REG - Oxford BioDynamics - Half-year Report
18/06/2024 07:00
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RNS Number : 7833S Oxford BioDynamics PLC 18 June 2024
Oxford BioDynamics Plc
("OBD" or the "Company" and, together with its subsidiaries, the "Group")
INTERIM RESULTS FOR THE SIX-MONTH PERIOD ENDED 31 MARCH 2024
Continued focus on commercialization, funding securing near-term plans
18 June 2024 - Oxford BioDynamics Plc (AIM: OBD), a biotechnology company
developing precision medicine tests based on the EpiSwitch® 3D genomics
platform, today announces its interim results for the six-month period to 31
March 2024.
CORPORATE AND OPERATIONAL HIGHLIGHTS
• Sustained growth in orders of EpiSwitch PSE test through the period
• Strengthening of commercial team to support commercialization of EpiSwitch
CiRT and EpiSwitch PSE
• US reimbursement code for EpiSwitch PSE
• Agreement with Bupa UK to cover EpiSwitch CiRT for customers
FINANCIAL HIGHLIGHTS
• Revenue of £327k (H1 2023: £220k)
• Operating loss £5.99m (H1 2023: £4.76m)
• Cash and term deposits at 31 March 2024 of £1.2m (31 March 2023: £3.6m)
• Announcement of equity placing, subscription and retail offer, to raise gross
proceeds of
£9.9m (March 2024)
POST-PERIOD END HIGHLIGHTS
• Seven commercial agreements now in place to provide EpiSwitch PSE on cash-pay
basis in US and UK
• Opening of ISO15189 UK clinical laboratory in existing Oxford facility (April
2024)
• Clinical registry opened, for prospective observational study in multiple
regional US health systems, to grow adoption of EpiSwitch CiRT (May 2024)
• The London Clinic to use EpiSwitch CiRT and EpiSwitch PSE tests (May 2024)
• Agreement with Goodbody Clinic to offer UK nationwide access to EpiSwitch PSE
(May 2024)
• EpiSwitch PSE to be used in prestigious NCI/NIH-sponsored prospective study
(June 2024)
• 1,019 EpiSwitch CiRT test orders since launch in February 2022 (June 2024)
• 454 EpiSwitch PSE test orders since launch in September 2023 (June 2024)
• Completed development of EpiSwitch SCB diagnostic test for multiple canine
cancers (June 2024)
Commenting on the results, Dr Jon Burrows, Chief Executive Officer of Oxford
BioDynamics, said:
"Following the launch, ahead of schedule, of our EpiSwitch PSE test at the end
of last year, we were pleased with the early award of a unique CPT code for
reimbursement of the test in the US. It is still early days post-launch, but
we believe we have set the right foundations and followed a careful approach
to building the market for PSE. We believe this approach is beginning to bear
fruit, with over 30 clinics ordering and nine commercial agreements for the
sale or distribution of the test signed since the beginning of the financial
year.
"We have continued to pursue growth in adoption of our CiRT test during and
after the period. Baseline test orders remained stable, and the work done by a
refreshed and expanded team in the period is now bringing the test to more US
oncologists through our engagement with CMOs at regional hospital groups.
"We were pleased to announce our fundraise in March 2024, against a backdrop
of difficult market conditions, to enable us to fund the Group's near-term
activities.
"As a Board, our aim is to generate value for the Company's shareholders, at
the same time as advancing personalized healthcare and building the market for
3D genomics. Our immediate focus in achieving these aims is twofold:
judiciously using available resources to grow sales of both of our commercial
tests and actively pursuing opportunities for non-dilutive transactions to
fund the Group's activities over the short-to-medium term."
-Ends-
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014 which is part of domestic UK law pursuant to the Market Abuse
(Amendment) (EU Exit) Regulations (SI 2019/310) ("UK MAR"). Upon the
publication of this announcement, this inside information (as defined
in UK MAR) is now considered to be in the public domain.
Investor presentation
The Company's management will conduct a presentation to investors via the
Yellowstone Advisory webinar platform at 2pm BST on 18 June 2024. The
presentation is open to existing and potential shareholders. Questions may be
submitted by emailing info@yellowstoneadvisory.com.
To register, please visit:
https://us02web.zoom.us/webinar/register/7517163574623/WN_9oWCOJcnT6qJKGK3stpciA
(https://us02web.zoom.us/webinar/register/7517163574623/WN_9oWCOJcnT6qJKGK3stpciA)
For further information please contact:
Oxford BioDynamics Plc +44 (0)1865 518910
Jon Burrows, CEO
Paul Stockdale, CFO
Shore Capital - Nominated Adviser and Broker +44 (0)20 7408 4090
Advisory: Stephane Auton / Lucy Bowden
Broking: Fiona Conroy
WG Partners - Joint Broker +44 (0)20 3705 9330
David Wilson / Claes Spång /
Satheesh Nadarajah / Erland Sternby
Instinctif Partners (Media / Analyst enquiries) Melanie Toyne-Sewell / Katie Tel: +44 (0)20 7457 2020 OxfordBioDynamics@instinctif.com
Duffell / Jack Kincade
Notes for Editors
About Oxford BioDynamics Plc
Oxford BioDynamics Plc (AIM: OBD) is a global biotechnology company, advancing
personalized healthcare by developing and commercializing precision medicine
tests for life-changing diseases.
It has two commercially available products: the EpiSwitch® PSE
(http://www.94percent.com/) (EpiSwitch Prostate Screening test)
and EpiSwitch® CiRT
(https://url.avanan.click/v2/___https:/www.mycirt.com/___.YXAxZTpzaG9yZWNhcDphOm86OTRjOGE5ZDRmYWIwMTc2MWFhZjYyZTZkMWJhZTFmNDg6NjphN2EwOmU5ZDc2NmYxZjYxNTk4OGE3YzY3NzkzYWRmODlmMmZmMzBmZmU2ZDZlZmNhMWI0ZmRlYjE3Nzc5N2Q4NmUzZTc6cDpU)
(Checkpoint Inhibitor Response Test) blood tests. PSE is a blood test that
boosts the predictive accuracy of a PSA test from 55% to 94% when testing the
presence or absence of prostate cancer, which has been launched in the US
and UK in September 2023. CiRT is a predictive immune response profile for
immuno-oncology (IO) checkpoint inhibitor treatments, launched in February
2022.
The Company's product portfolio is based on a proprietary 3D genomic biomarker
platform, EpiSwitch®, which can build molecular diagnostic classifiers for
the prediction of response to therapy, patient prognosis, disease diagnosis
and subtyping, and residual disease monitoring, in a wide range of
indications, including oncology, neurology, inflammation, hepatology and
animal health.
In March 2021, the Company launched the first commercially available
microarray kit for high-resolution 3D genome profiling and biomarker
discovery, the EpiSwitch Explorer Array Kit
(https://store.oxfordbiodynamics.com/) which is available for purchase by the
life science research community.
OBD has participated in more than 40 partnerships with big pharma and leading
institutions including Pfizer, EMD Serono, Genentech, Roche, Biogen, Mayo
Clinic, Massachusetts General Hospital and Mitsubishi Tanabe Pharma.
The Company has created a valuable technology portfolio, including biomarker
arrays, molecular diagnostic tests, bioinformatic tools for 3D genomics and an
expertly curated 3D genome knowledgebase comprising hundreds of millions of
data points from over 15,000 samples in more than 30 human diseases.
OBD's group headquarters and research, product development and UK clinical
laboratories are in Oxford, UK. It also has a commercial office
in Gaithersburg, MD, USA and a clinical laboratory in Frederick, MD, USA,
and a reference laboratory in Penang, Malaysia.
The company is listed on the London Stock Exchange's AIM, with ticker OBD. For
more information, please visit the Company's
website, www.oxfordbiodynamics.com
(https://url.avanan.click/v2/___http:/www.oxfordbiodynamics.com___.YXAxZTpzaG9yZWNhcDphOm86OTRjOGE5ZDRmYWIwMTc2MWFhZjYyZTZkMWJhZTFmNDg6Njo3ZjFmOjUxZjRiNmRmMzBiMGI3ZjA2NDJjNjFkZTc2MTM5MThjYjUxZGNiN2ZhNmRhNWRkMjY0MTAwNWY4ODA3ZjE4ZjU6cDpU)
, or follow OBD on X
(https://url.avanan.click/v2/___https:/twitter.com/OxBioDynamics___.YXAxZTpzaG9yZWNhcDphOm86OTRjOGE5ZDRmYWIwMTc2MWFhZjYyZTZkMWJhZTFmNDg6NjplM2FmOjIwMTI1ZWNlOWJkYjRjZDQ1YjA4YWI2NDc0NWY1OWYzNzg1NTEzYjM0NjIwYTZmNTljNjk0YTQ1YzBkMjg0OTM6cDpU)
(@OxBioDynamics) and LinkedIn
(https://url.avanan.click/v2/___https:/www.linkedin.com/company/oxford-biodynamics___.YXAxZTpzaG9yZWNhcDphOm86OTRjOGE5ZDRmYWIwMTc2MWFhZjYyZTZkMWJhZTFmNDg6Njo2YjgzOjcwMGI3YTM5ODdkMDVmNjA5ZDgxN2FmYWVjYTJkMjIzM2E3NTgzYzM0ZGIzMGIyZDIyYWZlZTVjN2QyZmY4ZGQ6cDpU)
.
