Cover Page
Cover Page | 12 Months Ended |
Dec. 31, 2020shares | |
Cover [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2020 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Trading Symbol | MREO |
Entity Registrant Name | Mereo Biopharma Group plc |
Entity Central Index Key | 0001719714 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Entity Shell Company | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Common Stock, Shares Outstanding | 338,953,141 |
Entity Voluntary Filers | No |
Entity Interactive Data Current | Yes |
Entity Address, Country | GB |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Title of 12(b) Security | Common Shares |
Security Exchange Name | NASDAQ |
Document Accounting Standard | International Financial Reporting Standards |
Document Registration Statement | false |
ICFR Auditor Attestation Flag | false |
Consolidated statement of compr
Consolidated statement of comprehensive loss - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of comprehensive income [abstract] | |||
Research and development expenses | £ (16,347) | £ (23,608) | £ (22,703) |
Administrative expenses | (21,222) | (15,909) | (11,775) |
Operating loss | (37,569) | (39,517) | (34,478) |
Net income recognized on acquisition of subsidiary | 1,035 | ||
Finance income | 44 | 377 | 307 |
Finance costs | (6,383) | (4,371) | (3,807) |
Changes in the fair value of financial instruments | (109,849) | 875 | 716 |
Loss on disposal of intangible assets | (10,872) | ||
Net foreign exchange (loss)/gain | (1,821) | 483 | (44) |
Loss before tax | (166,450) | (41,118) | (37,306) |
Taxation | 2,822 | 6,274 | 5,277 |
Loss attributable to equity holders of the parent | (163,628) | (34,844) | (32,029) |
Other comprehensive gain/(loss) – items that may be reclassified to profit or loss | |||
Exchange differences on translation of foreign operations | 349 | (499) | |
Other comprehensive gain/(loss), net of tax | 349 | (499) | |
Total comprehensive loss attributable to equity holders of the parent | £ (163,279) | £ (35,343) | £ (32,029) |
Basic and diluted loss per share | £ (0.48) | £ (0.39) | £ (0.45) |
Consolidated balance sheet
Consolidated balance sheet - GBP (£) £ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Non-current assets | ||
Property, plant and equipment | £ 1,573 | £ 11,558 |
Intangible assets | 31,648 | 44,456 |
Total non-current assets | 33,221 | 56,014 |
Current assets | ||
Prepayments | 1,619 | 2,111 |
R&D tax credits | 2,818 | 10,426 |
Other taxes recoverable | 804 | 979 |
Other receivables | 1,016 | 572 |
Cash and short-term deposits | 23,469 | 16,347 |
Total current assets | 29,726 | 30,435 |
Total assets | 62,947 | 86,449 |
Non-current liabilities | ||
Provisions | 1,216 | 1,449 |
Interest-bearing loans and borrowings | 16,142 | 5,373 |
Warrant liability | 50,775 | 131 |
Other liabilities | 62 | 44 |
Lease liability | 1,158 | 9,318 |
Total non-current liabilities | 69,353 | 16,315 |
Current liabilities | ||
Trade and other payables | 3,333 | 6,352 |
Accruals | 4,178 | 5,138 |
Provisions | 418 | 309 |
Interest-bearing loans and borrowings | 15,139 | |
Contingent consideration liability | 354 | |
Total current liabilities | 8,565 | 29,878 |
Lease liability | 636 | 2,586 |
Total liabilities | 77,918 | 46,193 |
Net (liabilities)/assets | (14,971) | 40,256 |
Equity | ||
Issued capital | 1,017 | 294 |
Share premium | 161,785 | 121,684 |
Other capital reserves | 128,374 | 59,147 |
Employee Benefit Trust shares | (1,305) | (1,305) |
Other reserves | 5,001 | 7,000 |
Accumulated loss | (309,693) | (146,065) |
Translation reserve | (150) | (499) |
Total equity | £ (14,971) | £ 40,256 |
Consolidated statement of cash
Consolidated statement of cash flows - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities | |||
Loss before tax | £ (166,450) | £ (41,118) | £ (37,306) |
Adjustments to reconcile loss before tax to net cash flows: | |||
Depreciation of property, plant and equipment | 1,599 | 1,577 | 39 |
Share-based payments expense | 1,558 | 1,636 | 2,190 |
Net foreign exchange loss/(gain) | 1,821 | (483) | 44 |
Increase/(decrease) in provisions | 162 | (517) | (1,003) |
Finance income | (44) | (377) | (307) |
Finance costs | 6,226 | 4,606 | 3,807 |
Modification (gain)/loss on bank loan | (456) | 730 | |
Gain on bargain purchase | (3,681) | ||
Gain on lease modification | (957) | ||
Fair value remeasurement on contingent consideration | 354 | ||
Fair value remeasurement on warrants | 109,849 | (875) | (716) |
Loss on disposal of intangible assets | 10,872 | ||
Working capital adjustments: | |||
(Increase)/decrease in trade and other receivables | 141 | (936) | 804 |
Increase/(decrease) in trade and other payables | (3,551) | (6,730) | 1,602 |
Tax credits received | 10,433 | 1,069 | 8,152 |
Net cash flows (used in) operating activities | (28,341) | (45,931) | (23,139) |
Investing activities | |||
Acquisition of subsidiary | (354) | 10,074 | |
Purchase)/disposal of property, plant and equipment | (16) | (21) | (34) |
Disposal of intangible assets (net of transaction costs) | 1,821 | ||
Proceeds from sale of short-term investments | 32,865 | ||
Interest earned | 44 | 377 | 286 |
Net cash flows from investing activities | 1,495 | 43,295 | 252 |
Financing activities | |||
Proceeds from issuance of ordinary shares | 20,136 | 273 | |
Transaction costs on issuance of shares | (1,307) | (761) | (8) |
Proceeds from issuance of convertible loan | 44,375 | ||
Transaction costs issuance of convertible loan | (3,598) | ||
Repayment of bank loans | (19,802) | ||
Proceeds from loans and borrowings | 455 | ||
Transaction costs related to loans and borrowings | (81) | (921) | |
Interest paid on bank loan | (2,900) | (1,739) | (1,645) |
Other financing proceeds | 78 | ||
Purchase of treasury shares | (998) | (307) | |
Payment of lease liabilities | (2,086) | (2,212) | |
Net cash flows from/(used in) financing activities | 34,737 | (5,710) | (2,075) |
Net increase/(decrease) in cash and cash equivalents | 7,891 | (8,346) | (24,962) |
Cash and cash equivalents at the beginning of the period | 16,347 | 25,042 | 50,045 |
Effect of exchange rate changes | 253 | (349) | (41) |
Cash and cash equivalents at the end of the period | £ 23,469 | £ 16,347 | £ 25,042 |
Consolidated statement of chang
Consolidated statement of changes in equity - GBP (£) £ in Thousands | Total | Share options [member] | LTIPs [member] | Conversion of loan note [member] | October 31, 2017 [member] | June 1, 2018 [member] | August 3, 2018 [member] | October 22, 2018 [member] | Issued capital [member] | Issued capital [member]Conversion of loan note [member] | Issued capital [member]Novartis bonus shares [member] | Issued capital [member]April 23, 2019 [member] | Issued capital [member]October 22, 2018 [member] | Share premium [member] | Share premium [member]Conversion of loan note [member] | Share premium [member]Novartis bonus shares [member] | Share premium [member]June 1, 2018 [member] | Share premium [member]August 3, 2018 [member] | Share premium [member]October 22, 2018 [member] | Other capital reserves [member] | Other capital reserves [member]Share options [member] | Other capital reserves [member]LTIPs [member] | Other capital reserves [member]Conversion of loan note [member] | Other capital reserves [member]Novartis bonus shares [member] | Other capital reserves [member]April 23, 2019 [member] | Employee benefit trust [member] | Other reserves [member] | Accumulated losses [member] | Translated reserve |
Beginning balance at Dec. 31, 2017 | £ 62,483 | £ 213 | £ 118,227 | £ 16,359 | £ 7,000 | £ (79,316) | |||||||||||||||||||||||
Loss for the period | (32,029) | (32,029) | |||||||||||||||||||||||||||
IFRS 9 restatement | 124 | 124 | |||||||||||||||||||||||||||
Issuance of share capital | £ 44 | £ 150 | £ 13 | £ 111 | £ 1 | £ 150 | £ 13 | £ 110 | |||||||||||||||||||||
Share-based payments | £ 1,871 | £ 319 | £ 1,871 | £ 319 | |||||||||||||||||||||||||
Issuance of warrants | 44 | ||||||||||||||||||||||||||||
Transaction costs on issuance of share capital | (8) | (8) | |||||||||||||||||||||||||||
Purchase of treasury shares | (307) | £ (307) | |||||||||||||||||||||||||||
Ending balance at Dec. 31, 2018 | 32,771 | 214 | 118,492 | 18,593 | (307) | 7,000 | (111,221) | ||||||||||||||||||||||
Other comprehensive income | (499) | ||||||||||||||||||||||||||||
Loss for the period | (34,844) | (34,844) | |||||||||||||||||||||||||||
Issuance of share capital | £ 40,892 | £ 74 | £ 40,818 | ||||||||||||||||||||||||||
Issuance of share capital | £ 2,369 | £ 3 | £ 3 | £ 2,366 | £ 1,587 | £ (1,590) | |||||||||||||||||||||||
Share-based payments | £ 1,543 | £ 93 | £ 1,543 | £ 93 | |||||||||||||||||||||||||
Issuance on conversion of loan notes | £ (310) | £ (310) | |||||||||||||||||||||||||||
Transaction costs on issuance of share capital | (761) | (761) | |||||||||||||||||||||||||||
Purchase of treasury shares | (998) | (998) | |||||||||||||||||||||||||||
Ending balance at Dec. 31, 2019 | 40,256 | 294 | 121,684 | 59,147 | (1,305) | 7,000 | (146,065) | £ (499) | |||||||||||||||||||||
Other comprehensive income | 349 | 349 | |||||||||||||||||||||||||||
Loss for the period | (163,628) | (163,628) | |||||||||||||||||||||||||||
Issuance of share capital | 16,937 | 347 | 18,715 | (2,125) | |||||||||||||||||||||||||
Currency translation of foreign operations | (499) | (499) | |||||||||||||||||||||||||||
Share-based payments | 1,558 | 1,558 | |||||||||||||||||||||||||||
Issuance of warrants | 4,080 | ||||||||||||||||||||||||||||
Issuance on conversion of loan notes | 54,865 | 375 | 21,386 | 33,104 | |||||||||||||||||||||||||
Issuance of share capital on conversion of loan notes and warrants | 1,084 | 1,084 | |||||||||||||||||||||||||||
Reclassification of loan notes embedded derivative (Note 18) | 33,481 | 33,481 | |||||||||||||||||||||||||||
Conversion of warrants | 127 | 1 | 126 | ||||||||||||||||||||||||||
Ending balance at Dec. 31, 2020 | £ (14,971) | £ 1,017 | £ 161,785 | £ 128,374 | £ (1,305) | £ 5,001 | £ (309,693) | £ (150) |
Corporate information
Corporate information | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Corporate information | 1. Corporate information Mereo BioPharma Group plc (the “Company”) is a clinical-stage, United Kingdom (“UK”) based biopharmaceutical company focused on oncology and rare diseases. The Company is a public limited company incorporated and domiciled in the UK, and registered in England, with shares publicly traded on the Nasdaq Global Market via American Depositary Shares (“ADSs”) under the ticker symbol MREO. The Company’s ordinary shares were previously admitted to trading on the AIM market of London Stock Exchange plc with admission canceled with effect on December 18, 2020. The Company’s registered office is located at Fourth Floor, 1 Cavendish Place, London, W1G 0QF, United Kingdom. The consolidated financial statements of Mereo BioPharma Group plc and its subsidiaries (collectively, the “Group”) for the year ended December 31, 2020 were authorized for issue in accordance with a resolution of the Directors on March 31, 2021. The principal activities of the Group are the development and commercialization of innovative therapeutic pharmaceutical products. |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Significant accounting policies | 2. Significant accounting policies 2.1 Basis of preparation The Group’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The consolidated financial statements are presented in pound sterling (“£”), which is the presentational currency of the Group. The functional currencies of consolidated subsidiaries are pound sterling and US dollars (“$”). All amounts disclosed in the consolidated financial statements and notes have been rounded to the nearest thousand, unless otherwise stated. 2.2 Basis of consolidation The consolidated financial information comprises the financial statements of Mereo BioPharma Group plc and its subsidiaries as at December 31, 2020. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealized gains on transactions between Group companies are eliminated in preparing the consolidated financial statements. Accounting policies of subsidiaries are consistent with the policies adopted by the Group. The Company has an employee share trust to facilitate share transactions pursuant to employee share schemes. Although the trust is a separate legal entity from the Group, it is consolidated into the Group’s results in accordance with the IFRS 10 rules on special purpose vehicles. The Company is deemed to control the trust principally because the trust cannot operate without the funding the Group provides. 2.3 Segmental information The Group has one operating segment. The Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer. The Group has a single portfolio of product candidates, with only direct research and development expenses monitored at a product candidate level. The CODM makes decisions over resource allocation at an overall portfolio level and the Group’s financing is managed and monitored on a consolidated basis. Following the acquisition of Mereo BioPharma 5, Inc. (formerly OncoMed Pharmaceuticals, Inc. or “OncoMed”) in 2019, non-current assets held by the Group are located in the United Kingdom and United States. As at December 31, 2020, approximately £0.5 million (2019: £22.4 million) of non-current assets are located in the United States. 2.4 Going concern The Group expects to incur significant operating losses for the foreseeable future as it continues its research and development efforts, seeks to obtain regulatory approval of its product candidates and pursues any future product candidates the Group may develop. As a result of these anticipated expenditures, the Group will need additional financing to support its continuing operations. Until such time as the Group can generate significant revenue from product sales, or other commercialization revenues, if ever, in respect of its oncology or rare disease product candidates or through partnering and/or out-licensing deals for its non-core disease product candidates, the Group will seek to finance its operations through a combination of public or private equity or debt financings or other sources. In February 2021, the Group completed a public offering of American Depository Shares (“ADSs”) and raised gross proceeds of $115.1 million (Note 27). This funding, together with the Group’s existing funds, will enable the Group to meet its liabilities as they fall due for the foreseeable future and at least 12 months. Therefore, the Group continues to adopt the going concern basis of accounting in preparing these consolidated financial statements. 2.5 Summary of significant accounting policies a) Research and development (R&D) costs Expenditure on product development is capitalized as an intangible asset and amortized over the expected useful economic life of the product candidate concerned. Capitalization commences from the point at which technical feasibility and commercial viability of the product candidate can be demonstrated and the Group is satisfied that it is probable that future economic benefits will result from the product candidate once completed. Capitalization ceases when the product candidate receives regulatory approval for launch. No such costs have been capitalized to date. Expenditure on R&D activities that do not meet the above criteria, including ongoing costs associated with acquired intellectual property rights and intellectual property rights generated internally by the Group, is recognized in the consolidated statement of comprehensive loss as incurred. Intellectual property and in-process R&D from asset acquisitions are recognized as intangible assets at cost. b) Taxation Tax expense recognized in the consolidated statement of comprehensive income comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity. Current income tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the consolidated financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted, or substantively enacted, by the end of the reporting period in the jurisdictions in which the Group operates. Amounts receivable in respect of research and development tax credits are recognized in the consolidated financial statements provided there is sufficient evidence that the amounts are recoverable. These credits are recognized within income tax in the consolidated statement of comprehensive loss. A provision is recognized for matters in which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. Where applicable, the assessment is based on management judgment supported by previous experience in respect of such activities and independent tax advice. Deferred tax Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilized. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Unrecognized deferred income tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered. Deferred tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply in the year when the asset or liability is realized, based on tax rates (and tax laws) enacted or substantively enacted at the end of the reporting period. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. c) Foreign currencies Items included in the consolidated financial statements are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in pound sterling (“£”), which is the presentational currency of the Group. The functional currencies of consolidated subsidiaries are pound sterling and US dollars (“$”). Transactions in foreign currencies are initially recorded by the Group’s entities at the rate prevailing on the date the transaction first qualifies for recognition. Differences arising on settlement or translation of monetary items as well as gains or losses on the retranslation of foreign currency balances at the period-end are recognized in the consolidated statement of comprehensive loss. The results and financial position of Group entities that have a functional currency different from the presentational currency of the Group are translated into the presentational currency (pound sterling). The assets and liabilities of such entities are translated into pound sterling at the rate of exchange prevailing at the balance sheet date. Income and expenses are translated at the average rate for the period. Fair value adjustments arising on acquisition of such entities are treated as assets and liabilities of the relevant entity and translated into pound sterling at the closing rate. The exchange differences arising on translation for consolidation are recognized in other comprehensive income. d) Property, plant and equipment Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment if the recognition criteria are met. All other repair and maintenance costs are recognized in profit or loss as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Useful lives of various property, plant and equipment are as follows: • Leasehold improvements shorter of lease term or ten years • Office equipment five years • IT equipment three years Property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statement of comprehensive loss when the asset is derecognized. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed annually and adjusted prospectively, if appropriate. e) Business combinations Business combinations are accounted for using the acquisition method of accounting. At the date of the acquisition, the Group initially recognizes the fair value of the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired business. The consideration transferred is measured at fair value at the date acquisition. The excess of the consideration transferred over the fair value of net identifiable assets of the business acquired is recorded as goodwill, unless the amount of consideration transferred is less than the fair value of net identifiable assets of the business acquired in which case the difference is recognized directly in the consolidated statement of comprehensive loss as a bargain purchase. A valuation is performed of assets and liabilities assumed on each acquisition accounted for as a business combination based on our best estimate of fair value. f) Leases Effective January 1, 2019, the Group adopted IFRS 16 (Leases) using the modified retrospective approach. The Group assesses whether a contract is, or contains, a lease at inception of the contract. The Group recognizes a right-of-use asset and a corresponding liability with respect to all lease arrangements in which it is a lessee. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise of fixed lease payments, less any lease incentives receivable. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever there is a significant change in lease term, lease payments or if the lease contract is modified and the lease modification is not accounted for as a separate lease. The right-of-use assets comprise the initial measurement of the corresponding lease liability and lease payments made at or before the commencement date, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. The right-of-use assets are presented within property, plant and equipment. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset: • Right-of-use asset (building) six to nine years • Right-of-use asset (equipment) one to two years When the Group is an intermediate lessor, it accounts for the head lease and the sub-lease as two separate contracts. The sub-lease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease. Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. g) Intangible assets Intangible assets are initially recorded at cost which has been determined as the fair value of the consideration paid and payable. Assets that have been acquired through a business combination are initially recorded at fair value. The fair value of consideration is regularly reviewed based on the probability of achieving contractual milestones. Where the consideration paid or payable is in shares, the cost is measured in accordance with IFRS 2 (Share Based Payments). Intangible assets that are not yet available for use are reviewed for impairment at each reporting date by allocating the assets to the cash-generating units to which they relate. The estimated useful life is the lower of the legal duration and economic useful life. The estimated useful lives of intangible assets are reviewed at least annually. Intangible assets are amortized from the date they are available for commercial use. No amortization has been recognized to date. An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized. h) Financial instruments Financial assets and liabilities are recognized in the consolidated balance sheet only when the Group becomes party to the contractual provisions of the instrument. Financial assets On initial recognition, a financial asset is classified into one of three primary measurement categories: • Amortized cost; • Fair value through other comprehensive income (“FVOCI”); or • Fair value through profit or loss (“FVTPL”). The initial classification into a primary measurement category depends on the nature and purpose of the financial asset. For each reporting period covered herein, the Group’s financial assets included only financial assets held at FVOCI. The Group’s financial assets include short-term investments which are not classified as cash and short-term deposits and are held in a business model whose objective is achieved by both collecting contractual cash flows and selling the short-term investment on maturity. For short-term investments, interest income and impairment gains or losses are recognized directly in the consolidated statement of comprehensive loss. The difference between cumulative fair value gains or losses and the cumulative amounts recognized in the consolidated statement of comprehensive loss is recognized in other comprehensive income until derecognition, when the amounts in other comprehensive income are reclassified to the consolidated statement of comprehensive loss. Classification as debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. Embedded derivatives An embedded derivative is a component of a hybrid contract that also includes a non-derivative host with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative. Derivatives embedded in hybrid contracts with hosts that are not financial assets within the scope of IFRS 9 (e.g. financial liabilities) are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at FVTPL. Compound instruments Convertible loan notes are regarded as compound instruments consisting of a liability component and an equity component. At the date of issue, the fair value of the liability component is estimated using a discount rate for an equivalent liability without the conversion feature. The difference between the proceeds from the issue of the convertible loan note and the fair value assigned to the liability component is included in equity. Financial liabilities Borrowings (including interest-bearing loans) are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method. Under the effective interest method, amortization is included as a finance cost in the consolidated statement of comprehensive loss. Non-substantial modifications to financial liabilities measured at amortized cost with the associated gain or loss recognized in the consolidated statement of comprehensive loss. The gain or loss is computed as the difference between the original contractual cash flows and the modified cash flows, discounted at the original effective interest rate. For substantial modifications, the existing financial liability is derecognized and a new financial liability is established. Borrowings are derecognized from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The warrant instruments are recorded at fair value, with changes in the fair value recognized in the consolidated statement of comprehensive loss, where the terms of the warrant instruments allow for cashless exercise. i) Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: • In the principal market for the asset or liability; or • In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: • Level 1 — quoted (unadjusted) market prices in active markets for identical assets or liabilities. • Level 2 — valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. • Level 3 — valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. j) Impairment of non-financial assets Further disclosures relating to impairment of non-financial assets are also provided in the following notes: • Disclosures for significant assumptions Note 3 • Property, plant and equipment Note 11 • Intangible assets not yet available for use Notes 12 and 13 At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. Impairment losses are recognized in the consolidated statement of comprehensive loss in expense categories consistent with the function of the impaired asset. An assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the consolidated statement of comprehensive loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase. k) Cash and short-term deposits Cash and short-term deposits in the balance sheet comprise cash at banks and on hand along with short-term deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in value. l) Provisions Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the consolidated statement of comprehensive loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost. Where contingent payments relate to future use of the in-licensed IP, no liability or provision is recognized for variable amounts to be paid to the vendors based on future events unless such arrangements are onerous. The liability (and corresponding expense in the income statement) to the vendors is recognized as an obligation arises. m) Provision for deferred cash consideration Provision for deferred cash consideration consists of future payments which are contractually committed but not yet certain. In respect of products which are not yet approved, such deferred cash consideration excludes potential milestones, royalties or other payments that are deemed to be so uncertain as to be unquantifiable. Deferred cash consideration is recognized as a liability with the amounts calculated as the risk adjusted net present value of anticipated deferred payments. The provision is reviewed at each balance sheet date and adjusted based on the likelihood of contractual milestones being achieved and therefore the deferred payment being settled. Increases in the provision relating to changes in the probability are recognized as an intangible asset. Increases in the provision relating to the unwinding of the time value of money are recognized as a finance expense. n) Share-based payments Employees (including executives) and non-executive directors of the Group receive remuneration in the form of share-based payments, whereby employees and non-executive directors render services as consideration for equity instruments (equity settled transactions). Incentives in the form of shares are provided to employees under various plans (Note 24). Executive officers also have outstanding shares under a deferred bonus share plan (“DBSP Plan”) and a long-term incentive plan (“LTIP Plan”). In accordance with IFRS 2 Share-based Payments (“IFRS 2”), charges for these incentives are expensed through the consolidated statement of comprehensive loss on a straight-line basis over their vesting period, based on the Group’s estimate of shares that will eventually vest. The total amount to be expensed is determined by reference to the fair value of the options or awards at the date they were granted. For LTIP shares, the fair value on grant date excludes the impact of any non-market vesting conditions, which are taken into account by adjusting the number of equity instruments included in the measurement of the share-based payment transaction and are adjusted each period until such time as the equity instruments vest. Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service. In accordance with IFRS 2, the cancellation of share options is accounted for as an acceleration of the vesting period and therefore any amount unrecognized that would otherwise have been charged in future accounting periods is recognized immediately. When options are forfeited, the accounting expense for any unvested awards is reversed. o) Costs of issuing capital Incremental costs incurred and directly attributable to the offering of equity securities are deducted from the related proceeds of the offering. The net amount is recorded as share premium in the period when such shares are issued. Where such expenses are incurred prior to the offering they are recorded in prepayments until the offering completes. Other costs incurred in such offerings are expensed as incurred and included in general and administrative expenses. p) Employee Benefit Trust The Group operates an Employee Benefit Trust (“EBT”), the Mereo BioPharma Group plc Employee Benefit Trust. The EBT holds ADS’s to satisfy the exercise of options under the Company’s share-based incentive schemes (Note 24). The EBT is a Jersey-based trust which was initially funded by a loan from the Company, which it utilized to purchase shares in sufficient quantity to fulfill the envisaged awards. The Company will issue ordinary shares to a custodian for conversion by a depositary bank to ADS’s and delivery to the EBT. These ordinary shares will be deducted from the shareholders’ funds on the consolidated balance sheet at their nominal value. Shares held by the EBT are included in the consolidated balance sheet as a reduction in equity. |
Significant judgments, estimate
Significant judgments, estimates and assumptions | 12 Months Ended |
Dec. 31, 2020 | |
