BenevolentAI Unaudited Preliminary Results for the Year Ended 31 December 2022
A year of strong operational progress with focused investment to drive future growth
LONDON–(BUSINESS WIRE)–Regulatory News:
BenevolentAI (“BenevolentAI” or the “Company” or the “Group”) (Euronext Amsterdam: BAI), a leading, clinical-stage AI-enabled drug discovery and development company, announces its unaudited preliminary results for the year ended 31 December 2022.
Joanna Shields, Chief Executive Officer of BenevolentAI, said:
“With the world’s attention on AI applications that deliver real-world impact, our progress in 2022 strongly positions BenevolentAI to capitalise on this moment. Our AI platform is proven to enhance drug discovery, as demonstrated by our growing pipeline and successful collaboration with AstraZeneca. Notable clinical and commercial milestones during the period include completing recruitment for our Phase II trial for BEN-2293, submitting the CTA for BEN-8744 and delivering an additional three novel targets to AstraZeneca’s portfolio.”
Operational highlights (including post period)
Delivered performance enhancements across the Benevolent Platform™
Introduced the next generation Knowledge Graph, powered by advanced natural language processing (NLP) to enable more precise predictions
Expanded Target ID tools to discover targets best prosecuted via alternative modalities
Substantially improved our suite of target identification tools; introduced sophisticated large language models to predict novel therapeutic drug targets from scientific literature
Launched a product for target progressibility assessments, enhancing R&D decisions across factors like druggability, selectivity and competitor and patent landscapes
Achieved sustained progress in our platform-generated clinical and pre-clinical pipeline
A topical potentially best-in-class PanTrk inhibitor in development to relieve inflammation and rapidly resolve the itch in patients with atopic dermatitis (AD)
Completed a Phase IIa study and expect top-line data by the end of March 2023
An oral peripherally-restricted small molecule PDE10 inhibitor under development as a first-in-class treatment for ulcerative colitis (UC) and with potential for other indications within inflammatory bowel diseases
Submitted a Clinical Trial Application (CTA) to the UK Medicines and Healthcare Products Regulatory Agency (MHRA) in December 2022, and expect to initiate a Phase I clinical trial in H1 2023
An orally administered asset under development as a best-in-class treatment for glioblastoma multiforme (GBM)
Declared as a clinical candidate in July 2022, with preparation for IND-enabling studies ongoing
The asset could be ready for Phase I studies in 2024
Grew our pre-clinical pipeline
Transitioned three assets into lead optimisation
Generated four new drug programmes using the Benevolent PlatformTM
Delivered strong performance in commercial Target ID collaboration with AstraZeneca
Delivered three additional novel targets discovered using the Benevolent Platform™ to AstraZeneca’s drug discovery portfolio
A total of five novel targets, two for chronic kidney disease (CKD) and three for idiopathic pulmonary fibrosis (IPF), have now been validated and selected for portfolio-entry by AstraZeneca
Each novel target selected by AstraZeneca has the potential to generate significant milestones and royalties for BenevolentAI
In January 2022, the collaboration was extended for a further 3 years to include heart failure (HF) and systemic lupus erythematosus (SLE)
Eli Lilly achieved full FDA approval for baricitinib in May 2022. BenevolentAI scientists first identified baricitinib as a COVID-19 treatment using the Benevolent Platform™ in January 2020
Initiated a non-commercial collaboration with the Drugs for Neglected Disease initiative (DNDi) and with Stanford University-based Helix Group
Made new appointments to strengthen the experience on BenevolentAI’s Board
In April 2022, Dr Oliver Brandicourt, former CEO of Sanofi and Jean Raby, Partner at Astorg, appointed to the Board as a part of the Business Combination.
Global ethics and governance expert, Dr Susan Liautaud joined the Board in June 2022
Kenneth Mulvany and Michael Brennan, two of the Company’s co-founders, stepped down from their positions as Non-Executive Directors.
Post period, in January 2023, the Board appointed Jean Raby to an additional new role as Senior Independent Non-Executive Director and Dr John Orloff to an additional new role as Workforce Non-Executive Director.
