Silence Therapeutics plc — FY2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022; this is an annual report, not a standalone Q4 filing. Filed March 15, 2023. Financial statements use IFRS as issued by the IASB and are presented in pounds sterling unless noted. Silence is a clinical-stage siRNA therapeutics company with no approved products or product-sales revenue.
Financial performance and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | £17.5m | £12.4m |
| Gross profit / gross margin | £6.6m / 37.8% | £5.0m / 39.9% |
| Research and development expense | £35.6m | £30.8m |
| General and administrative expense | £19.6m | £20.0m |
| Operating loss | £48.6m | £45.8m |
| Net loss | £40.5m | £39.4m |
| Operating cash flow | £45.5m outflow | £6.8m inflow |
| Cash, cash equivalents and U.S. Treasury Bills | £71.1m | £73.5m |
| Net assets | £22.1m | £8.5m |
Revenue was principally collaboration income and royalties, not product sales. Collaboration revenue was £16.9m and royalty income £0.6m. The company reported no material borrowings; lease liabilities were £0.446m at year-end. Current assets were £96.7m and current liabilities £21.9m, including £8.9m of current contract liabilities. Accumulated losses were £263.3m.
Changes versus the prior year
- Revenue rose 41%, primarily reflecting progress under the Mallinckrodt, AstraZeneca and Hansoh collaborations.
- R&D expense increased 16%, driven by clinical-trial and manufacturing activity; operating loss increased 6% and net loss increased 3%.
- Operating cash flow shifted from a £6.8m inflow to a £45.5m outflow, mainly because FY2021 included substantial collaborator upfront payments and FY2022 involved higher operating spend.
- In August 2022, Silence raised $56.5m gross (approximately £46.4m) through a registered direct offering of 5.95m ADSs. Ordinary shares outstanding rose from 89.8m to 107.8m during 2022.
Outlook, commentary and key risks
- Going concern: Management says year-end cash and cash equivalents and Treasury Bills are expected to fund operating expenses and capital requirements only through Q1 2024. The auditor highlighted a material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern. The forecast excludes unachieved collaboration milestones and future financing; up to $14m of potential milestones in the following 12 months could extend runway, but are contingent.
- Funding needs: Silence expects continuing losses and says additional capital will be needed. It may pursue equity, debt or collaborations; financing may dilute shareholders or require rights to be licensed or development programs reduced. An open-market sale agreement permits up to $100m of ADS sales, but no shares were sold under it in 2022.
- Pipeline: SLN360 is wholly owned and in Phase 2; SLN124 is being studied in thalassemia and polycythemia vera. The filing expected key multiple-dose Phase 1 readouts in Q4 2023 and expected ALPACAR-360 Phase 2 enrollment completion by year-end 2023. These are forward-looking expectations, not reported outcomes. SLN501, partnered with Mallinckrodt, began a Phase 1 study in 2022.
- Clinical evidence: SLN360 Phase 1 single-dose results showed substantial Lp(a) reductions, but the filing notes clinical development remains uncertain; biomarker reductions do not establish cardiovascular-outcome benefit. SLN124’s reported patient data were preliminary safety results; efficacy remains under evaluation.
- Partner economics: Collaborations are described as representing up to approximately $7.5bn in potential milestones plus royalties. These amounts are contingent on target selection, development, regulatory and commercial achievements and should not be treated as committed or assured funding.
- Other risks: Clinical or regulatory setbacks, dependence on collaboration partners and third-party manufacturers/CROs, competition, intellectual-property challenges, foreign-exchange exposure, inflation and supply-chain disruption may affect results. The U.K. SME R&D tax-credit rate was expected to decline for qualifying expenditure from April 2023.
- The company reported no material legal proceedings and no capital commitments at year-end. It has never paid dividends and does not expect to do so in the foreseeable future.
Most important facts for investors to verify
- Current cash runway and financing plans, including whether the Q1 2024 runway estimate or the going-concern uncertainty has changed.
- Actual timing and results of the SLN360 and SLN124 clinical readouts, and whether biomarker findings translate into meaningful patient outcomes.
- Whether collaboration milestones are achieved, and the scope, timing and termination rights of partner agreements.
- Future cash burn, R&D tax-credit receipts and the impact of changes to U.K. tax-credit rules.
- Potential dilution from additional equity issuance and outstanding share options. Also reconcile filing presentation differences: audited FY2021 loss per share is reported as 44.3p in the financial statements but 44.1p in one operating-results table; year-end ordinary shares are stated as both 107,808,471 and 107,808,472.