Business context and reporting period
NuCana plc filed this Form 20-F on March 4, 2021, reporting its fiscal year ended December 31, 2020; it is an annual report, not a standalone 2020 Q4 report. The UK-based company is a clinical-stage biopharmaceutical developer of oncology medicines using its ProTide technology. Its lead candidates are Acelarin, NUC-3373 and NUC-7738. Financial statements are prepared under IFRS in pounds sterling (£).
NuCana had no approved products and generated no product revenue. Its Nasdaq-listed ADSs trade as NCNA. There were 51.17 million ordinary shares outstanding at year-end.
Key financial metrics
| Metric (£ millions, except per-share data) | 2020 | 2019 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | 25.9 | 19.7 |
| Administrative expense | 7.1 | 6.0 |
| Operating loss | 36.4 | 26.7 |
| Loss before tax | 36.2 | 25.7 |
| Income tax credit | 5.5 | 4.2 |
| Net loss | 30.7 | 21.4 |
| Basic and diluted loss per share | £0.81 | £0.66 |
| Cash and cash equivalents at year-end | 87.4 | 52.0 |
| Net cash used in operating activities | 21.6 | 23.8 |
| Total assets | 107.8 | 70.3 |
| Total liabilities | 8.6 | 6.7 |
| Total equity | 99.2 | 63.5 |
Margins are not meaningful because the company had no revenue. Year-end lease liabilities were £0.6 million; the filing reports no material borrowing or debt financing. Current assets were £101.8 million and current liabilities £8.1 million. Current income tax receivable was £9.8 million. Accumulated deficit was £110.6 million.
Material changes versus the prior comparable period
- Net loss widened by £9.3 million, or about 43%, while R&D expense increased £6.2 million. Management attributed the R&D increase mainly to clinical trial costs, which rose to £12.5 million from £8.6 million, and higher manufacturing costs.
- Administrative expense rose £1.1 million. Net foreign-exchange losses increased to £3.5 million from £1.0 million, reflecting US-dollar cash balances and sterling appreciation; finance income declined to £0.2 million from £1.0 million.
- Operating cash use fell £2.2 million, in part because NuCana received a £4.2 million tax refund and had a working-capital inflow. Cash increased by £38.9 million overall, including £61.8 million net financing cash flow and a £3.5 million negative exchange-rate effect.
- Funding included a September 2020 follow-on offering of 17.89 million ADSs at $4.50 each, generating $80.5 million gross proceeds, and £3.7 million gross proceeds from ATM sales. Ordinary shares outstanding rose from 32.48 million to 51.17 million, a substantial increase in the share count.
Outlook, management commentary, risks and unusual items
- Liquidity and funding: Management said £87.4 million of year-end cash was expected to fund the current operating plan for at least 12 months. The company expects continuing losses and says further capital may be required; funding needs depend on trial progress, costs, approvals and commercialization plans.
- Pipeline plans: Acelarin’s global Phase 3 NuTide:121 biliary tract cancer trial was expected to enroll enough patients in 2021 for its first interim analysis in 2022. Enrollment in the separate Phase 3 pancreatic cancer trial had been suspended after a prespecified futility analysis, with 200 of a planned 328 patients enrolled. NUC-3373 was in Phase 1 and Phase 1b studies; a Phase 3 colorectal cancer trial was planned for the second half of 2021, subject to regulatory guidance and other factors. NUC-7738 was in Phase 1, with a Phase 2 trial planned for the second half of 2021, also conditional. These are filing-date expectations, not assurances.
- Clinical evidence: The company reported encouraging early or interim signals, including a 62% disease-control rate in 26 efficacy-evaluable patients in the NUC-3373 Phase 1b study and a 44% response rate in 16 evaluable patients in the Acelarin ABC-08 study. These small or interim datasets do not establish later-stage efficacy; the filing cautions that cross-trial comparisons are limited.
- COVID-19: Trial enrollment was temporarily paused in April 2020 and restarted in May. Management expected the pandemic could delay trial initiation and completion and identified risks to enrollment, sites, suppliers and regulatory timelines.
- Key operating risks: NuCana has no approved products, depends on successful clinical development and future financing, and relies on third parties for trials and manufacturing. Other risks include regulatory failure, adverse effects, competition, patent challenges, foreign-exchange movements and changes to UK R&D tax-credit rules.
- Legal and IP matters: In February 2021, after year-end, the EPO Opposition Division upheld NuCana’s patent claims covering sofosbuvir; Gilead could appeal and filed a UK lawsuit seeking revocation of the UK patent. The filing says this patent is separate from the patents covering NuCana’s product candidates. NuCana also disclosed challenges relating to BrightGene patent filings concerning Acelarin manufacturing and composition claims in certain jurisdictions.
- Controls and audit: Management concluded disclosure controls and internal control over financial reporting were effective at December 31, 2020. The auditor gave an unqualified opinion on the IFRS financial statements; no auditor attestation on internal controls was included because NuCana was an emerging growth company.
Most important facts for investors to verify
- Whether NuCana’s cash runway remains adequate against actual spending, trial commitments and the timing of R&D tax-credit receipts.
- Enrollment status, interim-analysis timing and results for NuTide:121, and the status and outcome of the suspended pancreatic study.
- Whether NUC-3373 and NUC-7738 met the stated development milestones, including any planned later-stage trials.
- Whether early clinical signals are confirmed in larger, controlled trials and whether safety or manufacturing issues emerge.
- Current share count, potential dilution from further financing or equity awards, and the effects of sterling-dollar movements.
- Developments in the Gilead patent proceedings, BrightGene-related patent matters and the Cardiff research agreement, which was scheduled to expire at the end of 2021 unless extended.