Tiziana Life Sciences plc — FY2020 Form 20-F
Reporting period: Year ended December 31, 2020. This is an annual report, not a standalone 2020 fourth-quarter filing. Financial statements are audited and prepared under IFRS as issued by the IASB, in U.S. dollars; the company’s functional currency is pounds sterling.
Business context
Tiziana is a clinical-stage biotechnology company focused on oncology and immunology. It reported no product revenue and had no products approved for sale. Key programs include Foralumab, an anti-CD3 antibody; Milciclib, a small-molecule oncology candidate; and TZLS-501, an anti-IL-6R antibody. The company uses a lean, largely outsourced development model.
Financial results and liquidity
| Metric (US$ millions, except per-share data) | 2020 | 2019 |
|---|---|---|
| Revenue | 0 | 0 |
| Research and development expense | 5.993 | 3.714 |
| General and administrative expense | 11.203 | 6.207 |
| Total operating expenses, net of IP disposal gain | 28.026 | 9.921 |
| Operating loss | 28.026 | 9.921 |
| Net loss | 26.131 | 9.323 |
| Comprehensive loss | 22.657 | 9.350 |
| Basic and diluted loss per share | US$0.1546 | US$0.0683 |
| Cash and cash equivalents at year-end | 65.824 | 0.200 |
| Working capital | 62.196 | (5.846) |
| Total assets | 70.656 | 2.378 |
| Total liabilities | 8.270 | 7.892 |
| Shareholders’ equity/(deficit) | 62.386 | (5.514) |
Gross margin is not meaningful because the company recorded no revenue or cost of revenue. Operating cash used was $11.335 million, versus $6.796 million in 2019; investing cash used was $0.123 million. Financing provided $75.346 million, and foreign-exchange movements added $1.736 million. The resulting increase in cash was $65.624 million.
Year-end liabilities included $0.555 million of lease liabilities, $5.590 million of accounts payable and accrued expenses, and $2.040 million payable to related parties. The contractual-obligations table reports no borrowings, but a financial-statement note separately describes a $0.324 million Planwise convertible debt instrument at year-end; the filing’s debt disclosures do not clearly reconcile.
Material changes versus 2019
- Net loss increased to $26.131 million from $9.323 million, while operating cash use rose to $11.335 million from $6.796 million.
- R&D expense increased by $2.279 million, principally due to development of TZLS-501; G&A increased by $4.996 million, including higher option-related charges and professional, compliance and legal costs.
- A $13.214 million realization-bonus expense was recorded after the company raised more than £20 million in August 2020. The Chairman was entitled to 4,763,995 shares in lieu of cash; the accounts show $13.503 million in a shares-to-be-issued reserve.
- A $2.663 million gain was recorded on disposal of StemPrintER intellectual property as part of its demerger to Accustem; the filing also reports a $0.279 million impairment charge relating to the SharDNA investment.
- Cash increased from $0.200 million to $65.824 million, largely reflecting $75.346 million of financing cash flow. Ordinary shares outstanding rose from 136.655 million to 194.612 million.
Outlook, commentary and principal risks
- Management expects continuing losses and higher R&D spending; profitability depends on successful development, regulatory approval and commercialization, none of which is assured. Directors stated that cash-flow projections supported meeting liabilities for 18 months from issuance of the financial statements, while cautioning that assumptions could prove wrong and capital could be used sooner.
- Plans described in the filing included further Foralumab studies in Crohn’s disease and progressive MS, follow-on COVID-19 studies, development of TZLS-501 including inhaled delivery, and a Milciclib combination trial in HCC. These were plans, not assured outcomes. Several cited study results, manufacturing milestones and appointments occurred after December 31, 2020.
- Pipeline evidence remains preliminary or from early-stage/small studies. Risks include clinical failure or delay, enrollment and safety issues, regulatory uncertainty, dependence on CROs and contract manufacturers, and the need for additional financing that may dilute shareholders.
- The company disclosed patent and licensing dependence, competitive and market-acceptance risks, currency exposure without hedging, and potential disruption from COVID-19. It had no sales force and relied on third parties for manufacturing and development.
- The auditor issued an unqualified opinion on the IFRS financial statements. Separately, management concluded disclosure controls were ineffective and identified material weaknesses in accounting resources and the control environment; management said the weaknesses did not cause a material misstatement in the reported statements and outlined remediation plans.
Important facts for investors to verify
- Reconcile the filing’s inconsistent narrative loss figures: audited statements report a 2020 net loss of $26.131 million, while one operating-review passage gives a different 2020 amount and misstates comparative-year figures.
- Confirm the outstanding convertible-debt disclosure: the note reports $0.324 million, while the balance sheet and contractual-obligations table do not clearly show that amount as borrowing.
- Check the status, timing, enrollment, results and regulatory path of each planned clinical program; distinguish post-year-end developments from FY2020 accomplishments.
- Assess cash burn and runway against actual subsequent spending, financing needs, license obligations and contingent clinical or commercial milestone payments.
- Track remediation of the disclosed internal-control material weaknesses and any further share issuance, including delivery of the Chairman’s bonus shares and related dilution.