Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 03, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38067 | ||
Entity Registrant Name | Verona Pharma plc | ||
Entity Incorporation, State or Country Code | X0 | ||
Entity Tax Identification Number | 98-1489389 | ||
Entity Address, Address Line One | 3 More London Riverside | ||
Entity Address, City or Town | London | ||
Entity Address, Postal Zip Code | SE1 2RE | ||
Entity Address, Country | GB | ||
Country Region | 44 | ||
City Area Code | 203 | ||
Local Phone Number | 283 4200 | ||
Title of 12(b) Security | Ordinary shares, nominal value £0.05 per share* | ||
Trading Symbol | VRNA | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Public Float | $ 251.3 | ||
Entity Common Stock, Shares Outstanding | 482,944,390 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement that the registrant intends to file with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the registrant’s 2022 Annual Meeting of Shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001657312 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Firm ID | 876 |
Auditor Location | Reading, United Kingdom |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 148,380 | $ 187,986 |
Prepaid expenses | 4,037 | 4,538 |
Tax incentive receivables | 15,583 | 8,260 |
Other current assets | 2,063 | 1,720 |
Total current assets | 170,063 | 202,504 |
Non-current assets: | ||
Furniture and equipment, net | 80 | 107 |
Goodwill | 545 | 545 |
Equity interest | 15,000 | 0 |
Right-of-use assets | 899 | 1,050 |
Total non-current assets: | 16,524 | 1,702 |
Total assets | 186,587 | 204,206 |
Current liabilities: | ||
Accounts payable | 10,044 | 178 |
Accrued expenses | 22,256 | 10,863 |
Operating lease liability | 648 | 798 |
Warrants | 0 | 2,246 |
Taxes payable | 147 | 0 |
Other current liabilities | 327 | 118 |
Total current liabilities | 33,422 | 14,203 |
Non-current liabilities: | ||
Term loan | 4,874 | 4,635 |
Operating Lease, Liability, Noncurrent | 286 | 514 |
Total non-current liabilities | 5,160 | 5,149 |
Total liabilities | 38,582 | 19,352 |
Commitments and contingencies | ||
Shareholders' equity | ||
Ordinary £0.05 par value shares: 489,177,550 and 488,304,446 issued, and 480,082,966 and 463,304,446 outstanding, at December 31, 2021 and 2020, respectively | 31,855 | 31,794 |
Additional paid-in capital | 385,070 | 366,411 |
Ordinary shares held in treasury | (603) | (1,700) |
Accumulated other comprehensive loss | (4,601) | (4,601) |
Accumulated deficit | (263,716) | (207,050) |
Total shareholders' equity | 148,005 | 184,854 |
Total liabilities and shareholders' equity | $ 186,587 | $ 204,206 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - £ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in pounds sterling per share) | £ 0.05 | £ 0.05 |
Common stock, issued (in shares) | 489,177,550 | 488,304,446 |
Common stock, outstanding (in shares) | 480,082,966 | 463,304,446 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 40,000 | $ 0 |
Operating expenses: | ||
Research and development | 79,406 | 44,505 |
Selling, general and administrative | 33,907 | 29,772 |
Total operating expenses | 113,313 | 74,277 |
Operating loss | (73,313) | (74,277) |
Other income/(expense): | ||
Research and development tax credit | 15,630 | 8,267 |
Interest income | 14 | 121 |
Interest expense | (340) | (35) |
Fair value movement on warrants | 2,246 | (1,136) |
Foreign exchange gain | 176 | 2,060 |
Total other income, net | 17,726 | 9,277 |
Loss before income taxes | (55,587) | (65,000) |
Income tax income/(expense) | 18 | (146) |
Net loss | (55,569) | (65,146) |
Other comprehensive loss: | ||
Foreign currency translation adjustments | 0 | (2,321) |
Total comprehensive loss attributable to shareholders of the Company | $ (55,569) | $ (67,467) |
Loss per share, basic and diluted (in dollars per share) | $ (0.12) | $ (0.25) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders’ Equity - USD ($) $ in Thousands | Total | Ordinary shares | Additional paid-in capital | Ordinary shares held in treasury | Accumulated other comprehensive loss | Accumulated deficit |
Beginning balance (in shares) at Dec. 31, 2019 | 105,326,638 | |||||
Beginning balance at Dec. 31, 2019 | $ 42,741 | $ 7,265 | $ 179,535 | $ 0 | $ (2,280) | $ (141,779) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (65,146) | (65,146) | ||||
Retranslation of foreign operations | (2,321) | (2,321) | ||||
Issuance of ordinary shares, net of issuance costs (in shares) | 355,831,184 | |||||
Issuance of ordinary shares, net of issuance costs | 187,360 | $ 22,700 | 164,660 | |||
Issuance of ordinary shares to treasury (in shares) | 25,000,000 | |||||
Issuance of ordinary shares to treasury | $ 1,700 | (1,700) | ||||
Issuance of ordinary shares from restricted share units and share options (in shares) | 2,146,624 | |||||
Issuance of ordinary shares from restricted share units and share options | 43 | $ 129 | 39 | (125) | ||
Share-based compensation | $ 22,177 | 22,177 | ||||
Ending balance (in shares) at Dec. 31, 2020 | 463,304,446 | 488,304,446 | ||||
Ending balance at Dec. 31, 2020 | $ 184,854 | $ 31,794 | 366,411 | (1,700) | (4,601) | (207,050) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (55,569) | (55,569) | ||||
Retranslation of foreign operations | 0 | |||||
Issuance of ordinary shares, net of issuance costs (in shares) | 873,104 | |||||
Issuance of ordinary shares, net of issuance costs | 733 | $ 61 | 672 | |||
Issuance of ordinary shares from restricted share units and share options | 1,097 | (1,097) | ||||
Share-based compensation | 25,425 | 25,425 | ||||
Common shares withheld for taxes on vested stock awards | (6,850) | (6,850) | ||||
Equity settled share-based compensation reclassified as cash-settled | $ (588) | (588) | ||||
Ending balance (in shares) at Dec. 31, 2021 | 480,082,966 | 489,177,550 | ||||
Ending balance at Dec. 31, 2021 | $ 148,005 | $ 31,855 | $ 385,070 | $ (603) | $ (4,601) | $ (263,716) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | ||
Net loss | $ (55,569) | $ (65,146) |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Foreign exchange gain | (176) | (2,060) |
Amortization of debt issue costs | 114 | 10 |
Accretion of redemption premium on debt | 125 | 8 |
Fair value adjustment | (2,246) | 1,136 |
Impairment of right-of-use asset | 0 | 289 |
Share-based compensation | 25,425 | 22,177 |
Depreciation and amortization | 629 | 623 |
Equity interest recognized as revenue | (15,000) | 0 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 501 | (3,065) |
Tax incentive receivables | (6,924) | 768 |
Other current assets | (343) | 187 |
Right-of-use assets | (440) | (703) |
Accounts payable | 9,866 | (1,398) |
Accrued expenses | 11,389 | 1,940 |
Lease liabilities | (373) | 110 |
Taxes payable | 147 | 0 |
Other current liabilities | (379) | 48 |
Net cash used in operating activities | (33,254) | (45,076) |
Cash flows from investing activities: | ||
Purchases of furniture and equipment | (12) | (82) |
Sale of short-term investments | 0 | 9,792 |
Net cash (used in)/provided by investing activities | (12) | 9,710 |
Cash flows from financing activities: | ||
Proceeds from issuance of ordinary shares | 733 | 200,156 |
Payment of offering costs in connection with the issuance of ordinary shares | 0 | (12,748) |
Proceeds from issuance of term loan | 0 | 5,000 |
Term loan issuance costs | 0 | (108) |
Payments of withholding taxes from share-based awards | (6,850) | 0 |
Proceeds from exercise of share options | 0 | 43 |
Net cash (used in)/provided by financing activities | (6,117) | 192,343 |
Effect of exchange rate changes on cash and cash equivalents | (223) | 581 |
Net change in cash and cash equivalents | (39,606) | 157,558 |
Cash and cash equivalents at beginning of the year | 187,986 | 30,428 |
Cash and cash equivalents at end of the year | 148,380 | 187,986 |
Supplemental Cash Flow Information [Abstract] | ||
Income taxes paid | 1 | 8 |
Interest paid | $ 215 | $ 7 |
Organization and description of
Organization and description of business operations | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization And Business Description | Organization and description of business operations Verona Pharma plc (the "Company") is incorporated and domiciled in the United Kingdom. Verona Pharma plc has one wholly-owned subsidiary, Verona Pharma, Inc., a Delaware corporation. Rhinopharma Limited (“Rhinopharma”), a Canadian company that was previously a non-operating, wholly-owned subsidiary, was dissolved in June 2021. The address of the registered office is 1 Central Square, Cardiff, CF10 1FS, United Kingdom. The Company is a clinical-stage biopharmaceutical group focused on developing and commercializing innovative therapeutics for the treatment of respiratory diseases with significant unmet medical needs. The Company’s American Depositary Shares (“ADSs”) are listed on the Nasdaq Global Market (“Nasdaq”) and trade under the symbol “VRNA”. The Company’s ordinary shares were also listed on the Alternative Investment Market of the London Stock Exchange (“AIM”) until October 30, 2020, when the shares were delisted from AIM in an effort to enhance liquidity of trading by combining all transactions on Nasdaq and to reduce costs through removing duplicative listing and compliance fees. Liquidity The Company has incurred recurring losses and negative cashflows from operations since inception, and has an accumulated deficit of $263.7 million as of December 31, 2021. The Company expects to incur additional losses and negative cash flows from operations until its products potentially gain regulatory approval and reach commercial profitability, if at all. The Company expects that its cash and cash equivalents as of December 31, 2021, will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance. In March, 2021, the Company entered into an open market sale agreement with respect to an at-the-market offering program (the “ATM Program”) under which the Company may issue and sell its ordinary shares in the form of ADSs, with an aggregate offering price of up to $100.0 million. During the year ended December 31, 2021, the Company sold 873,104 ordinary shares (equivalent to 109,138 ADSs) under the ATM Program, at an average price of approximately $0.86 per share (equivalent to $6.91 per ADS), raising aggregate net proceeds of approximately $0.7 million after deducting issuance costs. As of December 31, 2021, there remained $99.3 million of ordinary shares, in the form of ADSs, available for sale under the ATM Program. The Company’s commercial revenue, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if ever. Additionally we may enter into out-licensing transactions from time to time but there can be no assurance that the company can secure such transactions in the future. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives including to further advance clinical and regulatory activities, to fund prelaunch and launch related costs and to create an effective sales and marketing organization to commercialize ensifentrine. We will need to seek additional funding through public or private financings, debt financing, collaboration or licensing agreements and other arrangements. However, there is no guarantee that we will be successful in securing additional capital on acceptable terms, or at all. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting policies | Basis of Presentation and Summary of Significant Accounting policies Basis of presentation and consolidation The consolidated financial statements include the accounts of Verona Pharma plc and its wholly-owned subsidiaries Verona Pharma, Inc. and Rhinopharma through to its dissolution in June 2021. All inter-company balances and transactions have been eliminated. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("US GAAP") and the following accounting policies have been consistently applied. At the end of the second quarter of 2020, the Company determined that it no longer qualified as a Foreign Private Issuer under SEC rules. As a result, beginning January 1, 2021, the Company is required to report with the SEC on domestic forms and comply with domestic company rules in the United States. The transition to US GAAP was made retrospectively for all periods from the Company’s inception. Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual and prepayment of research and development expenses, the fair value of share-based compensation, the fair value of warrants and the fair value of the equity interest received under the Nuance Agreement (as defined below). Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates. Business combinations The Company applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Company. