TIDMDMTR
RNS Number : 4411J
DeepMatter Group PLC
27 April 2022
27 April 2022
DeepMatter Group Plc
Results for the year ended 31 December 2021
DeepMatter Group Plc (AIM: DMTR, " DeepMatter" or the "Group ),
the digital chemistry data and software company, has published its
audited results for the year ended 31 December 2021.
Highlights
-- Increased focus on CRO market - trials with Dr Reddy's and
Aurigene Pharmaceutical Services, two major Indian headquartered
global CROs secured
-- Multi-year data licensing agreement signed with the Life Science business of Merck
-- In Q1 2022, multi-year licencing and collaboration agreement
with Standigm Inc - the leading South Korean AI drug discovery
company for the provision of proprietary data and algorithms
-- Cost effective building of IP and capability via
SmartChemistry(TM) platform deployments to university centres at
Nottingham, Cambridge and Leeds
-- Positioning the Group as a key opinion leader with refreshed
Scientific Advisory Board and appointment of two new NEDs
-- Cash as at 31 Dec 21 GBP0.3m (31 Dec 20: GBP2.6m) . Raised
gross proceeds of GBP2.8m in Jan 22, enabling continued investment
in Group's unique SmartChemistry (TM) platform to underpin revenue
growth
-- Loss for the year GBP3.0m (2020: loss GBP2.4m) from revenues of GBP1.0m (2020: GBP1.3m).
Mark Warne, CEO of DeepMatter, said :
"There is a clear demand across our customer base for our
SmartChemisty(TM) platform which brings together our algorithms,
vast data base and real-time data capture capabilities into one
unified platform.
"We secured a number of notable international deals last year
and continue to grow from that base in 2022.
"The unique capabilities of our SmartChemisty(TM) platform
provide our customers with easy access and the ability to exploit
data in order to make chemical reaction discovery and design
faster, safer, more efficiently and increasingly sustainable."
For more information, contact:
DeepMatter Group plc T: 0141 548 8156
Mark Warne, Chief Executive Officer
C anaccord Genuity Limited (Nominated T: 020 7523 8000
Advisor and Broker)
Bobbie Hilliam
Meare Consulting T : 07990 858548
Adrian Duffield
About DeepMatter Group plc
DeepMatter's SmartChemistry(TM) platform (the combination of
proprietary data including data sourced from DigitalGlassware(R),
content from SPRESI and customer data combined with proprietary
algorithms from ICSynth and the application of Machine Learning and
AI) enables scientists across a range of industries, including
pharma, biotech, agri-science, scientific publishers and contract
research organisations (CROs), to easily capture, access and
exploit the vast amounts of data created in chemical reactions.
DeepMatter integrates its proprietary chemistry data and
proprietary software to significantly improve productivity,
efficiency, discovery, safety and sustainability of chemical
reactions for its customers.
DeepMatter's SmartChemistry(TM) platform capitalises on the
combination of its cloud technology, low cost-sensors, connectivity
to laboratory hardware and high-performance computing trends such
as artificial intelligence (AI).
Visit: www.deepmatter.io and follow @deepmattergroup
Strategic overview
DeepMatter brings together proprietary chemistry data and
algorithms in order to significantly improve productivity,
discovery and sustainability of chemical reactions.
Chemistry touches every aspect of our lives. Not just medicines
and the hydrocarbon sectors, but also across the food, cosmetics
and home products industry. Molecules generated from chemical
reactions underpin the biggest industries in the world: 96% of all
manufactured goods are touched by chemistry with $10 bn invested in
R&D alone.
Despite the huge scale of chemistry in one form or another, the
sector's infrastructure is not geared towards improving
productivity, discovery and sustainability. The processes employed,
and the equipment used in chemical reactions discovery to make
molecules, resembles approaches from the 19th Century. However, the
ability to generate vast quantities of data from the experiments a
scientist performs has exponentially changed, beyond all
recognition, over the last few years.
Despite the ability to generate this huge amount of data, the
industry has failed to make it readily available to scientists in a
useful, cost effective and manageable form. Scientists labour the
view there are lots of "new" ideas for chemistry. However, most are
not new. Many chemical reactions that are assumed to be new, are
actually already known with records lost or inaccessible,
regardless of whether the reaction has any useful purpose nor
not.
Our vision is to build the capabilities for scientists to easily
produce, access and use vast amount of data. Our SmartChemistry(TM)
platform is structured to enable easy access and exploitation of
the data in order to make chemical reaction discovery and design
faster, safer, more efficient and increasingly sustainable.