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Significant judgments, estimates and assumptions | 3. Significant judgments, estimates and assumptions The preparation of these consolidated financial statements requires the management of the Group to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Group bases its estimates and judgments on historical experience and on various other assumptions that it considers to be reasonable. Actual results may differ from these estimates under different assumptions or conditions. 3.1 Judgments a) Share-based compensation Incentives in the form of shares are provided to employees under certain equity award plans (which consist of both share awards and option grants). The fair value of the employee services received in exchange for equity award plans is recognized as an expense. The expense is based upon a number of assumptions disclosed in Note 24. The selection of different assumptions in the measurement of fair value of the equity award plans could affect the results of the Group. b) Impairment of intangible assets and property, plant and equipment An assessment was made in respect of indicators of impairment in the carrying value of the Group’s intangible assets (see Note 13), right-of-use If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is recognized as an impairment in the consolidated statement of comprehensive income. The assessment of intangible assets involves a number of significant judgments regarding the likelihood of successful product approval, the costs of attaining approval, the estimated useful life of intangible assets following commercialization and the subsequent commercial profitability of the product once approved. c) Incremental borrowing rate and lease modification Future lease payments are discounted using the interest rate implicit in the lease, or, if that rate cannot be readily determined, the incremental borrowing rate. IFRS 16 (Leases) defines the incremental borrowing rate as the rate of interest a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of similar value to the right-of-use For the year ended December 31, 2020, the determination of an appropriate discount rate has a significant effect on the lease liabilities recognized. For the current lease portfolio, the incremental borrowing rate was determined based on relevant and available information as the interest rate implicit in the lease arrangements cannot be readily determined. In addition to the determination of an appropriate discount rate, the Group was also required to assess the lease term for qualifying leases. The determination of the lease term is judgmental as for certain qualifying leases held by the Group, the contract includes an extension option beyond the non-cancellable In August 2020, a lease for office space was modified to reduce the size of the office space leased. At the time of this lease modification, judgment was applied in determining the new lease term and remeasuring the lease liability by discounting the revised lease payments using a revised incremental borrowing rate. d) Identification and classification of financial instruments On June 3, 2020, the Company completed a private placement transaction (Note 17) which comprised the issue of ordinary shares, Loan Notes and Warrants. Judgment is applied under IAS 32 (Financial instruments: Presentation) in determining the features of the identified financial instruments on both the transaction date and the date of the general meeting at which Resolutions relating to the private placement were voted on by the Shareholders, to determine the appropriate recognition in accordance with IAS 32. In applying this judgment, management considered the probability of passing the Resolutions at the general meeting and the likelihood of a change of control prior to the passing of the Resolutions, which impact the settlement terms of the financial instruments, and the classification of the financial instruments as liabilities or equity. Management concluded that a change of control event is uncertain and outside of the Company’s control, and therefore the conversion feature on the Loan Notes at the transaction date represented a financial liability with an embedded derivative for the conversion option. On the passing of the Resolutions, judgment was applied to determine that the effective terms of the Loans Notes changed and the embedded derivative financial liability representing the conversion option was reclassified to equity at its fair value, with no associated gain or loss recognized in profit or loss. e) Business combination On April 23, 2019, the Group obtained a 100% controlling interest in Mereo BioPharma 5, Inc. (formerly OncoMed), a Company based in the United States (“US”). The value of the net identifiable assets acquired was £44.6 million. Total consideration paid, being the fair value of 24.8 million ordinary shares of the Company, was £40.9 million. As the Group acquired Mereo BioPharma 5, Inc. for an amount less than the fair market value of the net assets acquired, a gain on bargain purchase of £3.7 million was recognized. Judgment is applied under IFRS 3 (Business Combinations) in determining whether a transaction meets the definition of a business combination, and so accounted for in accordance with its requirements. In applying this judgement, management has considered the underlying economic substance of the transaction in addition to the contractual terms. Our assessment is that Mereo BioPharma 5, Inc. meets the definition of a ‘business’ and the transaction has therefore been accounted for as a business combination. 3.2 Estimates and assumptions a) Deferred consideration Deferred consideration in the form of cash is recognized as a provision at each balance sheet date, to the extent its amount is quantifiable at the inception of the arrangement (see Note 19). The amount provided is based on estimates regarding the timing and progress of the related research and development activities. Deferred consideration in the form of shares is recognized as a share-based payment when it is probable that shares will be transferred. b) Fair value of financial instruments As part of the private placement transaction (Note 17), the Group performed a valuation of the fair value of the identified financial instruments including the embedded derivative and the warrants on the transaction date and the general meeting date. For qualifying financial instruments, the fair value is reassessed at each balance sheet date. Specific consideration was applied to the estimation of implied share price on the transaction date, the volatility, credit spread and discount rate. c) Fair value of intangible assets acquired in business combination The Group performed a valuation of the fair value of assets acquired and liabilities assumed following the acquisition of Mereo BioPharma 5, Inc. Based on the assets acquired and liabilities assumed, specific consideration was applied to the valuation of the intangible asset acquired which required an estimation of the expected useful life and future cash flows of the intangible asset alongside the determination of an appropriate discount rate. The intangible asset acquired was valued using a risk adjusted net present value model. In January 2020, the Group entered into a license agreement with OncXerna Therapeutics, Inc. (“OncXerna”) under which an exclusive worldwide license was granted in respect of intellectual property rights for the development and commercialization of navicixizumab and the associated intangible asset was derecognized (Note 12). d) Contingent consideration The Group makes a provision for the estimated fair value of amounts payable to the former shareholders of Mereo BioPharma 5, Inc. under the Contingent Value Rights Agreement (“CVR”), which is accounted for as a contingent consideration liability. At December 31, 2020, the Group estimates the fair value of the contingent consideration liability to be £ nil (2019: £0.4 million ($0.5 million)). The decrease in the fair value of the contingent consideration liability reflects the terms subsequently agreed with OncXerna. Total potential payments under the CVR on a gross, undiscounted basis, are approximately £58.6 million ($80.0 million). The estimated contingent consideration payable is based on a risk-adjusted, probability-based scenario. Under this approach the likelihood of future payments being made to the former shareholders of Mereo BioPharma 5, Inc. under the CVR is considered. The estimate could materially change over time in line with the development plan and potential subsequent commercialization of the product. |
Changes in accounting policies
Changes in accounting policies | 12 Months Ended |
Dec. 31, 2020 | |
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Changes in accounting policies | 4. Changes in accounting policies a) New standards, interpretations and amendments adopted from January 1, 2020 In the current year, the Group has applied the below amendments to IFRS issued by the IASB that are effective for an annual period that begins on or after January 1, 2020. Their adoption has not had any material impact on the disclosures or on the amounts reported in these consolidated financial statements: • Amendments to References to the Conceptual Framework in IFRS Standards • Amendments to IAS 1 and IAS 8 – Definition of “material” • Amendments to IFRS 3 – Definition of a “business” • Amendments to IFRS 7 and IFRS 9 – Interest Rate Benchmark Reform • Amendment to IFRS 16 – COVID-19 b) New standards, interpretations and amendments not yet effective At the date of authorization of these consolidated financial statements, the Group has not applied the following new and revised IFRS that have been issued but are not yet effective: Effective January 1, 2021 • Amendments to IFRS 4 Insurance Contracts • Amendments to IFRS 9, IAS 39 and IFRS 7 – Interest Rate Benchmark Reform – Phase 2 Effective January 1, 2022 • Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41) • Amendments to IAS 16 – Proceeds before Intended Use • Amendments to IAS 37 – Onerous Contracts – Cost of Fulfilling a Contract Effective January 1, 2023 • Amendments to IAS 1 – Classification of Liabilities as Current or Non-current • Amendments to IFRS 17 – Insurance Contracts The Group does n ot expect the adoption of the IFRS listed above will have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions. |
Group information
Group information | 12 Months Ended |
Dec. 31, 2020 | |
Investments accounted for using equity method [abstract] | |
Group information | 5. Group information Information about subsidiaries The consolidated financial statements of the Group include: Name Principal activities Country of % Equity December 31, % Equity December 31, Mereo BioPharma 1 Limited Pharmaceutical R&D UK 100 100 Mereo BioPharma 2 Limited Pharmaceutical R&D UK 100 100 Mereo BioPharma 3 Limited Pharmaceutical R&D UK 100 100 Mereo BioPharma 4 Limited Pharmaceutical R&D UK 100 100 Mereo BioPharma Ireland Limited Pharmaceutical R&D Ireland 100 100 Mereo BioPharma 5, Inc. Pharmaceutical R&D U.S. 100 100 Navi Subsidiary, Inc. Pharmaceutical R&D U.S. 100 100 Mereo US Holdings Inc. Holding company U.S. 100 100 Mereo BioPharma Group plc Employee Benefit Trust Employee share scheme Jersey – – The registered office of Mereo BioPharma 1 Limited, Mereo BioPharma 2 Limited, Mereo BioPharma 3 Limited and Mereo BioPharma 4 Limited is located at Fourth Floor, 1 Cavendish Place, London W1G 0QF. The registered office of Mereo BioPharma Ireland Limited is Rocktwist House, Block 1, Western Business Park, Shannon, County Clare, V14 FW97, Republic of Ireland. Mereo US Holdings Inc. was incorporated on December 3, 2018 for the sole purpose of effecting the business combination with Mereo BioPharma 5, Inc. (formerly OncoMed Pharmaceuticals, Inc.) on April 23, 2019. The registered office of Mereo US Holdings Inc., Mereo BioPharma 5, Inc. and its wholly owned subsidiary, Navi Subsidiary, Inc., is 251 Little Falls Drive, City of Wilmington, County of New Castle, Delaware 19808, US. |
Loss before taxation
Loss before taxation | 12 Months Ended |
Dec. 31, 2020 | |
Schedule Of Detailed Information About Loss Before Taxation [Abstract] | |
Loss before taxation | 6. Loss before taxation Loss before tax is stated after charging: Year ended December 31, 2020 2019 2018 Fees payable to the Company’s Auditor for the audit of Group accounts 449 514 323 Fees payable to the Company’s Auditor for other services: Audit of subsidiary accounts 49 45 30 Audit-related assurance services 318 311 171 Accounting advisory services – – 10 Legal and professional fees, including patent costs 4,619 2,413 936 Gain on modification of lease (957 ) – – Income from sub-lease (646 ) (855 ) – Operating lease expense (IAS 17) – – 293 Depreciation of right-of-use 1,531 1,505 – Depreciation (excluding right-of-use 68 52 40 Gain on modification of lease, sub-lease income and transaction costs associated with lease modification are included within administrative expenses within the consolidated statement of comprehensive loss. |
Employees
Employees | 12 Months Ended |
Dec. 31, 2020 | |
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Employees | 7. Employees The average monthly number of persons employed by the Group during the year was: Year ended December 31, 2020 2019 2018 By activity Administrative 22 28 24 Research and development 17 18 12 Total 39 46 36 Total compensation costs for persons employed by the Group (including Directors) during the year was: Year ended December 31, 2020 2019 2018 Included in research and development expenses: Salaries 3,046 2,824 1,792 Social security costs 397 110 (30 ) Pension contributions 66 62 73 Share-based payment expenses 446 152 526 Included in administrative expenses: Salaries 4,832 3,384 2,903 Social security costs 68 1 (124 ) (828 ) Pension contributions 89 114 99 Share-based payment expenses 1,112 1,485 1,663 Total employee benefit expenses 10,6 6 9 8,007 6,198 Total compensation costs for Directors during the year was: Year ended December 31, 2020 2019 2018 Salaries and fees 1,1 14 1,106 1,047 Benefits in kind 14 17 15 Pension contributions 6 1 25 11 Bonus 538 294 512 Total 1, 727 1,442 1,585 During 2020, one Director was a member of a defined contribution pension scheme (period ended December 31, 2019: two). Further details concerning the remuneration of key management personnel can be found in Note 26. |
Other income _ expenses and adj
Other income / expenses and adjustments | 12 Months Ended |
Dec. 31, 2020 | |
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Other income / expenses and adjustments | 8. Other income/expenses and adjustments 8.1 Finance income Year ended December 31, 2020 2019 2018 Bank interest earned 5 42 307 Interest earned on short-term investments – 141 – Gain on short-term investments 39 194 – Total finance income 44 377 307 8.2 Finance costs Year ended December 31 2020 2019 2018 Interest on convertible loan notes (2,241 ) (20 ) (185 ) Other interest – (10 ) – Interest on bank loan (2,900 ) (1,739 ) (1,645 ) Interest on lease liabilities (1,085 ) (1,314 ) – Accreted interest on bank loan – (1,523 ) (782 ) Modification gain/(loss) on bank loan – 456 (730 ) Loss on short-term deposits – – (22 ) Discounting of provision for deferred cash consideration (157 ) (221 ) (443 ) Total finance costs (6,383 ) (4,371 ) (3,807 ) 8.3 Changes in the fair value of financial instruments Year ended December 31 2020 2019 2018 Changes in the fair value of warrants – placement ( N (45,977 ) – – Changes in the fair value of warrants – bank loan ( N (714 ) 875 716 Changes in the fair value of embedded derivative ( N (63,158 ) – – Total (109,849 ) 875 716 In 2019 and 2018, changes in the fair value of financial instruments were included within finance costs. The 2019 and 2018 comparative balances have been reclassified accordingly. |
Taxation
Taxation | 12 Months Ended |
Dec. 31, 2020 | |
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Income tax | 9. Taxation Year ended December 31, 2020 2019 2018 UK corporation tax R&D credit 2,822 5,149 5,277 Other tax income / (expense) – 1,125 – Taxation 2,822 6,274 5,277 UK income tax The Group is entitled to claim tax credits in the United Kingdom (the “UK”) under the UK R&D small or medium-sized enterprise (“SME”) scheme, which provides additional taxation relief for qualifying expenditure on R&D activities, and includes an option to surrender a portion of tax losses arising from qualifying activities in return for a cash payment from HM Revenue & Customs (“HMRC”). The amount included in the financial statements represents the credit receivable by the Group for the year. The claims in respect of the year ended December 31, 2019 have been received by the Group. US income tax As at December 31, 2020, £0.8 million is receivable related to Alternative Minimum Tax (“AMT”) credits, recognized as other taxes recoverable within the consolidated balance sheet. At December 31, 2020, the Group had an Uncertain Tax Position of £2.5 million being held off the Balance Sheet, in respect of the R&D tax credits in the US. The Uncertain Tax Position is calculated based upon historic US R&D claims and equates to approximately 20% of the outstanding US R&D claims. Reconciliation of effective tax rate Year ended December 31, 2020 2019 2018 £’000s £’000s £’000s Loss on ordinary activities before income tax (166,450 ) (41,118 ) (37,306 ) Loss on ordinary activities before tax at the UK’s statutory income tax rate of 19% (2019: 19%) 31,626 7,812 7,088 Expenses not deductible for income tax purposes (permanent differences) (13,270 ) (317 ) (1,070 ) Income not taxable 4 – – Temporary timing differences – (343 ) (277 ) R&D relief uplift 1,214 2,540 2,271 Losses (unrecognized) (14,479 ) (4,380 ) (2,804 ) Deferred income from MBG loan guarantee costs – (54 ) 69 Foreign tax 184 – – Differences in overseas tax rates 261 340 – Derecognition of deferred tax (2,686 ) – – Gain on bargain purchase – 699 – Other (32 ) (23 ) – Tax credit for the year 2,822 6,274 5,277 Deferred tax The analysis of unrecognized deferred tax is set out below: Year ended December 31, 2020 2019 2018 £’000s £’000s £’000s Losses 37,021 19,443 8,604 Loan relationships 421 – – US tax credits 9,880 10,032 – Accruals – 947 – Fixed assets 414 400 – Share options 55 – – Other US deferred tax 86 – – Other 137 202 6 Temporary differences 18 4 495 Net deferred tax asset (unrecognized) 48,032 31,028 9,105 The analysis of recognized deferred tax is set out below: At January 1, 2020 Recognized At 31, 2020 Deferred tax liabilities Intangible asset and right-of-use asset (2,686 ) 2,590 (96 ) Deferred tax asset Net operating losses 2,686 (2,590 ) 96 Net deferred tax asset / (liability) – – – The deferred tax liability has arisen from the recognition of separately identifiable intangible assets on the acquisition of Mereo BioPharma 5, Inc. A deferred tax asset on losses has been recognized up to the level of the deferred tax liability, resulting in a net deferred tax liability of £nil. The remaining deferred tax assets, as set out in the table above, have not been recognized as there is uncertainty regarding when suitable future profits against which to offset the accumulated tax losses will arise. UK deferred tax The deferred tax assets have not been recognized as there is uncertainty regarding when suitable future profits against which to offset the accumulated tax losses will arise. There is no expiration date for the accumulated tax losses. The standard rate of corporation tax applied to the reported loss is 19% (2019: 19%). In the UK Budget on March 11, 17 , The March 2021 Budget announced a further increase to the main rate of corporation tax to 25% from April 2023. This rate has not been substantively enacted at the balance sheet date, as a result deferred tax balances as at December 31, At December 31, 2020, the Group had UK tax losses to be carried forward of approximately £136.9 million (2019: £70.2 million). US deferred tax US deferred tax assets and liabilities are calculated at a blended rate of approximately 21%. For Mereo BioPharma 5, Inc, with respect to accumulated tax losses carried forward prior to its acquisition by the Company, there is a change of control restriction which will limit the amount available in any one year. At December 31, 2020, the Group had US federal tax losses to be carried forward of approximately £50.1 million, of which £44.0 million can be carried forward indefinitely and £6.1 million which will begin to expire in 2022. At December 31, 2020, the Group had US state tax losses to be carried forward of approximately £3.3 million which begin to expire in 2027. |
Loss per share
Loss per share | 12 Months Ended |
Dec. 31, 2020 | |
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Loss per share | 10. Loss per share Basic loss per share is calculated by dividing the loss attributable for the year to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. As the net amount attributable to ordinary equity holders of the parent was a loss for the years ended December 31, 2020, 2019 and 2018, the dilutive potential shares are anti-dilutive for the earnings per share calculation. 2020 Loss £’000 December 31, 2020 £ 2019 Loss £’000 December 31, Weighted 2019 £ 2018 Loss £’000 December 31, 2018 £ Basic and diluted (163,628) 338,953,141 (0.48) (34,844) 89,424,476 (0.39) (32,029) 71,144,786 (0.45) The Company operates share option schemes (see Note 24) which could potentially dilute basic earnings per share in the future. As part of a license and option agreement with AstraZeneca (see Note 25) additional future payments of a maximum of 1,349,692 new ordinary shares would be payable on reaching certain clinical milestones. Warrants totaling 162,292,274 were issued in 2020 (2019: 321,444) that could potentially dilute basic earnings per share if converted. The equity-settled transactions were considered to be anti-dilutive as they would have decreased the loss per share and were therefore excluded from the calculation of diluted loss per share. For transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of authorization of these consolidated financial statements, see Note 27. |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2020 | |
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Property, plant and equipment | 11. Property, plant and equipment Right-of-use Right-of-use asset (equipment) Leasehold Office IT equipment Total £’000s £’000s £’000s £’000s £’000s £’000s Cost or valuation At January 1, 2020 11,877 1,024 164 71 116 13,252 Additions — — — — 16 16 Lease modification (10,220 ) 149 — — — (10,071 ) Disposals — — — — — — Currency translation effects 191 (4 ) — — — 187 At December 31, 2020 1,848 1,169 164 71 132 3,384 Depreciation and impairment At January 1, 2020 (996 ) (509 ) (69 ) (30 ) (90 ) (1,694 ) Lease modification 1,482 — — — — 1,482 Depreciation for the year (1,017 ) (514 ) (16 ) (35 ) (17 ) (1,599 ) At December 31, 2020 (531 ) (1,023 ) (85 ) (65 ) (107 ) (1,811 ) Net book value At January 1, 2020 10,881 515 95 41 26 11,558 At December 31, 2020 1,318 146 79 6 25 1,573 Right-of-use Right-of-use asset (equipment) Leasehold Office IT equipment Total £’000s £’000s £’000s £’000s £’000s £’000s Cost or valuation At January 1, 2019 — — 164 31 71 266 Additions — — — 21 21 Transition to IFRS 16 (Leases) 1,237 1,314 — — — 2,551 Acquisition of subsidiary 10,755 — — 58 24 10,837 Disposals — — — (18 ) — (18 ) Adjustment to carrying value — (290 ) — — — (290 ) Currency translation effects (115 ) — — — — (115 ) At December 31, 2019 11,877 1,024 164 71 116 13,252 Depreciation and impairment At January 1, 2019 — — (53 ) (16 ) (48 ) (117 ) Depreciation for the year (996 ) (509 ) (16 ) (14 ) (42 ) (1,577 ) At December 31, 2019 (996 ) (509 ) (69 ) (30 ) (90 ) (1,694 ) Net book value At January 1, 2019 — — 111 15 23 149 At December 31, 2019 10,881 515 95 41 26 11,558 In August 2020, the Group modified the scope of the leased office space in the US included in right-of-use non-lease The Group leases office space and equipment for use in research and development activities. The maturity of lease liabilities are as follows: Within 1 Between Between Over Total £’000s £’000s £’000s £’000s £’000s December 31, 2020 Maturity of lease liabilities 636 753 405 — 1,794 |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2020 | |
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Intangible assets | 12. Intangible assets Acquired £’000s Cost at January 1, 2019 33,005 Additions 12,693 Currency translation effects (171 ) Cost at December 31, 2019 45,527 Disposals (13,386 ) Currency translation 864 Cost at December 31, 2020 33,005 Revision to estimated value at January 1, 2019 (373 ) Revisions to estimated value (698 ) Revision to estimated value at December 31, 2019 (1,071 ) Revision to estimated value (286 ) Revision to estimated value at December 31, 2020 (1,357 ) Net book value at January 1, 2019 32,632 Net book value at December 31, 2019 44,456 Net book value at December 31, 2020 31,648 The Group’s strategy is to acquire and develop clinical-stage development programs for the treatment of oncology and rare diseases. In October 2017, the Group acquired the exclusive license for MPH-966 MPH-966 re-measured During the year the Group did not revise the value of any other intangible assets (2019: £nil). As the intangible assets remain under development, no amortization charge has been recognized (2019: £nil). On April 23, 2019, the Group acquired an intangible asset of £12.7 million following the acquisition of Mereo BioPharma 5, Inc. The intangible asset represented the intellectual property associated with etigilimab and navicixizumab, for which the fair value at acquisition was fully attributed to navicixizumab. On January 13, 2020, the Company entered into a license agreement with OncXerna under which an exclusive worldwide license was granted in respect of intellectual property rights for the development and commercialization of navicixizumab. Under the terms of the license agreement, the Company received an upfront gross payment of £3.1 million ($4 million). The transaction was recorded as a disposal and intellectual property with a carrying value of £13.4 million was derecognized. Consequently, the Group recognized a loss on disposal in the amount of £10.9 million (net of transaction costs) in the year ended December 31, 2020. Pursuant to the license agreement, the Company is entitled to additional payments of up to $302 million, however, no reliable estimate can currently be made of the future amounts to be received as the amounts are contingent on future events that are uncertain, accordingly, these milestone payments have not been recognized in the year ended December 31, 2020. |
Impairment testing of acquired
Impairment testing of acquired development programs not yet available for use | 12 Months Ended |
Dec. 31, 2020 | |
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Impairment testing of acquired development programs not yet available for use | 13. Impairment testing of acquired development programs not yet available for use Acquired development programs not yet available for use are assessed annually for impairment. The carrying amount of acquired development programs is as follows: As at December 31, 2020 2019 £’000s £’000s Acquired development programs Navicixizumab (navi) — 12,522 BSP-804 11,616 11,616 MPH-966 5,835 6,121 BSG-649 9,886 9,886 BCT-197 4,311 4,311 31,648 44,456 The Group considers the future development costs, the probability of successfully progressing each program to product approval and the likely commercial returns after product approval, among other factors, when reviewing for indicators of impairment. The results of this testing did not indicate any impairment of the acquired products’ rights for the year ended December 31, 2020. Management believe that the likelihood of a materially different outcome using different assumptions is remote. The acquired development programs are assets which are not used in commercialized products. These assets have not yet begun to be amortized but have been tested for impairment by assessing their value in use. Value in use calculations for each program are utilized to calculate the recoverable amount. The calculations use pre-tax out-licensed out-licensing when such terms are agreed. Key assumptions for the value in use calculations are described as follows: • Development costs to obtain regulatory approval – costs are estimated net of any contributions expected from collaborative arrangements with future partners. Management have developed cost estimates based on their previous experience and in conjunction with the expertise of their clinical development partners; • Launch dates of products – these reflect management’s expected date of launch for products based on the timeline of development programs required to obtain regulatory approval. The assumptions are based on management’s and clinical development partners’ prior experience; • Probability of successful development – management estimates probabilities of success for each phase of development based on industry averages and knowledge of specific programs; • Out-licensing • Sales projections – these are based on management’s internal projections using external market data and market research commissioned by the Company; • Profit margins and other operational expenses – these are based on the Company’s internal projections of current product manufacturing costings, with input from manufacturing partners where applicable, and estimates of operating costs based on management’s prior industry experience; • Cash flow projections – for all assets, cash flows are assessed over an industry-standard asset life of 20 years; and • Discount rates – the discount rate is estimated on a pre-tax Where an out-licensing At this stage of product development, the key sensitivity for all development programs is the probability of successful completion of clinical trials in order to obtain regulatory approval necessary for commercial sales. Therefore, full impairment of a development program is expected should such clinical trials be unsuccessful. |
Other receivables
Other receivables | 12 Months Ended |
Dec. 31, 2020 | |
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Other receivables | 14. Other receivables December 31, 2020 2019 £’000s £’000s Rent deposit 407 293 VAT recoverable 370 269 Other 239 10 1,016 572 |
Cash and short-term deposits
Cash and short-term deposits | 12 Months Ended |
Dec. 31, 2020 | |
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Cash and short-term deposits | 15. Cash and short-term deposits December 31, 2020 2019 £’000s £’000s Cash 22,922 15,803 Short-term deposits 547 544 23,469 16,347 Short-term deposits are available immediately and earn fixed interest at the respective short-term deposit rates and are held in a diversified portfolio of counterparties. |
Issued capital and reserves
Issued capital and reserves | 12 Months Ended |
Dec. 31, 2020 | |
