2023

Oxford, UK. GENinCode Plc (LSE: AIM GENI), the predictive genetics company focused on the prevention of cardiovascular disease (CVD), announces its results for the twelve months ended 31 December 2021.

The 2021 financial year saw the Company accelerate its commercial expansion programme, successfully complete its IPO and admission to the LSE: AIM market and file its Pre-Submission for regulatory approval of its lead product Cardio inCode® with the US FDA .

Operational and financial highlights

• Completion of IPO and admission to the LSE: AIM in July 2021 raising gross proceeds of £17m
• Filing of FDA Pre-Submission for Cardio inCode® (Genetic Risk Score) for the onset of cardiovascular disease with preparations underway for the full regulatory submission 
• Announcement of EVERSANA Life Science Services strategic collaboration to act as US commercial services partner for introduction of GENinCode products to the US market
• Announcement of Royal Brompton and Harefield and Guys and St Thomas’ NHS foundation trust collaboration in CVD polygenic risk assessment and preparations for launch of Lipid inCode® testing for familial hypercholesterolemia
• Successful completion and publication of Lipid inCode® NHS clinical study to improve diagnosis, turnaround time for testing of Familial Hypercholesterolemia (FH) at reduced cost to the NHS
• Announcement of FH pilot with NE-AHSN (North East and Cumbria – Academic Health Science Network) for implementation of Lipid inCode® with NHS   
• Full year revenues increased 20% to £1.2m (2020: £1.0m)
• Increased levels of investment in our commercialisation programme giving rise to an operating loss of (£4.1m) (2020: loss of (£1.1m))
• Cash reserves of £14.6m at 31 December 2021 (2020: £2.0m)

Recent developments

The Company announces today: 

• Completed Indiana University collaboration representing flagship facilities in preparation for introduction of Cardio inCode® to US market
• A collaboration with Kaiser Permanente, California to assess Cardio inCode® for the polygenic risk assessment of CVD
• Commissioning of GENinCode US CLIA lab (Clinical Laboratory Improvement Amendments) test facility in Irvine, California and appointment of ResearchDx Inc as the Company’s US CLIA partner
• Announcement of collaboration with BUPA Cromwell hospital, London for use of the Lipid inCode® test for familial hypercholesterolemia (FH)
• Completion of first COVID-19 Thrombo inCode® evaluation study for genetic predisposition to thrombosis – St Pau Hospital, Spain

Outlook for 2022

We will take commercial advantage of our clinically advanced genetic products to scale the market opportunities open to us. We are focused on our US regulatory and reimbursement submissions for Cardio inCode^®, a first-in-class genetic risk assessment for CVD and we will accelerate preparations for the US launch and reimbursement of our globally leading familial hypercholesterolemia test Lipid inCode^®.

Over the remainder of the year, we expect to complete the following key deliverables:

• Prepare final FDA regulatory submission for Cardio inCode^® with a view to gaining approval approximately six months following submission
• Based on the recent advances by CMS in local coverage determination and private reimbursement for FH, prepare to commercially launch Lipid inCode^® in the US market
• Continue to strengthen our partnership with EVERSANA for product launch preparations in the US market
• Set-up US CLIA lab for Cardio inCode^® and prepare Lipid inCode^® lab diagnostic test (LDT) service offering
• Complete our first NHS implementation of Lipid inCode^® to advance FH testing with the NHS
• Commission our new UK lab operation and complete UKAS accreditation submission for service delivery of Lipid inCode^® to support the NHS
• Continue to build our EU partnerships and develop our ongoing collaborative discussions with pharmaceutical companies
• Generate increased Year-on-Year revenue growth             
• Publish first COVID-19 Thrombo inCode^® evaluation study for genetic predisposition to thrombosis

Matthew Walls, Chief Executive Officer of GENinCode Plc said: “We enjoyed a productive 2021 with the successful completion of the IPO and £17m gross fundraise, enabling the expansion of our commercial programme across our US, UK and EU markets. 2022 has started well as we continue to deliver the plans set out at the IPO and focus on the US product launches of Cardio inCode® for cardiovascular disease preventative care and accelerate US launch plans for Lipid inCode® for the management of Familial Hypercholesterolemia.

“We are working closely with our US collaborative partner, EVERSANA, on launch planning and advancing our collaborations with Indiana University and Kaiser Permanente. We continue to build constructive discussions with the FDA in preparation for our regulatory filing for Cardio inCode®. In the UK, we have successfully completed our NHS clinical study for Lipid inCode® (familial hypercholesterolemia testing) and are now preparing our first NHS pilot implementation with the North of England-AHSN. We anticipate continued revenue growth over the 2022 financial year.”

Analyst meeting

The Company will hold an analyst meeting 9:30 a.m. (BST) on Tuesday 17 May. Matthew Walls, CEO and Paul Foulger, CFO will host an in-person analyst meeting at the offices of Walbrook PR, 75 King William Street, London, EC4N 7BE to discuss the financial results and key topics including business strategy, partnerships, regulatory and reimbursement processes.

Investor presentation details

The Company will also host a presentation for investors via the IMC platform at 3pm on 17 May. 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 for this, please use the following link: https://www.investormeetcompany.com/genincode-plc/register-investor

For more information visit www.genincode.com

About GENinCode

GENinCode Plc is a UK based company specialising in genetic risk assessment of cardiovascular disease. Cardiovascular disease is the leading cause of death and disability worldwide.

GENinCode operates business units in the UK, in the United States through GENinCode U.S. Inc and in Europe through GENinCode S.L.U.

GENinCode predictive technology provides patients and physicians with globally leading preventative care and treatment strategies. GENinCode CE marked invitro-diagnostic molecular tests combine clinical algorithms and bioinformatics to provide advanced patient risk assessment to predict disease onset.

About Cardiovascular Disease

Cardiovascular disease (CVD) is the leading cause of death globally, taking an estimated 17.9 million lives each year. CVD is a group of disorders of the heart and blood vessels and include coronary heart disease, cerebrovascular disease, rheumatic heart disease and other conditions. More than four out of five CVD deaths are due to heart attacks and strokes, and one third of these deaths occur prematurely in people under 70 years of age.

The most important behavioural risk factors of heart disease and stroke are unhealthy diet, physical inactivity, tobacco use and harmful use of alcohol. The effects of behavioural risk factors may show up in individuals as raised blood pressure, raised blood glucose, raised blood lipids, and overweight and obesity. These “intermediate risks factors” can be measured in primary care facilities and indicate an increased risk of heart attack, stroke, heart failure and other complications.

Cessation of tobacco use, reduction of salt in the diet, eating more fruit and vegetables, regular physical activity and avoiding harmful use of alcohol have been shown to reduce the risk of cardiovascular disease. Health policies that create conducive environments for making healthy choices affordable and available are essential for motivating people to adopt and sustain healthy behaviours.

Identifying those at highest risk of CVDs and ensuring they receive appropriate treatment can prevent premature deaths. Access to noncommunicable disease medicines and basic health technologies in all primary health care facilities is essential to ensure that those in need receive treatment and counselling.

CVD causes a quarter of all deaths in the UK and is the largest cause of premature mortality in deprived areas and is the single biggest area where the NHS can save lives over the next 10 years. CVD is largely preventable, through lifestyle changes and a combination of public health and NHS action on smoking and tobacco addiction, obesity, tackling alcohol misuse and food reformulation.

Genetic risk assessment can help early detection and treatment of CVD to help patients live longer, healthier lives. Many people are still living with undetected, high-risk conditions such as high blood pressure, raised cholesterol, and atrial fibrillation (AF). Progress continues in the NHS to identify and diagnose people routinely knowing their ‘ABC’ (testing and monitoring of AF, Blood pressure and Cholesterol) set out in the NHS 10 Year plan.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER’S STATEMENT

On behalf of the Board, we are delighted to present the Preliminary report for the twelve-month period ended 31 December 2021 for GENinCode Plc. 

Following the successful admission of the Company to the LSE: AIM market in July 2021, this statement provides a brief introduction to the Company, a summary of progress over the past year, recent developments and the outlook for the year ahead.    

Introduction

GENinCode is engaged in the genetic risk assessment, prediction, and prevention of cardiovascular disease (CVD). GENinCode products and technology have been developed with the aim of prognosing and predicting the onset of CVD to provide personalised treatment and improve patient outcomes.

CVD accounts for around 18 million deaths annually, representing approximately 31 per cent. of all deaths worldwide with the global cost of CVD estimated to reach approximately $1.04 trillion by 2030.

CVD encompasses all conditions linked to the heart and blood vessels and is currently the leading cause of death globally, with CVD commonly referred to as a ‘heart attack’ or ‘stroke’. Four out of five deaths related to CVD are a result of heart attacks and strokes, and one third of these deaths occur prematurely in people under the age of 70. There are approximately 550 million people living with heart and circulatory diseases worldwide. This number has been rising due to changing lifestyles, ageing, and a growing population and improved survival rates from heart attacks and strokes.

In the US, CVD affects over 85 million people and accounts for more than one-third of all deaths. Common characteristics which put individuals at risk of CVD include raised blood pressure, high cholesterol levels, as well as obesity, lack of exercise and the co-occurrence of other diseases such as diabetes. Approximately 655,000 people in the US die from CVD each year, with coronary artery disease and heart attacks the most common.

Multiple clinical studies have shown that an individual’s genetic load contributes between 40 to 50 per cent. to the development of CVD, highlighting genetics as one of the most significant contributing factors to the onset of cardiovascular disease.

The Company’s product portfolio draws on advanced genomic precision testing using polygenic (multiple-genes) technology, advanced molecular testing, genotyping, sequencing, and AI bioinformatics. Through a simple blood or saliva sample, the Company can analyse the genetic variants and medical information associated with CVD to determine a patient’s Genetic Risk Score (GRS) which is used to assess a patient’s cardiovascular risk.