With this data and software, DeepMatter is capitalising on cloud
technology, low cost-sensors, connectivity to routinely used
laboratory hardware and high-performance computing trends such as
artificial intelligence (AI).
Current trading and outlook
Although the Group made good progress in developing some new and
key international partnerships, the overall commercial progress was
behind the Board's initial expectations in 2021, as a result of
deals slipping from H2 2021 into 2022.
Over the last few months, the Group has launched its
SmartChemistry(TM) platform and signed up new partnerships.
For example, since the year end, the Group entered into a
multiyear licensing and collaboration agreement with AI-driven drug
discovery company Standigm. DeepMatter provides access to its
proprietary data and algorithms via its SmartChemisty(TM) platform.
This will enable Standigm to be more efficient and productive in
its drug discovery programmes through deeper data insights and
analysis.
Operational Review
Markets
The Group's customer base encompasses enterprises and research
operations from a wide range of industries including Pharma,
Biotech, Agri Science, Fine Chemicals, Scientific Publishers and
Contract Research Organisations (CROs).
SmartChemistry(TM) platform
Our SmartChemistry(TM) platform is structured to encompass:
-- A user interface to enable analysis and control
-- An algorithm layer to enable data cleansing, monitoring, modelling and prediction
-- A data layer made up of digitalised proprietary and unique
content along with published scientific research.
Our SmartChemistry(TM) platform enables discovery and design
with speed and sustainable delivery. By linking the cloud with the
laboratory we bring together all the key components a scientist
needs including:
-- Protocols and recipes
-- Integration of literature and electronic laboratory notebook content
-- Data clean-up
-- Hardware integration
-- API linkage
-- Proprietary sensors
-- Data analysis, machine learning and AI insights, in-situ
-- Retrosynthesis and forward reaction
-- Speed and reproducible outcome optimisation
-- Control and automation
Commercial highlights
The CRO market was a focus in 2021 and we moved to trial with Dr
Reddy's, a major Indian headquartered global CRO. Dr Reddy's
manufactures and markets a wide range of pharmaceuticals worldwide,
making it a good partner of choice in contract research,
development, and manufacturing services. Dr Reddy's are using the
platform to enhance reproducibility, which is paramount to
accelerate the discovery of new drugs.
Aurigene Pharmaceutical Services is a fully integrated Contract
Research, Development and Manufacturing Organization (CRO/CDMO) and
it is using our platform to help screen, develop and scale up
chemistry procedures and to accelerate custom drug discovery and
development projects.
Other highlights in 2021 from the Group's customer base,
included entering into a multi-year, data licensing agreement with
the Life Science business of Merck, to provide proprietary chemical
structure and reaction data content to Merck's selected
applications. This demonstrated the ability to monetise the data we
hold and continue to enrich.
Post the year end, the Group entered into a multiyear licensing
and collaboration agreement with AI-driven drug discovery company
Standigm. DeepMatter provides access to its proprietary data and
algorithms via its SmartChemisty(TM) platform. This will enable
Standigm to be more efficient and productive in its drug discovery
programmes through deeper data insights and analysis.
Building Intellectual Property through academic engagement
The Group has continued to reinforce strong links with leading
academic institutions and have deployments of our cloud based
platform in active use.
-- DeepMatter partnered with University of Leeds, in
collaboration with University of Sheffield, AstraZeneca, Somaserve
and Samsung to successfully win an EPSRC grant. SmartChemisty(TM)
is being used to share data in real-time and develop digitally
enabled scale-up of advanced nanoparticle products. Nanoparticles
are an important component in ensuring safe and effective drug
delivery of new-generation (mRNA) vaccines and certain anti-cancer
drugs.
-- The agreement with the University of Nottingham's Centre of
Sustainable chemistry is focused on the development of machine
learning models of sustainable chemistry for researchers in the
pharmaceutical sector, and related chemical-based industries.
SmartChemisty(TM) is being used to build interactive machine
learning models of sustainability.
-- At The University of Cambridge's Innovation Centre in Digital
Molecular Technologies (iDMT), an open innovation research centre
co-funded by the University of Cambridge, AstraZeneca, Shionogi,
and the European Regional Development Fund. The SmartChemisty(TM)
platform is being used as part of the development of a fully
digital workflow in the discovery and development of new molecules,
materials, reactions and processes.