Revenue increased to £10.6 million (2021: £4.6m), primarily reflecting increased revenues from the AstraZeneca collaboration
£12.1 million R&D tax credits received in the period
Completed business combination and listing on Euronext Amsterdam in April 2022 raising £186.8 million (€225 million) gross proceeds.
Net cash, cash equivalents and short-term deposits position of £130.2 million as of 31 December 2022 at the top end of market guidance (2021: £40.6m)
Maintained cash runway to Q4 2024, despite inflationary headwinds
Twelve months ended
Normalised research and development spend
Normalised administrative expenses
Normalised operating loss
Normalised basic and diluted EPS, expressed in pence
Reported operating loss
Reported basic and diluted EPS, expressed in pence
Cash, cash equivalents and short-term deposits
Analyst and Investor briefing
Management will host an analyst briefing at 9.30 am this morning, 16 March 2023, at the offices of FTI Consulting (200 Aldersgate, Aldersgate Street, London, EC1A 4HD, United Kingdom). To register your interest in attending either in person or virtually, analysts should contact FTI Consulting at BenevolentAI@fticonsulting.com.
A recording of the webcast will be made available in the investor section of the Company’s website shortly afterwards.
BenevolentAI (AMS: BAI) is a leading, clinical-stage AI-enabled drug discovery and development company listed on the Euronext Amsterdam stock exchange. Through the combined capabilities of this AI platform, its scientific expertise, and wet-lab facilities, BenevolentAI is well-positioned to deliver novel drug candidates with a higher probability of clinical success than those developed using traditional methods. The Benevolent Platform™ powers the Company’s in-house drug pipeline and supports successful collaborations with AstraZeneca, as well as leading research and charitable institutions.
This release may contain forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “plans”, “targets”, “aims”, “believes”, “expects”, “anticipates”, “intends”, “estimates”, “will”, “may”, “should” and similar expressions. Forward-looking statements include statements regarding objectives, goals, strategies, outlook and growth prospects; future plans, events or performance and potential for future growth; economic outlook and industry trends; developments in BenevolentAI’s markets; the impact of regulatory initiatives; and/or the strength of BenevolentAI’s competitors. These forward-looking statements reflect, at the time made, BenevolentAI’s beliefs, intentions and current targets/aims. Forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The forward-looking statements in this release are based upon various assumptions based on, without limitation, management’s examination of historical operating trends, data contained in BenevolentAI’s records, and third-party data. Although BenevolentAI believes these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond BenevolentAI’s control. Forward-looking statements are not guarantees of future performance, and such risks, uncertainties, contingencies and other important factors could cause the actual outcomes and the results of operations, financial condition and liquidity of BenevolentAI or the industry to differ materially from those results expressed or implied by such forward-looking statements. The forward-looking statements speak only as of the date of this release. No representation or warranty is made that any of these forward-looking statements or forecasts will come to pass or that any forecast result will be achieved.
CHIEF EXECUTIVE’S STATEMENT
I joined BenevolentAI as Chief Executive Officer nearly five years ago with a mission to align emerging technologies with science in a bold new way. Today, our ground-breaking AI platform is helping to drive a transformation in drug discovery by empowering scientists to uncover novel targets across many therapeutic areas for different modalities.
Our progress in 2022 has solidified our leadership in the sector as we continued to advance our in-house pipeline and enhance our AI drug discovery platform, the Benevolent Platform™. Commercially, we delivered solid performance in our highly productive collaboration with AstraZeneca, an important revenue driver for the Company, which provides strong scientific and commercial validation of our approach. During the period, AstraZeneca selected three additional novel targets for its portfolio, bringing the total to five novel targets selected to date, and extended the collaboration agreement for a further three years and in two new disease areas. This expansion of our collaboration led to a significant cash investment by AstraZeneca into the business as part of the Business Combination.
Discovery and development portfolio
At BenevolentAI, our AI platform enables scientists to unravel the biological mechanisms underlying complex multifactorial diseases. Using our platform, we have generated a portfolio of 15 named drug programmes and more than ten exploratory programmes, representing a healthy balance of potentially first-in-class and best-in-class assets. This includes BEN-2293, which we are currently progressing through a Phase Ib/IIa clinical study as a treatment for mild and moderate atopic dermatitis, with results expected in the first quarter of 2023. We filed a clinical trial application (CTA) in 2022 for our next most advanced programme, BEN-8744, for ulcerative colitis, with the objective to complete the Phase I clinical study by H1 2024 before initiating a Phase II study. Whilst the Benevolent Platform™ is disease-agnostic, with the unique ability to rapidly identify novel targets in any disease area, going forward, we will focus our internal development pipeline on three core strategic areas: immunology, neurology and oncology, as announced in September 2022. We look to co-develop or out-license the programmes that are outside these therapy areas.