A copy of this announcement is available on the Company's website at
www.oxfordbiodynamics.com (http://www.oxfordbiodynamics.com) .
This announcement includes "forward-looking statements" which include all
statements other than statements of historical facts, including, without
limitation, those regarding the Group's financial position, business strategy,
plans and objectives of management for future operations, and any statements
preceded by, followed by or that include forward-looking terminology such as
the words "targets", "believes", "estimates", "expects", "aims", "intends",
"will", "can", "may", "anticipates", "would", "should", "could" or similar
expressions or the negative thereof. Such forward-looking statements involve
known and unknown risks, uncertainties and other important factors beyond the
Group's control that could cause the actual results, performance or
achievements of the Group to be materially different from future results,
performance or achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous assumptions
regarding the Group's present and future business strategies and the
environment in which the Group will operate in the future. These
forward-looking statements speak only as at the date of this announcement. The
Group expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statements contained in this
announcement to reflect any change in the Group's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statements are based. As a result of these factors, readers are cautioned not
to rely on any forward-looking statement.
CHIEF EXECUTIVE OFFICER'S REVIEW
Introduction
The EpiSwitch PSE test was launched shortly before the start of the first half
of the financial year, and over the period, the OBD team began the work of
growing commercial orders for the test.
On EpiSwitch CIRT, we added a 'top-down' focus on senior physician
administrators at hospital groups alongside the 'bottom-up' peer-to-peer
approach to growing adoption of the test that we saw success from in mid-2023.
We strengthened and refreshed our CiRT team during and after the period.
Baseline orders from early-adopter oncologists have remained steady while we
have worked to bring regional medical centers on board. We are encouraged by
recent positive developments, discussed below, that highlight the value of and
prospects for CiRT.
Alongside our two on-market commercial tests, OBD's rich pipeline includes
deployable blood tests for clinical testing in diverse indications with large
addressable markets. During and after the period, we have been engaged in
ongoing discussions with third parties regarding the two most advanced of
these: the EpiSwitch SCB (Specific Canine Blood) multi-profile test for canine
cancer( 8 ) and the EpiSwitch NST (No Stool Test) which is a screening test
for colorectal/bowel cancer.
The fundraising, announced in March 2024, of £9.9m (before fees) was a
significant focus during the period. We were pleased to raise these funds to
support the Company's near-term activities in what were and continue to be
challenging market conditions. We are grateful for the support of both new and
existing shareholders.
EpiSwitch PSE
OBD's EpiSwitch Prostate Screening (PSE) Test( 1 ) is a non-invasive blood
test that accurately detects prostate cancer risk, reducing the number of men
referred for an unnecessary biopsy and treatment. The PSE test measures five
epigenetic biomarkers and combines these with a patient's PSA
(prostate-specific antigen) score to accurately predict the presence or
absence of prostate cancer.
PSE has high overall accuracy of 94% (sensitivity 86%, specificity 97%)( 2 ),
significantly boosting accuracy compared to a PSA test alone (accuracy 55%).
In addition to the superior accuracy that enables true early detection of
prostate cancer, a key parameter of the PSE test is its positive predictive
value (PPV). This is the metric that determines the false positive rate of a
testing modality. It is the PSE test's high PPV of 93% that helps physicians
avoid sending men for unnecessary destructive biopsies. PSE was launched in
the US and UK shortly before the period, in late September 2023. This was
quickly followed by the assignment of a unique CPT-PLA(‡) code for the test
(0433U), which has been available for use by US payors since 1 January 2024.
Up to the date of this report, a total of 454 PSE tests have been processed
for customers worldwide.
Our PSE vertical is led by SVP Business and Corporate Development, Dr Steven
Arrivo whose appointment we announced in November 2023. Steve and the rest of
the team are targeted with growing sales of PSE to 1,000 per month.
As previously announced, the team is using its significant collective
experience to follow a carefully devised, integrated commercial strategy to
reach this target:
1. Growing awareness and adoption of PSE by targeting large organization
accounts focusing on concierge medicine cash-pay accounts. Seven direct
agreements are now in place with clinics, hospitals and medical groups in the
US and UK (such as Doctors Studio (part of the nationwide Forum Health
network) in the US and The London Clinic, the UK's largest independent
charitable hospital, announced in May 2024( 3 )). These organizations are
typically committed to providing patients with the latest cutting-edge
diagnostic testing to assist in planning care and therapy. For OBD, such
direct agreements with medical groups allow for more rapid and predictable
receipt of revenues arising from the test.
2. Seeking national distribution partners to open a high volume sales
channel for test volume and utilization of the Company's clinical laboratory
capacity in the US and UK. In our most important market, the US, we are
actively engaged in discussions with potential national distribution partners.
Our plan is initially to utilize a partner's network to provide phlebotomy and
sample delivery to OBD's CLIA-registered(†) lab, for tests ordered from OBD
or the distribution partner. In time, it may be appropriate to transfer the
test into a partner's own lab network and roster of clinical tests.
In other markets, we have two non-US distribution agreements in place, with
Goodbody Clinic in the UK( 4 ), and, newly announced, KZT in Turkey. Goodbody
Clinic offers UK customers private health testing using a network of over 140
clinics nationwide. KZT is owned by Professor Dr Lutfi Tunç. Dr Tunç is a
key opinion leader ("KOL") with over 20 years' experience in advanced prostate
surgeries, an internationally recognized inventor of advanced surgical
techniques, and the founder of private clinics with a track record of bringing
new technologies to Turkey.
Such agreements bring potentially significant long-term opportunities for
sales of the test and allow us to benefit from our partners' existing
infrastructures to provide (for example) physician appointments, phlebotomy
services, local regulatory/legal compliance and administrative interactions
with individual patients. We are committed, alongside our primary focus on
building sales in the US market, to making the test available to patients in
other markets wherever possible.
3. Supporting the test through a program of KOL presentations, clinician
breakout groups and ongoing smart marketing. Marketing support for PSE
included targeted online campaigns, directly addressing men in the relevant
age bracket, as well as their families and physicians, to educate them about
the benefits of the test. We use a combination of display ads, cross-platform
social media campaigns and internet search advertising to drive traffic to the
test's dedicated site (94percent.com), which is now by far the most-visited of
the Group's websites in terms of number of users and engaged sessions.
Alongside online marketing targeting healthcare practitioners, we grew
awareness of the test with urologists through conference attendance,
presentations and interviews. During the period, OBD's Laboratory Medical
Director, Dr Robert Heaton, appeared on the Prostate Health Podcast( 5 ),
hosted by Garrett D. Pohlman, MD, a board-certified urologist who has treated
over 4,000 men for various prostate conditions and now routinely uses the PSE
test for patients in his clinical practice and outreach clinics.
Post-period end, Dr Pohlman is now working with OBD as an expert KOL. Having
used more than 40 PSE tests for his own patients, his feedback highlights at
least two valuable uses for PSE: as a screening/baseline/prostate cancer
detection test for any man; and to assist in deciding whether an MRI, and/or
perhaps more impactfully, when a biopsy is truly needed.
Dr Pohlman has experienced significant efficiency gains in his clinics from
the inclusion of the PSE test, highlighting the ease of explaining the simple
binary result to patients and families, improved patient experience and
straightforward sample handling for the clinic as major plus points. He has
also compiled several case studies covering real world instances where PSE
gave correct results that other pre-biopsy modalities called incorrectly. Dr
Pohlman reports a growing number of patients who have been able to forego
prostate biopsy (instead remaining on active surveillance) because of a
negative PSE test. He reports: "While we continue to monitor these patients,
PSE has led to a >50% biopsy avoidance rate."
Several posts on the Company's blog (intheloop.oxfordbiodynamics.com) have
featured the test. Our US team has promoted the test at sector-specific events
including the American Urological Association (AUA) Annual Meeting and LUGPA
(the only nonprofit urology trade association in the US) meetings.
4. Developing the health economics story for the test and applying for
its inclusion in the NCCN Guidelines and Compendia. The Company plans to build
a prospective observational registry study for PSE, similar to what has been
successfully set up for CiRT (described below).
PSE was validated and since launch has been run in OBD's US CLIA-registered
clinical laboratory in Frederick, MD, which was set up in 2023. During the
period, the Company successfully commissioned its ISO15189-certified UK
clinical laboratory in its existing Oxford facility, and after clinical
validation began processing PSE tests for UK and other non-US customers from
April 2024.
Further recognition of the utility and quality of PSE came in June 2024, with
the announcement of the test's inclusion in a clinical trial organized and
sponsored by the prestigious National Cancer Institute (NCI) of the National
Institutes of Health, (Bethesda, MD, USA). The test's inclusion in an
NCI-sponsored study provides important recognition in our key US market. In
addition, the prospect of inclusion in US protocols for the monitoring of
disease could lead to significant benefits in terms of growing utilisation of
the test.
We will provide an update on tests ordered to the end of the financial year
shortly after 30 September 2024.
