Full Press Release Details
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||
| Notes | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
| Research and development expenses | (4,845 | ) | (3,333 | ) | (14,551 | ) | (12,196 | ) | ||||||||||||
| Administrative expenses | (1,423 | ) | (957 | ) | (4,231 | ) | (3,599 | ) | ||||||||||||
| Net foreign exchange gains | 1,227 | 706 | 1,191 | 1,765 | ||||||||||||||||
| Operating loss | (5,041 | ) | (3,584 | ) | (17,591 | ) | (14,030 | ) | ||||||||||||
| Finance income | 252 | 297 | 867 | 739 | ||||||||||||||||
| Loss before tax | (4,789 | ) | (3,287 | ) | (16,724 | ) | (13,291 | ) | ||||||||||||
| Income tax credit | 3 | 912 | 771 | 3,020 | 3,063 | |||||||||||||||
| Loss for the period | (3,877 | ) | (2,516 | ) | (13,704 | ) | (10,228 | ) | ||||||||||||
| Basic and diluted loss per share | 4 | (0.12 | ) | (0.08 | ) | (0.42 | ) | (0.32 | ) |
The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Loss for the period | (3,877 | ) | (2,516 | ) | (13,704 | ) | (10,228 | ) | ||||||||
| Other comprehensive income: | ||||||||||||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||||||||||||
| Exchange differences on translation of foreign operations | 8 | 2 | 9 | 6 | ||||||||||||
| Other comprehensive income for the period | 8 | 2 | 9 | 6 | ||||||||||||
| Total comprehensive loss for the period | (3,869 | ) | (2,514 | ) | (13,695 | ) | (10,222 | ) | ||||||||
| Attributable to: | ||||||||||||||||
| Equity holders of the Company | (3,869 | ) | (2,514 | ) | (13,695 | ) | (10,222 | ) |
The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| September 30, 2019 | December 31, 2018 | |||||||||||
| (in thousands) | ||||||||||||
| Notes | ||||||||||||
| Assets | ||||||||||||
| Non-current assets | ||||||||||||
| Intangible assets | 5 | 3,838 | 3,122 | |||||||||
| Property, plant and equipment | 795 | 427 | ||||||||||
| Deferred tax asset | 3 | 28 | 47 | |||||||||
| 4,661 | 3,596 | |||||||||||
| Current assets | ||||||||||||
| Prepayments, accrued income and other receivables | 5,907 | 2,354 | ||||||||||
| Current income tax receivable | 3 | 7,284 | 4,263 | |||||||||
| Cash and cash equivalents | 6 | 58,091 | 76,972 | |||||||||
| 71,282 | 83,589 | |||||||||||
| Total assets | 75,943 | 87,185 | ||||||||||
| Equity and liabilities | ||||||||||||
| Capital and reserves | ||||||||||||
| Share capital and share premium | 8 | 80,832 | 80,715 | |||||||||
| Other reserves | 61,722 | 59,692 | ||||||||||
| Accumulated deficit | (72,347 | ) | (58,813 | ) | ||||||||
| Total equity attributable to equity holders of the Company | 70,207 | 81,594 | ||||||||||
| Non-current liabilities | ||||||||||||
| Provisions | 26 | 26 | ||||||||||
| Lease liability | 247 | |||||||||||
| 273 | 26 | |||||||||||
| Current liabilities | ||||||||||||
| Trade payables | 2,155 | 2,455 | ||||||||||
| Payroll taxes and social security | 136 | 127 | ||||||||||
| Lease liability | 190 | |||||||||||
| Accrued expenditure | 2,982 | 2,983 | ||||||||||
| 5,463 | 5,565 | |||||||||||
| Total liabilities | 5,736 | 5,591 | ||||||||||
| Total equity and liabilities | 75,943 | 87,185 |
The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
| For the Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||
| Share capital | Share premium | Own share reserve | Share option reserve | Foreign currency translation reserve | Capital reserve | Accumulated deficit | Total equity attributable to equity holders | |||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||||||
| Balance at January 1, 2018 | 1,272 | 79,236 | (339 | ) | 15,955 | (11 | ) | 42,466 | (45,159 | ) | 93,420 | |||||||||||||||||||||
| Loss for the period | (10,228 | ) | (10,228 | ) | ||||||||||||||||||||||||||||
| Other comprehensive income for the period | 6 | 6 | ||||||||||||||||||||||||||||||
| Total comprehensive loss for the period | 6 | (10,228 | ) | (10,222 | ) | |||||||||||||||||||||||||||
| Share-based payments | 1,494 | 1,494 | ||||||||||||||||||||||||||||||
| Exercise of share options | 15 | 167 | (140 | ) | 140 | 182 | ||||||||||||||||||||||||||
| Balance at September 30, 2018 | 1,287 | 79,403 | (339 | ) | 17,309 | (5 | ) | 42,466 | (55,247 | ) | 84,874 | |||||||||||||||||||||
