2020 Annual report and Accounts & AGM Notification

RNS Number : 7582W

Oxford Biomedica PLC

27 April 2021

 

Oxford Biomedica

2020 Annual report and Accounts & AGM Notification

London, UK - 27 April 2021: Oxford Biomedica plc ("Oxford Biomedica", "the Company" or "the Group") (LSE:OXB), a leading gene and cell therapy group, gives notice that copies of the 2020 Annual report and accounts and the Notice of Annual General Meeting ("AGM") have been sent to shareholders. These documents are available on the "Investors" section of the Group's website at www.oxb.com . Oxford Biomedica plc announced its preliminary results for the year ended 31 December 2020 on 15 April 2021.

Copies of these documents have been submitted to the Financial Conduct Authority for publication through the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Further copies of the 2020 Annual report and accounts are available from the Company Secretary, Oxford Biomedica plc, Windrush Court, Transport Way, Oxford, OX4 6LT, United Kingdom (telephone number: [phone]).

Oxford Biomedica plc intends to hold its AGM on Thursday 27 May 2021 at the offices of Oxford Biomedica plc, Windrush Court, Transport Way, Oxford OX4 6LT, commencing at 3:00 p.m. Shareholders will not be allowed to attend the AGM in light of the ongoing COVID-19 situation and the restrictions on public gatherings that have been implemented by the UK Government. Unfortunately this means shareholders will not be able to attend the AGM in person but the Company is pleased to be able to offer facilities for Shareholders to attend virtually, ask questions and vote at the AGM electronically in real time should they wish to do so. The details of how to do this are set out in the Notice of Annual General Meeting.

In accordance with the requirements of Rule 6.3.5 of the Disclosure Guidance and Transparency Rules of the UK Financial Conduct Authority, the appendix to this announcement contains descriptions of the principal risks and uncertainties affecting the Group and material related party transactions, and a responsibility statement which has been extracted from the 2020 Annual report and accounts.  This announcement should be read in conjunction with, and not as a substitute for, reading the full 2020 Annual report and accounts.

- Ends -

For further information, please contact:
Oxford Biomedica plc: Natalie Walter, Company Secretary	Tel: [phone]

Notes for editors

Oxford Biomedica (LSE:OXB) is a leading, fully integrated, cell and gene therapy group focused on developing life changing treatments for serious diseases. Oxford Biomedica and its subsidiaries (the "Group") have built a sector leading lentiviral vector delivery platform (LentiVector^®), which the Group leverages to develop in vivo and ex vivo products both in-house and with partners. The Group has created a valuable proprietary portfolio of gene and cell therapy product candidates in the areas of oncology, ophthalmology, CNS disorders and liver diseases. The Group has also entered into a number of partnerships, including with Novartis, Bristol Myers Squibb, Sio Gene Therapies, Orchard Therapeutics, Santen, Beam Therapeutics, Boehringer Ingelheim, the UK Cystic Fibrosis Gene Therapy Consortium and Imperial Innovations, through which it has long-term economic interests in other potential gene and cell therapy products. Additionally the group has signed a three year master supply and development agreement with AstraZeneca for large-scale manufacturing of the adenoviral based COVID-19 vaccine, AZD1222. Oxford Biomedica is based across several locations in Oxfordshire, UK and employs more than 670 people. Further information is available at www.oxb.com

Appendix

Principal risks and uncertainties

The Group is exposed to a range of risks. Some of them are specific to the Group's current operations, others are common to all development stage biopharmaceutical companies. The Board have carried out a robust assessment of the risks facing the Group, including those which could threaten its business model and future performance.

The Group operates in the cell and gene therapy biotechnology sector which, by its nature, is relatively high risk compared with other industry sectors. During 2020 there have only been a few additional cell and gene therapy products which have been approved for commercial use, and, consequently there are significant financial and development risks in the sector, and the regulatory authorities have shown caution in their regulation of such products.