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Issued capital and reserves | 16. Issued capital and reserves Number of Ordinary share Share Number £’000s £’000s Ordinary share capital As at January 1, 2018 71,094,974 213 118,227 Issued on June 1, 2018 for public offering 50,076 — 150 Issued on August 3, 2018 for exercise of share options 10,000 — 13 Issued on October 22, 2018 for exercise of share options 85,222 1 110 Transaction costs for issued share capital — — (8 ) As at December 31, 2018 71,240,272 214 118,492 Issued on April 23, 2019 for Mereo BioPharma 5, Inc 24,783,320 74 — Issued on June 21, 2019 for conversion of loan note 1,936,030 6 3,953 Transaction costs for issued share capital — — (761 ) As at December 31, 2019 97,959,622 294 121,684 Issued on February 11, 2020 for Securities Purchase Agreement 11,432,925 34 2,287 Issued on February 11, 2020 for Securities Purchase Agreement 2,862,595 9 224 Issued on February 20, 2020 for Securities Purchase Agreement 12,252,715 37 2,267 Issued on June 4, 2020 for private placement of ordinary shares 89,144,630 267 15,244 Transaction costs for issued share capital — — (1,307 ) Issued on June 30, 2020 for conversion of the Loan Notes 125,061,475 375 21,386 Conversion of warrants on December 23, 2020 239,179 1 — As at December 31, 2020 338,953,141 1,017 161,785 Since January 1, 2018, the following alterations to the Company’s share capital have been made. For each share issuance, ordinary shares of £0.003 in nominal value in the capital of the Company were issued. • Under the public offering dated June 1, 2018, the Company issued and allotted 50,076 ordinary shares at a price of £3.00 per share to investors. Gross cash received was £0.2 million; • On August 3, 2018 the Company issued and allotted 10,000 ordinary shares pursuant to an exercise of employee share options; • On October 22, 2018 the Company issued and allotted 85,222 ordinary shares pursuant to an exercise of employee share options; • On April 23, 2019, the Company issued and allotted 24,783,320 ordinary shares as consideration for the acquisition of Mereo BioPharma 5, Inc. The fair value of the ordinary shares, measured on the date of acquisition, was £1.65; • On June 21, 2019, Novartis converted £2.4 million of loan notes dated June 3, 2016 into 1,071,042 ordinary shares at a fixed conversion price of £2.21 per share. Under the terms of the notes, Novartis also received 864,988 bonus shares. • On February 11, 2020, the Company issued and allotted 11,432,925 ordinary shares at a price of £0.20 per share to Aspire Capital Fund, LLC (“Aspire Capital”). Gross cash received was £2.3 million. Aspire Capital has also committed to subscribe for up to an additional $25 million of ordinary shares exchangeable for ADSs from time to time during a 30-month period at the Company’s request. In consideration for this, the Group paid Aspire Capital a commission satisfied through a non-cash transaction wholly by the issue of a further 2,862,595 of the Company’s ordinary shares (equivalent to 572,519 ADSs) • On February 20, 2020, the Company issued and allotted 12,252,715 ordinary shares at a price of £0.19 per share. Gross cash received was £2.3 million; • On June 4, 2020, the Company issued and allotted 89,144,630 ordinary shares at a price of £0.174 per share to investors. Gross cash received was £15.5 million. The ordinary shares were in substance issued at a discount to the gross cash received. The fair value of the consideration of the ordinary shares was determined to be £13.4 million and therefore the ordinary shares were in substance issued at a discount of £2.1 million, which was recorded as a reduction to other reserves (other reserves represent amounts that relate to changes to the Company’s paid up equity and which are not capital reserves) in the consolidated statement of changes in equity. • On June 30, 2020, the Company issued and allotted 125,061,475 ordinary shares at a price of £0.174 per share to investors on conversion of the Loan Notes. The legal proceeds were £21.8 million; • On December 23, 2020, 690,205 Warrants (equivalent to 138,041 ADSs) were exercised. This transaction was completed by way of a cashless exercise resulting in 47,835 ADSs being issued at the aggregate nominal value of Other capital reserves Shares Share- Equity Other Merger Other Total £’000s £’000s £’000s £’000s £’000s £’000s £’000s At January 1, 2018 1,590 14,459 310 — — — 16,359 Share-based payments expense during the year — 2,302 — — — — 2,302 Share-based payments release for exercise of options — (112 ) — — — — (112 ) Issuance of warrants — — — 44 — — 44 At December 31, 2018 1,590 16,649 310 44 — — 18,593 At January 1, 2019 1,590 16,649 310 44 — — 18,593 Acquisition of Mereo BioPharma 5, Inc — — — — 40,818 — 40,818 Shares issued during the year (1,590 ) — — — — — (1,590 ) Convertible loan conversion — — (310 ) — — — (310 ) Share-based payments expense during the year — 1,636 — — — — 1,636 At December 31, 2019 — 18,285 — 44 40,818 — 59,147 At January 1, 2020 — 18,285 — 44 40,818 — 59,147 Share-based payments expense during the period — 1,558 — — — — 1,558 Novartis convertible loan instrument and warrants — — 1,084 — — — 1,084 Conversion of the Loan Notes — — — — — 33,104 33,104 Reclassification of the embedded derivative — — 33,481 — — — 33,481 At December 31, 2020 — 19,843 34,565 44 40,818 33,104 128,374 Shares to be issued At January 1, 2019, a maximum of 864,988 shares were remaining to be issued to Novartis pro-rata On June 21, 2019, the remaining 864,988 shares were issued to Novartis as fully paid up bonus shares for £nil consideration. There were no movement in this reserve in 2020 and the balance on January 1, 2020 and December 31, 2020 were £ nil. Share-based payments The Group has various share option schemes under which options to subscribe for the Group’s shares have been granted to certain executives, non-executive The share-based payment reserve is used to recognize (i) the value of equity settled share-based payments provided to employees, including key management personnel, as part of their remuneration and (ii) deferred equity consideration. Refer to Note 24 for further details. Equity component of convertible loan instrument The convertible loan notes issued to Novartis are a compound instrument consisting of a liability and an equity component. The value of the equity component (cost of the conversion option) as at December 31, 2020 is £1.08 million (December 31, 2019: £nil). On June 30, 2020, the Loan Notes in an aggregate principal amount of £21.8 million (together with accrued interest) were automatically converted into 125,061,475 ordinary shares. This resulted in £33.5 million recognized in other reserves in equity as a difference between the share capital and share premium recognized on conversion and the carrying value of the financial liability extinguished. See Note 17. Other Warrants issued The funding arrangements with The Alpha-1 Merger reserve The consideration paid to acquire Mereo BioPharma 5, Inc . Other reserves On June 30, 2020, the Company issued and allotted 125,061,475 ordinary shares of £0.003 in nominal value in the capital of the Company at a price of £0.174 per share to investors following the partial conversion of the Loan Notes. The legal proceeds were £21.8 million. This resulted in £33.1 million recognized in other reserves as a difference between the carrying value of the financial liability extinguished and the legal proceeds. Accumulated loss Year ended December 31, 2020 2019 2018 £’000s £’000s £’000s Other reserves 5,001 7,000 7,000 Accumulated losses (309,693 ) (146,065 ) (111,221 ) Other reserves represent a capital reduction undertaken in 2016 which created a reserve of £7.0 million. On June 3, 2020 the Company issued and allotted 89,144,630 ordinary shares to investors. The difference between the gross proceeds, £15.5 million, and the fair value of the consideration of the ordinary shares, £13.4 million, of £2.1 million, was recognized as a reduction to other reserves. |
Private Placement
Private Placement | 12 Months Ended |
Dec. 31, 2020 | |
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Private Placement | 17. Private Placement On June 3, 2020, the Company completed a £56 million private placement transaction which comprised of the issuance of 89,144,630 ordinary shares of £0.003 each at a price of £0.174 per share for total proceeds of £15.5 million, and the issue of Tranche 1 convertible loan notes (the “Loan Notes”) for total proceeds of £40.5 million. The investors also received conditional warrants to subscribe for an additional 161,048,366 ordinary shares (the “Warrants”). The terms of the Loan Notes and Warrants, and, in particular, their ability to be converted into ordinary shares was conditional on the passing of certain resolutions (the “Resolutions”) at a subsequent general meeting of shareholders held on June 30, 2020. At that date, the Resolutions were passed, and the Loan Notes became convertible into ordinary shares. Loan Notes The Loan Notes bear interest at a rate of 6% per annum and have an initial maturity date of June 2023. The Loan Notes are convertible into ordinary shares at the discretion of the holder and, if not converted by the initial maturity date, may be extended for an additional seven years, but will cease to bear interest from any extension date. The Loan Notes were initially recognized at their fair value of £38.6 million (debt host instrument in the amount of £26.7 million and the embedded derivative in the amount of £11.9 million, before transaction costs). Loan Notes in an aggregate principle amount of £40.5 million were issued on June 3, 2020 and became convertible upon the passing of the Resolutions. As a result, on June 30, 2020, Loan Notes in an aggregate principal amount of £21.8 million, together with accrued interest, were automatically converted into 125,061,475 ordinary shares, and Loan Notes in an aggregate principal amount of £18.9 million remain outstanding and as of December 31, 2020. See Note 18. Warrants Participants in the private placement transaction received conditional warrants to subscribe for further ordinary shares in an aggregate number equal to 50 percent of both the ordinary shares purchased and the ordinary shares issuable upon conversion of the Loan Notes. A total of 161,048,366 Warrants were issued. The fair value of the warrants at inception was £4.1 million. The Warrants have an exercise price of £0.348 per share and are exercisable at any time until their expiry in June 2023. The Warrants can be exercised for cash or on a cashless basis at the discretion of the warrant holder. Warrants outstanding at the expiry date may be converted into Tranche 2 Notes, with an expiry date of up to seven years from conversion, and do not bear interest. See Note 20. The Loan Notes and the Warrants were recognized as separate financial instruments. Transaction costs directly attributable to the private placement transaction were apportioned across the ordinary shares, Loan Notes and Warrants. |
Interest-bearing loans and borr
Interest-bearing loans and borrowings | 12 Months Ended |
Dec. 31, 2020 | |
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Interest-bearing loans and borrowings | 18. Interest-bearing loans and borrowings Year ended December 31, 2020 2019 £’000s £’000s Convertible loan notes 3,196 — Bank loan — 20,512 Private placement – Loan Notes 12,946 — At December 31 16,142 20,512 Current — 15,139 Non-current 16,142 5,373 Convertible loan notes On February 10, 2020, the Company entered into a convertible equity financing with Novartis Pharma (AG) (“Novartis”) under which Novartis purchased a £3.8 million convertible loan note (the “Novartis Loan Note”). The Novartis Loan Note is convertible at the discretion of the holder, at a fixed price of £0.265 per ordinary share and bears an interest rate of 6% per annum with a maturity date of February 2025. In connection with the Novartis Loan Note, the Company issued 1,449,614 warrants which are exercisable until February 2025 at an exercise price of £0.265. The fair value of the equity components of the Novartis Loan Note at December 31, 2020 was £1.1 million which includes the conversion feature and the warrants. Bank loan On December 15, 2020, the bank loan between the Company and its lenders, Silicon Valley Bank and Kreos Capital V (UK) Limited (the “Lenders”), was repaid in full. Accordingly, the total carrying value of the loan at December 31, 2020 was £ nil (2019: £20.5 million). No non-cash The terms of the bank loan required interest-only payments up until April 30, 2019, and thereafter payments of interest and principle in 23 equal monthly installments through maturity. The bank loan bore interest at an annual fixed rate of 8.5% and was secured by substantially all of the Group’s assets, including intellectual property rights owned or controlled by the Group. Following the repayment of the bank loan, the collateral was released by the Lenders. The bank loan was modified in both 2019 and 2018 and a modification gain of £0.5 million and a modification loss of £0.7 million, respectively, was recognized in the consolidated statement of comprehensive loss on the respective modification dates. Private placement – convertible loan notes The initial issuance of Loan Notes in an aggregate principle amount of £40.5 million were issued on June 3, 2020 and formed part of the private placement transaction (Note 17) were classified as a financial liability on initial recognition. Non-closely The fair value of the embedded derivative liability was £11.9 million on initial recognition and the fair value of the liability component was £24.4 million (net of transaction costs). During the year, between initial recognition and the passing of the Resolutions (note 17), changes in the fair value of the embedded derivative totaling £63.2 million were recognized as an expense in the consolidated statement of changes in comprehensive income. The Loan Notes were not convertible until certain Resolutions were passed at the Company’s general meeting on June 30, 2020, following which Loan Notes in an aggregate principal amount of £21.7 million (together with accrued interest) were automatically converted into 125,061,475 ordinary shares. Accordingly, a reduction in interest bearing loans of £13.3 million together with the derecognition of the embedded derivative relating to the conversion feature (£41.6 million) was recognized; no gain or loss recognized on conversion. The remaining portion of the embedded derivative relating to the conversion feature attributable to the Loan Notes outstanding (£33.5m) was reclassified to equity to reflect the effective change in the terms of the feature following the passing of the Resolutions. The movements in the carrying value of the liability component of the Loan Notes is included in the table below: Year ended December 31, 2020 2019 £’000s £’000s Liability component at date of issue (net of transaction costs) 24,417 — Interest charged (using effective interest rate) 1,803 — Converted to equity (13,274 ) — Carrying amount of liability component 12,946 — The movements in the carrying value of the embedded derivative relating to the conversion feature is included in the table below: Year ended December 31, 2020 2019 £’000s £’000s January 1 — — Arising during the year 11,913 — Change in fair value 63,158 — Reclassified to equity (75,071 ) — December 31 — — The change in fair value of the embedded derivative liability represents an unrealized loss (recognized within fair value changes on derivative financial instruments held at FVTPL) in the consolidated statement of comprehensive loss. The fair value of the embedded derivative was determined by comparing the fair value of the hybrid instrument and the fair value of the host debt, which excludes the conversion features, using a discounted cash flow model as well as Black-Scholes model for the hybrid contract. Inputs into the models used to fair value the embedded derivative at inception (June 3, 2020), at conversion (June 30, 2020) and at the balance sheet date are as follows: December 31, 2020 June 30, 2020 June 3, 2020 Expected volatility (%) — 61 61 Risk-free interest rate (%) — 0.19 0.27 Credit spread % — 1.8 6 2.01 Expected life of share options (years) — 3 3 Market price of ordinary shares (£) — 0.46 0.19 Probability of resolutions passing (%) — 100 90 Models used — Discounted cash flow/Black-Scholes Discounted cash flow/Black-Scholes Volatility was estimated by reference to the one-month |
Provisions
Provisions | 12 Months Ended |
Dec. 31, 2020 | |
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Provisions | 19. Provisions Year ended December 31, 2020 2019 £’000s £’000s Social security contributions on vested share options 109 104 Provision for deferred cash consideration 1,525 1,654 At December 31 1,6 3 1,758 Current 41 8 309 Non-current 1,2 16 1,449 Social security Deferred cash £’000s £’000s At January 1, 2019 842 2,131 Arising during the year — — Released (738 ) — Increase in provision due to the unwinding of the time value of money — 221 Decrease in provision due to a change in estimates relating to timelines and probabilities of contractual milestones being achieved (Note 12) — (698 ) At December 31, 2019 104 1,654 Arising during the year 5 — Increase in provision due to the unwinding of the time value of money — 157 Decrease in provision due to a change in estimates relating to timelines and probabilities of contractual milestones being achieved (revision to intangible asset, see Note 12) — (286 ) At December 31, 2020 109 1,525 Current — 309 Non-current 109 1,216 The provision for social security contributions on share options is calculated based on the number of vested options outstanding at the reporting date that are expected to be exercised. The provision is based on the estimated taxable gain arising on exercise of the share options, using the best estimate of the market price at the balance sheet date. The provision has been classified as non-current The deferred cash consideration is the estimate of the quantifiable but not certain future cash payment obligations due to AstraZeneca for the acquisition of certain assets (see Note 1 2 |
Warrant liability
Warrant liability | 12 Months Ended |
Dec. 31, 2020 | |
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Warrant liability | 20. Warrant liability Year ended December 31, 2020 2019 £’000s £’000s January 1 131 1,006 Issued during the year 4,080 131 Settled during the year (127 ) — Fair value changes during the year 46,691 (1,006 ) At December 31 50,775 131 The change in fair value of the warrant liability disclosed above represents an unrealized loss. Warrants – private placement As a part of the private placement transaction on June 3, 2020, the participating investors received conditional Warrants entitling them to subscribe for an aggregate of 161,048,366 ordinary shares. The Warrants were conditional on the Resolutions being passed at the general meeting on June 30, 2020. On the passing of the Resolutions, the Warrants entitled the investors to subscribe for ordinary shares at an exercise price of £0.348 per Warrant and are exercisable until June 2023. The Warrants are classified as liabilities as the Group does not have an unconditional right to avoid redeeming the instruments for cash. The fair value of the warrant liability was £4.1 million on initial recognition and was £49.9 million as of December 31, 2020. The change in the fair value of £46.0 million was recognized as an expense in the consolidated statement of comprehensive loss. As of December 31, 2020, 690,205 Warrants (equivalent to 138,041 ADSs) were exercised. This transaction was completed by way of a cashless exercise resulting in 47,835 ADSs being issued at the aggregate nominal value of the ordinary shares underlying the ADSs issued, in place of the exercise price of £ 0.348 Warrants – bank loan Pursuant to the terms of its loan facility, the Company issued warrants to the Lenders constituted by Warrant Instruments dated August 21, 2017 and October 1, 2018 (the “Warrant Instruments”). The terms of the Warrant Instruments allow for a cashless exercise and provide for ‘adjustment’ of the warrants in the event that the Company takes certain corporate actions, including issuing further equity securities or effecting a consolidation/subdivision of its shares, among others. There have been several adjustments to the Warrants Instruments to date to address issuances of shares by the Company, and in each case the prior adjustment has taken the form of an issue of additional warrants to the Lenders. At December 31, 2018, as part of the bank loan facility, the Company had issued 922,464 warrants to its lenders giving them the right to subscribe for ordinary shares at a range of exercise prices between £2.31 and £3.30. In 2019, the Company issued a further 321,444 warrants giving the counterparties the right to subscribe for ordinary shares at an exercise price of £2.95. In December 2020, the Company issued a further 1,243,908 warrants giving the Lenders the right to subscribe for ordinary shares at an exercise price of $0.4144. At December 31, 2020 the fair value of the warrants was £0.8 million (2019: £0.1 million). There were no warrants exercised as at December 31, 2020. Total outstanding warrants At December 31, 2020, a total of 162,845,977 warrants are outstanding. The warrants outstanding are equivalent to 48% of the ordinary share capital of the Company. The weighted average inputs to the Black-Scholes models used for the fair value of warrants granted during the year ended December 31 are as follows: Year ended December 31, 2020 2019 Expected volatility (%) 84-85 67 Risk-free interest rate (%) 0.25-(0.05) 1.26 Expected life of warrants (years) 3 10.0 Market price of ADS ($)/ordinary shares (£) $ 3.58 £ 0.83 Model used Black-Scholes Black-Scholes The contractual life of the options was used in calculating the expense for the year as there is no historical data in relation to the expected life of the warrants. Following cancellation of admission of the Company’s ordinary shares to trading on the AIM market of London Stock Exchange plc in December 2020, the market price of ADSs that are publicly traded on the Nasdaq Global Market was used to calculate the fair value of the warrants at December 31, 2020. Volatility was estimated by reference to the six-month The fair value of Warrants issued as part of the private placement transaction on June 3, 2020 were measured using a Black-Scholes |
Trade and other payables
Trade and other payables | 12 Months Ended |
Dec. 31, 2020 | |
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Trade and other payables | 21. Trade and other payables Year ended December 31, 2020 2019 £’000s £’000s Trade payables 3,165 6,148 Social security and other taxes 146 183 Other payables 22 21 At December 31 3,333 6,352 Trade and other payables are non-interest bearing and have an average term of one month. |
Changes in liabilities arising
Changes in liabilities arising from financing activities | 12 Months Ended |
Dec. 31, 2020 | |
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Changes in liabilities arising from financing activities | 22. Changes in liabilities arising from financing activities Contingent Lease Bank Novartis Warrant Deferred cash consideration Convertible notes – Other Total £’000s £’000s £’000s £’000s £’000s £’000s £’000s £’000s £’000s Carrying value At January 1, 2019 — — 19,446 2,038 1,005 2,131 — 34 24,654 Adoption of IFRS 16 (Leases) — 2,534 — — — — — — 2,534 Financing cash flows — (2,212 ) (1,739 ) — — — — — (3,951 ) Changes in foreign exchange — (131 ) — — — — — — (131 ) Changes in fair values 354 — — — (874 ) (477 ) — 10 (987 ) Interest expense — 1,314 3,262 20 — — — — 4,596 Gain on modification — — (457 ) — — — — — (457 ) Issuance of equity — — — (2,058 ) — — — — (2,058 ) Acquisition of subsidiary — 10,689 — — — — — — 10,689 Lease term reassessment — (290 ) — — — — — — (290 ) Carrying value at December 31, 2019 354 11,904 20,512 — 131 1,654 — 44 34,599 Settled during the year (354 ) — (23,412 ) — (127 ) — — — (23,893 ) Financing cash flows — (2,086 ) — 2,758 — — 36,330 18 37,020 Issuance of warrants — — — — 4,080 — — 4,080 Interest expense — 1,085 2,900 438 — — 1,803 — 6,226 Lease modification — (9,547 ) — — — — — — (9,547 ) Changes in fair values — — — — 46,691 (129 ) 63,158 — 109,720 Changes in foreign exchange — 438 — — — — — — 438 Reclassified to equity — — — — — — (88,345 ) — (88,345 ) Carrying value at December 31, 2020 — 1,794 — 3,196 50,775 1,525 12,946 62 70,298 |
Financial and capital risk mana
Financial and capital risk management and fair value measurement | 12 Months Ended |
Dec. 31, 2020 | |
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Financial and capital risk management and fair value measurement | 23. Financial and capital risk management and fair value measurement 23.1 Capital risk management The Group’s objectives when managing capital are to safeguard the ability to continue as a going concern and ensure that sufficient capital is in place to fund the Group’s R&D activities and operations. The Group’s principal method of adjusting the capital available is through issuing new shares or arranging suitable debt financing, including issuance of related warrants. The Group’s share capital and share premium are disclosed in Note 16. The Group’s loans are disclosed in Note 18. The Group monitors the availability of capital with regards to its committed and forecasted future expenditure on an ongoing basis. The Group has set up an Employee Benefit Trust which currently holds ADSs to satisfy exercises of options under the Company’s share option schemes (see Note 26). 23.2 Financial risk management objectives and policies The Group seeks to maintain a balance between equity capital and convertible and secured debt to provide sufficient cash resources to execute the business plan. In addition, the Group maintains a balance between cash held on deposit and short-term investments in pound sterling and other currencies to reduce its exposure to foreign exchange fluctuations in respect of its planned expenditure. Group’s principal financial instruments comprise warrants, convertible loan notes and trade payables which arise directly from its operations. The Group has various financial assets, including receivables and cash and short-term deposits. Interest rate risk The Group’s policy in relation to interest rate risk is to monitor short and medium-term interest rates and to place cash on deposit for periods that optimize the amount of interest earned while maintaining access to sufficient funds to meet the cost of is operating activities and future research and development activities. Prior to the repayment of the bank loan in full in December 2020, the interest payable was fixed. Consequently, there is no material exposure to interest rate risk in respect of interest payable. Foreign currency risk The Group currently has no revenue. The majority of operating costs are denominated in pound sterling, US dollars and Euros. Funding to date has been secured in a mixture of pound sterling and US dollars and therefore a level of natural hedging exists in respect of operating costs. Foreign exchange risk arises from R&D activities, commercial transactions and recognized assets and liabilities in foreign currencies. Credit and liquidity risks The Group’s policy is to deposit funds with multiple highly rated banks and financial institutions and also seeks to diversify its investments where this is consistent with achieving competitive rates of return. The Group’s liquid resources are invested with regard to the timing of payments to be made in the ordinary course of business. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Group’s Board of Directors on an annual basis and may be updated throughout the year subject to approval of the Group’s Audit and Risk Committee. The Group’s maximum exposure to credit risk for the components of the balance sheet at December 31, 2020 are the carrying amounts. The Group does not face a significant liquidity risk with regards to its lease liabilities. The Group monitors its funding requirements through preparation of short-term, mid-term and long-term forecasts. 23.3 Fair value hierarchy Fair value measurement using Date of valuation Total Quoted prices Significant Significant £’000s £’000s £’000s £’000s Liabilities measured at fair value Provision for deferred cash consideration (Note 19) December 31, 2020 1,525 — — 1,525 Warrant liability (Note 20) December 31, 2020 50,775 — 845 49,930 Fair value measurement using Date of valuation Total Quoted prices Significant Significant £’000s £’000s £’000s £’000s Liabilities measured at fair value Provision for deferred cash consideration (Note 19) December 31, 2019 1,654 — — 1,654 Provision for contingent consideration December 31, 2019 354 — — 354 Warrant liability (Note 20) December 31, 2019 131 — 131 — Liabilities for which fair values are disclosed Bank loan (Note 18) December 31, 2019 20,512 — 20,512 — There were no transfers between Level 1 and Level 2 during the years ended December 31, 2020 and 2019. The carrying values of financial assets and financial liabilities are recorded at amortized cost in the consolidated financial statements are approximately equal to their fair values. The following table presents the changes in Level 3 items for the periods ended December 31, 2020 and December 31, 2019: Provision for Provision for £’000s £’000s January 1, 2019 2,131 — Unwinding of the time value of money (recognized as a finance cost) 221 — Change in estimate relating to probabilities (revision to intangible asset, see Note 12) (698 ) — Change in estimate relating to probabilities (recognized as an administrative expense) — 354 December 31, 2019 1,654 354 January 1, 2020 1,654 354 Settled during the year — (354 ) Unwinding of the time value of money (recognized as a finance cost) 157 — Change in estimate relating to probabilities (revision to intangible asset, see Note 12) (286 ) — Change in estimate relating to probabilities (recognized as an administrative expense) — — December 31, 2020 1,525 — The following methods and assumptions were used to estimate the fair values: • The warrant liability is estimated using a Black-Scholes model, taking into account appropriate amendments to inputs in respect of volatility, remaining expected life of the warrants, cost of capital, probability of success and rates of interest at each reporting date. • The fair value of the provision for deferred cash consideration is estimated by discounting future cash flows using rates currently available for debt on similar terms and credit risk. In addition to being sensitive to a reasonably possible change in the forecast cash flows or the discount rate, the fair value of the deferred cash consideration is also sensitive to a reasonably possible change in the probability of reaching certain milestones. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value. • At December 31, 2020, the Group estimates the fair value of the contingent consideration liability to be £nil. An amount of £0.4 million was paid during the year relating to the Navi milestone received. The estimated contingent consideration payable is based on a risk-adjusted, probability-based scenario. Under this approach the likelihood of future payments being made to the former shareholders of Mereo BioPharma 5, Inc. under the CVR arrangement is considered. The estimate could materially change over time as the development plan and subsequent commercialization of the Navi product progresses. The significant unobservable inputs used in the fair value measurements categorized within Level 3 of the fair value hierarchy, together with a quantitative sensitivity analysis as at December 31, 2020 and 2019 are as follows: Valuation technique Significant unobservable inputs Input range (weighted average) Sensitivity of the input to fair value Provision for deferred cash consideration DCF WACC 2020: 12% 1% increase/decrease would result in a decrease/increase in fair value by £25,000 WACC 2019: 15.3% 1% increase/decrease would result in a decrease/increase in fair value by £33,000 Probability of success 2020: 13.8%–95% 10% increase/decrease would result in an increase/decrease in fair value by £0.4 million Probability of success 2019: 15.8%–95% 10% increase/decrease would result in an increase/decrease in fair value by £0.3 million Contingent consideration liability DCF Ongoing uncertainty in the clinical development of the Navi product Not applicable Total potential payments future payments relating to the contingent consideration liability on a gross, undiscounted basis are approximately $80million. Regulatory approval and commercialisation risks Sensitivity of the input to fair value is primarily driven by uncertainty in the clinical development of the Navi product. Future potential payments under the CVR arrangement are contingent on i) future development milestones and ii) future sales of the Navi product, following regulatory approval and commercialization. In January 2020, the Company entered into the licence agreement as detailed in Note 13. Although pursuant to the licence agreement the Company is entitled to additional payments of up to $302 million, there is still significant uncertainty that exist in respect of any milestone and royalty payments under the licence agreement. Warrant liability related to the private placement Black- Scholes model Expected volatility 2020: 85.1% Volatility was estimated by reference to the six-month historical volatility of the historical share price of the Company. If the volatility is increased to 93.8% based on three-month historical volatility, the carrying value of the warrants as of December 31, 2020 would increase to £52.9 million. 23.4 Liquidity risk The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments at December 31, 2020: Payments due by period Up to 1 year 1–3 years 3–5 years Over 5 years Total £’000s £’000s £’000s £’000s £’000s Leases 849 960 448 – 2,257 Trade and other payables (Note 21) 3,333 – – – 3,333 4,182 960 448 – 5,590 The Group may incur potential payments upon achievement of clinical, regulatory and commercial milestones, as applicable, or royalty payments that may be required to be made under license agreements the Group entered into with various entities pursuant to which the Group has in-licensed time and no such amounts are included here in. 23.5 Market risk The functional currency of the Company and all subsidiaries is pound sterling except for Mereo BioPharma 5, Inc. whose functional currency is US dollars. The Group incurs expenditures in foreign currencies and is exposed to the risks of foreign exchange rate movements, with the impact recognized in the consolidated statement of comprehensive loss. The Group seeks to minimize this exposure by passively maintaining foreign currency cash balances at levels appropriate to meet foreseeable foreign currency expenditures. The Group does not hedge potential future cash flows or income. The table below shows analysis of the pound sterling equivalent of period-end Year ended December 31, 2020 2019 Cash: Pound sterling 17,809 2,525 US dollars 5,586 13,807 Swiss francs 9 11 Euro 65 4 23,469 16,347 The table below shows those transactional exposures that give rise to net currency gains and losses recognized in the consolidated statement of comprehensive income. Such exposures comprise the net monetary assets and monetary liabilities of the Group that are not denominated in the functional currency of the relevant Group entity. As at December 31, these exposures were as follows: Year ended December 31, 2020 2019 Net foreign currency assets/(liabilities): US dollars 4,088 (219 ) Swiss francs 9 (6 ) Euro (513 ) (812 ) 3,584 (1,037 ) The most significant currencies in which the Group transacts, other than pound sterling, are the US dollar and the Euro. The Group also transacts in other currencies as necessary. The following table illustrates the sensitivity to a 10% weakening or strengthening in the period-end Year ended December 31, 2020 US dollar Euro Net foreign currency assets/(liabilities) £ ’000s £ ’000s Loss before tax (372 ) 47 Equity (372 ) 47 Year ended December 31, 2019 US dollar Euro Net foreign currency assets/(liabilities) £ ’000s £ ’000s Loss before tax 20 74 Equity 20 74 |
