Full Press Release Details
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||
| Notes | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
| Research and development expenses | (7,386 | ) | (8,971 | ) | (23,238 | ) | (26,200 | ) | ||||||||||||
| Administrative expenses | (1,715 | ) | (2,277 | ) | (5,756 | ) | (6,456 | ) | ||||||||||||
| Net foreign exchange gains | 2,912 | 1,274 | 7,120 | 488 | ||||||||||||||||
| Operating loss | (6,189 | ) | (9,974 | ) | (21,874 | ) | (32,168 | ) | ||||||||||||
| Finance income | 216 | 22 | 380 | 81 | ||||||||||||||||
| Loss before tax | (5,973 | ) | (9,952 | ) | (21,494 | ) | (32,087 | ) | ||||||||||||
| Income tax credit | 3 | 1,445 | 1,911 | 4,672 | 5,198 | |||||||||||||||
| Loss for the period | (4,528 | ) | (8,041 | ) | (16,822 | ) | (26,889 | ) | ||||||||||||
| Basic and diluted loss per share | 4 | (0.09 | ) | (0.15 | ) | (0.32 | ) | (0.52 | ) |
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, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Loss for the period | (4,528 | ) | (8,041 | ) | (16,822 | ) | (26,889 | ) | ||||||||
| Other comprehensive income: | ||||||||||||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||||||||||||
| Exchange differences on translation of foreign operations | 52 | 10 | 108 | 6 | ||||||||||||
| Other comprehensive income for the period | 52 | 10 | 108 | 6 | ||||||||||||
| Total comprehensive loss for the period | (4,476 | ) | (8,031 | ) | (16,714 | ) | (26,883 | ) | ||||||||
| Attributable to: | ||||||||||||||||
| Equity holders of the Company | (4,476 | ) | (8,031 | ) | (16,714 | ) | (26,883 | ) |
The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| September 30, 2022 | December 31, 2021 | |||||||||||
| (in thousands) | ||||||||||||
| Notes | ||||||||||||
| Assets | ||||||||||||
| Non-current assets | ||||||||||||
| Intangible assets | 5 | 2,512 | 2,410 | |||||||||
| Property, plant and equipment | 969 | 851 | ||||||||||
| Deferred tax asset | 3 | 95 | 60 | |||||||||
| Other non-current assets | 6 | 2,655 | 2,540 | |||||||||
| 6,231 | 5,861 | |||||||||||
| Current assets | ||||||||||||
| Prepayments, accrued income and other receivables | 7,052 | 4,161 | ||||||||||
| Current income tax receivable | 3 | 4,622 | 7,188 | |||||||||
| Cash and cash equivalents | 7 | 50,752 | 60,264 | |||||||||
| 62,426 | 71,613 | |||||||||||
| Total assets | 68,657 | 77,474 | ||||||||||
| Equity and liabilities | ||||||||||||
| Capital and reserves | ||||||||||||
| Share capital and share premium | 9 | 143,138 | 143,137 | |||||||||
| Other reserves | 75,068 | 72,137 | ||||||||||
| Accumulated deficit | (165,513 | ) | (149,726 | ) | ||||||||
| Total equity attributable to equity holders of the Company | 52,693 | 65,548 | ||||||||||
| Non-current liabilities | ||||||||||||
| Provisions | 46 | 46 | ||||||||||
| Lease liabilities | 459 | 164 | ||||||||||
| 505 | 210 | |||||||||||
| Current liabilities | ||||||||||||
| Trade payables | 5,614 | 1,829 | ||||||||||
| Payroll taxes and social security | 166 | 170 | ||||||||||
| Accrued expenditure | 9,456 | 9,510 | ||||||||||
| Lease liabilities | 223 | 207 | ||||||||||
| 15,459 | 11,716 | |||||||||||
| Total liabilities | 15,964 | 11,926 | ||||||||||
| Total equity and liabilities | 68,657 | 77,474 |
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, 2021 | 2,047 | 140,890 | (339 | ) | 24,782 | (22 | ) | 42,466 | (110,594 | ) | 99,230 | |||||||||||||||||||||
| Loss for the period | (26,889 | ) | (26,889 | ) | ||||||||||||||||||||||||||||
| Other comprehensive income for the period | 6 | 6 | ||||||||||||||||||||||||||||||
| Total comprehensive loss for the period | 6 | (26,889 | ) | (26,883 | ) | |||||||||||||||||||||||||||
| Share-based payments | 4,919 | 4,919 | ||||||||||||||||||||||||||||||
| Exercise of share options | 40 | 159 | (1,221 | ) | 1,203 | 181 | ||||||||||||||||||||||||||
| Lapse of share options | (196 | ) | 196 | |||||||||||||||||||||||||||||