Our industry and academic partners are increasingly adopting our
SmartChemistry(TM) platform as they join us in enabling our vision
- ' because molecules matter'.
Position DeepMatter as a Key Opinion Leader
We have also strengthened the Board of Directors to further
building our industrial knowledge and experience. Dr Bryn Roberts
joined the board as Non-executive Director in summer 2021, bringing
a wealth of experience in the pharmaceutical sector having spent 15
years at Roche. He is currently Senior Vice President and Head of
Data Services at Roche Information Solutions and until recently was
Global Head of Operations, Pharmaceutical Research & Early
Development.
As a member of the Pharmaceutical Research & Early
Development Leadership Team he led innovation in disciplines such
as Data Science and Laboratory Automation, including diverse
applications of Digital and Artificial Intelligence (AI)
technologies.
We have also refreshed and strengthened our Scientific Advisory
Board to ensure we continue to benefit from external verification
of our strategy, priorities and direction of travel. The Board is
led by Dr Richard Bourne, Professor of Digital Chemical
Manufacturing at the University of Leeds.
Working with Richard are:
-- Dr Nessa Carson, Principal Automation Scientist at Syngenta.
-- Dr Natalie Fey, an expert in computational approaches as
Associate Professor at the Centre for Computational Chemistry,
University of Bristol.
-- Dr David Parry, Head of Research at DeepMatter.
-- Dr Bryn Roberts, SVP and Head of Data Services at Roche
Information Solutions and non-executive director at DeepMatter.
Dr Mark Warne was invited to chair the Industrial Advisory Board
(IAB) at Imperial College's EPSRC Centre for Doctoral Training in
Next Generation Synthesis & Reaction Technology (CDT). In 2022
he was also invited to join the Industrial Advisory Board of
University of Leeds Process Chemistry and Chemical Engineering
school.
All these appointments cement DeepMatter as a thought leader in
the space, enabling close relationships with a number of
multinational pharma companies and Key Opinion Leaders - all of
whom are committed to integrating chemistry with technology and
sharing their expertise and experience with the chemists of the
future.
Financial review
The Group's results reflect the stage of the business as it
continues to invest in new products while building out a team
consisting of capability and expertise, to deliver the service
customers expect.
Revenue
Revenue for the year was GBP1.0m (2020: GBP1.3m) as we continued
to renew profitable business while trialing products with new
customers and exploring cross selling opportunities with existing
customers. The number of new paid evaluations of platform,
retrosynthesis and data capabilities during the year provides a
route to conversion and new contracted revenues in 2022.
Operating performance
As a group, enhancing our products in line with market trends
and customer feedback have been the key drivers during 2021.
R&D costs were GBP1.8m in 2021 (2020: GBP1.6m) in addition
to which, GBP0.1m of ICSynth development was capitalised. This
demonstrates the focus of the business in enhancing our products
and continuing to add functionality.
General and administrative expenses were unchanged at GBP2.0m
(2020: GBP2.0m) as we continued to tightly control costs.
In addition to these variances, the business claimed
Furlough/COVID scheme support in 2020 which reduced costs by
GBP0.2m in the prior year.
Capitalised software
In addition to further significant development of the
SmartChemistry(TM) platform, our retrosynthesis capability was also
invested in, adding further capability. This development work on
ICSynth has been capitalised. A total of GBP0.1m was capitalised
which will be amortised over two years in line with our accounting
policy.
Result
The Group incurred a total loss after tax for the year ended 31
December 2021 of GBP3.03 million (2020: loss GBP2.41 million)
reflecting our larger R&D spend and reduced revenue.
Cash
The Group's overall cash position at 31 December 2021 was GBP0.3
million (2020: GBP2.6 million) which reflects the continued
investment in products and the necessary funding to support a
controlled level of operating costs.
In December 2021 the Group announced a fundraise of GBP2.75m net
of costs which was completed in January 2022.
Net assets
The reduction in cash balance at the end of December 2021
translated to a decline in net assets. At 31 December 2021, net
assets were GBP5.95 million (2020: GBP8.90 million).
Post balance sheet financing activities
The Group raised gross proceeds of GBP2.8m after placing shares
at a price 0.1p in January 2022 from new and existing investors.
This discount was required to secure the future of the business
both in terms of cash runway and introducing new investors to the
register who are supportive of the business' strategy at this early
stage of development.
The Consolidated Financial Statements have been prepared for the
year to 31 December 2021.
