Oxford, UK: Sensyne Health plc (LSE: SENS) (“Sensyne” or the “Company” or the “Group”), the British Clinical AI technology company, today announces its audited full year results for the 12 months ended 30 April 2019.
Lord (Paul) Drayson, CEO of Sensyne Health, commented:
“I am pleased to report strong progress in our first full year reporting period as a public company, achieving a number of important milestones.”
OPERATING HIGHLIGHTS (INCLUDING POST-PERIOD EVENTS)
- First major pharmaceutical collaboration agreement for £5m signed with Bayer to accelerate the development of new treatments for cardiovascular disease using Clinical Artificial Intelligence
- Signed agreements with a Fortune 200 company and a data infrastructure specialist to launch and scale our digital health products in the U.S. – see separate press release issued today
- New partnership created with Evotec, Oxford University Innovation, Oxford Sciences Innovation and the University of Oxford called LAB10x to accelerate the commercialisation of the next generation of digital therapeutics and data-driven drug discovery from clinical artificial intelligence research and digital health innovations
- Signing of an agreement with Jefferson Health for the clinical and economic evaluation of Sensyne Health’s GDm-Health™ digital therapeutic product and generation of curated patient data within a US hospital system
- Strategic Research Agreement (SRA)s with two further NHS Trusts: George Eliot NHS Trust and Wye Valley NHS Trust
- The number of unique patients represented in the data held by NHS partner trusts stands at 2,105,000
- 20,057,000 patient admissions represented in the data held by NHS partner trusts
- Entered into a formal research agreement with the UK MHRA (Medicines and Healthcare products Regulatory Agency) to contribute to the development of methods to validate software algorithms used in digital health – see separate press release issued today
- Total revenues of £0.136m for the year to 30 April 2019 (2018: £0.081m)
- Research and development expenditure of £9.512m (2018: £2.742m)*
- Adjusted operating loss from continuing operations of £11.513m (2018: £6.222m)
- Operating loss of £19.010m for the year to 30 April 2019 (2018: £7.253m)
- Adjusted cash used in operations of £9.779m (2018: £5.372m)
- Cash and cash equivalents of £49.252m at 30 April 2019(2018: £4.541m)
- Adjusted loss per share of £0.10 (2018: £0.06)
*Incurred or capitalised net of amortisation, excluding SRAs
Analyst and Investor briefing
Lord Drayson, Chief Executive Officer, and Lorimer Headley, Chief Financial Officer, will present the full year results for analysts and investors today at 12.00 BST. There will be a simultaneous live conference call and webcast. For more details please contact firstname.lastname@example.org at Consilium Strategic Communications.
A replay of today’s webcast of the meeting and the presentation slides will be available on the investor section of Sensyne Health’s website after the event at https://www.sensynehealth.com/investors/investor-hub
For more information please contact:
Sensyne Health (www.sensynehealth.com)
+44 (0) 330 058 1845
Lord (Paul) Drayson, Chief Executive Officer
Lorimer Headley, Chief Financial Officer
Peel Hunt LLP (Nominated Adviser and Broker)
+ 44 (0) 20 7418 8900
Dr Christopher Golden
Consilium Strategic Communications
+44 20 3709 5700
About Sensyne Health
Sensyne Health plc is a healthcare technology company that creates value from accelerating the discovery and development of new medicines and improving patient care through the analysis of real-world evidence from large databases of anonymised patient data in collaboration with NHS Trusts. These anonymised patient data are ethically sourced in that any analysis of anonymised patient data (and hence the Company's access to it) must be pre-approved for each programme on a case-by-case basis by the relevant NHS Trusts. This is to ensure that the purpose of the anonymisation and the proposed analysis are subject to appropriate ethical oversight and information governance, including conformance with NHS principles, UK data protection law and applicable regulatory guidance. Sensyne Health is an early signatory to the Department of Health and Social Care's 'Initial Code of Conduct for data-driven health and care technology.
Sensyne Health is listed on the AIM Market of the London Stock Exchange (SENS.L).
Building a world class business
It is a great privilege to be delivering Sensyne Health’s first Chairman’s Statement following the Company’s initial public offering in August 2018.
