4basebio Plc - Half-year Report
("4basebio", the "Company" or the “Group”)
Half-year Report
for the six months ended
Operational Highlights (including post period end)
-- Revenues of more than £300k for the half year
-- Order book above £600k at 30 June 2024
-- Strong growth in higher value HQ and GMP opportunities
-- Supply Agreement signed for provision of DNA for tier 1 pharma
-- Supply of DNA for manufacture of mRNA used in first in human clinical
trial
-- Five additional patent filings during 2024
Financial Highlights
-- £40m cash investment announced 29 July 2024
-- Cash balances of £2.7 million at period end
-- Loss for the period of £5.7 million (H1 2023 loss: £3.6 million)
-- Net cash outflow from operating activities of £5.1 million (H1 2023:
£3.0 million)
Commenting on the interim results, Dr
We believe there is continued significant value creation potential through ongoing investment in our synthetic DNA platform, with the opportunity to develop additional novel nucleic acid products to further reinforce 4basebio’s unique market position and highlighting the flexibility of the technology platform. Our Hermes™ delivery platform is also progressing well with considerable promise both in the delivery of DNA and mRNA payloads.
We are delighted to have reached agreement with Elevage Medical Technologies, a Patient Square Capital platform and Prudential Assurance Company Limited acting by its investment manager M&G Investment Management Limited for an investment of £40 million, subject to regulatory approval. The funding will underpin the commercial growth of the Company and the continued investment in the platforms. We see this step as further validation of our stated ambition to become the leading player in the supply of DNA for cell & gene therapies and vaccines.”
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further enquiries, please contact:
4basebio PLC +44 (0)12 2396 7943
Heikki Lanckriet , CEO and CSO
Cairn Financial Advisers LLP (Nominated Adviser) +44 (0)20 7213 0880
Jo Turner / Sandy Jamieson Cavendish Capital Markets Limited (Broker)
Geoff Nash / Charlie Beeson / Nigel Birks +44 (0)20 7220 0500
Lionsgate Communications (Media Enquiries) +44 (0)77 91892509
Jonathan Charles
Notes to Editors
4basebio (AIM: 4BB) is an innovation driven life biotechnology company focussed on accelerating the development of advanced therapy medicinal products (ATMPs) through its high performant synthetic DNA products and non-viral, cell targeting nucleic acid delivery platform. The Company’s objective is to become a market leader in the manufacture and supply of high quality synthetic DNA products for research, therapeutic and pharmacological use as well as development of target specific non-viral vectors for the efficient delivery of payloads in patients.
Chairman’s Statement
Introduction
The Board is pleased to report on the Group’s continued progress during the first half of the year and the exciting developments over these past several months. It is pleasing to note 4basebio’s accelerating commercial traction, highlighted through a combination of half year revenue and confirmed order book, which together represents in excess of £900k. As indicated previously, 4basebio expects to make significant revenue progress this financial year.
At the same time, the Group continues to invest in its commercial and operational capabilities, underscored by headcount increasing to 101 at
Alongside this core focus, 4basebio is delighted to report the agreements entered into with Elevage Medical Technologies (“Elevage”), a Patient Square Capital platform and Prudential Assurance Company Limited acting by its investment manager M&G Investment Management Limited (“M&G”) to facilitate an investment of £40 million to further accelerate the Group’s commercial ambitions. As noted in the announcements of
The investment represents strong validation of the Group’s technology platform and commercial aims and we are looking forward to welcoming Elevage and M&G to our shareholder register. It is also anticipated that our new shareholders will make valuable contributions to the future strategic direction of the Group.
This investment coincides with the formation of a
Operational Review
Over the first half of the year, the Group has continued its focus on commercial activities, increasing its client base as well as continued product platform development underpinned by multiple patent filings. On these two points, the ambitions of the Group remain consistent with previous periods; accelerating commercial traction and continued innovation.
As the Group’s commercial and GMP activities mature, 4basebio is increasingly focussed on attracting customers at the late pre-clinical stage, with a particular emphasis on DNA production for IND-enabling clinical studies. Depending on each customer’s application area, this variously requires high quality (“HQ”) and GMP batches of DNA. Of particular highlight in this area is the commitment from a tier one pharma company, announced on
In addition, the use of 4basebio’s synthetic DNA for the manufacture of mRNA for a first in human clinical trial announced on
The Group continues to consider how it can further accelerate its commercial success and with the investment highlighted above, further significant expansion in this area is planned in the near term. While the Group’s customer base is primarily comprised of US clients, there has been increasing interest in GMP opportunities across both
While the Group’s core focus remains its synthetic DNA offering, 4basebio continues to make good progress in validating its Hermes™ platform in several collaborative studies which offer promising evidence of commercial potential for the platform, particularly in nucleic acid vaccine applications, supported by the
Throughout the half year, the Group has continued to innovate across both technology platforms; the unique flexibility of its synthetic DNA platform facilitating the generation of novel DNA products with multi-application uses.