EpiSwitch CiRT
The EpiSwitch Checkpoint Inhibitor Response Test (CiRT)( 6 ) is a
first-of-its-kind routine blood test that predicts a patient's likely response
to immune checkpoint inhibitor ("ICI") therapies, offering valuable insight
for oncologists, their patients and healthcare systems alike. CiRT accurately
identifies patients who will respond to ICI therapy with a binary result
(responder vs. non-responder)( 7 ) to support oncologists in first-line
treatment planning and making more informed treatment decisions when no
benefit or disease progression is observed, or adverse events occur. The test
can also identify as candidates for ICI therapy patients for whom other
options have been exhausted or who other less accurate tests suggest will not
respond to treatment with an ICI.
The CiRT vertical is led by Ryan Mathis, MD who joined the Group in December
2023.
To date, a total of 1,019 CiRT tests have been ordered, by more than 90
physicians, since the test was launched in February 2022. Through the period,
volumes of orders from early adopter oncologists remained close to the
baseline rate established in 2023. There were 298 test orders during the
period and a further 126 since 1 April. In the last few weeks, we have begun
to see initial positive results from the 'top-down' approach to introducing
the test to healthcare systems in addition to individual doctors. We have also
strengthened and refreshed our field sales team, including through the recent
recruitment of an experienced Director of Sales and two Senior Sales Managers.
In March 2024, we disclosed that we had had a number of positive interactions
with Chief Medical Officers (CMOs) and Physician Administrators from regional
healthcare systems in which multiple doctors were regularly using the CiRT
test. Dr Mathis has since worked with several CMOs to establish a prospective
observational registry study for CiRT, under a national Institutional Review
Board (IRB). The first of an expected total of seven healthcare systems was
onboarded to the registry study at the end of May 2024. This registry
mechanism allows the regional healthcare systems to adopt CiRT testing in a
timely way and disseminate the test throughout their network of doctors and
clinics.
There are several benefits from this approach. It allows for straightforward
system-wide incorporation of the test, including ordering and use of the test
by doctors in the hospital groups involved. Early evidence suggests that
demand for CiRT has increased following completion of the first onboarding
process. We will have a clearer understanding of the consistency of this trend
when we provide an update on test orders to the end of the financial year,
shortly after 30 September 2024.
The Company will claim reimbursement for tests performed from insurance payers
in the same way as for other test orders in the US. Data collected from the
patients in the registry will be used by OBD and CMOs to build the health
economic and outcomes research (HEOR) story for CiRT, which in turn will
inform decision-making about continued usage of the test and support its
eventual inclusion in the National Comprehensive Cancer Network (NCCN)
Guidelines and Compendia.
In October 2023, the Company announced an agreement with the UK's leading
health insurer, Bupa UK, to give Bupa patients who are being considered for
or already on ICI therapy access to EpiSwitch CiRT.
Also in the UK, in May 2024, we announced an agreement with the UK's largest
independent charitable hospital, The London Clinic, to provide patients with
access to the CiRT test.
The ability to predict whether patients are likely to respond to ICI therapy
offers significant potential benefits to healthcare payors and systems. Nine
anti-PD-(L)1 ICIs are currently approved for use in the US, for a wide variety
of cancer indications. Treatment costs range from
approximately $100,000 to $1 million per patient, depending on how many
cycles of treatment a patient receives. Approximately $44 billion was spent
on these drugs worldwide in 2023 and it is estimated that c.$19 billion is
spent annually on ineffective ICI therapy in the US alone. Insurers and payors
therefore want a reliable test to justify approving therapy and to know when
to stop these expensive treatments.
In this context, in the UK, the Company recently submitted an application, as
part of a public/private partnership involving clinicians and academics from
the Universities of Oxford and Birmingham, Imperial NHS Trust, Norfolk and
Norwich Universities NHS Trust, and OBD, to UK Research & Innovation's
Cancer Immunotherapy Response Research Platform (CIRRP) Grant. The grant is
intended to fund development of a broad utility, deep genotyping and
phenotyping platform capable of generating insights into patient response,
adverse effects, and resistance to immunotherapy, and exemplar project(s) to
demonstrate utility. Co-funded by the Office for Life Sciences and the Medical
Research Council, a total of £9 million is available over four years.
The consortium's "EpiSwitch CIRRP" application has been shortlisted for
interview by an expert panel in late June 2024. If funded, the project would
offer UK-based EpiSwitch CiRT and HiRT (Hyper-ICI Response Test) clinical
screening, initially to NHS trusts within the consortium, and then to NHS
networks across the UK, from OBD's existing ISO15189/UKAS accredited clinical
laboratory. It would also create real-world impact data within NHS clinical
practice for prediction of ICI response and prognosis of hyperprogressive
disease. The project would also seek to advance the understanding of genetic,
metabolomic and epigenetic mechanisms behind clinical outcomes, acquired
resistance and remission.
CiRT is a British invention that so far is predominantly utilized in the USA.
The potential grant award presents an excellent opportunity to bring the
benefit of the test to clinicians and patients within the NHS.
CiRT can also benefit the clinical development programs of pharma companies,
in analysing or predicting response to treatment with ICI therapies in
specific patient groups. At the request of pharma partners, the Company has
recently submitted proposals to provide access to CiRT and OBD's extensive 3D
genomics knowledgebase for multiple clinical development programs.
Product Pipeline
We have previously highlighted two of the programs in our pipeline as being
ready to deploy. These are EpiSwitch NST (No Stool Test), a screening blood
test for colorectal/bowel cancer and EpiSwitch SCB (Specific for Canine
Blood), a multi-profile whole-genome cancer test for dogs, the successful
development of which we announced post-period end, in June 2024( 9 ).
Our view remains that early monetization and commercialization of each of
these programs is more likely to occur with, and would benefit from, the
involvement of a partner organisation with significant presence in the
relevant market.
Notwithstanding this, in the case of EpiSwitch® SCB, we announced that we
will make the test available (on a regular commercial basis) to a select group
of veterinarians who will generate real-world utility data that will further
validate the test and support any eventual partnership or outlicensing
agreement with an organization with presence in the pet healthcare market.
Our aim is to expedite the market readiness of these high-performing tests,
and potentially to generate additional funding for the Company. Confidential
discussions with third parties about each of EpiSwitch® NST and EpiSwitch®
SCB commenced in early 2024 and have continued after the period.
Successful fundraising
In March 2024, we announced a successful equity fundraising of £9.9m (before
fees), to support the Company's short-term objectives, specifically:
supporting PSE and CiRT and pursuing partnering or outlicensing opportunities.
The fundraising comprised an equity placing, subscription and a PrimaryBid
offer, providing all UK shareholders with the opportunity to participate in
the fundraise.
We were pleased to complete the fundraise, particularly against a backdrop of
challenging market conditions, and are grateful to investors, both those new
to the Company and those in our longstanding supportive shareholder base, for
their participation.
Focus for remainder of 2024
OBD is still at an early phase in the commercialization of our technology.
Reporting on the half year provides a useful opportunity to reflect on
achievements, consider the challenges we face and maintain our focus on our
priorities.
We now have two commercial products launched and on the market, each with a
unique CPT-PLA code for US payors. Processing of blood samples takes place
in our own CLIA-certified and ISO15189 clinical labs. We have a growing number
of commercial agreements in place to provide clinics, hospital groups, payors
and patients with access to our tests. Our grant- and award-funded research
consistently delivers high quality results, answering questions that are
intractable for other modalities. We have a pipeline of deployable tests that
is generating interest from third parties.
Our priority for EpiSwitch® CiRT remains growing utilisation and adoption of
the test in the US market. Our recently established patient registry, to give
system-wide access to the test in key regional health centers, is our most
promising recent development in this respect. We also eagerly anticipate the
outcome of our consortium's CIRRP grant application in the UK.
The focus for PSE is growing sales, and we are allocating extra resource from
within our existing team to help do this. We enter the rest of the year with a
growing list of agreements in place, providing men with access to the test
through concierge medicine clinics as well as through insurance reimbursement.
There is huge opportunity to continue to grow sales, focusing initially on
large, cash-pay accounts. In the UK, the test is now more accessible through
our recently announced partnership with Goodbody, as well as through the
growing number of clinics and hospital groups who are choosing to use the test
for their private patients.
We will judiciously employ the resources entrusted to us by investors as we
strive to hit these targets. We rely on a very experienced but newly
established team, patiently pursuing the actions that we know will deliver
results, particularly in the US market. It is a team I am proud to lead into
the remainder of the year and I look forward to reporting to shareholders on
the progress we make together later in the year.
Dr Jon Burrows
Chief Executive Officer
Financial review
Introduction
During the six months to 31 March 2024, the Group continued to focus on
growing adoption of its two on-market tests. To that end, the cost base
increased, with higher marketing and staff costs the largest contributory
factors. Combined with a modest increase in revenue and other operating
income, this led to an increased operating loss for the period (H1 2024:
£6.00m, H1 2023: £4.76m, H2 2023: £5.41m).