Risk assessment and evaluation is therefore an integral and well-established part of the Group's management processes. The Group's risk management framework incorporates the implementation of a mitigation strategy, each tailored to the specific risk in question. The Group has taken the decision to disclose the steps it has taken to mitigate the risks facing the operations during the period, representing an important development compared to the Group's prior year approach to the disclosure of risks.  

Risk management framework

The Group’s risk management framework is as follows:

• Board of Directors – the Board has overall responsibility for risk management, determining the Group’s risk tolerance, andforensuringthemaintenanceofasoundsystemofinternalcontrol.TheBoardconsidersriskinthecontextof  its agenda items at each of its formal meetings, of which there are at least six annually. However, twice a year in March andSeptemberafullpresentationtotheBoardonriskisprovidedbytheRiskManagementCommittee.Therisk management processes are the responsibility of the Senior Executive Team but the Audit Committee monitors the  processesandtheirimplementationaswellasreviewingtheGroup’s internal financial controls and the internal controlsystems.TheAuditCommitteealsomonitorstheintegrityofthefinancialstatementsoftheGroupandanyformal announcements relating to the Group’s financial performance, reviewing significant financial reporting  judgements contained in them.

• Senior Executive Team (SET) – the SET generally meets every week, with twice monthly-extended SET sessions in order to discuss current business issues and consider relevant risks. During 2020, SET also held daily COVID-19  updatesessions.Atleasttwiceayear,theSETmeetswithrepresentativesfromtheRiskManagementCommittee to consider the operational risk management processes and risks identified.

• Key management committees – the Group currently has three key management sub-committees which meet monthly and through which much of the day-to-day business is managed. These are the extended Operational Leadership Team (which incorporates the Quality and Manufacturing Operations Committee), the Product Development Committee and the Technical Development Committee. SET members attend these meetings and risk management is a key feature of each sub-committee.

• Risk Management Committee – the Group has a Risk Management Committee comprising senior managers from eachareaofthebusinessandchairedbytheChiefofStaff.Thisgroupmeetsquarterlywitharemittoidentifyand  assessrisksinthebusinessandtoconsidermitigationandriskmanagementstepsthatcanbetaken.Theriskregister  is regularly reviewed by the SET and key risks are highlighted to the Board at each formal meeting.

• Standard Operating Procedures – all areas of the business have well established Standard Operating Procedures (SOPs)whicharerequired tobefollowedinordertominimisetherisksinherent in the business operations. Where these arerequiredforGMP,GCPandGLPanydeviations from the SOPs must be identified and investigated. Compliance withsuchSOPsareroutinelysubjecttoauditbytherelevantregulatorsandcustomers.OtherSOPs,suchasfinancial processes, are also subject to audits.

Key risks specific to the Group's current operations

Pharmaceutical product development risks

To develop a pharmaceutical product it is necessary to conduct pre-clinical studies and human clinical trials for product candidates to demonstrate safety and efficacy. The number of pre-clinical studies and clinical trials that will be required  variesdependingontheproductcandidate,theindicationbeingevaluated,thetrialresultsandtheregulationsapplicabletotheparticularproductcandidate.Inaddition,theGrouporitspartnerswillneedtoobtainregulatoryapprovalsto  conductclinicaltrialsandbioprocessdrugsbeforetheycanbemarketed.Thisdevelopmentprocesstakesmanyyears.TheGroupmayfailtosuccessfullydevelopaproductcandidateformanyreasons,including:

-  Failure to demonstrate long-term safety;

-  Failure to demonstrate efficacy;

-  Failure to develop technical solutions to achieve necessary dosing levels or acceptable delivery mechanisms;

-  Failure to establish robust bioprocessing processes;

-  Failure to obtain regulatory approvals to conduct clinical studies or, ultimately, to market the product; and

-  Failure to recruit sufficient patients into clinical studies.