The current standard of care for primary prevention and assessment of the risk of CVD has been in use and largely unchanged for many years. The advent of our polygenic risk assessment for CVD allows the identification and reclassification of individuals traditionally categorised at ‘low’ or ‘intermediate’ risk who are at higher genetic risk of a CVD event than their current risk assessment suggests. This enables earlier in life preventative measures to be adopted to lower the future risk of a CVD event.

GENinCode has a strong clinical evidence base, granted intellectual property portfolio and a vision to advance CVD risk assessment to more precisely align therapeutic treatment and lifestyle choices to improve patient outcomes.

2021 Business review

In the results for the twelve months ending 31 December 2021, the Company saw year-on-year revenue growth increase to £1.2m (2020 £1.0m) primarily from its European business. The Company’s key products are CE-Marked with Cardio inCode^®, Thrombo inCode^®, Lipid inCode^® and Sudd inCode^® generating the core product revenues. Following the IPO and admission to LSE: AIM the Company commenced its expansion strategy in the US, UK and Europe which are the key markets for growth.

Just prior to the IPO, we announced a strategic commercialisation agreement with EVERSANA Life Sciences Services, LLC. EVERSANA act as the Company’s US commercial services provider for the launch, market access and distribution of the Company’s products. EVERSANA provides a broad range of commercial services to the life sciences industry. Its integrated business solutions span all stages of the product life cycle to deliver long-term, sustainable value for patients, prescribers, channel partners and payors. EVERSANA has experience across many commercialisation areas, in particular reimbursement, pricing intelligence, market access and payor services. As such EVERSANA represents a strong US commercial partner capable of accelerating our growth in the US market.

We have announced collaborations with two leading US healthcare institutions, Indiana University (IU) School of Medicine and Kaiser Permanente Department of Research to assess the clinical utility and validation of our Cardio inCode^® product in preparation for FDA regulatory approval. Both collaborations are focused on clinically advancing and validating the introduction of our lead product Cardio inCode^®. IU is focused on assessing the use of Cardio inCode^® as a genetic risk enhancer for the onset of atherosclerosis (ASCVD), whilst Kaiser Permanente is clinically evaluating Cardio inCode^® against its population health cohort for the prediction and onset of CVD. We are also in advanced discussions with New York Presbyterian (NYP) hospital group (which includes Weill Cornell and Columbia University hospitals). NYP will undertake Cardio inCode^® clinical utility studies in the New York State primary care network of physicians. These three institutions will be the flagship facilities and healthcare groups for the initial adoption of Cardio inCode^® in the US.

US Regulatory and Reimbursement

We progressed discussions with the FDA through 2021 and were invited to make a pre-submission of the Cardio inCode^® regulatory filing in December 2021. We have subsequently held constructive discussions with the FDA for the full regulatory filing and expect to complete this filing over the coming months.

In September 2021 the Centres for Medicare and Medicaid Services (CMS) repealed the Medicare Coverage for Innovative Technologies (MCIT) ruling. Resulting from this ruling we are now preparing clinical utility studies (and accompanying healthcare economics) to underpin a reimbursement submission via the MolDx^® programme. The MolDx^® submission will establish coverage, pricing and reimbursement for Cardio inCode^®. We are also commencing private payer discussions with health insurance providers. The MolDx^® programme works on behalf of CMS to administer Medicare claims via Medicare Administrative Contractors (MACs). We expect to present our MolDx^® reimbursement submission early next year based on the completion of our clinical utility studies with selected US partner healthcare institutions.

Following positive public health endorsement of Familial Hypercholesterolemia (FH) by the Centers for Disease Control Office of Public Health Genomics (CDC) and the inclusion of FH testing as a Tier 1 genomic application (i.e. the test has a significant potential for positive impact on public health based on available evidence-based guidelines and recommendations), we have accelerated our plans and preparations for the US soft launch of Lipid inCode^® later this year. Our Lipid inCode ^® test and FH panel of genes is well-positioned to receive Medicare coverage based on recent policies that have been put in place that support genetic testing in cardiovascular disease.

Today we announce the completion of our partnership with ResearchDx, based in Irvine, California for the commissioning of the GENinCode US CLIA lab. Our US lab will be set-up and commissioned over the coming months to provide CLIA certified product services initially focused on Cardio inCode^® and Lipid inCode^®. It is important to note that, once CLIA lab approval has been granted, we will be able to begin generation of product to support our US preparations for launch and meaningful revenue growth.

UK and Europe

In the UK, the NHS Long Term Plan 2019 identifies CVD as a clinical priority and the single largest condition where lives can be saved over the next 10 years. The NHS Long Term Plan sets out to identify 25% of patients suffering with Familial Hypercholesterolemia (FH) by 2024. FH affects approximately 1 in 200-250 people in the UK who are unable to effectively metabolise cholesterol leading to the accelerated onset of CVD. GENinCode’s UK strategy is focused on advancing our Lipid inCode^® test to help support the NHS meet this plan. During the year we announced our collaboration with Royal Brompton and Harefield hospitals to provide CVD clinical genetic testing. RB&H is part of Guy’s and St Thomas’ NHS Foundation Trust, the largest specialist heart and lung centre in England and one of the largest in Europe.

More recently we have announced the successful completion of our NHS clinical study for FH to deliver improved diagnosis and risk assessment and a faster turnaround of test results at a lower cost to the NHS. We have recently commenced a clinical pilot with the NE-AHSN (North East and Cumbria – Academic Health Science Network) the centre of excellence for UK FH testing with a view to supporting the North of England meet its NHS targets.

Today we also announce a collaborative agreement with BUPA Cromwell Hospital for Lipid inCode^® testing for FH. This will allow UK private patients to receive genetic testing for FH from the BUPA Cromwell hospital based in West London. This agreement represents the start of UK private patient revenue generation for Lipid inCode^®_.

In Europe, the Company continues to build its business and evidence based polygenic product profile and has announced sales and distribution arrangements with Longwood Diagnostics S.L. and Synlab Diagnostics S.A.U. to support its expansion in Spain. We are preparing Cardio inCode^® for piloting for public health CVD risk assessment in the Spanish regions and expanding our sales team and collaborative partners in Italy and France.

Following the European outbreak of the COVID-19 pandemic in northern Spain and Italy we have undertaken a number of clinical studies to assess the severity of onset of COVID-19 to patients with a genetic predisposition to thrombosis using our Thrombo inCode ^® product.  The first of these studies based at Hospital St Pau, Barcelona has now completed its findings and we expect to present this publication over the coming months.   

Intellectual Property

We maintain an ongoing intellectual property programme to strengthen our existing patent portfolio and advance examinations across our family of patents for Cardio inCode^® and Thrombo inCode^®. We continue to build our intellectual property portfolio and are actively evaluating in-licensing opportunities as appropriate to enhance our competitive product positioning.

Financial review

The first half of 2021 was dominated by preparation for admission of the Company to the LSE:AIM, which was successfully completed on 22nd July 2021. The company raised £17.0 million (gross) before expenses. The proceeds are being used to accelerate our commercial programme in the US, EU, and the UK.

Despite last year’s challenges of the COVID-19 pandemic, our EU business held up well to report revenues of £1.2m (2020 £1.0m) for the full year. Gross profit for the year was £593k (2020: £523k) with a margin of 52% (2020: 54%) respectively.

Administrative expenses increased to £4.0m (2020: £1.6m). The year-on-year cost increase reflecting a first half growth in staffing and professional costs as the company prepared for admission to LSE:AIM with the second half ramp up in US investment following the completion of the EVERSANA partnership with spending focused on regulatory, reimbursement and market assessment preparations. 

The increased commercial investment gave rise to an operating loss for the year of (£4.1m) (2020: (£1.1m)), with the cash position at the end of December 2021 £14.6m (2020: 2.0m).

Capital structure

Following the listing on LSE: AIM the total number of ordinary shares in issue was 95,816,866. The loss per share for the year ending 31 December 2021 was 8.05p/share. The Board of Directors will not be recommending a dividend payment for the year ended 31 December 2021. 

Outlook

We will take commercial advantage of our clinically advanced genetic products to scale the market opportunities open to us. We are focused on our US regulatory and reimbursement submissions for Cardio inCode^®, a first-in-class genetic risk assessment for CVD and we will accelerate preparations for the US launch and reimbursement of our globally leading familial hypercholesterolemia test Lipid inCode^®.

Over the remainder of the year, we expect to complete the following key deliverables:

• Prepare final FDA regulatory submission for Cardio inCode^® with a view to gaining approval approximately six months following submission
• Based on the recent advances by CMS in local coverage determination and private reimbursement for FH, prepare to commercially launch Lipid inCode^® in the US market
• Continue to strengthen our partnership with EVERSANA for product launch preparations in the US market
• Set-up US CLIA lab for Cardio inCode^® and prepare Lipid inCode^® lab diagnostic test (LDT) service offering
• Complete our first NHS implementation of Lipid inCode^® to advance FH testing with the NHS
• Commission our new UK lab operation and complete UKAS accreditation submission for service delivery of Lipid inCode^® to support the NHS
• Continue to build our EU partnerships and develop our ongoing collaborative discussions with pharmaceutical companies
• Generate increased Year-on-Year revenue growt
• Publish first COVID-19 Thrombo inCode^® evaluation study for genetic predisposition to thrombosis

We have a strong and growing clinical evidence base built on studies amassed over the past 12 years to more precisely identify patients at risk of CVD and thereby enable improved preventative care.  

We continue to increase investment in our manpower resource and expertise as well as exploring other acquisition opportunities to take advantage of the growth opportunities open to us.

Despite the world market challenges and volatility, the Board believes our products and technology will deliver significant investor returns and we would like to thank our investors, Board, management and employees for their strength and determination in driving our business growth.