Financial Performance
Revenue increased compared to each of the preceding six-month periods, at
£327k (H1 2023: £220k, H2 2023: £290k), with the overall increase driven by
both test sales and projects for pharma and academic customers. Proprietary
product revenue continues to lag performance of tests where these are
reimbursed by US insurers. In particular, revenue from EpiSwitch CiRT is
currently predominantly generated from US insurer reimbursements and is
recognized on receipt of funds from payors. For cash-paid tests, revenue is
recognized on delivery of the relevant test report.
For PSE, in the US, our primary focus is on adding cash-pay accounts which are
invoiced on a regular basis, whilst continuing to perform testing for
insurance-covered patients referred by their urologists or primary care
physicians. All UK and RoW PSE tests are either pre-paid by patients or
invoiced to organizations with whom we have direct agreements in place. To
date, approximately 19% of all PSE orders have been on a cash-pay basis. This
is a higher proportion than was the case three months ago and it is
anticipated that this trend will continue. Receiving reimbursement from US
insurers for PSE is in hand: our unique CPT code has been live since January,
and submission of bolus reimbursement claims will follow in due course.
As noted above, the Group's cost base increased during the period. Research
and development expenses (H1 2024: £0.33m, H1 2023: £0.28m, H2 2023:
£0.47m) mainly reflect lab consumables and equipment maintenance costs. These
slightly increased on the equivalent period last year, driven by a combination
of additional costs associated with the Company's new US clinical laboratory
and more R&D activity in the UK laboratory. The second half of the
previous year also included write-offs of expired inventory for approximately
£0.09m.
Staff costs at £2.98m were up by 16% on the equivalent period last year, and
5% on the preceding half year (H1 2023: £2.57m, H2 2023: £2.84m), reflecting
increased staff numbers across the business as well as the full period impact
of pay rises awarded part way through H1 2023, in January 2023. Compared to
growth in the team over recent years, the period saw proportionally fewer new
staff recruited to senior roles. US-based staff represented just over
one-third of the Group's team during the period, increased from 26% in H1
2023, reflecting recruitment to sales, business development and customer
service roles during the period, and staff based at the Group's US clinical
lab who joined in the second half of the last financial year.
General and other administrative costs increased to £2.20m (H1 2023: £1.47m,
H2 2023: £1.94m). The increase compared to H1 2023 includes: £0.40m more in
marketing costs, incurred mainly to support PSE; £0.16m increase in
professional and consultancy fees, including for work to support the inclusion
of the Company's tests in NCCN Guidelines and higher medical director, medical
writing, legal, audit, tax, patent-related and joint broker fees; £0.11m
increase in property-related costs driven by higher utilities, rates, service
charge and dilapidations provisioning; £0.05m increase in travel-related
costs reflecting a larger sales team and more conference attendance compared
to the previous year.
Share option charges of £0.30m (H1 2023: £0.18m) are non-cash expenses that
spread the fair value of options issued to employees over vesting periods of
typically between one and three years from the date of the grant. These were
increased relative to the equivalent period in the previous year because more
unvested options were outstanding during the period and options issued in
October 2023, when the Company's share price was 34p, had a higher calculated
fair value per option than any other options granted since 2021.
Depreciation and amortization charges were increased at £0.73m (H1 2023:
£0.61m), driven mainly by higher right-of-use asset depreciation in respect
of the Group's US clinical laboratory (leased in April 2023). Depreciation of
tangible fixed assets and amortization of intangible assets (mainly patents)
were also slightly higher, reflecting additions, patent grants and the Group's
estimates of the useful economic life of patents in line with its accounting
policy, as set out in more detail in the Group's financial statements.
Other operating income of £0.4m (H1 2023: £0.2m) arose mainly from the
Group's two PACT Awards: a two-year $910,000 award funding extended
application of the technology used in the development of EpiSwitch CiRT to the
analysis of primary and acquired resistance to ICI (which was successfully
completed during the period) and a second, one-year, award of $963,000
supporting the development of prognostic biomarkers for hyper-progressive
disease (which was completed shortly after the end of the period). OBD is also
one of 26 participants in the EU-funded HIPPOCRATES (Health initiatives in
psoriasis and psoriatic arthritis consortium European states) consortium that
was awarded a total of €21 million over 5 years in 2021.
The fair value gain on financial liabilities designated as FVTPL (£1.20m, H1
2023: loss of £0.07m) relates to the warrants issued by the Company in 2021,
which are classified as liabilities. The gain for the period equates to the
reduction in the fair value of the warrant liability, itself driven mainly by
the reduction in the Company's share price from 37p to 9.4p between 30
September 2023 and 31 March 2024.
Financial position
Cash and fixed term deposits at 31 March 2024, which exclude the proceeds from
the £9.9m (before fees) fundraising completed in April 2024, were £1.19m
(31 March 2023: £3.62m, 30 September 2023: £5.25m), reflecting the overall
reduction in cash for the period of £4.06m.
Non-current assets of £8.49m (31 March 2023: £8.19m, 30 September 2023:
£8.96m) were increased compared to 31 March 2023 because of the recognition
of a right of use asset on the lease of the Group's US clinical laboratory in
the second half of the prior year as well as ongoing expenditure on intangible
assets (£0.23m, H1 2023: £0.17m) and property plant and equipment (£0.07m,
H1 2023: £0.11m).
Current assets excluding cash and fixed term deposits were £1.39m (31 March
2023: £2.47m, 30 September 2023: £1.92m), the difference primarily driven by
a lower outstanding balance at 31 March 2024 in respect of UK R&D Tax
Credits (the credit in respect of the prior year was received before the
period end, whereas the credit for the year ended 30 September 2022 was
received in April 2023) and the timing of invoicing and receipts for project
and grant- or award-funded work.
Current liabilities were increased compared to one year ago at £3.80m (31
March 2023: £2.10m, 30 September 2023: £4.00m). The increase was driven by
increased activity (mainly in the US), the timing of a small number of larger
payments, creditors in respect of fees incurred in relation to the recent
fundraise and the rescheduling of the Group's performance evaluation process,
which led to later payment of bonuses than in recent years.
Non-current liabilities were £5.64m (31 March 2023: £5.47m, 30 September
2023: £6.07m), comprising lease liabilities and dilapidations provisions in
respect of the Group's facilities.
Cash flow
Net cash used in operating activities in the period was reduced relative to
the equivalent period in the prior year, at £3.48m (H1 2023: £5.22m). The
impact of the higher operating loss for the period was more than offset by the
earlier receipt of UK R&D Tax Credits and the effect of adjustments for
non-cash items and working capital movements arising from the timing of
certain transactions, as noted for current liabilities above.
Net cash outflows from investing activities were £0.26m arising from capital
expenditure, offset by receipts of interest income. This represents a slight
increase in the net outflow from equivalent items in the prior period, once
investing inflows from maturing term deposits are excluded (H1 2023: £0.22m).
Financing cash outflow for the period of £0.32m reflects rent payments (H1
2023: net inflow of £8.10m, including £8.54m arising from issue of equity).
Post-period end, in April 2024, the Company successfully raised a total of
£9.86m (before fees) from the issue of equity shares.
Summary
The financial performance of the Group for the six months ended 31 March 2024
and its position at that date reflected continued investment in activities to
grow adoption and sales of OBD's two on-market tests, alongside further
development of its pipeline assets and completion of internal, commercial and
grant- and award-funded R&D work.
The raising of £9.9m (before fees) in equity funding post-period end, from
new and existing investors, was welcome. As previously noted, the Board aims
both to develop test sales sufficient to materially impact the business's
ongoing cash burn and to seek to monetize one or more of its assets to provide
additional working capital, ideally without recourse to further dilutive
equity issues. The Board is encouraged by the recent progress and current
prospects of the business as set out in the Chief Executive Officer's report
and also acknowledges that success in achieving the aims noted above, and the
likely timing of doing so, is uncertain. Management is closely monitoring the
Group's expected cashflows and, with the Board, is engaged in a review of
costs, to optimally balance preservation of the Group's cash resources and the
ongoing development of its business.
At the date of this report, a number of factors make it difficult to predict
anticipated product and other commercial revenue and associated cash receipts,
or income from any partnership or outlicensing agreement that may provide
additional funds. Accordingly, as explained in more detail in Note 2 to the
interim financial statements, the Board has concluded (as it did in the annual
reports for the years ended 30 September 2022 and 30 September 2023) that
there continues to be a material uncertainty which may cast significant doubt
on the Group's ability to continue as a going concern.
We plan to update shareholders on progress towards the Group's aims over the
remainder of the year, including provision of order volumes for PSE and CiRT
for the financial year, shortly after 30 September 2024.
Paul Stockdale
Chief Financial Officer
† CAP-CLIA regulated laboratories are accredited by the College of American
Pathologists as being compliant with the Clinical Laboratory Improvement
Amendments, 1988 (42 CFR, Part 493).
‡ A Current Procedural Terminology - Proprietary Laboratory Analysis
(CPT-PLA) code is used in the US to report medical and diagnostic services to
entities such as health care professionals and payors.
