Corporate News
Final Results
06 June 2023
Oxford, UK. GENinCode Plc (LSE:AIM GENI), the genetics company focused on the prevention of cardiovascular disease (CVD), announces its audited final results for the twelve months ended 31 December 2022. The 2022 financial year saw the Company accelerate its commercial expansion programme in the US, UK and Europe and the Company is now preparing to launch its first clinical diagnostic and risk assessment tests into the US market with its Early Access Programs.
DownloadThese Results are available in PDF format. |
Operational and financial highlights
- Preparation for US launch of LIPID inCode® for the diagnosis of familial hypercholesterolemia (“FH”) and CARDIO inCode® for the genetic risk of coronary heart disease.
- Improving US market conditions set by American Heart Association for the introduction of polygenic testing for coronary heart disease and reimbursement coverage for LIPID inCode®.
- Final preparations ongoing for filing FDA 510K submission for Cardio inCode® (kit format) for the onset of cardiovascular disease (“CVD”).
- NHS adoption of LIPID inCode® for FH diagnosis in the North of England to deliver comprehensive testing, improved turnaround times at reduced cost.
- CARDIO inCode® pilot launched in Extremadura, Spain.
- Acquisition of Risk of Ovarian Cancer Algorithm (ROCA) test for women at high risk of ovarian cancer. Awaiting completion of review by National Institute for Health and Care Excellence (NICE) as part of new guidance development.
- Full year revenues £1.4m (2021: £1.2m).
- Increased levels of investment in the commercialisation programme giving rise to a reported adjusted EBITDA loss of (£5.6m) (2021: loss of (£3.4m)).
- Cash reserves of £9.7m at 31 December 2022 (2021: £14.6m).
Post-period end highlights
- California state licensing approval and CLIA certification received for provision of LIPID inCode® and CARDIO inCode® test services from the Company’s laboratory based in Irvine, California.
- CPT PLA coding granted from the American Medical Association for CARDIO inCode®
- Announcement of LIPID inCode® collaboration with University Clinic Dresden, Germany for primary care diagnosis of FH and risk assessment of CVD.
- Presentation by Kaiser Permanente on the use of CARDIO inCode® for the polygenic risk assessment of CVD at European Society of Cardiology Annual Meeting in August 2023 in Amsterdam.
Matthew Walls, Chief Executive Officer of GENinCode Plc said: “We are starting to commercially advance our polygenic tests in the US and UK which together with our growing EU business and strengthening clinical evidence will enable us to rapidly scale our business. We remain firmly focused on our US product launch and first US revenues, broadening our NHS commercial relationship and expansion across our EU business. We will drive revenue growth whilst maintaining a tight operational cost base to target breakeven over the medium term, de-risking our business model whilst offering significant growth potential.”
Investor meeting
The Company will also host a presentation for investors via the IMC platform 2pm BST on Thursday, 8 June. The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9am the day before the meeting or at any time during the live presentation. To register, please use the following link: https://www.investormeetcompany.com/genincode-plc/register-investor
CHAIRMAN AND CHIEF EXECUTIVE OFFICER’S STATEMENT
2022 Business review
In the preliminary results for the twelve months ending 31 December 2022, the Company saw a year-on-year revenue increase to £1.4m (2021: £1.2m) primarily from growth in our European business. The Company’s key products include:
CARDIO inCode®- Genetic risk assessment of coronary heart disease
LIPID inCode® - Genetic diagnosis and management of familial (inherited) hypercholesterolemia
THROMBO inCode® - Genetic diagnosis and risk assessment of thrombophilia and thrombotic risk
SUDD inCode® - Genetic diagnosis and cause of sudden cardiac death and familial heart disease
The Company is now starting commercial expansion programmes in the US and UK to complement its European revenue growth.
US Business
The past year has seen significant advances in US genetic healthcare policy with a milestone statement by American Heart Association (AHA) on the importance of Polygenic Risk Scores for the future risk assessment of cardiovascular disease. We are now preparing our Early Access Program (EAP) discussions for the launch of LIPID inCode® and CARDIO inCode-Score® in the US with a select group of leading healthcare institutions from which we expect to see clinical adoption.