The board is pleased with the continued progress which has been made during the first half of 2024 and remains very positive about the future prospects for the Group. The Group continues to validate its commercial proposition and synthetic DNA more generally through customer revenues, while at the same time continuing to strengthen its market position through additional patent filings around its products and technologies.
Business outlook
Over the second half of the financial year, the Group expects to continue to secure new clients and increase revenues from the sale of DNA and Hermes™. As previously indicated, the Group will also continue investing in its technologies and capabilities, so that ongoing expenditure will continue to significantly exceed revenues, with the Group reporting a loss for the full year. The equity investment as noted above will strengthen the Group’s financial position and ensures 4basebio remains well-resourced to deliver on its ambitions and commercial targets.
Financial Review
The results for the period ended
Revenue
The timing of revenue recognition is dependent on the mutually agreed scheduling of customer projects. Revenue in the first six months of 2024 (“H1 2024”) was £0.33 million (H1 2023: £0.24 million), while the order book for DNA and Hermes™ projects exceeded £0.6 million.
Cost of sales
Cost of sales in H1 2024 was £92k (H1 2023: £77k), relating to the direct cost of products sold in the period.
Selling and administration expenses
Selling, general and administrative expenses were a combined £2.6 million in H1 2024 (H1 2023: £1.9 million), representing an increase of £0.7 million. Expenditure includes non-cash items relating to amortisation and depreciation of £383k (H1 2023: £190k) and share options charges of £348k (H1 2023: £87k). Other expenditure excluding these non-cash items rose by £311k, relating primarily to increases in Sales and marketing expenditure.
Operations expense
Operations expense was £1.4 million (H1 2023: £0.6 million) This reflects the scaling of the manufacturing and quality assurance teams between the periods.
Research and development
Overall research and development expenditure for H1 2024 was £2.5 million (H1 2023: £1.8 million), of which £0.2 million was capitalised in the period (H1 2023: £0.3 million). Overall expenditure increased as the
Tax
Tax represents R&D tax credits expected to be recovered in due course in relation to expenditure during the first half of the year.
Balance sheet
Non-current assets increased to £7.0 million at
Current liabilities reduced to £1.8 million at
Share Capital increased following the exercise of share options (as reported on 2 and
Cash flow
Net cash outflows from operations were £5.1 million for the period ended
Cash outflows from investing activities were static with a decline in the investment in tangible fixed assets of £0.2 million for the period ended
Cashflows from financing for the period ended
Exchange differences for the period represent changes in the British pound value of cash balances held in foreign currency.
Chairman
Consolidated statement of profit or loss and other comprehensive income
for the six months ended
Six months Six months Year ended 31
in £‘000 Note ended 30 June ended 30 June December 2023
2024 2023 (audited)
(unaudited) (unaudited)
Revenues 328 238 506
Cost of goods (92) (77) (166)
sold
Gross profit 236 161 340
Sales and
marketing (418) (248) (586)
expenses
Administration (2,198) (1,603) (3,250)
expenses
Operations expense (1,390) (596) (1,417)
Research and non-capitalised (2,269) (1,596) (3,560)
development expenses
Other operating expenses (6) (18) (85)
Other operating income 246 136 506
Loss from operations (5,799) (3,764) (8,052)
Finance expense (343) (98) (302)
Loss before tax (6,142) (3,862) (8,354)
Income tax 4 414 307 689
credit / expense
Loss for the (5,728) (3,555) (7,665)
period
Loss per share
-- Basic and diluted (in 5 (0.45) (0.29) (0.62)
£/share)
Items that may be reclassified
to the income statement in
subsequent periods
Exchange rate adjustments (88) (243) (172)
Total
comprehensive (5,816) (3,798) (7,837)
income
All of the loss for each period is from continuing operations.