Share-based payments
Share-based payments | 12 Months Ended |
Dec. 31, 2020 | |
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Share-based payments | 24. Share-based payments The charge for share-based payments under IFRS 2 arises across the following schemes: Year ended December 31, 2020 2019 2018 £’000s £’000s £’000s 2019 Equity Incentive Plan 922 635 – 2019 NED Equity Incentive Plan 167 160 – 2015 Plan 3 63 806 Mereo BioPharma Group plc Share Option Plan 376 685 1,064 Long Term Incentive Plan 90 93 320 Deferred Bonus Share Plan – – – 1,558 1,636 2,190 24.1 2019 Equity Incentive Plan (“EIP”) and 2019 Non-Executive The 2019 EIP and 2019 NED EIP were adopted on April 4, 2019. The 2019 EIP provides for the grant of market value options over ADSs (each ADS is represented by 5 ordinary shares) to executive directors and employees. The 2019 NED EIP provides for the grant of market value options over ADSs to non-executive During the year, market value options were granted to executive directors and employees under the 2019 EIP. Subject to the executive director or employees continued employment, one-fourth During the year, market value options were granted to non-executive one-year The fair value of share options granted were estimated at the date of grant using a Black-Scholes pricing model, taking into account the terms and conditions upon which the share options were granted. The fair value calculation does not include any allowance for dividends as the Company has no available profits for distribution. The exercise price of the share options will be equal to the market price of the underlying shares on the date of grant. The contractual term of the share options is 10 years. Movements during the year The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, options for the 2019 EIP and 2019 NED EIP during the year: 2020 EIP 2020 NED EIP Options WAEP $ Options Number WAEP $ Outstanding at January 1, 2020 798,050 4.29 77,000 4.2 Granted during the year 1,167,836 2.00 77,000 1.84 Cancelled during the year (406 ) 5.4 — — Forfeited during the year (397,607 ) 2.87 (4,584 ) 1.84 Exercised during the year — — — — Outstanding at December 31 1,567,873 2.94 149,416 3.06 Exercisable at December 31, 2020 259,829 4.42 138,412 3.15 2019 EIP 2019 NED EIP Options WAEP $ Options WAEP $ Outstanding at January 1, 2019 — — — — Granted during the year 801,200 4.29 77,000 4.2 Cancelled during the year (3,150 ) 5.4 — — Forfeited during the year — — — — Exercised during the year — — — — Outstanding at December 31 798,050 4.29 77,000 4.2 Exercisable at December 31 — — 38,478 4.2 The weighted average remaining contractual life for the share options outstanding as at December 31, 2020 was 8.9 years (2019: 9.5 years ). The weighted average fair value of options granted during the year was $2.23 per ADS or £0.33 per ordinary share (2019: £0.49 per ordinary share). Options outstanding at the end of the year had an exercise price of between $5.40 and $1.84. 24.2 The 2015 Plan Under the Mereo BioPharma Group Limited Share Option Plan (the “2015 Plan”), the Group, at its discretion, granted share options to employees, including executive management and NEDs. Share options vest over four years for executive management and employees and over three years for NEDs. No further share option grants are envisaged under the 2015 Plan. At January 1, 2020 and December 31, 2020 there were 8,923,600 (2019: 8,923,600) options outstanding with a WAEP of £1.32. There were no movements in the number of options in 2020. In 2019, 59,533 options with a WAEP of £1.29 were forfeited. All outstanding shares were exercisable at December 31, 2020 (2019: 8,901,478) with a WAEP of £1.32. The weighted average remaining contractual life for the share options outstanding as at December 31, 2020 was 4.6 years (2019: 5.6 years). Options outstanding at the end of the year had an exercise price of between £1.26 and £2.17. 24.3 The Mereo BioPharma Group plc Share Option Plan The Mereo BioPharma Group plc Share Option Plan (“Share Option Plan”) provides for the grant of options to acquire ordinary shares to employees, executive directors and executive officers. Options may be granted to all eligible employees on commencement of employment and may be granted on a periodic basis after that. Under the Share Option Plan, the Board of Directors may determine if the vesting of an option will be subject to the satisfaction of a performance condition. Following the introduction of the EIP and NED EIP, no further share option grants under the Share Option Plan are envisaged. Movements during the year The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, options for the Option Plan during the year: 2020 2019 Number WAEP £ Number WAEP £ Outstanding at beginning of the year 1,524,065 3.07 1,881,555 3.10 Granted during the year — — — — Cancelled during the year — — — — Forfeited during the year (112,670 ) 3.03 (357,490 ) 3.21 Outstanding at December 31 1,411,395 3.14 1,524,065 3.07 Exercisable at December 31 1,210,410 3.01 40,141 3.03 The weighted average remaining contractual life for the share options outstanding as at December 31, 2020 was 6.6 years (2019: 7.6 years). Options outstanding at the end of the year had an exercise price of between £2.71 and £3.19. 24.4 Long Term Incentive Plan Under the Company’s Long Term Incentive Plan (LTIP), initiated in 2016, the Group, at its discretion, may grant nil-cost The fair value of the LTIP Share Price Element is estimated at the date of grant using a Monte Carlo pricing model, taking into account the terms and conditions upon which the share options were granted. The fair value of the LTIP Strategic Element is estimated at the date of grant using a Black-Scholes pricing model, taking into account the terms and conditions upon which the share options were granted, and the expense recorded is based upon the expected level of achievement of non-marked The fair value calculations do not include any allowance for dividends as the Company has no available profits for distribution. The contractual term of the LTIP options is five years. The expense recognized for employee services received during the year to December 31, 2020 was £0.1 million (2019: £0.1 million). 2020 2019 2018 Granted during the year — — — Cancelled during the year — — — Lapsed during the year (427,324 ) (241,374 ) — Outstanding at December 31 482,748 910,072 1,151,446 Exercisable at December 31 — — — The weighted average remaining contractual life for the LTIP options outstanding as at December 31, 2020 was 0.5 years (2019: 0.9 years). The weighted average fair value of LTIP options granted during the year to December 31, 2020 was £nil (2019: £nil). No LTIP options were granted during the years ended December 31, 2019 and 2020. 24.5 Deferred Bonus Share Plan Under the previous terms of the Company’s Deferred Bonus Share Plan (DBSP), 30% of the annual bonus for 2017 for the senior management team was payable in deferred shares, which are governed by the DBSP plan rules. At the date of grant of the awards, the monetary bonus amount was divided by the closing share price to give the number of shares issued to the employee under the DBSP. The number of shares is fixed and not subject to adjustment between the issue date and vesting date. Under the DBSP, awards vest after three years from the date of the award. There are no further performance conditions attached to the award, nor any service conditions (including no requirement for continued employment once the awards have been made). Since the awards are issued at nil cost, they will be satisfied by the issue of ADSs from the Employee Benefit Trust. There were no movements in the number of DBSP options in 2020 or 2019. The outstanding number of options as at December 31, 2020 is 163,000 (2019: 163,000), of which 62,170 were exercisable (2019: nil). The weighted average remaining contractual life for the DBSP options outstanding as at December 31, 2020 was 0.6 years (2019: 1.6 years). For the 2018 and 2019 financial years, under the Deferred Bonus Plan (“2019 DBP”), 100% of the annual bonus was paid in cash, of which 30% of amounts granted to the senior management team (after deduction of income tax and the relevant employee’s national insurance contributions) was required to be utilized to acquire shares in the Company in the open market within 12 months of the grant of the award. No further grants under the DBSP are envisaged. 24.6 Deferred equity consideration In October 2017, the Company’s wholly owned subsidiary Mereo BioPharma 4 Limited entered into an exclusive license and option agreement (the “License Agreement”) to obtain from AstraZeneca an exclusive worldwide, sub-licensable MPH-966, Under the agreement with AstraZeneca, the Company may issue up to 1,349,693 ordinary shares which are dependent on achieving certain milestones. In respect of milestones that are probable, the Group has accounted for, but not yet issued, 429,448 ordinary shares with a grant date fair value of £3.10, representing a value of £1.3 million. 24.7 Weighted average inputs The following tables list the weighted average inputs to the models used for the fair value of share options granted during the year ended December 31, 2020: EIP 2019 grants NED EIP 2019 Expected volatility (%) 67 68 Risk-free interest rate (%) 0.59 0.64 Expected life of share options (years) 10 10 Market price of ADS’s ($) 1.99 1.84 Model used Black Scholes Black Scholes During the year ended December 31, 2020, no grants were issued under any other scheme. The following tables list the weighted average inputs to the models used for the fair value of share options granted during the year ended December 31, 2019: EIP 2019 grants NED EIP 2019 Expected volatility (%) 66 66 Risk-free interest rate (%) 0.95 0.97 Expected life of share options (years) 10 10 Market price of ordinary shares (£) 0.66 0.63 Model used Black Scholes Black Scholes During the year ended December 31, 2019, no grants were issued under any other scheme. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2020 | |
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Commitments and contingencies | 25. Commitments and contingencies 25.1 Group as a lessee Information relating to the Group as a lessee can be found in Note 11 (Property, Plant and Equipment) and Note 23 (Financial and capital risk management). 25.2 Operating lease arrangements Operating leases, in which the Group was the sublessor, related to a portion of an office leased by the Group, with lease terms of between one to two years. One of the subleases had an automatic extension on a month-to-month The maturity analysis of payments receivable by the Group in its capacity as sublessor is disclosed below: December 31, 2020 2019 Within one year — 552 After one year but not more than five years — — More than five years — — — 552 The Group did not have any leasing arrangements classified as finance leases as of December 31, 2020 and 2019. 25.3 Financial commitments Each of Mereo BioPharma 1 Limited, Mereo BioPharma 2 Limited and Mereo BioPharma 3 Limited (together, the “Subsidiaries”) issued to Novartis loan notes (which were assigned by Novartis to the Company in exchange for ordinary shares pursuant to the Subscription Agreement) and each of the Subsidiaries agreed to make future payments to Novartis comprising amounts equal to ascending specified percentages of tiered annual worldwide net sales (beginning at high single digits and reaching into double digits at higher sales) by such Subsidiary of products that include the assets acquired. The levels of ascending percentages of tiered annual worldwide net sales are the same for each Subsidiary under the respective Purchase Agreements. Each Subsidiary further agreed that in the event it transfers, licenses, assigns or leases all or substantially all of its assets, it will pay Novartis a percentage of the proceeds of such transaction. The Company will retain the majority of the proceeds from such a transaction. Such percentage is the same for each Subsidiary under the respective Purchase Agreements. The payment of a percentage of proceeds is not payable with respect to any transaction involving equity interests of Mereo BioPharma Group plc, a merger or consolidation of Mereo BioPharma Group plc, or a sale of any assets of Mereo BioPharma Group plc. In October 2017, the Group’s wholly owned subsidiary Mereo BioPharma 4 Limited entered into an exclusive license and option agreement (“the License Agreement”), to obtain from AstraZeneca an exclusive worldwide, sub-licensable MPH-966, MPH-966. sub-licensing licensed-product-by-licensed-product country-by-country The License Agreement will expire on the expiry of the last-to-expire |
Related party disclosures
Related party disclosures | 12 Months Ended |
Dec. 31, 2020 | |
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Related party disclosures | 26. Related party disclosures 26.1 Compensation of key management personnel of the Group The remuneration of key management personnel of the Group is set out below in aggregate: Year ended December 31, 2020 2019 2018 £’000s £’000s £’000s Short-term benefits 4,479 3,488 3,176 Post-employment benefits 144 64 60 IFRS 2 share-based payment charge 875 1,152 1,470 Total compensation paid to key management personnel 5,498 4,704 4,706 The amounts disclosed in the table above are the amounts recognized as an expense during the reporting period related to key management personnel. In 2020, key management personnel of the Group consisted of executive directors (the Chief Executive Officer and Chief Financial Officer – until July 2020), non-executive 26.2 Employee Benefit Trust In 2016 the Company set up an Employee Benefit Trust (“EBT”). The EBT holds ADS’s to satisfy the exercise of options under the Company’s share-based incentive schemes (Note 24). No funding was loaned to the EBT by the Company during the year ended December 31, 2020 (2019: £1.0 million). During the year ended December 31, 2020, 7 ordinary shares were purchased by the EBT (2019: 1,074,274). In December 2020, the EBT Converted its ordinary shares into 247,456 ADSs which it holds along with £21,762 as of December 31, 2020 and 2019. |
Events after the reporting peri
Events after the reporting period | 12 Months Ended |
Dec. 31, 2020 | |
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Events after the reporting period | 27. Events after the reporting period 27.1 Ultragenyx collaboration agreement On December 17, 2020, the Company announced a license and collaboration agreement with Ultragenyx for setrusumab, a monoclonal antibody in clinical development for OI. The agreement, which was subject to Hart-Scott-Rodino Antitrust Improvements Act 1976 (HSR) review completed on January, 25, 2021. Under the terms of the collaboration, Ultragenyx will lead future global development of setrusumab in both pediatric and adult patients. The Company granted Ultragenyx an exclusive license to develop and commercialize setrusumab in the U.S. and rest of the world, excluding Europe where the Company will retain commercial rights. Under the terms of the agreement, Ultragenyx made an upfront payment of £36.5 million ($50 million) in January 2021. Ultragenyx will also fund global development of the program until approval, and has agreed to pay a total of up to $254 million in contingent payments upon achievement of certain clinical, regulatory, and commercial milestones. Ultragenyx will pay tiered doubledigit percentage royalties to Mereo on net sales outside of Europe and Mereo will pay a fixed double digit percentage royalty to Ultragenyx on net sales in Europe. As the license and collaboration agreement became effective in January 2021, no revenue was recognized in the year ended December 31, 2020. As a consequence of the license and collaboration agreement with Ultragenyx and in accordance with terms of the agreement with Novartis as set out in Note 25.3, the Company made a payment to Novartis of approximately £7.3 million ($10 million). As the agreement was not effective until January 2021, a provision for this payment was not recognized in the year ended December 31, 2020. 27.2 Public offering of American Depository Shares On February 12, 2021, the Company announced an underwritten public offering of 39,675,000 American Depositary Shares, at a public offering price of $2.90 per ADS. Each ADS represents five ordinary shares of the Company. The aggregate gross proceeds to the Company from the offering, before deducting underwriting discounts and commissions and offering expenses were $115.1 million. The net proceeds, after transaction costs were £78.3 million ($108.2 million). |
Significant accounting polici_2
Significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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Basis of preparation | 2.1 Basis of preparation The Group’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The consolidated financial statements are presented in pound sterling (“£”), which is the presentational currency of the Group. The functional currencies of consolidated subsidiaries are pound sterling and US dollars (“$”). All amounts disclosed in the consolidated financial statements and notes have been rounded to the nearest thousand, unless otherwise stated. |
Basis of consolidation | 2.2 Basis of consolidation The consolidated financial information comprises the financial statements of Mereo BioPharma Group plc and its subsidiaries as at December 31, 2020. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealized gains on transactions between Group companies are eliminated in preparing the consolidated financial statements. Accounting policies of subsidiaries are consistent with the policies adopted by the Group. The Company has an employee share trust to facilitate share transactions pursuant to employee share schemes. Although the trust is a separate legal entity from the Group, it is consolidated into the Group’s results in accordance with the IFRS 10 rules on special purpose vehicles. The Company is deemed to control the trust principally because the trust cannot operate without the funding the Group provides. |
Segmental information | 2.3 Segmental information The Group has one operating segment. The Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer. The Group has a single portfolio of product candidates, with only direct research and development expenses monitored at a product candidate level. The CODM makes decisions over resource allocation at an overall portfolio level and the Group’s financing is managed and monitored on a consolidated basis. Following the acquisition of Mereo BioPharma 5, Inc. (formerly OncoMed Pharmaceuticals, Inc. or “OncoMed”) in 2019, non-current assets held by the Group are located in the United Kingdom and United States. As at December 31, 2020, approximately £0.5 million (2019: £22.4 million) of non-current assets are located in the United States. |
Going concern | 2.4 Going concern The Group expects to incur significant operating losses for the foreseeable future as it continues its research and development efforts, seeks to obtain regulatory approval of its product candidates and pursues any future product candidates the Group may develop. As a result of these anticipated expenditures, the Group will need additional financing to support its continuing operations. Until such time as the Group can generate significant revenue from product sales, or other commercialization revenues, if ever, in respect of its oncology or rare disease product candidates or through partnering and/or out-licensing deals for its non-core disease product candidates, the Group will seek to finance its operations through a combination of public or private equity or debt financings or other sources. In February 2021, the Group completed a public offering of American Depository Shares (“ADSs”) and raised gross proceeds of $115.1 million (Note 27). This funding, together with the Group’s existing funds, will enable the Group to meet its liabilities as they fall due for the foreseeable future and at least 12 months. Therefore, the Group continues to adopt the going concern basis of accounting in preparing these consolidated financial statements. |
Research and development | a) Research and development (R&D) costs Expenditure on product development is capitalized as an intangible asset and amortized over the expected useful economic life of the product candidate concerned. Capitalization commences from the point at which technical feasibility and commercial viability of the product candidate can be demonstrated and the Group is satisfied that it is probable that future economic benefits will result from the product candidate once completed. Capitalization ceases when the product candidate receives regulatory approval for launch. No such costs have been capitalized to date. Expenditure on R&D activities that do not meet the above criteria, including ongoing costs associated with acquired intellectual property rights and intellectual property rights generated internally by the Group, is recognized in the consolidated statement of comprehensive loss as incurred. Intellectual property and in-process R&D from asset acquisitions are recognized as intangible assets at cost. |
Taxation | b) Taxation Tax expense recognized in the consolidated statement of comprehensive income comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity. Current income tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the consolidated financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted, or substantively enacted, by the end of the reporting period in the jurisdictions in which the Group operates. Amounts receivable in respect of research and development tax credits are recognized in the consolidated financial statements provided there is sufficient evidence that the amounts are recoverable. These credits are recognized within income tax in the consolidated statement of comprehensive loss. A provision is recognized for matters in which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. Where applicable, the assessment is based on management judgment supported by previous experience in respect of such activities and independent tax advice. Deferred tax Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilized. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Unrecognized deferred income tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered. Deferred tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply in the year when the asset or liability is realized, based on tax rates (and tax laws) enacted or substantively enacted at the end of the reporting period. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. |
Foreign currencies | c) Foreign currencies Items included in the consolidated financial statements are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in pound sterling (“£”), which is the presentational currency of the Group. The functional currencies of consolidated subsidiaries are pound sterling and US dollars (“$”). Transactions in foreign currencies are initially recorded by the Group’s entities at the rate prevailing on the date the transaction first qualifies for recognition. Differences arising on settlement or translation of monetary items as well as gains or losses on the retranslation of foreign currency balances at the period-end are recognized in the consolidated statement of comprehensive loss. The results and financial position of Group entities that have a functional currency different from the presentational currency of the Group are translated into the presentational currency (pound sterling). The assets and liabilities of such entities are translated into pound sterling at the rate of exchange prevailing at the balance sheet date. Income and expenses are translated at the average rate for the period. Fair value adjustments arising on acquisition of such entities are treated as assets and liabilities of the relevant entity and translated into pound sterling at the closing rate. The exchange differences arising on translation for consolidation are recognized in other comprehensive income. |
Property, plant and equipment | d) Property, plant and equipment Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment if the recognition criteria are met. All other repair and maintenance costs are recognized in profit or loss as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Useful lives of various property, plant and equipment are as follows: • Leasehold improvements shorter of lease term or ten years • Office equipment five years • IT equipment three years Property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statement of comprehensive loss when the asset is derecognized. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed annually and adjusted prospectively, if appropriate. |
Business combinations | e) Business combinations Business combinations are accounted for using the acquisition method of accounting. At the date of the acquisition, the Group initially recognizes the fair value of the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired business. The consideration transferred is measured at fair value at the date acquisition. The excess of the consideration transferred over the fair value of net identifiable assets of the business acquired is recorded as goodwill, unless the amount of consideration transferred is less than the fair value of net identifiable assets of the business acquired in which case the difference is recognized directly in the consolidated statement of comprehensive loss as a bargain purchase. A valuation is performed of assets and liabilities assumed on each acquisition accounted for as a business combination based on our best estimate of fair value. |
Leases | f) Leases Effective January 1, 2019, the Group adopted IFRS 16 (Leases) using the modified retrospective approach. The Group assesses whether a contract is, or contains, a lease at inception of the contract. The Group recognizes a right-of-use asset and a corresponding liability with respect to all lease arrangements in which it is a lessee. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise of fixed lease payments, less any lease incentives receivable. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever there is a significant change in lease term, lease payments or if the lease contract is modified and the lease modification is not accounted for as a separate lease. The right-of-use assets comprise the initial measurement of the corresponding lease liability and lease payments made at or before the commencement date, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. The right-of-use assets are presented within property, plant and equipment. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset: • Right-of-use asset (building) six to nine years • Right-of-use asset (equipment) one to two years When the Group is an intermediate lessor, it accounts for the head lease and the sub-lease as two separate contracts. The sub-lease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease. Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. |
