EX-99.1 2 d135511dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

NUCANA PLC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

            For the Three Months Ended
March 31,
 
     Notes      2021     2020  
            (in thousands, except per share data)  
            £     £  

Research and development expenses

        (8,706     (5,938

Administrative expenses

        (2,104     (1,609

Net foreign exchange (losses) gains

        (677     2,127  
     

 

 

   

 

 

 

Operating loss

        (11,487     (5,420

Finance income

        24       144  
     

 

 

   

 

 

 

Loss before tax

        (11,463     (5,276

Income tax credit

     3        1,702       1,310  
     

 

 

   

 

 

 

Loss for the period

        (9,761     (3,966
     

 

 

   

 

 

 

Basic and diluted loss per share

     4        (0.19     (0.12

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.


NUCANA PLC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

 

     For the Three Months Ended
March 31,
 
     2021     2020  
     (in thousands)  
     £     £  

Loss for the period

     (9,761     (3,966

Other comprehensive (expense) income:

    

Items that may be reclassified subsequently to profit or loss:

    

Exchange differences on translation of foreign operations

     (3     21  
  

 

 

   

 

 

 

Other comprehensive (expense) income for the period

     (3     21  
  

 

 

   

 

 

 

Total comprehensive loss for the period

     (9,764     (3,945
  

 

 

   

 

 

 

Attributable to:

    

Equity holders of the Company

     (9,764     (3,945
  

 

 

   

 

 

 

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

 

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NUCANA PLC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS AT

 

                                                                    
          March 31,
2021
    December 31,
2020
 
          (in thousands)  
     Notes    £     £  

Assets

       

Non-current assets

       

Intangible assets

   5      4,764       4,753  

Property, plant and equipment

        1,098       1,189  

Deferred tax asset

   3      40       44  
     

 

 

   

 

 

 
        5,902       5,986  
     

 

 

   

 

 

 

Current assets

       

Prepayments, accrued income and other receivables

        4,813       4,628  

Current income tax receivable

   3      11,529       9,822  

Cash and cash equivalents

   6      78,625       87,356  
     

 

 

   

 

 

 
        94,967       101,806  
     

 

 

   

 

 

 

Total assets

        100,869       107,792  
     

 

 

   

 

 

 

Equity and liabilities

       

Capital and reserves

       

Share capital and share premium

   8      143,135       142,937  

Other reserves

        67,470       66,887  

Accumulated deficit

        (119,146     (110,594
     

 

 

   

 

 

 

Total equity attributable to equity holders of the Company

        91,459       99,230  
     

 

 

   

 

 

 

Non-current liabilities

       

Provisions

        46       46  

Lease liabilities

        296       367  
     

 

 

   

 

 

 
        342       413  
     

 

 

   

 

 

 

Current liabilities

       

Trade payables

        3,542       2,257  

Payroll taxes and social security

        159       177  

Accrued expenditure

        5,087       5,437  

Lease liabilities

        280       278  
     

 

 

   

 

 

 
        9,068       8,149  

Total liabilities

        9,410       8,562  
     

 

 

   

 

 

 

Total equity and liabilities

        100,869       107,792  
     

 

 

   

 

 

 

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

 

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NUCANA PLC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

 

     For the Three Months Ended March 31,  
     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, 2020

     1,299        79,541        (339     20,620       (10     42,466        (80,055     63,522  

Loss for the period

     —          —          —         —         —         —          (3,966     (3,966

Other comprehensive income for the period

     —          —          —         —         21       —          —         21  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total comprehensive loss for the period

     —          —          —         —         21       —          (3,966     (3,945

Share-based payments

     —          —          —         856       —         —          —         856  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Balance at March 31, 2020

     1,299        79,541        (339     21,476       11       42,466        (84,021     60,433  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Balance at January 1, 2021

     2,047        140,890        (339     24,782       (22     42,466        (110,594     99,230  

Loss for the period

     —          —          —         —         —         —          (9,761     (9,761

Other comprehensive expense for the period

     —          —          —         —         (3     —          —         (3
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total comprehensive loss for the period

     —          —          —         —         (3     —          (9,761     (9,764

Share-based payments

     —          —          —         1,795       —         —          —         1,795  

Exercise of share options

     39        159        —         (1,088     —         —          1,088       198  

Lapse of share options

     —          —          —         (121     —         —          121       —    
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Balance at March 31, 2021

     2,086        141,049        (339     25,368       (25     42,466        (119,146     91,459  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