Sensyne Health links the pharmaceutical sector with the clinicians who care for the patients and collect information about the progression of medical conditions. This enables pharmaceutical companies to use insights derived from clinical artificial intelligence to develop better-targeted drugs with a higher chance of successful patient outcomes. We describe Sensyne Health’s role as a “docking station” between the providers of data and those who need it to guide medical innovation, and we are proud to provide this connection ethically and efficiently while protecting public trust in how their data is used.
Artificial intelligence is a technology which worries some people. It suggests decision making by machines, loss of human control and the potential use of data for unauthorized purposes. There is no data more sensitive than personal medical data, and the public is rightly concerned about global technology companies having access to such information. It is to address this concern that Lord Drayson, Sensyne Health’s CEO, conceived our business
model, which I believe is unique and brilliant. No other company in the world, to my knowledge, provides the same guarantee of anonymity of patients’ data while being able to make the most of the medical and social opportunities presented by such a data set.
Each NHS Trust which provides data to Sensyne Health is a shareholder, and also benefits by way of a royalty on revenue generated by use of that data.
It is pleasing that so many enlightened UK investment institutions have recognised the importance of Sensyne Health’s mission and given the Company such unequivocal support, even against a backdrop of the UK’s turbulent politics and uncertain economic future. They have seen the size of the opportunity and the unique benefits of the NHS data set, and the opportunity has also been recognised by influential partners, such as Bayer, Jefferson Health in the US, Microsoft, EY, JPMorgan and Peel Hunt, who provide strategic support. The Company is grateful to all of them.
Recognition and thanks should also be given to the Sensyne Health executive team, who have achieved so much in a relatively short period.
Board and governance
We have an exceptionally talented and well-balanced Board encompassing members experienced in the fields of politics, medicine, finance, technology, engineering, law and accountancy. Recognition of their efforts should not be overlooked.
On behalf of the Board, I would like to thank Sir John Bell for his significant contribution to the Company as Chairman until October 2018 when he stepped down from the Board.
Success in our chosen field will depend upon scale and, in preparation for growth and reflecting our determined adherence to the highest ethical standards, we have chosen to adopt, where possible, standards of corporate governance in excess of the requirements of our AIM listing.
The best companies strive to recruit the best people, and their ability to do so measures future commercial success. Artificial Intelligence is a relatively new area and is experiencing huge growth. People with the necessary skills are in unprecedented demand and Sensyne Health has to compete in a global marketplace for these skills.
In the year since our IPO, we have done exceptionally well. At IPO we had 41 employees, and today we have over 80. This is both a reflection of the excitement generated by our business model and the hard work of the team in finding the right people. However, the demand for technical employees with appropriate skills is growing faster than supply, and salary inflation in our sector will accelerate. Recruitment will remain a corporate priority for the foreseeable future.
From the outset, Sensyne Health has attracted much attention in the medical world – and all of it has been positive. Lord Drayson and his team have succeeded in communicating the Company’s vision to the investment community, the media, the Government, the pharmaceutical industry and healthcare providers. Sensyne Health sits as an innovator at the interface of computer and medical science and at the interface of business and society.
Since the IPO, the Company has delivered on the promises it made at that time. The past year has been instructive about the importance of what we are doing and the things we need to do to continue our success. Political uncertainties and recent events in the investor community have posed challenges this year, however, the Sensyne Health team are determined to ensure that the quality of the commercial opportunity the Company is pursuing will be reflected in the creation of value for shareholders.
The Company has big ambition and truly exciting prospects.
Charles Swingland (Non-Executive Chairman)
Chief Executive Officer’s statement
Delivering on our strategy
Sensyne Health’s mission is to meet the challenge of rising healthcare costs and declining productivity in the discovery of new medicines, by bringing the power of clinical artificial intelligence to the analysis of ethically sourced, anonymised patient data.