The failure of the Group to develop successfully a product candidate could adversely affect the future profitability of the Group. There is a risk that the failure of any one product candidate could have a significant and sustained adverse impact on the Group's share price. There is also the risk that the failure of one product candidate in clinical development could have an adverse effect on the development of other product candidates, or on the Group's ability to enter into collaborations in respect of product candidates.

The Group has accepted this risk but looks to mitigate via ensuring that it has several product candidates under development in the pipeline and also seeks to collaborate with other larger more experienced partners on product development.

(i)  Safety risks

Safety issues may arise at any stage of the drug development process. An independent drug safety monitoring board (DSMB), the relevant regulatory authorities or the Group itself may suspend or terminate clinical trials at any time. There can be no assurances that any of the Group's product candidates will ultimately prove to be safe for human use. Adverse or inconclusive results from pre-clinical testing or clinical trials may substantially delay, or halt, the development of product candidates, consequently affecting the Group's timeline for profitability. The continuation of a particular study after review by the DSMB or review body does not necessarily indicate that all clinical trials will ultimately be successfully completed. The Group has accepted this risk but looks to mitigate the impact as much as possible through careful assessment of any safety issues arising from the product early in the development process and to stop the development if required.

(ii) Efficacy risks

Human clinical studies are required to demonstrate efficacy in humans when compared against placebo and/or existing alternative therapies. The results of pre-clinical studies and initial clinical trials of the Group's product candidates do not necessarily predict the results of later stage clinical trials. Unapproved product candidates in later stages of clinical trials may fail to show the desired efficacy despite having progressed through initial clinical trials. There can be no assurance that the efficacy data collected from the pre-clinical studies and clinical trials of the Group's product candidates will be sufficient to satisfy the relevant regulatory authorities that the product should be given a marketing authorisation. The Group has accepted this risk but looks to mitigate the impact as much as possible through consulation with the regulatory authorities early in the development process to determine what is required for market authorisation.

(iii) Technical risks

During the course of a product's development, further technical development may be required to improve the product candidates characteristics such as the delivery mechanism or the bioprocessing process. There is no certainty that such technical improvements or solutions can be identified. The Group continues to innovate in this area using its R&D expertise in collaboration with its customers to mitigate this risk.

(iv)  Bioprocessing process risk

There can be no assurance that the Group's product candidates will be capable of being produced in commercial quantities at acceptable cost. The Group's LentiVector   ^® platform product candidates use specialised bioprocessing processes offered by only a few organisations including the Group itself. There can be no assurance that the Group will be able to bioprocess the Group's product candidates at economic cost or that contractors who are currently able to bioprocess the Group's product candidates will continue to make capacity available at economic prices, or that suitable new contractors will enter the market. Bioprocessing processes that are effective and practical at the small scale required by the early stages of clinical development may not be appropriate at the larger scale required for later stages of clinical development or for commercial supply. There can be no assurance that the Group will be able to adapt current processes or develop new processes suitable for the scale required by later stages of clinical development or commercial supply in a timely or cost-effective manner, nor that contract bioprocessors will be able to provide sufficient bioprocessing capacity when required. The Group continues to monitor and review the platform and production processes to ensure that innovative steps are taken in order to increase production yields.

(v) Regulatory risk

The clinical development and marketing approval of the Group's product candidates, and the Group's bioprocessing facility, are regulated by healthcare regulatory agencies, such as the FDA (USA), EMA (Europe), and MHRA (UK). During the development stage, regulatory reviews of clinical trial applications or amendments can prolong development timelines. Similarly, there can be no assurance of gaining the necessary marketing approvals to commercialise products in development. Regulatory authorities may impose restrictions on a product candidates use or may require additional data before granting approval. If regulatory approval is obtained, the product candidate and bioprocessor will be subject to continual review and there can be no assurance that such an approval will not be withdrawn or restricted. The Group's laboratories, bioprocessing facility and conduct of clinical studies are also subject to regular audits by the MHRA and FDA to ensure that they comply with GMP, GCP and GLP standards. Failure to meet such standards could result in the laboratories or the bioprocessing site being closed or the clinical studies suspended until corrective actions have been implemented and accepted by the regulator. The Group consults with the regulator early in the development process to understand any concerns identified and looks to remedy these before they become a major issue.