 

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NUCANA PLC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

     For the Three Months Ended
March 31,
 
     2021     2020  
     (in thousands)  
     £     £  

Cash flows from operating activities

    

Loss for the period

     (9,761     (3,966

Adjustments for:

    

Income tax credit

     (1,702     (1,310

Amortization and depreciation

     222       217  

Finance income

     (24     (144

Interest expense on lease liabilities

     6       —    

Share-based payments

     1,795       856  

Net foreign exchange losses (gains)

     664       (2,164
  

 

 

   

 

 

 
     (8,800     (6,511

Movements in working capital:

    

(Increase) decrease in prepayments, accrued income and other receivables

     (191     423  

Increase in trade payables

     1,285       44  

Decrease in payroll taxes, social security and accrued expenditure

     (368     (165
  

 

 

   

 

 

 

Movements in working capital

     726       302  
  

 

 

   

 

 

 

Cash used in operations

     (8,074     (6,209
  

 

 

   

 

 

 

Net income tax received

     —         —    
  

 

 

   

 

 

 

Net cash used in operating activities

     (8,074     (6,209
  

 

 

   

 

 

 

Cash flows from investing activities

    

Interest received

     24       187  

Payments for property, plant and equipment

     (4     (10

Payments for intangible assets

     (138     (398
  

 

 

   

 

 

 

Net cash used in investing activities

     (118     (221
  

 

 

   

 

 

 

Cash flows from financing activities

    

Payments for lease liabilities

     (74     (73

Proceeds from issue of share capital

     198       —    
  

 

 

   

 

 

 

Net cash from (used in) financing activities

     124       (73
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (8,068     (6,503

Cash and cash equivalents at beginning of period

     87,356       51,962  
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (663     2,141  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

     78,625       47,600  
  

 

 

   

 

 

 

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

 

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NUCANA PLC

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. General information

NuCana plc (“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 “Group”).

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.

The Group’s statutory accounts for the year ended December 31, 2020 have not yet been reported on by the Company’s auditor or delivered to the Registrar of Companies. The Company filed its Annual Report on Form 20-F for the year ended December 31, 2020 with the SEC on March 4, 2021, which included the Company’s Consolidated Financial Statements for its fiscal year ended December 31, 2020. Those financial statements have been reported on by the Company’s auditor. The report of the auditor was (i) unqualified and (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report.

2. Significant accounting policies

Basis of preparation

The unaudited condensed consolidated financial statements (the “financial statements”) for the three months ended March 31, 2021 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, 2020. No new standards, amendments or interpretations have had an impact on the financial statements for the three months ended March 31, 2021. The financial statements comprise the financial statements of the Group at March 31, 2021. 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, 2020.

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 ended March 31, 2021 are not necessarily indicative of the results that can be expected for the Company’s fiscal year ending December 31, 2021.

Going concern

In 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 £78.6 million at March 31, 2021 will be sufficient to fund its current operating plan for at least the next 12 months. Further, the directors have conducted an assessment of the impact of COVID-19 on the going concern status of the Company and have concluded that it will not have a significant negative impact on the cash outflows of the Company over the period assessed for going concern purposes.

 

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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.

COVID-19

In response to the COVID-19 pandemic, all of the Company’s offices have been closed with employees continuing their work outside of the offices and the Company has restricted on-site staff access to only those required to execute their job responsibilities.

During the early months of the pandemic the Company announced that there was some temporary interruption to the enrollment of new patients in the Company’s ongoing clinical trials. In May 2020, the Company further announced that enrollment of new patients in the Company’s clinical trials had re-commenced. While the Company continues to evaluate the impact of COVID-19 on its operations, the Company believes that this pandemic will inevitably cause some delays to the timing of initiation and completion of its clinical trials. The Company is continuing to monitor the impact of COVID-19.

COVID-19 has had no impact on the judgements and estimates used in the preparation of these financial statements.

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, 2020.    

3. Income tax

 

     For the Three Months Ended
March 31,
 
     2021      2020  
     (in thousands)  
     £      £  

Current tax:

     

In respect of current period U.K.

     1,706        1,315  

In respect of current period U.S.

     —          —    
  

 

 

    

 

 

 
     1,706        1,315  

Deferred tax:

     

In respect of current period U.S.

     (4      (4

In respect of prior period U.S.

     —          (1
  

 

 

    

 

 

 

Income tax credit

     1,702        1,310  
  

 

 

    

 

 

 

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.

