 2021
Shares in group
undertakings
£
Total
£
3,617,838
6
3,617,838
6
3,617,844
100
(1,975)
3,617,844
100
(1,975)
3,615,969
3,615,969
1,975
1,975
1,975
(1,975)
1,975
(1,975)
-
-
3,615,969
3,615,969
3,615,869
3,615,869
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
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
% Holding
100.00
% Holding
100.00
% Holding
100.00
70
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
14.INVESTMENTS - continued
Subsidiaries
ValiSeek Limited
Registered office: England & Wales
Nature of business: Therapeutic research & development
Class of shares:
Ordinary shares
ValiGenx Limited
Registered office: England & Wales
Nature of business: Dormant
Class of shares:
Ordinary shares
Cytolytix Limited
Registered office: England & Wales
Nature of business: Therapeutic research & development
Class of shares:
Ordinary shares
Inaphaea Biolab Limited
Registered office: England & Wales
Nature of business: Pharmaceutical Services
Class of shares:
Ordinary shares
% Holding
55.55
% Holding
100.00
% Holding
60.00
% Holding
100.00
Valirx Plc has given a guarantee under Section 479 of the Companies Act 2006 for each of its subsidiary
undertakings listed above for all their liabilities as at 31 December 2023. These subsidiary undertakings
are therefore exempt from the requirement of audit of their individual accounts under Section 479A
of the Companies Act 2006.
15. TRADE AND OTHER RECEIVABLES
GROUP
COMPANY
Current
2023
£
2022
£
2023
£
2022
£
Amounts owed by Group undertakings
Other debtors
Rent deposit
VAT
Prepayments and accrued income
-
19,985
-
48,568
79,065
-
14,709
1,500
56,087
61,519
4,046,112
19,907
-
57,492
77,844
3,286,875
50,315
1,500
55,626
61,519
147,618
133,815
4,201,355
3,455,835
In the Directors’ opinion, the carrying amounts of receivables is considered a reasonable approximation
of fair value.
71
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
16. CASH AND CASH EQUIVALENTS
GROUP
COMPANY
2023
£
2022
£
2023
£
2023
£
Bank accounts
174,684
1,137,477
164,584
1,134,289
17. CALLED UP SHARE CAPITAL
GROUP
COMPANY
Allotted, called up and fully paid
Ordinary shares of 0.1p each
Deferred shares of 5.0p each
Deferred shares of 0.9p each
Deferred shares of 12.4p each
2023
Number
2022
Number
2023
£
2022
£
102,319,610
58,378,365
157,945,030
42,455,832
90,174,156
58,378,365
157,945,030
42,455,832
102,320
2,918,918
1,421,505
5,264,523
90,174
2,918,918
1,421,505
5,264,523
9,707,266
9,695,120
In February 2023, the Company raised £1.30 million, before expenses, through the issue of 11,818,181 new ordinary
shares at a price of 11 pence per share. The funds were to be used to provide working capital for the Group.
In February 2023, the Company settled existing liabilities amounting to £36,000 through the issue of 327,273
new shares at a price of 11 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
2023
£
2022
£
2023
£
2022
£
Trade creditors
Amounts owed to Group undertakings
Social security and other taxes
Other payables
Accruals and deferred income
124,637
-
23,095
2,879
53,830
24,955
-
17,603
2,905
66,470
113,911
447,187
17,058
-
48,170
24,955
447,187
17,603
-
66,470
204,441
111,933
626,326
556,215
In the Directors’ opinion, the carrying amounts of payables is considered a reasonable approximation of
fair value.
72
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
19. FINANCIAL LIABILITIES - BORROWINGS
GROUP
COMPANY
Current:
Bank loan
Non-current:
Bank loan:
1-2 years
2-5 years
Total bank loan
Current
Non-current
2023
£
2022
£
2023
£
10,213
9,962
10,213
2022
£
9,962
10,213
9,962
10,213
9,962
GROUP
COMPANY
2023
£
2022
£
2023
£
2022
£
10,472
1,385
10,213
11,857
10,472
1,385
10,213
11,857
11,857
22,070
11,857
22,070
GROUP
COMPANY
2023
£
2022
£
2023
£
2022
£
10,213
11,857
9,962
22,070
10,213
11,857
9,962
22,070
22,070
32,032
22,070
32,032
73
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
20.LEASES
Right-of-use assets
Group and Company
COST
At 1 January 2022
At 31 December 2022
At 31 December 2023
AMORTISATION
At 1 January 2022
Amortisation for year
At 31 December 2022
Amortisation for year
At 31 December 2023
NET BOOK VALUE
At 31 December 2023
At 31 December 2022
Lease liabilities
Group and Company
Set out below is the movement in lease liabilities during the period.