Our unique approach is based upon four strategic elements:
• a double bottom line business model that creates value for patients and shareholders and shares that value with the NHS via equity in the Company and a share of revenues;
• providing a docking station between the NHS and the life sciences industry that enables ethically sourced, anonymised patient data to be analysed using Clinical AI to accelerate medical research and improve patient care;
• developing scientific leadership in the development and use of software tools based upon a fusion of medical and computer science, in alignment with the values of the NHS and proving the value for patients and shareholders from the effective use of these tools; and
• being a great place to work, develop and make a difference.
The Company has made excellent progress over the past year in each of these elements.
Double bottom line business model
Our policy is to be a for-profit company listed on the London Stock Exchange that creates value and delivers significant public impact from accelerating the discovery and development of new medicines and improving patient care through the ethical use of clinical artificial intelligence. This “double bottom line” approach requires us to create a coalition of support for our strategy between the NHS community, the investment community and the life sciences industry. I am delighted to report on the excellent progress that the Company has made in its first year as a public company in building this coalition and delivering strong results.
Our strategy recognises the importance of maintaining society’s consent for the way in which patient data is used and for providing a fair return back to the NHS via equity ownership and a share of revenues. We regard delivering benefits to patients as our primary objective, and by achieving that objective we both maintain public confidence
in the use of patient data for the benefit of the wider community and provide an attractive financial return to the people who invest in our Company and enable us to do the work we do.
From inception, we have appreciated the vital importance of engaging with the public, the UK Government and Members of Parliament to discuss and help develop an understanding of the potential benefits of Clinical AI and the important safeguards that are needed to ensure that research is undertaken in a way that maintains public confidence and support. We have also engaged in making the case for the UK to create an attractive environment for data-driven health technology companies and their investors. Over the past year we have seen a growing appreciation, within Government, the media and the life sciences industry, of the value of real-world evidence gained from the analysis of anonymised patient data. The recent publication of the EY report on the value of NHS data concluded that an annual return to the UK Government of £10 billion per annum could be realised if a well-curated national database of linked primary and secondary care data were created. Research by YouGov, commissioned by Sensyne Health, concluded that Members of Parliament and the British public support the use of patient data for medical discovery, provided that appropriate controls are in place and that the NHS receives a fair financial return. During the year, working alongside JPMorgan, EY, Peel Hunt, Microsoft and Bayer, we have made good progress in developing policy advice and engaging with the UK Government and its advisers to enable the UK to develop an effective national patient data strategy.
This has involved participation in a number of consultation processes over the past year which have included the development of the UK Industrial Strategy in Life Sciences and led to the publication of the UK Government’s
Code of Conduct for data-driven health and care technology, to which Sensyne Health was an early signatory. These discussions are taking place within the context of a growing public appreciation of the potential threat from the misuse of personal data, the potential impact of AI on society and a backlash towards global tech companies and the “surveillance capital” business model. In this context, Sensyne Health’s “Capitalism 2.0” model is seen as a new and improved approach as people come to realise that the best AI is built on the best algorithms which in turn are trained on the best data. As that data resides with the NHS, a new model is required that is in alignment with the values of the NHS, one that makes patients its priority and provides a fair economic return to the NHS. The Sensyne Health model provides a unique point of difference with other commercial organisations and is a key strategic advantage for the Company.
Providing a docking station between the NHS and the life sciences industry
Sensyne Health operates at the interface of healthcare delivery and pharmaceutical R&D. Our scientists and clinicians work to develop new software tools that enable patients and clinicians to improve care and enable pharmaceutical scientists to discover and develop new medicines more efficiently. This work depends on the development of a fusion of medical and computer science capability. Our results demonstrate the significant benefits that our work is bringing to patients, the NHS and the UK economy.
Nevertheless, it is important to recognise the significant technical and organisational challenges that the Company faces as it works in partnership with NHS Trusts to curate, link and label the large and complex sets of anonymised patient data so that they are ready for analysis to derive the insights of potential value to clinicians and pharmaceutical scientists. Medical data is complex, and IT systems within NHS Trusts are imperfect and vary in capability and modernity across the NHS. This requires the Company to invest in the personnel and systems needed alongside the NHS Trusts and to develop the expertise and relationships required to partner effectively with these organisations.