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. The excess of the cost of acquisition over the fair value of the Company's share of the identifiable net assets acquired is recorded as goodwill. Identifiable ass ets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred and included in administrative expenses. Cash and cash equivalents The Company considers all highly liquid investments purchased with original maturities of ninety days or less at acquisition to be cash equivalents. Cash and cash equivalents includes deposits held at call with banks, term deposits with maturities of less than three months at inception, and in money market funds investing in U.S. and U.K. government debt and liquid securities from highly rated institutions. Short-term investments Short-term investments include fixed term deposits held at banks with original maturities between three months and a year. They are classified as loans and receivables and are measured at amortized cost using the effective interest method. Equity interest As part of the Nuance Agreement, the Company received an equity interest in Nuance Biotech, the parent company of Nuance Pharma (see note 9). As Nuance Biotech’s securities are not publicly traded the equity interest’s fair value is not readily determinable. The Company therefore follows guidance from ASC 321-10-35-2 and uses the fair value measurement alternative and measures the securities at cost, which is deemed to be the value indicated by the last observable transaction in Nuance Biotech's stock, subject to impairment. The valuation will be adjusted for any observable price changes in orderly transactions for an identical or similar investment in Nuance Biotech, or if there is an indicator of impairment. Furniture and equipment, net Furniture and equipment comprise office furniture and computer equipment and are stated at cost less accumulated depreciation, which is calculated on a straight-line basis over the expected useful economic lives, generally two Goodwill Goodwill consists of goodwill related to the acquisition of Rhinopharma. Goodwill is not amortized but periodically tested for impairment. Impairment of long-lived assets The Company reviews long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of assets may not be fully recoverable. The Company initially compares the market capitalization of the Company to the book value of its assets. If the value of the market capitalization does not support the valuation of the assets, the Company reviews estimates of the cash flows over the remaining lives of its other intangible assets, or related group of assets where applicable, in measuring whether the assets to be held and used will be realizable. In the event of impairment, the Company would discount the future cash flows using its then estimated incremental borrowing rate to estimate the amount of the impairment. Ligand agreement In 2006 the Company acquired Rhinopharma and assumed contingent liabilities owed to Ligand UK Development Limited (“Ligand”) (formerly Vernalis Development Limited). The Company refers to the assignment and license agreement as the Ligand Agreement. Ligand assigned to the Company all of its rights to certain patents and patent applications relating to ensifentrine and related compounds (the "Ligand Patents") and an exclusive, worldwide, royalty-bearing license under certain Ligand know-how to develop, manufacture and commercialize products (the "Ligand Licensed Products") developed using Ligand Patents, Ligand know-how and the physical stock of certain compounds. The Company is obligated to pay a milestone payment on obtaining the first approval of any regulatory authority for the commercialization of a Ligand Licensed Product, low single digit royalties based on the future sales performance of all Ligand Licensed Products and a portion equal to a mid-twenty percent of any consideration received from any sub-licensees for the Ligand Patents and for Ligand know-how. Royalties payable are based on the future sales performance so the amount payable is unlimited. At the time each contingency is resolved, the Company will record the contingent consideration payment (or payable) in connection with the Ligand Agreement as an expense and will classify it within R&D expenses. Revenue recognition The Company’s revenue arises from the Company’s agreement for the development and commercialization of ensifentrine in Greater China (the “Nuance Agreement”). The terms of the Nuance Agreement include non-refundable upfront fees, payments based upon achievement of developmental and regulatory milestones, commercial milestones, royalties payable on sales, and manufacturing and supply. These payments are viewed as both fixed and variable consideration. Non-refundable upfront fees are considered fixed, while milestone payments and revenue from the commercialized product are identified as variable consideration. The Company follows the five-step model in ASC 606 “Revenue from Contracts with Customers”: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. All of the Company’s revenue is derived from contracts with customers. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC Topic 606. The Company’s performance obligations include intellectual property rights, (which include the license, patents and developmental and regulatory data) and manufacturing and supply. Management are required to judge when performance obligations are satisfied and consequently when revenue is recognized. If the right to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the right when the right is transferred to the customer, and the customer can use and benefit from the right. If an arrangement includes development and regulatory milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or the licensee’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. For arrangements with licenses of intellectual property that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes royalty revenue and sales-based milestones at the later of (i) when the related sales occur, or (ii) when the performance obligation to which the royalty has been allocated has been satisfied. Research and development costs Research and development (“R&D”) costs are expensed as incurred. Research and development expenses include salaries, share-based compensation and benefits of employees, and other costs related to the Company’s R&D activities, including contracts with clinical research organizations and contract manufacturers. As part of the process of preparing financial statements the Company is required to estimate its expenses resulting from its obligations under contracts with vendors and consultants and clinical site agreements in connection with its R&D efforts. The financial terms of these contracts are subject to negotiations which vary contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to the Company under such contracts. The Company’s objective is to reflect the appropriate clinical trial expenses in its financial statements by matching those expenses with the period in which services and efforts are expended. The Company accounts for these expenses according to the progress of the trials and other development activities measured by patient progression and the timing of various aspects of the trial. The Company determines prepaid and accrual estimates through discussions with applicable personnel and outside service providers as to the progress of clinical trials, or other services completed. During the course of a clinical trial, the Company adjusts its rate of clinical trial expense recognition if actual results differ from its estimates. The Company makes estimates of its prepaid and accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known at that time. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in the Company reporting amounts that are too high or too low for any particular period. The Company’s clinical trial prepaid and accrual expense is dependent upon the timely and accurate reporting of study recruitment from contract research organizations and activities carried out by other third-party vendors as well as the timely processing of any change orders from the contract research organizations. Share-based compensation The Company has a share-based compensation plan under which various types of equity-based awards may be granted, including stock options and restricted stock units (RSUs). The fair value of share options and RSUs, which are subject to milestone or service conditions with graded vesting, are recognized as compensation expense using the cliff vesting method; f orfeitures are recognized as they occur. The Company uses the fair-value based method to determine compensation for all arrangements under which employees receive shares. The fair value of each option and RSU is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatility is based on the historical volatility of the Company’s ordinary shares over the expected term of the options. The expected term of options granted is derived using the simplified method, which computes the expected term as the average of the sum of the vesting term plus the contract term. Historically the risk-free rate has been based on the appropriate U.K. government debt yield. After delisting its Ordinary shares from AIM on October 30, 2020, the Company used U.S. government debt yields. Details of the assumptions used are set out in note 12 to the consolidated financial statements. Other income - United Kingdom R&D tax credits Other operating income relates to R&D tax credits receivable in the UK. As a company that carries out extensive research and development activities, Verona is subject to the UK R&D Small and Medium Enterprise (“SME”) Program. Qualifying expenditures largely comprise employment costs for research staff, consumables, a proportion of relevant, permitted sub-contract costs and certain internal overhead costs incurred as part of research projects for which it does not receive income. Tax credits related to the SME Program are received as cash and are recorded as other income, as they are akin to grant income, in the consolidated statements of operations and comprehensive loss. Income taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). This Topic prescribes the use of the liability method, whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. ASC 740 establishes a single model to address accounting for uncertain tax positions. ASC 740 clarified the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. The Company has no uncertain tax positions. Comprehensive loss The Company accounts for comprehensive loss in accordance with ASC 220, “Income Statement - Reporting Comprehensive Income”. Comprehensive income represents all changes in stockholders’ equity during the period except those resulting from investments by, or distributions to, stockholders. Segment Reporting The Company has one operating and reportable segment, pharmaceutical development. The Company’s long-lived assets are held in the United Kingdom. Foreign Currencies Reporting currency The Company’s reporting currency is U.S. dollars. Prior to July 1, 2020, Verona Pharma plc’s functional currency was pounds sterling and its financial statements were translated to U.S. dollars. The statement of comprehensive income was translated at average rates for the period, assets and liabilities at the balance sheet date exchange rate and equity balances at historical rates. Translation differences were recorded in accumulated other comprehensive income / (loss). Functional currency The Company's consolidated financial statements are measured using the currency of the primary economic environment in which the entity operates, which was pounds sterling for Verona Pharma plc until June 30, 2020. In the six months to June 30, 2020, management changes resulted in lower people costs being paid in pounds sterling. Following the Company’s private placement in July 2020 (the “Private Placement”) the Company entered into contracts to commence Phase 3 trials for ensifentrine and the majority of the costs are incurred in U.S. dollars. Management reviewed budgeted activities over the next five years and identified that the majority of costs from the second half of 2020 onwards will be incurred in U.S. dollars. Furthermore, the Private Placement raised funds in U.S. dollars and having delisted from AIM any future fundraises will be in U.S. dollars. Also, the commercial focus of Company is the U.S. market. As a consequence, management determined the Company's functional currency changed from pounds sterling to U.S. dollars and was accounted for prospectively from July 1, 2020. To convert Verona Pharma plc’s books and records into U.S. dollars, income and expenses were translated at average rates, assets and liabilities at the June 30, 2020, exchange rate, and equity balances at historical rates. Translation differences were recorded in accumulated other comprehensive income/(loss). Treasury shares In the year ended December 31, 2020, the Company incorporated a trust to facilitate the acquisition of shares, by or for the benefit of employees and former employees. In the year ended December 31, 2020, the Company issued 25 million ordinary shares (equivalent to 3.125 million ADSs) to cover expected shares issued upon the vesting of share awards to employees. The Company has the indirect ability to control the trust as trustees are required to act in accordance with the trust deed and because the Company controls the issuance of shares to cover awards. As a consequence, the trust is consolidated into the Company’s consolidated financial statements. The shares that were issued to the trust that have not been issued to employees to satisfy vesting of share awards are included in the Consolidated Balance Sheet as treasury shares. Fair value of financial instruments US GAAP defines fair value and requires companies to establish a framework for measuring fair value and disclosure about fair value measurements using a three-tier approach. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Our financial instruments include cash equivalents, an equity interest, other assets, accounts payable and accrued expenses and other liabilities. Fair value estimates of these instruments are made at a specific point in time, based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision. The equity interest is held at cost subject to impairment, following guidance from ASC 321-10-35-2 . The carrying amounts of the other instruments are considered to be representative of their fair values because of their short-term nature. Concentration of credit risk Financial instruments that potentially subject the Company to concentration of credit risk consist of principally cash and cash equivalents, bank deposits and certain receivables. The Company holds cash and cash equivalents with highly rated financial institutions and in highly rated money market funds and the Company has not experienced any significant credit losses in these accounts and does not believe the Company is exposed to any significant credit risk on these instruments. Lease accounting The company accounts for leases in accordance with ASU No. 2016-02, “Leases” (Topic 842) (“ASC 842”). The standard requires lessees to recognize almost all leases on the balance sheet as right-of-use (“ROU”) assets and lease liabilities, and requires leases to be classified as either operating or finance type leases. Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU ass ets and liabilities are recognized at the commencement date based on the present value of remaining lease payments. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As the Company's leases do not provide an implicit rate, the Company determines the incremental borrowing rate in calculating the present value of lease payments. The ROU assets also include any lease payments made prior to commencement and are recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease. When it is reasonably certain the Company will exercise such options the lease will be recognized as a liability and a corresponding ROU asset also recognized. Operating leases are included in operating lease ROU assets in current and non-current operating lease liabilities on the Company's Consolidated Balance sheets. Recently issued accounting pronouncements, not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments. This guidance replaces the current incurred loss impairment methodology. Under the new guidance, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects its current estimate of credit losses expected to be incurred over the life of the financial instrument based on historical experience, current conditions and reasonable and supportable forecasts. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates (“ASU 2019-10”). The purpose of this amendment is to create a two tier rollout of major updates, staggering the effective dates between larger public companies and all other entities. This granted certain classes of companies, including Smaller Reporting Companies (“SRCs”), additional time to implement major FASB standards, including ASU 2016-13. Larger public companies will have an effective date for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities are permitted to defer adoption of ASU 2016-13, and its related amendments, until the earlier of fiscal periods beginning after December 15, 2022. Under the current SEC definitions, we meet the definition of an SRC as of the ASU 2019-10 issuance date and are deferring adoption for ASU 2016-13. The guidance requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements, but do not believe the adoption of this standard will have a material impact on our consolidated financial statements. |
Prepaid expenses
Prepaid expenses | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid expenses | Prepaid expenses Prepaid expenses consisted of the following (in thousands): December 31, 2021 2020 Clinical trial and other development costs $ 2,169 $ 2,551 Insurance 1,555 1,701 Other 313 286 Total prepaid expenses $ 4,037 $ 4,538 |
Tax and tax incentive receivabl
Tax and tax incentive receivable | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Tax and tax incentive receivable | Tax incentive receivables Taxes receivable consisted of the following (in thousands): December 31, 2021 2020 R&D tax credit receivable - U.K. $ 15,583 $ 8,202 Tax receivable - U.S. — 58 Total tax receivable $ 15,583 $ 8,260 |
Property leases
Property leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Property leases | Property leases The right-of-use assets (“ROU”) relate to rented office space in London and North Carolina, with leases ending in 2023 and 2024, respectively. In the year ended December 31, 2021, the Company extended its existing London lease. As a consequence it modified its accounting for the lease and recorded $0.6 million lease liability and corresponding ROU asset. In the year ended December 31, 2020, the Company entered into a lease arrangement in North Carolina for office space and recognized lease liability and corresponding ROU asset of $0.7 million. To calculate lease liabilities the Company used a weighted average discount rate of 8%. The weighted average remaining lease term is 1.8 years. Minimum annual payments over the remaining lease periods as of December 31, 2021 are as follows (in thousands): 2022 655 2023 276 2024 38 Total minimum future lease payments $ 969 Less: imputed interest (35) Total operating lease liabilities $ 934 The total operating lease expense included in selling, general and administrative costs was $651,000. |
Accrued expenses
Accrued expenses | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued expenses | Accrued expenses Accrued expenses consisted of the following (in thousands): December 31, 2021 2020 Clinical trial and other development costs $ 21,336 $ 8,607 Professional fees, listing and general corporate costs 919 2,149 People related costs 1 107 Total accrued expenses $ 22,256 $ 10,863 |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Warrants | Warrants In 2016, the Company issued 31,115,926 units to new and existing investors at the placing price of £1.4365 per unit. Each unit comprised one ordinary share and one warrant. The warrant holders can subscribe for 0.4 of an ordinary share at a per share exercise price of £1.7238 until May 2, 2022. The warrant holders can opt for a cashless exercise of their warrants, whereby the warrant holders can choose to exchange the warrants held for a reduced number of warrants exercisable at nil consideration. The reduced number of warrants is calculated based on a formula considering the share price and the exercise price of the warrants. At December 31, 2021, 31,003,155 warrants remain outstanding and entitle the investors to subscribe for, in aggregate, a maximum of 12,401,262 ordinary shares. If, after a transaction, should the warrants be exercisable for unlisted securities, the warrant holders may demand a cash payment instead of the delivery of the underlying securities. Accordingly, the warrants are accounted for as a liability under ASC 480 “Distinguishing Liabilities from Equity”.The warrants are measured at fair value, classified as Level 3 in the fair value hierarchy, with movements recorded in finance income/(expense) in the Consolidated Statements of Operations and Comprehensive Loss. In the years ended December 31, 2021, and 2020, no warrants were exercised or forfeited. The warrants had no intrinsic value as at December 31, 2021. There have been no changes in valuation techniques or transfers between fair value measurement levels during the years ended December 31, 2021 and 2020. The warrants are valued using the Black-Scholes model and the table below presents the assumptions used: December 31, 2021 2020 Shares potentially issued under warrants 12,401,262 12,401,262 Exercise price in pounds sterling £ 1.7238 £ 1.7238 Risk-free interest rate 0.07 % — % Expected term to exercise 0.33 1.33 Annualized volatility 51.6 % 105.4 % Dividend rate — % — % Calculated value of the warrants, in thousands of U.S. dollars $ — $ 2,246 The following table shows the movement of the value of the warrants (in thousands): December 31, 2021 2020 At January 1 $ 2,246 $ 1,188 Fair value adjustment (2,246) 1,114 Foreign exchange differences recognized in loss for the period — 22 Translation differences recognized in other comprehensive loss — (78) At December 31 $ — $ 2,246 For the amount recognized at December 31, 2021, the effect when the following parameter deviates up or down is presented in the below table (in thousands): 10% volatility increase $ 4 Base case, reported fair value — 10% volatility decrease $ — |
Term loan
Term loan | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Term loan | Term loan In November 2020, the Company and its wholly owned subsidiary, Verona Pharma, Inc. (“Verona U.S.” and, together with the company, the “Borrowers”) entered into a term loan facility of up to $30.0 million (the “Term Loan”), consisting of term loan advances in an aggregate amount of $5.0 million funded at closing, a term loan advance available subject to certain terms and conditions in an aggregate amount of $10.0 million (the “Term B Loan”) and a term loan advance available subject to certain terms and conditions in an aggregate amount of $15.0 million (the “Term C Loan”), with Silicon Valley Bank, a California corporation (“SVB”), the proceeds of which will be used for general corporate and working capital purposes. The Term Loan is governed by a loan and security agreement, dated as of November 19, 2020, between the Borrowers and SVB, as amended (the “Loan Agreement”). The Term B Loan will be available, subject to and customary terms and conditions, only during the period commencing upon the achievement of a specific clinical milestone relating to ensifentrine through and including September 30, 2022. The Term C Loan will be available, subject to customary terms and conditions, only during the period commencing upon the achievement of an additional specific clinical milestone relating to ensifentrine through and including June 30, 2023. The Term Loan will mature on November 1, 2024. Each advance under the Term Loan accrues interest at a floating per annum rate equal to the greater of (a) the sum of the prime rate reported in The Wall Street Journal plus 1.00% and (b) four and one-quarter of one percent (4.25%). The Term Loan provides for interest-only payments on a monthly basis until the payment date immediately preceding December 1, 2023. Thereafter, amortization payments will be payable monthly in equal installments of principal plus monthly payments of accrued interest. Upon repayment (whether at maturity, upon acceleration or by prepayment or otherwise), the Borrowers shall make a final payment to SVB in the amount of 10% of the aggregate Term Loans advanced (the "Final Payment"). The Borrowers may prepay the Term Loan in full but not in part provided that the Borrowers (i) provide ten days’ prior written notice to SVB, (ii) pays on the date of such prepayment (A) all outstanding principal plus accrued and unpaid interest, (B) a prepayment fee of $450,000 plus 3.0% of the Term C Loans advanced if paid on or before the first anniversary of the closing date; $300,000 plus 2.00% of the Term C Loans advanced if paid after the first anniversary of the closing date and on or before the second anniversary of the closing date; and $150,000 plus 1.00% of the Term C Loans advanced if paid thereafter and prior to maturity, (C) the Final Payment and (D) all other sums, if any, that shall become due and payable with respect to the Term Loan Advances, including interest at the Default Rate with respect to any past due amounts. Amounts outstanding during an event of default are payable upon SVB's demand and shall accrue interest at an additional rate of 3.0% per annum. The Term Loan is secured by a lien on substantially all of the assets of the Borrowers, other than the equity interests of Verona U.S. and other than intellectual property, provided that such lien on substantially all assets includes any rights to payments and proceeds from the sale, licensing or disposition of intellectual property. The Borrowers have also granted SVB a negative pledge with respect to its intellectual property. The Loan Agreement contains customary covenants and representations, including but not limited to financial reporting obligations and limitations on dividends, indebtedness, collateral, investments, distributions, transfers, mergers or acquisitions, taxes, corporate changes, deposit accounts, and subsidiaries. The Loan Agreement also contains other customary provisions, such as expense reimbursement, non-disclosure obligations as well as