At 1 January 2022
Interest expense
Repayments
At 31 December 2022
Interest expense
Repayments
At 31 December 2023
74
Leasehold
property
£
Total
£
23,152
23,152
23,152
23,152
23,152
23,152
9,874
7,717
9,874
7,717
17,591
5,561
17,591
5,561
23,152
23,152
-
-
5,561
5,561
13,439
1,241
(9,000)
5,680
1,094
(6,774)
-
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
20.LEASES - continued
Group and Company
Group and Company
Current
Non-current
2023
£
-
-
2022
£
5,680
-
-
5,680
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 any 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 £nil (2022: £18,450).
At the year end, the amounts owed to Directors were as follows:
G Desler
Dr S Dilly
M Lampshire
Dr K Cox
S Panu
2023
£
2022
£
52
2,879
-
-
-
26
2,879
-
-
-
23. ULTIMATE CONTROLLING PARTY
The Directors consider that there is no ultimate controlling party.
75
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
24.SHARE-BASED PAYMENT TRANSACTIONS
Share option
At 31 December 2023 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:
2022
Number of
shares
Weighted average
remaining contractual
life (years)
Brought forward
Granted during the year
Lapsed during the year
73,764
3,000,000
(4,400)
5.60
Weighted average
exercise price (pence)
1,316.50
12.00
500.00
Carried forward
3,069,364
9.58
42.71
2023
Number of
shares
Weighted average
remaining contractual
life (years)
Weighted average
exercise price (pence)
Brought forward
3,069,364
9.58
42.71
Carried forward
3,069,364
8.58
42.71
All options were exercisable at the year end, with the following exceptions. No options were exercised during the year.
Option 6: Vest only after the Company’s share price has maintained a 20-day VWAP (Volume Weight Average Price) of 25p.
Options 7 and 9: Vest only after the Company’s share price has maintained a 20-day VWAP of 30p.
Options 8 and 10: Vest only after the Company’s share price has maintained a 20-day VWAP of 40p.
If the price does not reach these price targets by 6 September 2024, the options will lapse. If they meet the criteria, the
options can be exercised at any date to 6 September 2032.
The following share-based payment arrangements were in existence at the balance sheet date.
Options
1 Granted 19 January 2014
2 Granted 21 October 2014
3 Granted 26 June 2015
4 Granted 9 February 2018
5 Granted 6 September 2022
6 Granted 6 September 2022
7 Granted 6 September 2022
8 Granted 6 September 2022
9 Granted 11 October 2022
10 Granted 11 October 2022
Number
3,392
4,032
3,940
58,000
500,000
375,000
800,000
1,175,000
75,000
75,000
Expiry
date
Exercise
price
Fair value at
grant date
19/01/2024
21/10/2024
26/06/2025
09/02/2028
06/09/2032
06/09/2032
06/09/2032
06/09/2032
11/10/2032
11/10/2032
5,391.25p
5,625.00p
6,375.00p
500.00p
12.00p
12.00p
12.00p
12.00p
12.00p
12.00p
625.00p
468.75p
505.00p
348.75p
10.74p
7.38p
5.37p
0.61p
6.15p
0.77p
76
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
24.SHARE-BASED PAYMENT TRANSACTIONS - continued
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
Grant date
share price
Exercise
price
Expected
volatility
1 Granted 19 January 2014
2 Granted 21 October 2014
3 Granted 26 June 2015
4 Granted 9 February 2018
5 Granted 6 September 2022
6 Granted 6 September 2022
7 Granted 6 September 2022
8 Granted 6 September 2022
9 Granted 11 October 2022
10 Granted 11 October 2022
5,391.25p
5,625.00p
6,312.50p
500.00p
13.75p
13.75p
13.75p
13.75p
15.75p
15.75p
5,391.25p
5,625.00p
6,375.00p
500.00p
12.00p
12.00p
12.00p
12.00p
12.00p
12.00p
17.00%
17.00%
16.00%
196.00%
234.47%
234.47%
234.47%
234.47%
234.75%
234.75%
Expected
option life
(years)
3.00
3.00
3.00
3.00
2.00
2.00
2.00
2.00
2.00
2.00
Risk-free
interest rate
0.99%
1.00%
0.38%
0.88%
3.11%
3.11%
3.11%
3.11%
4.64%
4.64%
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 £36,936 (2022: £66,725).
Warrants
At 31 December 2023 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.
2022
Number of
shares
Weighted average
remaining contractual
life (years)
Weighted average
exercise price (pence)
Brought forward
Lapsed during the year
3,969,615
(66,666)
4.57
22.89
75.00
Carried forward
3,902,949
4.57
22.00
2023
Number of
shares
Weighted average
remaining contractual
life (years)
Weighted average
exercise price (pence)
Brought forward
Granted during the year
3,902,949
3,745,454
4.57
22.00
13.43
Carried forward
7,648,403
2.38
17.80
All warrants were exercisable at the year end.
The following warrants were in existence at the balance sheet date.
77
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
24.SHARE-BASED PAYMENT TRANSACTIONS - continued
The following warrants were in existence at the balance sheet date.
