Silence Therapeutics plc — FY2023 Form 20-F
Reporting period: Fiscal year ended December 31, 2023; annual IFRS financial statements in pounds sterling. The filing is not a standalone fourth-quarter report. Silence is a clinical-stage biotechnology company developing siRNA medicines and has no approved products or product-sales revenue.
Financial results and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | £25.4 million | £17.5 million |
| Gross profit / gross margin | £15.1 million / 59.3% | £6.6 million / 37.8% |
| Research and development expense | £44.0 million | £35.6 million |
| General and administrative expense | £20.6 million | £19.6 million |
| Operating loss | £49.6 million | £48.6 million |
| Net loss | £43.3 million | £40.5 million |
| Operating cash outflow | £39.4 million | £45.5 million |
| Cash and cash equivalents at year-end | £54.0 million | £54.8 million |
- Revenue was entirely from collaborations and royalties, not product sales. Collaboration income was £24.8 million and royalty income £0.6 million.
- Revenue increased 45%; gross margin improved, while the operating loss widened 2% and the net loss widened 7%.
- R&D spending increased 24%, primarily from additional clinical trials and contract manufacturing. Share-based payment expense rose to £13.1 million from £10.3 million.
- FY2023 financing cash inflow was £25.2 million, mainly from ADS sales; investing activities generated £16.4 million, including Treasury bill redemptions. Cash increased £2.2 million over the year.
- The company reported no material financing commitments such as credit lines, and lease liabilities of £0.3 million. Trade and other payables were £12.4 million. Contract liabilities of £64.1 million are deferred collaboration revenue, not borrowings.
Material changes and notable items
- FY2023 revenue included a £10.5 million Mallinckrodt collaboration amount, including an £8.0 million cumulative revenue adjustment following the return of two preclinical targets to Silence. The filing says no cash payment was made for reacquiring those rights; the assets’ fair value was assessed as nil.
- AstraZeneca nominated its first product candidate in May 2023, triggering a $10 million milestone; Silence received $10 million from AstraZeneca during 2023. Hansoh milestones generated a further $4 million in receipts.
- Silence raised approximately £25.5 million before £1.0 million of fees through its at-the-market ADS program in 2023. Ordinary shares outstanding increased from 107.8 million to 118.8 million.
- After year-end, the company raised $20 million through ADS sales in January 2024 and announced a $120 million gross private placement in February, before approximately £5.7 million of fees. It also reported a further $10 million AstraZeneca milestone in February 2024.
- In March 2024, Mallinckrodt said it would not continue developing SLN501 after phase 1, ending the collaboration’s remaining activities and commitments.
Outlook, management commentary and risks
- Management expects continued operating losses and higher R&D costs as programs advance. It said year-end resources were sufficient for at least the next 12 months from the financial statements’ issuance; the filing also says anticipated collaboration milestones could extend funding into 2026. Milestones are conditional, and additional funding may be required.
- Expected clinical updates at the filing date included zerlasiran phase 2 topline data at 36 weeks in Q1 2024 and 48 weeks in Q2 2024, and divesiran phase 1 data in the first half of 2024. A phase 3 design for zerlasiran was being finalized; no formal financial guidance was provided.
- Zerlasiran’s phase 1 multiple-dose results showed Lp(a) reductions of up to 99%; the phase 2 ALPACAR-360 study was fully enrolled. Divesiran is being studied in polycythemia vera; the company said it was prioritizing that program and did not plan to advance development in thalassemia at that time.
- Key risks include clinical failure or delay, regulatory uncertainty, reliance on collaboration partners and third-party manufacturers, need for further capital and possible shareholder dilution, foreign-exchange movements, and intellectual-property, data-security and privacy risks.
- Silence reported a £43.3 million annual loss and £304.6 million accumulated losses. Management nevertheless prepared the statements on a going-concern basis, citing available cash and post-year-end financing; future milestone receipts remain uncertain.
- The filing says Silence expected to lose foreign private issuer status in 2025, potentially increasing reporting, accounting and compliance costs and requiring a transition to U.S. GAAP reporting.
Most important facts for investors to verify
- Cash runway assumptions after the January and February 2024 fundraises, including expected burn and the timing and likelihood of collaboration milestones.
- Whether the £10.5 million Mallinckrodt revenue recognition, especially the £8.0 million catch-up adjustment, is nonrecurring and how it affects comparisons of underlying collaboration revenue.
- Upcoming clinical data, trial enrollment and safety findings for zerlasiran and divesiran, and the timing and cost of any phase 3 program.
- The effect of Mallinckrodt’s decision to stop SLN501 development and the prospects for the two reacquired complement targets.
- Share-count dilution from the 2023 ADS sales, 2024 private placement, and outstanding options; the filing reports 118.8 million ordinary shares at year-end 2023 and 139.5 million as of March 1, 2024.