indemnification rights for the benefit of SVB. The Loan Agreement includes a minimum cash covenant triggered when Borrowers' consolidated cash and cash equivalents drop below $45.0 million at any time after the earliest to occur of any of the following: (i) the release of negative data from ENHANCE-2 and/or ENHANCE-1, which in the reasonable business discretion Borrowers’ senior management, would be considered insufficient to support submission of an NDA to the FDA, (ii) the FDA issues a complete response letter with respect to an NDA submitted for ensifentrine, or (iii) failure to achieve a specific regulatory milestone relating to ensifentrine by June 30, 2023 (extendable to March 31, 2024 upon the Borrowers receiving a specified amount of new cash proceeds after September 8, 2020 from the sale of equity securities in one or more public financings or other bona fide equity financings, subordinated debt and/or upfront/milestone payments from one or more collaboration agreements not prohibited in the Loan Agreement). Upon such trigger, Borrowers must cash collateralize an amount equal to the outstanding obligations to SVB plus the amount of any prepayment penalty and Final Payment which would be due in the event the Loan Agreement were prepaid in full with respect to the Term Loans advanced as of such time. The events of default under the Loan Agreement include, but are not limited to, the Borrowers’ failure to make any payments of principal or interest under the Loan Agreement or other transaction documents, the Borrowers’ breach or default in the performance of any covenant under the Loan Agreement or other transaction documents, the occurrence of a material adverse change, any Borrower making a false or misleading representation or warranty in any material respect under the Loan Agreement, any Borrower’s insolvency or bankruptcy, any attachment or judgment on any Borrower’s assets of at least $500,000, or the occurrence of any default under any agreement or obligation of any Borrower involving indebtedness in excess of $500,000. If an event of default occurs, SVB is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement. In connection with the Term Loan the Company incurred debt issuance costs totaling approximately $400 thousand which were deducted from the carrying amount of the debt and are being amortized over the estimated term of the debt using the effective interest method. As of December 31, 2021, the carrying value of the Term Loan was approximately $4.9 million, of which all was due in greater than 12 months. The debt balance has been categorized within Level 3 of the fair value hierarchy. The carrying amount of the debt approximates its fair value based on prevailing interest rates as of the balance sheet date. |
Nuance
Nuance | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Nuance | Significant agreements Ligand agreement See note 2 for Ligand agreement details. Nuance agreement The Company entered into a collaboration and license agreement (the “Nuance Agreement”) with Nuance Pharma Limited (“Nuance Pharma”) effective June 9, 2021 (the “Effective Date”), under which the Company granted Nuance Pharma the exclusive rights to develop and commercialize ensifentrine in Greater China (China, Taiwan, Hong Kong and Macau). In return, the Company received an unconditional right to consideration aggregating $40.0 million consisting of $25.0 million in cash and an equity interest, valued at $15.0 million as of the Effective Date, in Nuance Biotech, the parent company of Nuance Pharma. The Company is eligible to receive future milestone payments of up to $179.0 million triggered upon achievement of certain clinical, regulatory, and commercial milestones, as well as tiered double-digit royalties as a percentage of net sales of the products in Greater China. The Company will recognize these milestones when it is probable that a significant revenue reversal would not occur. As of December 31, 2021, the $25.0 million cash payment and $15.0 million equity interest had been received and the holding in Nuance Biotech was recorded as Equity Interest on the Condensed Consolidated Balance Sheet. The Equity Interest is recorded cost subject to impairment. As of December 31, 2021, there had been no transactions to indicate any change in the value of Nuance Biotech’s stock, nor had there been any indications of impairment. The Equity Interest is therefore recorded at a value of $15.0 million as of December 31, 2021. Under the terms of the Nuance Agreement, at any time until three months prior to the expected submission of the first New Drug Application in Greater China, if (i) a third party is interested in partnering with the Company, either globally or in territory covering at least the United States or Europe, for the development and/or commercialization of ensifentrine or (ii) the Company undergoes a change of control, the Company will have an exclusive option right to buy back the license granted to Nuance Pharma and all related assets. The price is agreed to be equal to the aggregate of (i) all prior amounts paid by Nuance Pharma to the Company in cash under the agreement and (ii) all development and regulatory costs incurred and paid by Nuance Pharma in connection with the development and commercialization of ensifentrine under the Nuance Agreement multiplied by a single-digit factor range dependent upon achievement of certain milestones, subject to a specified maximum amount. The Nuance Agreement will continue on a jurisdiction-by-jurisdiction and product-by-product basis until the expiration of royalty payment obligations with respect to such product in such jurisdiction unless earlier terminated by the parties. Either party may terminate the Nuance Agreement for an uncured material breach or bankruptcy of the other party. Nuance Pharma may also terminate the Nuance Agreement at will upon 90 days' prior written notice. The Company reviewed the buy-back option and determined that because it is conditional on a third party the Company does not have the practical ability to exercise it and, accordingly, the contract is accounted for under ASC 606. The transaction price at the Effective Date of the Nuance Agreement was $40.0 million consisting of the $25.0 million upfront cash payment and $15.0 million equity interest. Developmental and regulatory milestones, and the manufacture and supply of ensifentrine drug product, were not included in the transaction price as management determined that it is not probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Commercial milestones and sales royalties were also excluded and will be recognized when the milestones are achieved or the sales occur in Greater China. The performance obligations in the Nuance Agreement include the grant of the license (including the right to commercialize ensifentrine until the end of the term, the sharing of certain know how, and the sharing of certain clinical and regulatory data), and manufacture and supply of ensifentrine drug product. The company have determined that the manufacturing and supply was not at a discount. The Company has determined that the license and the know how shared with Nuance Pharma constitutes functional intellectual property and that revenue relating to this should be recognized at a point in time. Consequently, the Company determined that it fulfilled its obligations to Nuance Pharma after it delivered the know how that will allow Nuance Pharma to file an investigational new drug application in Greater China. This know how was delivered in the year ended December 31, 2021, and the $40.0 million revenue was therefore recognized as revenue in this period. Revenue relating to the manufacture and supply obligations will be recognized when the drug product is delivered. On the Effective Date, $4.0 million of costs of obtaining the contract were recorded as a contract asset. As of December 31, 2021, the entire cost had been recognized in the Consolidated Statements of Operations. |
Benefit plans
Benefit plans | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Benefits plans | Benefit plansThe Company maintains a 401(k) defined contribution retirement plan in the U.S. and a defined contribution plan in the U.K. for its employees and executive director. The assets of the plans are held separately from those of the Company in independently administered funds. The retirement plan cost charge represents the contributions payable by the Company to the plans during the year. Defined contribution costs during the years ended December 31, 2021 and 2020 amounted to $274 thousand and $315 thousand, respectively. |
Taxation
Taxation | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Taxation | Taxation Verona Pharma plc operates in the United Kingdom and Verona Pharma, Inc. in the United States and they are subject to income taxes in those countries. U.K. corporation tax is charged at 19% and the U.S. Federal Income tax rate is 21%. The components of (profit)/loss before income taxes are as follows (in thousands): December 31, 2021 2020 United States $ (4,850) $ (3,191) United Kingdom 60,437 68,191 Total $ 55,587 $ 65,000 The components of income tax expense are as follows (in thousands): December 31, 2021 2020 United States $ (18) $ 146 United Kingdom — — Total current tax (credit)/expense $ (18) $ 146 United States — — United Kingdom — — Total deferred tax expense — — Total income tax (credit)/expense $ (18) $ 146 A reconciliation of the U.K. statutory income tax rate to our effective income tax rate is as follows (in percentages): December 31, 2021 2020 U.K. tax rate 19.0 % 19.0 % Non-deductible expenses (7.5) % (8.9) % Research and development incentive (10.9) % (4.8) % Share options exercised 2.6 % 0.4 % Change in deferred tax valuation allowance (3.0) % (5.9) % Other differences (0.1) % — % Effective income tax rate 0.1 % (0.2) % Components of the Company’s deferred tax assets and liabilities are as follows (in thousands): December 31, 2021 2020 Deferred tax liabilities: Contingent liability (1) $ (8,903) $ (5,860) Total deferred tax liabilities (8,903) (5,860) Deferred tax assets: Net operating losses 26,931 19,855 IPR&D asset (1) 7,992 5,631 Future exercisable shares 4,228 10,480 Other 4 215 Total deferred tax assets 39,155 36,181 Less: valuation allowance (30,252) (30,321) Deferred tax assets, net of valuation allowance $ — $ — Movements in the deferred tax valuation allowance Valuation allowance at January 1 $ 30,321 $ 13,504 Change in tax rates 7,353 1,632 (Decrease)/increase in valuation allowance (7,422) 14,815 Foreign currency translation adjustments — 370 Valuation allowance at December 31 $ 30,252 $ 30,321 (1) These relate to the difference in the tax base of the IP R&D asset and assumed contingent liability and the financial reporting base, which is nil under US GAAP. Management has reviewed cumulative tax losses and projections of future taxable losses and determined that it is not more likely than not that they will be realized. Accordingly, valuation allowances have been provided over deferred tax assets At December 31, 2021 and December 31, 2020, the Company had U.K. net operating losses (“NOLs”) of $104.3 million and $95.7 million, respectively. The NOLs can be carried forward indefinitely to be offset against future taxable profits, but this is restricted to an annual £5 million allowance after which there will be a 50% restriction in the profits that can be covered by losses brought forward. The Company files separate income tax returns in the U.K. and the U.S. All necessary income tax filings have been completed for all years up to and including December 31, 2020, and there are no ongoing tax examinations in any jurisdiction. No interest or penalties were recognized in the consolidated statements of operations or consolidated balance sheets. As of December 31, 2021, the Company has no uncertain tax positions. |
Share based compensation
