logo-loader
RNS
Arix Bioscience PLC

Arix Bioscience Plc - Annual Results for the year ended 31 December 2019

Arix Bioscience plc

Full year results for the year ended31 December 2019

(“Arix”, LSE: ARIX) a global venture capital company focused on investing in and building breakthrough biotech companies, today announces its full year results for the year ended ., :LONDON10 March 2020Arix Bioscience plc31 December 2019

Financial performance

Two new portfolio companies added to the portfolio:

Funding continued growth in the portfolio

Together with the two new portfolio companies, these companies raised in aggregate over the period.$322 million

Continued clinical progress in the portfolio, with 26 live clinical trials

Over the period a number of companies reached important clinical milestones, notably:

Post period end

Quench Bio launched from stealth with Series A financing

In January, Arix announced the Series A financing and launch of Quench Bio, a company that Arix created and seeded with in . The Series A financing recognised a 40% uplift to the seed financing. Following the financing Arix retains a 21.7% stake in the business. This is the first company co-founded and formed by Arix from scratch, combining scientific discoveries from professors in with entrepreneurs and co-investors in . It encapsulates the benefits of Arix’s transatlantic footprint and culture.Atlas VentureJune 2018GermanyBoston

raised in a public offering and reported additional encouraging data in AUTO3Autolus$72.4 million

In January, completed a follow-on financing raising net proceeds of approximately . Following the offering Arix retains a 6.5% ownership stake. This financing will enable to develop its lead programme, , in adult ALL through its Phase 2 trial and advance its next generation of T cell therapies into the clinic.AutolusAutolusAUTO1$72.4 million

Appointment of Dr. as Entrepreneur in ResidenceRoberto Iacone

Dr. has been appointed as the second Entrepreneur in Residence at Arix. Roberto will focus on company creation, sourcing early stage European opportunities with Arix partner, , the strategic venture investing arm of . This new role extends Arix’s collaboration with to identify opportunities for early stage investment and create new biotechnology companies together.Roberto IaconeTakeda Ventures, Inc.Takeda PharmaceuticalsTakeda Ventures

Iterum raised through a private placement$52 million

Following the disappointing news, announced in Q4 2019, that results from its Phase 3 trial in complicated intra-abdominal infections narrowly missed its primary endpoint, Iterum completed a private placement with new and existing investors in . This will enable the company to fund the continued Phase 3 clinical development of sulopenem and the management of regulatory filings. Arix agreed to invest (£1.5 million) in the financing. This investment is in addition to Arix’s existing stake of 7.3% in Iterum (amounting to 1,089,903 ordinary shares).$51.9 million$1.9 millionJanuary 2020

Key anticipated milestones

The company notes key clinical milestones anticipated by its portfolio companies in 2020:

, CEO, commented:Joe Anderson

“We remain focused on driving realisable value in our portfolio, and in turn our NAV, and I believe we are well positioned to do so through 2020 and beyond. We have had a challenging year with our shareholder structure and volatility in our public portfolio companies, but look ahead with confidence and see a portfolio that is maturing and has the potential to deliver real value.”

Conference Call and presentation Information   

Arix will host a conference call today, 10 March at / , to discuss the company’s financial results and operational update.12:15 pm GMT7:15am EST

To listen to the webcast and view the accompanying slide presentation, please go to:https://arixbioscience.com/investor-relations/events-presentations

The call may also be accessed by dialling (0)330 336 9125 for and European callers and +1 323-794-2588 for callers. Please reference conference ID 4517667.U.K.U.S.

Enquiries

For more information on Arix, please contact:

, Head of Investor Relations +44 (0)20 7290 1072Arix Bioscience plc


Charlotte Parrycharlotte@arixbioscience.com

Mary Clark, T: +44 (0) 20 3950 9144Optimum Strategic Communications


Supriya Mathuroptimum.arix@optimumcomms.com

AboutArix Bioscience plc

is a global venture capital company focused on investing in and building breakthrough biotech companies around cutting edge advances in life sciences.Arix Bioscience plc

We collaborate with exceptional entrepreneurs and provide the capital, expertise and global networks to help accelerate their ideas into important new treatments for patients. As a listed company, we are able to bring this exciting growth phase of our industry to a broader range of investors.

www.arixbioscience.com

Chairman’s Statement

Good underlying progress in the portfolio with a focus on unlocking and realising value for shareholders in 2020

2019 was a year of both progress and challenge for the Company.

The Arix portfolio now comprises 16 biotech companies addressing serious unmet medical need, building on innovative science and led by successful entrepreneurs in their respective areas. The portfolio saw positive clinical data from four of these companies during the year and three raised additional capital at valuation uplifts to the prior round. Harpoon was one of these companies, the fourth in our portfolio to successfully list and raise capital on Nasdaq.

Our strategic partnerships continue to play an important role in guiding and supporting our activities at Arix. We have built a strong dialog with our pharmaceutical partners Fosun, Ipsen, and UCB and benefit from their expertise as they also gain access to our pipeline and portfolio of emerging biotech companies. Our academic partnerships with in and in are also beginning to bear fruit. Our first company incubated from , Quench Bio, attracted leading new investors in its well supported Series A funding round shortly after year-end.TakedaMax PlanckFred HutchMax PlanckGermanySeattle

The portfolio is reaching a point where investors can expect to start to see value realisations either through the strategic sale of portfolio companies to pharmaceutical or larger biotech companies or through the sale of publicly listed holdings. The executive team will be focused on this in 2020 as well as attracting additional investment to the company. During 2019, the book value of the portfolio was impacted significantly by , one of our listed companies whose stock price was riding high in the early part of the year but has come back significantly. However, we do continue to see good progress in this company’s clinical programmes.Autolus

An additional challenge during the year was the suspension in of the , our largest shareholder with a 19.8% holding in Arix. We have been seeking to achieve an orderly transition of this holding to long-term supportive investors, and remove the distraction and consequent uncertainty that it has had on the share price in recent months.June 2019Woodford Equity Income Fund

In the latter part of 2019 the Board held a strategy day to review the performance of the company and the portfolio and to agree the outline of a three year plan to deliver value for shareholders. We also reviewed options to further build the business as value is delivered over the next three years.

From a governance perspective we have also started to build a more centric Board with the skills and experience to guide the company through the next few critical years. In particular, , who joined as a Non Executive in 2019 brings broad experience in capital markets and in advising public company Boards. , who joined more recently, brings strong transatlantic industry experience in clinical development, business development and venture capital. With the added industry and financial experience of , deep R&D expertise of and the successful venture and industry track record of , the governance is in place to guide the company to take the actions needed to deliver value for shareholders.LondonUKMark BreuerNaseem AminGiles KerrTrevor JonesArt Pappas

I would also like to take this opportunity to thank , and for their service as Board members and for their important contributions in the formative years as we created and built Arix.Franz HumerJames RawlingsonMeghan Fitzgerald

Arix has built a portfolio of companies pursuing breakthroughs in treating serious diseases for the benefit of patients. To continue this important work I look forward to 2020, where we start to achieve cash realisations to reinvest in new companies, to attract new investors and to deliver value for shareholders. I know and the team at Arix are up to the challenge and have a portfolio that can deliver on this.Joe Anderson

ChairmanJonathan Peacock

9 March 2020

Chief Executive Officer’s Review

Developing the long term potential of the business

We are working closely with our portfolio companies to build realisable value for our shareholders and see multiple clinical and scientific development milestones in the year ahead.

We have made good progress since the IPO in . The portfolio is now well-balanced and diverse, with science that is showing significant promise and products that have progressed well in clinical trials. To date, we have invested £138 million in the Gross Portfolio, which was valued at £154m by year-end, including £5 million of realisations. The team at Arix has the right blend of experience and talent to make the most of the significant opportunities in the portfolio on behalf of shareholders.February 2017

Despite this, and disappointingly, during 2019, the results for the period show a 25% decline in Net Asset Value (NAV) per share (down 51p per share) compared to a positive return of 32% (48p per share) a year earlier. Our results were particularly impacted by the volatility of our public stocks, which collectively fell by 38% in 2019, giving up strong gains made in the prior year. As a result, our reported NAV at year-end was £202 million (£1.49 per share) compared to £270 million (£2.00 per share) at .December 2018

Most of our portfolio companies were small private companies at the time we first invested. As we reported last year, progress has been rapid and four of these have already made the transition to public companies following IPOs on the Nasdaq.

An IPO is not necessarily an exit point for us, but rather a means for the portfolio company to access additional capital from the public markets to speed the development of new products through clinical testing. But the development of these medicines takes time; it is a competitive business and clinical trials in humans, rightly, are highly regulated and set very high standards for proving efficacy and safety before approval is achieved for new products to treat patients. As a result, public biotech company share prices can be volatile in the period between their listing and producing definitive data, as was seen with Arix’s listed portfolio companies, which made up 44% of our NAV at the beginning of the year.

Our view is that such fluctuations, although important to manage to the extent they can be, are less relevant to true value creation than is making solid progress with clinical development. On that count, during 2019 we saw meaningful progress in the clinical development plans of our portfolio companies. This is key to securing sustainable uplifts in our NAV and this remains our top priority.

