Akari Therapeutics plc — FY2020 Form 20-F
Reporting period: Fiscal year ended December 31, 2020; this is an annual report, not a standalone fourth-quarter filing. Akari is a clinical-stage biotechnology company developing nomacopan, which targets complement C5 and leukotriene B4 pathways. Financial statements are prepared under U.S. GAAP.
Key financial metrics
| Metric | FY2020 | FY2019, restated |
|---|---|---|
| Product revenue | None | None |
| Research and development expense | $8.82 million | $8.74 million |
| General and administrative expense | $9.16 million | $8.22 million |
| Operating loss | $17.98 million | $16.96 million |
| Net loss | $17.08 million | $16.85 million |
| Operating cash used | $16.95 million | $12.92 million |
| Cash at year-end | $14.06 million | $5.73 million |
| Total current assets / current liabilities | $14.58 million / $5.22 million | $6.44 million / $6.47 million |
| Total debt | No short- or long-term debt reported | No short- or long-term debt reported |
The company has no product sales, so operating margins are not meaningful. Loss per ordinary share was reported as $0.01 in both years. Financing provided $25.07 million of net cash in FY2020; investing cash flow was zero. Year-end shareholders’ equity was $9.38 million, and accumulated deficit was $182.28 million.
Changes versus the prior comparable period
- Net loss increased by about $0.24 million, while operating cash use increased by about $4.03 million. R&D expense was nearly flat; G&A rose about 11%, mainly because of a one-time, non-cash $0.9 million Aspire Capital commitment-share expense.
- Year-end cash rose by $8.32 million, largely from equity financing, despite higher operating cash burn. The share count increased from 2.25 billion at year-end 2019 to 3.85 billion at year-end 2020, reflecting substantial equity issuance and dilution.
- After a December 2020 change in share-currency denomination, the company reclassified outstanding warrant liabilities to equity. The filing reports this as an accounting reclassification, not cash proceeds.
Outlook, risks, and unusual items
- Liquidity and going concern: Management said available capital was expected to fund operations through May 2021, excluding further Aspire Capital sales. The auditor cited recurring losses and net capital deficiency as raising substantial doubt about the company’s ability to continue as a going concern. Additional financing is required; availability and terms are uncertain. The $30 million Aspire facility had $24 million remaining at year-end, subject to its terms and market conditions.
- Development outlook: Management expected clinical expenses to rise as nomacopan development advanced. A pivotal Phase III bullous pemphigoid program began in early 2021, with recruitment expected to open midyear. The pediatric HSCT-TMA Phase III study was open for enrollment in Europe and the U.S., but remained exposed to COVID-related disruption.
- Clinical uncertainty: The filing reports positive Phase II bullous pemphigoid topline results in a small study. The AKC study was halted amid the pandemic; the Brazil COVID-19 study was paused to optimize dosing. Nomacopan is investigational and has no marketing approval. Enrollment delays, efficacy and safety uncertainty, and reliance on third-party manufacturing remain material risks.
- Restatement and controls: The company restated prior financial statements after determining that RPC options issued in 2015 were incorrectly treated and valued as a liability rather than equity. The filing says the correction is non-cash and does not create a legal liability. Prior annual reports for 2015–2019 and quarterly reports through September 2020 were deemed unreliable; 2018 and 2019 statements are restated here. Management identified a material weakness involving review and valuation of complex financial instruments and concluded internal controls and disclosure controls were ineffective as of year-end.
- Other items: COVID-19 disrupted trial access, enrollment, and supply chains. The filing reports no significant contractual obligations or off-balance-sheet arrangements at year-end. In April 2021, after the reporting period, SEC staff notified Akari that it had concluded its investigation concerning the Edison report and PNH trial and did not intend to recommend an enforcement action against the company.
Important facts for investors to verify
- Whether subsequent financing extended the stated runway and on what dilution terms; confirm current cash, burn rate, and Aspire facility availability and usage.
- The full restatement effects across all affected periods, the non-cash accounting treatment, and progress in remediating the material weakness.
- Current status, enrollment, timelines, and complete clinical data for the BP and HSCT-TMA Phase III programs, and the status of the paused or halted programs.
- Manufacturing supply, scale-up, and commercial-supply arrangements, which the filing says were not yet secured on a commercial basis.
- Current share count and potential dilution from warrants, options, and further equity financing; each ADS represents 100 ordinary shares.