(vi)  Failure to recruit sufficient patients into clinical studies

Clinical trials are established under protocols which specify how the trials should be conducted. Protocols specify the number of patients to be recruited into the study and the characteristics of patients who can and cannot be accepted into the study. The risk exists that it proves difficult in practice to recruit the number of patients with the specified characteristics, potentially causing delays or even abandonment of the clinical study. This could be caused by a variety of reasons such as the specified characteristics being too tightly defined resulting in a very small population of suitable patients, or the emergence of a competing drug, either one that is approved or another drug in the clinical stage of development. The threats from the above product development risks are inherent in the pharmaceutical industry and have not changed fundamentally over the last year. The Group aims to mitigate these risks by employing experienced staff and other external parties, such as contract research organisations to plan, implement and monitor its product development activities and to review progress regularly in the Group's Product Development Committee.

Bioprocessing revenue risk

The Group receives significant revenues from bioprocessing lentiviral vectors and adenoviral based vaccines for third parties. Bioprocessing of lentiviral vectors and adenovirus based vaccines is complex and bioprocessing batches may fail to meet the required specification due to contamination or inadequate yield. Failure to deliver batches to the required specification may lead to loss of revenues. Furthermore, the Group relies on third parties, in some cases sole suppliers, for the supply of raw materials and certain out-sourced services. If such suppliers perform in an unsatisfactory manner it could harm the Group’s business. TheGroup’sbioprocessingandanalyticalfacilitiesaresubjecttoregular  inspectionandapprovalbyregulatorsandcustomers.Failuretocomplywiththestandardsrequiredcouldresultin production operations being suspended until the issues are rectified with the potential for loss of revenue.

As the Group’s revenues from bioprocessing are growing, the risk to the Group has increased in the last twelve months. TheGroupmitigatestheriskoffailingtomeetrequiredspecificationsbyinvestinginhighqualityfacilities,equipment and employees and, in particular, in quality management processes. In addition, the Group mitigates the supply chain issues with looking to source second suppliers and stockpile three months of critical material supplies. The Group has  also asked key suppliers to hold stocks in UK warehouses in order to cover any immediate supply issues. Outsourcing of fill and finish has also been seen as a risk, but the Group is looking to bring this in-house in order to have more control over the process.

Collaborator and partner risk

The Group has entered several collaborations and partnerships, involving the development of product candidates by partners in which the Group has a financial interest through IP licenses. Failure of the partners to continue to develop the relevant product candidates for any reason could result in the Group losing potential revenues. The Group looks to mitigate this risk through having a close relationship with the Group's partners via steering group meetings that look at candidate selection and progression.

Business development

The Group may seek to out-license or spin-out its in-house product development programmes into externally funded vehicles and may seek to arrange strategic partnerships for developing the Group’s other product candidates. The Group may not be successful in its efforts to build these third party relationships which may cause the development of the products to be delayed or curtailed. The Group has enhanced the commercial development function within the Group and is thus putting significant resources behind the effort to find good strategic partners in order to assist in developing the Group’s other product candidates.

The Group is building a revenue generating business by providing its LentiVector^® platform to third parties in return for  revenuesderivedfromprocessdevelopment,bioprocessingandfutureroyalties.TheGroupmaybeunsuccessfulinbuildingthisbusinessforreasonsincluding:a)failingtomaintainaleadershippositioninlentiviralvectortechnology;b)becominguncompetitivefromapricingperspective;andc)failuretoprovideanadequateservicetobusinesspartnersandcollaborators.TheGroupiscontinuingtoinvestinitsLentiVector^®technologyinordertoreducethisrisk,andit  alsotakescustomerrelationshipmanagementextremelyseriouslytoensurethatcustomersandpartnersreceivetheservicetheyexpect,asindicatedbytheGrouponpages31and32oftheAnnualReport.
 