Recent public health developments announced by the US Centres for Disease Control to identify individuals suffering with familial hypercholesterolemia (FH) have escalated the disease area to a ‘Tier 1’ public health status. Resulting from this increased focus on FH and existing reimbursement coding for FH diagnosis, we have accelerated the commissioning and validation of LIPID inCode® for the US market.
Over the year the Company commissioned its US diagnostic lab and applied for and received California State Licensing approval and subsequently CLIA (Clinical Laboratory Improvement Amendments) regulatory approval for our dedicated US laboratory based in Irvine, California. CLIA approval enables the Company to start selling its lab diagnostic tests in the US market. The dedicated CLIA lab also enables greater control, efficiency over our supply chain alongside improved gross margins from our operations. Both CARDIO inCode-Score® and LIPID inCode® are now preparing for commercial launch.
Following the US Food and Drug Administration (FDA) Pre-Submission for the CARDIO inCode® test kit for coronary heart disease, we have continued productive discussions with the FDA for the preparation and regulatory filing of our final 510K kit submission. Analytical work to complete the filing has been extensive and time consuming. We are nearing completion of this programme and expect to file our 510K over the coming weeks. We anticipate a six-month review period with the FDA prior to expected approval later this year. The approval of the 510K ‘kit format’ will complement our existing lab diagnostic test services and will extend sales across other CLIA labs in the US market.
At the end of the year, we bolstered the GENinCode US sales team and are now preparing to ‘soft launch’ the LIPID inCODE® and CARDIO inCode® Early Access Programs (EAPs). The EAPs will enable selected institutions and KOL physicians to access these products on a ‘free of charge’ basis in return for market feedback. We expect these programs to lead to the start of first US test revenues.
During the year we also commenced collaborations with Indiana University (IU) School of Medicine, the largest US medical school, in preparation for the introduction of CARDIO inCode® to the US market and expanded our collaboration with Kaiser Permanente, California, to assess CARDIO inCode® for the polygenic risk assessment of CVD. We anticipate strong clinical utility results from both the IU and Kaiser Permanente collaborations with business updates expected over the coming months.
UK and Europe Business
In the UK NHS, we successfully completed and published our first LIPID inCode® NHS clinical study to improve diagnosis and turnaround time for testing of Familial Hypercholesterolemia (FH) at reduced cost to the NHS. Following the NHS publication, we announced the implementation of LIPID inCode® with the North East and Cumbria – Academic Health Science Network (NENC-AHSN) and more recently our first major commercial programme to support the NHS 10-Year plan to identify 25% of those individuals in the UK suffering with FH. The LIPID inCode® implementation represents the first commercial polygenic CVD risk test to be adopted by the NHS. During the year we also announced a collaboration with BUPA Cromwell Hospital, London, for use of our LIPID inCode® test leading to our first UK product revenues.
Aligned with our UK growth, we commissioned our new UK lab based in Hammersmith, London.
We have also recently announced our collaboration with MVZ Uniklinikum labs in Dresden, Germany. Uniklinikum represent the largest treatment centre in Germany for patients suffering with hypercholesterolemia and the German team will follow a similar pathway to the NHS with state-based reimbursement for our initial LIPID inCode® test.
In Spain, we announced the first CARDIO inCode® pilot implementation study in the Spanish region of Extremadura. The Extremadura region has a population of c.1m, with an estimated 50,000 individuals at risk of a cardiovascular event, including heart attack. CARDIO inCode® is expected to change clinical practice by identifying those individuals at high genetic risk and improve preventative treatment. Successful completion of the pilot in over 500 individuals will lead to the extension of the programme across the Extremadura region.
We also completed our first THROMBO inCode® COVID-19 evaluation study for patients with a genetic predisposition to thrombosis at St Pau Hospital, Spain. We are continuing to clinically assess the impact of thrombosis in the escalation of severe COVID-19 where it is conveniently aligned with our existing strategy.
