NuCana plc — FY 2018 Form 20-F
Filing and period: Annual report filed March 7, 2019, covering the fiscal year ended December 31, 2018. The requested “2018 Q4” is not a separate quarterly reporting period in this filing. Financial statements are prepared under IFRS in pounds sterling (£).
Business context
NuCana is a clinical-stage biopharmaceutical company developing oncology medicines using its ProTide technology. It had no approved products and generated no product revenue. Lead candidates were Acelarin, NUC-3373 and NUC-7738; all remained in clinical development.
Financial performance and liquidity
| Metric | FY 2018 | FY 2017 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | £16.8 million | £17.7 million |
| Administrative expense | £5.2 million | £4.6 million |
| Operating loss | £19.1 million | £25.7 million |
| Loss before tax | £18.1 million | £25.5 million |
| Income tax credit | £4.2 million | £2.4 million |
| Net loss | £13.8 million | £23.1 million |
| Net cash used in operating activities | £12.2 million | £8.7 million |
| Cash and cash equivalents at year-end | £77.0 million | £86.7 million |
| Total assets / total liabilities | £87.2 million / £5.6 million | £96.4 million / £2.9 million |
There is no meaningful revenue margin to assess because the company had no product sales. The filing does not present a conventional debt balance; year-end liabilities primarily comprised trade payables, payroll taxes and accrued expenditure. Management stated that available cash should fund its current operating plan at least into 2021, while cautioning that additional financing may be needed and is not assured. The company reported an accumulated deficit of £58.8 million.
Changes versus FY 2017
- Net loss narrowed by £9.2 million, largely reflecting a £2.9 million foreign-exchange gain in 2018 versus a £1.7 million loss in 2017, higher finance income and a larger tax credit. The 2017 comparison also included £1.8 million of IPO-related expense.
- Underlying R&D costs, excluding share-based compensation, rose by £7.1 million as clinical-trial and manufacturing spending increased. Reported R&D expense fell because share-based compensation was substantially lower in 2018 (£0.8 million versus £8.8 million in 2017).
- Operating cash outflow increased by £3.5 million. Cash declined by £9.7 million during 2018; FY 2017 cash had been boosted by net IPO proceeds of £77.7 million.
- Year-end ordinary shares outstanding increased to 32.2 million from 31.8 million, mainly through option exercises.
Outlook, clinical programs and risks
- Acelarin: In an interim Phase 1b biliary-tract-cancer study, 14 patients were reported in the intent-to-treat group; the objective response rate was 50%, and 11 efficacy-evaluable patients had a reported 64% response rate. NuCana planned a Phase 3 trial in biliary tract cancer in 2019, subject to regulatory guidance and other factors. The pancreatic-cancer Phase 3 study was expected to enroll 328 patients; more than 170 were enrolled by March 2019. Interim ovarian-cancer Phase 2 data were expected in 2019.
- NUC-3373: Interim Phase 1 data included three patients with stable disease and progression-free survival exceeding nine months as of the reported cutoff. A Phase 1b colorectal-cancer combination study began in October 2018; a Phase 2/3 study was planned for 2019, subject to regulatory guidance and other factors.
- NUC-7738: A Phase 1 trial in advanced solid tumors had opened. The candidate had no established clinical efficacy; supporting evidence described in the filing was preclinical.
- Management emphasized that early and interim results may change and may not predict later-stage outcomes or regulatory approval. All candidates require further clinical development; NuCana may never obtain approval, generate product revenue or achieve profitability.
- Key risks include clinical-trial failure or delay, patient enrollment, regulatory requirements, reliance on third-party manufacturers and CROs, single-source supply for key materials, intellectual-property disputes, funding needs, foreign-exchange volatility, and uncertain reimbursement and commercial acceptance. The company did not use currency hedges.
- Unusual financial items include the £2.9 million foreign-exchange gain, £4.2 million R&D-related tax credit, and lower share-based compensation expense. Management disclosed a potential £3.3 million employer National Insurance liability if all vested unapproved options had been exercised at the December 31, 2018 share price; this was contingent, not a recorded debt.
- IFRS 16 lease accounting was expected to increase reported assets and liabilities by an estimated £0.6 million from 2019, without material impact on loss before tax or net cash flow.
Most important facts for investors to verify
- Whether the stated cash runway into 2021 remains achievable against actual trial spending, cash balances and financing requirements.
- Final, adequately powered results and safety data from the Acelarin and NUC-3373 trials, rather than interim response or disease-control measures.
- Regulatory feedback, trial design, enrollment progress and timing for the planned 2019 studies.
- Manufacturing capacity, supply continuity and any need to qualify alternative suppliers as programs advance.
- Actual realization and continued eligibility for R&D tax credits, plus the potential cash cost of option-related National Insurance.
- Patent scope, remaining protection and the terms and continuing obligations under the Cardiff research and license agreements.