Attraction and retention of highly skilled employees

The Group depends on recruiting and retaining highly skilled employees to deliver its objectives and meet its customers’ needs. The market for such employees is increasingly competitive and failure to recruit or to retain staff with the  requiredskillsandexperiencecouldadverselyaffecttheGroup’sperformance.TheGroupmitigatesthisriskbycreating anattractiveworkingenvironmentandconductingbenchmarkingreviewsinordertoensurethattheremunerationpackageofferedtoemployeesiscomparablewithcompetingemployersasindicatedbytheGrouponpages53and55oftheAnnualReport.

Broader business risks which are applicable to the Group

The broader   business   risks,   which   the   Group   face   as   outlined   below   are   important   and   the   Group   looks   to   identify   these   risks   early   through   a   horizon   scanning   project   with   the   assistance   of   external   healthcare   consultants   and   then   outlines   actions   for   the   business   development   team,   the   SET   and   ultimately   the   Board   to   follow   by   way   of   mitigation.

Cell and gene therapy risk

The Group's commercial success, both from its own product development and from supporting other companies in the sector, will depend on the acceptance of cell and gene therapy by the medical community and the public for the prevention and/or treatment of diseases. To date only a limited number of gene therapy products have been approved either in Europe and/or in the USA. Furthermore, specific regulatory requirements, over and above those imposed on other products, apply to gene and cell therapies and there can be no assurance that additional requirements will not be imposed in the future. This may increase the cost and time required for successful development of cell and gene therapy products. The Group looks to mitigate this risk through market assessments of the product development pathway and conducts pricing and reimbursement studies for the cell and gene therapy product.

Rapid technical change

The cell and gene therapy sector is characterised by rapidly changing technologies and significant competition. Advances in other technologies in the sector could undermine the Group’s commercial prospects. The Group looks to  mitigatethisriskthroughahorizonscanningprojectinordertoidentifythecompetitionandtechnologyadvancesinthesectorandtodevelopeitherin-houseorviain-licensing,newtechnologiesfortheGroup’sproductsandplatform.

Longer-term commercialisation risks

In the longer term, the success of the Group's product candidates and those of its partners will depend on the regulatory and commercial environment several years into the future. Future commercialisation risks include:

-  The emergence of new and/or unexpected competitor products or technologies. The biotechnology and pharmaceutical industries are subject to rapid technological change which could affect the success of the Group's product candidates or make them obsolete;

-  Regulatory authorities becoming increasingly demanding regarding efficacy standards or risk averse regarding safety;

-  Governments or other payers being unwilling to pay for/reimburse gene therapy products at a level which would justify the investment. Based on clinical studies to date, the Group's LentiVector ^®  platform product candidates have the unique potential to provide permanent therapeutic benefit from a single administration. The pricing of these therapies will depend on assessments of their cost-benefit and cost effectiveness;

-  The willingness of physicians and/or healthcare systems to adopt new treatment regimes.

Any or all of these risks could result in the Group’s future profitability being adversely affected as future royalties and   milestones from commercial partners could be reduced. The Group looks to mitigate this long term commercialisation risk through a horizon scanning project in order to identify the competition and technology advances early, consult with regulatory authorities on a regular basis and perform pricing and reimbursement studies on the Group’s products to identify any serious issues in advance .

Intellectual property and patent protection risk

The Group's success depends, amongst other things, on maintaining proprietary rights to its products and technologies and the Board gives high priority to the strategic management of the Group's intellectual property portfolio. However, there can be no guarantee that the Group's product candidates and technologies are adequately protected by intellectual property. Furthermore, if the Group's patents are challenged, the defence of such rights could involve substantial costs and an uncertain outcome.