During 2019, we have had a particular focus on building start-up companies based on cutting edge science to balance our portfolio of later stage companies. Company creation involves substantial effort from our team, and yields high ownership of the resulting company for relatively modest investment of capital. We have started a programme of bringing accomplished life science entrepreneurs into Arix to help us with such work and recently the first results of this emerged in the shape of STipe, our new portfolio company, led by , Arix Entrepreneur in Residence. Our investment team has also been busy helping to build Quench Bio – a company that emerged from stealth mode shortly after year-end. We are looking to extend these efforts in company creation and as part of this are pleased to have announced the appointment of as our second Entrepreneur in Residence in .Christian SchetterRoberto IaconeMarch 2020

The year ahead

We remain focused on driving realisable value in our portfolio, and in turn our NAV, and I believe we are well positioned to do so through 2020 and beyond.

We have had a challenging year with our shareholder structure and volatility in our public portfolio companies, which in the near term continues with the emergence of a new risk in the form of coronavirus, but look ahead with confidence and see a portfolio that is maturing and has the potential to deliver real value.

I am privileged to lead such a talented and dedicated team, optimistic about the direction in which our business is heading and confident in the long-term value Arix can deliver.

Chief Executive OfficerJoe Anderson

9 March 2020

Financial Review

Arix’s core focus is to invest in and build breakthrough biotech companies, whilst maintaining disciplined capital allocation.

2019 has been a year of transition for Arix’s finances, during which the Group implemented a leaner structure and lower ongoing cost base. Arix’s portfolio companies have continued to progress, although this year’s results are marked by volatility in the valuation of Arix’s listed investments, which has led to a reduction in the Group’s net asset value, and a loss for the financial year.

At year-end, net asset value totalled £202.1 million, a reduction of £68.1 million compared to 2018’s £270.2 million. This was predominantly driven by a net downward revaluation of Arix’s investments of £58.6 million in the year (2018: £51.2 million positive revaluation).

Arix ended the year with cash and deposits of £54.6 million (2018: £91.2 million), the reduction predominantly driven by strong investment activity, with £39.2 million deployed across both new and existing portfolio companies; partially offsetting this, some initial modest realisations were seen (£8.9 million of proceeds).

Core Portfolio

Arix added one new company to its Core Portfolio during the year, co-leading the Series B investment into Imara, with a commitment of (£11.3 million). In the first half of the year, Harpoon Therapeutics completed its Nasdaq IPO, in which Arix invested a further (£4.7 million); and Aura Biosciences successfully closed a Series D financing round, at a 33% uplift to the 2017 Series C, when Arix first invested in the company. also completed a follow-on financing, in , in which Arix invested a further £3.8 million. Investment pace slowed during the second half of the year, although milestone investments were made into , Aura Biosciences and Artios Pharma (the latter funded in ), in line with existing commitments.$63 million$15.0 million$6.0 millionAutolus TherapeuticsAmplyx PharmaceuticalsApril 2019January 2020

The Core Portfolio incurred a net negative revaluation of £54.6 million during the year, arising almost exclusively from Arix’s listed investments. The majority of the impact was from , with Arix’s stake falling by £50.8 million, compared to a £55.9 million positive revaluation in 2018. Other notable decreases in the value of listed stakes were seen with (£7.7 million) and Pharmaxis (£2.6 million). Arix’s stake in Harpoon Therapeutics increased in value by £6.1 million in the period, while the unlisted investments in the Core Portfolio contributed £1.9 million.Autolus TherapeuticsLogicBio Therapeutics

Shortly prior to year-end, with the stock at all-time highs, Arix realised 11% of its stake in Harpoon, at two times the average cost of investment, marking the first modest proceeds received from the Core Portfolio.

Discovery Portfolio

Arix holds its earliest stage assets in the Discovery Portfolio. This acts as a development pool for some of the most promising emerging areas of biotech, with the companies often in the initial stages of research and development. One new company was added to this portfolio in the year, as Arix co-led the €20 million Series A financing of Stipe Therapeutics, committing €5.7 million (£4.8 million), for a 19.8% stake. Meanwhile, a decision was taken to wind down Mitoconix Bio, in which Arix had invested £0.8 million. While it is always disappointing when a company does not reach its potential, this highlights Arix’s risk-based approach, initially committing small amounts of capital split into milestone-dependent tranches, meaning cash is preserved when necessary levels of conviction are not achieved.

A positive development within the Discovery Portfolio was Quench Bio, which emerged from stealth mode shortly after year-end, concluding its Series A financing. Arix co-founded the company in 2018, alongside , incubating the investment within the Discovery Portfolio over the past 18 months.Atlas Venture

Other Interests

Arix’s Other Interests reflect legacy holdings, which continue to wind down. Proceeds of £4.3 million were received during the year, while net writedowns of £4.5 million were recognised; at year-end, the remaining positions total £2.7 million.

Cash Position

Cash and deposits totalled £54.6 million at year-end, compared to £91.2 million the previous year. The reduction in the period was predominantly driven by ongoing deployment into Arix’s portfolio, with £39.2 million invested. This was partially offset by the realisation of a portion of Arix’s Harpoon holding, and by the wind down of Arix’s Other Interests, which cumulatively generated £8.8 million of proceeds during the year.

At year-end, amounts committed to portfolio companies, upon completion of agreed milestones, totalled £8.5 million; this excludes 2019’s £4.3 million investment in Artios, the funds for which were transferred in . Arix continues to take a prudent approach to cash management, reserving funds for both the anticipated future requirements of the portfolio and the ongoing costs of the business, leaving Arix well placed to continue supporting the existing portfolio.January 2020

Consolidated Statement of Comprehensive Income

The largest component of Arix’s Statement of Comprehensive Income is the change in fair value of investments, which reduced by £58.6 million in the year (2018: increase of £51.2 million). The significant movements in this balance are discussed on the previous page.

Throughout 2019, Arix has been transitioning to a leaner organisational structure and lower cost base. Significant changes were made to the management team, with Sir and departing, and moving to a Non-Executive role. The previously announced premises review resulted in the sub-letting of Arix’s US office and a move to smaller location. Despite incurring a number of one-off costs associated with these changes during 2019, Administrative Expenses excluding Depreciation and Amortisation were £1.5 million lower than the previous year, at £9.3 million. Arix anticipates that these costs will be below £9.0 million in 2020.Christopher EvansJames RawlingsonJonathan Peacock

As expected, Revenue decreased to £0.5 million (2018: £1.3 million), reflecting The Wales Life Sciences Investment Fund’s reducing contribution as the fund enters the later years of its life. Interest income of £0.8 million (2018: £0.7 million) was earned on Arix’s cash and deposits.

Other deductions in the period relate to foreign exchange losses of £4.4 million (2018: £4.6 million gain), predominantly arising from Arix’s increasingly US dollar denominated investment portfolio; a one-off £0.5 million impairment relating to Arix’s sub-let US property; a £0.8 million impairment to intangible assets; and a share based payment charge of £2.8 million (2018: £3.3 million).

Taxation

Movements in Arix’s tax balance to date have principally related to deferred tax balances. Revaluations in Arix’s investments are only taxable once realised, but a deferred tax charge is recognised in the same period as an unrealised revaluation. Where possible, Arix aims to take advantage of the UK’s Substantial Shareholding Exemption, which exempts taxable gains or losses arising from the disposal of shares, where certain conditions are met.

Valuation Policy

Arix’s investments are valued in accordance with International Private Equity and Venture Capital Valuation Guidelines (‘IPEV Guidelines’). Quoted investments are marked-to-market at the period end. Unquoted investments are valued with reference to the most recent funding round; milestones; or by discounted cash flow.December 2018

Investment summary

Risk Management

The Group monitors a number of principal risks and uncertainties that may impact the business. These include financial, non-financial, internal and external concerns.

Risk management framework

The Directors are able to manage the business, and achieve its strategic objectives, due to an effective risk management framework which features multiple layers.

Board

Managing risk is a key responsibility of the Board, who set a strong tone, in line with best practice corporate governance.

Key committees

oversees the effectiveness of the risk management processes.The Audit and Risk Committee

The Remuneration Committee ensures incentives and reward are balanced and appropriate for achieving the strategy.

The Nomination Committee addresses the need for continuing strength at the senior levels of the Company and is responsible for succession planning.

Executive management

The management team is responsible for identifying, assessing and mitigating the day-to-day operational risks.

boards and independent assurancePortfolio Company

The boards of our Portfolio Companies are responsible for ensuring they meet key commercial objectives, and in this they are typically supported by senior members of the team, who also sit on their boards.Arix Bioscience

Independent assurance is provided by industry experts when required. For example, external advisors are engaged to provide regulatory compliance support to the , Arix Bioscience’s -regulated fund management subsidiary.Board of Arix Capital ManagementFCA

Risks and Mitigants

The key risks to Arix have been assessed in light of the current environment; these, along with the steps taken by Arix to manage such risks, are detailed below.

Viability statement

The Board has assessed the prospects of Arix over a period greater than 12 months. We have considered a period of three years from the balance sheet date, as the Board expects the majority of Arix’s current commitments and new proceeds raised to be committed over the next three years, and therefore reflects the period over which the Group’s cash flows are assessed internally.

A robust assessment of the principal risks and their mitigants has been carried out. The Board assessed Arix’s business model, particularly its approach to future cash commitments to existing portfolio companies. Key judgements reflected how future cash requirements may change from restrictive regulations, and how the availability of capital may be impacted from the loss of key personnel.