Share based compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share based compensation | Share-based compensation The Company operates various share based incentive plans for its staff and issues ordinary shares or ADSs when share-based awards are exercised. The Company records share-based compensation expense related to share options and RSUs granted to employees and directors. The expense is included in R&D and general and administrative costs, based on the nature of individual employees’ functions, and represents the relevant year's allocation of the expense. The costs of share-based compensation to employees are recognized in the consolidated statements of operations and comprehensive loss, together with a corresponding increase in equity over the vesting period. Options are issued with an exercise price of the market price on the day of grant and generally vest over a period of one The following table shows the allocation of share-based compensation between R&D and selling, general and administrative costs (in thousands): December 31, 2021 2020 Research and development $ 9,654 $ 9,319 Selling, general and administrative 15,771 12,858 Total share-based compensation $ 25,425 $ 22,177 EMI Option Plan and Pre-IPO Option Plan The EMI Option Plan and the Pre-IPO Option Plan were adopted by our board of directors on September 18, 2006, and July 24, 2012, respectively. The total number of shares that may be issued under these plans is the current number of outstanding options over 114,000 ordinary shares, or 14,250 ADSs, for the EMI Option Plan and 1,860,000 ordinary shares, or 232,500 ADSs, for the Pre-IPO Option Plan. No further awards have been granted since the 2017 Incentive Plan was adopted, and no further awards will be granted under them. 2017 Incentive Plan The 2017 Incentive Plan was adopted by our board of directors and became effective on April 26, 2017, in order to grant share based compensation to certain of the Company’s directors and employees. It provides for the grant of stock options, RSUs, and other share-based awards to Company’s directors, officers, employees and non-employee directors. In the year ended December 31, 2019, the Company modified the terms of all RSUs issued prior to January 1, 2019 to include a market based condition, which was also included in the terms of RSUs issued during 2019. The Company's stock price must be maintained above the equivalent of £2 per ordinary share for thirty days for the RSUs to vest, in addition to the existing service condition. The RSUs vest five years after the date of grant irrespective of whether the £2 market condition was met. This modification did not result in an increase in the fair value of the RSUs. Share option activity The number of options, the weighted average grant date fair value per stock option, and the weighted average exercise price are all shown below on a per ordinary shares basis. The Company’s ADSs that are listed on the Nasdaq Global Market each represent eight ordinary shares. The following table shows share option activity and includes the options outstanding from all three plans : Number of share options outstanding Weighted average exercise price (1) Weighted average remaining contractual term (years) Aggregate intrinsic value Outstanding at January 1, 2020 14,179,196 $ 1.53 Granted 2,096,285 0.73 Forfeited (2,506,017) 1.53 Expired (589,128) 1.93 Exercised (54,664) 0.75 Outstanding at December 31, 2020 13,125,672 $ 1.41 7.3 $ 914 Granted 1,696,000 0.72 Forfeited (2,126,472) 1.06 Outstanding at December 31, 2021 12,695,200 $ 1.38 6.5 $ 950 Exercisable at December 31, 2021 10,177,240 $ 1.53 6.1 $ 553 (1) The exercise prices relate to the equivalent price for an ordinary share, calculated as one eighth of the ADS price. Determining the fair value of share options and RSUs The total fair values of the options and RSUs were estimated using the Black-Scholes option-pricing model for equity-settled compensation, amounted to $3.1 million for instruments granted in the year ended December 31, 2021 (2020: $62.1 million). The cost is amortized over the vesting period of the options and RSUs on a straight-line basis using the cliff-vesting method.The following assumptions were used for the Black-Scholes valuation of share options granted in 2021 and 2020. Expected volatility Volatility is calculated using historical weekly averages of the Company's share price over a period that is in line with the expected life of the options and RSUs. Fair value of ordinary shares. The fair value of ordinary shares has been based on the share price of the Company’s shares on AIM on the evening before the date of grant up until October 20, 2020 when the company delisted from AIM. Post this the fair value has been based on the ADS’s traded on NASDAQ on the evening before the date of grant. Risk-free interest rate The risk-free interest rate has been based on U.K. Government debt yield for the relevant term at the time of grant up until October 20, 2020 when the company delisted from AIM. After this appropriate U.S Treasury yield rates were used. Expected term. The expected term is determined using the simplified method. Expected dividend There are no expected dividends. A summary of the weighted-average assumptions applicable to the share options granted in the applicable years is as follows: December 31, 2021 2020 Risk-free interest rate 0.79% - 1.32% 0% -0.21% Expected lives, years 5-7 5-7 Expected volatility 85.35% - 87.68% 65.83% - 75.40% Expected dividend yield — % — % Grant date fair value (per share) $0.62 - $0.78 $0.40 - $0.62 Restricted stock units activity The following table shows RSU activity: Number of RSUs outstanding Weighted average remaining contractual term (years) Outstanding at January 1, 2020 1,602,969 Granted 62,566,271 Forfeited (84,920) Vested (2,091,960) Outstanding at December 31, 2020 61,992,360 1.5 Granted 3,030,928 Forfeited (2,002,584) Vested (24,673,352) Outstanding at December 31, 2021 38,347,352 1.2 Number of RSUs outstanding Weighted average remaining vesting Period Period in which the target must be achieved RSUs subject to time based vesting 37,833,688 1.2 n/a RSUs subject to milestone based vesting 513,664 0.2 2022 - 2024 The intrinsic and fair value of RSUs that vested in the year ended December 31, 2021, was $20.2 million (2020: $1.5 million). As of December 31, 2021, total compensation cost related to share options and RSUs granted but not yet recognized was $16.2 million. This cost will be amortized to expense over a weighted average remaining period of 1.5 years and will be adjusted for subsequent forfeitures. |
Net loss per share
Net loss per share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net loss per share | Net loss per share Net loss per share is calculated on an ordinary share basis. The Company’s ADSs that are listed on the Nasdaq Global Market each represent eight ordinary shares. The following table shows the computation of basic and diluted earnings per share for 2021 and 2020 (net loss in thousands, loss per share in dollars): December 31, 2021 2020 Numerator: Net loss $ (55,569) $ (65,146) Net loss available to ordinary shareholders - basic and diluted $ (55,569) $ (65,146) Denominator: Weighted-average shares outstanding - basic and diluted 473,188,457 262,932,653 Net loss per share - basic and diluted $ (0.12) $ (0.25) During the years ended December 31, 2021 and 2020, outstanding share options, RSUs and warrants of 63,443,814 and 87,519,294, respectively, were not included in the computation of diluted earnings per ordinary share, because to do so would be antidilutive. |
Related party transactions and
Related party transactions and other shareholder matters | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related party transactions and other shareholder matters | Related party transactions and other shareholder matters In the year ended December 31, 2021, there were no related party transactions. In the year ended December 31, 2020, certain directors and officers participated in the Private Placement, summarized below: Participation in Private Placement Ordinary Shares Consideration Dr. Ebsworth 222,216 £ 100,000 Dr. Zaccardelli 444,440 $ 249,998 Mr. Sinha (through connected persons) 533,328 $ 299,997 Dr. Ullman 266,664 $ 149,983 Dr. Edwards 53,328 $ 29,997 Mr. Hahn 177,784 $ 100,004 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation and consolidation | Basis of presentation and consolidation The consolidated financial statements include the accounts of Verona Pharma plc and its wholly-owned subsidiaries Verona Pharma, Inc. and Rhinopharma through to its dissolution in June 2021. All inter-company balances and transactions have been eliminated. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("US GAAP") and the following accounting policies have been consistently applied. At the end of the second quarter of 2020, the Company determined that it no longer qualified as a Foreign Private Issuer under SEC rules. As a result, beginning January 1, 2021, the Company is required to report with the SEC on domestic forms and comply with domestic company rules in the United States. The transition to US GAAP was made retrospectively for all periods from the Company’s inception. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual and prepayment of research and development expenses, the fair value of share-based compensation, the fair value of warrants and the fair value of the equity interest received under the Nuance Agreement (as defined below). Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates. |
Business combinations | Business combinations The Company applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Company. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. The excess of the cost of acquisition over the fair value of the Company's share of the identifiable net assets acquired is recorded as goodwill. Identifiable ass ets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred and included in administrative expenses. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments purchased with original maturities of ninety days or less at acquisition to be cash equivalents. Cash and cash equivalents includes deposits held at call with banks, term deposits with maturities of less than three months at inception, and in money market funds investing in U.S. and U.K. government debt and liquid securities from highly rated institutions. |
Short term investments | Short-term investments Short-term investments include fixed term deposits held at banks with original maturities between three months and a year. They are classified as loans and receivables and are measured at amortized cost using the effective interest method. Equity interest As part of the Nuance Agreement, the Company received an equity interest in Nuance Biotech, the parent company of Nuance Pharma (see note 9). As Nuance Biotech’s securities are not publicly traded the equity interest’s fair value is not readily determinable. The Company therefore follows guidance from ASC 321-10-35-2 and uses the fair value measurement alternative and measures the securities at cost, which is deemed to be the value indicated by the last observable transaction in Nuance Biotech's stock, subject to impairment. The valuation will be adjusted for any observable price changes in orderly transactions for an identical or similar investment in Nuance Biotech, or if there is an indicator of impairment. |
Furniture and equipment, net | Furniture and equipment, net Furniture and equipment comprise office furniture and computer equipment and are stated at cost less accumulated depreciation, which is calculated on a straight-line basis over the expected useful economic lives, generally two |
Goodwill | Goodwill Goodwill consists of goodwill related to the acquisition of Rhinopharma. Goodwill is not amortized but periodically tested for impairment. |
Impairment of long-lived assets | Impairment of long-lived assets The Company reviews long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of assets may not be fully recoverable. The Company initially compares the market capitalization of the Company to the book value of its assets. If the value of the market capitalization does not support the valuation of the assets, the Company reviews estimates of the cash flows over the remaining lives of its other intangible assets, or related group of assets where applicable, in measuring whether the assets to be held and used will be realizable. In the event of impairment, the Company would discount the future cash flows using its then estimated incremental borrowing rate to estimate the amount of the impairment. |
Ligand agreement | Ligand agreement In 2006 the Company acquired Rhinopharma and assumed contingent liabilities owed to Ligand UK Development Limited (“Ligand”) (formerly Vernalis Development Limited). The Company refers to the assignment and license agreement as the Ligand Agreement. Ligand assigned to the Company all of its rights to certain patents and patent applications relating to ensifentrine and related compounds (the "Ligand Patents") and an exclusive, worldwide, royalty-bearing license under certain Ligand know-how to develop, manufacture and commercialize products (the "Ligand Licensed Products") developed using Ligand Patents, Ligand know-how and the physical stock of certain compounds. The Company is obligated to pay a milestone payment on obtaining the first approval of any regulatory authority for the commercialization of a Ligand Licensed Product, low single digit royalties based on the future sales performance of all Ligand Licensed Products and a portion equal to a mid-twenty percent of any consideration received from any sub-licensees for the Ligand Patents and for Ligand know-how. Royalties payable are based on the future sales performance so the amount payable is unlimited. At the time each contingency is resolved, the Company will record the contingent consideration payment (or payable) in connection with the Ligand Agreement as an expense and will classify it within R&D expenses. Revenue recognition The Company’s revenue arises from the Company’s agreement for the development and commercialization of ensifentrine in Greater China (the “Nuance Agreement”). The terms of the Nuance Agreement include non-refundable upfront fees, payments based upon achievement of developmental and regulatory milestones, commercial milestones, royalties payable on sales, and manufacturing and supply. These payments are viewed as both fixed and variable consideration. Non-refundable upfront fees are considered fixed, while milestone payments and revenue from the commercialized product are identified as variable consideration. The Company follows the five-step model in ASC 606 “Revenue from Contracts with Customers”: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. All of the Company’s revenue is derived from contracts with customers. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC Topic 606. The Company’s performance obligations include intellectual property rights, (which include the license, patents and developmental and regulatory data) and manufacturing and supply. Management are required to judge when performance obligations are satisfied and consequently when revenue is recognized. If the right to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the right when the right is transferred to the customer, and the customer can use and benefit from the right. If an arrangement includes development and regulatory milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or the licensee’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. For arrangements with licenses of intellectual property that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes royalty revenue and sales-based milestones at the later of (i) when the related sales occur, or (ii) when the performance obligation to which the royalty has been allocated has been satisfied. |