References
1 Oxford BioDynamics Plc. (2023). EpiSwitch PSE. https://www.94percent.com
(https://www.94percent.com)
2 Pchejetski, D., et al. (2023). Circulating Chromosome Conformation
Signatures Significantly Enhance PSA Positive Predicting Value and Overall
Accuracy for Prostate Cancer Detection. Cancers, 15(3), 821.
http://dx.doi.org/10.3390/cancers15030821
(http://dx.doi.org/10.3390/cancers15030821)
3 Oxford BioDynamics Plc. (2024). OBD partners with The London Clinic for
PSE & CiRT.
https://otp.tools.investis.com/clients/uk/oxford_biodynamics_plc/rns/regulatory-story.aspx?cid=2040&newsid=1822465
(https://otp.tools.investis.com/clients/uk/oxford_biodynamics_plc/rns/regulatory-story.aspx?cid=2040&newsid=1822465)
4 Oxford BioDynamics Plc. (2024). OBD partners with Goodbody Clinic on PSE
test.
https://otp.tools.investis.com/clients/uk/oxford_biodynamics_plc/rns/regulatory-story.aspx?cid=2040&newsid=1823661
(https://otp.tools.investis.com/clients/uk/oxford_biodynamics_plc/rns/regulatory-story.aspx?cid=2040&newsid=1823661)
5 The Prostate Health Podcast, Episode 96 (2023). Advancing Precision
Medicine: EpiSwitch PSE Prostate Cancer Screening Test with 94% Accuracy -
Robert Heaton, MD.
https://www.prostatehealthpodcast.com/96-advancing-precision-medicine-episwitch-pse-prostate-cancer-screening-test-with-94-accuracy-robert-heaton-md/
(https://www.prostatehealthpodcast.com/96-advancing-precision-medicine-episwitch-pse-prostate-cancer-screening-test-with-94-accuracy-robert-heaton-md/)
6 Oxford BioDynamics Plc. (2022). EpiSwitch CiRT. https://www.mycirt.com
(https://www.mycirt.com)
7 Hunter, E., et al. (2023). Development and validation of blood‐based
predictive biomarkers for response to PD‐1/PD-L1 checkpoint inhibitors:
evidence of a universal systemic core of 3D immunogenetic profiling across
multiple oncological indications, Cancers 15(10), 2696.
https://www.mdpi.com/2072-6694/15/10/2696
(https://www.mdpi.com/2072-6694/15/10/2696)
8 Hunter, E., et al. Whole Genome 3D Blood Biopsy Profiling of Canine
Cancers: Development and Validation of EpiSwitch Multi-Choice Array-Based
Diagnostic Test. bioRxiv 2024.05.22.595358; doi:
https://doi.org/10.1101/2024.05.22.595358
(https://doi.org/10.1101/2024.05.22.595358)
9 Oxford BioDynamics Plc. (2024). OBD develops multi-cancer diagnostic test
for dogs.
https://otp.tools.investis.com/clients/uk/oxford_biodynamics_plc/rns/regulatory-story.aspx?cid=2040&newsid=1827709
(https://otp.tools.investis.com/clients/uk/oxford_biodynamics_plc/rns/regulatory-story.aspx?cid=2040&newsid=1827709)
Consolidated income statement
Six-month period Year ended 30 September
ended 31 March
2024 2023 2023
(unaudited) (unaudited) (audited)
Note £000 £000 £000
Continuing operations
Revenue 3 327 220 510
Cost of sales (193) (76) (244)
Gross profit 134 144 266
Research & development costs (excluding staff costs) 4 (325) (284) (758)
Staff costs 4,5 (2,978) (2,565) (5,403)
General & other admin costs 4 (2,200) (1,467) (3,411)
Share option charges 12 (300) (176) (332)
Depreciation and amortization 7-9 (726) (610) (1,357)
Other operating income 402 200 827
Operating loss (5,993) (4,758) (10,168)
Fair value (loss)/gain on financial liabilities designated as FVTPL 1,202 (73) (1,246)
Gain reclassified to profit or loss on disposal of foreign operation - 114 113
Finance income 33 55 103
Finance costs (117) (90) (213)
Loss before tax (4,875) (4,752) (11,411)
Income tax 150 309 585
Loss for the period from continuing operations (4,725) (4,443) (10,826)
Loss attributable to:
Owners of the Company (4,725) (4,443) (10,826)
Non-controlling interest - - -
(4,725) (4,443) (10,826)
Earnings per share
From continuing operations
Basic and diluted (pence per share) 6 (2.3) (3.2) (7.3)
Consolidated statement of comprehensive income
Six-month period Year ended 30 September
ended 31 March
2024 2023 2023
(unaudited) (unaudited) (audited)
Note £000 £000 £000
Loss for the period (4,725) (4,443) (10,826)
Exchange differences on translation of foreign operations that may be (8) (151) (182)
reclassified to the income statement
Total comprehensive income for the period (4,733) (4,594) (11,008)
Total comprehensive income attributable to:
Owners of the Company (4,733) (4,594) (11,008)
Non-controlling interest - - -
(4,733) (4,594) (11,008)
Consolidated statement of financial position
31 March 31 March 30 September
2024 2023 2023
(unaudited) (unaudited) (audited)
£000 £000 £000
Assets Note
Non-current assets
Intangible fixed assets 7 2,060 1,703 1,913
Property, plant and equipment 8 2,022 2,397 2,238
Right-of-use assets 9 4,363 4,086 4,759
Deferred tax asset 49 - 50
Total non-current assets 8,494 8,186 8,960
Current assets
Inventories 229 373 274
Trade and other receivables 1,156 2,100 1,643
Fixed term deposits - 2,425 -
Cash and cash equivalents 1,187 1,198 5,250
Total current assets 2,572 6,096 7,167
Total assets 11,066 14,282 16,127
Equity and liabilities
Capital and reserves
Share capital 11 2,023 1,467 2,023
Share premium 32,144 27,095 32,144
Translation reserve (71) (32) (63)
Share option reserve 2,995 2,834 2,776
Retained earnings (35,469) (24,656) (30,825)
Equity attributable to owners of the Company 1,622 6,708 6,055
Non-controlling interest - - -
Total equity 1,622 6,708 6,055
Current liabilities
Trade and other payables 2,665 1,143 1,707
Warrant liability 13 158 187 1,360
Lease liabilities 10 840 737 818
Current tax liabilities 143 35 116
Total current liabilities 3,806 2,102 4,001
Non-current liabilities
Lease liabilities 10 5,165 5,019 5,621
Provisions 463 432 440
Deferred tax 10 21 10
Total non-current liabilities 5,638 5,472 6,071
Total liabilities 9,444 7,574 10,072
Total equity and liabilities 11,066 14,282 16,127
Consolidated statement of changes in equity
Share capital Share premium Translation reserve Share option reserve Retained earnings Attributable to share- Non-controlling interest Total
holders
£000 £000 £000 £000 £000 £000 £000 £000
At 1 October 2022 1,004 19,020 119 3,154 (20,709) 2,588 - 2,588
Loss for the period - - - - (4,443) (4,443) - (4,443)
Other comprehensive income for the period - - (151) - - (151) - (151)
Total comprehensive income for the period - - (151) - (4,443) (4,594) - (4,594)
Subscription for new shares 463 8,809 - - - 9,272 - 9,272
Transaction costs for new shares - (734) - - - (734) - (734)
Share option credit - - - 176 - 176 - 176
Lapse of vested share options - - - (496) 496 - -
At 31 March 2023 1,467 27,095 (32) 2,834 (24,656) 6,708 - 6,708
At 1 April 2023 1,467 27,095 (32) 2,834 (24,656) 6,708 - 6,708
Loss for the period - - - - (6,383) (6,383) - (6,383)
Other comprehensive income for the period - - (31) - - (31) - (31)
Total comprehensive income for the period - - (31) - (6,383) (6,414) - (6,414)
Subscription for new shares 556 5,559 - - - 6,115 - 6,115
Transaction costs for new shares - (510) - - - (510) - (510)
Share option credit - - - 156 - 156 - 156
Lapse of vested share options - - - (214) 214 - - -
At 30 September 2023 2,023 32,144 (63) 2,776 (30,825) 6,055 - 6,055
At 1 October 2023 2,023 32,144 (63) 2,776 (30,825) 6,055 - 6,055
Loss for the period - - - - (4,725) (4,725) - (4,725)
Other comprehensive income for the period - - (8) - - (8) - (8)
Total comprehensive income for the period - - (8) - (4,725) (4,733) - (4,733)
Share option credit - - - 300 - 300 - 300
Lapse of vested share options - - - (81) 81 - - -
At 31 March 2024 2,023 32,144 (71) 2,995 (35,469) 1,622 - 1,622
Consolidated statement of cash flows
Six-month period ended 31 March Year ended 30 September
2024 2023 2023
(unaudited) (unaudited) (audited)
Note £000 £000 £000
Loss before tax for the financial period (4,875) (4,752) (11,411)
Adjustments to reconcile loss for the period to net cash flows:
Net interest 84 34 141
Loss on disposal of property, plant and equipment - 3 4
Depreciation of property, plant and equipment 8 273 261 548
Depreciation of right-of-use assets 9 378 290 663
Amortization of intangible fixed assets 7 77 59 146
Net foreign exchange movements 7 25 (122)
Movement in provisions 23 8 16
Share based payments charge 12 300 176 332
Fair value (gain) / loss on financial liabilities designated as FVTPL 13 (1,202) 73 1,246
Gain reclassified to profit or loss on disposal of foreign operation - (114) -
Working capital adjustments:
Increase in trade and other receivables (19) (296) (448)
Decrease / (increase) in inventories 45 (36) 63
Increase / (decrease) in trade and other payables 756 (878) (286)
Operating cash flows before interest and tax paid (4,153) (5,147) (9,108)
R&D tax credits received 684 - 896
Tax paid (1) (75) (82)
Net cash used in operating activities (3,470) (5,222) (8,294)
Investing activities
Interest received 33 37 71
Purchases of property, plant and equipment (66) (92) (250)
Purchases of intangible fixed assets (226) (169) (466)
(Increase) / decrease in term deposits - (2,400) 25
Net cash (used in) / generated by investing activities (259) (2,624) (620)
Financing activities
Interest paid (117) (90) (213)
Repayment of lease liabilities (209) (361) (723)
Issue of equity shares and warrants - 9,272 15,387
Transaction costs relating to equity issues - (734) (1,244)
Net cash generated by financing activities (326) 8,087 13,207
Net increase / (decrease) in cash and cash equivalents (4,055) 241 4,293
Foreign exchange movement on cash and cash equivalents (8) (17) (17)
Cash and cash equivalents at beginning of year 5,250 974 974
Cash and cash equivalents at end of period 1,187 1,198 5,250
Notes
1. General information
The interim financial information was authorized for issue by the Board of
Directors on 17 June 2024. The information for the period ended 31 March 2024
has not been audited and does not constitute statutory accounts as defined in
section 434 of the Companies Act 2006 and should therefore be read in
conjunction with the audited financial statements of the Company and its
subsidiaries as at and for the year ended 30 September 2023, which were
prepared in accordance with UK-adopted international accounting standards and
have been delivered to the Registrar of Companies. The Report of the Auditor
on the financial statements was unqualified, did not contain an emphasis of
matter paragraph and did not contain any statement under section 498 of the
Companies Act 2006. This interim information does not comply with IAS 34
Interim Financial Reporting, as is permissible under the rules of AIM.