Having initially started with a base case scenario considering Arix’s finances over the assessment period, the estimated impacts on the Group’s cash flow, as described above, are modelled, creating a range of adverse scenarios. An extreme downside case is then considered, reflecting the estimated cash flow impact of all considered risks occuring concurrently. Finally, the analysis considers the mitigating actions the Group could take to reduce the financial impact of the noted risks.

Based on its review, and the consideration of any changes that had occurred post year-end, the Board has a reasonable expectation that Arix will be able to continue in operation and meet its liabilities as they fall due over a three-year period from the date of this report and confirm that preparing the financial statements on a going concern basis is appropriate.

Consolidated statement of comprehensive income

For the year ended31 December 2019

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

Consolidated statement of financial position

As at31 December 2019

The accompanying notes form an integral part of the financial statements. The financial statements were approved by the Board of Directors and authorised for issue on , and were signed on its behalf by9 March 2020

Joe Anderson

Chief Executive Officer

Consolidated statement of changes in equity

For the year31 December 2019

For the year ended31 December 2018

Consolidated statement of cash flows

For the year ended31 December 2019

Notes to the financial statements

1. General Information

The principal activity of (the ‘Company’) and its subsidiaries (together the ‘Arix Group’ or ‘the Group’) is to invest in and build breakthrough biotech companies around cutting edge advances in life sciences.Arix Bioscience plc

The Company is incorporated and domiciled in the . was incorporated on as and changed its name to . It subsequently re-registered as a public limited company and changed its name to . The address of its registered office is , , W1J 6EQ. The registered number is 09777975.United Kingdom20 Berkeley SquareLondonArix Bioscience plcPerceptive Bioscience Investments LimitedArix Bioscience LimitedArix Bioscience plc15 September 2015

2. Accounting Policies

A. Basis of preparation

The consolidated financial statements of the have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS as adopted by the . The financial statements comply with IFRS as issued by the (IASB) as adopted by the .Arix GroupEuropean UnionInternational Accounting Standards BoardEuropean Union

The financial statements have been prepared on a historical cost basis, except for certain financial assets which have been measured at fair value. The financial statements are presented in British pounds sterling, which is the functional and presentational currency of the Company, and the presentational currency of the Group; balances are presented in thousands of British pounds sterling unless otherwise stated.

has applied all standards and interpretations issued by the IASB that were effective at the period end date. The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented.The Arix Group

Use of judgements and estimates

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Arix Group’s accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

Significant estimates are made by the when determining the appropriate methodology for valuing investments (see Note 2(i)) and share-based payments (see Note 2(o) and Note 18).Arix Group

In preparing these financial statements, the Directors have considered the relationship that the Group has with (the “WLSIF”) and specifically as to whether the Group controls WLSIF. The Directors note that while (a 100% subsidiary of ), in its role as fund manager to WLSIF, and (a 100% subsidiary of ) in its role as general partner of the WLSIF, both exercise power over the activities of WLSIF, they do not have sufficient exposure to variability of returns from WLSIF to meet the definition of control and therefore acts as agents, rather than principals of WLSIF. Accordingly, WLSIF has not been consolidated into these financial statements.The Wales Life Sciences Investment FundArix Capital Management LimitedArix Bioscience plcArthurian Life Sciences SPV GP LimitedArix Bioscience plc

B. Basis of consolidation

Subsidiaries

Subsidiaries are entities over which the has control. controls an entity when it is exposed to, or has the right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred. They are deconsolidated from the date that control ceases. The acquisition method of accounting is used to account for business combinations by the Group.Arix GroupThe Arix Group

The consolidated financial statements comprise a consolidation of the subsidiary entities listed below. This table contains the disclosures required by Section 409 of the Companies Act 2006 for subsidiaries.

All companies are involved in investing in and building breakthrough biotech companies around cutting edge advances in life sciences, other than and the companies, which are engaged in fund management activity, and , which holds a financial interest in a limited partnership.Arix Capital ManagementArthurian Life SciencesArthurian Life Sciences Carried Interest Partner LP

*, a dormant company, was deregistered on .Arix Bioscience Pty Limited8 January 2020

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.

Associates

Associates are entities over which the Group has significant influence, but does not control, generally accompanied by a shareholding of between 20% and 50% of the voting rights.

No associates are presented on the Statement of Financial Position as the Group elects to hold such investments at fair value through profit and loss. This treatment is permitted by IAS 28 Investment in Associates and Joint Ventures, which permits investments held by entities that are akin to venture capital organisations to be excluded from its measurement methodology requirements where those investments are designated, upon initial recognition, at fair value through profit or loss and accounted for in accordance with IFRS 9 Financial Instruments. Changes in fair value of associates are recognised in the Statement of Comprehensive Income in the period in which the change occurs. The Group has no interests in associates through which it carries on its business.

The disclosures required by Section 409 of the Companies Act 2006 for associated undertakings are included in Note 11 to the financial statements. Similarly, those investments which may not have qualified as an associate but fall within the wider scope of significant holdings and so are subject to Section 409 disclosure acts are also included in Note 11 to the financial statements.

WLSIF is considered neither a subsidiary nor an associate, as detailed in Note 2(a).

C. Adoption of new and revised standards

Certain new accounting standards and interpretations have been applied by the Group from . The Group’s assessment of the impact of these new standards and interpretations is set out below.1 January 2019

IFRS16 ‘Leases’

The Group has adopted IFRS 16 Leases retrospectively from , but has not restated comparatives for the 2018 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on .1 January 20191 January 2019

On adoption of IFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as ‘operating leases’ under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments. Right of use assets were measured at the amount equal to the lease liability. There were no onerous lease contracts that would have required an adjustment to the right of use assets at the date of initial application, although one right of use asset has subsequently been impaired, in line with IFRS 16.

Assessment for Impairment and Resulting Investment Property

The Group has assessed its right of use assets for impairment, in line with IAS 36 Impairment of Assets. During the year, the Group vacated its office at , and has sub-let that space. The right of use asset at has therefore been impaired to its fair value, being the expected proceeds to the Group from sub-letting. As the property no longer contributes to the Group’s core business and is able to produce its own independent cash flows it is considered its own cash generating unit, and is therefore required to be classified as an investment property in line with IAS 40 Investment Property. The property is held at its fair value, being the expected proceeds to the Group from sub-letting.New York250 West 55th Street250 West 55th Street

D. Revenue recognition

Revenue is generated from fund management fees, and from Non-Executive Directors’ fees. Fund management fees are earned as a percentage of funds managed and are recognised in the period in which these services are provided. Non-Executive Directors’ fees are recognised on an accruals basis.

E. Foreign currency translation

The assets and liabilities of foreign operations are translated to Group’s presentational currency (British pounds sterling) at foreign exchange rates ruling at the period-end date. The revenues and expenses of foreign operations are translated at an average rate for the period where this rate approximates to the foreign exchange rates ruling at the dates of the transactions. Exchange differences arising from this translation of foreign operations are reported as an item of other comprehensive income and accumulated in the translation reserve.

F. Leases

As explained in Note 2(c) above, the Group has changed its accounting policy for leases. Until , leases of the Group’s premises were classified as as operating leases. Rents payable under operating leases were charged against income on a straight-line basis over the lease term, even if payments were not made on such a basis.31 December 2018

G. Exceptional items

Items that are material in size and unusual in nature are disclosed separately to provide a more accurate indication of underlying performance.

H. Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset.

Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets:

Office equipment                       Three years

Fixtures and fittings                   Five years

Office furniture                          Five years

Leasehold property                   Five years

I. Financial assets

classifies its financial assets as either at fair value through profit or loss or amortised cost. The classification depends on the purpose for which the financial assets have been acquired and is determined on initial recognition.The Arix Group

Amortised cost assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period, which are classified as non-current assets. The Arix Group’s loans and receivables comprise trade and other receivables and cash and cash equivalents in the Consolidated Statement of Financial Position.

Regular purchases and sales of financial assets are recognised on the trade date – the date on which the commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the has transferred substantially all risks and rewards of ownership.Arix GroupArix Group

Equity investments

Those investments in the that are held with a view to the ultimate realisation of capital gains are recognised as equity investments within the scope of IFRS 9 and are classified as financial assets at fair value through profit or loss. This includes investments in associated undertakings, as per Note 11. When financial assets are initially recognised they are measured at fair value. They are subsequently remeasured at their fair value if a valuation event occurs.Arix Group

Valuation of investments

The fair value of the Group’s investments is determined using International Private Equity and Venture Capital Valuation Guidelines (‘IPEV Guidelines’), which comply with IFRS.December 2018

The fair value of quoted investments is based on bid prices at the period end date.

Upon investment, the fair value of unlisted securities is recognised at cost. Similarly, following a further funding round with participation by at least one third party, the price of the funding round is generally considered to represent the investment’s fair value at the transaction date, although the specific terms and circumstances of each funding round must always be considered.

Following the transaction date, each investment is observed for objective evidence of an increase or impairment in its value. This reflects the fact that investments made in seed, start-up and early stage biotech companies often have no current and no short-term future revenues or positive cash flows; in such circumstances, it can be difficult to gauge the probability and financial impact of the success or failure of development or research activities and to make reliable cash flow forecasts. As such, the Group carries out an enhanced assessment based on milestone analysis, which seeks to determine whether there is an indication of a change in fair value based on changes to the company’s prospects. A milestone event may include, but is not limited to, technical measures, such as clinical trial progress; financial measures, such as a company’s availability of cash; and market measures, such as licensing agreements agreed by the company. Indicators of impairment might include significant delays to clinical progress, technical complications or financial difficulties. Often qualitative milestones provide a directional indication of the movement of fair value. Calibrating such milestones may result in a fair value equal to the transaction value. Any ultimate change in valuation reflects the assessed impact of the progress against milestones and the consequential impact on a potential future external valuation point, such as a future funding round or initial public offering.