Key Group financial performance indicators are set out
below:
31 December 2021 31 December 2020
--------------------------------------------------------- ----------------- -----------------
Net assets (GBP million) 5.95 8.90
Net asset value per share (pence) 0.64 0.96
Total loss after tax (GBP million) (3.03) (2.41)
Basic loss per share from continuing operations (pence) (0.33) (0.30)
Cash and short-term deposits with banks (GBP million) 0.30 2.61
--------------------------------------------------------- ----------------- -----------------
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
Year to 31 December 2021 Year to 31 December 2020
GBP'000 GBP'000
------------------------------------------------------- ------- ------------------------- -------------------------
Continuing operations
Revenue 1,011 1,319
Cost of sales (377) (433)
----------------------------------------------------------- --- ------------------------- -------------------------
Gross profit 634 886
----------------------------------------------------------- --- ------------------------- -------------------------
Research and development costs (1,773) (1,596)
Share based payments (121 ) (167)
Administrative expenses (2,010) (1,980)
Other income - 187
----------------------------------------------------------- --- ------------------------- -------------------------
Operating loss (3,270) (2,670)
Finance income - net 3 13
----------------------------------------------------------- --- ------------------------- -------------------------
Loss before tax (3,267) (2,657)
Taxation 241 244
----------------------------------------------------------- --- ------------------------- -------------------------
Loss for the financial period (3,026) (2,413)
Other comprehensive income
Amounts which may be reclassified to profit or loss
Currency translation differences on foreign operation (48) 53
----------------------------------------------------------- --- ------------------------- -------------------------
Total comprehensive loss for the year attributable to:
The Company's equity shareholders (3,074) (2,360)
Loss per share attributable to the equity holders of the
Company:
Basic and diluted loss per share from continuing
operations (pence) (0.33) (0.30)
----------------------------------------------------------- --- ------------------------- -------------------------
Consolidated Statement of Financial Position
As at 31 December 2021
At 31 December 2021 At 31 December 2020
GBP'000 GBP'000
---------------------------------------------------------- -------------------- --------------------
Assets
Non-current assets
Intangible assets and goodwill 6,155 6,517
Investments 3 3
Plant and equipment 29 25
Right-of-use assets - 61
6,187 6,606
---------------------------------------------------------- -------------------- --------------------
Current assets
Trade and other receivables 186 454
Income tax asset 158 214
Cash and cash equivalents 302 2,606
646 3,274
---------------------------------------------------------- -------------------- --------------------
Liabilities
Current liabilities
Trade and other payables (670) (598)
Lease liabilities - (64)
----------------------------------------------------------- -------------------- --------------------
(670) (662)
---------------------------------------------------------- -------------------- --------------------
Net current (liabilities) / assets (24) 2,612
----------------------------------------------------------- -------------------- --------------------
Non-current liabilities
Deferred tax (216) (318)
----------------------------------------------------------- -------------------- --------------------
Total non-current liabilities (216) (318)
----------------------------------------------------------- -------------------- --------------------
Total net assets 5,947 8,900
----------------------------------------------------------- -------------------- --------------------
Shareholders equity
Called up share capital 92 92
Share premium 9,134 10,200
Merger reserve 7,037 5,971
Shares to be issued reserve - 204
Foreign currency translation reserve 12 60
Retained deficit (10,328) (7,627)
----------------------------------------------------------- -------------------- --------------------
Total equity attributable to shareholders of the Company 5,947 8,900
----------------------------------------------------------- -------------------- --------------------
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Foreign
Shares to currency
Share Share Merger Retained be issued translation
capital premium reserve deficit reserve reserve Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ------------- ------------- ------------- ------------ ------------ ------------ -------------
Balance at 31
December 2019 74 7,136 5,971 (5,381) 1,274 7 9,081
---------------- ------------- ------------- ------------- ------------ ------------ ------------ -------------
Loss for the
year to 31
December 2020 - - - (2,413) - - (2,413)
Currency
translation
differences - - - - - 53 53
---------------- ------------- ------------- ------------- ------------ ------------ ------------ -------------
Total
comprehensive
loss for the
year to 31
December 2020 - - - (2,413) - 53 (2,360)
---------------- ------------- ------------- ------------- ------------ ------------ ------------ -------------
Transactions
with owners:
Issue of shares
for cash 14 1,998 - - - - 2,012
Deferred
consideration
shares issued 4 1,066 - - (1,070) - -
Share based