| Balance at September 30, 2021 | 2,087 | 141,049 | (339 | ) | 28,284 | (16 | ) | 42,466 | (136,084 | ) | 77,447 | |||||||||||||||||||||
| Balance at January 1, 2022 | 2,087 | 141,050 | (339 | ) | 30,027 | (17 | ) | 42,466 | (149,726 | ) | 65,548 | |||||||||||||||||||||
| Loss for the period | (16,822 | ) | (16,822 | ) | ||||||||||||||||||||||||||||
| Other comprehensive income for the period | 108 | 108 | ||||||||||||||||||||||||||||||
| Total comprehensive loss for the period | 108 | (16,822 | ) | (16,714 | ) | |||||||||||||||||||||||||||
| Share-based payments | 3,900 | 3,900 | ||||||||||||||||||||||||||||||
| Exercise of share options | 1 | (362 | ) | 320 | (41 | ) | ||||||||||||||||||||||||||
| Lapse of share options | (715 | ) | 715 | |||||||||||||||||||||||||||||
| Balance at September 30, 2022 | 2,088 | 141,050 | (339 | ) | 32,850 | 91 | 42,466 | (165,513 | ) | 52,693 |
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, | ||||||||
| 2022 | 2021 | |||||||
| (in thousands) | ||||||||
| Cash flows from operating activities | ||||||||
| Loss for the period | (16,822 | ) | (26,889 | ) | ||||
| Adjustments for: | ||||||||
| Income tax credit | (4,672 | ) | (5,198 | ) | ||||
| Amortization, depreciation and loss on disposal | 676 | 673 | ||||||
| Finance income | (380 | ) | (81 | ) | ||||
| Interest expense on lease liabilities | 11 | 15 | ||||||
| Share-based payments | 3,900 | 4,919 | ||||||
| Net foreign exchange gains | (7,233 | ) | (533 | ) | ||||
| (24,520 | ) | (27,094 | ) | |||||
| Movements in working capital: | ||||||||
| Increase in prepayments, accrued income and other receivables | (2,758 | ) | (497 | ) | ||||
| Increase in trade payables | 3,785 | 1,634 | ||||||
| (Decrease) increase in payroll taxes, social security and accrued expenditure | (101 | ) | 2,333 | |||||
| Movements in working capital | 926 | 3,470 | ||||||
| Cash used in operations | (23,594 | ) | (23,624 | ) | ||||
| Net income tax received | 7,220 | 9,888 | ||||||
| Net cash used in operating activities | (16,374 | ) | (13,736 | ) | ||||
| Cash flows from investing activities | ||||||||
| Interest received | 368 | 79 | ||||||
| Payments for property, plant and equipment | (12 | ) | (43 | ) | ||||
| Payments for intangible assets | (396 | ) | (537 | ) | ||||
| Payments for other non-current assets | (2,597 | ) | ||||||
| Net cash used in investing activities | (40 | ) | (3,098 | ) | ||||
| Cash flows from financing activities | ||||||||
| Payments for lease liabilities | (189 | ) | (222 | ) | ||||
| Proceeds from issue of share capital | 1 | 198 | ||||||
| Net cash used in financing activities | (188 | ) | (24 | ) | ||||
| Net decrease in cash and cash equivalents | (16,602 | ) | (16,858 | ) | ||||
| Cash and cash equivalents at beginning of period | 60,264 | 87,356 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 7,090 | 529 | ||||||
| Cash and cash equivalents at end of period | 50,752 | 71,027 |
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 patients with 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 three wholly owned subsidiaries, NuCana, Inc., NuCana Limited and NuCana BioMed Trustee Company Limited (together referred to
The financial information presented in these unaudited condensed consolidated financial statements does not
constitute the Group s statutory accounts within the meaning of section 434 of the U.K. Companies Act 2006.
statutory accounts for the year ended December 31, 2021 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 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, 2022 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, 2021. No new standards, amendments or interpretations have had an impact on the
financial statements for the three months and nine months ended September 30, 2022. The financial statements comprise the financial statements of the Group at September 30, 2022. 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, 2021.
