Tiziana Life Sciences Ltd — FY2023 Form 20-F
Reporting period: Year ended December 31, 2023. This is an annual report, not a standalone fourth-quarter report. Financial statements are audited and prepared under IFRS as issued by the IASB; figures below are U.S. dollars unless stated otherwise.
Business context
Tiziana is a pre-revenue clinical-stage biotechnology company developing therapies for neurodegenerative, immune, lung and oncology indications. Its lead program is intranasal Foralumab for non-active secondary progressive multiple sclerosis (na-SPMS); Milciclib and TZLS-501 are other pipeline assets. The company reported no product sales or approved products.
Financial results and liquidity
| Metric | FY2023 / December 31, 2023 | FY2022 / December 31, 2022 |
|---|---|---|
| Revenue from product sales | None | None |
| Research and development expense | $8.113 million | $12.955 million |
| General and administrative expense | $9.871 million | $1.631 million in the selected-data table; $1.638 million in the results discussion |
| Total operating expenses / operating loss | $17.984 million | $14.586 million |
| Net loss | $17.691 million | $15.397 million |
| Basic and diluted loss per share | $0.173 per share (reported as $0.17 on the statements) | $0.152 per share (reported as $0.15) |
| Net cash used in operating activities | $15.698 million | $19.615 million |
| Cash and cash equivalents | $1.183 million | $18.122 million |
| Total assets | $12.184 million | $26.477 million |
| Total shareholders’ equity | $5.536 million | $19.571 million |
There was no material borrowing balance reported. Lease liabilities were $247,000 ($138,000 current and $109,000 non-current); contractual operating-lease obligations totaled $259,000. Current liabilities were $6.539 million, including $6.387 million in accounts payable and accrued expenses. The balance sheet implies working capital of $798,000, while the selected financial data reports $688,000.
Operating cash use declined year over year, but cash fell by $16.911 million. Investing activities used $1.253 million, including $1.0 million invested in related-party Okyo Pharma and about $253,000 in share buybacks. Financing activities provided a net $40,000. The filing reports no off-balance-sheet arrangements.
Changes and notable items
- R&D expense decreased $4.842 million, reflecting a shift in spending toward Foralumab and lower TZLS-501 manufacturing costs. Foralumab direct R&D expense was $7.570 million; Milciclib was $80,000 and TZLS-501 was $355,000.
- G&A rose substantially. Management cites option-related expense, higher investor/public-relations and travel costs, director fees and foreign-exchange movements; the filing’s discussion of the FX amount is not fully consistent with the financial statements.
- Other income was $742,000, including finance income and fair-value movements on related-party investments. The Okyo holding generated a reported $567,000 fair-value gain; the Accustem holding incurred a fair-value loss. The notes and results discussion contain differing amounts and descriptions for some investment movements.
- The company purchased 2.1 million Okyo shares in October 2023, converting a related-party loan and accrued interest into an investment. It also reported related-party receivables, shared-services balances and investments; review the notes for details and terms.
- Year-end shares issued and outstanding were 103,087,744; 1,573,510 shares were held in treasury. The company bought back 281,253 shares during 2023 at an average price of $0.90, excluding fees.
Outlook, risks and contingencies
- Going concern and funding: The auditor identified substantial doubt about the company’s ability to continue as a going concern. Management’s forecast indicated existing cash could be used up by July 2024 without additional financing. Management cited potential liability deferrals, cost reductions and additional equity; the filing provides no assurance that funding will be obtained. The statements are prepared on a going-concern basis without adjustments for the uncertainty.
- Pipeline outlook: The Phase 2a na-SPMS trial of intranasal Foralumab began dosing its first patient in December 2023. The filing says topline results are anticipated in Q4 2024, while another passage refers to topline data expected in 2025. FDA clearance was also reported for an intranasal Foralumab Alzheimer’s study. These are development plans, not established outcomes or financial guidance.
- Evidence limitations: Management reported encouraging biomarker and functional observations in a small Expanded Access population. These findings are not controlled-trial evidence of efficacy. The Phase 2a trial’s primary endpoint is change in microglial activation measured by PET.
- Program prioritization: Management focused resources on intranasal Foralumab for neurodegenerative disease; Milciclib, TZLS-501, and several other programs were paused or deprioritized. The company expects continuing R&D costs and losses and has no product revenue.
- Key risks: Additional capital may be unavailable or dilutive; clinical trials may fail, be delayed or face enrollment, safety, manufacturing or regulatory issues; the company relies on third-party CROs and manufacturers and licensed intellectual property. Foreign-exchange exposure is unhedged. The company also faces competition, patent and licensing risks, and potential pricing and reimbursement constraints.
- Controls: Management concluded internal control over financial reporting was ineffective at year-end due to a material weakness: failure to timely develop and communicate an employee handbook. Disclosure controls were also deemed ineffective. Management planned remediation; the auditor did not audit internal controls.
- Listing: Nasdaq notified the company in July 2023 that it did not meet the $1 minimum bid-price requirement. In January 2024, it received an extension through July 15, 2024 to regain compliance.
- Other tax uncertainty: The filing gives conflicting statements about whether the company was a passive foreign investment company (PFIC) in 2023. U.S. investors should consult their tax advisers and verify the company’s final position.
Most important facts for investors to verify
- Available cash, actual cash burn, financing raised after year-end, and whether the going-concern funding gap was resolved.
- The status and enrollment of the Foralumab Phase 2a trial, its primary endpoint, and the stated Q4 2024 versus 2025 topline timing.
- The small, uncontrolled Expanded Access evidence versus results from controlled clinical studies.
- Discrepancies in reported working capital, G&A, loss per share and related-party investment gains or losses.
- Related-party transactions, receivables and investments, including their valuation, recoverability, governance and terms.
- Progress in remediating the material weakness and whether internal controls improve.
- Nasdaq bid-price compliance and the company’s PFIC status and related U.S. tax disclosures.