payment charge - - - 167 - - 167
Balance at 31
December 2020 92 10,200 5,971 (7,627) 204 60 8,900
---------------- ------------- ------------- ------------- ------------ ------------ ------------ -------------
Loss for the
year to 31
December 2021 - - - (3,026) - - (3,026)
Currency
translation
differences - - - - - (48) (48)
---------------- ------------- ------------- ------------- ------------ ------------ ------------ -------------
Total
comprehensive
loss for the
year to 31
December 2021 - - - (3,026) - (48) (3,074)
---------------- ------------- ------------- ------------- ------------ ------------ ------------ -------------
Transactions
with owners:
Share based
payment charge - - - 121 - - 121
Transfer - (1,066) 1,066 - - - -
Release of
shares not
issued - - - 204 (204) - -
---------------- ------------- ------------- ------------- ------------ ------------ ------------ -------------
Balance at 31
December 2021 92 9,134 7,037 (10,328) - 12 5,947
---------------- ------------- ------------- ------------- ------------ ------------ ------------ -------------
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
Year to 31 December 2021 Year to 31 December 2020
GBP'000 GBP'000
-------------------------------------------------------------- ------------------------- -------------------------
Cash flows from operating activities
Operating loss from continuing operations (3,270) (2,670)
Depreciation and amortisation charges 449 580
Share based payments charge 121 167
Operating cash outflows before movement in working capital (2,700) (1,923)
Decrease / (Increase) in trade and other receivables 268 (22)
Increase in trade and other payables 72 134
-------------------------------------------------------------- ------------------------- -------------------------
Cash used in operations (2,360) (1,811)
Taxation received 214 172
Interest received 3 17
-------------------------------------------------------------- ------------------------- -------------------------
Net cash used in operating activities (2,143 ) (1,622)
-------------------------------------------------------------- ------------------------- -------------------------
Cash flows from investing activities
Purchases of property, plant and equipment (25) (6)
Capitalisation of intangible assets (74) (277)
Net cash (used in) investing activities (99) (283)
-------------------------------------------------------------- ------------------------- -------------------------
Cash flows from financing activities
Proceeds from the issue of share capital - 2,151
Transaction costs arising from issue of share capital - (138)
Payment of lease liabilities (65) (129)
Net cash (used in) /generated by financing activities (65) 1,884
-------------------------------------------------------------- ------------------------- -------------------------
Net decrease in cash and cash equivalents (2,307) (21)
Cash and cash equivalents at beginning of year 2,606 2,607
Effects of exchange rate changes on cash and cash equivalents 3 20
------------------------- -------------------------
Cash and cash equivalents at end of year 302 2,606
-------------------------------------------------------------- ------------------------- -------------------------
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
A full copy of the Company's 2021 Annual Report is now available
on the Company's website at www.deepmatter.io under the Investor
Relations/Annual & Interim Reports section and will shortly be
posted to shareholders. This contains on page 62, a Notice of the
Annual General Meeting, to be held at the offices of Canaccord
Genuity Limited, 88 Wood Street, London, UK, EC2V 7QR at 13:00 p.m.
on Friday 27 May 2022.
Shareholders may ask questions in advance of the meeting by
emailing AGM@deepmatter.io , with responses to be set out on the
Company's investor website at www.deepmatter.io following the
publication of the results of the AGM. Questions must be received
no later than 13.00 p.m. on Wednesday 25 May 2022.
The Board of Directors approved this announcement on 26 April
2022. Whilst the financial information included in this preliminary
announcement has been prepared in accordance with accounting
policies consistent with UK-adopted international accounting
standards ("IFRS") this announcement does not itself contain
sufficient information to comply with all the disclosure
requirements of IFRS and does not constitute statutory accounts of
the Company for the years ended 31 December 2021 or 31 December
2020.
The financial information has been extracted from the statutory
accounts of the Company for the years ended 31 December 2021 and 31
December 2020. The auditor, Nexia Smith & Williamson, has
reported on the statutory accounts for the years ended 31 December
2021 and 2020; the reports were unqualified and did not contain a
statement under either section 498(2) or 498(3) of the Companies
Act 2006. In their report on the statutory accounts for the year
ended 31 December 2021 and 2020, the auditor drew attention to the
disclosures concerning going concern and the existence of a
material uncertainty, the valuation of goodwill, intangible assets
and investment in the subsidiaries including intercompany
receivables.
The statutory accounts for the year ended 31 December 2020 have
been delivered to the Registrar of Companies, and those for the
year ended 31 December 2021 will be delivered to the Registrar of
Companies following the Company's Annual General Meeting.
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