When forming a view of the fair value of its investment, the takes into account circumstances where an investment’s equity structure involves different class rights on a sale or liquidity event.Arix Group

The valuation metrics used in these financial statements are discussed in Note 11.

Although the Directors use their best judgement, there are inherent limitations in any valuation techniques. Whilst fair value estimates presented herein attempt to present the amount the could realise in a current transaction, the final realisation may be different, as future events will also affect the current estimates of fair value. The effects of such events on the estimates of fair value, including the ultimate realisation of investments, could be material to the financial statements.Arix Group

Treatment of gains and losses arising on fair value

Realised and unrealised gains and losses on financial assets at fair value through profit and loss are included in the Statement of Comprehensive Income in the period in which they arise.

Recognition of financial assets

Purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Impairment of financial assets

At the end of each reporting period the Group assesses whether there is objective evidence that its loans and other receivables are impaired. The amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The asset’s carrying amount is reduced through the use of an allowance account and the amount of the loss is recognised in the Statement of Comprehensive Income within administrative expenses. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the reversal of the previously recognised impairment loss is recognised in the Statement of Comprehensive Income within administrative expenses. The Group’s financial assets that are subject to IFRS 9’s expected credit loss model are its loans and receivables, cash and cash equivalents and cash on long term deposit. The identified impairment loss is considered immaterial.

Financial assets and liabilities are offset when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the or the counterparty. Where these conditions are met, the net amount is reported in the Statement of Financial Position.Arix Group

and cash equivalents and Cash on long-term depositJ. Cash

Cash and cash equivalents comprise cash at bank and in hand, call deposits and bank overdrafts. Cash on long-term deposit comprises cash held on term deposit for a period of at least three months.

and intangible assetsK. Goodwill

Intangibles were acquired by the as part of the acquisition of and .Arix GroupArix Capital Management LimitedArthurian Life Sciences SPV GP Limited

It is the policy of the to amortise these fair values over the period in which the is expected to obtain economic benefit from the related intangible assets. The excess of consideration transferred over the fair value of net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in the Statement of Comprehensive Income as a bargain purchase. The asset is assessed for impairment periodically and marked down appropriately if an indication of impairment is noted.Arix GroupArix Group

L. Share capital

Ordinary shares and Series C Shares are classified as equity. Equity instruments issued by the are recorded at the proceeds received, net of direct issue costs.Arix Group

Own shares represent shares of that are held by an employee share trust for the purpose of fulfilling obligations in respect of various employee share plans. Own shares are treated as a deduction from equity until the shares are cancelled, reissued or disposed of. When they vest, they are transferred from own shares to retained earnings at their weighted average cost.Arix Bioscience plc

M. Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer).

If not, they are presented as non-current liabilities.

Trade payables are initially recognised at fair value, generally being the invoiced amount and are subsequently measured at amortised cost, using the effective interest method.

and deferred taxationN. Current

The tax expense for the year comprises deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised directly in equity.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.Arix Group

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the balance sheets, using the liability method. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the Statement of Financial Position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

O. Share-based payments

operates an equity incentive plan and an executive share option plan in which the Group’s founders also participate. Share options must be measured at fair value and recognised as an expense in the Statement of Comprehensive Income with a corresponding increase in equity. The fair value of the option is estimated at the date of grant using a Black-Scholes Model or Monte Carlo simulation and is charged as an expense in the Statement of Comprehensive Income over the vesting period. Where relevant, the charge is adjusted each year to reflect the expected and actual level of vesting. Estimation uncertainty arises with this balance as the calculation incorporates assumptions for share price, exercise price, expected volatility (based on similar quoted companies), risk-free interest rate and share option term. Further detail on Share-based Payments is available in Note 18.The Arix Group

P. Financial risk management

is exposed to market risk, interest rate risk, credit risk and liquidity risk. The senior management oversees the management of these risks and ensures that the financial risk taking is governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Arix Group’s policies and risk appetite.The Arix Group

The Board of Directors review and agree the policies for managing each of these risks, which are summarised below:

Market risk

Foreign exchange risk – the operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar and euros. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. has certain investments whose net assets are exposed to foreign currency translation risk; at period-end the held US dollar-denominated assets valued at ; euro-denominated assets valued at €4.7m; Canadian dollar-denominated assets valued at ; and Australian dollar-denominated assets valued at . A 10% appreciation in each currency would have a £9.4m negative impact on Arix’s Income Statement; a 10% depreciation would have a £11.5m positive impact on Arix’s income statement. The impact of foreign exchange on these holdings is closely monitored.Arix GroupThe Arix GroupArix Group$126.5mC$0.2mA$7.0m

Price risk – the is exposed to equity securities price risk because investments are held at fair value through profit or loss.Arix Group

The Group’s strategy is to deploy long term capital into innovative companies which have novel, high-impact outcomes; Arix believes that such companies are less susceptible to macroeconomic cycles. The Group monitors the availability of its capital closely, ensuring sufficient balances are available for the continuing operation of the business throughout the period assessed in the viability statement.

Interest rate risk

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market interest rates.

The Arix Group’s income is substantially independent of changes in market interest rates. Interest-bearing assets include only cash and cash equivalents, which earn interest at variable rates. has a treasury policy to manage cash and cash equivalents. In the year ended , a 10% change in underlying interest rates would have impacted Arix’s Finance Income by £71k.The Arix Group31 December 2019

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the . The major classes of financial assets of the are cash and cash equivalents (£54.6m (2018: £31.0m)); cash on long-term deposit (£nil (2018: £60.2m)); and trade and other receivables (£1.1m (2018: £2.2m)).Arix GroupArix Group

Risk of counterparty default arising on cash and cash equivalents is controlled within a framework of dealing with high-quality institutions.

As at , 100% of cash and cash equivalents and cash on long-term deposit was deposited with institutions that have a credit rating of at least category A+, according to Fitch ratings.31 December 2019

No counterparty has failed to meet its obligations over the period. The maximum exposure to credit risk is represented by the carrying amount of each asset. Management does not expect any significant counterparty to fail to meet its obligations.

Liquidity risk

manages liquidity risk by maintaining sufficient cash to enable it to meet its operational requirements. The following table details the Group’s remaining contractual maturity for its financial liabilities based on undiscounted contractual payments:The Arix Group

Capital risk management

manages its capital to ensure that it will be able to continue as a going concern, whilst also maximising the operating potential of the business. The capital structure of the consists of equity attributable to equity holders of the , comprising issued capital and retained earnings as disclosed in the Consolidated Statement of Changes in Equity. is not subject to externally imposed capital requirements.The Arix GroupArix GroupArix GroupThe Arix Group

3. Revenue

The total revenue for the has been derived from its principal activity of investing in and building breakthrough biotech companies around cutting edge advances in life sciences. All of this revenue relates to trading undertaken in the .Arix GroupUnited Kingdom

4. Segmental Information

Information for the purposes of resource allocation and assessment of performance is reported to the Arix Group’s Chief Executive Officer, who is considered to be the chief operating decision maker, based wholly on the overall activities of the . Although Arix makes investments globally, these are considered by one Investment Committee and reported internally as a single portfolio.  It has therefore been determined that the has only one reportable segment under IFRS 8 (‘Operating Segments’), which is that of sourcing, financing and developing healthcare and life science businesses globally. The Arix Group’s revenue, results and assets for this one reportable segment can be determined by reference to the Consolidated Statement of Comprehensive Income and Consolidated Statement of Financial Position.Arix GroupArix Group

5. (Loss)/Profit Before Taxation

Non-audit services in the year relate to the interim review (£30k) and an FCA Client Asset Report (£6k) (2018: capital raise £150k; remuneration advice £10k; interim review £29k; FCA Client Asset Report £6k).Arix Bioscience plc

6. Administrative Expenses

The administrative expenses charge broken down by nature is as follows:

7. Net Finance Income/(Expenses)

8. Employee Costs

Employee costs (including Directors) comprise:

9. Income Tax

10. (Loss)/Earnings per Share

On , the Group issued 114,358 ordinary shares, in relation to certain share awards. On , 530,000 shares were issued, in relation to certain share awards. On , 84,249 shares were issued, in relation to certain share awards. As at , the Group had 135,551,850 ordinary shares in issue (2018: 134,823,243).4 January 20191 May 20192 July 201931 December 2019

At the year-end date, 5,080,582 of the ordinary shares were subject to restrictions. These shares are not entitled to vote, attend meetings or to receive dividends or other distributions. Consequently, restricted shares have been excluded from the calculation of the weighted average number of shares in issue.