Intangible assets | 2. Significant accounting policies 2.1 Basis of preparation The Group’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The consolidated financial statements are presented in pound sterling (“£”), which is the presentational currency of the Group. The functional currencies of consolidated subsidiaries are pound sterling and US dollars (“$”). All amounts disclosed in the consolidated financial statements and notes have been rounded to the nearest thousand, unless otherwise stated. 2.2 Basis of consolidation The consolidated financial information comprises the financial statements of Mereo BioPharma Group plc and its subsidiaries as at December 31, 2020. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealized gains on transactions between Group companies are eliminated in preparing the consolidated financial statements. Accounting policies of subsidiaries are consistent with the policies adopted by the Group. The Company has an employee share trust to facilitate share transactions pursuant to employee share schemes. Although the trust is a separate legal entity from the Group, it is consolidated into the Group’s results in accordance with the IFRS 10 rules on special purpose vehicles. The Company is deemed to control the trust principally because the trust cannot operate without the funding the Group provides. 2.3 Segmental information The Group has one operating segment. The Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer. The Group has a single portfolio of product candidates, with only direct research and development expenses monitored at a product candidate level. The CODM makes decisions over resource allocation at an overall portfolio level and the Group’s financing is managed and monitored on a consolidated basis. Following the acquisition of Mereo BioPharma 5, Inc. (formerly OncoMed Pharmaceuticals, Inc. or “OncoMed”) in 2019, non-current assets held by the Group are located in the United Kingdom and United States. As at December 31, 2020, approximately £0.5 million (2019: £22.4 million) of non-current assets are located in the United States. 2.4 Going concern The Group expects to incur significant operating losses for the foreseeable future as it continues its research and development efforts, seeks to obtain regulatory approval of its product candidates and pursues any future product candidates the Group may develop. As a result of these anticipated expenditures, the Group will need additional financing to support its continuing operations. Until such time as the Group can generate significant revenue from product sales, or other commercialization revenues, if ever, in respect of its oncology or rare disease product candidates or through partnering and/or out-licensing deals for its non-core disease product candidates, the Group will seek to finance its operations through a combination of public or private equity or debt financings or other sources. In February 2021, the Group completed a public offering of American Depository Shares (“ADSs”) and raised gross proceeds of $115.1 million (Note 27). This funding, together with the Group’s existing funds, will enable the Group to meet its liabilities as they fall due for the foreseeable future and at least 12 months. Therefore, the Group continues to adopt the going concern basis of accounting in preparing these consolidated financial statements. 2.5 Summary of significant accounting policies a) Research and development (R&D) costs Expenditure on product development is capitalized as an intangible asset and amortized over the expected useful economic life of the product candidate concerned. Capitalization commences from the point at which technical feasibility and commercial viability of the product candidate can be demonstrated and the Group is satisfied that it is probable that future economic benefits will result from the product candidate once completed. Capitalization ceases when the product candidate receives regulatory approval for launch. No such costs have been capitalized to date. Expenditure on R&D activities that do not meet the above criteria, including ongoing costs associated with acquired intellectual property rights and intellectual property rights generated internally by the Group, is recognized in the consolidated statement of comprehensive loss as incurred. Intellectual property and in-process R&D from asset acquisitions are recognized as intangible assets at cost. b) Taxation Tax expense recognized in the consolidated statement of comprehensive income comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity. Current income tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the consolidated financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted, or substantively enacted, by the end of the reporting period in the jurisdictions in which the Group operates. Amounts receivable in respect of research and development tax credits are recognized in the consolidated financial statements provided there is sufficient evidence that the amounts are recoverable. These credits are recognized within income tax in the consolidated statement of comprehensive loss. A provision is recognized for matters in which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. Where applicable, the assessment is based on management judgment supported by previous experience in respect of such activities and independent tax advice. Deferred tax Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilized. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Unrecognized deferred income tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered. Deferred tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply in the year when the asset or liability is realized, based on tax rates (and tax laws) enacted or substantively enacted at the end of the reporting period. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. c) Foreign currencies Items included in the consolidated financial statements are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in pound sterling (“£”), which is the presentational currency of the Group. The functional currencies of consolidated subsidiaries are pound sterling and US dollars (“$”). Transactions in foreign currencies are initially recorded by the Group’s entities at the rate prevailing on the date the transaction first qualifies for recognition. Differences arising on settlement or translation of monetary items as well as gains or losses on the retranslation of foreign currency balances at the period-end are recognized in the consolidated statement of comprehensive loss. The results and financial position of Group entities that have a functional currency different from the presentational currency of the Group are translated into the presentational currency (pound sterling). The assets and liabilities of such entities are translated into pound sterling at the rate of exchange prevailing at the balance sheet date. Income and expenses are translated at the average rate for the period. Fair value adjustments arising on acquisition of such entities are treated as assets and liabilities of the relevant entity and translated into pound sterling at the closing rate. The exchange differences arising on translation for consolidation are recognized in other comprehensive income. d) Property, plant and equipment Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment if the recognition criteria are met. All other repair and maintenance costs are recognized in profit or loss as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Useful lives of various property, plant and equipment are as follows: • Leasehold improvements shorter of lease term or ten years • Office equipment five years • IT equipment three years Property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statement of comprehensive loss when the asset is derecognized. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed annually and adjusted prospectively, if appropriate. e) Business combinations Business combinations are accounted for using the acquisition method of accounting. At the date of the acquisition, the Group initially recognizes the fair value of the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired business. The consideration transferred is measured at fair value at the date acquisition. The excess of the consideration transferred over the fair value of net identifiable assets of the business acquired is recorded as goodwill, unless the amount of consideration transferred is less than the fair value of net identifiable assets of the business acquired in which case the difference is recognized directly in the consolidated statement of comprehensive loss as a bargain purchase. A valuation is performed of assets and liabilities assumed on each acquisition accounted for as a business combination based on our best estimate of fair value. f) Leases Effective January 1, 2019, the Group adopted IFRS 16 (Leases) using the modified retrospective approach. The Group assesses whether a contract is, or contains, a lease at inception of the contract. The Group recognizes a right-of-use asset and a corresponding liability with respect to all lease arrangements in which it is a lessee. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise of fixed lease payments, less any lease incentives receivable. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever there is a significant change in lease term, lease payments or if the lease contract is modified and the lease modification is not accounted for as a separate lease. The right-of-use assets comprise the initial measurement of the corresponding lease liability and lease payments made at or before the commencement date, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. The right-of-use assets are presented within property, plant and equipment. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset: • Right-of-use asset (building) six to nine years • Right-of-use asset (equipment) one to two years When the Group is an intermediate lessor, it accounts for the head lease and the sub-lease as two separate contracts. The sub-lease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease. Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. g) Intangible assets Intangible assets are initially recorded at cost which has been determined as the fair value of the consideration paid and payable. Assets that have been acquired through a business combination are initially recorded at fair value. The fair value of consideration is regularly reviewed based on the probability of achieving contractual milestones. Where the consideration paid or payable is in shares, the cost is measured in accordance with IFRS 2 (Share Based Payments). Intangible assets that are not yet available for use are reviewed for impairment at each reporting date by allocating the assets to the cash-generating units to which they relate. The estimated useful life is the lower of the legal duration and economic useful life. The estimated useful lives of intangible assets are reviewed at least annually. Intangible assets are amortized from the date they are available for commercial use. No amortization has been recognized to date. An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized. |
Financial instruments | h) Financial instruments Financial assets and liabilities are recognized in the consolidated balance sheet only when the Group becomes party to the contractual provisions of the instrument. Financial assets On initial recognition, a financial asset is classified into one of three primary measurement categories: • Amortized cost; • Fair value through other comprehensive income (“FVOCI”); or • Fair value through profit or loss (“FVTPL”). The initial classification into a primary measurement category depends on the nature and purpose of the financial asset. For each reporting period covered herein, the Group’s financial assets included only financial assets held at FVOCI. The Group’s financial assets include short-term investments which are not classified as cash and short-term deposits and are held in a business model whose objective is achieved by both collecting contractual cash flows and selling the short-term investment on maturity. For short-term investments, interest income and impairment gains or losses are recognized directly in the consolidated statement of comprehensive loss. The difference between cumulative fair value gains or losses and the cumulative amounts recognized in the consolidated statement of comprehensive loss is recognized in other comprehensive income until derecognition, when the amounts in other comprehensive income are reclassified to the consolidated statement of comprehensive loss. Classification as debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. Embedded derivatives An embedded derivative is a component of a hybrid contract that also includes a non-derivative host with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative. Derivatives embedded in hybrid contracts with hosts that are not financial assets within the scope of IFRS 9 (e.g. financial liabilities) are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at FVTPL. Compound instruments Convertible loan notes are regarded as compound instruments consisting of a liability component and an equity component. At the date of issue, the fair value of the liability component is estimated using a discount rate for an equivalent liability without the conversion feature. The difference between the proceeds from the issue of the convertible loan note and the fair value assigned to the liability component is included in equity. Financial liabilities Borrowings (including interest-bearing loans) are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method. Under the effective interest method, amortization is included as a finance cost in the consolidated statement of comprehensive loss. Non-substantial modifications to financial liabilities measured at amortized cost with the associated gain or loss recognized in the consolidated statement of comprehensive loss. The gain or loss is computed as the difference between the original contractual cash flows and the modified cash flows, discounted at the original effective interest rate. For substantial modifications, the existing financial liability is derecognized and a new financial liability is established. Borrowings are derecognized from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The warrant instruments are recorded at fair value, with changes in the fair value recognized in the consolidated statement of comprehensive loss, where the terms of the warrant instruments allow for cashless exercise. |
Fair value measurement | i) Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: • In the principal market for the asset or liability; or • In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: • Level 1 — quoted (unadjusted) market prices in active markets for identical assets or liabilities. • Level 2 — valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. • Level 3 — valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. |
Impairment of non-financial assets | j) Impairment of non-financial assets Further disclosures relating to impairment of non-financial assets are also provided in the following notes: • Disclosures for significant assumptions Note 3 • Property, plant and equipment Note 11 • Intangible assets not yet available for use Notes 12 and 13 At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. Impairment losses are recognized in the consolidated statement of comprehensive loss in expense categories consistent with the function of the impaired asset. An assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the consolidated statement of comprehensive loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase. |
Cash and short-term deposits | k) Cash and short-term deposits Cash and short-term deposits in the balance sheet comprise cash at banks and on hand along with short-term deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in value. |
Provisions | l) Provisions Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the consolidated statement of comprehensive loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost. Where contingent payments relate to future use of the in-licensed IP, no liability or provision is recognized for variable amounts to be paid to the vendors based on future events unless such arrangements are onerous. The liability (and corresponding expense in the income statement) to the vendors is recognized as an obligation arises. |
Provision for deferred cash consideration | m) Provision for deferred cash consideration Provision for deferred cash consideration consists of future payments which are contractually committed but not yet certain. In respect of products which are not yet approved, such deferred cash consideration excludes potential milestones, royalties or other payments that are deemed to be so uncertain as to be unquantifiable. Deferred cash consideration is recognized as a liability with the amounts calculated as the risk adjusted net present value of anticipated deferred payments. The provision is reviewed at each balance sheet date and adjusted based on the likelihood of contractual milestones being achieved and therefore the deferred payment being settled. Increases in the provision relating to changes in the probability are recognized as an intangible asset. Increases in the provision relating to the unwinding of the time value of money are recognized as a finance expense. |
Share-based payments | n) Share-based payments Employees (including executives) and non-executive directors of the Group receive remuneration in the form of share-based payments, whereby employees and non-executive directors render services as consideration for equity instruments (equity settled transactions). Incentives in the form of shares are provided to employees under various plans (Note 24). Executive officers also have outstanding shares under a deferred bonus share plan (“DBSP Plan”) and a long-term incentive plan (“LTIP Plan”). In accordance with IFRS 2 Share-based Payments (“IFRS 2”), charges for these incentives are expensed through the consolidated statement of comprehensive loss on a straight-line basis over their vesting period, based on the Group’s estimate of shares that will eventually vest. The total amount to be expensed is determined by reference to the fair value of the options or awards at the date they were granted. For LTIP shares, the fair value on grant date excludes the impact of any non-market vesting conditions, which are taken into account by adjusting the number of equity instruments included in the measurement of the share-based payment transaction and are adjusted each period until such time as the equity instruments vest. Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service. In accordance with IFRS 2, the cancellation of share options is accounted for as an acceleration of the vesting period and therefore any amount unrecognized that would otherwise have been charged in future accounting periods is recognized immediately. When options are forfeited, the accounting expense for any unvested awards is reversed. |
Costs of issuing capital | o) Costs of issuing capital Incremental costs incurred and directly attributable to the offering of equity securities are deducted from the related proceeds of the offering. The net amount is recorded as share premium in the period when such shares are issued. Where such expenses are incurred prior to the offering they are recorded in prepayments until the offering completes. Other costs incurred in such offerings are expensed as incurred and included in general and administrative expenses. |
Employee Benefit Trust | p) Employee Benefit Trust The Group operates an Employee Benefit Trust (“EBT”), the Mereo BioPharma Group plc Employee Benefit Trust. The EBT holds ADS’s to satisfy the exercise of options under the Company’s share-based incentive schemes (Note 24). The EBT is a Jersey-based trust which was initially funded by a loan from the Company, which it utilized to purchase shares in sufficient quantity to fulfill the envisaged awards. The Company will issue ordinary shares to a custodian for conversion by a depositary bank to ADS’s and delivery to the EBT. These ordinary shares will be deducted from the shareholders’ funds on the consolidated balance sheet at their nominal value. Shares held by the EBT are included in the consolidated balance sheet as a reduction in equity. |
Significant accounting polici_3
Significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Statement [line items] | |
Summary of Depreciation Calculated on Straight-Line Basis Over Estimated Useful Lives of Assets | Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Useful lives of various property, plant and equipment are as follows: • Leasehold improvements shorter of lease term or ten years • Office equipment five years • IT equipment three years |
Summary of Estimated Useful lives of Right of Use Assets | Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset: • Right-of-use asset (building) six to nine years • Right-of-use asset (equipment) one to two years |
Group information (Tables)
Group information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments accounted for using equity method [abstract] | |
Summary of Information About Subsidiaries of the Group | The consolidated financial statements of the Group include: Name Principal activities Country of % Equity December 31, % Equity December 31, Mereo BioPharma 1 Limited Pharmaceutical R&D UK 100 100 Mereo BioPharma 2 Limited Pharmaceutical R&D UK 100 100 Mereo BioPharma 3 Limited Pharmaceutical R&D UK 100 100 Mereo BioPharma 4 Limited Pharmaceutical R&D UK 100 100 Mereo BioPharma Ireland Limited Pharmaceutical R&D Ireland 100 100 Mereo BioPharma 5, Inc. Pharmaceutical R&D U.S. 100 100 Navi Subsidiary, Inc. Pharmaceutical R&D U.S. 100 100 Mereo US Holdings Inc. Holding company U.S. 100 100 Mereo BioPharma Group plc Employee Benefit Trust Employee share scheme Jersey – – |
Loss before taxation (Tables)
Loss before taxation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule Of Detailed Information About Loss Before Taxation [Abstract] | |
Summary of Loss before tax is stated after charging | Loss before tax is stated after charging: Year ended December 31, 2020 2019 2018 Fees payable to the Company’s Auditor for the audit of Group accounts 449 514 323 Fees payable to the Company’s Auditor for other services: Audit of subsidiary accounts 49 45 30 Audit-related assurance services 318 311 171 Accounting advisory services – – 10 Legal and professional fees, including patent costs 4,619 2,413 936 Gain on modification of lease (957 ) – – Income from sub-lease (646 ) (855 ) – Operating lease expense (IAS 17) – – 293 Depreciation of right-of-use 1,531 1,505 – Depreciation (excluding right-of-use 68 52 40 |
Employees (Tables)
Employees (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Average Monthly Persons Employed By Group | The average monthly number of persons employed by the Group during the year was: Year ended December 31, 2020 2019 2018 By activity Administrative 22 28 24 Research and development 17 18 12 Total 39 46 36 |
Summary of Employee | Total compensation costs for persons employed by the Group (including Directors) during the year was: Year ended December 31, 2020 2019 2018 Included in research and development expenses: Salaries 3,046 2,824 1,792 Social security costs 397 110 (30 ) Pension contributions 66 62 73 Share-based payment expenses 446 152 526 Included in administrative expenses: Salaries 4,832 3,384 2,903 Social security costs 68 1 (124 ) (828 ) Pension contributions 89 114 99 Share-based payment expenses 1,112 1,485 1,663 Total employee benefit expenses 10,6 6 9 8,007 6,198 |
Summary of Compensation Cost For Directors | Total compensation costs for Directors during the year was: Year ended December 31, 2020 2019 2018 Salaries and fees 1,1 14 1,106 1,047 Benefits in kind 14 17 15 Pension contributions 6 1 25 11 Bonus 538 294 512 Total 1, 727 1,442 1,585 |
Other income _ expenses and a_2
Other income / expenses and adjustments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Finance Income | 8.1 Finance income Year ended December 31, 2020 2019 2018 Bank interest earned 5 42 307 Interest earned on short-term investments – 141 – Gain on short-term investments 39 194 – Total finance income 44 377 307 |
Summary of Finance Costs | 8.2 Finance costs Year ended December 31 2020 2019 2018 Interest on convertible loan notes (2,241 ) (20 ) (185 ) Other interest – (10 ) – Interest on bank loan (2,900 ) (1,739 ) (1,645 ) Interest on lease liabilities (1,085 ) (1,314 ) – Accreted interest on bank loan – (1,523 ) (782 ) Modification gain/(loss) on bank loan – 456 (730 ) Loss on short-term deposits – – (22 ) Discounting of provision for deferred cash consideration (157 ) (221 ) (443 ) Total finance costs (6,383 ) (4,371 ) (3,807 ) |
Summary of Changes In The Fair Value Of Financial Instruments | 8.3 Changes in the fair value of financial instruments Year ended December 31 2020 2019 2018 Changes in the fair value of warrants – placement ( N (45,977 ) – – Changes in the fair value of warrants – bank loan ( N (714 ) 875 716 Changes in the fair value of embedded derivative ( N (63,158 ) – – Total (109,849 ) 875 716 |
Taxation (Tables)
Taxation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Income Tax Credit | Year ended December 31, 2020 2019 2018 UK corporation tax R&D credit 2,822 5,149 5,277 Other tax income / (expense) – 1,125 – Taxation 2,822 6,274 5,277 |
Summary of Reconciliation to the Earnings Loss Per Income Statement | Year ended December 31, 2020 2019 2018 £’000s £’000s £’000s Loss on ordinary activities before income tax (166,450 ) (41,118 ) (37,306 ) Loss on ordinary activities before tax at the UK’s statutory income tax rate of 19% (2019: 19%) 31,626 7,812 7,088 Expenses not deductible for income tax purposes (permanent differences) (13,270 ) (317 ) (1,070 ) Income not taxable 4 – – Temporary timing differences – (343 ) (277 ) R&D relief uplift 1,214 2,540 2,271 Losses (unrecognized) (14,479 ) (4,380 ) (2,804 ) Deferred income from MBG loan guarantee costs – (54 ) 69 Foreign tax 184 – – Differences in overseas tax rates 261 340 – Derecognition of deferred tax (2,686 ) – – Gain on bargain purchase – 699 – Other (32 ) (23 ) – Tax credit for the year 2,822 6,274 5,277 |
Summary of Deferred Tax | The analysis of unrecognized deferred tax is set out below: Year ended December 31, 2020 2019 2018 £’000s £’000s £’000s Losses 37,021 19,443 8,604 Loan relationships 421 – – US tax credits 9,880 10,032 – Accruals – 947 – Fixed assets 414 400 – Share options 55 – – Other US deferred tax 86 – – Other 137 202 6 Temporary differences 18 4 495 Net deferred tax asset (unrecognized) 48,032 31,028 9,105 |
Summary of analysis of recognized deferred tax | The analysis of recognized deferred tax is set out below: At January 1, 2020 Recognized At 31, 2020 Deferred tax liabilities Intangible asset and right-of-use asset (2,686 ) 2,590 (96 ) Deferred tax asset Net operating losses 2,686 (2,590 ) 96 Net deferred tax asset / (liability) – – – |
Loss per share (Tables)
Loss per share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Loss Per Share | 2020 Loss £’000 December 31, 2020 £ 2019 Loss £’000 December 31, Weighted 2019 £ 2018 Loss £’000 December 31, 2018 £ Basic and diluted (163,628) 338,953,141 (0.48) (34,844) 89,424,476 (0.39) (32,029) 71,144,786 (0.45) The Company operates share option schemes (see Note 24) which could potentially dilute basic earnings per share in the future. |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Property, Plant and Equipment | Right-of-use Right-of-use asset (equipment) Leasehold Office IT equipment Total £’000s £’000s £’000s £’000s £’000s £’000s Cost or valuation At January 1, 2020 11,877 1,024 164 71 116 13,252 Additions — — — — 16 16 Lease modification (10,220 ) 149 — — — (10,071 ) Disposals — — — — — — Currency translation effects 191 (4 ) — — — 187 At December 31, 2020 1,848 1,169 164 71 132 3,384 Depreciation and impairment At January 1, 2020 (996 ) (509 ) (69 ) (30 ) (90 ) (1,694 ) Lease modification 1,482 — — — — 1,482 Depreciation for the year (1,017 ) (514 ) (16 ) (35 ) (17 ) (1,599 ) At December 31, 2020 (531 ) (1,023 ) (85 ) (65 ) (107 ) (1,811 ) Net book value At January 1, 2020 10,881 515 95 41 26 11,558 At December 31, 2020 1,318 146 79 6 25 1,573 Right-of-use Right-of-use asset (equipment) Leasehold Office IT equipment Total £’000s £’000s £’000s £’000s £’000s £’000s Cost or valuation At January 1, 2019 — — 164 31 71 266 Additions — — — 21 21 Transition to IFRS 16 (Leases) 1,237 1,314 — — — 2,551 Acquisition of subsidiary 10,755 — — 58 24 10,837 Disposals — — — (18 ) — (18 ) Adjustment to carrying value — (290 ) — — — (290 ) Currency translation effects (115 ) — — — — (115 ) At December 31, 2019 11,877 1,024 164 71 116 13,252 Depreciation and impairment At January 1, 2019 — — (53 ) (16 ) (48 ) (117 ) Depreciation for the year (996 ) (509 ) (16 ) (14 ) (42 ) (1,577 ) At December 31, 2019 (996 ) (509 ) (69 ) (30 ) (90 ) (1,694 ) Net book value At January 1, 2019 — — 111 15 23 149 At December 31, 2019 10,881 515 95 41 26 11,558 |
Summary of The maturity of lease liabilities | The Group leases office space and equipment for use in research and development activities. The maturity of lease liabilities are as follows: Within 1 Between Between Over Total £’000s £’000s £’000s £’000s £’000s December 31, 2020 Maturity of lease liabilities 636 753 405 — 1,794 |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Detailed Information about Intangible Assets | Acquired £’000s Cost at January 1, 2019 33,005 Additions 12,693 Currency translation effects (171 ) Cost at December 31, 2019 45,527 Disposals (13,386 ) Currency translation 864 Cost at December 31, 2020 33,005 Revision to estimated value at January 1, 2019 (373 ) Revisions to estimated value (698 ) Revision to estimated value at December 31, 2019 (1,071 ) Revision to estimated value (286 ) Revision to estimated value at December 31, 2020 (1,357 ) Net book value at January 1, 2019 32,632 Net book value at December 31, 2019 44,456 Net book value at December 31, 2020 31,648 |
Impairment testing of acquire_2
Impairment testing of acquired development programs not yet available for use (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Carrying Amount of Acquired Development Programs | The carrying amount of acquired development programs is as follows: As at December 31, 2020 2019 £’000s £’000s Acquired development programs Navicixizumab (navi) — 12,522 BSP-804 11,616 11,616 MPH-966 5,835 6,121 BSG-649 9,886 9,886 BCT-197 4,311 4,311 31,648 44,456 |
Other receivables (Tables)
Other receivables (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Other Receivables | December 31, 2020 2019 £’000s £’000s Rent deposit 407 293 VAT recoverable 370 269 Other 239 10 1,016 572 |
Cash and short-term deposits (T
Cash and short-term deposits (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Cash and Short-term Deposits | December 31, 2020 2019 £’000s £’000s Cash 22,922 15,803 Short-term deposits 547 544 23,469 16,347 |
Issued capital and reserves (Ta
Issued capital and reserves (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Detailed Information of Ordinary Share Capital | Number of Ordinary share Share Number £’000s £’000s Ordinary share capital As at January 1, 2018 71,094,974 213 118,227 Issued on June 1, 2018 for public offering 50,076 — 150 Issued on August 3, 2018 for exercise of share options 10,000 — 13 Issued on October 22, 2018 for exercise of share options 85,222 1 110 Transaction costs for issued share capital — — (8 ) As at December 31, 2018 71,240,272 214 118,492 Issued on April 23, 2019 for Mereo BioPharma 5, Inc 24,783,320 74 — Issued on June 21, 2019 for conversion of loan note 1,936,030 6 3,953 Transaction costs for issued share capital — — (761 ) As at December 31, 2019 97,959,622 294 121,684 Issued on February 11, 2020 for Securities Purchase Agreement 11,432,925 34 2,287 Issued on February 11, 2020 for Securities Purchase Agreement 2,862,595 9 224 Issued on February 20, 2020 for Securities Purchase Agreement 12,252,715 37 2,267 Issued on June 4, 2020 for private placement of ordinary shares 89,144,630 267 15,244 Transaction costs for issued share capital — — (1,307 ) Issued on June 30, 2020 for conversion of the Loan Notes 125,061,475 375 21,386 Conversion of warrants on December 23, 2020 239,179 1 — As at December 31, 2020 338,953,141 1,017 161,785 |
Summary of Other Capital Reserves | Other capital reserves Shares Share- Equity Other Merger Other Total £’000s £’000s £’000s £’000s £’000s £’000s £’000s At January 1, 2018 1,590 14,459 310 — — — 16,359 Share-based payments expense during the year — 2,302 — — — — 2,302 Share-based payments release for exercise of options — (112 ) — — — — (112 ) Issuance of warrants — — — 44 — — 44 At December 31, 2018 1,590 16,649 310 44 — — 18,593 At January 1, 2019 1,590 16,649 310 44 — — 18,593 Acquisition of Mereo BioPharma 5, Inc — — — — 40,818 — 40,818 Shares issued during the year (1,590 ) — — — — — (1,590 ) Convertible loan conversion — — (310 ) — — — (310 ) Share-based payments expense during the year — 1,636 — — — — 1,636 At December 31, 2019 — 18,285 — 44 40,818 — 59,147 At January 1, 2020 — 18,285 — 44 40,818 — 59,147 Share-based payments expense during the period — 1,558 — — — — 1,558 Novartis convertible loan instrument and warrants — — 1,084 — — — 1,084 Conversion of the Loan Notes — — — — — 33,104 33,104 Reclassification of the embedded derivative — — 33,481 — — — 33,481 At December 31, 2020 — 19,843 34,565 44 40,818 33,104 128,374 |
Summary of Accumulated Loss | Year ended December 31, 2020 2019 2018 £’000s £’000s £’000s Other reserves 5,001 7,000 7,000 Accumulated losses (309,693 ) (146,065 ) (111,221 ) |
Interest-bearing loans and bo_2
Interest-bearing loans and borrowings (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Interest-bearing Loans and Borrowings | Year ended December 31, 2020 2019 £’000s £’000s Convertible loan notes 3,196 — Bank loan — 20,512 Private placement – Loan Notes 12,946 — At December 31 16,142 20,512 Current — 15,139 Non-current 16,142 5,373 |