Third party patents may emerge containing claims that impact the Group's freedom to operate. There can be no assurance that the Group will be able to obtain licences to these patents at reasonable cost, if at all, or be able to develop or obtain alternative technology. Where copyright, design right and/or "know how" protect the Group's product candidates or technology, there can be no assurance that a competitor or potential competitor will not independently develop the same or similar product candidates or technology.

Rights of ownership over, and rights to license and use, intellectual property depend on a number of factors, including the circumstances under which the intellectual property was created and the provisions of any agreements covering such intellectual property. There can be no assurance that changes to the terms within licence agreements will not affect the entitlement of the Group to the relevant intellectual property or to license the relevant intellectual property from others.

Financial risks

(a) Product liability and insurance risk

In carrying out its activities the Group potentially faces contractual and statutory claims, or other types of claim from customers, suppliers and/or investors. In addition, the Group is exposed to potential product liability risks that are inherent in the research, pre-clinical and clinical evaluation, bioprocessing, marketing and use of pharmaceutical products. While the Group is currently able to obtain insurance cover, there can be no assurance that any future necessary insurance cover will be available to the Group at an acceptable cost, if at all, or that, in the event of any claim, the level of insurance carried by the Group now or in the future will be adequate, or that a product liability or other claim would not have a material and adverse effect on the Group's future profitability and financial condition.

(b) Foreign currency exposure

The Group records its transactions and prepares its financial statements in pounds sterling, but some of the Group's income from collaborative agreements and patent licences is received in US dollars and the Group incurs a proportion of its expenditure in US dollars and the Euro. The Group's cash balances are predominantly held in pounds sterling, although the Group's Treasury Policy permits cash balances to be held in other currencies in order to hedge foreseen foreign currency expenses. The Group keeps its unhedged position under constant review. To the extent that the Group's foreign currency assets and potential liabilities are not matched, fluctuations in exchange rates between pounds sterling, the US dollar and the Euro may result in realised and unrealised gains and losses on translation of the underlying currency into pounds sterling that may increase or decrease the Group's results of operations and may adversely affect the Group's financial condition, each stated in pounds sterling. In addition if the currencies in which the Group earns its revenues and/or holds its cash balances weaken against the currencies in which it incurs its expenses, this could adversely affect the Group's future profitability.

Special   interest   groups   and   adverse   public opinion

 

During 2020 the Group entered into a supply agreement with AstraZeneca for large-scale commercial manufacture of the adenovirus vector-based COVID-19 vaccine. Such work can be subject to adverse public opinion and has attracted the attention of special interest groups, including those opposed to vaccination programmes, also referred to as “anti- vaxxers”. To date, the Group has not been targeted by anti-vax campaigners, but there can be no assurance that such groups will not, in the future, focus on the Group’s activities, or that any such public opinion would not adversely affect   the Group’s operations. Adverse publicity about the Group, its role in the manufacture of the Oxford AstraZeneca   COVID-19 vaccine, or any other part of the industry may hurt the Group’s public image, which could harm its operations, cause its share price to decrease or impair its ability to gain market acceptance for its products. The Group has looked   to mitigate this risk through assistance from the UK government (Centre for Protection of National Infrastructure) on the protection of its facilities/infrastructure and scenario planning with its external public relations agency with regard  tostrategiccommunications.

Cyber   security

 

Cyber attacks seeking to compromise the confidentiality, integrity and availability of IT systems and the data held on them are a continuing risk to the Group. Indeed, with the Group operating in manufacture of the Oxford AstraZeneca COVID-19 vaccine this has increased the risk of cyber attack to the Group. Compromised confidentiality, integrity and availability of our assets resulting from a cyber attack would impact the Group’s ability to deliver to customers and, ultimately, its   financial performance and damage the Group’s reputation. The Group has looked to mitigate this risk through implementing robust security monitoring to provide early detection of hostile activity on the Group’s networks and has sought assistance from the UK government (National Cyber Security Centre) to protect the Group’s IT systems.