2. Basis of accounting
Basis of preparation
These interim consolidated financial statements have been prepared under the
historical cost convention, except for, where applicable, the revaluation of
financial liabilities at fair value through profit or loss, and in accordance
with the recognition and measurement principles of UK-adopted international
accounting standards.
Reporting currency
The consolidated financial statements are presented in pounds sterling (GBP),
which is also the Company's functional currency.
Going concern
In assessing the appropriateness of adopting the going concern assumption, in
preparation for the fundraise completed by the Group after the period end, the
Group prepared a detailed forecast for the period ending 30 September 2025
("the forecast"). The forecast included:
· estimates of likely revenue arising from EpiSwitch CiRT and
EpiSwitch PSE (based on the Group's own assessments of market opportunities);
· anticipated revenues from contracts with pharmaceutical partners;
· expected income from existing grants and awards;
· operating costs reflecting the current cost base (plus
inflationary increases), including staff recruited during the period and
increased marketing activity to support the commercial tests already launched;
and
· capital expenditure, primarily to maintain and extend the Group's
patent estate.
In preparing the forecast, the Directors note that it includes estimates of
product and contract revenue reflecting significant increases in the number of
CiRT and PSE tests to be ordered through the remainder of FY24 and into FY25
compared to the period, and expectations of a number of new contracts with
pharma customers. Predicted cash balances in the forecast, whilst positive
throughout the period covered, are expected to be reduced to a low level
relative to the Group's cost base through much of 2025.
The Directors also draw attention to several significant uncertainties
inherent in the preparation of the forecast, primarily relating to balances
associated with the revenue / income cycle, since most of the Group's costs
are reasonably predictable and controllable. These uncertainties include
volumes of orders of the Group's two on-market tests; reimbursement rates and
timing of the reimbursement cycle (and consequent impact on the Group's
working capital); and the number and value of new pharma/biotech agreements.
Cash resources as predicted in the forecast are very sensitive to changes in
the assumptions related to these uncertainties: this was noted in an
alternative 'low growth scenario' considered by the Directors that reflects
reduced test volumes compared to the forecast and assumes no new projects for
pharma customers. Without any remedial action to reduce costs or delay
expenditure, in this scenario the Group and Company would need to obtain
additional funds during the first quarter of 2025 in order to continue as a
going concern.
Revenue during the period ended 31 March 2024 was increased slightly compared
to each of the preceding two half-year periods, but the Group remained
lossmaking with income significantly exceeded by operating costs, which have
increased relative to prior periods. The Group was able to maintain its cash
reserves during and after the period, including through the raising
of £9.86m (before costs) through a placing, subscription and PrimaryBid
offer announced in March 2024 and approved by shareholders after the period
end in April 2024. During the year ended 30 September 2023, the Group raised a
total of £15.4m (before costs) from new and existing shareholders, in two
fundraises. However, as at the date of publication of this report, there is no
guarantee that the Group will be able to access further cash resources from
investors. This issue may be compounded if the Company's share price were to
fall further from its current level.
The Directors do not believe that any of the factors above is unusual or
unexpected for the Group at this point in the execution of its strategy.
However, shareholders should be aware that there is uncertainty around its
ability to generate sufficient revenues and the timing of receipts from
customers, as well as the ability of the Group to raise sufficient finance to
meet its expected costs. These conditions present a material uncertainty
which may cast significant doubt on the Group and Parent Company's ability to
continue as a going concern and, therefore, it may be unable to realize its
assets and discharge its liabilities in the normal course of business.
Accounting policies
The interim financial statements have been prepared in accordance with the
accounting policies set out in the Annual Report and Accounts for the year
ended 30 September 2023, which is available on the Company's website.
Accounting judgements and estimates
There have been no significant changes to critical accounting judgements or
accounting estimates of amounts reported in prior financial periods.
3. Revenue
All revenue is derived from the Group's principal activities, namely sales of
proprietary products and biomarker research and development. Analysis of the
Group's revenue by principal activities, geography and pattern of revenue
recognition is as follows:
Six-month period Year ended 30 September
ended 31 March
2024 2023 2023
£000 £000 £000
Continuing operations:
Sales of proprietary products
USA 121 79 160
Rest of World 20 2 34
141 81 194
Biomarker research and development
USA 103 129 228
Rest of World 83 10 88
186 139 316
Consolidated revenue 327 220 510
Six-month period Year ended 30 September
ended 31 March
2024 2023 2023
£000 £000 £000
Continuing operations
Revenue recognized at a point in time 141 81 194
Revenue recognized over time 186 139 316
327 220 510
Information about major customers
The Group's revenues for the periods covered by this report are derived from a
small number of customers, several of which represent more than 10% of the
revenue for the period. These are summarized below:
Six-month period Year ended 30 September
ended 31 March
2024 2023 2023
£000 £000 £000
Revenue from individual customers each representing more than 10% of revenue
for the period:
155 194 280
Number Number Number
Number of individual customers each representing more than 10% of revenue for
the period
2 2 2
4. Business segments
Products and services from which reportable segments derive their revenues
Information reported to the Group's Chief Executive (who has been determined
to be the Group's Chief Operating Decision Maker) for the purposes of resource
allocation and assessment of segment performance is focused on costs incurred
to support the Group's main activities. The Group is currently determined to
have one reportable segment under IFRS 8, that of sales and proprietary
products and biomarker research and development. This assessment will be kept
under review as the Group's activity expands.
The Group's operating expenses and non-current assets, analysed by
geographical location were as follows:
Six-month period Year ended
ended 31 March 30 September
2024 2023 2023
£000 £000 £000
Staff costs
UK 1,385 1,269 2,614
USA 1,551 1,243 2,692
Rest of World 42 53 97
Total staff costs 2,978 2,565 5,403
Research & development costs
UK 239 284 680
USA 86 - 77
Rest of World - - 1
Total research & development costs 325 284 758
General & other admin costs
UK 1,353 1,111 2,399
USA 840 335 969
Rest of World 7 21 43
Total general & other admin costs 2,200 1,467 3,411
31 March 2024 31 March 2023 30 September 2023
Non-current assets £000 £000 £000
UK 7,162 7,708 7,446
USA 1,298 430 1,478
Malaysia 34 48 36
Total non-current assets 8,494 8,186 8,960
5. Staff costs
Six-month period Year ended
ended 31 March 30 September
2024 2023 2023
£000 £000 £000
Wages and salaries 2,648 2,213 4,829
Social security costs 193 210 331
Other pension costs 137 142 243
2,978 2,565 5,403
The average number of persons, including executive directors, employed by the
Group during the period was as follows:
Six-month period Year ended
ended 31 March 30 September
2024 2023 2023
Number Number Number
Management and administration 15 10 11
Clinical operations and customer support 11 9 10
Laboratory-based 27 24 24
53 43 45
6. Earnings per share
From continuing operations
The calculation of the basic and diluted earnings per share is based on the
following data:
Six-month period Year ended
ended 31 March 30 September
2024 2023 2023
£000 £000 £000
Earnings for the purposes of basic earnings per share being net loss (4,725) (4,443) (10,826)
attributable to owners of the Company
Earnings for the purposes of diluted earnings per share (4,725) (4,443) (10,826)
No. No. No.
