Business context and reporting period
NuCana plc filed this Form 20-F on April 27, 2022, reporting for the fiscal year ended December 31, 2021. This is an annual report, not a standalone 2021 fourth-quarter report. The U.K.-based clinical-stage biopharmaceutical company develops cancer medicines using its ProTide technology. Its ADSs trade on Nasdaq as NCNA. Financial statements are prepared under IFRS in pounds sterling.
NuCana had no approved products and generated no product revenue. Its principal clinical programs were NUC-3373 and NUC-7738; Acelarin’s Phase 3 biliary-tract-cancer trial was discontinued in March 2022.
Financial performance, cash flow and liquidity
Amounts below are in £ millions unless stated otherwise.
| Metric | 2021 | 2020 | Change / context |
|---|---|---|---|
| Revenue | None | None | No approved products or product sales |
| Research and development expenses | 36.8 | 25.9 | Increased 10.9 |
| Administrative expenses | 8.5 | 7.1 | Increased 1.4 |
| Impairment of intangible assets | 2.8 | — | Full carrying value of Acelarin-related patents impaired |
| Operating loss | 47.9 | 36.4 | Widened 11.5 |
| Loss for the year | 40.5 | 30.7 | Widened 9.9 |
| Basic and diluted loss per share | £0.78 | £0.81 | Lower loss per share despite higher total loss |
| Net cash used in operating activities | 23.8 | 21.6 | Use increased 2.2 |
| Cash and cash equivalents at year-end | 60.3 | 87.4 | Decreased 27.1 |
| Total assets | 77.5 | 107.8 | Decreased 30.3 |
| Total liabilities | 11.9 | 8.6 | Included £0.4 million of lease liabilities |
Margins are not meaningful because the company reported no revenue. No material borrowings are identified in the provided filing text; disclosed lease liabilities were £0.4 million at year-end. The company reported cash of £60.3 million and stated that, under its current operating plan, this was expected to fund operations for at least the next 12 months. It also reported £7.2 million of current income tax receivable and a £2.5 million non-current deposit connected with German patent litigation.
Investing activities used £3.6 million, including £2.6 million of payments for other non-current assets. Financing activities used £0.1 million; unlike 2020, there was no follow-on offering proceeds in 2021. The £7.3 million income tax credit was largely research and development tax credits; the company received £9.9 million in net income tax refunds in 2021.
Material changes versus the prior comparable period
- R&D spending rose 42%, primarily because clinical-trial costs increased to £20.4 million from £12.5 million. Acelarin accounted for £22.8 million of 2021 R&D expense, versus £13.9 million in 2020; NUC-3373 spending was £7.3 million and NUC-7738 spending £4.0 million.
- Administrative costs rose, principally due to higher insurance, professional fees and share-based payment expenses.
- Foreign exchange moved from a £3.5 million loss in 2020 to a £0.3 million gain in 2021, mainly reflecting movements in the U.S. dollar against sterling.
- Cash declined from £87.4 million to £60.3 million. The 2020 comparison included £62.1 million of net proceeds from a follow-on offering; no ADSs were sold under the new Jefferies ATM program in 2021.
- The Acelarin impairment was recorded in 2021 as an adjusting event after the March 2022 announcement that the NuTide:121 Phase 3 trial would stop. The independent monitoring committee concluded the regimen was unlikely to meet its overall-survival objective, notwithstanding a higher observed response rate.
Outlook, management commentary and key risks
- Management planned to report further NUC-3373 and NUC-7738 clinical data in 2022. It intended, subject to regulatory guidance and other factors, to pursue a randomized Phase 2 and then Phase 3 study of NUC-3373 in second-line colorectal cancer, and to explore other indications and combinations. NUC-7738 had completed dose finding and was entering Phase 2.
- Management planned to review NuTide:121 results to determine whether Acelarin had any further development pathway. The discontinued trial also drove the £2.8 million patent impairment.
- The company expects continued losses and rising development expenses and may require additional financing. It warned that financing may not be available on acceptable terms and could dilute shareholders or require concessions on product rights.
- Clinical development, regulatory approval, patient enrollment, safety, manufacturing capacity and reliance on third-party CROs and suppliers remain significant risks. Early clinical signals may not predict later-stage results.
- COVID-19 had temporarily interrupted trial enrollment in 2020; enrollment resumed, but management expected possible delays. The Ukraine conflict could impede trial enrollment, follow-up and data collection at regional sites, including for the discontinued NuTide:121 study.
- NuCana has currency exposure, primarily to the U.S. dollar, and does not use currency hedges. A 1% strengthening of sterling against the dollar was estimated to reduce net foreign-currency financial assets and liabilities by £0.4 million.
- Patent disputes with Gilead over a European patent covering sofosbuvir remain ongoing. NuCana deposited €3.0 million (£2.6 million) as security for potential legal-cost reimbursement in German proceedings; the outcome and timing are uncertain. The filing states this dispute does not affect patents covering NuCana’s product candidates.
- NuCana stated that its existing cash was sufficient for at least 12 months based on its current plan; this is management’s estimate, not a guarantee. The company also disclosed potential changes to U.K. R&D tax-credit rules and uncertainty over future eligibility.
- The filing reports effective disclosure controls and management-assessed effective internal control over financial reporting at December 31, 2021. The auditor did not provide an internal-controls attestation because NuCana was an emerging growth company.
Most important facts for investors to verify
- Whether subsequent NUC-3373 and NUC-7738 trial data support the stated development plans, and whether timelines or trial designs have changed.
- NuTide:121’s final data, any further Acelarin plans, and the practical implications of the impairment.
- Actual cash burn, R&D tax-credit receipts, and whether cash runway remains consistent with management’s at-least-12-month estimate.
- Financing plans, ATM usage, potential dilution, and the effect of outstanding share options.
- Updates on Gilead litigation, the €3.0 million court deposit, and any other patent or licensing developments.
- Material effects of trial-site disruption, supplier constraints, currency movements, or changes to U.K. tax-credit rules.