UK's departure from European Union ("Brexit")

The   Group   completed   its   Brexit   preparations   at   the   end   of   2020.   The   Group   established   a   Brexit   Taskforce   that   assessed     the   potential   impact   on   the   Group's   business   following   advice   from   the   UK   and   EU   governing   bodies   and   put   in   place   mitigation   actions   against   issues   that   may   arise   from   Brexit . . 

The   Group's   priority   was   to   maintain   supply   of   products   to   any   customers   in   the   EU,   post   Brexit.   This   involved   the   Group   establishing   an   Irish   office,   which   will   enable   the   Group   to   release   UK   manufactured   products   within   the   EU.   The   Group   stockpiled   three   months   of   critical   material   supplies   and   asked   key   suppliers   to   hold   stocks   in   UK   warehouses   in   order   to   cover   any   immediate   Brexit   supply   issues.

The Group has currently assessed the impact on its operations to be minor. However it is not possible at this point in time to predict the full impact of the free trade agreement with the European Union on the Group and it could still have  amaterialadverseeffectontheGroup’sbusiness,financialconditionandresultsofoperations.

COVID-19

As a result of   the COVID-19 pandemic, the Group has conducted an assessment of the potential financial and operational  riskstothebusiness.WhiletheGroupisyettoexperienceanysignificant negative impactfromthevirusonrevenues,theGroup  continuallymonitorsthepotentialimpactontheGroup’ssupplychain,withaparticularfocusonkeymanufacturingandprocessdevelopmentinventories.

The Group complies with government COVID-19 safe working practices. In addition, the Group implemented a daily  seniormanagementworkinggrouptomonitorcurrentCOVID-19developmentsandGOV.UKguidance,toriskassess  theGroup’ssupplychainandtodirecttheGroup’sphasedresponse.TheGrouphasworkedwithstaff,customersand  supplierstomonitoranypotentialdisruptionand,sofar,theGrouphasnotexperiencedany,anddoesnotcurrentlyexpecttoexperience,significantsupplyissuesoranychangesinoverallcustomerdemand.

The Group is aware that there is the potential for global shortages in certain inventories. As part of its mitigation strategy, the Group has increased, where possible, the level of incoming materials and components held in warehouses, which  willmitigatetheriskintheshorttermagainstlabourshortagesandsubsequentproductiondelaysatitskeysuppliers.Thesemitigationshavebeensuccessfultodatebutthereisnoguaranteeagainstfuturedisruption.

The Group has a duty of care towards all employees, and therefore the Group expects some of its staff to be required   toself-isolatetopreventthepossiblespreadofinfection.ThereisalsoariskthattherecouldbedisruptiontoproductionintheeventofemployeesbecomingillduetoCOVID-19.Asaresult,theGrouphastakenactiontoprovideaCOVID  secureworkplaceandtomitigatethespreadofinfectionattheGroup’sfacilitiesthroughenhancedcleaningprocesses,staggeringofshifts,theprovisionofhandsanitiserincommonareasandtherecommendationthatemployeesworkfromhomeifpossible.TheGroupwasalsopleasedtotakepartinthegovernmentpilotforlateralflowtestinginthe  workplaceand,whilethetestinghasbeenvoluntary,theGrouphasseenhightake-upoftestingbyemployees.The  BoardisupdatedonpositiveCOVID-19casesamongsttheworkforceateveryBoardmeetingandtheSETreceives  weeklyupdates.Sincerollingoutthelateralflowtestingintheworkforce,theGrouphasseen15positivecasesof  COVID-19,allofwhomhavesincerecovered.TherehavenotbeenanyemployeefatalitiesresultingfromCOVID-19.  In addition, front line production employees have been vaccinated against COVID-19 as per the government’srecommendations.