Number of shares
Weighted average number of ordinary shares for the purposes of basic and 202,303,415 139,099,667 147,481,566
diluted earnings per share*
Weighted average number of potential ordinary shares* 20,253,254 17,761,631 17,771,839
Pence Pence Pence
Loss per share
Basic and diluted loss per share (2.3) (3.2) (7.3)
* Ordinary shares that may be issued on the exercise of options or warrants
are not treated as dilutive as the Group is loss-making and the potential
ordinary shares do not increase the loss per share from continuing operations.
7. Intangible fixed assets
Group Website development costs Software development costs Patents Total
£000 £000 £000 £000
Cost
At 1 October 2023 62 173 2,101 2,336
Additions - 27 199 226
Exchange differences (5) (5)
At 31 March 2024 62 195 2,300 2,557
Amortization
At 1 October 2023 62 99 262 423
Charge for the period - 23 54 77
Exchange differences - (3) - (3)
At 31 March 2024 62 119 316 497
Carrying amount
At 31 March 2024 - 76 1,984 2,060
At 31 March 2023 - 55 1,648 1,703
At 30 September 2023 - 74 1,839 1,913
8. Property, plant and equipment
Group Leasehold improvements Office equipment Fixtures & fittings Laboratory equipment Total
£000 £000 £000 £000 £000
Cost
At 1 October 2023 2,084 191 185 2,300 4,760
Additions 12 8 - 47 67
Disposals - (3) - - (3)
Exchange differences - (2) (1) (20) (23)
At 31 March 2024 2,096 194 184 2,327 4,801
Accumulated depreciation
At 1 October 2023 437 127 77 1,881 2,522
Charge for the period 105 20 17 131 273
Eliminated on disposals - (3) - - (3)
Exchange differences - (1) - (12) (13)
At 31 March 2024 542 143 94 2,000 2,779
Carrying amount
At 31 March 2024 1,554 51 90 327 2,022
At 31 March 2023 1,747 56 112 482 2,397
At 30 September 2023 1,647 64 108 419 2,238
9. Right-of-Use Assets
Group Buildings Other Total
£000 £000 £000
Cost
At 1 October 2023 6,241 18 6,259
Additions 16 - 16
Derecognition (11) - (11)
Exchange differences (43) - (43)
At 31 March 2024 6,203 18 6,221
Accumulated depreciation
At 1 October 2023 1,483 17 1,500
Charge for the period 378 - 378
Derecognition (11) - (11)
Exchange differences (9) - (9)
At 31 March 2024 1,841 17 1,858
Carrying amount
At 31 March 2024 4,362 1 4,363
At 31 March 2023 4,082 4 4,086
At 30 September 2023 4,578 1 4,579
10. Leasing
Group 31 March 31 March 30 September
2024 2023 2023
Maturity analysis: £000 £000 £000
Year 1 1,049 900 1,045
Year 2 1,040 861 1,052
Year 3 1,046 813 1,051
Year 4 1,053 812 1,058
Year 5+ 2,560 3,064 3,101
6,748 6,450 7,307
Less: future interest charges (743) (694) (868)
6,005 5,756 6,439
Analyzed as:
Lease liabilities (current) 840 737 818
Lease liabilities (non-current) 5,165 5,019 5,621
6,005 5,756 6,439
The group has elected not to recognise a lease liability for short term leases
(leases with an expected term of 12 months or less) or for leases of low value
assets. Payments made under such leases are expensed on a straight-line basis.
11. Share capital of the Company
31 March 2024 31 March 2023 30 September 2023
Number £ Number £ Number £
Authorized shares
Ordinary shares of £0.01 each 202,303,415 2,023,034 146,712,380 1,467,124 202,303,415 2,023,034
The Company has one class of ordinary shares which carry no right to fixed
income.
The Company has a number of shares reserved for issue pursuant to warrants and
under an equity-settled share option scheme; further details are disclosed in
Notes 12 and 13.
12. Share-based payments
Equity-settled share option scheme
In November 2016, the Company established an Enterprise Management Incentive
("EMI") share option scheme, under which options have been granted to certain
employees, and a non-employee option scheme with similar terms, except that
options granted under it may not have EMI status. EMI and non-EMI share
options were also previously granted under a share option scheme established
in October 2008 ("the 2008 Scheme"). The Company does not intend to grant any
further options under the 2008 Scheme. All of the schemes are equity-settled
share-based payment arrangements, whereby the individuals are granted share
options of the Company's equity instruments, namely ordinary shares of 1 pence
each.
The schemes include non-market-based vesting conditions only, whereby the
share options may be exercised from the date of vesting until the 10(th)
anniversary of the grant date. In most cases options vest under the following
pattern: one-third of options granted vest on the first anniversary of the
grant date; one-third on the second anniversary and one-third on the third
anniversary. The only exception to this pattern is 84,000 options which were
granted in the year ended 30 September 2016 which vested immediately upon
grant.
The options outstanding as at 31 March 2024 had exercise prices in the range
of £0.16 to £2.10.
Options outstanding Six-month period Year ended 30 September
ended 31 March
2024 2023 2023
Unaudited Unaudited Audited
Number Number Number
Outstanding at start of period 9,983,143 9,447,658 9,447,658
Granted during the period 3,383,000 1,857,500 2,721,061
Forfeited during the period (238,333) (1,767,409) (2,185,576)
Exercised during the period - - -
Outstanding at end of period 13,127,810 9,537,749 9,983,143
Weighted average remaining contractual life (in years) of options outstanding 6.51 6.01 6.60
at the period end
Options exercisable Number of Options Weighted average exercise price Latest exercise price
£
£
At 31 March 2024 5,879,409 0.75 0.16
At 31 March 2023 5,056,976 0.77 0.19
At 30 September 2023 5,983,853 0.76 0.16
Share option expense Six-month period Year ended 30 September
ended 31 March
2024 2023 2023
£000 £000 £000
Expense arising from share-based payment transactions 300 176 332
13. Warrants
As at 31 March 2024 there were 7,791,803 shares reserved for issue under
warrants (30 September 2023 and 31 March 2023: 7,791,803).
The Warrants have an exercise price of 58.125p and may be exercised for a
period beginning one year and ending five years following the date of
issuance.
In certain circumstances, the Warrants may be exercised by way of a 'cashless
exercise' whereby holders are entitled to receive a number of warrant shares
equal to [(A-B) x 7,791,803]/(A), where A is the value of the Company's
ordinary shares at the time, and B is the warrant exercise price of 58.125p.
Anti-dilution provisions are also in place such that if there is an adjustment
for any dividends paid or changes to ordinary share capital at any time whilst
the warrant is outstanding, the number of shares issued on exercise of the
warrant is adjusted to take into account the proportionate change (with a
limitation on fractional shares).
On award and at each subsequent reporting date, the fair value of the Warrants
has been estimated using the Black-Scholes option pricing model. Volatility
has been estimated by reference to historical share price data over a period
commensurate with the expected term of the options awarded. The assumptions
used in arriving at the fair value for the Warrants during the period were as
follows:
Restated
31 March 31 March 30 September 2023
2024 2023
Share price at value date (p) 9.4 14.25 37
Exercise price (p) 58.125 58.125 58.125
Expected volatility 98.06% 66.01% 84.39%
Dividend yield 0% 0% 0%
Expected life of option 2.61 years 3.61 years 3.11 years
Risk free interest rate 3.87% 3.46% 4.55%
Fair value per Warrant (p) 2p 2p 17p
31 March 31 March 30 September
2024 2023 2023
£000 £000 £000
Warrant liability 158 187 1,360
14. Financial instruments
Financial risk management objectives and policies
The Group is exposed to various risks in relation to financial instruments,
the main types of risk being market risk, credit risk and liquidity risk,
which are described in more detail below.
The Group's financial assets and liabilities are summarized by category in the
table below.
The Group's financial risk management is co-ordinated at its head office by
its finance function, in close co-operation with the Board. It co-ordinates
access to financial markets, monitors and manages the financial risks relating
to the operations of the Group through internal reports which analyse
exposures.
The Group does not trade in financial assets for speculative purposes, nor has
it entered into derivatives.
Categories of financial instruments
The carrying amounts of financial assets and financial liabilities in each
category are as follows:
Group 31 March 31 March 30 September
2024 2023 2023
Note £000 £000 £000
Financial assets
Amortized cost
Cash and cash equivalents 1,187 1,198 5,250
Term deposits - 2,425 -
Trade and other receivables 469 1,752 1,053
Total financial assets 1,656 5,375 6,303
Financial liabilities
Amortized cost
Trade and other payables 2,690 820 1,614
Lease liabilities 10 6,005 5,756 6,439
8,695 6,576 8,053
FVTPL
Warrant liability 13 158 187 1,360
Total financial liabilities 8,853 6,763 9,413
Fair value measurement of financial instruments
Financial assets and financial liabilities measured at fair value in the
consolidated statement of financial position are grouped into three levels of
a fair value hierarchy. The three levels are defined based on the
observability of significant inputs to the measurement, as follows:
· Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities
· Level 2: inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly or indirectly
· Level 3: unobservable inputs for the asset or liability.