| Balance at January 1, 2019 | 1,289 | 79,426 | (339 | ) | 17,564 | 1 | 42,466 | (58,813 | ) | 81,594 | ||||||||||||||||||||||
| Loss for the period | (13,704 | ) | (13,704 | ) | ||||||||||||||||||||||||||||
| Other comprehensive income for the period | 9 | 9 | ||||||||||||||||||||||||||||||
| Total comprehensive loss for the period | 9 | (13,704 | ) | (13,695 | ) | |||||||||||||||||||||||||||
| Share-based payments | 2,191 | 2,191 | ||||||||||||||||||||||||||||||
| Exercise of share options | 9 | 108 | (132 | ) | 132 | 117 | ||||||||||||||||||||||||||
| Surrender of fully vested share options | (38 | ) | 38 | |||||||||||||||||||||||||||||
| Balance at September 30, 2019 | 1,298 | 79,534 | (339 | ) | 19,585 | 10 | 42,466 | (72,347 | ) | 70,207 |
The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Nine Months Ended September 30, | ||||||||
| 2019 | 2018 | |||||||
| (in thousands) | ||||||||
| Cash flows from operating activities | ||||||||
| Loss for the period | (13,704 | ) | (10,228 | ) | ||||
| Adjustments for: | ||||||||
| Income tax credit | (3,020 | ) | (3,063 | ) | ||||
| Amortization and depreciation | 522 | 261 | ||||||
| Finance income | (867 | ) | (739 | ) | ||||
| Share-based payments | 2,191 | 1,494 | ||||||
| Net foreign exchange gains | (1,228 | ) | (1,808 | ) | ||||
| (16,106 | ) | (14,083 | ) | |||||
| Movements in working capital: | ||||||||
| Increase in prepayments, accrued income and other receivables | (3,593 | ) | (2 | ) | ||||
| (Decrease) increase in trade payables | (300 | ) | 1,416 | |||||
| Increase in payroll taxes, social security and accrued expenditure | 8 | 878 | ||||||
| Movements in working capital | (3,885 | ) | 2,292 | |||||
| Cash used in operations | (19,991 | ) | (11,791 | ) | ||||
| Net income tax received | 20 | 1,905 | ||||||
| Net cash used in operating activities | (19,971 | ) | (9,886 | ) | ||||
| Cash flows from investing activities | ||||||||
| Interest received | 915 | 694 | ||||||
| Payments for property, plant and equipment | (29 | ) | (205 | ) | ||||
| Payments for intangible assets | (988 | ) | (928 | ) | ||||
| Net cash used in investing activities | (102 | ) | (439 | ) | ||||
| Cash flows from financing activities | ||||||||
| Payments for lease liabilities | (146 | ) | ||||||
| Proceeds from issue of share capital | 117 | 182 | ||||||
| Net cash (used in) from financing activities | (29 | ) | 182 | |||||
| Net decrease in cash and cash equivalents | (20,102 | ) | (10,143 | ) | ||||
| Cash and cash equivalents at beginning of period | 76,972 | 86,703 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 1,221 | 1,791 | ||||||
| Cash and cash equivalents at end of period | 58,091 | 78,351 |
The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. General information
( NuCana or the Company ) is a clinical-stage biopharmaceutical company developing a portfolio of new medicines to treat cancer. NuCana is harnessing the power of phosphoramidate chemistry to generate new medicines called
ProTides. These compounds have the potential to improve cancer treatment by enhancing the efficacy and safety of several current standards of care.
The Company has ordinary shares in the form of American Depositary Shares ( ADSs ) registered with the US Securities and Exchange
Commission (the SEC ) and has been listed on The Nasdaq Global Select Market ( Nasdaq ) since October 2, 2017. The Company is incorporated in England and Wales and domiciled in the United Kingdom. The Company s
registered office is located at 77/78 Cannon Street, London EC4N 6AF, United Kingdom and its principal place of business is located at 3 Lochside Way, Edinburgh, EH12 9DT, United Kingdom.
The Company has two wholly owned subsidiaries, NuCana, Inc. and NuCana BioMed Trustee Company Limited (together referred to as the
The comparative figures for the year ended December 31, 2018 are not the Group s statutory accounts for that
financial year within the meaning of section 434 of the U.K. Companies Act 2006. Those accounts have been reported on by the Company s auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii)
did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the U.K. Companies Act 2006.