We look forward to updating our investors on our forthcoming progress.

CFO STATEMENT

Operating Results

Sales increased by £193,311 or 20.1% from £960,801 in 2020 to £1,154,112 in 2021 and operating loss increased by £3,096,267 from (£1,050,004) in 2020 to (£4,146,271) in 2021.

Top 5 Geographic Markets

The gross margin decreased from 54.4% to 51.4%, largely as a result of the product mix but also due to pricing pressure from the Company’s preferred laboratory service provider in Girona.

Administrative Expenses

The number of employees and directors increased from 16 (14 in Spain and 2 in the UK) at 31 December 2020 to 28 (19 in Spain, 8 in the UK, and 1 in the US) at 31 December 2021, as the Group strengthened its management team, increased its regulatory resources, and put in place a laboratory team in London in preparation for the commercial launch of Lipid inCode^® in 2022. This has resulted in salaries and associated costs increasing from £721,851 to £1,677,348 during the period.

In June 2021, the Company entered into a Product Commercialisation Agreement with Eversana Life Sciences L.L.C., whereby EVERSANA would act as the Company’s commercial services provider for the launch, market access, and distribution logistics for the Company’s products in the USA. The cost of US commercialisation fees in 2021, mainly payable to EVERSANA, amounted to £1,257,138.

Legal, Professional, and Consultancy fees increased from £368,961 in 2020 to £446,999 in 2021, mainly as a result of the extra operational expenses associated with being on the AIM market (broker fees, nomad fees, Financial PR fees, Registrar fees, AIM fees etc). Additionally, the Company has increased the size of the Clinical Advisory Board, both in the UK and the US.

Adjusted EBITDA

Intangible amortisation charges in 2021 were £28,922 compared to a charge of £20,876 in 2020; this increase is in line with the rise in capitalised patent cost activity during the year. Depreciation charges in 2021 were £5,794 compared to a charge of £1,898 in 2020; again, this increase is commensurate with the increased property, plant and equipment purchases in the year, due to the increased headcount and associated investment since the IPO during the period.

Share Options were granted to directors, employees, and certain advisors in April 2021, hence for the first time, under IFRS 2 the Company is required to recognise share based payment awards in the financial statements based on fair value when the awards are received, which is determined at the grant date for share-based payments. The charge for the year amounted to £72,906 and was calculated using the Black-Scholes model.

Successful completion of an IPO and admission to the LSE:AIM took place in July 2021; costs associated with the IPO amounted to £1,727,666. Of this amount, £583,669 was charged to the Income Statement and £1,143,997 was netted off against the share premium.

Non-recurring expenditure of £9,051 was incurred by our Spanish office in 2021 and represented previously capitalised development costs written off to the Income Statement in the period.

Taxation

As highlighted in note 8 to the Consolidated Financial Statements, although the expected tax credit at the UK corporation tax rate of 19% increased from (£199,488) in 2020 to (£786,028) in 2021, a large movement in the unrecognised deferred tax asset balance has resulted in a charge of £826,075 to the Income Statement in the period in accordance with IAS 12 Income Taxes, leading to a net charge of £6,071.

The UK budget announced on 3 March 2021 an increase in the main corporation tax rate from 19% to 25% on profits over £250,000 with effect from 1 April 2023.  Due to the nature of the business and uncertainty of profit generation the rate has not been reflected in the consolidated financial statements.

Other comprehensive income

Included in other comprehensive income are the net exchange differences on translation of foreign operations. The gain on translation of £72,000 in 2021 compares to a gain in 2020 of £440.

The gain in both years arises predominantly due to the strengthening of the GBP against the Euro. A significant proportion of the Group’s operations are based in Spain and with the strengthening of GBP in 2021 from an opening rate of £1:Eur1.12 to a closing rate at the end of 2021 of £1:Eur1.16, this movement was the main reason for the gain in the period.

Assets and Liabilities

Non-Current Assets

Intangible assets have increased from £139,486 at 31 December 2020 to £192,602 at 31 December 2021 as the Company continues to further build its intellectual property portfolio.

Property, plant and equipment has risen from £11,129 at 31 December 2020 to £46,265 at 31 December 2021 due to laboratory equipment purchases at the Company’s lab premises in London.

Current Assets

The Company holds very little in the way of finished goods and work in progress, largely because around 60% of its revenues originate from genomic service testing, as well as the fact that the kits are mainly ordered and then delivered directly from kit manufacturer/supplier to customer.

Trade and Other Receivables have increased from £248,589 at 31 December 2020 to £398,827 at 31 December 2021, predominantly due a higher level of prepayments as a result of expenditure for the following period having been invoiced by suppliers before the period end.

Liabilities

Trade and Other Payables increased from £563,495 at 31 December 2020 to £1,485,857 at 31 December 2021, split across non-current liabilities and current liabilities; this rise is mainly due to the nature of the payment structure set out in the agreement with our US commercialisation partner, EVERSANA.

Cash flow and working capital

Operating cash outflow increased from (£1,037,781) in 2020 to (£3,023,388) in 2021.The increase is largely explained by the drop-through of increased operating losses, offset by a reduction in net working capital, largely as a result of increased payables balances at 31 December 2021.

Net cash flows used in investing activities increased from (£68,273) in 2020 to (£145,436) in 2021, reflecting increased patent expenditure and laboratory equipment in the UK.

Net cash flows from financing activities increased from £3,026,142 in 2020 to £15,855,983 in 2021. In 2020, a private fundraise was carried out, comprising two institutional investors and a small number of private investors. In July 2021, the Company announced admission to trading on AIM together with a successful fundraise for gross proceeds of £17m before expenses.

As a result of the above activities there was an overall increase in cash and cash equivalents of £12,551,005 from £2,003,072 at 31 December 2020 to £14,554,077 at 31 December 2021.

………………………………

Paul Foulger
Chief Financial Officer
16 May 2022

Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the Year Ended 31 December 2021

The notes form part of these financial statements     

Consolidated Statement of Financial Position
31 December 2021

The financial statements were approved by the Board of Directors on 16 May 2022 and were signed on its behalf by:

..........................................................

Paul Foulger
Director
16 May 2022

The notes form part of these financial statements

Company Statement of Financial Position
31 December 2021

As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these financial statements.  The parent company's loss for the financial year was £1,856,657 (2020 – loss of £364,036).

The financial statements were approved by the Board of Directors on 16 May 2022 and were signed on its behalf by:

..........................................................

Paul Foulger
Director
16 May 2022

The notes form part of these financial statements

Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2021

The notes form part of these financial statements

Company Statement of Changes in Equity
for the Year Ended 31 December 2021

The notes form part of these financial statements

Consolidated Statement of Cash Flows
for the Year Ended 31 December 2021

The notes form part of these financial statements

Company Statement of Cash Flows
for the Year Ended 31 December 2021

2022

Oxford, UK. GENinCode Plc (LSE: AIM GENI), the predictive genetics company focused on the prevention of cardiovascular disease (CVD), announces its results for the twelve months ended 31 December 2021.

The 2021 financial year saw the Company accelerate its commercial expansion programme, successfully complete its IPO and admission to the LSE: AIM market and file its Pre-Submission for regulatory approval of its lead product Cardio inCode® with the US FDA .

Operational and financial highlights

• Completion of IPO and admission to the LSE: AIM in July 2021 raising gross proceeds of £17m
• Filing of FDA Pre-Submission for Cardio inCode® (Genetic Risk Score) for the onset of cardiovascular disease with preparations underway for the full regulatory submission 
• Announcement of EVERSANA Life Science Services strategic collaboration to act as US commercial services partner for introduction of GENinCode products to the US market
• Announcement of Royal Brompton and Harefield and Guys and St Thomas’ NHS foundation trust collaboration in CVD polygenic risk assessment and preparations for launch of Lipid inCode® testing for familial hypercholesterolemia
• Successful completion and publication of Lipid inCode® NHS clinical study to improve diagnosis, turnaround time for testing of Familial Hypercholesterolemia (FH) at reduced cost to the NHS
• Announcement of FH pilot with NE-AHSN (North East and Cumbria – Academic Health Science Network) for implementation of Lipid inCode® with NHS   
• Full year revenues increased 20% to £1.2m (2020: £1.0m)
• Increased levels of investment in our commercialisation programme giving rise to an operating loss of (£4.1m) (2020: loss of (£1.1m))
• Cash reserves of £14.6m at 31 December 2021 (2020: £2.0m)

Recent developments

The Company announces today: 

• Completed Indiana University collaboration representing flagship facilities in preparation for introduction of Cardio inCode® to US market
• A collaboration with Kaiser Permanente, California to assess Cardio inCode® for the polygenic risk assessment of CVD
• Commissioning of GENinCode US CLIA lab (Clinical Laboratory Improvement Amendments) test facility in Irvine, California and appointment of ResearchDx Inc as the Company’s US CLIA partner
• Announcement of collaboration with BUPA Cromwell hospital, London for use of the Lipid inCode® test for familial hypercholesterolemia (FH)
• Completion of first COVID-19 Thrombo inCode® evaluation study for genetic predisposition to thrombosis – St Pau Hospital, Spain

Outlook for 2022

We will take commercial advantage of our clinically advanced genetic products to scale the market opportunities open to us. We are focused on our US regulatory and reimbursement submissions for Cardio inCode^®, a first-in-class genetic risk assessment for CVD and we will accelerate preparations for the US launch and reimbursement of our globally leading familial hypercholesterolemia test Lipid inCode^®.