The following table shows the levels within the hierarchy of financial
liabilities measured at fair value on a recurring basis (there were no
financial assets measured at fair value on a recurring basis in any of the
periods):
Group
Level 1 Level 2 Level 3 Total
At 31 March 2024 Note £000 £000 £000 £000
Financial liabilities
Warrant liability 13 - 158 - 158
- 158 - 158
At 31 March 2023
Financial liabilities
Warrant liability - 187 - 187
- 187 - 187
At 30 September 2023
Financial liabilities
Warrant liability - 1,360 - 1,360
- 1,360 - 1,360
Management has assessed that the fair values of cash and term deposits, trade
receivables, trade payables and other current liabilities approximate their
carrying amounts largely due to the short-term maturities of these
instruments. Further, the Directors consider that the carrying amounts of
other financial assets and financial liabilities recorded at amortized cost in
the financial statements approximate to their fair values. Accordingly, none
of the bases for valuation under the fair value hierarchy set out in IFRS 13
'Fair Value Measurement' have been deployed in arriving at the values for
these items.
Market risk
The Group's activities expose it primarily to the financial risks of changes
in foreign currency exchange rates (see below). To mitigate its exposure to
foreign currency risk, the Group monitors amounts to be paid and received in
specific currencies, and where these are expected largely to offset one
another, no further currency hedging activity or forward exchange contracts
are entered into.
Foreign currency sensitivity
The Group undertakes transactions denominated in foreign currencies, therefore
exposures to exchange rate fluctuations arise. Exchange rate exposures are
managed within approved policy parameters, utilising natural hedging as
outlined above where possible. The carrying amounts of the Group's and
Company's foreign currency-denominated monetary assets and liabilities at the
relevant period end dates are as follows:
Assets
Group 31 March 2024 31 March 2023 30 September 2023
£000 £000 £000
US dollar 538 249 312
Singapore dollar 23 11 18
Malaysian ringgit 14 7 6
Outstanding at end of period 575 267 336
Liabilities
31 March 2024 31 March 2023 30 September 2023
£000 £000 £000
US dollar (1,155) (274) (802)
Singapore dollar (6) (4) (4)
Euro (13) - (19)
Malaysian ringgit - (2) -
Outstanding at end of period (1,174) (280) (825)
The Group is mainly exposed to variations in the exchange rate between
sterling and the US dollar and, to a lesser extent, the Singapore dollar.
The following table details the Group's sensitivity to a 10% weakening in the
pound sterling against the relevant foreign currencies. 10% is the sensitivity
rate used when reporting foreign currency risk internally to key management
personnel and represents management's assessment of a reasonably possible
movement in foreign exchange rates over the medium term (3-12 months). The
sensitivity analysis includes only outstanding foreign currency denominated
monetary items and adjusts their translation at the period end for a 10%
change in foreign currency rates. For a 10% strengthening of the pound
sterling against the relevant currency, there would be a comparable impact on
the profit and other equity, and the balances below would be negative.
US dollar impact Singapore dollar impact
Six-month period ended Year ended Six-month period ended Year ended
31 March 2024 31 March 2023 30 September 2023 31 March 2024 31 March 2023 30 September 2023
£000 £000 £000 £000 £000 £000
Profit 62 2 49 2 1 2
In Management's opinion, the sensitivity analysis is representative of the
inherent foreign exchange risk through the year.
Interest rate sensitivity
The Group is not significantly exposed to interest rate risk because it does
not have any external borrowings. It does hold funds on deposit in accounts
paying variable interest rates. The Group's finance income is therefore
affected by variations in deposit interest rates.
Credit risk
Credit risk is the risk that a counterparty fails to discharge its contractual
obligations, resulting in financial loss to the Group. The Group is primarily
exposed to credit risk in respect of its cash, cash equivalents and term
deposits and trade and other receivables.
Credit risk management
The Group has adopted a policy of only dealing with creditworthy
counterparties and obtaining sufficient collateral where appropriate, as a
means of mitigating the risk of financial loss from defaults. The Group makes
appropriate enquiries of the counter party and independent third parties to
determine credit worthiness. Use of other publicly available financial
information and the Group's own trading records is made to rate its banking
counterparties and major customers. The Group's exposure and the credit
worthiness of its counterparties are continuously monitored and the aggregate
value of transactions is spread amongst approved counterparties. Credit
exposure is also controlled by counterparty limits that are reviewed and
approved by Group management continuously.
The vast majority of the Group's cash and cash equivalents are invested either
with systemic UK and global banks or UK banks with a Tier 1 capital ratio
significantly in excess of the current regulatory recommendation. Cash in
excess of the Group's immediate requirements is predominantly invested in
short-term deposits, breakable term deposits or notice accounts which allow
for instant access to funds if necessary. The Group holds some deposits in
accounts requiring notice of 95 days to access funds.
Trade receivables consist of a small number of customers, spread across
various geographical areas. Ongoing credit evaluation is performed on the
financial condition of accounts receivable. Expected credit loss rates are
based on the Group's historical credit losses during the 48 months prior to 1
April 2024. There were no credit losses during that period, but where
appropriate, the historical rates are adjusted to reflect specific current and
forward-looking factors that may affect a customer's ability to settle the
amount outstanding.
Trade receivables are written off when there is no reasonable expectation of
recovery. Failure to make payments within 180 days of an invoice's due date
and failure to engage with the Group on alternative payment arrangements would
be considered indicative of no reasonable expectation of recovery.
Because the commercial research and grant-funded contracts in which the Group
is involved tend to be invoiced by means of milestone payments covering a
substantial portion of each project, this may distort the credit exposure
profile at certain points during a given financial period. For the six-month
period ended 31 March 2024 the proportion of revenue attributable to one
customer was 31% (year ended 30 September 2023: 45%), but the Directors are of
the view that this does not signify that there is more than a low to moderate
risk in this respect, and this is borne out by the Group's history of having
incurred no credit losses throughout the period covered by this report.
The carrying amount recorded for financial assets in the consolidated
financial statements is stated net of any impairment losses and represents the
Group's maximum exposure to credit risk. No guarantees have been given in
respect of third parties.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities. To counter this
risk, the Group seeks to operate from cash reserves and with no bank debt. The
Group monitors forecast cash inflows and outflows and adjusts its term
deposits accordingly to ensure that sufficient funds are available to meet
cash requirements. For its contracts with pharma and biotech customers, the
Group benefits from a substantial proportion of revenue being paid in advance.
The following table details the Group's expected maturity for its
non-derivative financial assets. It has been drawn up based on the
undiscounted contractual maturities of the financial assets including interest
that will be earned on those assets. The inclusion of information on
non-derivative financial assets is necessary to understand the Group's
liquidity risk management as the liquidity is managed on a net asset and
liability basis.
Group Weighted average effective interest rate Less 1-3 months 3 months to 1 year 1-5 years 5+ years Total
than 1 month
% £000 £000 £000 £000 £000 £000
31 March 2024
Non-interest bearing 1,646 - - - - 1,646
Variable interest rate instruments 5.2% 10 - - - - 10
1,656 - - - - 1,656
31 March 2023
Non-interest bearing 2,945 - - - - 2,945
Variable interest rate instruments 2.8% 5 2,408 25 - - 2,438
2,950 2,408 25 - - 5,383
30 September 2023
Non-interest bearing 6,299 - - - - 6,299
Variable interest rate instruments 3.3% 4 - - - - 4
6,303 - - - - 6,303
Variable rate instruments above are balances on interest-bearing notice
accounts. The amounts included above for variable interest rate instruments
for both non-derivative financial assets and liabilities are subject to change
if variable interest rates differ to those estimates of interest rates
determined at the relevant year-ends presented above.
The following table details the expected maturity of the Group's
non-derivative financial liabilities. Figures disclosed in the table are
contractual undiscounted cashflows including, for lease liabilities, future
interest charges.
Group Weighted average effective interest rate Less 1-3 months 3 months to 1 year 1-5 years 5+ years Total
than 1 month
% £000 £000 £000 £000 £000 £000
31 March 2024
Non-interest bearing 2,690 - - - - 2,690
Fixed interest rate instruments 8.8% 21 242 786 4,199 1,501 6,749
2,711 242 786 4,199 1,501 9,439
31 March 2023
Non-interest bearing 820 - - - - 820
Fixed interest rate instruments 7.5% 9 221 689 3,311 2,251 6,481
829 221 689 3,311 2,251 7,301
30 September 2023
Non-interest bearing 1,614 - - - - 1,614
Fixed interest rate instruments 7.5% 20 242 782 4,225 2,038 7,307
1,634 242 782 4,225 2,038 8,921
15. Events after the balance sheet date
On 14 March 2024, the company announced that it had successfully raised gross
proceeds of £9.86m by way of a placing, subscription and retail offer of a
total of 109,552,235 newly-issued ordinary shares of 1 pence each from
institutional, retail and other investors, at a price of 9 pence per share.
The new Shares represent approximately 35.1% of the Company's issued ordinary
share capital as enlarged by the Fundraising.
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