 

     March 31,
2021
     December 31,
2020
 
     (in thousands)  
     £      £  

Current income tax receivable

     

U.K. tax

     11,525        9,818  

U.S. tax

     4        4  
  

 

 

    

 

 

 
             11,529        9,822  
  

 

 

    

 

 

 

Deferred tax asset

     

U.S. deferred tax asset

     40        44  
  

 

 

    

 

 

 

 

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4. Basic and diluted loss per share

 

     For the Three Months Ended
March 31,
 
     2021      2020  
     (in thousands, except
per share data)
 
     £      £  

Loss for the period

     (9,761      (3,966
  

 

 

    

 

 

 

Basic and diluted weighted average number of shares

     51,649        32,479  
     £      £  

Basic and diluted loss per share

     (0.19      (0.12
  

 

 

    

 

 

 

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

Intangible assets comprise patents with a carrying value of £4.6 million as of March 31, 2021 (as of December 31, 2020: £4.6 million) and computer software with a carrying value of £0.2 million as of March 31, 2021 (as of December 31, 2020: £0.2 million).

During the three months ended March 31, 2021, the Company acquired intangible assets with a cost of £0.1 million in relation to patents. There were no disposals of intangible assets in the three months ended March 31, 2021.

6. Cash and cash equivalents

 

                                             
     March 31,
2021
     December 31,
2020
 
     (in thousands)  
     £      £  

Cash and cash equivalents

     78,625        87,356  
  

 

 

    

 

 

 

Cash and cash equivalents comprise cash at banks with deposit maturity terms of three months or less, which is subject to insignificant risk of changes in value. Cash at banks earns interest at fixed or variable rates based on the terms agreed for each account.

7. 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. Options granted under each of the six plans have a maximum life of 10 years. 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.

As detailed in the table below, during the three months ended March 31, 2021, 1,501,663 share options were granted under the 2020 Long-Term Incentive Plan (three months ended March 31, 2020: no 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.

 

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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 three 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 three years or less, have been valued using the Company’s own historical volatility rates.

 

    Options granted on  
    January 13, 2021     February 10, 2021     February 10, 2021     February 10, 2021  

Vesting dates

    January 13, 2022       February 10, 2022       February 10, 2022       February 10, 2022  
    January 13, 2023       February 10, 2023       February 10, 2023       February 10, 2023  
    January 13, 2024       February 10, 2024       February 10, 2024       February 10, 2024  
    January 13, 2025       February 10, 2025       February 10, 2025       February 10, 2025  

Volatility

    81.42     81.45     87.66     83.86

Dividend yield

    0     0     0     0

Risk-free investment rate

    0.01     0.11     0.01     0.05

Fair value of option at grant date

  £ 2.37     £ 2.74     £ 4.49     £ 4.49  

Fair value of share at grant date

  £ 3.92     £ 4.53     £ 4.53     £ 4.53  

Exercise price at date of grant

  £ 3.92     £ 4.53     £ 0.04     £ 0.04  

Lapse date

    January 13, 2031       February 10, 2031       —         February 10, 2031  

Expected option life (years)

    4.50       4.50       2.50       3.50  

Number of options granted

    200,000       872,775       91,888       337,000  

For the three months ended March 31, 2021, the Company has recognized £1.8 million of share-based payment expense in the statement of operations (three months ended March 31, 2020: £0.9 million).

8. Share capital and share premium

 

     March 31,
2021
     December 31,
2020
 
     (in thousands)  
     £      £  

Share capital

     2,086        2,047  

Share premium

     141,049        140,890  
  

 

 

    

 

 

 
          143,135        142,937  
  

 

 

    

 

 

 

 

     March 31,
2021
     December 31,
2020
 
    

Number

(in thousands)

 
Issued share capital comprises:              

Ordinary shares of £0.04 each

            52,162        51,175  
  

 

 

    

 

 

 

 

     Number of
shares
     Share
capital
     Share
premium
 
     (in thousands)  
Fully paid shares:           £      £  

Balance at December 31, 2020

     51,175        2,047        140,890  

Issue of shares on exercise of options

     987        39        159  
  

 

 

    

 

 

    

 

 

 

Balance at March 31, 2021

     52,162        2,086        141,049  
  

 

 

    

 

 

    

 

 

 

 

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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 March 31, 2021, 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 £0.8 million (December 31, 2020: £0.8 million).

 

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