Disclosure of movements in the carrying value of the liability component of the loan notes | The movements in the carrying value of the liability component of the Loan Notes is included in the table below: Year ended December 31, 2020 2019 £’000s £’000s Liability component at date of issue (net of transaction costs) 24,417 — Interest charged (using effective interest rate) 1,803 — Converted to equity (13,274 ) — Carrying amount of liability component 12,946 — |
Disclosure of movements in the carrying value of the embedded derivative | The movements in the carrying value of the embedded derivative relating to the conversion feature is included in the table below: Year ended December 31, 2020 2019 £’000s £’000s January 1 — — Arising during the year 11,913 — Change in fair value 63,158 — Reclassified to equity (75,071 ) — December 31 — — |
Disclosure of the inputs into the model used to fair value the embedded derivative | December 31, 2020 June 30, 2020 June 3, 2020 Expected volatility (%) — 61 61 Risk-free interest rate (%) — 0.19 0.27 Credit spread % — 1.8 6 2.01 Expected life of share options (years) — 3 3 Market price of ordinary shares (£) — 0.46 0.19 Probability of resolutions passing (%) — 100 90 Models used — Discounted cash flow/Black-Scholes Discounted cash flow/Black-Scholes |
Provisions (Tables)
Provisions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Provisions | Year ended December 31, 2020 2019 £’000s £’000s Social security contributions on vested share options 109 104 Provision for deferred cash consideration 1,525 1,654 At December 31 1,6 3 1,758 Current 41 8 309 Non-current 1,2 16 1,449 |
Summary of Social Security Contributions on Share Options | Social security Deferred cash £’000s £’000s At January 1, 2019 842 2,131 Arising during the year — — Released (738 ) — Increase in provision due to the unwinding of the time value of money — 221 Decrease in provision due to a change in estimates relating to timelines and probabilities of contractual milestones being achieved (Note 12) — (698 ) At December 31, 2019 104 1,654 Arising during the year 5 — Increase in provision due to the unwinding of the time value of money — 157 Decrease in provision due to a change in estimates relating to timelines and probabilities of contractual milestones being achieved (revision to intangible asset, see Note 12) — (286 ) At December 31, 2020 109 1,525 Current — 309 Non-current 109 1,216 |
Warrant liability (Tables)
Warrant liability (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Warrant Liability | Year ended December 31, 2020 2019 £’000s £’000s January 1 131 1,006 Issued during the year 4,080 131 Settled during the year (127 ) — Fair value changes during the year 46,691 (1,006 ) At December 31 50,775 131 |
Summary of Weighted Average Inputs to the Models Used for the Fair Value of Warrants Granted | The weighted average inputs to the Black-Scholes models used for the fair value of warrants granted during the year ended December 31 are as follows: Year ended December 31, 2020 2019 Expected volatility (%) 84-85 67 Risk-free interest rate (%) 0.25-(0.05) 1.26 Expected life of warrants (years) 3 10.0 Market price of ADS ($)/ordinary shares (£) $ 3.58 £ 0.83 Model used Black-Scholes Black-Scholes |
Trade and other payables (Table
Trade and other payables (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Trade and Other Payables | Year ended December 31, 2020 2019 £’000s £’000s Trade payables 3,165 6,148 Social security and other taxes 146 183 Other payables 22 21 At December 31 3,333 6,352 |
Changes in liabilities arisin_2
Changes in liabilities arising from financing activities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Changes in Liabilities Arising from Financing Activities | Contingent Lease Bank Novartis Warrant Deferred cash consideration Convertible notes – Other Total £’000s £’000s £’000s £’000s £’000s £’000s £’000s £’000s £’000s Carrying value At January 1, 2019 — — 19,446 2,038 1,005 2,131 — 34 24,654 Adoption of IFRS 16 (Leases) — 2,534 — — — — — — 2,534 Financing cash flows — (2,212 ) (1,739 ) — — — — — (3,951 ) Changes in foreign exchange — (131 ) — — — — — — (131 ) Changes in fair values 354 — — — (874 ) (477 ) — 10 (987 ) Interest expense — 1,314 3,262 20 — — — — 4,596 Gain on modification — — (457 ) — — — — — (457 ) Issuance of equity — — — (2,058 ) — — — — (2,058 ) Acquisition of subsidiary — 10,689 — — — — — — 10,689 Lease term reassessment — (290 ) — — — — — — (290 ) Carrying value at December 31, 2019 354 11,904 20,512 — 131 1,654 — 44 34,599 Settled during the year (354 ) — (23,412 ) — (127 ) — — — (23,893 ) Financing cash flows — (2,086 ) — 2,758 — — 36,330 18 37,020 Issuance of warrants — — — — 4,080 — — 4,080 Interest expense — 1,085 2,900 438 — — 1,803 — 6,226 Lease modification — (9,547 ) — — — — — — (9,547 ) Changes in fair values — — — — 46,691 (129 ) 63,158 — 109,720 Changes in foreign exchange — 438 — — — — — — 438 Reclassified to equity — — — — — — (88,345 ) — (88,345 ) Carrying value at December 31, 2020 — 1,794 — 3,196 50,775 1,525 12,946 62 70,298 |
Financial and capital risk ma_2
Financial and capital risk management and fair value measurement (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary of Fair Value Hierarchy | Fair value measurement using Date of valuation Total Quoted prices Significant Significant £’000s £’000s £’000s £’000s Liabilities measured at fair value Provision for deferred cash consideration (Note 19) December 31, 2020 1,525 — — 1,525 Warrant liability (Note 20) December 31, 2020 50,775 — 845 49,930 Fair value measurement using Date of valuation Total Quoted prices Significant Significant £’000s £’000s £’000s £’000s Liabilities measured at fair value Provision for deferred cash consideration (Note 19) December 31, 2019 1,654 — — 1,654 Provision for contingent consideration December 31, 2019 354 — — 354 Warrant liability (Note 20) December 31, 2019 131 — 131 — Liabilities for which fair values are disclosed Bank loan (Note 18) December 31, 2019 20,512 — 20,512 — |
Summary of the Changes in Level 3 | The following table presents the changes in Level 3 items for the periods ended December 31, 2020 and December 31, 2019: Provision for Provision for £’000s £’000s January 1, 2019 2,131 — Unwinding of the time value of money (recognized as a finance cost) 221 — Change in estimate relating to probabilities (revision to intangible asset, see Note 12) (698 ) — Change in estimate relating to probabilities (recognized as an administrative expense) — 354 December 31, 2019 1,654 354 January 1, 2020 1,654 354 Settled during the year — (354 ) Unwinding of the time value of money (recognized as a finance cost) 157 — Change in estimate relating to probabilities (revision to intangible asset, see Note 12) (286 ) — Change in estimate relating to probabilities (recognized as an administrative expense) — — December 31, 2020 1,525 — |
Summary of Changes In Significant Unobservable Inputs Under Valuation Model Used In Level Fair Value Measurement | The significant unobservable inputs used in the fair value measurements categorized within Level 3 of the fair value hierarchy, together with a quantitative sensitivity analysis as at December 31, 2020 and 2019 are as follows: Valuation technique Significant unobservable inputs Input range (weighted average) Sensitivity of the input to fair value Provision for deferred cash consideration DCF WACC 2020: 12% 1% increase/decrease would result in a decrease/increase in fair value by £25,000 WACC 2019: 15.3% 1% increase/decrease would result in a decrease/increase in fair value by £33,000 Probability of success 2020: 13.8%–95% 10% increase/decrease would result in an increase/decrease in fair value by £0.4 million Probability of success 2019: 15.8%–95% 10% increase/decrease would result in an increase/decrease in fair value by £0.3 million Contingent consideration liability DCF Ongoing uncertainty in the clinical development of the Navi product Not applicable Total potential payments future payments relating to the contingent consideration liability on a gross, undiscounted basis are approximately $80million. Regulatory approval and commercialisation risks Sensitivity of the input to fair value is primarily driven by uncertainty in the clinical development of the Navi product. Future potential payments under the CVR arrangement are contingent on i) future development milestones and ii) future sales of the Navi product, following regulatory approval and commercialization. In January 2020, the Company entered into the licence agreement as detailed in Note 13. Although pursuant to the licence agreement the Company is entitled to additional payments of up to $302 million, there is still significant uncertainty that exist in respect of any milestone and royalty payments under the licence agreement. Warrant liability related to the private placement Black- Scholes model Expected volatility 2020: 85.1% Volatility was estimated by reference to the six-month historical volatility of the historical share price of the Company. If the volatility is increased to 93.8% based on three-month historical volatility, the carrying value of the warrants as of December 31, 2020 would increase to £52.9 million. |
Summary of Maturity Profile of Financial Liabilities Based on Contractual Undiscounted Payments | The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments at December 31, 2020: Payments due by period Up to 1 year 1–3 years 3–5 years Over 5 years Total £’000s £’000s £’000s £’000s £’000s Leases 849 960 448 – 2,257 Trade and other payables (Note 21) 3,333 – – – 3,333 4,182 960 448 – 5,590 |
Detailed Information About Cash And Cash Equivalents By Currency Type | Year ended December 31, 2020 2019 Cash: Pound sterling 17,809 2,525 US dollars 5,586 13,807 Swiss francs 9 11 Euro 65 4 23,469 16,347 |
Detailed Onformation About Gain Loss On Foreign Currency Translaction Recognized In Income Statement | The table below shows those transactional exposures that give rise to net currency gains and losses recognized in the consolidated statement of comprehensive income. Such exposures comprise the net monetary assets and monetary liabilities of the Group that are not denominated in the functional currency of the relevant Group entity. As at December 31, these exposures were as follows: Year ended December 31, 2020 2019 Net foreign currency assets/(liabilities): US dollars 4,088 (219 ) Swiss francs 9 (6 ) Euro (513 ) (812 ) 3,584 (1,037 ) |
Summary of sensitivity analyis of currency movement | The following table illustrates the sensitivity to a 10% weakening or strengthening in the period-end Year ended December 31, 2020 US dollar Euro Net foreign currency assets/(liabilities) £ ’000s £ ’000s Loss before tax (372 ) 47 Equity (372 ) 47 Year ended December 31, 2019 US dollar Euro Net foreign currency assets/(liabilities) £ ’000s £ ’000s Loss before tax 20 74 Equity 20 74 |
Share-based payments (Tables)
Share-based payments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Statement [LineItems] | |
Summary of Share-based Payments Under IFRS 2 | The charge for share-based payments under IFRS 2 arises across the following schemes: Year ended December 31, 2020 2019 2018 £’000s £’000s £’000s 2019 Equity Incentive Plan 922 635 – 2019 NED Equity Incentive Plan 167 160 – 2015 Plan 3 63 806 Mereo BioPharma Group plc Share Option Plan 376 685 1,064 Long Term Incentive Plan 90 93 320 Deferred Bonus Share Plan – – – 1,558 1,636 2,190 |
Summary of Number and Weighted Average Exercise Prices (WAEP) of, and Movements in, Options | The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, options for the 2019 EIP and 2019 NED EIP during the year: 2020 EIP 2020 NED EIP Options WAEP $ Options Number WAEP $ Outstanding at January 1, 2020 798,050 4.29 77,000 4.2 Granted during the year 1,167,836 2.00 77,000 1.84 Cancelled during the year (406 ) 5.4 — — Forfeited during the year (397,607 ) 2.87 (4,584 ) 1.84 Exercised during the year — — — — Outstanding at December 31 1,567,873 2.94 149,416 3.06 Exercisable at December 31, 2020 259,829 4.42 138,412 3.15 2019 EIP 2019 NED EIP Options WAEP $ Options WAEP $ Outstanding at January 1, 2019 — — — — Granted during the year 801,200 4.29 77,000 4.2 Cancelled during the year (3,150 ) 5.4 — — Forfeited during the year — — — — Exercised during the year — — — — Outstanding at December 31 798,050 4.29 77,000 4.2 Exercisable at December 31 — — 38,478 4.2 |
Summary of Number and Movements in Long Term Incentive Plan Options | The expense recognized for employee services received during the year to December 31, 2020 was £0.1 million (2019: £0.1 million). 2020 2019 2018 Granted during the year — — — Cancelled during the year — — — Lapsed during the year (427,324 ) (241,374 ) — Outstanding at December 31 482,748 910,072 1,151,446 Exercisable at December 31 — — — |
Summary of Weighted Average Inputs to the Models Used for the Fair Value of Share Options Granted | The following tables list the weighted average inputs to the models used for the fair value of share options granted during the year ended December 31, 2020: EIP 2019 grants NED EIP 2019 Expected volatility (%) 67 68 Risk-free interest rate (%) 0.59 0.64 Expected life of share options (years) 10 10 Market price of ADS’s ($) 1.99 1.84 Model used Black Scholes Black Scholes The following tables list the weighted average inputs to the models used for the fair value of share options granted during the year ended December 31, 2019: EIP 2019 grants NED EIP 2019 Expected volatility (%) 66 66 Risk-free interest rate (%) 0.95 0.97 Expected life of share options (years) 10 10 Market price of ordinary shares (£) 0.66 0.63 Model used Black Scholes Black Scholes During the year ended December 31, 2019, no grants were issued under any other scheme. |
Mereo BioPharma Group plc Share Option Plan [member] | |
Statement [LineItems] | |
Summary of Number and Weighted Average Exercise Prices (WAEP) of, and Movements in, Options | The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, options for the Option Plan during the year: 2020 2019 Number WAEP £ Number WAEP £ Outstanding at beginning of the year 1,524,065 3.07 1,881,555 3.10 Granted during the year — — — — Cancelled during the year — — — — Forfeited during the year (112,670 ) 3.03 (357,490 ) 3.21 Outstanding at December 31 1,411,395 3.14 1,524,065 3.07 Exercisable at December 31 1,210,410 3.01 40,141 3.03 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary Of Maturity Analysis Of Operating Lease Payments Receivable | The maturity analysis of payments receivable by the Group in its capacity as sublessor is disclosed below: December 31, 2020 2019 Within one year — 552 After one year but not more than five years — — More than five years — — — 552 |
Related party disclosures (Tabl
Related party disclosures (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Text block [abstract] | |
Summary Of Compensation of key management personnel of the Group | The remuneration of key management personnel of the Group is set out below in aggregate: Year ended December 31, 2020 2019 2018 £’000s £’000s £’000s Short-term benefits 4,479 3,488 3,176 Post-employment benefits 144 64 60 IFRS 2 share-based payment charge 875 1,152 1,470 Total compensation paid to key management personnel 5,498 4,704 4,706 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Detail) £ in Thousands, $ in Millions | Feb. 28, 2021USD ($) | Dec. 31, 2020GBP (£) | Dec. 31, 2018GBP (£) | Dec. 31, 2019GBP (£) |
Disclosure of voluntary change in accounting policy [line items] | ||||
Proceeds from issuing shares | £ 20,136 | £ 273 | ||
American depository shares [member] | ||||
Disclosure of voluntary change in accounting policy [line items] | ||||
Proceeds from issuing shares | $ | $ 115.1 | |||
OncoMed [Member] | ||||
Disclosure of voluntary change in accounting policy [line items] | ||||
Acquisition of non-current assets | £ 500 | £ 22,400 |
Significant Accounting Polici_5
Significant Accounting Policies - Summary of Depreciation Calculated on Straight-Line Basis Over Estimated Useful Lives of Assets (Detail) | 12 Months Ended |
Dec. 31, 2020 | |
Leasehold improvements [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives | shorter of lease term or ten years |
Office equipment [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives | 5 years |
IT equipment [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives | 3 years |
Significant Accounting Polici_6
Significant Accounting Policies - Summary of Depreciation Method For Right of Use Assets And Useful Life (Detail) | 12 Months Ended |
Dec. 31, 2020 | |
Building [member] | Bottom of range [member] | |
Statement [line items] | |
Useful life of right-of-use asset | 6 years |
Building [member] | Top of range [member] | |
Statement [line items] | |
Useful life of right-of-use asset | 9 years |
Equipment | Bottom of range [member] | |
Statement [line items] | |
Useful life of right-of-use asset | 1 year |
Equipment | Top of range [member] | |
Statement [line items] | |
Useful life of right-of-use asset | 2 years |
Significant judgments, estima_2
Significant judgments, estimates and assumptions - Additional Information (Detail) £ in Millions, shares in Millions, $ in Millions | Aug. 23, 2019GBP (£)shares | Dec. 31, 2020GBP (£) | Dec. 31, 2020USD ($) | Dec. 31, 2019GBP (£) | Dec. 31, 2019USD ($) | Apr. 23, 2019 |
Significant Accounting Judgments Estimates And Assumption [Line Items] | ||||||
Fair value of the contingent consideration liability | £ 0 | £ 0.4 | $ 0.5 | |||
Potential payments under the CVR arrangement | £ 58.6 | $ 80 | ||||
Percentage of voting equity interests acquired | 100.00% | |||||
Net identifiable assets | £ 44.6 | |||||
Equity instruments (24.8 million ordinary shares) | £ 40.9 | |||||
OncoMed [Member] | ||||||
Significant Accounting Judgments Estimates And Assumption [Line Items] | ||||||
Business acquisition shares issued | shares | 24.8 | |||||
Gain on bargain purchase business combination | £ 3.7 |
Group Information - Summary of
Group Information - Summary of Information About Subsidiaries of the Group (Detail) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Mereo BioPharma 1 Limited [member] | ||
Disclosure of subsidiaries [line items] | ||
Name | Mereo BioPharma 1 Limited | |
Principal activities | Pharmaceutical R&D | |
Country of incorporation | UK | |
% equity interest | 100.00% | 100.00% |
Mereo BioPharma 2 Limited [member] | ||
Disclosure of subsidiaries [line items] | ||
Name | Mereo BioPharma 2 Limited | |
Principal activities | Pharmaceutical R&D | |
Country of incorporation | UK | |
% equity interest | 100.00% | 100.00% |
Mereo BioPharma 3 Limited [member] | ||
Disclosure of subsidiaries [line items] | ||
Name | Mereo BioPharma 3 Limited | |
Principal activities | Pharmaceutical R&D | |
Country of incorporation | UK | |
% equity interest | 100.00% | 100.00% |
Mereo BioPharma 4 Limited [member] | ||
Disclosure of subsidiaries [line items] | ||
Name | Mereo BioPharma 4 Limited | |
Principal activities | Pharmaceutical R&D | |
Country of incorporation | UK | |
% equity interest | 100.00% | 100.00% |
Mereo BioPharma Ireland Limited [member] | ||
Disclosure of subsidiaries [line items] | ||
Name | Mereo BioPharma Ireland Limited | |
Principal activities | Pharmaceutical R&D | |
Country of incorporation | Ireland | |
% equity interest | 100.00% | 100.00% |
Mereo BioPharma 5 Inc [Member] | ||
Disclosure of subsidiaries [line items] | ||
Name | Mereo BioPharma 5, Inc. | |
Principal activities | Pharmaceutical R&D | |
Country of incorporation | U.S. | |
% equity interest | 100.00% | 100.00% |
Navi Subsidiary Inc [Member] | ||
Disclosure of subsidiaries [line items] | ||
Name | Navi Subsidiary, Inc. | |
Principal activities | Pharmaceutical R&D | |
Country of incorporation | U.S. | |
% equity interest | 100.00% | 100.00% |
Mereo US Holdings Inc [member] | ||
Disclosure of subsidiaries [line items] | ||
Name | Mereo US Holdings Inc. | |
Principal activities | Holding company | |
Country of incorporation | U.S. | |
% equity interest | 100.00% | 100.00% |
Mereo BioPharma Group plc Employee Benefit Trust [member] | ||
Disclosure of subsidiaries [line items] | ||
Name | Mereo BioPharma Group plc Employee Benefit Trust | |
Principal activities | Employee share scheme | |
Country of incorporation | Jersey |
Loss before taxation - Summary
Loss before taxation - Summary of information about Loss Before Taxation (Detail) - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule Of Detailed Information About Loss Before Taxation [Abstract] | |||
Fees payable to the Company's Auditor for the audit of Group accounts | £ 449 | £ 514 | £ 323 |
Fees payable to the Company's Auditor for other services: | |||
Audit of subsidiary accounts | 49 | 45 | 30 |
Audit-related assurance services | 318 | 311 | 171 |
Accounting advisory services | 10 | ||
Legal and professional fees including patent costs | 4,619 | 2,413 | 936 |
Gain on modification of lease | (957) | ||
Income From Sub Lease | (646) | (855) | |
Operating lease expense (IAS 17) | 293 | ||
Depreciation of right-of-use assets (IFRS 16) | 1,531 | 1,505 | |
Depreciation (excluding right-of-use assets) | £ 68 | £ 52 | £ 40 |
Employees- Additional Informati
Employees- Additional Information (Detail) - Directors | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of employee abstract [Abstract] | ||
Number Of Directors | 1 | 2 |
Employees- Summary of Average M
Employees- Summary of Average Monthly Persons Employed By Group (Detail) - Number | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
By activity | |||
Average number of employees | 39 | 46 | 36 |
Administrative [member] | |||
By activity | |||
Average number of employees | 22 | 28 | 24 |
Research and development [member] | |||
By activity | |||
Average number of employees | 17 | 18 | 12 |
Employees - Summary of Total co
Employees - Summary of Total compensation cost for persons Employed by the Group (Detail) - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of employee [line items] | |||
Share-based payment expenses | £ 1,558 | £ 1,636 | £ 2,190 |
Total employee benefit expenses | 10,669 | 8,007 | 6,198 |
Research and development expenses [member] | |||
Disclosure of employee [line items] | |||
Salaries | 3,046 | 2,824 | 1,792 |
Social security costs | 397 | 110 | (30) |
Pension contributions | 66 | 62 | 73 |
Share-based payment expenses | 446 | 152 | 526 |
Administrative expenses [member] | |||
Disclosure of employee [line items] | |||
Salaries | 4,832 | 3,384 | 2,903 |
Social security costs | 681 | (124) | (828) |
Pension contributions | 89 | 114 | 99 |
Share-based payment expenses | £ 1,112 | £ 1,485 | £ 1,663 |
Employee - Summary of Compensat
Employee - Summary of Compensation Cost For Directors (Detail) - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of employee [line items] | |||
Pension contributions | £ 144 | £ 64 | £ 60 |
Total | 5,498 | 4,704 | 4,706 |
Directors [member] | |||
Disclosure of employee [line items] | |||
Salaries and fees | 1,114 | 1,106 | 1,047 |
Benefits in kind | 14 | 17 | 15 |
Pension contributions | 61 | 25 | 11 |
Bonus | 538 | 294 | 512 |
Total | £ 1,727 | £ 1,442 | £ 1,585 |
Other income _ expenses and a_3
Other income / expenses and adjustments - Summary of Finance Income (Detail) - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of Other Income Expenses And Adjustment [Line Items] | |||
Bank Interest Earned | £ 5 | £ 42 | £ 307 |
Interest earned on short-term investments | 141 | ||
Gain on short-term investments | 39 | 194 | |
Total finance income | £ 44 | £ 377 | £ 307 |
Other income _ expenses and a_4
Other income / expenses and adjustments - Summary of Finance Charge (Detail) - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of Other Income Expenses And Adjustment [Line Items] | |||
Interest on convertible loan notes | £ (2,241) | £ (20) | £ (185) |
Other interest | (10) | ||
Interest on bank loan | (2,900) | (1,739) | (1,645) |
Interest on lease liabilities | (1,085) | (1,314) | |
Accreted interest on bank loan | (1,523) | (782) | |
Modification gain/(loss) on bank loan | 456 | (730) | |
Loss on short-term deposits | (22) | ||
Discounting of provision for deferred cash consideration | (157) | (221) | (443) |
Total finance costs | £ (6,383) | £ (4,371) | £ (3,807) |
Other income _ expenses and a_5
Other income / expenses and adjustments - Summary of Changes In The Fair Value Of Financial Instruments (Detail) - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of Changes in the fair value of financial instruments [Line Items] | |||
Gain (Loss) on change in fair value of warrants | £ (109,849) | £ 875 | £ 716 |
Placement [Member] | |||
Disclosure of Changes in the fair value of financial instruments [Line Items] | |||
Gain (Loss) on change in fair value of warrants | (45,977) | ||
Bank Loan [member] | |||
Disclosure of Changes in the fair value of financial instruments [Line Items] | |||
Gain (Loss) on change in fair value of warrants | (714) | 875 | £ 716 |
Embedded Derivative [Member] | |||
Disclosure of Changes in the fair value of financial instruments [Line Items] | |||
Gain (Loss) on change in fair value of warrants | £ (63,158) | £ 0 |
Taxation - Summary of Income Ta
Taxation - Summary of Income Tax Credit (Detail) - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Major components of tax expense (income) [abstract] | |||
UK corporation tax R&D credit | £ 2,822 | £ 5,149 | £ 5,277 |
Other tax income / (expense) | 1,125 | ||
Taxation | £ 2,822 | £ 6,274 | £ 5,277 |
Taxation - Additional Informati
Taxation - Additional Information (Detail) - GBP (£) £ in Thousands | Dec. 31, 2020 | Apr. 01, 2020 | Mar. 11, 2020 | Apr. 30, 2023 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of income tax credit [line items] | |||||||
Description of accumulated tax losses | The deferred tax liability has arisen from the recognition of separately identifiable intangible assets on the acquisition of Mereo BioPharma 5, Inc. A deferred tax asset on losses has been recognized up to the level of the deferred tax liability, resulting in a net deferred tax liability of £nil. | ||||||
Other taxes recoverable | £ 804 | £ 804 | £ 979 | ||||
Deferred Income Tax Liability | |||||||
Uncertain tax position off balance sheet | £ 2,500 | £ 2,500 | |||||
Uncertain tax position off balance sheet | % | 20.00% | 20.00% | |||||
Top of range [member] | |||||||
Disclosure of income tax credit [line items] | |||||||
Corporate tax reduction | 25.00% | ||||||
Bottom of range [member] | |||||||
Disclosure of income tax credit [line items] | |||||||
Corporate tax reduction | 19.00% | ||||||
Indefinitely Expired [Member] | |||||||
Disclosure of income tax credit [line items] | |||||||
Tax Losses carry forward | £ 44,000 | ||||||
UK Tax Authority [Member] | |||||||
Disclosure of income tax credit [line items] | |||||||
Corporate tax reduction | 19.00% | 19.00% | |||||
Standard rate of corporation tax applied to reported loss | 19.00% | 19.00% | |||||
Rate at which deferred tax assets and liabilities would be recognized | 19.00% | ||||||
Tax Losses carry forward | £ 136,900 | £ 70,200 | |||||
US Tax Authority [Member] | |||||||
Disclosure of income tax credit [line items] | |||||||
Rate at which deferred tax assets and liabilities would be recognized | 21.00% | ||||||
Tax Losses carry forward | 50,100 | ||||||
US Tax Authority [Member] | Expire In 2023 [Member] | |||||||
Disclosure of income tax credit [line items] | |||||||
Tax Losses carry forward | 6,100 | ||||||
Expiration date | 2022 | ||||||
US Tax Authority [Member] | Expire In 2028 [Member] | |||||||
Disclosure of income tax credit [line items] | |||||||
Tax Losses carry forward | £ 3,300 | ||||||
Expiration date | 2027 | ||||||
Changes in tax rates or tax laws enacted or announced [member] | UK Tax Authority [Member] | |||||||
Disclosure of income tax credit [line items] | |||||||
Corporate tax reduction | 17.00% |
Taxation - Summary of Reconcili
Taxation - Summary of Reconciliation to the Earnings Loss Per Income Statement (Detail) - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Major components of tax expense (income) [abstract] | |||
Loss on ordinary activities before income tax | £ (166,450) | £ (41,118) | £ (37,306) |
Loss on ordinary activities before tax at the UK's statutory income tax rate of 19% (2019: 19%) | 31,626 | 7,812 | 7,088 |
Expenses not deductible for income tax purposes (permanent differences) | (13,270) | (317) | (1,070) |
Income not taxable | 4 | ||
Temporary timing differences | (343) | (277) | |
R&D relief uplift | 1,214 | 2,540 | 2,271 |
Losses (unrecognized) | (14,479) | (4,380) | (2,804) |
Deferred income from MBG loan guarantee costs | (54) | 69 | |
Foreign tax | 184 | ||
Differences in overseas tax rates | 261 | 340 | |
Derecognition of deferred tax | (2,686) | ||
Gain on bargain purchase | 699 | ||
Other | (32) | (23) | |
Tax credit for the year | £ 2,822 | £ 6,274 | £ 5,277 |
Taxation - Summary of Reconci_2
Taxation - Summary of Reconciliation to the Earnings Loss Per Income Statement (Parenthetical) (Detail) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
UK Tax Authority [Member] | ||
Disclosure Of Income Tax Credit [line items] | ||
Statutory income tax rate | 19.00% | 19.00% |
Taxation - Summary of Deferred
Taxation - Summary of Deferred Tax (Detail) - GBP (£) £ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Net deferred tax asset (unrecognised) | £ 48,032 | £ 31,028 | £ 9,105 |
Losses [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Net deferred tax asset (unrecognised) | 37,021 | 19,443 | 8,604 |
Loan relationships [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Net deferred tax asset (unrecognised) | 421 | ||
US Tax Credit [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Net deferred tax asset (unrecognised) | 9,880 | 10,032 | |
Accruals [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Net deferred tax asset (unrecognised) | 947 | ||
Fixed assets [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Net deferred tax asset (unrecognised) | 414 | 400 | |
Share options [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Net deferred tax asset (unrecognised) | 55 | ||
Other US deferred tax [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Net deferred tax asset (unrecognised) | 86 | ||
Other [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Net deferred tax asset (unrecognised) | 137 | 202 | 6 |
Temporary differences [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Net deferred tax asset (unrecognised) | £ 18 | £ 4 | £ 495 |
Taxation - Summary of analysis
Taxation - Summary of analysis of recognized deferred tax (Detail) £ in Thousands | 12 Months Ended |
Dec. 31, 2020GBP (£) | |
Disclosure Of Analysis Of Recognized Deferred Tax [Line Items] | |
Deferred tax asset/(liabilities) | £ (31,028) |
Deferred tax asset/(liabilities) | (48,032) |
Intangible Asset and Right of Use Asset [member] | |
Disclosure Of Analysis Of Recognized Deferred Tax [Line Items] | |
Deferred tax asset/(liabilities) | (2,686) |
Recognized in income | 2,590 |
Deferred tax asset/(liabilities) | (96) |
Net Operating Losses [member] | |
Disclosure Of Analysis Of Recognized Deferred Tax [Line Items] | |
Deferred tax asset/(liabilities) | 2,686 |
Recognized in income | (2,590) |
Deferred tax asset/(liabilities) | £ 96 |
Loss per share - Summary of Los
Loss per share - Summary of Loss Per Share (Detail) - GBP (£) £ / shares in Units, £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings per share [abstract] | |||
Loss | £ (163,628) | £ (34,844) | £ (32,029) |
Weighted shares number | 338,953,141,000 | 89,424,476,000 | 71,144,786,000 |
Loss per share | £ (0.48) | £ (0.39) | £ (0.45) |
Loss per share - Additional inf
Loss per share - Additional information (Detail) - shares | Jun. 01, 2018 | Jun. 03, 2016 | Dec. 31, 2020 | Dec. 31, 2019 |
Earnings per share [abstract] | ||||
New ordinary shares payable | 1,349,692 | |||
Warrants issued | 50,076 | 1,071,042 | 162,292,274 | 321,444 |
Property, plant and equipment -
Property, plant and equipment - Additional information (Detail) £ in Millions | Aug. 31, 2020GBP (£) |
Disclosure of detailed information about property, plant and equipment [line items] | |