In October, we announced the acquisition of the entire issued share capital of Abcodia Limited, Cambridge, and its Risk of Ovarian Cancer Algorithm (ROCA) test and technology. Unique in its field, and based on growing published clinical evidence, the ROCA test represents a breakthrough for the early detection of familial ovarian cancer in BRCA+ genetically predisposed women. The clinical and economic benefits of the ROCA test are under review by NICE as part of new guidance development for this cohort of women, and through additional industry partnerships, the test is poised to engage commercially, initially in the UK.
Intellectual Property
We maintain an ongoing intellectual property programme to strengthen our existing patent portfolio and are advancing our family of patents for both CARDIO inCode® and THROMBO inCode®. We will continue to build our intellectual property portfolio and actively evaluate in-licensing and acquisition opportunities as appropriate to enhance our competitive product positioning.
Financial review
Following the admission of the Company to the AIM market in July 2021 and the £15.3m net funds raised, we have delivered our commercial programme for the US, UK and EU markets whilst maintaining tight control over spending. This approach has enabled us to meet our business plans whilst retaining strong cash reserves in a weakening financial market.
Our EU business reported revenues of £1.4m (2021 £1.2m) for the full year. Gross profit for the year was £632k (2021: £593k) with a margin of 44% (2021: 51%). The reduced margin reflecting the increased (largely inflationary) material and service costs over the year.
Administrative expenses increased to £6.3m (2021: £4.0m). The year-on-year cost increase reflecting growth in staffing and professional costs with the ramp up in US and UK investment in preparation for our US and UK laboratory services, increased sales and marketing resource with spending primarily focused on market access and launch preparations.
This increased commercial investment gave rise to an adjusted EBITDA loss for the year of (£5.6m) (2021: (£3.4m)), with the cash position at the end of December 2022 being £9.7m (2021: £14.6m).
Capital structure
The total number of ordinary shares in issue was 95,816,866. The loss per share for the year ending 31 December 2022 was 6.2p/share. The Board of Directors will not be recommending a dividend payment for the year ended 31 December 2022.
Outlook
We will continue to take commercial advantage of our product developments and strong clinical evidence to scale the market opportunities now emerging. We are focused on our US launch, generating our first US revenues, the development of our NHS relationships and expansion in the EU. Given the challenging markets, we are driving revenue growth whilst maintaining a tight operational cost base to target a breakeven/profit position over the medium term. This will enable us to de-risk our business model whilst delivering strong growth as our products come to market in the US, alongside UK and EU growth.
During 2023, we expect to complete the following key deliverables:
- Launch of LIPID inCode® and CARDIO inCode® Early Access Programs in the US market to generate first US revenues
- Finalisation and filing of 510K regulatory submission for CARDIO inCode® (kit format) to accelerate US sales
- Expand NHS programme for LIPID inCode® and introduce CARDIO inCode®
- Expand the MVZ Uniklinikum, Germany collaborative program and menu of products
- Build our EU partnerships and develop our ongoing collaborative discussions with pharmaceutical companies
- Strengthen the commercial, marketing and selling teams to support US revenue growth
We are now preparing launch plans in the US to complement our UK and EU revenue growth.
We have a strong and growing competitive clinical advantage to identify patients at genetic risk of coronary heart disease to improve preventive care in the largest global disease area with highest level of mortality.
Commensurate with growth we will build investment in our international manpower resource and expertise as well as exploring other acquisition opportunities to take advantage of the growth opportunities open to us.
We continue to strengthen our business and believe our tests are industry leading and will deliver significant investor returns. We would like to thank our investors, Board, management and employees for their strength and determination in helping support and drive our business growth.
We look forward to updating our investors on our forthcoming progress.