Consolidated statement of financial position
in £’000 Note 30 June2024(unaudited) 31 December 2023
(audited)
Assets
Intangible assets 6 2,972 2,669
Property, plant and equipment 7 4,001 4,197
Other non-current assets 33 34
Non-current assets 7,006 6,900
Inventories 362 332
Trade receivables 52 107
Other current assets 1,790 1,514
Cash and cash equivalents 8 2,718 3,069
Current assets 4,922 5,022
Total assets 11,928 11,922
Liabilities
Financial liabilities (220) (392)
Trade payables (795) (694)
Other current liabilities (790) (1,191)
Current liabilities (1,805) (2,277)
Financial liabilities (15,274) (10,065)
Other liabilities (67) (72)
Non-current liabilities (15,341) (10,137)
Total liabilities (17,146) (12,414)
Net liabilities (5,218) (492)
Share capital 11,547 11,132
Share premium 1,033 706
Merger reserve 688 688
Capital reserve 13,878 13,530
Foreign exchange reserve (246) (158)
Profit and loss reserve (32,118) (26,390)
Total Equity 9 (5,218) (492)
Consolidated statement of changes in equity
for the six months ended
in £‘000 Share Share Merger Capital Foreign Profit and Total equity
capital premium reserve reserve exchange loss reserve
Balance at 1
January 2023 11,130 706 688 13,307 14 (18,725) 7,120
(audited)
Loss for the - - - - - (7,665) (7,665)
year
Foreign
Exchange
difference
arising on - - (172) - (172)
translation
of 4basebio
S.L.U.
Share based - - - 223 - - 223
payments
Shares
issued in 2 - - - - - 2
period
Balance at
31 December 11,132 706 688 13,530 (158) (26,390) (492)
2023
(audited)
[in £‘000] Share Share Merger Capital Foreign Profit and Total equity
capital premium reserve reserve exchange loss reserve
Balance at 1
January 2024 11,132 706 688 13,530 (158) (26,390) (492)
(audited)
Loss for the - - - - - (5,728) (5,728)
year
Foreign
Exchange
difference
arising on - - (88) - (88)
translation
of 4basebio
S.L.U.
Share option - - - 348 - - 348
charge
Shares
issued in 415 327 - - - - 742
period
Balance at
30 June 2024 11,547 1,033 688 13,878 (246) (32,118) (5,218)
(unaudited)
Consolidated statement of cash flows
for the six months ended
30
June20230 June2023 31 December
in £’000 4 (unaudited) 2023(audited)
(unaudi
ted)
Net loss for the (5,728)(3,555) (7,665)
period
Adjustments to reconcile net loss for the
period to net cashflows
Income taxes (414) (307) (689)
Interest charge 343 98 302
Depreciation of property, plant and equipment 376 315 676
Amortisation and impairment of intangible 137 16 33
assets
Other non-cash items 296 87 220
Tax receipt 118 561 561
Working capital changes:
(Increase)/decrease in trade receivables and (55) (104) (109)
other current assets
Increase/(decrease) in trade payables and (180) (28) 695
other current liabilities
(Increase)/decrease in inventories (34) (70) (202)
Net Cash flows from operating (5,141)(2,987) (6,178)
activities
Investments in property, plant and equipment (188) (406) (871)
and intangible assets
Investments in capitalised development and (507) (330) (619)
intangible assets
Cash flows from investing activities (695) (736) (1,490)
Net receipt/(payment) of loans 4,845 3,187 6,584
Interest paid (53) (26) (67)
Capital lease payments (37) (49) (94)
Proceeds of shares issue 742 2 2
Cash flows from financing activities 5,497 3,114 6,425
Net change in cash and cash equivalents (339) (609) (1,243)
Exchange differences (12) (184) (39)
Cash and cash equivalents at the beginning of 3,069 4,351 4,351
the period
Cash and cash equivalents at the end of the 2,718 3,558 3,069
period
Notes to the financial statements
For the six months ended 30 June 2024
1. General information
The Company is domiciled in
The Company’s shares are traded on London Stock Exchange’s AIM market. The international securities number (ISIN) number for its AIM traded shares is GB00BLD8ZL39; its ticker symbol is 4bb.l.
The interim report was approved by the board of directors on
1. Significant accounting policies
Basis of preparation
This half year report, which is not audited, has been prepared in accordance with the measurement and recognition criteria of
The accounting policies applied in this half year report are consistent with those in the financial statements for the year ended
Significant judgments
In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The significant judgments made in relation to the financial statements are further set out below.
Going concern
The directors have at the time of approving the half year report a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the financial statements.
Internally - generated intangible assets – research and development expenditure
Development expenditure is capitalised when the conditions referred to in Note 4 of the Company's 2023 annual report are met. 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 if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
1. Foreign currencies
The functional currency of the Group is British Pounds.