Over the remainder of the year, we expect to complete the following key deliverables:

• Prepare final FDA regulatory submission for Cardio inCode^® with a view to gaining approval approximately six months following submission
• Based on the recent advances by CMS in local coverage determination and private reimbursement for FH, prepare to commercially launch Lipid inCode^® in the US market
• Continue to strengthen our partnership with EVERSANA for product launch preparations in the US market
• Set-up US CLIA lab for Cardio inCode^® and prepare Lipid inCode^® lab diagnostic test (LDT) service offering
• Complete our first NHS implementation of Lipid inCode^® to advance FH testing with the NHS
• Commission our new UK lab operation and complete UKAS accreditation submission for service delivery of Lipid inCode^® to support the NHS
• Continue to build our EU partnerships and develop our ongoing collaborative discussions with pharmaceutical companies
• Generate increased Year-on-Year revenue growth             
• Publish first COVID-19 Thrombo inCode^® evaluation study for genetic predisposition to thrombosis

Matthew Walls, Chief Executive Officer of GENinCode Plc said: “We enjoyed a productive 2021 with the successful completion of the IPO and £17m gross fundraise, enabling the expansion of our commercial programme across our US, UK and EU markets. 2022 has started well as we continue to deliver the plans set out at the IPO and focus on the US product launches of Cardio inCode® for cardiovascular disease preventative care and accelerate US launch plans for Lipid inCode® for the management of Familial Hypercholesterolemia.

“We are working closely with our US collaborative partner, EVERSANA, on launch planning and advancing our collaborations with Indiana University and Kaiser Permanente. We continue to build constructive discussions with the FDA in preparation for our regulatory filing for Cardio inCode®. In the UK, we have successfully completed our NHS clinical study for Lipid inCode® (familial hypercholesterolemia testing) and are now preparing our first NHS pilot implementation with the North of England-AHSN. We anticipate continued revenue growth over the 2022 financial year.”

Analyst meeting

The Company will hold an analyst meeting 9:30 a.m. (BST) on Tuesday 17 May. Matthew Walls, CEO and Paul Foulger, CFO will host an in-person analyst meeting at the offices of Walbrook PR, 75 King William Street, London, EC4N 7BE to discuss the financial results and key topics including business strategy, partnerships, regulatory and reimbursement processes.

Investor presentation details

The Company will also host a presentation for investors via the IMC platform at 3pm on 17 May. 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 for this, please use the following link: https://www.investormeetcompany.com/genincode-plc/register-investor

For more information visit www.genincode.com

About GENinCode

GENinCode Plc is a UK based company specialising in genetic risk assessment of cardiovascular disease. Cardiovascular disease is the leading cause of death and disability worldwide.

GENinCode operates business units in the UK, in the United States through GENinCode U.S. Inc and in Europe through GENinCode S.L.U.

GENinCode predictive technology provides patients and physicians with globally leading preventative care and treatment strategies. GENinCode CE marked invitro-diagnostic molecular tests combine clinical algorithms and bioinformatics to provide advanced patient risk assessment to predict disease onset.

About Cardiovascular Disease

Cardiovascular disease (CVD) is the leading cause of death globally, taking an estimated 17.9 million lives each year. CVD is a group of disorders of the heart and blood vessels and include coronary heart disease, cerebrovascular disease, rheumatic heart disease and other conditions. More than four out of five CVD deaths are due to heart attacks and strokes, and one third of these deaths occur prematurely in people under 70 years of age.

The most important behavioural risk factors of heart disease and stroke are unhealthy diet, physical inactivity, tobacco use and harmful use of alcohol. The effects of behavioural risk factors may show up in individuals as raised blood pressure, raised blood glucose, raised blood lipids, and overweight and obesity. These “intermediate risks factors” can be measured in primary care facilities and indicate an increased risk of heart attack, stroke, heart failure and other complications.

Cessation of tobacco use, reduction of salt in the diet, eating more fruit and vegetables, regular physical activity and avoiding harmful use of alcohol have been shown to reduce the risk of cardiovascular disease. Health policies that create conducive environments for making healthy choices affordable and available are essential for motivating people to adopt and sustain healthy behaviours.

Identifying those at highest risk of CVDs and ensuring they receive appropriate treatment can prevent premature deaths. Access to noncommunicable disease medicines and basic health technologies in all primary health care facilities is essential to ensure that those in need receive treatment and counselling.

CVD causes a quarter of all deaths in the UK and is the largest cause of premature mortality in deprived areas and is the single biggest area where the NHS can save lives over the next 10 years. CVD is largely preventable, through lifestyle changes and a combination of public health and NHS action on smoking and tobacco addiction, obesity, tackling alcohol misuse and food reformulation.

Genetic risk assessment can help early detection and treatment of CVD to help patients live longer, healthier lives. Many people are still living with undetected, high-risk conditions such as high blood pressure, raised cholesterol, and atrial fibrillation (AF). Progress continues in the NHS to identify and diagnose people routinely knowing their ‘ABC’ (testing and monitoring of AF, Blood pressure and Cholesterol) set out in the NHS 10 Year plan.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER’S STATEMENT

On behalf of the Board, we are delighted to present the Preliminary report for the twelve-month period ended 31 December 2021 for GENinCode Plc. 

Following the successful admission of the Company to the LSE: AIM market in July 2021, this statement provides a brief introduction to the Company, a summary of progress over the past year, recent developments and the outlook for the year ahead.    

Introduction

GENinCode is engaged in the genetic risk assessment, prediction, and prevention of cardiovascular disease (CVD). GENinCode products and technology have been developed with the aim of prognosing and predicting the onset of CVD to provide personalised treatment and improve patient outcomes.

CVD accounts for around 18 million deaths annually, representing approximately 31 per cent. of all deaths worldwide with the global cost of CVD estimated to reach approximately $1.04 trillion by 2030.

CVD encompasses all conditions linked to the heart and blood vessels and is currently the leading cause of death globally, with CVD commonly referred to as a ‘heart attack’ or ‘stroke’. Four out of five deaths related to CVD are a result of heart attacks and strokes, and one third of these deaths occur prematurely in people under the age of 70. There are approximately 550 million people living with heart and circulatory diseases worldwide. This number has been rising due to changing lifestyles, ageing, and a growing population and improved survival rates from heart attacks and strokes.

In the US, CVD affects over 85 million people and accounts for more than one-third of all deaths. Common characteristics which put individuals at risk of CVD include raised blood pressure, high cholesterol levels, as well as obesity, lack of exercise and the co-occurrence of other diseases such as diabetes. Approximately 655,000 people in the US die from CVD each year, with coronary artery disease and heart attacks the most common.

Multiple clinical studies have shown that an individual’s genetic load contributes between 40 to 50 per cent. to the development of CVD, highlighting genetics as one of the most significant contributing factors to the onset of cardiovascular disease.

The Company’s product portfolio draws on advanced genomic precision testing using polygenic (multiple-genes) technology, advanced molecular testing, genotyping, sequencing, and AI bioinformatics. Through a simple blood or saliva sample, the Company can analyse the genetic variants and medical information associated with CVD to determine a patient’s Genetic Risk Score (GRS) which is used to assess a patient’s cardiovascular risk.

The current standard of care for primary prevention and assessment of the risk of CVD has been in use and largely unchanged for many years. The advent of our polygenic risk assessment for CVD allows the identification and reclassification of individuals traditionally categorised at ‘low’ or ‘intermediate’ risk who are at higher genetic risk of a CVD event than their current risk assessment suggests. This enables earlier in life preventative measures to be adopted to lower the future risk of a CVD event.

GENinCode has a strong clinical evidence base, granted intellectual property portfolio and a vision to advance CVD risk assessment to more precisely align therapeutic treatment and lifestyle choices to improve patient outcomes.

2021 Business review

In the results for the twelve months ending 31 December 2021, the Company saw year-on-year revenue growth increase to £1.2m (2020 £1.0m) primarily from its European business. The Company’s key products are CE-Marked with Cardio inCode^®, Thrombo inCode^®, Lipid inCode^® and Sudd inCode^® generating the core product revenues. Following the IPO and admission to LSE: AIM the Company commenced its expansion strategy in the US, UK and Europe which are the key markets for growth.

Just prior to the IPO, we announced a strategic commercialisation agreement with EVERSANA Life Sciences Services, LLC. EVERSANA act as the Company’s US commercial services provider for the launch, market access and distribution of the Company’s products. EVERSANA provides a broad range of commercial services to the life sciences industry. Its integrated business solutions span all stages of the product life cycle to deliver long-term, sustainable value for patients, prescribers, channel partners and payors. EVERSANA has experience across many commercialisation areas, in particular reimbursement, pricing intelligence, market access and payor services. As such EVERSANA represents a strong US commercial partner capable of accelerating our growth in the US market.

We have announced collaborations with two leading US healthcare institutions, Indiana University (IU) School of Medicine and Kaiser Permanente Department of Research to assess the clinical utility and validation of our Cardio inCode^® product in preparation for FDA regulatory approval. Both collaborations are focused on clinically advancing and validating the introduction of our lead product Cardio inCode^®. IU is focused on assessing the use of Cardio inCode^® as a genetic risk enhancer for the onset of atherosclerosis (ASCVD), whilst Kaiser Permanente is clinically evaluating Cardio inCode^® against its population health cohort for the prediction and onset of CVD. We are also in advanced discussions with New York Presbyterian (NYP) hospital group (which includes Weill Cornell and Columbia University hospitals). NYP will undertake Cardio inCode^® clinical utility studies in the New York State primary care network of physicians. These three institutions will be the flagship facilities and healthcare groups for the initial adoption of Cardio inCode^® in the US.

US Regulatory and Reimbursement

We progressed discussions with the FDA through 2021 and were invited to make a pre-submission of the Cardio inCode^® regulatory filing in December 2021. We have subsequently held constructive discussions with the FDA for the full regulatory filing and expect to complete this filing over the coming months.