| Matthew Walls Chief Executive Officer 5 June 2023 | William Rhodes Chairman 5 June 2023 |
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December 2022
| 2022 | 2021 | ||
|---|---|---|---|
| £’000 | £’000 | ||
| CONTINUING OPERATIONS | |||
| Revenue | 1,430 | 1,154 | |
| Cost of sales | (798) | (561) | |
| GROSS PROFIT | 632 | 593 | |
| Administrative expenses | (6,266) | (4,019) | |
| ADJUSTED EBITDA | (5,634) | (3,426) | |
| Depreciation | (104) | (6) | |
| Amortisation | (59) | (29) | |
| Loss on disposal of fixed assets | - | (19) | |
| Share based payment expense | (102) | (73) | |
| Listing costs | - | (584) | |
| Non-recurring expenditure | - | (9) | |
| OPERATING LOSS | (5,899) | (4,146) | |
| Other income | 173 | 10 | |
| Finance charge | (20) | - | |
| LOSS BEFORE INCOME TAX | (5,746) | (4,136) | |
| Income tax | 187 | (6) | |
| LOSS FOR THE FINANCIAL YEAR | (5,559) | (4,142) | |
| Other comprehensive income for the year | |||
| Items that are or may be subsequently reclassified to the profit and loss: | |||
| Exchange differences on translation of foreign operations | (361) | 72 | |
| LOSS ATTRIBUTABLE TO EQUITY SHAREHOLDERS OF THE COMPANY | (5,920) | (4,070) | |
| EARNINGS PER SHARE | |||
| Basic earnings per share (pence) | (6.18) | (8.05) | |
| Diluted earnings per share (pence) | (6.18) | (8.05) | |
Consolidated Statement of Financial Position
31 December 2022
| 2022 | 2021 | ||
|---|---|---|---|
| £’000 | £’000 | ||
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Intangible assets | 161 | 193 | |
| Property, plant and equipment | 653 | 46 | |
| Right of use asset | 349 | - | |
| Goodwill | 149 | - | |
| 1,312 | 239 | ||
| CURRENT ASSETS | |||
| Inventories | 20 | 14 | |
| Trade and other receivables | 717 | 399 | |
| Cash and cash equivalents | 9,732 | 14,554 | |
| Financial assets | 16 | 4 | |
| 10,485 | 14,971 | ||
| TOTAL ASSETS | 11,797 | 15,210 | |
| EQUITY | |||
| SHAREHOLDERS’ EQUITY | |||
| Called up share capital | 958 | 958 | |
| Share premium | 15,551 | 15,551 | |
| Foreign currency translation reserve | (289) | 72 | |
| Share based payment reserve | 175 | 73 | |
| Retained earnings | (8,495) | (2,936) | |
| TOTAL EQUITY | 7,900 | 13,718 | |
| LIABILITIES | |||
| NON-CURRENT LIABILITIES | |||
| Trade and other payables | 1,434 | 661 | |
| Lease liability | 285 | - | |
| CURRENT LIABILITIES | |||
| Trade and other payables | 2,078 | 825 | |
| Lease liability | 69 | - | |
| Deferred Tax | 31 | 6 | |
| TOTAL LIABILITIES | 3,897 | 1,492 | |
| TOTAL EQUITY AND LIABILITIES | 11,797 | 15,210 |
Company Statement of Financial Position
31 December 2022
| 2022 | 2021 | ||
|---|---|---|---|
| £’000 | £’000 | ||
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Investments | 221 | 31 | |
| Intangible assets | 159 | 179 | |
| Property, plant, and equipment | 164 | 32 | |
| Right of use asset | 349 | - | |
| Trade and other receivables | 5,668 | 2,791 | |
| 6,561 | 3,033 | ||
| CURRENT ASSETS | |||
| Trade and other receivables | 531 | 168 | |
| Cash and cash equivalents | 9,468 | 14,243 | |
| 9,999 | 14,411 | ||
| TOTAL ASSETS | 16,560 | 17,444 | |
| EQUITY | |||
| SHAREHOLDERS’ EQUITY | |||
| Called up share capital | 958 | 958 | |
| Share premium | 15,551 | 15,551 | |
| Share based payment reserve | 175 | 73 | |
| Retained earnings | (1,413) | 493 | |
| TOTAL EQUITY | 15,271 | 17,075 | |
| LIABILITIES | |||
| NON-CURRENT LIABILITIES | |||
| Contingent consideration provision | 155 | - | |
| Lease liability | 285 | - | |
| CURRENT LIABILITIES | |||
| Trade and other payables Lease liability | 749 69 | 363 - | |
| Deferred Tax | 31 | 6 | |
| TOTAL LIABILITIES | 1,289 | 369 | |