Research and development costs | Research and development costs Research and development (“R&D”) costs are expensed as incurred. Research and development expenses include salaries, share-based compensation and benefits of employees, and other costs related to the Company’s R&D activities, including contracts with clinical research organizations and contract manufacturers. As part of the process of preparing financial statements the Company is required to estimate its expenses resulting from its obligations under contracts with vendors and consultants and clinical site agreements in connection with its R&D efforts. The financial terms of these contracts are subject to negotiations which vary contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to the Company under such contracts. The Company’s objective is to reflect the appropriate clinical trial expenses in its financial statements by matching those expenses with the period in which services and efforts are expended. The Company accounts for these expenses according to the progress of the trials and other development activities measured by patient progression and the timing of various aspects of the trial. The Company determines prepaid and accrual estimates through discussions with applicable personnel and outside service providers as to the progress of clinical trials, or other services completed. During the course of a clinical trial, the Company adjusts its rate of clinical trial expense recognition if actual results differ from its estimates. The Company makes estimates of its prepaid and accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known at that time. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in the Company reporting amounts that are too high or too low for any particular period. The Company’s clinical trial prepaid and accrual expense is dependent upon the timely and accurate reporting of study recruitment from contract research organizations and activities carried out by other third-party vendors as well as the timely processing of any change orders from the contract research organizations. |
Share-based compensation | Share-based compensation The Company has a share-based compensation plan under which various types of equity-based awards may be granted, including stock options and restricted stock units (RSUs). The fair value of share options and RSUs, which are subject to milestone or service conditions with graded vesting, are recognized as compensation expense using the cliff vesting method; f orfeitures are recognized as they occur. The Company uses the fair-value based method to determine compensation for all arrangements under which employees receive shares. The fair value of each option and RSU is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatility is based on the historical volatility of the Company’s ordinary shares over the expected term of the options. The expected term of options granted is derived using the simplified method, which computes the expected term as the average of the sum of the vesting term plus the contract term. Historically the risk-free rate has been based on the appropriate U.K. government debt yield. After delisting its Ordinary shares from AIM on October 30, 2020, the Company used U.S. government debt yields. |
Other income - U.K. R&D tax credits | Other income - United Kingdom R&D tax credits Other operating income relates to R&D tax credits receivable in the UK. As a company that carries out extensive research and development activities, Verona is subject to the UK R&D Small and Medium Enterprise (“SME”) Program. Qualifying expenditures largely comprise employment costs for research staff, consumables, a proportion of relevant, permitted sub-contract costs and certain internal overhead costs incurred as part of research projects for which it does not receive income. Tax credits related to the SME Program are received as cash and are recorded as other income, as they are akin to grant income, in the consolidated statements of operations and comprehensive loss. |
Income taxes | Income taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). This Topic prescribes the use of the liability method, whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. ASC 740 establishes a single model to address accounting for uncertain tax positions. ASC 740 clarified the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. The Company has no uncertain tax positions. |
Comprehensive loss | Comprehensive loss The Company accounts for comprehensive loss in accordance with ASC 220, “Income Statement - Reporting Comprehensive Income”. Comprehensive income represents all changes in stockholders’ equity during the period except those resulting from investments by, or distributions to, stockholders. |
Segment Reporting | Segment Reporting The Company has one operating and reportable segment, pharmaceutical development. The Company’s long-lived assets are held in the United Kingdom. |
Foreign Currencies | Foreign Currencies Reporting currency The Company’s reporting currency is U.S. dollars. Prior to July 1, 2020, Verona Pharma plc’s functional currency was pounds sterling and its financial statements were translated to U.S. dollars. The statement of comprehensive income was translated at average rates for the period, assets and liabilities at the balance sheet date exchange rate and equity balances at historical rates. Translation differences were recorded in accumulated other comprehensive income / (loss). Functional currency The Company's consolidated financial statements are measured using the currency of the primary economic environment in which the entity operates, which was pounds sterling for Verona Pharma plc until June 30, 2020. In the six months to June 30, 2020, management changes resulted in lower people costs being paid in pounds sterling. Following the Company’s private placement in July 2020 (the “Private Placement”) the Company entered into contracts to commence Phase 3 trials for ensifentrine and the majority of the costs are incurred in U.S. dollars. Management reviewed budgeted activities over the next five years and identified that the majority of costs from the second half of 2020 onwards will be incurred in U.S. dollars. Furthermore, the Private Placement raised funds in U.S. dollars and having delisted from AIM any future fundraises will be in U.S. dollars. Also, the commercial focus of Company is the U.S. market. As a consequence, management determined the Company's functional currency changed from pounds sterling to U.S. dollars and was accounted for prospectively from July 1, 2020. To convert Verona Pharma plc’s books and records into U.S. dollars, income and expenses were translated at average rates, assets and liabilities at the June 30, 2020, exchange rate, and equity balances at historical rates. Translation differences were recorded in accumulated other comprehensive income/(loss). |
Treasury Shares | Treasury shares In the year ended December 31, 2020, the Company incorporated a trust to facilitate the acquisition of shares, by or for the benefit of employees and former employees. In the year ended December 31, 2020, the Company issued 25 million ordinary shares (equivalent to 3.125 million ADSs) to cover expected shares issued upon the vesting of share awards to employees. The Company has the indirect ability to control the trust as trustees are required to act in accordance with the trust deed and because the Company controls the issuance of shares to cover awards. As a consequence, the trust is consolidated into the Company’s consolidated financial statements. The shares that were issued to the trust that have not been issued to employees to satisfy vesting of share awards are included in the Consolidated Balance Sheet as treasury shares. |
Fair value of financial instruments | Fair value of financial instruments US GAAP defines fair value and requires companies to establish a framework for measuring fair value and disclosure about fair value measurements using a three-tier approach. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Our financial instruments include cash equivalents, an equity interest, other assets, accounts payable and accrued expenses and other liabilities. Fair value estimates of these instruments are made at a specific point in time, based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision. The equity interest is held at cost subject to impairment, following guidance from ASC 321-10-35-2 . The carrying amounts of the other instruments are considered to be representative of their fair values because of their short-term nature. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to concentration of credit risk consist of principally cash and cash equivalents, bank deposits and certain receivables. The Company holds cash and cash equivalents with highly rated financial institutions and in highly rated money market funds and the Company has not experienced any significant credit losses in these accounts and does not believe the Company is exposed to any significant credit risk on these instruments. |
Recently adopted accounting pronouncements and Recently issued accounting pronouncements, not yet adopted | The company accounts for leases in accordance with ASU No. 2016-02, “Leases” (Topic 842) (“ASC 842”). The standard requires lessees to recognize almost all leases on the balance sheet as right-of-use (“ROU”) assets and lease liabilities, and requires leases to be classified as either operating or finance type leases. Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU ass ets and liabilities are recognized at the commencement date based on the present value of remaining lease payments. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As the Company's leases do not provide an implicit rate, the Company determines the incremental borrowing rate in calculating the present value of lease payments. The ROU assets also include any lease payments made prior to commencement and are recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease. When it is reasonably certain the Company will exercise such options the lease will be recognized as a liability and a corresponding ROU asset also recognized. Operating leases are included in operating lease ROU assets in current and non-current operating lease liabilities on the Company's Consolidated Balance sheets. Recently issued accounting pronouncements, not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments. This guidance replaces the current incurred loss impairment methodology. Under the new guidance, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects its current estimate of credit losses expected to be incurred over the life of the financial instrument based on historical experience, current conditions and reasonable and supportable forecasts. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates (“ASU 2019-10”). The purpose of this amendment is to create a two tier rollout of major updates, staggering the effective dates between larger public companies and all other entities. This granted certain classes of companies, including Smaller Reporting Companies (“SRCs”), additional time to implement major FASB standards, including ASU 2016-13. Larger public companies will have an effective date for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities are permitted to defer adoption of ASU 2016-13, and its related amendments, until the earlier of fiscal periods beginning after December 15, 2022. Under the current SEC definitions, we meet the definition of an SRC as of the ASU 2019-10 issuance date and are deferring adoption for ASU 2016-13. The guidance requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements, but do not believe the adoption of this standard will have a material impact on our consolidated financial statements. |
