Tiziana Life Sciences Ltd — FY2021 Form 20-F
Reporting period: Fiscal year ended December 31, 2021, compared primarily with FY2020. This is an annual filing, not a standalone 2021 fourth-quarter report. Financial statements are audited and prepared under IFRS, in U.S. dollars; amounts below are in millions unless stated otherwise.
Business context
Tiziana is a clinical-stage biotechnology company developing treatments for oncology and immune diseases. Its principal candidates are Foralumab, Milciclib and the anti-IL-6R antibody TZLS-501. It reported no product sales revenue and operates one segment focused on research and development.
Financial performance and position
| Metric | FY2021 / Dec. 31, 2021 | FY2020 / Dec. 31, 2020 |
|---|---|---|
| Product revenue | $0 | $0 |
| Other income | $0.9, including $0.75 sublicense income | Not material in the reported comparison |
| Research and development expense | $13.2 | $6.0 |
| General and administrative expense | $13.3 | $11.2 |
| Total operating expenses | $27.4 | $28.0 |
| Net loss | $23.4 | $26.1 |
| Basic and diluted loss per share | $0.24 | $0.27, based on the detailed EPS note |
| Operating cash used | $21.8 | $11.3 |
| Cash and cash equivalents | $42.2 | $65.8 |
| Working capital | $41.1 | $62.2 |
| Total liabilities | $7.5 | $8.3 |
| Shareholders’ equity | $41.3 | $62.4 |
There was no meaningful gross margin because the company had no product revenue. The income tax credit was $3.24 million, principally reflecting U.K. R&D relief. The comprehensive loss was $27.9 million, including a $4.5 million adverse currency translation adjustment.
The cash-flow statement reports $0.13 million of investing cash inflow and $0.02 million of financing cash outflow in 2021; cash declined by $21.7 million before the $2.0 million adverse exchange-rate effect. The decrease in cash including that exchange effect was $23.6 million. The company reported no borrowings at year-end; its $0.49 million convertible loan liability was converted to shares in November 2021. Year-end lease liabilities were nil.
Material changes versus FY2020
- R&D expense increased $7.2 million, with increased spending on TZLS-501 and Foralumab manufacturing and development.
- G&A expense rose $2.1 million. The company cited option-modification and option-issuance charges, along with higher compliance, professional and legal costs.
- Net loss narrowed by $2.7 million, partly because FY2020 included a $13.2 million realization bonus expense and a $2.7 million gain on disposal of StemPrintER intellectual property. FY2021 included a further $0.855 million charge related to the chairman’s delayed bonus settlement.
- Cash fell from $65.8 million to $42.2 million as operating cash use increased and there was little net financing inflow in 2021, versus $75.3 million of financing cash inflow in 2020.
- Outstanding shares increased from 97.3 million to 102.3 million. The company completed a group reorganization, placing a Bermuda-incorporated parent above the prior group, and its common shares began trading on Nasdaq in October 2021.
Outlook, commentary and risks
- Management said existing cash was expected to fund operations and capital expenditure for the foreseeable future. Its going-concern projections indicated that liabilities could be met through at least June 2023, with an estimated $15 million cash surplus at that point. The company cautioned that assumptions could prove wrong and that additional funding may be needed.
- Planned development included oral Foralumab studies in Crohn’s disease, nasal Foralumab evaluation in progressive MS, an IND for inhaled TZLS-501 in idiopathic pulmonary fibrosis, and a Milciclib/gemcitabine study in KRAS-mutated NSCLC. The filing’s timelines are plans, not assured outcomes.
- Foralumab’s reported positive expanded-access MS results were from one patient and are preliminary; the filing described biomarker and clinical improvements, not controlled-trial evidence of efficacy.
- The company remains pre-revenue and loss-making, with substantial clinical, regulatory, manufacturing and financing risks. It relies on third-party CROs and manufacturers, has no backup manufacturer identified, and has no established sales force.
- Management identified material weaknesses in internal control over financial reporting, citing limited accounting resources and an ineffective control environment. Management reported remediation plans; the independent auditor did not audit or opine on internal-control effectiveness.
- Other notable exposures include foreign-exchange movements (no hedging in place), dependence on licensed intellectual property, and the possibility of clinical delays, adverse events, regulatory setbacks or inability to raise capital on acceptable terms.
Most important facts for investors to verify
- Cash runway: reconcile the $42.2 million year-end cash balance, $21.8 million operating cash use and management’s June 2023 liquidity projection against subsequent spending and financing.
- Clinical progress: verify trial initiation, enrollment, safety and controlled efficacy data for Foralumab, Milciclib and TZLS-501; distinguish single-patient expanded-access observations from trial results.
- Financial-reporting controls: track whether the disclosed material weaknesses were remediated and whether accounting resources and oversight improved.
- Related-party and compensation matters: review settlement of the chairman’s realization bonus, related-party balances, and the terms and potential dilution of outstanding options.
- Filing consistency: confirm the cash-flow presentation and functional-currency disclosures against the audited statements and subsequent filings; some narrative and tabular disclosures in the provided text appear inconsistent.