Climate change

The Group's   governance   and   approach   to   climate   change,   including   its   first   voluntary   disclosure   using   recommendations   of   the   Taskforce   for   Climate-related   Financial   Disclosure   (TCFD)   is   set   out   on   page   62   of   the   Strategic   Report.

The Group has assessed the impact of climate change and concluded that there is likely to be some minor future  financialrisks,whichwouldneedto bemanaged,butnonethatwould materiallyimpacttheGroup’sbusinessmodel.This assessment is consistent with the Sustainability Accounting Standards Board’s (SASB) Materiality Map, whichindicatesthattheissueisnotlikelytobematerialforthebiotechnologyandpharmaceuticalsector.TheGroupwillkeepthisassessmentunderreviewwithreferencetoanyfutureworkpreparedontheMaterialityMapbySASBorothers.The  Groupexpectsthattheimpactsarelikelytobeweather-relateddisruptionatinternalmanufacturingsitesandtotheGroup’ssuppliers,withtheprospectofincreasedcostsofresourcesandfuels.TheGroupplanstocontinuetodevelop  itsbusinesscontinuityplanswithalternativemanufacturingsitesandasecondsourcingstrategyifpossibletomitigate  theseimpacts.

Financial position

The Directors have considered the cash position in the context of going concern and their conclusions are set out in the Financial review page 50, the Director's report (page 126) and in note 1 to the Consolidated financial statements (page 148) of the Annual Report.

Statement of Directors' responsibilities

The Directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and parent Company financial statements for each financial year. Under that law the Directors have prepared the Group and parent Company financial statements in accordance with International Financial Reporting Standards (IFRSs) in conformity with the requirements of the Companies Act 2006 and applicable law and have elected to prepare the parent Company financial staements on the same basis. In addition, the Group financial statements are required under the UK Disclosure Guidance and Transpraency Rules to be prepared in accordance with International Financial Reporting Standards adopted pursant to Regulation (EC) No. 1606/2002 as it applies in the European Union.

Under Company law the Directors must approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of the Group's profit and loss for that period. In preparing each of the Group and parent Company financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and estimates that are reasonable, relevant and reliable;

· state whether they have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and, as regards the Group financial statements, International Financial Reporting Standards adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union;

· assess the Group and parent Company ability to continue as a going concern, disclosing as applicable, matters related to going concern; and

· use the going concern basis of accounting unless they either intend to liquidate the Groupm or parent Company or to cease operations, or to have no realistic alternatives but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and parent company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine as necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error and have general responsibility for taking such stepsas are reasonable open to them to safeguard the assets of the Company and the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Report that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors consider that the Annual Report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group and parent Company's performance, business model and strategy.

Each of the Directors, whose names and functions are listed below confirm that, to the best of their knowledge:

· the Group and parent Company's financial statements, which have been prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group and parent company; and

· the Directors' report contained on pages 124 to 131 of the Annual report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

Name	Function
Roch Doliveux	Chair (from June 2020)
John Dawson	Chief Executive Officer
Stuart Paynter	Chief Financial Officer
Andrew Heath	Non-Executive Director
Stuart Henderson	Deputy Chairman and Senior Independent Director
Heather Preston	Non-Executive Director
Robert Ghenchev	Non-Executive Director
Sam Rasty	Non-Executive Director (from December 2020)
Professor Dame Kay Davies	Non-Executive Director (from March 2021)

In accordance with Section 418 of the Companies Act 2006, Directors' report shall include a statement, in the case of each Director in office at the date the Directors' report is approved, that:

(a) so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware; and

(b) he/she has taken all the steps that he/she ought to have taken as a Director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Company: transactions with related parties

There is an outstanding balance of £nil (2019: £5,417) owed to Lorenzo Tallarigo at year end. There were no other outstanding balances in respect of transactions with Directors and connected persons at 31 December 2020 (2019: none).

 

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