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, 2022 are not necessarily indicative of the results that can be expected for the Company s fiscal year ending December 31, 2022.
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 for the 15 month period to December 31,
2023, 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 50.8 million at September 30, 2022 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.
The Company continues to evaluate and assess the impact of COVID-19 on its operations and believes if
there is a resurgence in COVID-19 that this would potentially cause some delays to the timing and progress of its clinical trials.
COVID-19 has had no impact on the judgements and estimates used in the preparation of these financial
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, 2021.
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Current tax: | ||||||||||||||||
| In respect of current period U.K. | 1,404 | 1,845 | 4,619 | 5,139 | ||||||||||||
| In respect of current period U.S. | (1 | ) | ||||||||||||||
| In respect of prior period U.K. | 35 | 70 | 35 | 70 | ||||||||||||
| 1,439 | 1,915 | 4,653 | 5,209 | |||||||||||||
| Deferred tax: | ||||||||||||||||
| In respect of current period U.S. | 6 | (4 | ) | 19 | (11 | ) | ||||||||||
| In respect of prior period U.S. | ||||||||||||||||
| Income tax credit | 1,445 | 1,911 | 4,672 | 5,198 |
The income tax credit primarily represents the U.K. research and development tax credit. In the United
Kingdom, the Company is able to surrender some of its trading losses for a cash rebate of up to 33.35% of expenditure related to eligible research and development projects.
| September 30, 2022 | December 31, 2021 | |||||||
| (in thousands) | ||||||||
| Current income tax receivable | ||||||||
| U.K. tax | 4,619 | 7,185 | ||||||
| U.S. tax | 3 | 3 | ||||||
| 4,622 | 7,188 | |||||||
| Deferred tax asset | ||||||||
| U.S. deferred tax asset | 95 | 60 |
4. Basic and diluted loss per share
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Loss for the period | (4,528 | ) | (8,041 | ) | (16,822 | ) | (26,889 | ) | ||||||||
| Basic and diluted weighted average number of shares | 52,196 | 52,165 | 52,192 | 51,994 | ||||||||||||
| Basic and diluted loss per share | (0.09 | ) | (0.15 | ) | (0.32 | ) | (0.52 | ) |
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
includes patents with a carrying value of 2.5 million as of September 30, 2022 (as of December 31, 2021: 2.3 million).
During the nine months ended September 30, 2022, the Company acquired intangible assets with a cost of 0.4 million in relation
6. Other non-current assets
| September 30, 2022 | December 31, 2021 | |||||||
| (in thousands) | ||||||||
| Other non-current assets | 2,655 | 2,540 |
During 2021, the Company provided a security of 3.0 million by depositing funds with the German
Regional Court of Dusseldorf ( RC Dusseldorf ) to cover the legal costs of Gilead Sciences Ireland UC and Gilead Sciences GmbH in the event that the Company is unsuccessful in the final outcome of the patent infringement litigation in
The extent to which the sum deposited will be reimbursed to the Company is dependent on a range of potential outcomes with
respect to the patent infringement litigation in Germany, and the timing of those outcomes, which is currently indeterminable.
| September 30, 2022 | December 31, 2021 | |||||||
| (in thousands) | ||||||||
| Cash and cash equivalents | 50,752 | 60,264 |
Cash and cash equivalents comprise cash at banks with deposit maturity terms of three months or less. Cash at
banks earns interest at fixed or variable rates based on the terms agreed for each account.
8. Share-based payments
The Company has six share-based payment plans for employees, directors and consultants. The share options granted will be settled in equity. If
the Company determines, and at its discretion, an arrangement may be made under the 2020 Long-Term Incentive Plan to substitute the right to acquire shares with a cash alternative of equivalent value. Options granted under each of the six plans have
a maximum life of 10 years.
