ARIX BIOSCIENCE PLC These condensed interim financial statements for the six months ended 30 June 2021 have been prepared on a going concern basis, in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority and with UK Adopted International Accounting Standard ('IAS') 34, 'Interim financial reporting', as adopted by the European Union. The going concern assessment covers a period of at least 12 months from the approval of these interim financial statements and includes the Group's current performance, financial position and the principal and emerging risks facing the Group, including the ongoing impact of the Covid-19 pandemic on portfolio companies and wider macroeconomic conditions.
The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2020, which have been prepared in accordance with International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. The accounting policies adopted in the interim financial statements are consistent with those followed in the annual financial statements for the year ended 31 December 2020.
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to the expected total annual profit or loss. 3. Estimates
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgements and estimates made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that are set on page 91 of the consolidated financial statements for the year ended 31 December 2020 and no retrospective adjustments were made. 4. Segmental Information
Information for the purposes of resource allocation and assessment of performance is reported to the Arix Group's Interim Chief Executive, who is considered to be the chief operating decision maker, based wholly on the overall activities of the Arix Group. It has therefore been determined that the Arix Group has only one reportable segment under IFRS 8 ('Operating Segments'), which is that of sourcing, financing and developing healthcare and life science businesses globally. The Arix Group's revenue, results and assets for this one reportable segment can be determined by reference to the Condensed Consolidated Interim Statement of Comprehensive Income and Condensed Consolidated Interim Statement of Financial Position. 5. Financial Risk Management and Financial Instruments
The Arix Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, and cash flow interest rate risk), credit risk and liquidity risk.
The condensed consolidated interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Group's annual financial statements as at 31 December 2020. There have been no changes in the risk management department or in any risk management policies since the year end. 6. Earnings per Share
Basic earnings per share is calculated by dividing the profit/(loss) attributable to equity holders of Arix Bioscience plc by the weighted average number of unrestricted shares.
Potentially dilutive ordinary shares include options and conditional share awards issued under the Company's long-term incentive plans. As the Arix Group has incurred a loss in the period, the diluted loss per share is the same as the basic earnings per share as the loss has an anti-dilutive effect and the inclusion of the shares would be to decrease the loss per share.
2021 2020
£'000 £'000
(Loss)/profit attributable to equity holders of Arix Bioscience plc (38,567) 49,500
Weighted average number of shares in issue 129,067,511 130,471,267
Fully diluted weighted average number of shares 139,931,167 142,931,280
Basic (loss)/earnings per share (£0.30) £0.38
Diluted (loss)/earnings per share (£0.30) £0.35 7. Revenue The total revenue for Arix Group has been derived from its principal activity of investing in and building breakthrough biotech companies around cutting edge advances in life sciences. All of this revenue relates to trading undertaken in the United Kingdom.
2021 2020
£'000 £'000
Fund management fee income 171 182
Other income 12 10
183 192 8. Exceptional Costs Items that are material size and unusual in nature are included in administrative expenses and disclosed separately to provide a more accurate indication of underlying performance. £1.0m of costs incurred during the shareholder engagement period are included as exceptional costs (June 20: £nil). The shareholder engagement period has now completed and as a result the board composition has changed. 9. Investments
Level 1- Quoted Investments Level 3 - Unquoted Investments Total
£'000 £'000 £'000
At 31 December 2020 95,712 58,704 154,416
Additions 9,481 18,097 27,579
Disposals (24,265) (7,743) (32,008)
Realised and unrealised gain on investments (23,327) (6,566) (29,893)
Foreign exchange gains (1,714) (853) (2,567)
At 30 June 2021 55,887 61,641 117,527 Transfers from Level 3 to Level 1 reflects companies which have listed during the period. Level 3 investments are valued with reference to milestone analysis (£60.6m) and net asset value (£1.0m).
Level 1- Quoted Investments Level 3 - Unquoted Investments Total
£'000 £'000 £'000
At 31 December 2019 87,844 64,077 151,921
Additions 3,486 8,115 11,601
Disposals (9,068) - (9,068)
Transfers 11,707 (11,707) -
Realised and unrealised gain on investments 29,667 12,957 42,624
Foreign exchange gains 5,550 3,529 9,079
At 30 June 2020 129,186 76,971 206,157 The Group's valuation policy can be found in page 93 of Group's annual report for the year ended 31 December 2020. The Group's milestone valuation approach cannot be readily sensitised and therefore the Group have not disclosed sensitivity analysis for Level 3 inputs. A 10% movement in the share price of Level 1 inputs would result in a £5.6m movement in investment portfolio value (December 2020: £9.5m).
As permitted by IAS 28 'Investment in Associates' and in accordance with the Arix Group accounting policy, investments are held at fair value even though the Arix Group may have significant influence over the companies. Significant influence is determined to exist when the Group holds more than 20% of the holding or when less than 20% is held but in combination with a certain level of board representation is deemed to be able to exert significant influence. As at 30 June 2021, the Arix Group is deemed to have significant influence over the following entities:
Company Country Registered Address Issued Share Net Assets / Profit / Date of Financial
Capital Held (Liabilities) (Loss) Information
Depixus SAS France 3-5 Impasse Reille, 21.4% ?2,431k ?(1,486)k 31 Dec 2018
(EUR) 75014 Paris
Quench Bio, Inc. USA 400 Technology Sq, 25.0% N/A N/A Not publicly
Cambridge, MA available
Stipe Denmark Lyngsievvej 18, 8230 17.8% N/A N/A Not publicly
Therapeutics Aps Abyhoj available (MORE TO FOLLOW) Dow Jones Newswires
August 12, 2021 02:00 ET (06:00 GMT)