Basic earnings per share is calculated by dividing the profit attributable to equity holders of by the weighted average number of enfranchised shares (as adjusted for capital subscription in accordance with the terms of the restrictive share agreement) in issue during the period.Arix Bioscience plc

No adjustment has been made to the basic loss per share in the year ended , as the exercise of share options would have the effect of reducing the loss per ordinary share, and therefore is not dilutive. Potentially dilutive ordinary shares relate to contingently issuable shares arising under the Group’s Executive Incentive Plan.31 December 2019

11. Investments

Equity Investments

Transfers from Level 3 to Level 1 reflects companies which have listed during the year. Level 3 investments are valued with reference to either the most recent funding round (£37.6m, 2018: £33.4m); net asset value (£1.4m, 2018: £4.5m); market-based write-up (£22.7m, 2018: £23.8m); discretionary write-down (£2.4m, 2018: £3.2m); or by discounted cash flow (£nil, 2018: £nil). See Note 2(I) for further details on the valuation of Level 3 investments.

As permitted by IAS 28 ‘Investment in Associates’ and in accordance with the accounting policy, investments are held at fair value even though the may have significant influence over the companies. Significant influence is determined to exist when the Group holds more than 20% of the holding or when less than 20% is held but in combination with a certain level of board representation is deemed to be able to exert significant influence. As at , the is deemed to have significant influence over the following entities:Arix GroupArix GroupArix Group31 December 2019

In addition, at , the Group held the following investments in companies where it is not considered to have significant influence:31 December 2019

has an interest in one structured entity, (registered address: , , , CF11 9LJ). The fund has interests in Welsh life sciences opportunities. A structured entity is an entity that is structured in such a way that voting or similar rights are not the dominant factor in deciding who controls the entity. is not deemed to have control over this fund for the reasons disclosed in Note 2(a). The Group’s interest is recognised within both Investments and Receivables, and totals £1.7m at year-end (2018: £5.5m); the Group’s exposure is limited to the carrying value within Investments and Receivables.The Arix GroupThe Wales Life Sciences Investment FundThe Arix GroupSophia House28 Cathedral RoadCardiff, Wales

12. Intangible Assets

An intangible asset arose on plc’s acquisition of entities, relating to management fees due to as a result of managing . These fees are amortised over the remaining life of the fund. The expected fees to be received over the remaining life of the fund have been reduced, resulting in an impairment to the asset in the period.Arix BioscienceArthurian Life SciencesArix Capital Management LimitedThe Wales Life Sciences Investment Fund

13. Property, Plant and Equipment

Year ended31 December 2019

Year ended31 December 2018

14. Trade and Other Receivables

The maximum exposure to credit risk at the reporting date is the carrying value of each asset class listed above. does not hold any collateral as security.The Arix Group

15. Cash and Cash Equivalents and Cash on Long-Term Deposit

The carrying value of cash and cash equivalents and cash on long-term deposit approximates to its fair value.

16. Trade and Other Payables

The carrying values of trade and other payables approximates their fair value.

17. Share Capital

On , the Group issued 114,358 ordinary shares, in relation to certain share awards. On , 530,000 shares were issued, in relation to certain share awards. On , 84,249 shares were issued, in relation to certain share awards. As at , the Group had 135,551,850 ordinary shares in issue (2018: 134,823,243).4 January 20191 May 20192 July 201931 December 2019

At the year-end date, 5,080,582 of the ordinary shares were subject to restrictions. These shares are not entitled to vote, attend meetings or to receive dividends or other distributions. Consequently, restricted shares have been excluded from the calculation of the weighted average number of shares in issue. There are no Treasury Shares in issue.

18. Share Options

During 2019, share-based payment expenses have been recognised relating to a range of share schemes operated by the .Arix Group

Executive Incentive Plan

operates an Executive Incentive Plan for Executive Directors and certain employees of the Company.The Arix Group

In , the Executive Directors and certain employees were awarded options or conditional awards which, in case of options will become exercisable at nil cost and in the case of the conditional share awards, will vest at nil cost on the third anniversary of their grant, on , subject to performance criteria. This requires the share price to have grown by a set percentage over the assessment period, with the quantum of shares vesting dependent on the level of share price growth; 1,486,747 options were unvested at year-end (2018: 1,486,747).  In the year ended , a share-based payment charge of £430k (2018: £430k) was recognised in relation to the Executive Incentive Plan.May 201726 May 202031 December 2019

In , the Executive Directors and certain employees were awarded options or conditional awards which, in case of options, will become exercisable at nil cost and, in the case of the conditional share awards, will vest at nil cost on the third anniversary of their grant, on , subject to performance criteria. This requires the share price to have grown by a set percentage over the assessment period, with the quantum of shares vesting dependent on the level of share price growth; 2,290,499 options were unvested at year-end (2018: 2,290,499). In the year ended , a share-based payment charge of £883k (2018: £427k) was recognised in relation to the Executive Incentive Plan.May 201817 May 202131 December 2019

In , the Executive Directors and certain employees were awarded options or conditional awards which, in case of options, will become exercisable at nil cost and, in the case of the conditional share awards, will vest at nil cost at the end of the three year performance period, subject to performance criteria. This requires the share price to have grown by a set percentage over the assessment period, on , with the quantum of shares vesting dependent on both the level of share price growth and the level of net asset value growth; 2,524,661 were issued in the period, all of which are unvested at year-end. In the year ended , a share-based payment charge of £448k (2018: £nil) was recognised in relation to the Executive Incentive Plan. The charge relating to net asset value growth was calculated based upon the share price at grant of £1.5750, and the assessed liklehood of vesting. The charge relating to share price growth was calculated using a Monte Carlo simulation model, using assumptions relating to share price at grant (£1.5750); risk free interest rate (0.72%); time to vesting (3 years); and expected volatility based on comparable listed investments (39.6%).May 20191 January 202231 December 2019

IPO Award

In , the Executive Directors and certain employees were awarded one-off nil cost options or conditional awards in recognition of their contribution to the Company’s initial public offering. The options were granted on ; all options vested after two years, on . 1,409,166 options were unvested at the start of the period; all vested, of which 439,799 were exercised at nil cost; 969,367 were unexercised at year-end.  In the year ended , a share-based payment charge of £213k (2018: £1,470k) was recognised in relation to the IPO Awards. The charge was calculated as the total number of options granted, at the IPO share price of £2.07, recognised across the two-year vesting period.February 201722 February 201722 February 201931 December 2019

Executive Share Option Plan and Founder Incentive Shares

At the Arix Group’s inception, an Executive Share Option Plan was in operation, in which two Directors participated. Options were granted on with an original exercise price of £1.80 per ordinary share. This was subsequently amended for one Director, with the exercise price reducing by £0.18 per annum for a five year period from to . The number of ordinary shares subject to the options totals 5,520,559. The options vested in four equal proportions on 8 February of 2017, 2018, 2019 and 2020. The options may not be exercised after the tenth anniversary of the grant date and it will lapse on that date if it has not lapsed or been exercised in full before then. All options vest at the end of the vesting period relating to that option or on the occurrence of a contingent event; these include a change of control or cessation of employment in accordance with “good leaver” provisions.8 February 2016February 2019February 2024

No options have been exercised to date. In the year ended , a share-based payment charge of £567k (2018: £582k) was recognised in relation to the Executive Share Option Plan, calculated using the Black–Scholes model. Assumptions used in the model relating to the risk free interest rate and expected volatility were unchanged from those used in the prior period.31 December 2019

Restricted shares with identical terms, including a £1.80 price for the lifting of restrictions, were offered to the founders of the Company, totalling 5,080,582 shares. As these relate to a former Director, no longer employed by Arix, the full remaining share based payment charge of £179k was recognised in the year ended (2018: £348k). The charge was calculated using the Black–Scholes model. Assumptions used in the model relating to the risk free interest rate and expected volatility were unchanged from those used in the prior period.31 December 2019

Non-Executive Director Awards

Pursuant to their respective letters of appointment, certain Non-Executive Directors received a one-off share award during the year; a share based payment charge of £70k (2018: £76k) was recognised during the period.

19. Net Cash From Operating Activities

20. Financial Commitments

The Group has amounts committed to portfolio companies but not yet invested; at these totalled £8.5m (2018: £21.0m).31 December 2019

21. Financial Instruments

Financial Assets

has other receivables and cash that derive directly from its operations. Financial assets at fair value through profit or loss are measured as either Level 1 or Level 3 under the fair value hierarchy, as described in Note 2(i) and disclosed in Note 11.The Arix Group

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. The Arix Group’s cash and cash equivalents are deposited with A+ rated institutions. Investments and other receivables do not have a credit rating. However, the Group does not believe these to be past due nor impaired.

Financial Liabilities

The Arix Group’s principal financial liabilities comprise trade and other payables. The primary purpose of these financial liabilities is to finance the operations.

22. Guarantees

The Company has provided a rent deposit guarantee in respect of its former US office, now classified as an Investment Property, for an amount of , (£198,456), unchanged from 2018.$261,657

23. Related Party Transactions

Consultancy fees plus expenses amounting to £130,262 (inclusive of VAT) (2018: £544,336) were payable to during the period, a partnership controlled by Sir , a former Director and substantial shareholder of the Company. All contractual arrangements with have ceased. At , £nil (inclusive of VAT) (2018: £nil) was owed to by the Company.Merlin Scientific LLPMerlin Scientific LLPMerlin Scientific LLPChris Evans31 December 2019

During the period, key management has comprised Executive Directors, whose remuneration is disclosed in the Directors Remuneration Report; and other members of the Executive Committee. These other members received short-term employee benefits of £371,834 in the year, relating to the period in which they were fulfilling key management responsibilities (2018: £nil).