As detailed in the table below, during the nine months ended September 30, 2022,
1,497,013 share options were granted under the 2020 Long-Term Incentive Plan (nine months ended September 30, 2021: 4,164,913 share options granted). Options granted under this plan 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 over a period of up to 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 such as the assumption that the options are exercised at a point in time of up to two years after vesting. This has been incorporated into the measurement by means of actuarial modelling. As NuCana plc was unlisted until
October 2, 2017, it is not possible to derive historical volatility from the Company s ADSs prior to October 2017. For options with an estimated life of greater than four years, the underlying expected volatility was determined by using
the average of the historical volatility of similar listed entities as a proxy. Options granted with an estimated life of four years or less, have been valued using the Company s own historical volatility rates.
| Options granted on | ||||||||||||||||
| March 9, 2022 | March 9, 2022 | July 12, 2022 | July 12, 2022 | |||||||||||||
| Vesting dates | March 9, 2023 | March 9, 2023 | July 12, 2023 | July 12, 2023 | ||||||||||||
| March 9, 2024 | March 9, 2024 | July 12, 2024 | July 12, 2024 | |||||||||||||
| March 9, 2025 | March 9, 2025 | July 12, 2025 | July 12, 2025 | |||||||||||||
| March 9, 2026 | March 9, 2026 | July 12, 2026 | July 12, 2026 | |||||||||||||
| Volatility | 89.32 | % | 95.70 | % | 94.05 | % | 103.18 | % | ||||||||
| Dividend yield | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||
| Risk-free investment rate | 1.36 | % | 1.37 | % | 1.76 | % | 1.79 | % | ||||||||
| Fair value of option at grant date | 0.37 | 0.53 | 0.64 | 0.64 | ||||||||||||
| Fair value of share at grant date | 0.56 | 0.56 | 0.67 | 0.67 | ||||||||||||
| Exercise price at date of grant | 0.56 | 0.04 | 0.04 | 0.04 | ||||||||||||
| Lapse date | March 9, 2032 | March 9, 2032 | July 12, 2032 | |||||||||||||
| Expected option life (years) | 4.5 | 3.5 | 3.5 | 2.5 | ||||||||||||
| Number of options granted | 1,020,925 | 95,000 | 275,725 | 105,363 |
For the three months ended September 30, 2022, the Company recognized 1.2 million of
share-based payment expense in the statement of operations (three months ended September 30, 2021: 1.3 million). For the nine months ended September 30, 2022, the Company recognized 3.9 million of share-based payment
expense in the statement of operations (nine months ended September 30, 2021: 4.9 million).
9. Share capital and share premium
| September 30, 2022 | December 31, 2021 | |||||||
| (in thousands) | ||||||||
| Share capital | 2,088 | 2,087 | ||||||
| Share premium | 141,050 | 141,050 | ||||||
| 143,138 | 143,137 | |||||||
| September 30, 2022 | December 31, 2021 | |||||||
| Number (in thousands) | ||||||||
| Issued share capital comprises: | ||||||||
| Ordinary shares of 0.04 each | 52,196 | 52,180 |
| Number of shares | Share capital | Share premium | ||||||||||
| (in thousands) | ||||||||||||
| Fully paid shares: | ||||||||||||
| Balance at December 31, 2021 | 52,180 | 2,087 | 141,050 | |||||||||
| Issue of shares on exercise of options | 16 | 1 | ||||||||||
| Balance at September 30, 2022 | 52,196 | 2,088 | 141,050 |
10. Contingent assets and liabilities
As referenced in Note 6, during 2021 the Company provided a security of 3.0 million to cover the legal costs of Gilead Sciences
Ireland UC and Gilead Sciences GmbH in the event that the Company is unsuccessful in the final outcome of the patent infringement litigation in Germany. Any cost reimbursement by the Company to the defendants is dependent on a range of potential
outcomes, and the timing of those outcomes, with respect to the litigation, which are currently indeterminable. Therefore, no provision has been recognized with respect to these legal costs as the Company does not consider it probable that the
litigation will be unsuccessful.
In July 2022, following a comprehensive hearing in May 2022, RC Dusseldorf issued a first instance
judgment that the two Gilead entities infringe our composition of matter claims in EP 2955190 through their sales of Sovaldi, Harvoni, Vosevi and Epclusa in Germany. Following this judgment, Gilead is obliged to bear the costs of these proceedings,
including approximately 0.9 million ( 0.8 million) of costs incurred to date by NuCana in relation to the patent infringement litigation in Germany. The precise amount is to be fixed by the RC Dusseldorf and Gilead has appealed the