Prepaid expenses (Tables)
Prepaid expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Summary of Prepaid Expenses | Prepaid expenses consisted of the following (in thousands): December 31, 2021 2020 Clinical trial and other development costs $ 2,169 $ 2,551 Insurance 1,555 1,701 Other 313 286 Total prepaid expenses $ 4,037 $ 4,538 |
Tax and tax incentive receiva_2
Tax and tax incentive receivable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Components of Taxes Receivable | Taxes receivable consisted of the following (in thousands): December 31, 2021 2020 R&D tax credit receivable - U.K. $ 15,583 $ 8,202 Tax receivable - U.S. — 58 Total tax receivable $ 15,583 $ 8,260 |
Property leases (Tables)
Property leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Minimum Annual Operating Lease Payments | Minimum annual payments over the remaining lease periods as of December 31, 2021 are as follows (in thousands): 2022 655 2023 276 2024 38 Total minimum future lease payments $ 969 Less: imputed interest (35) Total operating lease liabilities $ 934 |
Accrued expenses (Tables)
Accrued expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following (in thousands): December 31, 2021 2020 Clinical trial and other development costs $ 21,336 $ 8,607 Professional fees, listing and general corporate costs 919 2,149 People related costs 1 107 Total accrued expenses $ 22,256 $ 10,863 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Fair Value Valuation Assumptions of Warrants | The warrants are valued using the Black-Scholes model and the table below presents the assumptions used: December 31, 2021 2020 Shares potentially issued under warrants 12,401,262 12,401,262 Exercise price in pounds sterling £ 1.7238 £ 1.7238 Risk-free interest rate 0.07 % — % Expected term to exercise 0.33 1.33 Annualized volatility 51.6 % 105.4 % Dividend rate — % — % Calculated value of the warrants, in thousands of U.S. dollars $ — $ 2,246 |
Schedule of Movement of the Value of the Warrants | The following table shows the movement of the value of the warrants (in thousands): December 31, 2021 2020 At January 1 $ 2,246 $ 1,188 Fair value adjustment (2,246) 1,114 Foreign exchange differences recognized in loss for the period — 22 Translation differences recognized in other comprehensive loss — (78) At December 31 $ — $ 2,246 |
Fair Value Impact Of Increase Or Decrease in Volatility | For the amount recognized at December 31, 2021, the effect when the following parameter deviates up or down is presented in the below table (in thousands): 10% volatility increase $ 4 Base case, reported fair value — 10% volatility decrease $ — |
Taxation (Tables)
Taxation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Components of loss before income taxes | The components of (profit)/loss before income taxes are as follows (in thousands): December 31, 2021 2020 United States $ (4,850) $ (3,191) United Kingdom 60,437 68,191 Total $ 55,587 $ 65,000 |
Components of income tax expense | The components of income tax expense are as follows (in thousands): December 31, 2021 2020 United States $ (18) $ 146 United Kingdom — — Total current tax (credit)/expense $ (18) $ 146 United States — — United Kingdom — — Total deferred tax expense — — Total income tax (credit)/expense $ (18) $ 146 |
Reconciliation of the U.K. statutory income tax rate | A reconciliation of the U.K. statutory income tax rate to our effective income tax rate is as follows (in percentages): December 31, 2021 2020 U.K. tax rate 19.0 % 19.0 % Non-deductible expenses (7.5) % (8.9) % Research and development incentive (10.9) % (4.8) % Share options exercised 2.6 % 0.4 % Change in deferred tax valuation allowance (3.0) % (5.9) % Other differences (0.1) % — % Effective income tax rate 0.1 % (0.2) % |
Deferred tax assets and liabilities | omponents of the Company’s deferred tax assets and liabilities are as follows (in thousands): December 31, 2021 2020 Deferred tax liabilities: Contingent liability (1) $ (8,903) $ (5,860) Total deferred tax liabilities (8,903) (5,860) Deferred tax assets: Net operating losses 26,931 19,855 IPR&D asset (1) 7,992 5,631 Future exercisable shares 4,228 10,480 Other 4 215 Total deferred tax assets 39,155 36,181 Less: valuation allowance (30,252) (30,321) Deferred tax assets, net of valuation allowance $ — $ — Movements in the deferred tax valuation allowance Valuation allowance at January 1 $ 30,321 $ 13,504 Change in tax rates 7,353 1,632 (Decrease)/increase in valuation allowance (7,422) 14,815 Foreign currency translation adjustments — 370 Valuation allowance at December 31 $ 30,252 $ 30,321 (1) These relate to the difference in the tax base of the IP R&D asset and assumed contingent liability and the financial reporting base, which is nil under US GAAP. |
Share based compensation (Table
Share based compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Allocation of Share Based Compensation Expense | The following table shows the allocation of share-based compensation between R&D and selling, general and administrative costs (in thousands): December 31, 2021 2020 Research and development $ 9,654 $ 9,319 Selling, general and administrative 15,771 12,858 Total share-based compensation $ 25,425 $ 22,177 |
Share Option Activity | The following table shows share option activity and includes the options outstanding from all three plans : Number of share options outstanding Weighted average exercise price (1) Weighted average remaining contractual term (years) Aggregate intrinsic value Outstanding at January 1, 2020 14,179,196 $ 1.53 Granted 2,096,285 0.73 Forfeited (2,506,017) 1.53 Expired (589,128) 1.93 Exercised (54,664) 0.75 Outstanding at December 31, 2020 13,125,672 $ 1.41 7.3 $ 914 Granted 1,696,000 0.72 Forfeited (2,126,472) 1.06 Outstanding at December 31, 2021 12,695,200 $ 1.38 6.5 $ 950 Exercisable at December 31, 2021 10,177,240 $ 1.53 6.1 $ 553 (1) The exercise prices relate to the equivalent price for an ordinary share, calculated as one eighth of the ADS price. |
Schedule of Weighted-Average Assumptions | A summary of the weighted-average assumptions applicable to the share options granted in the applicable years is as follows: December 31, 2021 2020 Risk-free interest rate 0.79% - 1.32% 0% -0.21% Expected lives, years 5-7 5-7 Expected volatility 85.35% - 87.68% 65.83% - 75.40% Expected dividend yield — % — % Grant date fair value (per share) $0.62 - $0.78 $0.40 - $0.62 |
Restricted Stock Unit Activity | The following table shows RSU activity: Number of RSUs outstanding Weighted average remaining contractual term (years) Outstanding at January 1, 2020 1,602,969 Granted 62,566,271 Forfeited (84,920) Vested (2,091,960) Outstanding at December 31, 2020 61,992,360 1.5 Granted 3,030,928 Forfeited (2,002,584) Vested (24,673,352) Outstanding at December 31, 2021 38,347,352 1.2 Number of RSUs outstanding Weighted average remaining vesting Period Period in which the target must be achieved RSUs subject to time based vesting 37,833,688 1.2 n/a RSUs subject to milestone based vesting 513,664 0.2 2022 - 2024 |
Net loss per share (Tables)
Net loss per share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earning Per Share | The following table shows the computation of basic and diluted earnings per share for 2021 and 2020 (net loss in thousands, loss per share in dollars): December 31, 2021 2020 Numerator: Net loss $ (55,569) $ (65,146) Net loss available to ordinary shareholders - basic and diluted $ (55,569) $ (65,146) Denominator: Weighted-average shares outstanding - basic and diluted 473,188,457 262,932,653 Net loss per share - basic and diluted $ (0.12) $ (0.25) |
Related party transactions an_2
Related party transactions and other shareholder matters (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Private Placement to Related Parties | In the year ended December 31, 2020, certain directors and officers participated in the Private Placement, summarized below: Participation in Private Placement Ordinary Shares Consideration Dr. Ebsworth 222,216 £ 100,000 Dr. Zaccardelli 444,440 $ 249,998 Mr. Sinha (through connected persons) 533,328 $ 299,997 Dr. Ullman 266,664 $ 149,983 Dr. Edwards 53,328 $ 29,997 Mr. Hahn 177,784 $ 100,004 |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)subsidiary$ / sharesshares | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of wholly owned subsidiaries | subsidiary | 1 | ||
Class of Stock [Line Items] | |||
Accumulated deficit | $ 263,716 | $ 207,050 | |
Number of shares issued in sale (in shares) | shares | 873,104 | ||
Sale of stock price per share (in dollars per share) | $ / shares | $ 0.86 | ||
Consideration received from sale of stock | $ 700 | ||
American Depository Shares | |||
Class of Stock [Line Items] | |||
Maximum aggregate offering price | $ 100,000 | ||
Number of shares issued in sale (in shares) | shares | 109,138 | ||
Sale of stock price per share (in dollars per share) | $ / shares | $ 6.91 | ||
Remaining ordinary shares available for sale | $ 99,300 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting policies (Details) | 12 Months Ended | |
Dec. 31, 2021segment | Dec. 31, 2020shares | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Number of operating segments | segment | 1 | |
Number of reportable segments | segment | 1 | |
Ordinary shares | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Issuance of ordinary shares to treasury (in shares) | shares | 25,000,000 | |
Issuance of ordinary shares to treasury as ADS equivalent (in shares) | shares | 3,125,000 | |
Minimum | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Furniture and equipment, useful life | 2 years | |
Maximum | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Furniture and equipment, useful life | 5 years |
Prepaid expenses (Details)
Prepaid expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Clinical trial and other development costs | $ 2,169 | $ 2,551 |
Insurance | 1,555 | 1,701 |
Other | 313 | 286 |
Total prepaid expenses | $ 4,037 | $ 4,538 |
Tax and tax incentive receiva_3
Tax and tax incentive receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
R&D tax credit receivable - U.K. | $ 15,583 | $ 8,202 |
Tax receivable - U.S. | 0 | 58 |
Total tax receivable | $ 15,583 | $ 8,260 |
Property leases - Narrative (De
Property leases - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | ||
Impairment of right-of-use asset | $ 0 | $ 289 |
Operating lease liability | $ 934 | |
Discount rate (in percent) | 8.00% | |
Weighted average remaining lease term | 1 year 9 months 18 days | |
Operating lease expense | $ 651 | |
Building | ||
Lessee, Lease, Description [Line Items] | ||
Right-of-use assets recognized with associated liability | $ 700 | |
London | Building | ||
Lessee, Lease, Description [Line Items] | ||
Right-of-use assets recognized with associated liability | $ 600 |
Property leases - Maturity (Det
Property leases - Maturity (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Leases [Abstract] | |
Lessee, Operating Lease, Liability, to be Paid, Year One | $ 655 |
Lessee, Operating Lease, Liability, to be Paid, Year Two | 276 |
Lessee, Operating Lease, Liability, to be Paid, Year Three | 38 |
Total minimum future lease payments | 969 |
Less: imputed interest | (35) |
Total operating lease liabilities | $ 934 |
Accrued expenses (Details)
Accrued expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Clinical trial and other development costs | $ 21,336 | $ 8,607 |
Professional fees, listing and general corporate costs | 919 | 2,149 |
People related costs | 1 | 107 |
Total accrued expenses | $ 22,256 | $ 10,863 |
Warrants - Narrative (Details)
Warrants - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2021£ / sharesshares | Dec. 31, 2020£ / sharesshares | Dec. 31, 2021USD ($)shares | Dec. 31, 2016£ / sharesshares | |
Other Liabilities Disclosure [Abstract] | ||||
Stock warrants (in shares) | 12,401,262 | 12,401,262 | 31,115,926 | |
Issue price of warrants (in pounds sterling per share) | £ / shares | £ 1.4365 | |||
Number of shares called by each warrant | 0.4 | |||
Exercise price of stock warrant (in pound sterling per share) | £ / shares | £ 1.7238 | £ 1.7238 | £ 1.7238 | |
Number of outstanding warrants | 31,003,155 | |||
Number of warrants exercised and forfeited | 0 | 0 | ||
Intrinsic value | $ | $ 0 |
Warrants - Fair Value Assumptio
Warrants - Fair Value Assumptions (Details) $ in Thousands | Dec. 31, 2021USD ($)shares | Dec. 31, 2021£ / shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2020£ / shares | Dec. 31, 2016£ / sharesshares |
Class of Warrant or Right [Line Items] | |||||
Stock warrants (in shares) | shares | 12,401,262 | 12,401,262 | 31,115,926 | ||
Exercise price of stock warrant (in pound sterling per share) | £ / shares | £ 1.7238 | £ 1.7238 | £ 1.7238 | ||
Expected term to exercise | 3 months 29 days | 1 year 3 months 29 days | |||
Calculated value of the warrants, in thousands of U.S. dollars | $ | $ 0 | $ 2,246 | |||
Risk-free interest rate | |||||