2. Significant accounting policies
Basis of preparation
The unaudited condensed consolidated financial statements (the financial statements ) for the three months and nine months ended
September 30, 2019 have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting ( IAS 34 ). The significant accounting policies and methods of computation applied in the
preparation of the financial statements are consistent with those applied in the Company s annual financial statements for the year ended December 31, 2018. No new standards, amendments or interpretations have had an impact on the
financial statements for the three months and nine months ended September 30, 2019, except for the adoption of IFRS 16, Leases, effective as of January 1, 2019. The financial statements comprise the financial statements of the Group
at September 30, 2019. The financial statements are presented in pounds sterling, which is also the Company s functional currency. All values are rounded to the nearest thousand, except where otherwise indicated.
The financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in
conjunction with the Company s annual financial statements for the year ended December 31, 2018.
In the opinion of management,
these unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the results of operations, financial position and cash flows. The results of operations for the three months and
nine months ended September 30, 2019 are not necessarily indicative of the results that can be expected for the Company s fiscal year ending December 31, 2019.
Adoption of IFRS 16: Leases
IFRS 16 was issued in January 2016 and replaces IAS 17 Leases, IFRIC 4 Determining Whether an Arrangement Contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The Company adopted IFRS 16 on
January 1, 2019 using the modified retrospective approach to transition utilizing the practical expedients outlined in the standard.
Upon adoption of IFRS 16, the Company recognized right of use lease assets in the amount of 0.5 million and corresponding lease
liabilities of 0.4 million. The adoption of IFRS 16 has not had a material impact on the reported loss for the three or nine month periods.
common with many companies in the biopharmaceutical sector, the Company incurs significant expenditure in its early years as it researches and develops its potential products for market.
The Company s board of directors, having reviewed the operating budgets and development plans, considers that the Company has adequate
resources to continue in operation for the foreseeable future. The board of directors is therefore satisfied that it is appropriate to adopt the going concern basis of accounting in preparing the financial statements. The Company believes that its
cash and cash equivalents of 58.1 million at September 30, 2019 will be sufficient to fund its current operating plan for at least the next 12 months.
As the Company continues to incur losses, the transition to profitability is dependent upon
the successful development, approval and commercialization of its product candidates and achieving a level of revenues adequate to support its cost structure. The Company may never achieve profitability, and unless and until it does, it will
continue to need to raise additional capital. There can be no assurances, however, that additional funding will be available on acceptable terms.
Judgements and estimates
The accounting estimates and judgements made by management in applying the Group s accounting policies that have the most significant
effect on the amounts included within these financial statements, were the same as those that applied to the annual financial statements for the year ended December 31, 2018.
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||
| Current tax: | ||||||||||||||||
| In respect of current period U.K. | 1,006 | 760 | 3,129 | 3,103 | ||||||||||||
| In respect of current period U.S. | (1 | ) | (1 | ) | (3 | ) | (3 | ) | ||||||||
| In respect of prior period U.K. | (86 | ) | 19 | (86 | ) | 19 | ||||||||||
| 919 | 778 | 3,040 | 3,119 | |||||||||||||
| Deferred tax: | ||||||||||||||||
| In respect of current period U.S. | (7 | ) | (6 | ) | (20 | ) | (15 | ) | ||||||||
| In respect of prior period U.S. | (1 | ) | (41 | ) | ||||||||||||
| Income tax credit | 912 | 771 | 3,020 | 3,063 |
The income tax credit recognized primarily represents the U.K. research and development tax credit. In the
United Kingdom, the Company is able to surrender some of its losses for a cash rebate of up to 33.35% of expenditure related to eligible research and development projects.
| September 30, 2019 | December 31, 2018 | |||||||
| (in thousands) | ||||||||
| Current income tax receivable | ||||||||
| U.K. tax | 7,282 | 4,239 | ||||||
| U.S. tax | 2 | 24 | ||||||
| 7,284 | 4,263 | |||||||
| Deferred tax asset | ||||||||
| U.S. deferred tax asset | 28 | 47 |
4. Basic and diluted loss per share
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Loss for the period | (3,877 | ) | (2,516 | ) | (13,704 | ) | (10,228 | ) | ||||||||
| Basic and diluted weighted average number of shares | 32,372 | 32,056 | 32,280 | 31,894 | ||||||||||||
| Basic and diluted loss per share | (0.12 | ) | (0.08 | ) | (0.42 | ) | (0.32 | ) |
Basic loss per share is calculated by dividing the loss for the period attributable to the
equity holders of the Company by the weighted average number of shares outstanding during the period.
The potential shares issued through
equity settled transactions were considered to be anti-dilutive as they would have decreased the loss per share and were therefore excluded from the calculation of diluted loss per share.
5. Intangible assets
comprise patents with a carrying value of 3.6 million as of September 30, 2019 (as of December 31, 2018: 3.0 million) and computer software with a carrying value of 0.2 million as of September 30, 2019
(as of December 31, 2018: 0.1 million).