In September 2021 the Centres for Medicare and Medicaid Services (CMS) repealed the Medicare Coverage for Innovative Technologies (MCIT) ruling. Resulting from this ruling we are now preparing clinical utility studies (and accompanying healthcare economics) to underpin a reimbursement submission via the MolDx^® programme. The MolDx^® submission will establish coverage, pricing and reimbursement for Cardio inCode^®. We are also commencing private payer discussions with health insurance providers. The MolDx^® programme works on behalf of CMS to administer Medicare claims via Medicare Administrative Contractors (MACs). We expect to present our MolDx^® reimbursement submission early next year based on the completion of our clinical utility studies with selected US partner healthcare institutions.

Following positive public health endorsement of Familial Hypercholesterolemia (FH) by the Centers for Disease Control Office of Public Health Genomics (CDC) and the inclusion of FH testing as a Tier 1 genomic application (i.e. the test has a significant potential for positive impact on public health based on available evidence-based guidelines and recommendations), we have accelerated our plans and preparations for the US soft launch of Lipid inCode^® later this year. Our Lipid inCode ^® test and FH panel of genes is well-positioned to receive Medicare coverage based on recent policies that have been put in place that support genetic testing in cardiovascular disease.

Today we announce the completion of our partnership with ResearchDx, based in Irvine, California for the commissioning of the GENinCode US CLIA lab. Our US lab will be set-up and commissioned over the coming months to provide CLIA certified product services initially focused on Cardio inCode^® and Lipid inCode^®. It is important to note that, once CLIA lab approval has been granted, we will be able to begin generation of product to support our US preparations for launch and meaningful revenue growth.

UK and Europe

In the UK, the NHS Long Term Plan 2019 identifies CVD as a clinical priority and the single largest condition where lives can be saved over the next 10 years. The NHS Long Term Plan sets out to identify 25% of patients suffering with Familial Hypercholesterolemia (FH) by 2024. FH affects approximately 1 in 200-250 people in the UK who are unable to effectively metabolise cholesterol leading to the accelerated onset of CVD. GENinCode’s UK strategy is focused on advancing our Lipid inCode^® test to help support the NHS meet this plan. During the year we announced our collaboration with Royal Brompton and Harefield hospitals to provide CVD clinical genetic testing. RB&H is part of Guy’s and St Thomas’ NHS Foundation Trust, the largest specialist heart and lung centre in England and one of the largest in Europe.

More recently we have announced the successful completion of our NHS clinical study for FH to deliver improved diagnosis and risk assessment and a faster turnaround of test results at a lower cost to the NHS. We have recently commenced a clinical pilot with the NE-AHSN (North East and Cumbria – Academic Health Science Network) the centre of excellence for UK FH testing with a view to supporting the North of England meet its NHS targets.

Today we also announce a collaborative agreement with BUPA Cromwell Hospital for Lipid inCode^® testing for FH. This will allow UK private patients to receive genetic testing for FH from the BUPA Cromwell hospital based in West London. This agreement represents the start of UK private patient revenue generation for Lipid inCode^®_.

In Europe, the Company continues to build its business and evidence based polygenic product profile and has announced sales and distribution arrangements with Longwood Diagnostics S.L. and Synlab Diagnostics S.A.U. to support its expansion in Spain. We are preparing Cardio inCode^® for piloting for public health CVD risk assessment in the Spanish regions and expanding our sales team and collaborative partners in Italy and France.

Following the European outbreak of the COVID-19 pandemic in northern Spain and Italy we have undertaken a number of clinical studies to assess the severity of onset of COVID-19 to patients with a genetic predisposition to thrombosis using our Thrombo inCode ^® product.  The first of these studies based at Hospital St Pau, Barcelona has now completed its findings and we expect to present this publication over the coming months.   

Intellectual Property

We maintain an ongoing intellectual property programme to strengthen our existing patent portfolio and advance examinations across our family of patents for Cardio inCode^® and Thrombo inCode^®. We continue to build our intellectual property portfolio and are actively evaluating in-licensing opportunities as appropriate to enhance our competitive product positioning.

Financial review

The first half of 2021 was dominated by preparation for admission of the Company to the LSE:AIM, which was successfully completed on 22nd July 2021. The company raised £17.0 million (gross) before expenses. The proceeds are being used to accelerate our commercial programme in the US, EU, and the UK.

Despite last year’s challenges of the COVID-19 pandemic, our EU business held up well to report revenues of £1.2m (2020 £1.0m) for the full year. Gross profit for the year was £593k (2020: £523k) with a margin of 52% (2020: 54%) respectively.

Administrative expenses increased to £4.0m (2020: £1.6m). The year-on-year cost increase reflecting a first half growth in staffing and professional costs as the company prepared for admission to LSE:AIM with the second half ramp up in US investment following the completion of the EVERSANA partnership with spending focused on regulatory, reimbursement and market assessment preparations. 

The increased commercial investment gave rise to an operating loss for the year of (£4.1m) (2020: (£1.1m)), with the cash position at the end of December 2021 £14.6m (2020: 2.0m).

Capital structure

Following the listing on LSE: AIM the total number of ordinary shares in issue was 95,816,866. The loss per share for the year ending 31 December 2021 was 8.05p/share. The Board of Directors will not be recommending a dividend payment for the year ended 31 December 2021. 

Outlook

We will take commercial advantage of our clinically advanced genetic products to scale the market opportunities open to us. We are focused on our US regulatory and reimbursement submissions for Cardio inCode^®, a first-in-class genetic risk assessment for CVD and we will accelerate preparations for the US launch and reimbursement of our globally leading familial hypercholesterolemia test Lipid inCode^®.

Over the remainder of the year, we expect to complete the following key deliverables:

• Prepare final FDA regulatory submission for Cardio inCode^® with a view to gaining approval approximately six months following submission
• Based on the recent advances by CMS in local coverage determination and private reimbursement for FH, prepare to commercially launch Lipid inCode^® in the US market
• Continue to strengthen our partnership with EVERSANA for product launch preparations in the US market
• Set-up US CLIA lab for Cardio inCode^® and prepare Lipid inCode^® lab diagnostic test (LDT) service offering
• Complete our first NHS implementation of Lipid inCode^® to advance FH testing with the NHS
• Commission our new UK lab operation and complete UKAS accreditation submission for service delivery of Lipid inCode^® to support the NHS
• Continue to build our EU partnerships and develop our ongoing collaborative discussions with pharmaceutical companies
• Generate increased Year-on-Year revenue growt
• Publish first COVID-19 Thrombo inCode^® evaluation study for genetic predisposition to thrombosis

We have a strong and growing clinical evidence base built on studies amassed over the past 12 years to more precisely identify patients at risk of CVD and thereby enable improved preventative care.  

We continue to increase investment in our manpower resource and expertise as well as exploring other acquisition opportunities to take advantage of the growth opportunities open to us.

Despite the world market challenges and volatility, the Board believes our products and technology will deliver significant investor returns and we would like to thank our investors, Board, management and employees for their strength and determination in driving our business growth.

We look forward to updating our investors on our forthcoming progress.

CFO STATEMENT

Operating Results

Sales increased by £193,311 or 20.1% from £960,801 in 2020 to £1,154,112 in 2021 and operating loss increased by £3,096,267 from (£1,050,004) in 2020 to (£4,146,271) in 2021.

Top 5 Geographic Markets

The gross margin decreased from 54.4% to 51.4%, largely as a result of the product mix but also due to pricing pressure from the Company’s preferred laboratory service provider in Girona.

Administrative Expenses

The number of employees and directors increased from 16 (14 in Spain and 2 in the UK) at 31 December 2020 to 28 (19 in Spain, 8 in the UK, and 1 in the US) at 31 December 2021, as the Group strengthened its management team, increased its regulatory resources, and put in place a laboratory team in London in preparation for the commercial launch of Lipid inCode^® in 2022. This has resulted in salaries and associated costs increasing from £721,851 to £1,677,348 during the period.

In June 2021, the Company entered into a Product Commercialisation Agreement with Eversana Life Sciences L.L.C., whereby EVERSANA would act as the Company’s commercial services provider for the launch, market access, and distribution logistics for the Company’s products in the USA. The cost of US commercialisation fees in 2021, mainly payable to EVERSANA, amounted to £1,257,138.

Legal, Professional, and Consultancy fees increased from £368,961 in 2020 to £446,999 in 2021, mainly as a result of the extra operational expenses associated with being on the AIM market (broker fees, nomad fees, Financial PR fees, Registrar fees, AIM fees etc). Additionally, the Company has increased the size of the Clinical Advisory Board, both in the UK and the US.

Adjusted EBITDA

Intangible amortisation charges in 2021 were £28,922 compared to a charge of £20,876 in 2020; this increase is in line with the rise in capitalised patent cost activity during the year. Depreciation charges in 2021 were £5,794 compared to a charge of £1,898 in 2020; again, this increase is commensurate with the increased property, plant and equipment purchases in the year, due to the increased headcount and associated investment since the IPO during the period.

Share Options were granted to directors, employees, and certain advisors in April 2021, hence for the first time, under IFRS 2 the Company is required to recognise share based payment awards in the financial statements based on fair value when the awards are received, which is determined at the grant date for share-based payments. The charge for the year amounted to £72,906 and was calculated using the Black-Scholes model.

Successful completion of an IPO and admission to the LSE:AIM took place in July 2021; costs associated with the IPO amounted to £1,727,666. Of this amount, £583,669 was charged to the Income Statement and £1,143,997 was netted off against the share premium.

Non-recurring expenditure of £9,051 was incurred by our Spanish office in 2021 and represented previously capitalised development costs written off to the Income Statement in the period.

Taxation

As highlighted in note 8 to the Consolidated Financial Statements, although the expected tax credit at the UK corporation tax rate of 19% increased from (£199,488) in 2020 to (£786,028) in 2021, a large movement in the unrecognised deferred tax asset balance has resulted in a charge of £826,075 to the Income Statement in the period in accordance with IAS 12 Income Taxes, leading to a net charge of £6,071.