Modification of accounting standard transaction costs | £ 2.5 |
IFRS 16 | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Reduction in Right of Use Assets | 8.7 |
Reduction in Lease Liability | 9.5 |
Gain on Modification of Lease | £ 0.7 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Summary of IFRS 16 Lease Explanatory (Detail) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | £ 11,558 | £ 149 |
Ending balance | 1,573 | 11,558 |
Cost or valuation member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 13,252 | 266 |
Additions | 16 | 21 |
Lease modification | (10,071) | |
Transition to IFRS 16 (Leases) | 2,551 | |
Acquisition of subsidiary (Note 5) | 10,837 | |
Disposals | (18) | |
Adjustment to carrying value | (290) | |
Currency translation effects | 187 | (115) |
Ending balance | 3,384 | 13,252 |
Depreciation/Amortization and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (1,694) | (117) |
Lease modification | 1,482 | |
Depreciation for the year | (1,599) | (1,577) |
Ending balance | (1,811) | (1,694) |
Leasehold improvements [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 95 | 111 |
Ending balance | 79 | 95 |
Leasehold improvements [member] | Cost or valuation member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 164 | 164 |
Additions | 0 | |
Ending balance | 164 | 164 |
Leasehold improvements [member] | Depreciation/Amortization and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (69) | (53) |
Depreciation for the year | (16) | (16) |
Ending balance | (85) | (69) |
Office equipment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 41 | 15 |
Ending balance | 6 | 41 |
Office equipment [member] | Cost or valuation member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 71 | 31 |
Additions | 0 | |
Acquisition of subsidiary (Note 5) | 58 | |
Disposals | (18) | |
Ending balance | 71 | 71 |
Office equipment [member] | Depreciation/Amortization and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (30) | (16) |
Depreciation for the year | (35) | (14) |
Ending balance | (65) | (30) |
IT equipment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 26 | 23 |
Ending balance | 25 | 26 |
IT equipment [member] | Cost or valuation member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 116 | 71 |
Additions | 16 | 21 |
Acquisition of subsidiary (Note 5) | 24 | |
Disposals | 0 | |
Ending balance | 132 | 116 |
IT equipment [member] | Depreciation/Amortization and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (90) | (48) |
Depreciation for the year | (17) | (42) |
Ending balance | (107) | (90) |
Right-of-use asset (building) [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 10,881 | |
Ending balance | 1,318 | 10,881 |
Right-of-use asset (building) [member] | Cost or valuation member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 11,877 | |
Lease modification | (10,220) | |
Transition to IFRS 16 (Leases) | 1,237 | |
Acquisition of subsidiary (Note 5) | 10,755 | |
Currency translation effects | 191 | (115) |
Ending balance | 1,848 | 11,877 |
Right-of-use asset (building) [member] | Depreciation/Amortization and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (996) | |
Lease modification | 1,482 | |
Depreciation for the year | (1,017) | (996) |
Ending balance | (531) | (996) |
Right-of-use asset (equipment) [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 515 | |
Ending balance | 146 | 515 |
Right-of-use asset (equipment) [member] | Cost or valuation member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 1,024 | |
Lease modification | 149 | |
Transition to IFRS 16 (Leases) | 1,314 | |
Adjustment to carrying value | (290) | |
Currency translation effects | (4) | |
Ending balance | 1,169 | 1,024 |
Right-of-use asset (equipment) [member] | Depreciation/Amortization and impairment [member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | (509) | |
Depreciation for the year | (514) | (509) |
Ending balance | £ (1,023) | £ (509) |
Property, plant and equipment_3
Property, plant and equipment - Summary of Maturity of Lease Liabilities (Detail) £ in Thousands | Dec. 31, 2020GBP (£) |
Disclosure of maturity analysis of operating lease payments [line items] | |
Maturity of Lease liabilities | £ 1,794 |
Within 1 year [member] | |
Disclosure of maturity analysis of operating lease payments [line items] | |
Maturity of Lease liabilities | 636 |
Between 1 and 3 years [member] | |
Disclosure of maturity analysis of operating lease payments [line items] | |
Maturity of Lease liabilities | 753 |
Between 3 and 5 years [member] | |
Disclosure of maturity analysis of operating lease payments [line items] | |
Maturity of Lease liabilities | £ 405 |
Intangible Assets - Summary of
Intangible Assets - Summary of Detailed Information about Intangible Assets (Detail) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of detailed information about intangible assets [line items] | ||
Beginning balance | £ 44,456 | £ 32,632 |
Ending balance | 31,648 | 44,456 |
Cost or valuation member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Beginning balance | 45,527 | 33,005 |
Additions | 12,693 | |
Disposals | (13,386) | |
Currency translation effects | 864 | (171) |
Ending balance | 33,005 | 45,527 |
Depreciation/Amortization and impairment [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Beginning balance | (1,071) | (373) |
Revision to estimated value | (286) | (698) |
Ending balance | £ (1,357) | £ (1,071) |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) £ in Thousands, $ in Millions | Apr. 23, 2019GBP (£) | Oct. 28, 2017GBP (£) | Dec. 31, 2020GBP (£) | Dec. 31, 2020USD ($) | Dec. 31, 2019GBP (£) |
Disclosure of detailed information about intangible assets [line items] | |||||
Amortisation charge recognised on intangible assets | £ 0 | £ 0 | |||
Deferred equity consideration | 1,558 | ||||
Loss on disposal of intangible assets | 10,900 | ||||
Global Licensing Agreement [Member] | |||||
Disclosure of detailed information about intangible assets [line items] | |||||
Upfront Payment Received | 3,100 | $ 4 | |||
Events After Reporting Date [Member] | Global Licensing Agreement [Member] | |||||
Disclosure of detailed information about intangible assets [line items] | |||||
Derecognised Financial Assets | 13,400 | ||||
Additional milestone payment | $ | $ 302 | ||||
OncoMed [Member] | |||||
Disclosure of detailed information about intangible assets [line items] | |||||
Acquisition of Intangible Assets Other Than Goodwill | £ 12,700 | ||||
MPH-966 [member] | |||||
Disclosure of detailed information about intangible assets [line items] | |||||
Deferred equity consideration | £ 7,200 | ||||
Present value of provision for deferred cash consideration | 300 | 700 | |||
Other intangible assets [member] | |||||
Disclosure of detailed information about intangible assets [line items] | |||||
Revision in the value of any other intangible assets | £ 0 | £ 0 |
Impairment Testing of Acquire_3
Impairment Testing of Acquired Development Programs Not Yet Available for Use - Summary of Carrying Amount of Acquired Development Programs (Detail) - GBP (£) £ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of detailed information about intangible assets [line items] | ||
Acquired development programs | £ 31,648 | £ 44,456 |
Navicixizumab [Member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Acquired development programs | 12,522 | |
BPS-804 [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Acquired development programs | 11,616 | 11,616 |
MPH-966 [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Acquired development programs | 5,835 | 6,121 |
BGS-649 [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Acquired development programs | 9,886 | 9,886 |
BCT-197 [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Acquired development programs | £ 4,311 | £ 4,311 |
Impairment Testing of Acquire_4
Impairment Testing of Acquired Development Programs Not Yet Available for Use - Additional Information (Detail) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of quantitative information about right-of-use assets [abstract] | ||
Impairment of the acquired products' rights | £ 0 | |
Cash flow projections - Industry-standard asset life | P20Y | |
Discount rates | 12.00% | 15.30% |
Other Receivables - Summary of
Other Receivables - Summary of Other Receivables (Detail) - GBP (£) £ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of other receivables [abstract] | ||
Rent deposit | £ 407 | £ 293 |
VAT recoverable | 370 | 269 |
Other | 239 | 10 |
Total | £ 1,016 | £ 572 |
Cash and Short-term Deposits -
Cash and Short-term Deposits - Summary of Cash and Short-term Deposits (Detail) - GBP (£) £ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and cash equivalents [abstract] | ||||
Cash | £ 22,922 | £ 15,803 | ||
Short-term deposits | 547 | 544 | ||
Total | £ 23,469 | £ 16,347 | £ 25,042 | £ 50,045 |
Issued Capital and Reserves - S
Issued Capital and Reserves - Summary of Detailed Information of Ordinary Share Capital (Detail) - GBP (£) £ in Thousands | Feb. 20, 2020 | Feb. 11, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of classes of share capital [line items] | |||||
Beginning balance | £ 40,256 | £ 32,771 | £ 62,483 | ||
Issuances in the period | 16,937 | ||||
Ending balance | (14,971) | 40,256 | 32,771 | ||
Beginning balance | 121,684 | ||||
Ending balance | 161,785 | 121,684 | |||
Share premium [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Beginning balance | 121,684 | 118,492 | 118,227 | ||
Issuances in the period | 18,715 | ||||
Ending balance | 161,785 | 121,684 | 118,492 | ||
Beginning balance | 121,684 | 118,492 | 118,227 | ||
Ending balance | 161,785 | 121,684 | 118,492 | ||
Aspire Capital One [member] | Share premium [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issued for public offering | 150 | ||||
Aspire Capital Two [member] | Share premium [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issued for public offering | 13 | ||||
Aspire Capital Three [Member] | Share premium [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issued for public offering | 110 | ||||
Transaction Costs [Member] | Share premium [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issued for public offering | (1,307) | (761) | (8) | ||
Private Placement [member] | Share premium [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issued for public offering | 15,244 | ||||
Conversion of Loan Note [member] | Share premium [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issued for public offering | 21,386 | 3,953 | |||
Conversion of Warrants [member] | Share premium [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issued for public offering | 0 | ||||
Ordinary shares [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Beginning balance | 294 | 214 | 213 | ||
Ending balance | £ 1,017 | £ 294 | £ 214 | ||
Ordinary shares issued and fully paid, Beginning balance | 97,959,622 | 71,240,272 | 71,094,974 | ||
Ordinary shares issued and fully paid, Ending balance | 338,953,141 | 97,959,622 | 71,240,272 | ||
Ordinary shares [member] | Aspire Capital One [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issued | 50,076 | ||||
Ordinary shares [member] | Aspire Capital Two [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issued | 10,000 | ||||
Ordinary shares [member] | OncoMed [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issuances in the period | £ 74 | ||||
Issued | 24,783,320 | ||||
Ordinary shares [member] | Private Placement [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issuances in the period | £ 267 | ||||
Issued | 89,144,630 | ||||
Ordinary shares [member] | Conversion of Loan Note [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issuances in the period | £ 375 | £ 6 | |||
Issued | 125,061,475 | 1,936,030 | |||
Ordinary shares [member] | Exercise of Share Options [member] | Aspire Capital Three [Member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issuances in the period | £ 1 | ||||
Issued | 85,222 | ||||
Ordinary shares [member] | Conversion of Warrants [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issuances in the period | £ 1 | ||||
Issued | 239,179 | ||||
Ordinary shares [member] | Securities Purchase Agreement [Member] | Aspire Capital One [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issuances in the period | £ 34 | ||||
Issued | 11,432,925 | ||||
Issued for public offering | £ 2,287 | ||||
Ordinary shares [member] | Securities Purchase Agreement [Member] | Aspire Capital Two [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issuances in the period | £ 9 | ||||
Issued | 2,862,595 | ||||
Issued for public offering | £ 224 | ||||
Ordinary shares [member] | Securities Purchase Agreement [Member] | Boxer Capital [member] | |||||
Disclosure of classes of share capital [line items] | |||||
Issuances in the period | £ 37 | ||||
Issued | 12,252,715 | ||||
Issued for public offering | £ 2,267 |
Issued Capital and Reserves - A
Issued Capital and Reserves - Additional Information (Detail) £ / shares in Units, £ in Thousands, $ in Millions | Dec. 23, 2020£ / sharesshares | Jun. 30, 2020GBP (£)£ / sharesshares | Jun. 04, 2020GBP (£)£ / sharesshares | Jun. 03, 2020GBP (£)£ / sharesshares | Feb. 20, 2020GBP (£)£ / sharesshares | Feb. 11, 2020GBP (£)£ / sharesshares | Jun. 21, 2019GBP (£)£ / sharesshares | Apr. 23, 2019£ / sharesshares | Jan. 01, 2019£ / sharesshares | Jun. 01, 2018GBP (£)£ / sharesshares | Jun. 03, 2016shares | Mar. 21, 2016GBP (£) | Dec. 31, 2020GBP (£)£ / sharesshares | Dec. 31, 2019GBP (£)shares | Feb. 11, 2020USD ($)shares | Dec. 31, 2018shares | Oct. 22, 2018shares | Aug. 03, 2018shares | Dec. 31, 2017shares |
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Ordinary shares issued and allotted | shares | 89,144,630 | 12,252,715 | |||||||||||||||||
Nominal value | £ / shares | £ 0.003 | ||||||||||||||||||
Ordinary shares price per share | £ / shares | £ 0.174 | £ 0.19 | £ 0.08 | ||||||||||||||||
Conversion of loan notes into ordinary shares amount | £ 2,400 | £ 40,500 | |||||||||||||||||
Conversion of loan notes into ordinary shares | shares | 50,076 | 1,071,042 | 162,292,274 | 321,444 | |||||||||||||||
Share conversion price per share | £ / shares | £ 2.21 | ||||||||||||||||||
Maximum shares to be issued | shares | 864,988 | ||||||||||||||||||
Equity component (consideration received for the warrants) | £ 100 | £ 100 | |||||||||||||||||
Nominal value of issued capital | 1,017 | £ 294 | |||||||||||||||||
Other Reserve [Member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Reduction in share premium | £ 2,100 | ||||||||||||||||||
Fair value of Acquisition for Ordinary shares | 13,400 | ||||||||||||||||||
Proceeds from issue of ordinary shares | £ 15,500 | ||||||||||||||||||
Issued | shares | 89,144,630 | ||||||||||||||||||
Directors [member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Reduction in share premium | £ 7,000 | ||||||||||||||||||
Novartis [member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Conversion of loan notes into ordinary shares amount | £ 21,800 | £ 1,080 | |||||||||||||||||
Number of converted loans converted to ordinary shares | shares | 125,061,475 | ||||||||||||||||||
Amount recognised on conversion and carrying value of the financial liability extinguished | £ 33,500 | ||||||||||||||||||
Aspire Capital Fund LLC [Member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Ordinary shares price per share | £ / shares | £ 0.20 | ||||||||||||||||||
Cash consideration | £ 2,300 | ||||||||||||||||||
Number of converted loans converted to ordinary shares | shares | 2,862,595 | ||||||||||||||||||
Issued | shares | 572,519 | ||||||||||||||||||
Ordinary shares [member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Ordinary shares issued and allotted | shares | 125,061,475 | 89,144,630 | 24,783,320 | 11,432,925 | 85,222 | 10,000 | |||||||||||||
Nominal value | £ / shares | £ 0.003 | £ 3 | |||||||||||||||||
Ordinary shares price per share | £ / shares | £ 0.174 | £ 0.174 | £ 1.65 | ||||||||||||||||
Cash consideration | £ 21,800 | £ 15,500 | £ 2,300 | £ 200 | |||||||||||||||
Shares issued as fully paid up | shares | 338,953,141 | 97,959,622 | 71,240,272 | 71,094,974 | |||||||||||||||
Proceeds from issue of ordinary shares | 13,400 | ||||||||||||||||||
Discount On Issue Of Shares | £ 2,100 | ||||||||||||||||||
Ordinary shares [member] | OncoMed [Member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Fair value of Acquisition for Ordinary shares | £ 40,900 | ||||||||||||||||||
Issued | shares | 24,783,320 | ||||||||||||||||||
Ordinary shares [member] | OncoMed [Member] | Issued capital [member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Nominal value of issued capital | £ 100 | ||||||||||||||||||
Ordinary shares [member] | Conversion Of Warrants [Member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Share conversion price per share | £ / shares | £ 0.348 | ||||||||||||||||||
Number Of Warrants converted | shares | 690,205 | ||||||||||||||||||
Issued | shares | 239,179 | ||||||||||||||||||
Ordinary shares [member] | Novartis [member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Maximum shares to be issued | shares | 864,988 | ||||||||||||||||||
Ordinary shares to be issued price per share | £ / shares | £ 1.84 | ||||||||||||||||||
Ordinary shares [member] | Aspire Capital Fund LLC [Member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Commitement to issue capital | $ | $ 25 | ||||||||||||||||||
Novartis bonus shares [member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Conversion of loan notes into ordinary shares amount | £ 0 | ||||||||||||||||||
Maximum shares to be issued | shares | 864,988 | ||||||||||||||||||
Merger reserve [member] | OncoMed [Member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Shares issued as fully paid up | shares | 24,783,320 | ||||||||||||||||||
Merger reserve [member] | OncoMed [Member] | Issued capital [member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Excess Amount Within Other Capital Reserves | £ 40,800 | ||||||||||||||||||
Capital reserve [member] | Equity component of convertible loan [member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Gain loss on extnguishment of financial liability | £ 33,100 | ||||||||||||||||||
ADS [Member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Number of new stock issued | shares | 47,835 | 47,835 | |||||||||||||||||
ADS [Member] | Conversion Of Warrants [Member] | |||||||||||||||||||
Disclosure of classes of share capital [line items] | |||||||||||||||||||
Number Of Warrants converted | shares | 138,041 |
Issued Capital and Reserves -_2
Issued Capital and Reserves - Summary of Other Capital Reserves (Detail) - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of classes of share capital [line items] | |||
Beginning balance | £ 7,000 | £ 7,000 | |
Share-based payments expense during the year | 1,558 | ||
Shares issued | 16,937 | ||
Equity component of convertible loan instrument | 54,865 | ||
Ending balance | 5,001 | 7,000 | £ 7,000 |
Issuance of warrants | 4,080 | ||
Capital reserve [member] | |||
Disclosure of classes of share capital [line items] | |||
Beginning balance | 59,147 | 18,593 | 16,359 |
Acquisition of OncoMed (Note 5) | 40,818 | ||
Share-based payments expense during the year | 1,558 | 1,636 | 2,302 |
Share-based payments release for exercise of options | (112) | ||
Shares issued | (1,590) | ||
Equity component of convertible loan instrument | 1,084 | ||
Conversion of the Loan Notes | 33,104 | (310) | |
Reclassification of the embedded derivative | 33,481 | ||
Ending balance | 128,374 | 59,147 | 18,593 |
Issuance of warrants | 44 | ||
Shares to be issued [member] | Capital reserve [member] | |||
Disclosure of classes of share capital [line items] | |||
Beginning balance | 1,590 | 1,590 | |
Shares issued | (1,590) | ||
Ending balance | 1,590 | ||
Share-based payments [member] | Capital reserve [member] | |||
Disclosure of classes of share capital [line items] | |||
Beginning balance | 18,285 | 16,649 | 14,459 |
Share-based payments expense during the year | 1,558 | 1,636 | 2,302 |
Share-based payments release for exercise of options | (112) | ||
Ending balance | 19,843 | 18,285 | 16,649 |
Equity component of convertible loan [member] | Capital reserve [member] | |||
Disclosure of classes of share capital [line items] | |||
Beginning balance | 310 | 310 | |
Equity component of convertible loan instrument | 1,084 | ||
Conversion of the Loan Notes | (310) | ||
Reclassification of the embedded derivative | 33,481 | ||
Ending balance | 34,565 | 310 | |
Other Warrents Issued [Member] | Capital reserve [member] | |||
Disclosure of classes of share capital [line items] | |||
Beginning balance | 44 | 44 | |
Ending balance | 44 | 44 | 44 |
Issuance of warrants | £ 44 | ||
Merger reserve [member] | Capital reserve [member] | |||
Disclosure of classes of share capital [line items] | |||
Beginning balance | 40,818 | ||
Acquisition of OncoMed (Note 5) | 40,818 | ||
Ending balance | 40,818 | £ 40,818 | |
Other Reserve [Member] | Capital reserve [member] | |||
Disclosure of classes of share capital [line items] | |||
Conversion of the Loan Notes | 33,104 | ||
Ending balance | £ 33,104 |
Issued Capital and Reserves -_3
Issued Capital and Reserves - Summary of Accumulated Loss (Detail) - GBP (£) £ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of classes of share capital [abstract] | |||
Other reserves | £ 5,001 | £ 7,000 | £ 7,000 |
Accumulated losses | £ (309,693) | £ (146,065) | £ (111,221) |
Private Placement - Additional
Private Placement - Additional Information (Details) £ in Millions | Jun. 30, 2020GBP (£) | Jun. 03, 2020GBP (£)£ / sharesshares | Jun. 21, 2019GBP (£) | Dec. 31, 2020GBP (£)shares | Feb. 20, 2020shares | Feb. 10, 2020GBP (£) | Dec. 31, 2019shares |
Statement [line items] | |||||||
Private Placement Offerings | £ 56 | ||||||
Common stock shares issued | shares | 89,144,630 | 12,252,715 | |||||
Par value per share | £ / shares | £ 0.003 | ||||||
Shares issued price per share | £ / shares | 0.174 | ||||||
Proceeds from Issuance of Convertible Notes | £ 40.5 | £ 40.5 | |||||
Borrowing interest rate | 6.00% | ||||||
Conversion of loan notes into ordinary shares amount | £ 2.4 | £ 40.5 | |||||
Convertible loan amount | £ 18.9 | ||||||
Warrants issued | shares | 1,243,908 | 321,444 | |||||
Percentage Number Of Shares Issuable | 50.00% | ||||||
Exercise price per warrants | 0.348 | ||||||
Debt maturity | June 2023 | ||||||
Novartis [member] | |||||||
Statement [line items] | |||||||
Borrowing interest rate | 6.00% | ||||||
Conversion of loan notes into ordinary shares amount | £ 21.8 | ||||||
Number of converted loans converted to ordinary shares | shares | 125,061,475 | ||||||
Notional amount | £ 3.8 | ||||||
Warrants [Member] | |||||||
Statement [line items] | |||||||
Common stock shares issued | shares | 161,048,366 | ||||||
Warrants issued | shares | 161,048,366 | ||||||
Fair value of the warrants | £ 4.1 | ||||||
Loans And Notes | |||||||
Statement [line items] | |||||||
Notional amount | 38.6 | ||||||
Debt Host Instrument | |||||||
Statement [line items] | |||||||
Notional amount | 26.7 | ||||||
Embedded Derivative | |||||||
Statement [line items] | |||||||
Notional amount | £ 11.9 | ||||||
Tranche 1 Notes [Member] | |||||||
Statement [line items] | |||||||
Proceeds from Issuance of Convertible Notes | £ 15.5 |
Interest-bearing Loans and Bo_3
Interest-bearing Loans and Borrowings - Summary of Interest-bearing Loans and Borrowings (Detail) - GBP (£) £ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of detailed information about borrowings [abstract] | ||
Convertible loan notes ("Novartis Notes") | £ 3,196 | |
Bank loan | £ 20,512 | |
Private placement – Loan Notes | 12,946 | |
At December 31 | 16,142 | 20,512 |
Current | 15,139 | |
Non-current | £ 16,142 | £ 5,373 |
Interest-bearing Loans and Bo_4
Interest-bearing Loans and Borrowings - Additional Information (Detail) £ / shares in Units, £ in Thousands | Jun. 30, 2020GBP (£) | Jun. 03, 2020GBP (£) | Feb. 10, 2020GBP (£)£ / sharesshares | Dec. 31, 2020GBP (£)Installmentshares | Dec. 31, 2019GBP (£) | Dec. 31, 2018GBP (£) |
Disclosure of detailed information about borrowings [line items] | ||||||
Borrowing interest rate | 6.00% | |||||
Accreted interest on bank loan | £ 1,523 | £ 782 | ||||
Derecogniton of the embedded derivative | £ 41,600 | |||||
Proceeds from Issuance of Convertible Notes | £ 40,500 | £ 40,500 | ||||
Fair value of the liability component net of transaction costs | £ 24,400 | |||||
Embedded derivative loan notes outstanding | £ 33,500 | |||||
Bank loan [member] | ||||||
Disclosure of detailed information about borrowings [line items] | ||||||
Number of monthly installments | Installment | 23 | |||||
Interest rate on loans | 8.50% | |||||
Accreted interest on bank loan | £ 0 | 20,500 | ||||
Gains (Losses) on borrowings recognized in profit and loss | £ 500 | £ (700) | ||||
Embedded derivative | ||||||
Disclosure of detailed information about borrowings [line items] | ||||||
Notes issued value | 11,900 | |||||
Notional amount | 11,900 | |||||
Derivative financial liabilities | £ 63,200 | |||||
Novartis [member] | ||||||
Disclosure of detailed information about borrowings [line items] | ||||||
Issuance of unsecured convertible loan notes | shares | 21,700,000 | |||||
Borrowing interest rate | 6.00% | |||||
Number of converted loans converted to ordinary shares | shares | 125,061,475 | |||||
Conversion price per share | £ / shares | £ 0.265 | |||||
Notes issued value | £ 3,800 | |||||
Notional amount | £ 3,800 | |||||
Accreted interest on bank loan | £ 13,300 | |||||
Equity component of the Notes | £ 1,100 | |||||
Exercise price of warrants | £ / shares | £ 0.265 | |||||
Number of securities called by warrants or rights | shares | 1,449,614 | |||||
Expiry date of warrants | Feb. 10, 2025 |
Interest bearing loans and borr
Interest bearing loans and borrowings - Summary Of Movements In The Carrying Value Of The Liability Component Of The Loan Notes (Detail) £ in Thousands | 12 Months Ended |
Dec. 31, 2020GBP (£) | |
DisclosureOfMovementsInTheCarryingValueOfTheLiabilityComponentOfTheLoanNotes [Abstract] | |
Liability component at date of issue (net of transaction costs) | £ 24,417 |
Interest charged (using effective interest rate) | 1,803 |
Reclassified to equity | (13,274) |
Carrying amount of liability component | £ 12,946 |
Interest bearing loans and bo_2
Interest bearing loans and borrowings - Summary Of Movements In The Carrying Value Of The Embedded Derivative (Detail) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of nominal amount of credit derivative [abstract] | ||
At the beginning of the year | £ 0 | £ 0 |
Arising during the year | 11,913 | 0 |
Fair value movements recorded in profit or loss (recognised within ‘FV changes on derivative financial instruments held at FVTPL') | 63,158 | 0 |
Reclassified to equity | (75,071) | 0 |
At the end of the year | £ 0 | £ 0 |
Interest bearing loans and bo_3
Interest bearing loans and borrowings - Summary Of The Inputs Into The Model Used To Fair Value The Embedded Derivative (Detail) | Jun. 30, 2020yr£ / shares | Jun. 03, 2020yr£ / shares | Dec. 31, 2020yr£ / shares |
DisclosureOfTheInputsIntoTheModelUsedToFairValueTheEmbeddedDerivativeAbstract [Abstract] | |||
Expected volatility | 61.00% | 61.00% | 0.00% |
Risk-free interest rate | 0.19% | 0.27% | 0.00% |
Credit spread | 186 | 201 | 0 |
Expected life of share options | yr | 3 | 3 | 0 |
Market price of ordinary shares | £ / shares | £ 0.46 | £ 0.19 | £ 0 |
Probability of resolutions passing | 100.00% | 90.00% | 8212.00% |
Model used | Discounted cash flow/Black-Scholes model | Discounted cash flow/Black-Scholes model | — |
Provisions - Summary of Provisi
Provisions - Summary of Provisions (Detail) - GBP (£) £ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure provisions [line items] | |||
Provisions | £ 1,634 | £ 1,758 | |
Current | 418 | 309 | |
Non-current | 1,216 | 1,449 | |
Social security contributions on share options [member] | |||
Disclosure provisions [line items] | |||
Provisions | 109 | 104 | £ 842 |
Non-current | 109 | ||
Provision for deferred cash consideration [member] | |||
Disclosure provisions [line items] | |||
Provisions | £ 1,525 | £ 1,654 |
Provisions - Summary of Social
Provisions - Summary of Social Security Contributions on Share Options (Detail) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of other provisions [line items] | ||
Beginning balance | £ 1,758 | |
Ending balance | 1,634 | £ 1,758 |
Current | 418 | 309 |
Non-current | 1,216 | 1,449 |
Social security contributions on share options [member] | ||
Disclosure of other provisions [line items] | ||
Beginning balance | 104 | 842 |
Arising (released) during the year | 5 | (738) |
Ending balance | 109 | 104 |
Non-current | 109 | |
Deferred cash consideration [member] | ||
Disclosure of other provisions [line items] | ||
Beginning balance | 1,654 | 2,131 |
Increase in provision due to the unwinding of the time value of money | 157 | 221 |
Decrease in provision due to a change in estimates relating to timelines and probabilities of contractual milestones being achieved | (286) | (698) |
Ending balance | 1,525 | £ 1,654 |
Current | 309 | |
Non-current | £ 1,216 |
Warrant Liability - Summary of
Warrant Liability - Summary of Warrant Liability (Detail) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Warrant Liability [Abstract] | ||
Beginning balance | £ 131 | £ 1,006 |
Issued during the year | 4,080 | 131 |
Settled during the year | (127) | |
Fair value changes during the year | 46,691 | (1,006) |
Ending balance | £ 50,775 | £ 131 |
Warrant Liability - Additional
Warrant Liability - Additional Information (Detail) £ in Thousands | Dec. 23, 2020shares | Dec. 31, 2020GBP (£)shares | Dec. 31, 2020shares | Dec. 31, 2020£ / ADS | Jun. 30, 2020GBP (£)Pence | Jun. 03, 2020shares | Dec. 31, 2019GBP (£)shares | Dec. 31, 2018GBP (£)shares |
Disclosure of classes of share capital [line items] | ||||||||
Warrants issued | 1,243,908 | 321,444 | ||||||
Percentage of ordinary share capital | 48.00% | |||||||
Warrant liability | £ | £ 50,775 | £ 131 | £ 1,006 | |||||
Exercise price per warrants | 0.4144 | 0.348 | 2.95 | |||||
fair value of the warrant liability | £ | £ 49,900 | £ 4,100 | ||||||
ADS [Member] | ||||||||
Disclosure of classes of share capital [line items] | ||||||||
Warrants issued | 138,041 | |||||||
Number of new stock issued | 47,835 | 47,835 | ||||||
Private placement [Member] | ||||||||
Disclosure of classes of share capital [line items] | ||||||||
Warrants issued | 690,205 | 161,048,366 | ||||||
Fair Value Adjustments Of Warrants | £ | £ 46,000 | |||||||
Exercise price per warrants | Pence | 0.348 | |||||||
Bank loan [member] | ||||||||
Disclosure of classes of share capital [line items] | ||||||||
Warrants issued | 922,464 | |||||||
Warrant liability | £ | £ 800 | £ 100 | ||||||
Bottom of range [member] | Bank loan [member] | ||||||||
Disclosure of classes of share capital [line items] | ||||||||
Exercise price per warrants | 3.30 | |||||||
Top of range [member] | Bank loan [member] | ||||||||
Disclosure of classes of share capital [line items] | ||||||||
Exercise price per warrants | £ / ADS | 2.31 | |||||||
Warrant [Member] | ||||||||
Disclosure of classes of share capital [line items] | ||||||||
Number of warrants outstanding | 162,845,977 |
Warrant Liability - Summary o_2
Warrant Liability - Summary of Weighted Average Inputs to the Models Used for the Fair Value of Warrants Granted (Detail) | Jun. 30, 2020 | Jun. 03, 2020 | Dec. 31, 2020$ / shares | Dec. 31, 2019£ / shares |
Disclosure of classes of share capital [line items] | ||||
Expected volatility | 61.00% | 61.00% | 0.00% | |
Risk-free interest rate | 0.19% | 0.27% | 0.00% | |
Warrant liability [member] | ||||
Disclosure of classes of share capital [line items] | ||||
Expected volatility | 67.00% | |||
Risk-free interest rate | 1.26% | |||
Expected life of warrants (years) | 3 years | 10 years | ||
Market price of ordinary shares | (per share) | $ 3.58 | £ 0.83 | ||
Model used | Black-Scholes | Black-Scholes | ||
Bottom of range [member] | Warrant liability [member] | ||||