During the nine months ended September 30, 2019, the Company acquired intangible
assets with a cost of 0.8 million in relation to patents and 0.2 million in relation to computer software. There were no disposals of intangible assets in the nine months ended September 30, 2019.
6. Cash and cash equivalents
| September 30, 2019 | December 31, 2018 | |||||||
| (in thousands) | ||||||||
| Cash and cash equivalents | 58,091 | 76,972 |
Cash and cash equivalents comprise cash at bank with maturities of three months or less earning interest at
fixed or variable rates based on the terms agreed for each account.
7. Share-based payments
The Company has three share-based payment plans, including a U.S. sub-plan, for its employees,
directors and consultants. The share options granted will be settled in equity.
As detailed in the table below, during the nine months
ended September 30, 2019, an aggregate of 1,202,150 share options were granted under the Company s U.K. share-based payment plans and under the U.S. share option sub-plan. Options granted under these
plans will vest if the option holder remains under respective contract of employment or contract of service for the agreed vesting period. The share options granted in the period will vest equally over a period of four years.
The fair values of options granted were determined using the Black-Scholes model that takes into account factors specific to the share
incentive plan. As the Company completed its initial public offering in October 2017, it is not possible to derive historical volatility from the Company s ADSs prior to October 2017. The underlying expected volatility was therefore determined
by using the historical volatility of similar listed entities as a proxy. The volatility percentage applied to each tranche is the average of the historical volatility of comparable companies to the Company.
The following weighted average principal assumptions were used in calculating the fair values of options granted:
| Options granted on | ||||||||||||
| Mar 13, 2019 | May 15, 2019 | Sep 11, 2019 | ||||||||||
| Vesting dates | Mar 13, 2020 | May 15, 2020 | Sep 11, 2020 | |||||||||
| Mar 13, 2021 | May 15, 2021 | Sep 11, 2021 | ||||||||||
| Mar 13, 2022 | May 15, 2022 | Sep 11, 2022 | ||||||||||
| Mar 13, 2023 | May 15, 2023 | Sep 11, 2023 | ||||||||||
| Volatility | 69.05 | % | 69.08 | % | 70.14 | % | ||||||
| Dividend yield | 0 | % | 0 | % | 0 | % | ||||||
| Risk-free investment rate | 0.85 | % | 0.77 | % | 0.44 | % | ||||||
| Fair value of option at grant date | 5.46 | 6.07 | 4.22 | |||||||||
| Fair value of share at grant date | 10.13 | 11.26 | 7.79 | |||||||||
| Exercise price at date of grant | 10.13 | 11.26 | 7.79 | |||||||||
| Lapse date | Mar 13, 2029 | May 15, 2029 | Sep 11, 2029 | |||||||||
| Expected option life (years) | 4.50 | 4.50 | 4.50 | |||||||||
| Number of options granted | 120,750 | 967,400 | 114,000 |
For the three months ended September 30, 2019, the Company has recognized
1.0 million of share-based payment expense in the statement of operations (three months ended September 30, 2018: 0.5 million). For the nine months ended September 30, 2019, the Company has recognized
2.2 million of share-based payment expense in the statement of operations (nine months ended September 30, 2018: 1.5 million).
8. Share capital and share premium
| September 30, 2019 | December 31, 2018 | |||||||
| (in thousands) | ||||||||
| Share capital | 1,298 | 1,289 | ||||||
| Share premium | 79,534 | 79,426 | ||||||
| 80,832 | 80,715 | |||||||
| September 30, 2019 | December 31, 2018 | |||||||
| Number (in thousands) | ||||||||
| Issued share capital comprises: | ||||||||
| Ordinary shares of 0.04 each | 32,456 | 32,226 |
| Number of shares | Share capital | Share premium | ||||||||||
| (in thousands) | ||||||||||||
| Fully paid shares: | ||||||||||||
| Balance at December 31, 2018 | 32,226 | 1,289 | 79,426 | |||||||||
| Issue of shares on exercise of options | 230 | 9 | 108 | |||||||||
| Balance at September 30, 2019 | 32,456 | 1,298 | 79,534 |
9. Contingent liabilities
Under its U.K. share-based payment plan, the Company granted unapproved share options that have fully vested. If and when these share options
are exercised, the Company will be liable for the Employer Class 1 National Insurance payable to HMRC in the United Kingdom. This contingent liability will be determined based on the market value of the shares on exercise less the exercise
price paid by the option holders, at the prevailing rate of Employer National Insurance (currently 13.8%). Based on the closing price of the Company s ADSs on The Nasdaq Global Select Market on September 30, 2019, the last trading day
of the period to which these financial statements relate, and assuming full exercise of all outstanding and vested unapproved share options on that date, the Employer National Insurance contingent liability would have been 1.6 million
(December 31, 2018: 3.3 million).