| TOTAL EQUITY AND LIABILITIES | 16,560 | 17,444 |
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2022
| Foreign | ||||||
|---|---|---|---|---|---|---|
| Called up | Share | Currency | Share based | |||
| share | premium | Translation | payment | Retained | Total | |
| capital | account | Reserve | reserve | earnings | equity | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Balance at 1 January 2021 | 114 | 3,318 | - | - | (1,573) | 1,859 |
| Changes in equity | ||||||
| Reduction of share premium | - | (2,779) | - | - | 2,779 | - |
| Bonus share issue | 458 | (458) | - | - | - | - |
| Issue of share capital | 386 | 16,614 | - | - | - | 17,000 |
| Costs of share issue | - | (1,144) | - | - | - | (1,144) |
| Share based payments | - | - | - | 73 | - | 73 |
| Profit or loss | - | - | - | - | (4,142) | (4,142) |
| Foreign exchange on translation | - | - | 72 | - | - | 72 |
| Balance at 31 December 2021 | 958 | 15,551 | 72 | 73 | (2,936) | 13,718 |
| Changes in equity | ||||||
| Share based payments | - | - | - | 102 | - | 102 |
| Profit or loss | - | - | - | - | (5,559) | (5,559) |
| Foreign exchange on translation | - | - | (361) | - | - | (361) |
| Balance at 31 December 2022 | 958 | 15,551 | (289) | 175 | (8,495) | 7,900 |
Company Statement of Changes in Equity
for the Year Ended 31 December 2022
| Called up | Share | ||||
|---|---|---|---|---|---|
| share | premium | Other | Retained | Total | |
| capital | account | reserves | earnings | equity | |
| £’000 | £’000 | £’000 | £’000 | £’000 |
Balance at 1 January 2021 | 114 | 3,318 | - | (429) | 3,003 |
Changes in equity | |||||
Reduction of share premium | - | (2,779) | - | 2,779 | - |
Bonus share issue | 458 | (458) | - | - | - |
Issue of share capital | 386 | 16,614 | - | - | 17,000 |
Costs of share issue | - | (1,144) | - | - | (1,144) |
Share based payments | - | - | 73 | - | 73 |
Profit or loss | - | - | - | (1,857) | (1,857) |
Balance at 31 December 2021 | 958 | 15,551 | 73 | 493 | 17,075 |
Changes in equity | |||||
Share based payments | - | - | 102 | - | 102 |
Profit or loss | - | - | - | (1,906) | (1,906) |
Balance at 31 December 2022 | 958 | 15,551 | 175 | (1,413) | 15,271 |
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2022
| 2022 | 2021 | |
|---|---|---|
| £'000 | £'000 |
Cash flows from operating activities | ||
Loss before taxation | (5,745) | (4,137) |
Adjustments for: | ||
Foreign exchange loss/(gain) | (197) | 136 |
Depreciation and amortisation | 163 | 35 |
Loss on disposal | - | 19 |
Share based payments | 102 | 73 |
Finance charges | 19 | - |
Taxation | - | 6 |
Operating loss before working capital changes | (5,658) | (3,868) |
Cash used in operations | ||
Decrease / (Increase) in trade and other receivables | (106) | (150) |
(Decrease) / Increase in trade and other payables | 2,022 | 922 |
Decrease / (Increase) in inventory | (6) | 4 |
Decrease / (Increase) in financial assets | (13) | (2) |
Net cash outflow from operating activities | (3,762) | (3,094) |
Investing activities | ||
Purchase of property, plant, and equipment | (700) | (41) |
Purchase of intangible assets | (149) | (104) |
Net cash flows used in investing activities | (849) | (145) |
Financing activities | ||
Movement in lease liability | (47) | - |
Issue of ordinary shares (net of issue expenses) | - | 15,856 |
Net cash flows from financing activities | (47) | 15,856 |
Net change in cash and cash equivalents | (4,658) | 12,617 |
Cash and cash equivalents at the beginning of the year | 14,554 | 2,003 |
Exchange gains / (losses) on cash and cash equivalents | 197 | (136) |
Movement in retranslation | (361) | 70 |
Cash and cash equivalents at the end of the year | 9,732 | 14,554 |