Warrants
Number
Expiry
date
Exercise
price
Fair value at
grant date
1 Granted 25 August 2021
2 Granted 6 February 2023
3 Granted 6 February 2023
4 Granted 6 February 2023
3,902,949
2,954,545
81,818
709,091
24/08/2026
06/02/2026
06/02/2026
06/02/2026
22.00p
14.00p
14.00p
11.00p
16.85p
N/A
7.34p
7.39p
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
warrant
life (years)
Risk-free
interest rate
1 Granted 25 August 2021
2 Granted 6 February 2023
3 Granted 6 February 2023
4 Granted 6 February 2023
21.25p
10.10p
10.10p
10.10p
22.00p
14.00p
14.00p
11.00p
521.50%
-
225.50%
225.50%
3.00
3.00
3.00
3.00
0.33%
-
3.21%
3.21%
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 warrants are equity settled and the charge for the year is £58,411 (2022: £473,066). As the warrants
relating to the charge 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.
Warrants 2 fall outside the scope of IFRS as they were issued to shareholders during the new share issue in
February 2023, and as such no charge has been made in respect of these warrants.
78
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
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
Post-employment benefits
Share-based payments
2023
£
2022
£
318,454
9,600
21,630
319,420
9,600
6,858
349,684
335,878
G Desler
Dr S Dilly
M Lampshire
Dr K Cox
S Panu (appointed 11/10/22)
K Alexander (resigned 30/06/22)
l
e
m
p
o
y
m
e
n
t
b
e
n
e
fi
t
s
P
o
s
t
-
£
p
a
y
m
e
n
t
b
a
s
e
d
S
h
a
r
e
-
£
Salary
£
2023
£
2022
£
66,450
145,000
26,750
48,150
32,104
-
-
9,600
-
-
-
-
2,662
7,985
1,996
6,654
2,333
-
69,112
162,585
28,746
54,804
34,437
-
53,873
163,469
30,855
64,683
10,186
12,812
318,454
9,600
21,630
349,684
335,878
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 (2022: 1).
79
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
25.KEY MANAGEMENT PERSONNEL COMPENSATION - continued
The Directors interests in share options as at 31 December 2023 are as follows:
Number of
options
Exercise
price
Date of
grant
First date of
exercise
Final date of
exercise
G Desler
G Desler
G Desler
G Desler
G Desler
G Desler
Dr S Dilly
Dr S Dilly
Dr S Dilly
Dr S Dilly
Dr S Dilly
1,408
1,408
1,518
24,000
100,000
100,000
228,334
512
240
4,000
300,000
300,000
604,752
5,390.63p
5,625.00p
6,375.00p
500.00p
12.00p
12.00p
19/01/2014
21/10/2014
26/06/2015
07/02/2018
06/09/2022
06/09/2022
19/01/2014
21/10/2014
26/06/2015
07/02/2018
Note 1
Note 2
19/01/2024
21/10/2024
25/06/2025
07/02/2028
06/09/2032
06/09/2032
5,625.00p
6,375.00p
500.00p
12.00p
12.00p
21/10/2014
07/02/2018
07/02/2018
06/09/2022
06/09/2022
21/10/2014
07/02/2018
07/02/2018
Note 1
Note 2
21/10/2024
07/02/2028
07/02/2028
06/09/2032
06/09/2032
Dr K Cox
Dr K Cox
250,000
250,000
12.00p
12.00p
06/09/2022
06/09/2022
Note 1
Note 2
06/09/2032
06/09/2032
500,000
M Lampshire
M Lampshire
75,000
75,000
12.00p
12.00p
06/09/2022
06/09/2022
Note 1
Note 2
06/09/2032
06/09/2032
150,000
S Panu
S Panu
75,000
75,000
12.00p
12.00p
11/10/2022
11/10/2022
Note 1
Note 2
11/10/2032
11/10/2032
150,000
Note 1: Vest only after the Company’s share price has maintained a 20-day VWAP (Volume Weight Average Price) of 30p.
Note 2: Vest only after the Company’s share price has maintained a 20-day VWAP of 40p.
If the price does not reach these price targets by 6 September 2024, the options will lapse. If they meet the criteria, the options
can be exercised at any date to 6 September 2032.
80
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
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
2023
£
2022
£
147,618
174,684
133,815
1,137,477
Total loans and receivables
322,302
1,271,292
Total financial assets
322,302
1,271,292
Financial liabilities
Trade and other payables
Cash and cash equivalents
Lease liabilities
Total financial liabilities
2023
£
2022
£
181,346
22,070
-
94,330
32,032
5,680
203,416
132,042
81
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2023
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.
27.POST BALANCE SHEET EVENTS
In January 2024, the Company raised £1.8 million before expenses by way of a placing, a retail offer and
directors’ subscription of 30,029,063 new ordinary shares of £0.001 each in the Company at a price of
6p pence per share.
82
83
www.valirx.com
ValiRx Plc
MediCity (Nottingham), D6 Thane Road,
Nottingham, NG90 6BH UK
Tel: +44 (0)115 784 0026
Email: info@valirx.com