The principal currency rate of the Group other than the British Pounds is the euro which has developed as follows in relation to the equivalent of one pound (GBP/£):
Closing exchange rate Average exchange rate
in GBP 31 December Six months Six months ended
30 June 2024 2023 ended 30 June 30 June 2023 Year ended 31
2024 December 2023
Euro 0.8464 0.8691 0.8547 0.8764 0.8698
1. Income taxes
The Group anticipates claiming R&D tax credits in both the
1. Loss per share
Six months ended 30 Six months ended 30 Year ended 31
June 2024 June 2023 December 2023
Numeratorin £‘000
Loss for the period (5,728) (3,555) (7,665)
Denominatornumber of
shares
Weighted average
number of registered
shares in circulation
(ordinary shares) for 12,709,129 12,318,987 12,319,270
calculating the
undiluted earnings
per share
Diluted and Undiluted
earnings per share (0.45) (0.29) (0.62)
(£/share)
1. Intangible assets
in £‘000 Development costs Patents and licences Total Cost or acquisition value 01 January 2023 3,040 504 3,544 Additions 446 173 619 Exchange differences (62) (8) (70) 31 December 2023 3,424 669 4,093 01 January 2024 3,424 669 4,093 Additions 246 261 507 Exchange differences (91) (14) (105) 30 June 2024 3,579 916 4,495 Cumulative amortisation and impairment 01 January 2023 1,367 53 1,420 Amortisation 4 29 33 Exchange differences (28) (1) (29) 31 December 2023 1,343 81 1,424 01 January 2024 1,343 81 1,424 Amortisation 116 21 137 Exchange differences (36) (2) (38) 30 June 2024 1,423 100 1,523 Net book value 31 December 2023 2,081 588 2,669 30 June 2024 2,156 816 2,972
1. Property, plant and equipment
[in £‘000] Operating Land and buildings Right of use assets Total
equipment
Cost or
acquisition value
01 January 2023 2,803 1,040 643 4,486
Additions 895 - 372 1,267
Disposals (24) - - (24)
Exchange (8) - (3) (11)
differences
31 December 2023 3,666 1,040 1,012 5,718
01 January 2024 3,666 1,040 1,012 5,718
Additions 190 - - 190
Exchange (14) (3) (3) (20)
differences
30 June 2024 3,842 1,037 1,009 5,888
Cumulative
amortisation and
impairment
01 January 2023 670 140 43 853
Depreciation 493 47 137 677
Disposals (4) - - (4)
Exchange (5) - - (5)
differences
31 December 2023 1,154 187 180 1,521
01 January 2024 1,154 187 180 1,521
Depreciation 285 25 66 376
Exchange (7) (1) (2) (10)
differences
30 June 2024 1,432 211 244 1,887
Net book value
31 December 2023 2,512 853 832 4,197
30 June 2024 2,410 826 765 4,001
1. Cash and cash equivalents
[in £‘000] 30 June 2024 31 December 2023 Bank balances and cash in hand 2,718 3,069 Cash and cash equivalents 2,718 3,069
1. Equity
On
Share-based payments
During H1 2024, 78,996 share options to subscribe for shares in the Company were granted to employees with an average weighted exercise price of £0.85 per share. As reported on
In addition, 20,000 and 4,000 options were awarded at a market price of £6.70 and £7.25 respectively. These share options vest one quarter on the anniversary of the grant, over four years. Consistent with previous awards as explained in note 24 to the 2023 financial statements, the awards were valued using a Black Scholes valuation model.
An overall share-based payments charge of £348k (H1 2023: £87k) has been expensed in the period with a corresponding amount recognised in equity based on fair values calculated per option, as at the dates of grant. The charge for the half year is high due to the unique pricing and vesting conditions associated with the compensation options, with the full year charge expected to be proportionately lower.
1. Legal matters
As disclosed in note 26 of the 2023 financial statements, 4basebio S.L.U., the Company’s Spanish subsidiary, is engaged in legal proceedings in Spanish Courts with Tyris Tx. The matter remains ongoing.
1. Approval of the half year report
The half year report was approved by the board of directors and authorised for publication on
1. Events after the reporting period
On
The Company then announced on
On
Forward-looking statements
This announcement may contain certain statements about the future outlook for the 4basebio. Although the directors believe their expectations are based on reasonable assumptions, any statements about future outlook may be influenced by factors that could cause actual outcomes and results to be materially different.