The UK budget announced on 3 March 2021 an increase in the main corporation tax rate from 19% to 25% on profits over £250,000 with effect from 1 April 2023.  Due to the nature of the business and uncertainty of profit generation the rate has not been reflected in the consolidated financial statements.

Other comprehensive income

Included in other comprehensive income are the net exchange differences on translation of foreign operations. The gain on translation of £72,000 in 2021 compares to a gain in 2020 of £440.

The gain in both years arises predominantly due to the strengthening of the GBP against the Euro. A significant proportion of the Group’s operations are based in Spain and with the strengthening of GBP in 2021 from an opening rate of £1:Eur1.12 to a closing rate at the end of 2021 of £1:Eur1.16, this movement was the main reason for the gain in the period.

Assets and Liabilities

Non-Current Assets

Intangible assets have increased from £139,486 at 31 December 2020 to £192,602 at 31 December 2021 as the Company continues to further build its intellectual property portfolio.

Property, plant and equipment has risen from £11,129 at 31 December 2020 to £46,265 at 31 December 2021 due to laboratory equipment purchases at the Company’s lab premises in London.

Current Assets

The Company holds very little in the way of finished goods and work in progress, largely because around 60% of its revenues originate from genomic service testing, as well as the fact that the kits are mainly ordered and then delivered directly from kit manufacturer/supplier to customer.

Trade and Other Receivables have increased from £248,589 at 31 December 2020 to £398,827 at 31 December 2021, predominantly due a higher level of prepayments as a result of expenditure for the following period having been invoiced by suppliers before the period end.

Liabilities

Trade and Other Payables increased from £563,495 at 31 December 2020 to £1,485,857 at 31 December 2021, split across non-current liabilities and current liabilities; this rise is mainly due to the nature of the payment structure set out in the agreement with our US commercialisation partner, EVERSANA.

Cash flow and working capital

Operating cash outflow increased from (£1,037,781) in 2020 to (£3,023,388) in 2021.The increase is largely explained by the drop-through of increased operating losses, offset by a reduction in net working capital, largely as a result of increased payables balances at 31 December 2021.

Net cash flows used in investing activities increased from (£68,273) in 2020 to (£145,436) in 2021, reflecting increased patent expenditure and laboratory equipment in the UK.

Net cash flows from financing activities increased from £3,026,142 in 2020 to £15,855,983 in 2021. In 2020, a private fundraise was carried out, comprising two institutional investors and a small number of private investors. In July 2021, the Company announced admission to trading on AIM together with a successful fundraise for gross proceeds of £17m before expenses.

As a result of the above activities there was an overall increase in cash and cash equivalents of £12,551,005 from £2,003,072 at 31 December 2020 to £14,554,077 at 31 December 2021.

………………………………

Paul Foulger
Chief Financial Officer
16 May 2022

Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the Year Ended 31 December 2021

The notes form part of these financial statements     

Consolidated Statement of Financial Position
31 December 2021

The financial statements were approved by the Board of Directors on 16 May 2022 and were signed on its behalf by:

..........................................................

Paul Foulger
Director
16 May 2022

The notes form part of these financial statements

Company Statement of Financial Position
31 December 2021

As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these financial statements.  The parent company's loss for the financial year was £1,856,657 (2020 – loss of £364,036).

The financial statements were approved by the Board of Directors on 16 May 2022 and were signed on its behalf by:

..........................................................

Paul Foulger
Director
16 May 2022

The notes form part of these financial statements

Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2021

The notes form part of these financial statements

Company Statement of Changes in Equity
for the Year Ended 31 December 2021

The notes form part of these financial statements

Consolidated Statement of Cash Flows
for the Year Ended 31 December 2021

The notes form part of these financial statements

Company Statement of Cash Flows
for the Year Ended 31 December 2021

2021

Oxford, UK. GENinCode Plc (LSE: AIM GENI), the predictive genetics company focused on the prevention of cardiovascular disease (CVD), announces its results for the twelve months ended 31 December 2021.

The 2021 financial year saw the Company accelerate its commercial expansion programme, successfully complete its IPO and admission to the LSE: AIM market and file its Pre-Submission for regulatory approval of its lead product Cardio inCode® with the US FDA .

Operational and financial highlights

• Completion of IPO and admission to the LSE: AIM in July 2021 raising gross proceeds of £17m
• Filing of FDA Pre-Submission for Cardio inCode® (Genetic Risk Score) for the onset of cardiovascular disease with preparations underway for the full regulatory submission 
• Announcement of EVERSANA Life Science Services strategic collaboration to act as US commercial services partner for introduction of GENinCode products to the US market
• Announcement of Royal Brompton and Harefield and Guys and St Thomas’ NHS foundation trust collaboration in CVD polygenic risk assessment and preparations for launch of Lipid inCode® testing for familial hypercholesterolemia
• Successful completion and publication of Lipid inCode® NHS clinical study to improve diagnosis, turnaround time for testing of Familial Hypercholesterolemia (FH) at reduced cost to the NHS
• Announcement of FH pilot with NE-AHSN (North East and Cumbria – Academic Health Science Network) for implementation of Lipid inCode® with NHS   
• Full year revenues increased 20% to £1.2m (2020: £1.0m)
• Increased levels of investment in our commercialisation programme giving rise to an operating loss of (£4.1m) (2020: loss of (£1.1m))
• Cash reserves of £14.6m at 31 December 2021 (2020: £2.0m)

Recent developments

The Company announces today: 

• Completed Indiana University collaboration representing flagship facilities in preparation for introduction of Cardio inCode® to US market
• A collaboration with Kaiser Permanente, California to assess Cardio inCode® for the polygenic risk assessment of CVD
• Commissioning of GENinCode US CLIA lab (Clinical Laboratory Improvement Amendments) test facility in Irvine, California and appointment of ResearchDx Inc as the Company’s US CLIA partner
• Announcement of collaboration with BUPA Cromwell hospital, London for use of the Lipid inCode® test for familial hypercholesterolemia (FH)
• Completion of first COVID-19 Thrombo inCode® evaluation study for genetic predisposition to thrombosis – St Pau Hospital, Spain

Outlook for 2022

We will take commercial advantage of our clinically advanced genetic products to scale the market opportunities open to us. We are focused on our US regulatory and reimbursement submissions for Cardio inCode^®, a first-in-class genetic risk assessment for CVD and we will accelerate preparations for the US launch and reimbursement of our globally leading familial hypercholesterolemia test Lipid inCode^®.

Over the remainder of the year, we expect to complete the following key deliverables:

• Prepare final FDA regulatory submission for Cardio inCode^® with a view to gaining approval approximately six months following submission
• Based on the recent advances by CMS in local coverage determination and private reimbursement for FH, prepare to commercially launch Lipid inCode^® in the US market
• Continue to strengthen our partnership with EVERSANA for product launch preparations in the US market
• Set-up US CLIA lab for Cardio inCode^® and prepare Lipid inCode^® lab diagnostic test (LDT) service offering
• Complete our first NHS implementation of Lipid inCode^® to advance FH testing with the NHS
• Commission our new UK lab operation and complete UKAS accreditation submission for service delivery of Lipid inCode^® to support the NHS
• Continue to build our EU partnerships and develop our ongoing collaborative discussions with pharmaceutical companies
• Generate increased Year-on-Year revenue growth             
• Publish first COVID-19 Thrombo inCode^® evaluation study for genetic predisposition to thrombosis

Matthew Walls, Chief Executive Officer of GENinCode Plc said: “We enjoyed a productive 2021 with the successful completion of the IPO and £17m gross fundraise, enabling the expansion of our commercial programme across our US, UK and EU markets. 2022 has started well as we continue to deliver the plans set out at the IPO and focus on the US product launches of Cardio inCode® for cardiovascular disease preventative care and accelerate US launch plans for Lipid inCode® for the management of Familial Hypercholesterolemia.

“We are working closely with our US collaborative partner, EVERSANA, on launch planning and advancing our collaborations with Indiana University and Kaiser Permanente. We continue to build constructive discussions with the FDA in preparation for our regulatory filing for Cardio inCode®. In the UK, we have successfully completed our NHS clinical study for Lipid inCode® (familial hypercholesterolemia testing) and are now preparing our first NHS pilot implementation with the North of England-AHSN. We anticipate continued revenue growth over the 2022 financial year.”

Analyst meeting

The Company will hold an analyst meeting 9:30 a.m. (BST) on Tuesday 17 May. Matthew Walls, CEO and Paul Foulger, CFO will host an in-person analyst meeting at the offices of Walbrook PR, 75 King William Street, London, EC4N 7BE to discuss the financial results and key topics including business strategy, partnerships, regulatory and reimbursement processes.

Investor presentation details

The Company will also host a presentation for investors via the IMC platform at 3pm on 17 May. 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 for this, please use the following link: https://www.investormeetcompany.com/genincode-plc/register-investor

For more information visit www.genincode.com

About GENinCode

GENinCode Plc is a UK based company specialising in genetic risk assessment of cardiovascular disease. Cardiovascular disease is the leading cause of death and disability worldwide.

GENinCode operates business units in the UK, in the United States through GENinCode U.S. Inc and in Europe through GENinCode S.L.U.

GENinCode predictive technology provides patients and physicians with globally leading preventative care and treatment strategies. GENinCode CE marked invitro-diagnostic molecular tests combine clinical algorithms and bioinformatics to provide advanced patient risk assessment to predict disease onset.

About Cardiovascular Disease

Cardiovascular disease (CVD) is the leading cause of death globally, taking an estimated 17.9 million lives each year. CVD is a group of disorders of the heart and blood vessels and include coronary heart disease, cerebrovascular disease, rheumatic heart disease and other conditions. More than four out of five CVD deaths are due to heart attacks and strokes, and one third of these deaths occur prematurely in people under 70 years of age.