24. Events After the Reporting Date

On , a further (£1.5m) was invested in Iterum Therapeutics plc. The Arix Group’s investment was in the form of convertible loan notes and royalty-linked senior subordinated notes.22 January 2020$1.9m

On , the participated in the Series A financing. Arix’s aggregate commitment to the company now totals over , and the Group retains a stake in the company of over 20%.24 January 2020Arix GroupQuench Bio, Inc.$12.5m

On , closed a public offering. did not participate; its stake in the company now totals 6.5%.27 January 2020Autolus Therapeutics plcThe Arix Group

On , the completed the sale of its direct holding in Verona Pharma plc. Proceeds of £1.5m were received, in line with the investment’s valuation as at .5 February 202031 December 2019Arix Group

On , a further (£2.1m) was invested in Imara, Inc., in line with existing commitments. The Group’s fully diluted stake in the company now totals 9.9%.25 February 2020$2.7m

ENDS

--  Net Asset Value (NAV) of £202 million (: £270 million),  per share (:  per share). Equates to a 25%
        decline in NAV per share for the year versus a 32% increase in 2018
    --  Gross Portfolio valued at £149 million (: £175 million),
        and £5m of cash realisations in the period
            --  Uplifts including Aura (Series D), Harpoon (Nasdaq IPO), Quench
                Bio (Series A) outweighed by volatility of public holdings,
                notably a 60% decline in  share price
    --  £36 million of capital deployed into the Gross Portfolio during the
        period
    --  Cash of £55 million at  (: £91 million)December 2018December 2018December 201831 December 2019December 2018149
        pence200 penceAutolus'
--  Co-led a  Series B financing in new portfolio company
        Imara, committing  (£11.4 million) for a 9.9% stake
    --  Co-led a €20.0 million Series A in new portfolio company STipe
        Therapeutics, committing €5.7 million (£4.9 million) for a 19.8% stake.
        , Arix Entrepreneur in Residence, appointed as STipe’s
        Executive Chairman$63.0 million$15.0 millionChristian Schetter
--  Harpoon (T cell engagers) raised net proceeds of  in a
        Nasdaq IPO, in which Arix invested  (£4.7 million)
    --   (CAR-T cell immunotherapy) completed a  follow-on
        financing in which Arix invested a further  (£3.8 million)
    --  Aura Biosciences (ocular melanoma) completed a  Series D
        financing, in which Arix committed a further  (£3.4 million)$70.7 million$6.0 million$108.8 million$5.0 million$40.0 million$4.5 millionAutolus
--  Aura presented further positive safety and efficacy data from the
        ongoing AU-011 Phase 1b/2 study for choroidal melanoma
    --   reported encouraging data from its  programme in adult
        acute lymphoblastic leukaemia (aALL), as well as early results from its
        AUTO3 programme in diffuse large B-cell lymphoma (DLBCL)
    --  Amplyx announced positive interim Phase 2 data from its lead programme
        APX001 in candidemia
    --  Harpoon initiated a Phase 1/2a clinical trial for HPN536, a
        mesothelin-targeting T cell engager, for the treatment of ovarian cancer
        and other mesothelin-expressing solid tumours
    --  Imara reported interim Phase 2a data from its IMR-687 clinical study for
        patients with sickle cell disease, showing proof of concept clinical
        activity
    --  VelosBio transitioned to a clinical stage company, initiating the
        VLS-101 Phase 1 clinical study for the treatment of haematological
        cancersAutolusAUTO1
--  Artios expects to initiate a Phase 1 study in ATM-deficient tumours by
        the end 2020
    --   expects to announce results from the ACCUTE Phase 3 clinical
        study in necrotising soft tissue infections in H1 2020
    --  Aura expects to initiate the AU-011 Phase 3 clinical study for choroidal
        melanoma in the H2 2020
    --  Amplyx expects to announce further Phase 2 data for APX001 in candidemia
        in 2020
    --   expects to initiate a Phase 2 registration trial of  in
        adult ALL in H1 2020 and present updated Phase 1 data in H1 and H2 2020
    --   expects to make a go/no go decision on Phase 2 initiation of
        AUTO3 in DLBCL in mid-2020
    --   expects to announce interim Phase 1 AUTO4 T cell lymphoma data
        in H2 2020
    --   expects next generation (NG) programmes to enter the clinic in
        2020
    --  Harpoon expects to present interim data from its HPN424 Phase 1 clinical
        study in prostate cancer in H1 2020
    --  Harpoon expects to present data from its HPN536 Phase1/2a clinical trial
        for ovarian cancer and other mesothelin-expressing solid tumours in H2
        2020
    --  Harpoon expects to initiate the HPN217 Phase 1 trial for the treatment
        of multiple myeloma and the HPN328 Phase 1 clinical study in small cell
        lung cancer in 2020
    --  Imara expects to announce updated results from its IMR-687 Phase 2a
        clinical study in sickle cell disease (SCD) by the end of 2020
    --  Imara expects to initiate Phase 2b trials for SCD and beta thalassemia
        in H1 2020
    --  Iterum expects to announce results from the SURE 1 Phase 3 clinical
        study in uncomplicated urinary tract Infections and the SURE 2 Phase 3
        clinical study in complicated urinary tract infections in H1 2020
    --  Pharmaxis expects to announce Phase 1b results from its systemic LOX
        inhibitor for myelofibrosis and/or pancreatic cancer in H1 2020
    --  VelosBio expects to announce Phase 1 data for VLS-101 in haematological
        cancers in H2 2020Atox BioAutolusAUTO1AutolusAutolusAutolus
Investment Value Investment Realisations Change in       FX Value    Fully      Fully     Fully
                   31  in period    in period Valuation Movement    31  Diluted Committed,   Funded.
                  Dec         £m           £m        £m       £m   Dec   Equity    Not Yet     Fully
                   18                                               19 Interest   Invested   Diluted
                   £m                                               £m       £m         £m    Equity
                                                                                           Interest,
                                                                                                   %

Core portfolio

Amplyx            3.2        1.9            –         –    (0.2)   4.9     3.0%          –      3.0%
Pharmaceuticals

Artios Pharma    10.9        4.3            –         –        –  15.2    12.4%          –     12.4%

Atox Bio          3.2        3.2            –     (1.2)    (0.2)   5.0     6.4%        0.2      6.5%

Aura              3.9        3.4            –       1.2    (0.2)   8.3     7.7%          –      7.7%
Biosciences

Autolus          81.5        3.8            –    (50.8)    (0.7)  33.8     7.5%          –      7.5%

Harpoon          23.9        4.7        (4.3)       6.1    (1.5)  28.9    10.4%          –     10.4%
Therapeutics

Imara               –        9.3            –       1.4        –  10.7     9.2%        2.1      9.9%

Iterum            4.3          –            –     (0.6)        –   3.7     7.3%          –      7.3%
Therapeutics

LogicBio         24.3          –            –     (7.7)    (0.3)  16.3    13.0%          –     13.0%
Therapeutics

Pharmaxis         6.4          –            –     (2.6)    (0.1)   3.7    11.1%          –     11.1%

VelosBio          5.2          –            –       0.5    (0.2)   5.5     8.9%        3.3     11.3%

Verona Pharma     2.5          –            –     (0.9)        –   1.6     2.5%          –      2.5%

                169.3       30.6        (4.3)    (54.6)    (3.4) 137.6                 5.6

Discovery         6.2        5.6        (0.3)       0.5    (0.4)  11.6                 2.9
portfolio

Gross portfolio 175.5       36.2        (4.6)    (54.1)    (3.8) 149.2                 8.5

Other interests   8.5        3.0        (4.2)     (4.5)    (0.1)   2.7                   –

Total           184.0       39.2        (8.8)    (58.6)    (3.9) 151.9                 8.5
Investments
Area             Risk                 Impact               Mitigation

1 Clinical trial Arix’s portfolio     Negative clinical    Arix has an
risks            typically comprises  trial read outs may  experienced team
                 companies that are   reduce the value of  responsible for
                 engaged in clinical  the portfolio        identifying and
                 trials.              company, potentially developing portfolio
                 There is a risk that to nil. This would   companies, resulting
                 the trials may       therefore result in  in a high standard of
                 produce negative or  a decrease in Arix’s due diligence before
                 inconclusive         profitability, and   the commitment of any
                 results.             reduce Arix’s        capital.
                                      ability to generate  Post?investment, Arix
                                      positive cash flows  typically has
                                      from future          representatives on
                                      realisations.        the company’s board
                                      Inconclusive read    of directors,
                                      outs may both reduce ensuring it is fully
                                      the value of the     aware of business
                                      portfolio company,   developments, and
                                      impacting Arix’s     allowing for
                                      profitability, and   mitigation of
                                      require further      possible issues as
                                      capital to fund      they arise.
                                      additional trials to Arix funds a range of
                                      seek further clarity portfolio companies
                                      in the results,      and continues to
                                      adversely impacting  develop its portfolio
                                      Arix’s cash flow.    across a range of
                                                           therapeutic areas.
                                                           Its diverse portfolio
                                                           means that Arix’s
                                                           financial performance
                                                           is not overly reliant
                                                           on any one business.

