Business context and reporting period
Alterity Therapeutics Limited is an Australian clinical-stage biotechnology company developing therapies for neurodegenerative and movement disorders. This Form 20-F is an annual report for the fiscal year ended June 30, 2021—not a standalone 2020 fourth-quarter report. Financial statements are prepared under IFRS in Australian dollars (A$). The lead candidate, ATH434, is being prepared for a Phase 2 study in multiple system atrophy (MSA); the company has no commercial product revenue.
Key financial metrics
| Metric (A$ unless stated) | FY2021 | FY2020 |
|---|---|---|
| Product revenue | None reported | None reported |
| Net loss | 15.31 million | 13.46 million |
| Research and development expense | 12.28 million | 10.10 million |
| General and administrative expense | 6.94 million | 3.45 million |
| Interest and other income | 4.51 million | 0.14 million |
| Net cash used in operating activities | 17.33 million | 9.43 million |
| Cash and cash equivalents at year-end | 28.12 million | 9.20 million |
| Total assets / total liabilities | 33.59 million / 3.12 million | 9.91 million / 2.76 million |
| Accumulated deficit | 169.73 million | 154.42 million |
FY2021 other income included an A$4.13 million Australian R&D tax incentive receivable, A$0.15 million of COVID-related government assistance and A$0.21 million from a Michael J. Fox Foundation grant. The company reported no income tax expense. No conventional borrowings are disclosed; reported lease liabilities were A$65,649 at year-end. Current assets were A$33.49 million and current liabilities A$3.07 million. The filing provides no meaningful product gross margin or operating margin because the company has no product sales.
Material changes versus the prior year
- Net loss widened by A$1.85 million, while R&D expense rose 21.6%, mainly reflecting ATH434 Phase 2 preparation.
- General and administrative expense more than doubled, partly due to A$1.95 million in share-based payment expense, CEO transition-related termination payments and higher consulting fees.
- Operating cash outflow increased by A$7.90 million. FY2020 cash flow included A$4.82 million of R&D tax refunds; no such refund was received in FY2021.
- Financing activities generated A$36.69 million net, principally from equity issuance. The company issued approximately 1.047 billion shares during the year, taking period-end ordinary shares to 2.084 billion from 1.037 billion.
- Cash increased to A$28.12 million, supported by a A$35 million placement and A$4.24 million of ATM proceeds during FY2021.
Outlook, commentary and risks
- Management said cash on hand, the subsequent ATM proceeds and the expected FY2021 R&D tax incentive receivable should fund planned research, including ATH434 Phase 2 preparation and commencement, and working capital for at least 12 months from the report date. This is management’s assessment, not a guarantee; further financing may be needed.
- After year-end, the company issued 322,857,900 shares at A$0.0532 each, raising approximately A$17.18 million through its ATM facility.
- ATH434 completed Phase 1 in healthy volunteers and was reported as well tolerated. The company was planning a Phase 2 MSA study for the second half of 2021, with FDA and EMA input; trial timing, recruitment, endpoints and results remain uncertain. ATH434 had U.S. and EU orphan-drug designations for MSA.
- PBT2 has a U.S. FDA Partial Clinical Hold tied to neurotoxicology findings in dogs, which restricts dose levels and requires further characterization. Earlier human studies reported safety and some secondary cognitive findings, but the filing does not establish efficacy for approval.
- COVID-19 had caused some disruption to research and trial planning and could create delays, higher costs and additional funding needs. Other key risks include sustained operating losses, dependence on external financing and potential dilution, uncertain clinical and regulatory outcomes, third-party research and manufacturing reliance, and patent and competition risks.
- The A$4.13 million FY2021 R&D incentive receivable depends on management’s eligibility assessment and was identified as a critical audit matter. The FY2020 claim was assessed as a non-refundable offset; the company was considering its options, including an appeal.
- The filing reports no material legal proceedings or contingent liabilities. R&D termination commitments were approximately A$4.5 million, generally subject to 30-day termination notice. There were no dividends, and none are anticipated in the foreseeable future.
Important facts for investors to verify
- Whether the FY2021 A$4.13 million R&D tax incentive receivable was ultimately collected and whether any FY2020 assessment was appealed or changed.
- Actual ATH434 Phase 2 start, enrollment, protocol/endpoints and subsequent safety and efficacy results, rather than planned timelines or preclinical evidence.
- Cash burn and remaining runway after the July 2021 ATM raise, including the timing and cost of clinical programs and any need for further capital.
- The scale of dilution from FY2021 and post-year-end share issues, outstanding options and any future equity financing.
- Any regulatory developments affecting the PBT2 Partial Clinical Hold and the evidence needed to support further development.
The consolidated financial statements received an unqualified audit opinion. The auditor identified the R&D tax incentive receivable as a critical audit matter. Management stated that disclosure controls and internal control over financial reporting were effective; the auditor was not engaged to express an opinion on internal control effectiveness.