Class of Warrant or Right [Line Items] | |||||
Measurement Input | 0.0007 | 0 | |||
Annualized volatility | |||||
Class of Warrant or Right [Line Items] | |||||
Measurement Input | 0.516 | 1.054 | |||
Dividend rate | |||||
Class of Warrant or Right [Line Items] | |||||
Measurement Input | 0 | 0 |
Warrants - Movement in Value (D
Warrants - Movement in Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Warrant Activity | ||
At January 1 | $ 2,246 | $ 1,188 |
Fair value adjustment | (2,246) | 1,114 |
Foreign exchange differences recognized in loss for the period | 0 | 22 |
Translation differences recognized in other comprehensive loss | 0 | (78) |
At December 31 | $ 0 | $ 2,246 |
Warrants - Effect of Change in
Warrants - Effect of Change in Volatility (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Other Liabilities Disclosure [Abstract] | |
10% volatility increase | $ 4 |
Base case, reported fair value | 0 |
10% volatility decrease | $ 0 |
Term loan (Details)
Term loan (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 19, 2020 | |
Debt Instrument [Line Items] | ||||
Funded advances | $ 0 | $ 5,000,000 | ||
Secured Debt | Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 30,000,000 | |||
Funded advances | $ 5,000,000 | |||
Interest rate | 4.25% | |||
Final payment (in percent) | 10.00% | |||
Term of prior written notice | 10 days | |||
Interest rate in the event of default | 3.00% | |||
Loan covenant, minimum cash and cash equivalents | $ 45,000,000 | |||
Default threshold of attachment or judgment on any of borrower’s assets | 500,000 | |||
Default indebtedness threshold for default of any agreement or obligation | $ 500,000 | |||
Debt issuance costs incurred | $ 400,000 | |||
Carry value of debt | $ 4,900,000 | |||
Secured Debt | Term Loan Facility | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.00% | |||
Secured Debt | Term B Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 10,000,000 | |||
Secured Debt | Term C Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | 15,000,000 | |||
Secured Debt | Term C Loan | First Anniversary | ||||
Debt Instrument [Line Items] | ||||
Prepayment fee | $ 450,000 | |||
Prepayment fee (in percent) | 3.00% | |||
Secured Debt | Term C Loan | Second Anniversary | ||||
Debt Instrument [Line Items] | ||||
Prepayment fee | $ 300,000 | |||
Prepayment fee (in percent) | 2.00% | |||
Secured Debt | Term C Loan | After Second Anniversary and Prior to Maturity | ||||
Debt Instrument [Line Items] | ||||
Prepayment fee | $ 150,000 | |||
Prepayment fee (in percent) | 1.00% |
Nuance (Details)
Nuance (Details) - Nuance (Shanghai) Pharma Co Ltd - USD ($) $ in Millions | Dec. 31, 2021 | Jun. 09, 2021 |
Capitalized Contract Cost [Line Items] | ||
Transaction price | $ 40 | |
Accounts receivable | 25 | |
Equity interest receivable | $ 15 | 15 |
Future eligible milestone payments | 179 | |
Deferred revenue | $ 25 | 25 |
Capitalized Contract Cost, Net | $ 4 |
Benefit plans (Details)
Benefit plans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | ||
Contribution cost | $ 274 | $ 315 |
Taxation - Loss Before Tax (Det
Taxation - Loss Before Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (4,850) | $ (3,191) |
United Kingdom | 60,437 | 68,191 |
Total | $ 55,587 | $ 65,000 |
Taxation - Tax Expense (Benefit
Taxation - Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (18) | $ 146 |
United Kingdom | 0 | 0 |
Total current tax (credit)/expense | (18) | 146 |
United States | 0 | 0 |
United Kingdom | 0 | 0 |
Total deferred tax expense | 0 | 0 |
Total income tax (credit)/expense | $ (18) | $ 146 |
Taxation - Reconciliation of St
Taxation - Reconciliation of Statutory Rate (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
U.K. tax rate | 19.00% | 19.00% |
Non-deductible expenses | (7.50%) | (8.90%) |
Research and development incentive | (10.90%) | (4.80%) |
Share options exercised | 2.60% | 0.40% |
Change in deferred tax valuation allowance | (3.00%) | (5.90%) |
Other differences | (0.10%) | 0.00% |
Effective income tax rate | 0.10% | (0.20%) |
Taxation - Deferred Tax Assets
Taxation - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred tax liabilities: | ||
Contingent liability | $ (8,903) | $ (5,860) |
Total deferred tax liabilities | (8,903) | (5,860) |
Deferred tax assets: | ||
Net operating losses | 26,931 | 19,855 |
IPR&D asset | 7,992 | 5,631 |
Future exercisable shares | 4,228 | 10,480 |
Other | 4 | 215 |
Total deferred tax assets | 39,155 | 36,181 |
Less: valuation allowance | (30,252) | (30,321) |
Deferred tax assets, net of valuation allowance | 0 | 0 |
SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset | ||
Valuation Allowance [Roll Forward] | ||
Valuation allowance at January 1 | 30,321 | 13,504 |
Change in tax rates | 7,353 | 1,632 |
(Decrease)/increase in valuation allowance | (7,422) | 14,815 |
Foreign currency translation adjustments | 0 | 370 |
Valuation allowance at December 31 | $ 30,252 | $ 30,321 |
Taxation - Narrative (Details)
Taxation - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss | $ 104,300,000 | $ 95,700,000 |
Interest and penalties recognized | 0 | 0 |
Interest accrued | 0 | 0 |
Penalties accrued | $ 0 | $ 0 |
Share based compensation - Shar
Share based compensation - Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation | $ 25,425 | $ 22,177 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation | 9,654 | 9,319 |
Selling, general and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation | $ 15,771 | $ 12,858 |
Share based compensation - Narr
Share based compensation - Narrative (Details) $ in Millions | 12 Months Ended | 57 Months Ended | ||||
Dec. 31, 2021USD ($)Rateshares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019£ / shares | Dec. 31, 2021USD ($)Rateshares | Jul. 24, 2012shares | Sep. 18, 2006shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number granted (in shares) | 1,696,000 | 2,096,285 | ||||
Number of ordinary shares per ADS | Rate | 800.00% | 800.00% | ||||
Fair value for instruments granted during period | $ | $ 3.1 | $ 62.1 | ||||
Cost related to share options and RSUs granted but not yet recognized | $ | $ 16.2 | $ 16.2 | ||||
Expected period for recognition | 1 year 6 months | |||||
EMI Option Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number granted (in shares) | 0 | |||||
Pre-IPO Option Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number granted (in shares) | 0 | |||||
Share Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Contract life | 10 years | |||||
Share Options | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 1 year | |||||
Share Options | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 4 years | |||||
Share Options | EMI Option Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 114,000 | |||||
Number of American Depository Shares authorized | 14,250 | |||||
Further awards to be granted (in shares) | 0 | 0 | ||||
Share Options | Pre-IPO Option Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 1,860,000 | |||||
Number of American Depository Shares authorized | 232,500 | |||||
Further awards to be granted (in shares) | 0 | 0 | ||||
Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Intrinsic and fair value, vested | $ | $ 20.2 | $ 1.5 | ||||
Restricted Stock Units | 2017 Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 5 years | |||||
Minimum stock price required to vest (in pound sterling per share) | £ / shares | £ 2 | |||||
Period to maintain minimum stock price | 30 days |
Share based compensation - Sh_2
Share based compensation - Share Option Activity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)$ / sharesRateshares | Dec. 31, 2020USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | ||
Number of ordinary shares per ADS | Rate | 800.00% | |
Number of share options outstanding | ||
Beginning balance outstanding | shares | 13,125,672 | 14,179,196 |
Granted | shares | 1,696,000 | 2,096,285 |
Forfeited | shares | (2,126,472) | (2,506,017) |
Expired | shares | (589,128) | |
Exercised | shares | (54,664) | |
Ending balance outstanding | shares | 12,695,200 | 13,125,672 |
Exercisable | shares | 10,177,240 | |
Weighted average exercise price | ||
Outstanding, Beginning Balance, Weighted average exercise price (in dollars per share) | $ / shares | $ 1.41 | $ 1.53 |
Granted, Weight average exercise price (in dollars per share) | $ / shares | 0.72 | 0.73 |
Forfeited, Weight average exercise price (in dollars per share) | $ / shares | 1.06 | 1.53 |
Expired, Weight average exercise price (in dollars per share) | $ / shares | 1.93 | |
Exercised, Weight average exercise price (in dollars per share) | $ / shares | 0.75 | |
Outstanding, Ending Balance, Weighted average exercise price (in dollars per share) | $ / shares | 1.38 | $ 1.41 |
Exercisable, Weight average exercise price (in dollars per share) | $ / shares | $ 1.53 | |
Stock option activity, additional disclosures | ||
Outstanding, Weighted average remaining contractual term (years) | 6 years 6 months | 7 years 3 months 18 days |
Exercisable, Aggregate intrinsic value (in dollars) | $ | $ 553 | |
Outstanding, Aggregate intrinsic value (in dollars) | $ | $ 950 | $ 914 |
Exercisable, Weighted average remaining contractual term (years) | 6 years 1 month 6 days |
Share based compensation - Weig
Share based compensation - Weighted-Average Assumptions (Details) - Share Options - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 0.79% | 0.00% |
Risk-free interest rate, maximum | 1.32% | 0.21% |
Expected volatility, minimum | 85.35% | 65.83% |
Expected volatility, maximum | 87.68% | 75.40% |
Expected dividend yield | 0.00% | 0.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected lives, years | 5 years | 5 years |
Grant date fair value (in dollars per share) | $ 0.62 | $ 0.40 |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected lives, years | 7 years | 7 years |
Grant date fair value (in dollars per share) | $ 0.78 | $ 0.62 |
Share based compensation - RSU
Share based compensation - RSU Activity (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Restricted Stock Units | ||
RSU Activity | ||
Outstanding, beginning balance | 61,992,360 | 1,602,969 |
Granted | 3,030,928 | 62,566,271 |
Forfeited | (2,002,584) | (84,920) |
Vested | (24,673,352) | (2,091,960) |
Outstanding, ending balance | 38,347,352 | 61,992,360 |
Outstanding, Weighted average remaining contractual term | 1 year 2 months 12 days | 1 year 6 months |
Number of RSUs outstanding | 38,347,352 | 61,992,360 |
Time-Based Vesting | ||
RSU Activity | ||
Outstanding, ending balance | 37,833,688 | |
Number of RSUs outstanding | 37,833,688 | |
Weighted average remaining vesting Period | 1 year 2 months 12 days | |
Milestone-Based Vesting | ||
RSU Activity | ||
Outstanding, ending balance | 513,664 | |
Number of RSUs outstanding | 513,664 | |
Weighted average remaining vesting Period | 2 months 12 days |
Net loss per share - Computatio
Net loss per share - Computation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net loss | $ (55,569) | $ (65,146) |
Net loss available to ordinary shareholders - basic | (55,569) | (65,146) |
Net loss available to ordinary shareholders - diluted | $ (55,569) | $ (65,146) |
Denominator: | ||
Weighted-average shares outstanding - basic and diluted (in shares) | 473,188,457 | 262,932,653 |
Net loss per share - basic and diluted (in dollars per share) | $ (0.12) | $ (0.25) |
Antidilutive securities excluded from computation of loss per share (in shares) | 63,443,814 | 87,519,294 |
Related party transactions an_3
Related party transactions and other shareholder matters (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)shares | Dec. 31, 2021GBP (£)shares | |
Related Party Transaction [Line Items] | ||
Number of shares issued in sale (in shares) | 873,104 | 873,104 |
Consideration received from sale of stock | $ | $ 700,000 | |
Director or Officer | Private Placement | Dr. Ebsworth | ||
Related Party Transaction [Line Items] | ||
Number of shares issued in sale (in shares) | 222,216 | 222,216 |
Consideration received from sale of stock | £ | £ 100,000 | |
Director or Officer | Private Placement | Dr. Zaccardelli | ||
Related Party Transaction [Line Items] | ||
Number of shares issued in sale (in shares) | 444,440 | 444,440 |
Consideration received from sale of stock | $ | $ 249,998 | |
Director or Officer | Private Placement | Mr. Sinha | ||
Related Party Transaction [Line Items] | ||
Number of shares issued in sale (in shares) | 533,328 | 533,328 |
Consideration received from sale of stock | $ | $ 299,997 | |
Director or Officer | Private Placement | Dr. Ullman | ||
Related Party Transaction [Line Items] | ||
Number of shares issued in sale (in shares) | 266,664 | 266,664 |
Consideration received from sale of stock | $ | $ 149,983 | |
Director or Officer | Private Placement | Dr. Edwards | ||
Related Party Transaction [Line Items] | ||
Number of shares issued in sale (in shares) | 53,328 | 53,328 |
Consideration received from sale of stock | $ | $ 29,997 | |
Director or Officer | Private Placement | Mr. Hahn | ||
Related Party Transaction [Line Items] | ||
Number of shares issued in sale (in shares) | 177,784 | 177,784 |
Consideration received from sale of stock | $ | $ 100,004 |