2 Personnel      Arix’s success is    The financial        Arix’s investment
                 predicated on the    performance of Arix  team have strong
                 quality of its       depends on its       scientific
                 investment           ability to identify  backgrounds and are
                 decisions, which in  and develop          experienced life
                 turn is a product of outstanding          sciences investors.
                 the calibre of its   portfolio companies  Arix has a
                 investment team.     and, as such, is     market?appropriate
                 There is a risk of   reliant on its key   remuneration scheme
                 Arix being unable to personnel.           for its senior
                 attract or retain    Loss of key          employees. This
                 staff of sufficient  individuals could    includes share
                 calibre.             reduce the quality   incentive schemes,
                                      of Arix’s investment which reward
                                      decision-making and  personnel for
                                      therefore negatively long?term service and
                                      affect Arix’s        performance.
                                      financial            Arix has three
                                      performance and      management members
                                      future prospects.    making up the
                                                           Executive Committee
                                                           performing active
                                                           day?to?day roles who
                                                           are able to provide
                                                           emergency cover for
                                                           each other over a
                                                           short period.
                                                           Arix’s Nomination
                                                           Committee is
                                                           responsible for
                                                           appropriate
                                                           succession planning.

3 Macroeconomic  Adverse market       An economic          Arix’s strategy is to
conditions       conditions may       downturn, triggered  deploy capital into
                 impact Arix’s        by macroeconomic     innovative businesses
                 operational model.   factors or a market  which have unique,
                                      shock such as        high impact outcomes;
                                      coronavirus, may     Arix believes that
                                      reduce opportunities such businesses are
                                      for Arix to realise  less susceptible to
                                      capital from         macroeconomic cycles.
                                      portfolio companies, Arix has funded
                                      affecting cash flow  portfolio companies
                                      and financial        across a range of
                                      performance if       geographies,
                                      portfolio valuations including the UK,
                                      are reduced. The     USA, Europe, Israel
                                      availability of      and Australia. As
                                      capital for any      such, it is not
                                      external fundraising overly reliant on a
                                      by Arix or its       downturn or market
                                      portfolio companies  shock in a single
                                      may also be          geography.
                                      affected.            Arix monitors its
                                                           availability of
                                                           capital closely,
                                                           ensuring sufficient
                                                           funds are available
                                                           for the investment
                                                           and operational needs
                                                           of the business.

4 Legislation &  Changes to           A change in          Arix’s portfolio is
regulation       government policy or government           diversified by
                 regulation in the    regulation (for      geography, with
                 research, healthcare example CFIUS in the exposure to the UK,
                 or life sciences     United States) may   USA, Europe, Israel
                 industries could     adversely affect the and Australia,
                 impact Arix or its   profitability of the protecting the Group
                 portfolio companies. healthcare and life  from the adverse
                                      sciences industry,   actions of any one
                                      resulting in a       government.
                                      reduction in the     Arix’s corporate team
                                      number of investment actively monitors
                                      opportunities,       changes to laws and
                                      availability of      regulation, and where
                                      external funding or  considered necessary
                                      potential exit       enlists the advice of
                                      opportunities for    relevant experts to
                                      portfolio companies. consider any company
                                                           or portfolio impacts.

5 Brexit         Brexit may have an   Specific impacts     Arix has the ability
                 impact beyond the    could include:       to withstand a
                 risks described      a depressed UK       depressed capital
                 above in terms of by capital market that  market, including but
                 severity of a        does not support the not limited to the
                 downturn or the      raising of capital   ability to dispose of
                 nature of the        for the Group or its a portion of its
                 impact.              UK-based portfolio   listed investments;
                                      companies; or        withhold funds that
                                      a reduction in       are reserved for the
                                      government-funded    existing portfolio;
                                      research in biotech, or the ability to
                                      leading to reduced   issue up to 10% of
                                      investment           share capital to a
                                      opportunities.       new investor. Arix
                                                           also closely monitors
                                                           available capital and
                                                           holds cash reserves
                                                           to cover future
                                                           operating costs.
                                                           Both Arix’s portfolio
                                                           and pipeline of
                                                           future opportunities
                                                           has a broad
                                                           geographic spread,
                                                           with limited exposure
                                                           to the UK capital
                                                           market and government
                                                           policy. As such, its
                                                           financial performance
                                                           is not overly reliant
                                                           on the UK market.
Note     2019     2018
                                                               £’000    £’000

Change in fair value of investments                      11 (58,642)   51,173

Revenue                                                   3      506    1,328

Administrative expenses                                   6  (9,709) (11,698)

Operating (loss) / profit                                   (67,845)   40,803

Net finance income                                        7      769      708

Foreign exchange (losses) / gains                            (4,443)    4,583

Impairment of right-of-use and intangible assets             (1,259)        –

Share-based payment charge                               18  (2,790)  (3,333)

(Loss) / profit before taxation                             (75,568)   42,761

Taxation                                                  9    5,883  (5,883)

(Loss) / profit for the year                                (69,685)   36,878

Other comprehensive (expense) / income

Exchange differences on translating foreign operations         (185)    1,269

Taxation                                                  9        –        –

Total comprehensive (expense) / income for the year         (69,870)   38,147

Attributable to

Owners of Arix Bioscience plc                               (69,870)   38,147

Earnings per share

Basic earnings per share (p)                             10   (53.8)     32.1

Diluted earnings per share (p)                           10   (53.8)     29.7
Note    2019    2018
                                       £’000   £’000

ASSETS

Non-current assets

Investments held at fair value    11 151,921 183,981

Intangible assets                 12     688   1,770

Property, plant and equipment     13     160     313

Right of use asset                       249       –

Investment property                      366       –

                                     153,384 186,064

Current assets

Cash and cash equivalents         15  54,638  31,009

Cash on long-term deposit         15       –  60,209

Trade and other receivables       14   1,106   2,174

Right of use asset                        90       –

                                      55,834  93,392

TOTAL ASSETS                         209,218 279,456

LIABILITIES

Current liabilities

Trade and other payables          16 (6,154) (3,399)

Lease liability                        (685)       –

Deferred tax liability             9       – (5,883)

                                     (6,839) (9,282)

Non-Current Liabilities

Lease Liability                        (271)       –

TOTAL LIABILITIES                    (7,110) (9,282)

NET ASSETS                           202,108 270,174

EQUITY

Share capital and share premium   17 188,585 188,585

Retained earnings                     15,718  82,018

Other reserves                       (2,195)   (429)

TOTAL EQUITY                         202,108 270,174
Share Capital and   Other    Other Retained Earnings    Total
                             Premium  Equity Reserves             £’000    £’000
                               £’000   £’000    £’000

As at 1 January              188,585 (1,211)      782            82,018  270,174
2019

Loss for the year                  –       –        –          (69,685) (69,685)

Other                              –       –    (780)               595    (185)
comprehensive
(expense)/income

Share-based                        –       –        –             2,790    2,790
payment charge

Acquisition of own                 –   (986)        –                 –    (986)
shares

Issue of own                       –     443    (443)                 –        –
shares to
employees

As at 31 December            188,585 (1,754)    (441)            15,718  202,108
2019
Share Capital and   Other    Other Retained Earnings   Total
                              Premium  Equity Reserves             £’000   £’000
                                £’000   £’000    £’000

As at 1 January               105,125       –    (768)            42,088 146,445
2018

Profit for the year                 –       –        –            36,878  36,878

Other comprehensive                 –       –    1,550             (281)   1,269
income

Contributions of               83,460       –        –                 –  83,460
equity, net of
transaction costs
and tax

Share-based payment                 –       –        –             3,333   3,333
charge

Acquisition of own                  – (1,211)        –                 – (1,211)
shares

Issue of own shares                 –       –        –                 –       –
to employees

As at 31 December             188,585 (1,211)      782            82,018 270,174
2018
Note     2019      2018
                                                               £’000     £’000

Net cash from operating activities                       19  (9,242)  (11,018)

Finance income                                                   769         –

Finance expenses                                                   –      (12)

Tax paid                                                           –      (28)

Net cash from operating activities                           (8,473)  (11,058)

Cash flows from investing activities

Purchase of equity investments                              (34,858)  (55,228)

Disposal of equity and loan investments                        8,791         –

Purchase of property, plant and equipment                        (6)       (2)

Net cash received from / (placed on) long-term deposit        60,209  (60,209)

Net cash from investing activities                            34,136 (115,439)

Cash flows from financing activities

Net proceeds from issue of shares                                  –    83,460

Purchase of own shares by Employee Benefit Trust               (986)   (1,211)

Net cash from financing activities                             (986)    82,249

Net increase/(decrease) in cash and cash equivalents          24,677  (44,248)

Cash and cash equivalents at start of year                    31,009    74,938

Effect of exchange rate changes                              (1,048)       319

Cash and cash equivalents at end of year                      54,638    31,009
Entity                  Country of        Registered Address       Ownership
                        Incorporation

Arix Bioscience         England and Wales 20 Berkeley Square,      100%
Holdings Limited                          London, W1J 6EQ

Arix Bioscience, Inc    United States     214 West 29th Street,    100%
                                          2nd Floor, New York NY
                                          10001

Arix Capital Management England and Wales Sophia House, 28         100%
Limited                                   Cathedral Road, Cardiff,
                                          CF11 9LJ

Arthurian Life Sciences Scotland          16 Charlotte Square,     100%
GP Limited                                Edinburgh, EH2 4DF

ALS SPV Limited         England and Wales 20 Berkeley Square,      100%
                                          London, W1J 6EQ

Arthurian Life Sciences England and Wales Sophia House, 28         100%
SPV GP Limited                            Cathedral Road, Cardiff,
                                          CF11 9LJ

Arix Bioscience plc     Jersey            26 New Street, St        100%
Employee Benefit Trust                    Helier, Jersey, JE2 3RA