Disclosure of classes of share capital [line items] | ||||
Expected volatility | 84.00% | |||
Risk-free interest rate | 0.05% | |||
Top of range [member] | Warrant liability [member] | ||||
Disclosure of classes of share capital [line items] | ||||
Expected volatility | 85.00% | |||
Risk-free interest rate | 0.25% |
Trade and Other Payables - Summ
Trade and Other Payables - Summary of Trade and Other Payables (Detail) - GBP (£) £ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Trade and other payables [abstract] | ||
Trade payables | £ 3,165 | £ 6,148 |
Social security and other taxes | 146 | 183 |
Other payables | 22 | 21 |
At December 31 | £ 3,333 | £ 6,352 |
Changes in Liabilities Arisin_3
Changes in Liabilities Arising from Financing Activities - Summary of Changes in Liabilities Arising from Financing Activities (Detail) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of reconciliation of liabilities arising from financing activities [line items] | ||
Beginning balance | £ 34,599 | £ 24,654 |
Financing cash flows | 37,020 | (3,951) |
Changes in foreign exchange | 438 | (131) |
Changes in fair values | 109,720 | (987) |
Interest expense | 6,226 | 4,596 |
Loss on modification | (9,547) | |
Adoption of IFRS 16 (Leases) | 2,534 | |
Gain on modification | (457) | |
Issuance of equity | (2,058) | |
Acquisition of subsidiary | 10,689 | |
Lease term reassessment | (290) | |
Settled during the year | (23,893) | |
Issuance of warrants | 4,080 | |
Reclassified to equity | (88,345) | |
Ending balance | 70,298 | 34,599 |
Contingent consideration [member] | ||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | ||
Beginning balance | 354 | |
Changes in fair values | 354 | |
Settled during the year | (354) | |
Ending balance | 354 | |
Lease liability [member] | ||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | ||
Beginning balance | 11,904 | |
Financing cash flows | (2,086) | (2,212) |
Changes in foreign exchange | 438 | (131) |
Interest expense | 1,085 | 1,314 |
Loss on modification | (9,547) | |
Adoption of IFRS 16 (Leases) | 2,534 | |
Acquisition of subsidiary | 10,689 | |
Lease term reassessment | (290) | |
Ending balance | 1,794 | 11,904 |
Bank loan [member] | ||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | ||
Beginning balance | 20,512 | 19,446 |
Financing cash flows | 2,758 | (1,739) |
Changes in fair values | 0 | |
Interest expense | 2,900 | 3,262 |
Gain on modification | (457) | |
Settled during the year | (23,412) | |
Ending balance | 20,512 | |
Novartis notes [member] | ||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | ||
Beginning balance | 2,038 | |
Interest expense | 20 | |
Issuance of equity | (2,058) | |
Ending balance | 3,196 | |
Warrant liability [member] | ||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | ||
Beginning balance | 131 | 1,005 |
Changes in fair values | 46,691 | (874) |
Settled during the year | (127) | |
Issuance of warrants | 4,080 | |
Ending balance | 50,775 | 131 |
Deferred cash consideration [member] | ||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | ||
Beginning balance | 1,654 | 2,131 |
Changes in fair values | (129) | (477) |
Ending balance | 1,525 | 1,654 |
Convertible loan notes –private placement | ||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | ||
Financing cash flows | 36,330 | |
Changes in fair values | 63,158 | |
Interest expense | 1,803 | |
Reclassified to equity | (88,345) | |
Ending balance | 12,946 | |
other [Member] | ||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | ||
Beginning balance | 44 | 34 |
Financing cash flows | 18 | |
Changes in fair values | 10 | |
Ending balance | £ 62 | £ 44 |
Financial and Capital Risk Ma_3
Financial and Capital Risk Management and Fair Value Measurement - Additional Information (Detail) £ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2020GBP (£) | Dec. 31, 2020USD ($) | Dec. 31, 2019GBP (£) | Dec. 31, 2019USD ($) | |
Disclosure of detailed information about financial instruments [line items] | ||||
Fair value of the contingent consideration liability | £ 0 | £ 0.4 | $ 0.5 | |
Percentage of increase decrease in sensitivity analysis affecting input to fair value | 10.00% | 10.00% | ||
Milestone payment for regulatory and commercial achievements | $ | $ 302 | |||
Global Licensing Agreement [member] | ||||
Disclosure of detailed information about financial instruments [line items] | ||||
Milestone payment for regulatory and commercial achievements | £ | £ 0.4 |
Financial and Capital Risk Ma_4
Financial and Capital Risk Management and Fair Value Measurement - Summary of Fair Value Hierarchy (Detail) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Provision for deferred cash consideration [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Date of valuation | Dec. 31, 2020 | Dec. 31, 2019 |
Financial liabilities at fair value | £ 1,525 | £ 1,654 |
Provision for contingent consideration [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Date of valuation | Dec. 31, 2019 | |
Financial liabilities at fair value | £ 354 | |
Warrant liability [member] | Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Date of valuation | Dec. 31, 2020 | Dec. 31, 2019 |
Financial liabilities at fair value | £ 50,775 | £ 131 |
Bank loan [member] | Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Date of valuation | Dec. 31, 2019 | |
Financial liabilities | £ 20,512 | |
Significant observable inputs (Level 2) | Warrant liability [member] | Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Financial liabilities at fair value | 845 | 131 |
Significant observable inputs (Level 2) | Bank loan [member] | Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Financial liabilities | 20,512 | |
Significant unobservable inputs (Level 3) | Provision for deferred cash consideration [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Financial liabilities at fair value | 1,525 | 1,654 |
Significant unobservable inputs (Level 3) | Provision for contingent consideration [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Financial liabilities at fair value | £ 354 | |
Significant unobservable inputs (Level 3) | Warrant liability [member] | Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Financial liabilities at fair value | £ 49,930 |
Financial and Capital Risk Ma_5
Financial and Capital Risk Management and Fair Value Measurement - Summary of changes in level 3 of fair value of hierarchy (Detail) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Summary of changes in level 3 of fair value of hierarchy [Line Items] | ||
Beginning balance | £ 1,758 | |
Ending balance | 1,634 | £ 1,758 |
Provision for deferred cash consideration [member] | ||
Summary of changes in level 3 of fair value of hierarchy [Line Items] | ||
Beginning balance | 1,654 | |
Ending balance | 1,525 | 1,654 |
Provision for deferred cash consideration [member] | Level 3 of fair value hierarchy [member] | ||
Summary of changes in level 3 of fair value of hierarchy [Line Items] | ||
Beginning balance | 1,654 | 2,131 |
Unwinding of the time value of money recognised as a finance charge | 157 | 221 |
Change in estimate relating to probabilities (revision to intangible asset | (286) | (698) |
Ending balance | 1,525 | 1,654 |
Provision for contingent consideration [member] | Level 3 of fair value hierarchy [member] | ||
Summary of changes in level 3 of fair value of hierarchy [Line Items] | ||
Beginning balance | 354 | |
Settled during the year | £ (354) | |
Change in estimate relating to probabilities (recognized as an administrative expense) | 354 | |
Ending balance | £ 354 |
Financial and Capital Risk Ma_6
Financial and Capital Risk Management and Fair Value Measurement - Summary of Changes In Significant Unobservable Inputs Under Valuation Model Used In Level Fair Value Measurement (Detail) £ in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2020GBP (£) | Dec. 31, 2020USD ($) | Dec. 31, 2019GBP (£) | Dec. 31, 2020USD ($) | |
Disclosure of significant unobservable inputs used in fair value measurement [line items] | ||||
Undiscounted contingent liability for future payments | $ | $ 80 | |||
Milestone payment for regulatory and commercial achievements | $ | $ 302 | |||
Weighted average cost of capital [member] | Provision for deferred cash consideration [member] | Discounted cash flow model [member] | ||||
Disclosure of significant unobservable inputs used in fair value measurement [line items] | ||||
Weighted average cost of capital | 12.00% | 15.30% | 12.00% | |
Percentage of increase decrease in sensitivity analysis affecting input to fair value | 1.00% | 1.00% | 1.00% | |
Increase decrease in sensitivity analysis affecting input to fair value | £ 25,000 | £ 33,000 | ||
Probability of success [member] | Provision for deferred cash consideration [member] | Discounted cash flow model [member] | ||||
Disclosure of significant unobservable inputs used in fair value measurement [line items] | ||||
Percentage of increase decrease in sensitivity analysis affecting input to fair value | 10.00% | 10.00% | 10.00% | |
Increase decrease in sensitivity analysis affecting input to fair value | £ 400 | £ 300 | ||
Expected Volatility One [Member] | ||||
Disclosure of significant unobservable inputs used in fair value measurement [line items] | ||||
Expected Volatility Percentage | 93.80% | 93.80% | ||
Financial liabilities, at fair value | £ 52,900 | |||
Bottom of range [member] | Probability of success [member] | Provision for deferred cash consideration [member] | Discounted cash flow model [member] | ||||
Disclosure of significant unobservable inputs used in fair value measurement [line items] | ||||
Probability of success | 13.80% | 13.80% | 15.80% | |
Top of range [member] | Probability of success [member] | Provision for deferred cash consideration [member] | Discounted cash flow model [member] | ||||
Disclosure of significant unobservable inputs used in fair value measurement [line items] | ||||
Probability of success | 95.00% | 95.00% | 95.00% | |
Weighted average [member] | Expected Volatility Member [Member] | Warrants Related To Pipe member [Member] | Black And Scholes Method [member] | ||||
Disclosure of significant unobservable inputs used in fair value measurement [line items] | ||||
Expected Volatility Percentage | 85.10% | 85.10% |
Financial and Capital Risk Ma_7
Financial and Capital Risk Management and Fair Value Measurement - Summary of Maturity Profile of Financial Liabilities Based on Contractual Undiscounted Payments (Detail) £ in Thousands | Dec. 31, 2020GBP (£) |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Financial liabilities on contractual undiscounted payments | £ 5,590 |
lease [member] | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Financial liabilities on contractual undiscounted payments | 2,257 |
Trade And Other Payables [Member] | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Financial liabilities on contractual undiscounted payments | 3,333 |
Within one year [member] | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Financial liabilities on contractual undiscounted payments | 4,182 |
Within one year [member] | lease [member] | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Financial liabilities on contractual undiscounted payments | 849 |
Within one year [member] | Trade And Other Payables [Member] | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Financial liabilities on contractual undiscounted payments | 3,333 |
After one year but not more than three years [member] | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Financial liabilities on contractual undiscounted payments | 960 |
After one year but not more than three years [member] | lease [member] | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Financial liabilities on contractual undiscounted payments | 960 |
Later than three years and not later than five years [member] | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Financial liabilities on contractual undiscounted payments | 448 |
Later than three years and not later than five years [member] | lease [member] | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | |
Financial liabilities on contractual undiscounted payments | £ 448 |
Financial and Capital Risk Ma_8
Financial and Capital Risk Management and Fair Value Measurement - Detailed Information About Cash And Cash Equivalents By Currency Type (Detail) - GBP (£) £ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Detailed Information about Cash and Cash Equivalents by Currency Type [Line Items] | ||||
Cash and cash equivalents | £ 23,469 | £ 16,347 | £ 25,042 | £ 50,045 |
Pound Sterling [Member] | ||||
Detailed Information about Cash and Cash Equivalents by Currency Type [Line Items] | ||||
Cash and cash equivalents | 17,809 | 2,525 | ||
US Dollar [Member] | ||||
Detailed Information about Cash and Cash Equivalents by Currency Type [Line Items] | ||||
Cash and cash equivalents | 5,586 | 13,807 | ||
Swiss Francs [Member] | ||||
Detailed Information about Cash and Cash Equivalents by Currency Type [Line Items] | ||||
Cash and cash equivalents | 9 | 11 | ||
Euro [Member] | ||||
Detailed Information about Cash and Cash Equivalents by Currency Type [Line Items] | ||||
Cash and cash equivalents | £ 65 | £ 4 |
Financial and Capital Risk Ma_9
Financial and Capital Risk Management and Fair Value Measurement - Detailed Information About Gain Loss On Foreign Currency Translaction Recognized In Income Statement (Detail) - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of detailed information about financial instruments [line items] | |||
Net foreign exchange gain/(loss) | £ (1,821) | £ 483 | £ (44) |
Market Uncertainty [member] | |||
Disclosure of detailed information about financial instruments [line items] | |||
Net foreign exchange gain/(loss) | 3,584 | (1,037) | |
US Dollar [Member] | Market Uncertainty [member] | |||
Disclosure of detailed information about financial instruments [line items] | |||
Net foreign exchange gain/(loss) | 4,088 | (219) | |
Swiss Francs [Member] | Market Uncertainty [member] | |||
Disclosure of detailed information about financial instruments [line items] | |||
Net foreign exchange gain/(loss) | 9 | (6) | |
Euro [Member] | Market Uncertainty [member] | |||
Disclosure of detailed information about financial instruments [line items] | |||
Net foreign exchange gain/(loss) | £ (513) | £ (812) |
Financial and Capital Risk M_10
Financial and Capital Risk Management and Fair Value Measurement - Details the Group's Sensitivity to a 10% Change in the Period-End Rate (Detail) £ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2020GBP (£) | Dec. 31, 2020USD ($) | Dec. 31, 2019GBP (£) | Dec. 31, 2019USD ($) | Dec. 31, 2018GBP (£) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Statement [line items] | |||||||
Loss before tax | £ (166,450) | £ (41,118) | £ (37,306) | ||||
Currency risk [member] | |||||||
Statement [line items] | |||||||
Loss before tax | 47 | $ (372) | 74 | $ 20 | |||
Equity | £ 47 | £ 74 | $ (372) | $ 20 |
Share-based Payments - Charge f
Share-based Payments - Charge for Share-based Payments Under IFRS 2 (Detail) - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Share-based payments | £ 1,558 | £ 1,636 | £ 2,190 |
2019 Equity Incentive Plan [member] | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Share-based payments | 922 | 635 | |
2019 Non-Executive Director Equity Incentive Plan [member] | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Share-based payments | 167 | 160 | |
2015 Plan [member] | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Share-based payments | 3 | 63 | 806 |
Mereo BioPharma Group plc Share Option Plan [member] | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Share-based payments | 376 | 685 | 1,064 |
Long-term incentive plan [member] | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Share-based payments | 90 | £ 93 | £ 320 |
Deferred bonus share plan [member] | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Share-based payments | £ 0 |
Share-based Payments - Addition
Share-based Payments - Additional Information (Detail) | 12 Months Ended | |||||||
Dec. 31, 2020GBP (£)shares£ / shares | Dec. 31, 2020GBP (£)£ / shares$ / sharesshares | Dec. 31, 2019GBP (£)shares£ / shares | Dec. 31, 2019GBP (£)£ / shares$ / shares | Dec. 31, 2018USD ($) | Dec. 31, 2017shares | Dec. 31, 2020$ / shares | Dec. 31, 2019USD ($)$ / shares | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Number of shares each ADR represent | shares | 5 | |||||||
Number of shares granted, but not yet paid | shares | 429,448 | |||||||
Fair value of ordinary shares | £ | £ 3.10 | £ 3.10 | ||||||
Amount of shares granted | shares | 1.3 | |||||||
Ordinary shares [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Weighted average exercise price of share options granted | £ / shares | £ 0.33 | |||||||
ADS [Member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Weighted average exercise price of share options granted | £ / shares | £ 2.23 | |||||||
2015 Plan [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Weighted average remaining contractual life for the share options outstanding period | 4 years 7 months 6 days | 5 years 7 months 6 days | ||||||
Options outstanding exercise price | $ 1.26 | $ 2.17 | ||||||
Number of share options forfeited in share-based payment arrangement | 59,533 | |||||||
Weighted average exercise price of share options forfeited in share-based payment arrangement | £ / shares | £ 1.29 | |||||||
Weighted average exercise price of share options exercisable in share-based payment arrangement | £ / shares | £ 1.32 | £ 1.32 | ||||||
Number of share options outstanding in share-based payment arrangement | 8,923,600 | 8,923,600 | 8,923,600 | 8,923,600 | 8,923,600 | |||
Number of share options exercisable in share-based payment arrangement | 8,901,478 | 8,901,478 | 8,901,478 | |||||
2015 Plan [member] | Existing Non-Executive Directors [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Vesting period | 4 years | |||||||
2015 Plan [member] | Newly Non-Executive Directors [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Vesting period | 3 years | |||||||
Mereo BioPharma Group plc Share Option Plan [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Weighted average remaining contractual life for the share options outstanding period | 6 years 7 months 6 days | 7 years 7 months 6 days | ||||||
Number of share options forfeited in share-based payment arrangement | 112,670 | 357,490 | ||||||
Weighted average exercise price of share options forfeited in share-based payment arrangement | £ / shares | £ 3.03 | £ 3.21 | ||||||
Weighted average exercise price of share options exercisable in share-based payment arrangement | £ / shares | £ 3.01 | £ 3.01 | £ 3.03 | £ 3.03 | ||||
Number of share options outstanding in share-based payment arrangement | 1,411,395 | 1,411,395 | 1,524,065 | 1,524,065 | 1,881,555 | 1,524,065 | ||
Number of share options exercisable in share-based payment arrangement | 1,210,410 | 1,210,410 | 40,141 | 40,141 | 40,141 | |||
Mereo BioPharma Group plc Share Option Plan [member] | Bottom of range [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Options outstanding exercise price | £ / shares | £ 2.71 | £ 2.71 | ||||||
Mereo BioPharma Group plc Share Option Plan [member] | Top of range [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Options outstanding exercise price | £ / shares | £ 3.19 | £ 3.19 | ||||||
Long-term incentive plan [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Number of options granted | 0 | 0 | 0 | |||||
Weighted average remaining contractual life for the share options outstanding period | 6 months | 10 months 24 days | ||||||
Weighted average fair value of options granted | £ | £ 0 | £ 0 | £ 0 | £ 0 | ||||
Percentage of options issued to employees | 75.00% | 75.00% | ||||||
Percentage of options vested to employees | 25.00% | 25.00% | ||||||
Employee services expense | £ | £ 100,000 | £ 100,000 | ||||||
Number of share options outstanding in share-based payment arrangement | 482,748 | 482,748 | 910,072 | 910,072 | 1,151,446 | 910,072 | ||
Number of share options exercisable in share-based payment arrangement | 0 | 0 | 0 | 0 | 0 | 0 | ||
Deferred bonus share plan [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Number of options granted | shares | 0 | 0 | ||||||
Weighted average remaining contractual life for the share options outstanding period | 7 months 6 days | 1 year 7 months 6 days | ||||||
Weighted average fair value of options granted | $ | $ 0 | $ 0 | ||||||
Annual bonus payable in deferred shares | 30.00% | |||||||
2019 Equity Incentive Plan [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Contractual term share options | 10 years | |||||||
Number of options granted | 1,167,836 | 801,200 | ||||||
Weighted average remaining contractual life for the share options outstanding period | 8 years 10 months 24 days | |||||||
Weighted average fair value of options granted | £ | £ 0 | £ 0 | ||||||
Vesting period | 3 years | |||||||
Number of share options forfeited in share-based payment arrangement | 397,607 | |||||||
Weighted average exercise price of share options forfeited in share-based payment arrangement | £ 2.87 | |||||||
Weighted average exercise price of share options exercisable in share-based payment arrangement | 4.42 | |||||||
Number of share options outstanding in share-based payment arrangement | 1,567,873 | 1,567,873 | 798,050 | 798,050 | 798,050 | |||
Number of share options exercisable in share-based payment arrangement | 259,829 | 259,829 | ||||||
Weighted average exercise price of share options granted | £ 2 | £ 4.29 | ||||||
2019 Equity Incentive Plan [member] | Bottom of range [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Options outstanding exercise price | 1.84 | |||||||
2019 Equity Incentive Plan [member] | Top of range [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Options outstanding exercise price | 5.40 | |||||||
2019 Non-Executive Director Equity Incentive Plan [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Number of options granted | 77,000 | 77,000 | ||||||
Weighted average remaining contractual life for the share options outstanding period | 9 years 6 months | |||||||
Vesting period | 1 year | |||||||
Number of share options forfeited in share-based payment arrangement | 4,584 | |||||||
Weighted average exercise price of share options forfeited in share-based payment arrangement | £ 1.84 | |||||||
Weighted average exercise price of share options exercisable in share-based payment arrangement | $ 3.15 | $ 4.2 | ||||||
Number of share options outstanding in share-based payment arrangement | 149,416 | 149,416 | 77,000 | 77,000 | 77,000 | |||
Number of share options exercisable in share-based payment arrangement | 138,412 | 138,412 | 38,478 | 38,478 | 38,478 | |||
Weighted average exercise price of share options granted | £ 1.84 | £ 4.2 | ||||||
AstraZeneca [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Share issued upon consideration | shares | 1,349,693 | 1,349,693 | ||||||
Deferred Bonus Plan [member] | ||||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||||
Number of options granted | shares | 0 | |||||||
Annual bonus payable in deferred shares | 100.00% | |||||||
Percentage of annual bonus granted to directors | 30.00% | |||||||
Number of share options outstanding in share-based payment arrangement | 163,000 | 163,000 | 163,000 | 163,000 | 163,000 | |||
Number of share options exercisable in share-based payment arrangement | 62,170 | 62,170 | 0 | 0 | 0 |
Share-based Payments - Summary
Share-based Payments - Summary of Number and Weighted Average Exercise Prices (WAEP) of, and Movements in, Options (Detail) | 12 Months Ended | |||||
Dec. 31, 2020£ / shares | Dec. 31, 2020£ / shares$ / shares | Dec. 31, 2019£ / shares | Dec. 31, 2019£ / shares$ / shares | Dec. 31, 2020$ / shares | Dec. 31, 2019$ / shares | |
2019 Equity Incentive Plan [member] | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Options over ADR Number outstanding at beginning of the year | 798,050 | 798,050 | ||||
Options over ADR Number granted during the year | 1,167,836 | 1,167,836 | 801,200 | 801,200 | ||
Options over ADR Number cancelled during the year | (406) | (406) | (3,150) | (3,150) | ||
Options over ADR Number forfeited during the year | (397,607) | (397,607) | ||||
Options over ADR Number outstanding at December 31 | 1,567,873 | 1,567,873 | 798,050 | 798,050 | ||
Options over ADR Number exercisable at December 31 | 259,829 | 259,829 | 259,829 | |||
WAEP options outstanding at beginning of the year | $ 4.29 | |||||
WAEP options granted during the year | 2 | $ 4.29 | ||||
WAEP options cancelled during the year | 5.4 | 5.4 | ||||
WAEP options forfeited during the year | 2.87 | |||||
WAEP options outstanding at December 31 | $ 2.94 | $ 4.29 | ||||
WAEP options exercisable at December 31 | $ 4.42 | |||||
2019 Non-Executive Director Equity Incentive Plan [member] | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Options over ADR Number outstanding at beginning of the year | 77,000 | 77,000 | ||||
Options over ADR Number granted during the year | 77,000 | 77,000 | 77,000 | 77,000 | ||
Options over ADR Number forfeited during the year | (4,584) | (4,584) | ||||
Options over ADR Number outstanding at December 31 | 149,416 | 149,416 | 77,000 | 77,000 | ||
Options over ADR Number exercisable at December 31 | 138,412 | 138,412 | 38,478 | 38,478 | 138,412 | 38,478 |
WAEP options outstanding at beginning of the year | $ 4.2 | |||||
WAEP options granted during the year | 1.84 | $ 4.2 | ||||
WAEP options forfeited during the year | 1.84 | |||||
WAEP options outstanding at December 31 | $ 3.06 | $ 4.2 | ||||
WAEP options exercisable at December 31 | $ 3.15 | $ 4.2 | ||||
Mereo BioPharma Group plc Share Option Plan [member] | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Options over ADR Number outstanding at beginning of the year | 1,524,065 | 1,524,065 | 1,881,555 | 1,881,555 | ||
Options over ADR Number cancelled during the year | 0 | 0 | ||||
Options over ADR Number forfeited during the year | (112,670) | (112,670) | (357,490) | (357,490) | ||
Options over ADR Number outstanding at December 31 | 1,411,395 | 1,411,395 | 1,524,065 | 1,524,065 | ||
Options over ADR Number exercisable at December 31 | 1,210,410 | 1,210,410 | 40,141 | 40,141 | 1,210,410 | 40,141 |
WAEP options outstanding at beginning of the year | £ / shares | £ 3.07 | £ 3.10 | ||||
WAEP options cancelled during the year | $ 0 | |||||
WAEP options forfeited during the year | £ / shares | 3.03 | 3.21 | ||||
WAEP options outstanding at December 31 | £ / shares | 3.14 | 3.07 | ||||
WAEP options exercisable at December 31 | £ / shares | £ 3.01 | $ 3.01 | £ 3.03 | $ 3.03 |
Share-based Payments - Summar_2
Share-based Payments - Summary of Weighted Average Inputs to the Models Used for the Fair Value of Share Options Granted (Detail) - £ / shares | Jun. 30, 2020 | Jun. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure of classes of share capital [line items] | ||||
Expected volatility (%) | 61.00% | 61.00% | 0.00% | |
Risk-free interest rate (%) | 0.19% | 0.27% | 0.00% | |
2019 Equity Incentive Plan [member] | ||||
Disclosure of classes of share capital [line items] | ||||
Expected volatility (%) | 67.00% | 66.00% | ||
Risk-free interest rate (%) | 0.59% | 0.95% | ||
Expected life of share options (years) | 10 years | 10 years | ||
Market price of ordinary shares (£) | £ 1.99 | £ 0.66 | ||
Model used | Black Scholes | Black Scholes | ||
2019 Non-Executive Director Equity Incentive Plan [member] | ||||
Disclosure of classes of share capital [line items] | ||||
Expected volatility (%) | 68.00% | 66.00% | ||
Risk-free interest rate (%) | 0.64% | 0.97% | ||
Expected life of share options (years) | 10 years | 10 years | ||
Market price of ordinary shares (£) | £ 1.84 | £ 0.63 | ||
Model used | Black Scholes | Black Scholes |
Share-based Payments - Summar_3
Share-based Payments - Summary of Number and Movements in Long Term Incentive Plan Options (Detail) - Long-term incentive plan [member] | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Granted during the year | 0 | 0 | 0 |
Lapsed during the year | (427,324) | (241,374) | |
Options over ADR Number outstanding at December 31 | 482,748 | 910,072 | 1,151,446 |
Exercisable at December 31 | 0 | 0 | 0 |
Commitments and Contingencies -
Commitments and Contingencies - Summary of Future Minimum Lease Payments under Non-cancellable Operating Leases (Detail) £ in Thousands | Dec. 31, 2019GBP (£) |
Disclosure of maturity analysis of operating lease payments [line items] | |
Non cancellable operating leases | £ 552 |
Within one year [member] | |
Disclosure of maturity analysis of operating lease payments [line items] | |
Non cancellable operating leases | £ 552 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Detail) £ in Thousands, $ in Millions | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2017USD ($)shares | Dec. 31, 2020GBP (£) | Dec. 31, 2019GBP (£) | |
Disclosure of commitments and contingencies [line items] | |||
Finance leases | £ | £ 0 | £ 0 | |
Mereo BioPharma 4 Limited [member] | |||
Disclosure of commitments and contingencies [line items] | |||
Payment of ordinary shares | $ 3 | ||
Issuance of aggregate ordinary shares | shares | 490,798 | ||
Aggregate upfront payment amount | $ 5 | ||
Payments of aggregate and issue additional ordinary shares | $ 115.5 | ||
Bottom of range [member] | |||
Disclosure of commitments and contingencies [line items] | |||
Lease term | 1 year | ||
Top of range [member] | |||
Disclosure of commitments and contingencies [line items] | |||
Lease term | 2 years |
Related Party Disclosures - Add
Related Party Disclosures - Additional Information (Detail) - GBP (£) £ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of transactions between related parties [line items] | ||
Amount paid to trust by the company | £ 0 | £ 1,000 |
Shares purchased by the EBT | 1,074,274 | |
ADS [Member] | ||
Disclosure of transactions between related parties [line items] | ||
American depositary share held by employee benefit trust | 247,456 | 247,456 |
Cash held by employee benefit trust | £ 21,762 | £ 21,762 |
Related Party Disclosures - Sum
Related Party Disclosures - Summary Of Compensation of key management personnel of the Group (Detail) - GBP (£) £ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of transactions between related parties [abstract] | |||
Short-term benefits | £ 4,479 | £ 3,488 | £ 3,176 |
Post-employment benefits | 144 | 64 | 60 |
IFRS 2 share-based payment charge | 875 | 1,152 | 1,470 |
Total compensation paid to key management personnel | £ 5,498 | £ 4,704 | £ 4,706 |
Events after the reporting pe_2
Events after the reporting period - Additional Information (Detail) £ / shares in Units, $ / shares in Units, $ in Millions | Feb. 12, 2021USD ($)$ / sharesshares | Jan. 31, 2021GBP (£) | Jan. 31, 2021USD ($) | Dec. 31, 2020GBP (£) | Dec. 31, 2020USD ($) | Jun. 03, 2020£ / shares |
Statement [line items] | ||||||
Milestone payment for regulatory and commercial achievements | $ 302 | |||||
Par value per share | £ / shares | £ 0.003 | |||||
Shares issued conversion ratio | 5 | |||||
ADS [Member] | ||||||
Statement [line items] | ||||||
Stock issued through Intial public offering | shares | 39,675,000 | |||||
Events After Reporting Date [member] | ADS [Member] | ||||||
Statement [line items] | ||||||
Par value per share | $ / shares | $ 2.90 | |||||
Payment of underwriting discounts ,commissions and offering expenses | $ 115.1 | |||||
Proceeds from Issuing Depository Shares net of transaction cost | £ 78,300,000 | 108.2 | ||||
Events After Reporting Date [member] | Ultragenyx collaboration agreement [Member] | ||||||
Statement [line items] | ||||||
Upfront Payment Received | £ 36,500,000 | $ 50 | ||||
Milestone payment for regulatory and commercial achievements | $ 254 | |||||
Revenue | £ | 0 | |||||
Events After Reporting Date [member] | Ultragenyx collaboration agreement [Member] | Novartis [member] | ||||||
Statement [line items] | ||||||
Milestone payment to Ultragenyx collaboration agreement | £ 7,300,000 | $ 10 |