The most important behavioural risk factors of heart disease and stroke are unhealthy diet, physical inactivity, tobacco use and harmful use of alcohol. The effects of behavioural risk factors may show up in individuals as raised blood pressure, raised blood glucose, raised blood lipids, and overweight and obesity. These “intermediate risks factors” can be measured in primary care facilities and indicate an increased risk of heart attack, stroke, heart failure and other complications.

Cessation of tobacco use, reduction of salt in the diet, eating more fruit and vegetables, regular physical activity and avoiding harmful use of alcohol have been shown to reduce the risk of cardiovascular disease. Health policies that create conducive environments for making healthy choices affordable and available are essential for motivating people to adopt and sustain healthy behaviours.

Identifying those at highest risk of CVDs and ensuring they receive appropriate treatment can prevent premature deaths. Access to noncommunicable disease medicines and basic health technologies in all primary health care facilities is essential to ensure that those in need receive treatment and counselling.

CVD causes a quarter of all deaths in the UK and is the largest cause of premature mortality in deprived areas and is the single biggest area where the NHS can save lives over the next 10 years. CVD is largely preventable, through lifestyle changes and a combination of public health and NHS action on smoking and tobacco addiction, obesity, tackling alcohol misuse and food reformulation.

Genetic risk assessment can help early detection and treatment of CVD to help patients live longer, healthier lives. Many people are still living with undetected, high-risk conditions such as high blood pressure, raised cholesterol, and atrial fibrillation (AF). Progress continues in the NHS to identify and diagnose people routinely knowing their ‘ABC’ (testing and monitoring of AF, Blood pressure and Cholesterol) set out in the NHS 10 Year plan.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER’S STATEMENT

On behalf of the Board, we are delighted to present the Preliminary report for the twelve-month period ended 31 December 2021 for GENinCode Plc. 

Following the successful admission of the Company to the LSE: AIM market in July 2021, this statement provides a brief introduction to the Company, a summary of progress over the past year, recent developments and the outlook for the year ahead.    

Introduction

GENinCode is engaged in the genetic risk assessment, prediction, and prevention of cardiovascular disease (CVD). GENinCode products and technology have been developed with the aim of prognosing and predicting the onset of CVD to provide personalised treatment and improve patient outcomes.

CVD accounts for around 18 million deaths annually, representing approximately 31 per cent. of all deaths worldwide with the global cost of CVD estimated to reach approximately $1.04 trillion by 2030.

CVD encompasses all conditions linked to the heart and blood vessels and is currently the leading cause of death globally, with CVD commonly referred to as a ‘heart attack’ or ‘stroke’. Four out of five deaths related to CVD are a result of heart attacks and strokes, and one third of these deaths occur prematurely in people under the age of 70. There are approximately 550 million people living with heart and circulatory diseases worldwide. This number has been rising due to changing lifestyles, ageing, and a growing population and improved survival rates from heart attacks and strokes.

In the US, CVD affects over 85 million people and accounts for more than one-third of all deaths. Common characteristics which put individuals at risk of CVD include raised blood pressure, high cholesterol levels, as well as obesity, lack of exercise and the co-occurrence of other diseases such as diabetes. Approximately 655,000 people in the US die from CVD each year, with coronary artery disease and heart attacks the most common.

Multiple clinical studies have shown that an individual’s genetic load contributes between 40 to 50 per cent. to the development of CVD, highlighting genetics as one of the most significant contributing factors to the onset of cardiovascular disease.

The Company’s product portfolio draws on advanced genomic precision testing using polygenic (multiple-genes) technology, advanced molecular testing, genotyping, sequencing, and AI bioinformatics. Through a simple blood or saliva sample, the Company can analyse the genetic variants and medical information associated with CVD to determine a patient’s Genetic Risk Score (GRS) which is used to assess a patient’s cardiovascular risk.

The current standard of care for primary prevention and assessment of the risk of CVD has been in use and largely unchanged for many years. The advent of our polygenic risk assessment for CVD allows the identification and reclassification of individuals traditionally categorised at ‘low’ or ‘intermediate’ risk who are at higher genetic risk of a CVD event than their current risk assessment suggests. This enables earlier in life preventative measures to be adopted to lower the future risk of a CVD event.

GENinCode has a strong clinical evidence base, granted intellectual property portfolio and a vision to advance CVD risk assessment to more precisely align therapeutic treatment and lifestyle choices to improve patient outcomes.

2021 Business review

In the results for the twelve months ending 31 December 2021, the Company saw year-on-year revenue growth increase to £1.2m (2020 £1.0m) primarily from its European business. The Company’s key products are CE-Marked with Cardio inCode^®, Thrombo inCode^®, Lipid inCode^® and Sudd inCode^® generating the core product revenues. Following the IPO and admission to LSE: AIM the Company commenced its expansion strategy in the US, UK and Europe which are the key markets for growth.

Just prior to the IPO, we announced a strategic commercialisation agreement with EVERSANA Life Sciences Services, LLC. EVERSANA act as the Company’s US commercial services provider for the launch, market access and distribution of the Company’s products. EVERSANA provides a broad range of commercial services to the life sciences industry. Its integrated business solutions span all stages of the product life cycle to deliver long-term, sustainable value for patients, prescribers, channel partners and payors. EVERSANA has experience across many commercialisation areas, in particular reimbursement, pricing intelligence, market access and payor services. As such EVERSANA represents a strong US commercial partner capable of accelerating our growth in the US market.

We have announced collaborations with two leading US healthcare institutions, Indiana University (IU) School of Medicine and Kaiser Permanente Department of Research to assess the clinical utility and validation of our Cardio inCode^® product in preparation for FDA regulatory approval. Both collaborations are focused on clinically advancing and validating the introduction of our lead product Cardio inCode^®. IU is focused on assessing the use of Cardio inCode^® as a genetic risk enhancer for the onset of atherosclerosis (ASCVD), whilst Kaiser Permanente is clinically evaluating Cardio inCode^® against its population health cohort for the prediction and onset of CVD. We are also in advanced discussions with New York Presbyterian (NYP) hospital group (which includes Weill Cornell and Columbia University hospitals). NYP will undertake Cardio inCode^® clinical utility studies in the New York State primary care network of physicians. These three institutions will be the flagship facilities and healthcare groups for the initial adoption of Cardio inCode^® in the US.

US Regulatory and Reimbursement

We progressed discussions with the FDA through 2021 and were invited to make a pre-submission of the Cardio inCode^® regulatory filing in December 2021. We have subsequently held constructive discussions with the FDA for the full regulatory filing and expect to complete this filing over the coming months.

In September 2021 the Centres for Medicare and Medicaid Services (CMS) repealed the Medicare Coverage for Innovative Technologies (MCIT) ruling. Resulting from this ruling we are now preparing clinical utility studies (and accompanying healthcare economics) to underpin a reimbursement submission via the MolDx^® programme. The MolDx^® submission will establish coverage, pricing and reimbursement for Cardio inCode^®. We are also commencing private payer discussions with health insurance providers. The MolDx^® programme works on behalf of CMS to administer Medicare claims via Medicare Administrative Contractors (MACs). We expect to present our MolDx^® reimbursement submission early next year based on the completion of our clinical utility studies with selected US partner healthcare institutions.

Following positive public health endorsement of Familial Hypercholesterolemia (FH) by the Centers for Disease Control Office of Public Health Genomics (CDC) and the inclusion of FH testing as a Tier 1 genomic application (i.e. the test has a significant potential for positive impact on public health based on available evidence-based guidelines and recommendations), we have accelerated our plans and preparations for the US soft launch of Lipid inCode^® later this year. Our Lipid inCode ^® test and FH panel of genes is well-positioned to receive Medicare coverage based on recent policies that have been put in place that support genetic testing in cardiovascular disease.

Today we announce the completion of our partnership with ResearchDx, based in Irvine, California for the commissioning of the GENinCode US CLIA lab. Our US lab will be set-up and commissioned over the coming months to provide CLIA certified product services initially focused on Cardio inCode^® and Lipid inCode^®. It is important to note that, once CLIA lab approval has been granted, we will be able to begin generation of product to support our US preparations for launch and meaningful revenue growth.

UK and Europe

In the UK, the NHS Long Term Plan 2019 identifies CVD as a clinical priority and the single largest condition where lives can be saved over the next 10 years. The NHS Long Term Plan sets out to identify 25% of patients suffering with Familial Hypercholesterolemia (FH) by 2024. FH affects approximately 1 in 200-250 people in the UK who are unable to effectively metabolise cholesterol leading to the accelerated onset of CVD. GENinCode’s UK strategy is focused on advancing our Lipid inCode^® test to help support the NHS meet this plan. During the year we announced our collaboration with Royal Brompton and Harefield hospitals to provide CVD clinical genetic testing. RB&H is part of Guy’s and St Thomas’ NHS Foundation Trust, the largest specialist heart and lung centre in England and one of the largest in Europe.

More recently we have announced the successful completion of our NHS clinical study for FH to deliver improved diagnosis and risk assessment and a faster turnaround of test results at a lower cost to the NHS. We have recently commenced a clinical pilot with the NE-AHSN (North East and Cumbria – Academic Health Science Network) the centre of excellence for UK FH testing with a view to supporting the North of England meet its NHS targets.

Today we also announce a collaborative agreement with BUPA Cromwell Hospital for Lipid inCode^® testing for FH. This will allow UK private patients to receive genetic testing for FH from the BUPA Cromwell hospital based in West London. This agreement represents the start of UK private patient revenue generation for Lipid inCode^®_.