Arthurian Life Sciences Scotland          16 Charlotte Square,     100%
Carried Interest                          Edinburgh, EH2 4DF
Partner LP

Arix Bioscience Pty     Australia         Level 27, AMP Centre, 50 100%
Limited*                                  Bridge Street, Sydney
                                          NSW 2000
Within one year £’000 Total
                                                                     £’000

Trade, Other Payables and Accruals (excluding                  6,154 6,154
non-financial liabilities)
2019  2018
                            £’000 £’000

Fund management fee income    480   866

Other income                   26   462

                              506 1,328
2019  2018
                                                                   £’000 £’000

Amortisation                                                       (287) (287)

Depreciation                                                       (159) (216)

Impairment of right of use asset                                   (464)     –

Impairment of intangible asset                                     (795)     –

Auditors’ remuneration

Statutory audit services

Fees payable for the audit of the Arix Group accounts                141   135

Fees payable for the audit of the accounts of subsidiaries of the     48    40
Arix Group

Non-audit services

Other assurance and advisory services                                 36   195

Total auditors’ remuneration                                         225   370
2019   2018
                   £’000  £’000

Employment costs   5,637  6,537

Recruitment costs    147    563

Consultancy fees     320    512

Other expenses     3,605  4,086

                   9,709 11,698
2019  2018
               £’000 £’000

Bank interest    769   720

Bank charges       –  (12)

                 769   708
2019  2018
                            £’000 £’000

Salary and bonus            4,808 5,651

Social security costs         532   580

Pension and benefits costs    297   306

                            5,637 6,537
2019    2018
                                                        £’000   £’000

Current year tax charge

Current tax                                                 –       –

Deferred tax – current year                           (5,760)   6,665

Deferred tax – effect of change in tax rates              687   (782)

Adjustment in respect of previous periods               (810)       –

Total tax (credit) / charge                           (5,883)   5,883

Reconciliation of tax charge

(Loss) / profit before tax                           (75,568)  42,761

Expected tax based on 19.00% (2018: 19.00%)          (14,358)   8,124

Effects of:

Expenses not deductible for tax purposes               12,120   3,101

Adjustment in respect of previous periods               (810)       –

Income not taxable                                    (9,808) (2,926)

Impact of rate between deferred tax and current tax       693   (777)

Recognition of items previously not recognised              – (2,646)

Net gains / (losses)                                      (6)       –

Employee share options                                    116      23

Deferred tax not recognised                             6,170     984

Total tax (credit) / charge                           (5,883)   5,883

Recognised deferred tax provisions

Brought forward                                         5,883       –

Relating to Profit and loss                           (5,883)   5,883

Relating to Other comprehensive income                      –       –

Carried forward                                             –   5,883

Represented by:

Unutilised tax losses                                     (8) (2,835)

ACAs                                                        –    (17)

Intangibles                                               276     325

Employee benefits                                       (276)   (373)

Investments                                                 9   8,784

Other timing differences                                  (1)     (1)

                                                            –   5,883

Unrecognised deferred tax provisions

Unutilised tax losses                                 (5,263)   (996)

Priority profit share outstanding                          69       –

Other timing differences                                (299)       –

                                                      (5,493)   (996)
As at       As at
                                                      31 December 31 December
                                                             2019        2018
                                                            £’000       £’000

(Loss)/profit attributable to equity holders of Arix     (69,870)      38,147
Bioscience plc

Weighted average number of shares in issue for the    129,948,773 118,787,412
purposes of basic earnings per share

Weighted average number of shares in issue for the    129,948,773 128,521,402
purposes of diluted earnings per share

Basic (loss)/earnings per share                           (53.8p)       32.1p

Diluted (loss)/earnings per share                         (53.8p)       29.7p
Level 1 –   Level 3 –    Total
                                           Quoted    Unquoted    £’000
                                      Investments Investments
                                            £’000       £’000

At 1 January 2019                         118,982      64,999  183,981

Additions                                   8,485      30,681   39,166

Disposals                                 (4,277)     (4,514)  (8,791)

Transfers                                  23,131    (23,131)        –

Unrealised (loss)/gain on investments    (56,475)     (2,167) (58,642)

Foreign exchange losses                   (2,002)     (1,791)  (3,793)

At 31 December 2019                        87,844      64,077  151,921
Company      Country of    Registered     % of  Net Assets/  Profit/     Date of
             Incorporation Address      Issued (Liabilities)  (Loss)   Financial
                                         Share    of Company      of Information
                                       Capital               Company
                                          Held

Depixus SAS  France        3-5 Impasse   20.7%         1,948 (1,439) 31 December
(EUR)                      Reille,                                          2017
                           75014 Paris

Quench Bio,  USA           400           32.4%           N/A     N/A         Not
Inc (USD)                  Technology                                   publicly
                           Square,                                     available
                           Cambridge,
                           MA 02139

Stipe        Denmark       Lyngsievvej   14.8%           N/A     N/A         Not
Therapeutics               18, 8230                                     publicly
Aps (EUR)                  Abyhoj                                      available
Company                       Board Seat? % of Issued Share Capital
                                                               Held

Amplyx Pharmaceuticals, Inc.     Observer                      3.0%

Artios Pharma Limited                   Y                     12.4%

Atox Bio, Inc.                          Y                      6.4%

Aura Biosciences, Inc.                  Y                      7.7%

Autolus Therapeutics plc                Y                      7.5%

Harpoon Therapeutics, Inc.              Y                     10.4%

Imara, Inc.                             Y                      9.2%

Iterum Therapeutics Limited             Y                      7.3%

LogicBio Therapeutics, Inc.             Y                     13.0%

OptiKira, LLC                           Y                     13.3%

Pharmaxis Limited                       Y                     11.1%

PreciThera, Inc                         N                     13.9%

VelosBio, Inc.                          Y                      8.9%

Verona Pharma plc                       N                      2.5%
Year Ended  Year Ended
                      31 December 31 December
                             2019        2018

Brought forward             1,770       2,057

Amortisation                (287)       (287)

Impairment in period        (795)           –

                              688       1,770
Fixtures and Leasehold Improvements    Office Total
                         Fittings                  £’000 Equipment £’000
                            £’000                            £’000

As at 1 January 2019          258                     25        30   313

Exchange translation            –                      –         –     –
adjustments

Additions                       –                      –         6     6

Depreciation charge         (120)                   (10)      (29) (159)

At 31 December 2019           138                     15         7   160
Fixtures and Leasehold Improvements    Office Total
                         Fittings                  £’000 Equipment £’000
                            £’000                            £’000

As at 1 January 2018          410                     34        79   523

Exchange translation            2                      1         1     4
adjustments

Additions                       –                      –         2     2

Depreciation charge         (154)                   (10)      (52) (216)

At 31 December 2018           258                     25        30   313
As at       As at
                   31 December 31 December
                          2019        2018
                         £’000       £’000

Trade receivables          771       1,734

Prepayments                264         359

VAT receivable              71          81

                         1,106       2,174
As at       As at
                           31 December 31 December
                                  2019        2018
                                 £’000       £’000

Cash at bank and in hand        54,638      31,009

Cash on long-term deposit            –      60,209
As at       As at
                             31 December 31 December
                                    2019        2018
                                   £’000       £’000

Trade payables                       123         228

Accruals and other payables        6,031       3,171

                                   6,154       3,399
As at       As at
                                                         31 December 31 December
                                                                2019        2018
                                                               £’000       £’000

Allotted and called up

135,551,850 ordinary shares of £0.00001 each (2018:                1           1
134,823,243 shares)

49,671 Series C shares of £1 each (2018: 49,671 shares)           50          50
Year Ended  Year Ended
                              31 December 31 December
                                     2019        2018
                                    £’000       £’000

Executive Incentive Plan 2017         430         430

Executive Incentive Plan 2018         883         427

Executive Incentive Plan 2019         448           –

2017 IPO Award                        213       1,470

Executive Share Option Plan           567         582

Founder Incentive Shares              179         348

Non-Executive Director Awards          70          76

                                    2,790       3,333
Year Ended  Year Ended
                                                    31 December 31 December
                                                           2019        2018
                                                          £’000       £’000

(Loss)/profit before income tax                        (75,568)      42,761

Adjustments for:

Change in fair value of investments                      58,642    (51,173)

Foreign exchange losses/(gains)                           4,443     (4,583)

Share-based payment charge                                2,790       3,333

Depreciation and amortisation                               446         503

Impairment of assets                                      1,259           –

Finance income                                            (769)       (708)

Changes in working capital

Decrease/(increase) in trade and other receivables        1,068       (908)

Decrease in trade and other payables                    (1,553)       (243)

Cash used in operations                                 (9,242)    (11,018)
Year Ended  Year Ended
                                                       31 December 31 December
                                                              2019        2018
                                                             £’000       £’000

Financial assets at fair value through profit or loss

Equity investments                                         151,921     183,981

Loans and receivables

Other receivables (excluding prepayments)                      771       1,734

Long-term cash on deposit                                        –      60,209

Cash and cash equivalents                                   54,638      31,009
Year Ended  Year Ended
                                               31 December 31 December
                                                      2019        2018
                                                     £’000       £’000

Trade, other payables and accruals (excluding        6,154       3,399
non-financial liabilities)
NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of...

FOR OUR FULL DISCLAIMER CLICK HERE

154 min read