Post-IPO, the signing of our first major pharmaceutical agreement with Bayer, to apply our Clinical AI to improve the development of new cardiovascular drugs, was a major milestone for the Company. It is focused on cardiovascular disease, the leading clinical priority for the NHS under the NHS Long Term Plan, and of major commercial importance to Bayer in its leading therapeutic area of focus.
Our business development pipeline is advancing strongly, and we anticipate signing additional agreements with pharmaceutical companies in a number of therapeutic areas in our second year as a public company.
Our recent announcement of an agreement with a US Fortune 200 company to become our sales and marketing partner in the United States completes the set of objectives set out at IPO and provides a strong foundation for future growth.
During the financial year we signed Strategic Research Agreements with five NHS Trusts and are on track to create a network of collaborations that creates a patient population of at least five million patients. Our work with these NHS Trusts, and users of our software tools, is already delivering significant improvements to patient care. We have received strong interest from NHS Trusts across the UK in developing additional Strategic Research Agreements.
Developing scientific leadership
The work undertaken by our R&D team in collaboration with the University of Oxford has made good progress. Highlights have been the development of an algorithm for machine-learning-based clustering of real-world
data to identify patient sub-groups; the prediction of stroke using machine learning based on routinely collected clinical variables; the analysis of Phase II and Phase III clinical trials data and progress in our whole genome sequencing programme in asthma.
During the year we developed and launched two major software products: SEND 19.1, and GDm-Health 18.1. The feedback from patients and clinicians on the quality and effectiveness of these products has been excellent. Both of these products were invented and clinically tested by the University of Oxford and the Oxford University Hospitals NHS Foundation Trust working in partnership. They were then subsequently licensed to Sensyne Health, which completed their development and deployment in the wider NHS.
In June we announced the creation of LAB10x in partnership with Evotec, OUI and OSI. LAB10x will provide a bridge between Sensyne Health and the research being undertaken at the University of Oxford in the fields of clinical artificial intelligence and digital health.
With the establishment of the US Fortune 200 company relationship in the United States, we have now created an efficient pathway for digital health and Clinical AI innovations to transfer from the University of Oxford labs, via clinical validation in the NHS and then to scalable deployment across the UK and the United States.
Being a great place to work, develop and make a difference
We operate in a highly competitive environment for talent where people with the skills and expertise that we need to deliver on our mission are in short supply and have many attractive options on where to work. Our social impact business model and our focus on patients are important factors in attracting and retaining the right people to work at Sensyne Health and in building a world-class team able to develop and scale the business. Key to this is being a great place to work and develop, embracing diversity, attracting talent internationally, and creating a fusion of world-class expertise in medical and computer science.
I am delighted by the quality of the team that we have built thus far and their commitment to our mission. I am confident that we will continue to attract the right people as we grow and as the Sensyne Health model and its impact becomes more widely appreciated.
Since the year end the Company has continued to make good progress and is well placed to deliver on its strategy. 2019 was a pivotal year for the Company and 2020 will be just as important as we build on the progress we have made and further create value from our unique business model.
Sensyne Health has a world-class team of people who have worked extremely hard over the past year to deliver these results for patients and shareholders. I would like to thank them for their drive and professionalism. I should also like to express my gratitude to shareholders for their new and continued support.
Overall there has been excellent progress in our first year as a public company and I look forward to updating shareholders at our AGM. I am excited about Sensyne Health’s future prospects. Our strategy is working, we are building a great team and our science is world class. These will be the foundations of our success in delivering value for patients and shareholders in future and in proving the utility of the Sensyne Health approach to business with social impact.
Experience over the past year has taught us that rather than trying to build a portfolio of small contracts with multiple pharmaceutical clients that would in time develop into larger contracts with those clients, we are better off focusing our efforts on building strategic relationships from the start with a small number of clients that develop a broader R&D partnership relationship with us, as we have achieved with Bayer. This has had the effect of reducing our revenue in FY19 and the revenue to be expected in the six months to 31 October 2019 and has increased the proportion of revenue we now have under contract for the second half of FY20 and for FY21 than was previously expected. Going forward we expect this strategy of focusing on fewer, larger contracts will generate the best return for shareholders.