In Europe, the Company continues to build its business and evidence based polygenic product profile and has announced sales and distribution arrangements with Longwood Diagnostics S.L. and Synlab Diagnostics S.A.U. to support its expansion in Spain. We are preparing Cardio inCode^® for piloting for public health CVD risk assessment in the Spanish regions and expanding our sales team and collaborative partners in Italy and France.

Following the European outbreak of the COVID-19 pandemic in northern Spain and Italy we have undertaken a number of clinical studies to assess the severity of onset of COVID-19 to patients with a genetic predisposition to thrombosis using our Thrombo inCode ^® product.  The first of these studies based at Hospital St Pau, Barcelona has now completed its findings and we expect to present this publication over the coming months.   

Intellectual Property

We maintain an ongoing intellectual property programme to strengthen our existing patent portfolio and advance examinations across our family of patents for Cardio inCode^® and Thrombo inCode^®. We continue to build our intellectual property portfolio and are actively evaluating in-licensing opportunities as appropriate to enhance our competitive product positioning.

Financial review

The first half of 2021 was dominated by preparation for admission of the Company to the LSE:AIM, which was successfully completed on 22nd July 2021. The company raised £17.0 million (gross) before expenses. The proceeds are being used to accelerate our commercial programme in the US, EU, and the UK.

Despite last year’s challenges of the COVID-19 pandemic, our EU business held up well to report revenues of £1.2m (2020 £1.0m) for the full year. Gross profit for the year was £593k (2020: £523k) with a margin of 52% (2020: 54%) respectively.

Administrative expenses increased to £4.0m (2020: £1.6m). The year-on-year cost increase reflecting a first half growth in staffing and professional costs as the company prepared for admission to LSE:AIM with the second half ramp up in US investment following the completion of the EVERSANA partnership with spending focused on regulatory, reimbursement and market assessment preparations. 

The increased commercial investment gave rise to an operating loss for the year of (£4.1m) (2020: (£1.1m)), with the cash position at the end of December 2021 £14.6m (2020: 2.0m).

Capital structure

Following the listing on LSE: AIM the total number of ordinary shares in issue was 95,816,866. The loss per share for the year ending 31 December 2021 was 8.05p/share. The Board of Directors will not be recommending a dividend payment for the year ended 31 December 2021. 

Outlook

We will take commercial advantage of our clinically advanced genetic products to scale the market opportunities open to us. We are focused on our US regulatory and reimbursement submissions for Cardio inCode^®, a first-in-class genetic risk assessment for CVD and we will accelerate preparations for the US launch and reimbursement of our globally leading familial hypercholesterolemia test Lipid inCode^®.

Over the remainder of the year, we expect to complete the following key deliverables:

• Prepare final FDA regulatory submission for Cardio inCode^® with a view to gaining approval approximately six months following submission
• Based on the recent advances by CMS in local coverage determination and private reimbursement for FH, prepare to commercially launch Lipid inCode^® in the US market
• Continue to strengthen our partnership with EVERSANA for product launch preparations in the US market
• Set-up US CLIA lab for Cardio inCode^® and prepare Lipid inCode^® lab diagnostic test (LDT) service offering
• Complete our first NHS implementation of Lipid inCode^® to advance FH testing with the NHS
• Commission our new UK lab operation and complete UKAS accreditation submission for service delivery of Lipid inCode^® to support the NHS
• Continue to build our EU partnerships and develop our ongoing collaborative discussions with pharmaceutical companies
• Generate increased Year-on-Year revenue growt
• Publish first COVID-19 Thrombo inCode^® evaluation study for genetic predisposition to thrombosis

We have a strong and growing clinical evidence base built on studies amassed over the past 12 years to more precisely identify patients at risk of CVD and thereby enable improved preventative care.  

We continue to increase investment in our manpower resource and expertise as well as exploring other acquisition opportunities to take advantage of the growth opportunities open to us.

Despite the world market challenges and volatility, the Board believes our products and technology will deliver significant investor returns and we would like to thank our investors, Board, management and employees for their strength and determination in driving our business growth.

We look forward to updating our investors on our forthcoming progress.

CFO STATEMENT

Operating Results

Sales increased by £193,311 or 20.1% from £960,801 in 2020 to £1,154,112 in 2021 and operating loss increased by £3,096,267 from (£1,050,004) in 2020 to (£4,146,271) in 2021.

Top 5 Geographic Markets

The gross margin decreased from 54.4% to 51.4%, largely as a result of the product mix but also due to pricing pressure from the Company’s preferred laboratory service provider in Girona.

Administrative Expenses

The number of employees and directors increased from 16 (14 in Spain and 2 in the UK) at 31 December 2020 to 28 (19 in Spain, 8 in the UK, and 1 in the US) at 31 December 2021, as the Group strengthened its management team, increased its regulatory resources, and put in place a laboratory team in London in preparation for the commercial launch of Lipid inCode^® in 2022. This has resulted in salaries and associated costs increasing from £721,851 to £1,677,348 during the period.

In June 2021, the Company entered into a Product Commercialisation Agreement with Eversana Life Sciences L.L.C., whereby EVERSANA would act as the Company’s commercial services provider for the launch, market access, and distribution logistics for the Company’s products in the USA. The cost of US commercialisation fees in 2021, mainly payable to EVERSANA, amounted to £1,257,138.

Legal, Professional, and Consultancy fees increased from £368,961 in 2020 to £446,999 in 2021, mainly as a result of the extra operational expenses associated with being on the AIM market (broker fees, nomad fees, Financial PR fees, Registrar fees, AIM fees etc). Additionally, the Company has increased the size of the Clinical Advisory Board, both in the UK and the US.

Adjusted EBITDA

Intangible amortisation charges in 2021 were £28,922 compared to a charge of £20,876 in 2020; this increase is in line with the rise in capitalised patent cost activity during the year. Depreciation charges in 2021 were £5,794 compared to a charge of £1,898 in 2020; again, this increase is commensurate with the increased property, plant and equipment purchases in the year, due to the increased headcount and associated investment since the IPO during the period.

Share Options were granted to directors, employees, and certain advisors in April 2021, hence for the first time, under IFRS 2 the Company is required to recognise share based payment awards in the financial statements based on fair value when the awards are received, which is determined at the grant date for share-based payments. The charge for the year amounted to £72,906 and was calculated using the Black-Scholes model.

Successful completion of an IPO and admission to the LSE:AIM took place in July 2021; costs associated with the IPO amounted to £1,727,666. Of this amount, £583,669 was charged to the Income Statement and £1,143,997 was netted off against the share premium.

Non-recurring expenditure of £9,051 was incurred by our Spanish office in 2021 and represented previously capitalised development costs written off to the Income Statement in the period.

Taxation

As highlighted in note 8 to the Consolidated Financial Statements, although the expected tax credit at the UK corporation tax rate of 19% increased from (£199,488) in 2020 to (£786,028) in 2021, a large movement in the unrecognised deferred tax asset balance has resulted in a charge of £826,075 to the Income Statement in the period in accordance with IAS 12 Income Taxes, leading to a net charge of £6,071.

The UK budget announced on 3 March 2021 an increase in the main corporation tax rate from 19% to 25% on profits over £250,000 with effect from 1 April 2023.  Due to the nature of the business and uncertainty of profit generation the rate has not been reflected in the consolidated financial statements.

Other comprehensive income

Included in other comprehensive income are the net exchange differences on translation of foreign operations. The gain on translation of £72,000 in 2021 compares to a gain in 2020 of £440.

The gain in both years arises predominantly due to the strengthening of the GBP against the Euro. A significant proportion of the Group’s operations are based in Spain and with the strengthening of GBP in 2021 from an opening rate of £1:Eur1.12 to a closing rate at the end of 2021 of £1:Eur1.16, this movement was the main reason for the gain in the period.

Assets and Liabilities

Non-Current Assets

Intangible assets have increased from £139,486 at 31 December 2020 to £192,602 at 31 December 2021 as the Company continues to further build its intellectual property portfolio.

Property, plant and equipment has risen from £11,129 at 31 December 2020 to £46,265 at 31 December 2021 due to laboratory equipment purchases at the Company’s lab premises in London.

Current Assets

The Company holds very little in the way of finished goods and work in progress, largely because around 60% of its revenues originate from genomic service testing, as well as the fact that the kits are mainly ordered and then delivered directly from kit manufacturer/supplier to customer.

Trade and Other Receivables have increased from £248,589 at 31 December 2020 to £398,827 at 31 December 2021, predominantly due a higher level of prepayments as a result of expenditure for the following period having been invoiced by suppliers before the period end.

Liabilities

Trade and Other Payables increased from £563,495 at 31 December 2020 to £1,485,857 at 31 December 2021, split across non-current liabilities and current liabilities; this rise is mainly due to the nature of the payment structure set out in the agreement with our US commercialisation partner, EVERSANA.

Cash flow and working capital

Operating cash outflow increased from (£1,037,781) in 2020 to (£3,023,388) in 2021.The increase is largely explained by the drop-through of increased operating losses, offset by a reduction in net working capital, largely as a result of increased payables balances at 31 December 2021.

Net cash flows used in investing activities increased from (£68,273) in 2020 to (£145,436) in 2021, reflecting increased patent expenditure and laboratory equipment in the UK.

Net cash flows from financing activities increased from £3,026,142 in 2020 to £15,855,983 in 2021. In 2020, a private fundraise was carried out, comprising two institutional investors and a small number of private investors. In July 2021, the Company announced admission to trading on AIM together with a successful fundraise for gross proceeds of £17m before expenses.

As a result of the above activities there was an overall increase in cash and cash equivalents of £12,551,005 from £2,003,072 at 31 December 2020 to £14,554,077 at 31 December 2021.

………………………………

Paul Foulger
Chief Financial Officer
16 May 2022

Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the Year Ended 31 December 2021