Rt. Hon. Lord Drayson PhD FIET FREng FMedSci (Chief Executive Officer)
Chief Financial Officer’s statement
The year has seen significant growth and development of Sensyne Health. We have entered into five new SRAs with the NHS under our double bottom line model and conducted a successful listing on the London Stock Exchange on 17 August 2018. Together, these enabled us to increase our investment in research and development, which led to the launch of our first products in SEND 19.1 and GDm-Health 18.1, and, subsequent to the year end, signing our first major pharmaceutical deal with Bayer. This has been delivered with our expenditure, cash used in operations and the cash balance at year end all within expectations and our planned objectives at IPO.
To enable our IPO, a restructuring was carried out of the Drayson Technologies Group, where the Sensyne Health Group was held prior to the IPO. Under IFRS, Sensyne Health Group is required to present the results of Drayson Technologies Group until the completion of the restructure, with any elements that are not related to Sensyne Health shown as a discontinued operation. This statement is therefore based on the continuing operations’ results which represent the Sensyne Health business.
We raised £60 million in new funds through our IPO, having previously received £4.778 million in a private pre-IPO round. This provided net funds to the Group of £59.192 million after total transaction costs of £5.540 million (of which £2.652 million is recognised in the Consolidated Statement of Comprehensive Income and £2.888 million is offset against Share Premium in the Statement of Financial Position).
Progress since IPO
With the funds raised, we have primarily invested these in R&D as we worked toward our goal of securing our first major pharmaceutical deal within two years of our IPO. We also commenced a lease on our new office at the Schrödinger Building at the Oxford Science Park. We continue to use adjusted results as our primary measure of financial performance as we believe they better reflect the use of funds.
Total R&D expenditure
Our expenditure rose to £9.512 million in the year (2018: £2.742 million), which primarily consists of employee and related costs.
Adjusted operating loss
Our adjusted operating loss was £11.513 million for the year (2018: £6.222 million). This was driven by our increased employee costs of £7.889m (2018: £3.531 million), with the majority of other expenditure being employee related items such as office expenditure, fees paid to recruiters and use of external contractors.
Our statutory operating loss of £19.010 million (2018: £7.253 million) includes non-cash items such as share-based payments of £0.772 million (2018: nil), and amortisation of the equity we have provided under our SRAs
of £2.901 million (2018: £0.930 million). It also includes exceptional items, of which £2.652 million (2018: £nil) relates to the IPO fees recognised in the Consolidated Statement of Comprehensive Income.
Our revenue for the year was £0.136 million (2018: £0.081 million), reflecting the initial revenue recognisable under contracts from the release of SEND and GDm-Health in the later part of the year. Our first major pharmaceutical contract was signed after the year end; therefore no revenue is recognisable in the year to 30 April 2019.
Adjusted loss per share
The adjusted loss per share was £0.10 (2018: £0.06), an increase of 67%, principally reflecting the increase in R&D expenditure.
The statutory loss per share was £0.16 (2018: £0.08).
Adjusted cash used in operations
The cash used in the year was £9.779 million (2018: £5.372 million), which tracks the adjusted operating loss set out above, and our management of working capital creating a net inflow of £1.706m (2018: £0.850m).
Cash at year end
The trading above resulted in a cash balance at year end of £49.252 million (2018: £4.541 million).
Statement of Financial Position
Other than cash, the largest balance at year end is intangible assets of £18.068 million (2018: £4.714 million). The largest component is the value of the equity provided to the NHS under our SRAs, which is £16.208 million (2018: £4.160 million).
Outlook and going concern
Following the year end our first major pharmaceutical deal was signed with Bayer, which provides income of £5 million over a two-year period spanning FY20-22. We will continue to expand our R&D activity alongside delivering on this contract and securing new customers. With the funds available and the analysis carried out and reported in the viability statement, even in the absence of any new customer agreements, the Group has adequate resources to operate for a period of at least 24 months from the date of this report.
Lorimer Headley (Chief Financial Officer)
Click here for full copy of the RNS announcement
Click here for a copy of our 2019 Annual Report and Accounts