Product and technology
Throughout the year, we delivered performance enhancements to our world-leading AI drug discovery platform. We enhanced our data foundations by launching our next-generation Knowledge Graph, which is powered by advanced natural language processing (NLP) to enable more precise target predictions. We also substantially improved our suite of target identification tools, allowing scientists to discover targets best prosecuted via alternative modalities, and introduced sophisticated large language models (LLM) to predict novel therapeutic drug targets from scientific literature. Finally, we improved R&D decisions by launching a powerful new tool that enables scientists to make target progressibility assessments based on factors like druggability, selectivity and competitor and patent landscapes.
These improvements to our transformative, scalable technology infrastructure have played a pivotal role in delivering key milestones in 2022 through our in-house pipeline and our successful collaboration with AstraZeneca.
Nurturing continuous innovation
Innovation is at the centre of everything we do, and 2022 reinforced our commitment to creating the conditions for innovation to flourish at BenevolentAI. Building on the legacy of our monthly ‘Challenge Days’ – set up during the pandemic – we brought our entire team together for Innovation Week 2022 hosted at our London headquarters for an intensive five days of cross-functional collaboration, which resulted in significant product enhancements, new development projects and enriched team cohesion.
Our collaborations with academic innovators further multiply our opportunities for impact. In the first half of 2022, we initiated phase two of our AI research partnership with the Stanford University-based Helix Group, which focuses on discovering more effective methods to extract knowledge from biological and clinical information. Our innovation pipeline feeds into our intellectual property portfolio, including 91 tech-related applications and 122 drug discovery patent applications, representing an important strategic asset for BenevolentAI.
BenevolentAI is a purposeful company, and we believe it is important to amplify the impact of our platform and put our technology to good use for wider societal benefit. While our core strategy is to discover novel targets and develop better treatments through our in-house pipeline and partnerships, our non-commercial deployments compliment this core mission in the interest of the global good. One of the most visible applications of our approach was in support of the global campaign against COVID-19. This year we received further validation of the results of AI-enabled research, Baricitinib, the drug identified by BenevolentAI as a treatment for COVID-19 in January 2020, was fully approved by the US Food and Drug Administration (FDA). Baricitinib has been a mainstay of treatment in hospitals globally since being approved for emergency use by the FDA in November 2020, and its success in saving the lives of critically ill COVID-19 patients is a testament to the power of our platform and its potential to enhance and accelerate life-saving research.
Further underscoring our commitment to using our platform for broader societal benefit, we signed a new not-for-profit partnership with the Drugs for Neglected Diseases initiative (DNDi) in 2022. The partnership aims to identify targets and approved drugs that could be used to treat dengue fever, a climate-sensitive neglected disease representing one of the top ten threats to global public health worldwide.
Completing our business combination and successfully listing on Euronext Amsterdam in April 2022 was a testament to the strength of our business and growth story. As a result, we closed 2022 in a strong financial position, with a cash runway to Q4 2024 and sufficient capital to support our pipeline and strategy to drive long-term value creation.
We have several value inflection points both in the near and medium term. We expect top-line results of the Phase IIa clinical study for BEN-2293 in Q1 2023, and subject to results we will focus on out-licensing of BEN-2293 for atopic dermatitis post-Phase IIa data and initiate a Phase I study for BEN-8744 for ulcerative colitis in H1 2023. We also plan on delivering one to two CTA or IND-stage drug candidates. We expect to commence IND-enabling studies for at least one additional asset whilst transitioning three projects into lead optimisation, initiating four new drug discovery programmes. We also aim at signing an additional collaboration in the year ahead.
2023 has the potential to be a breakthrough year for BenevolentAI. With the world’s attention on AI applications that deliver real-world impact, we are strongly positioned to capitalise on this moment. With our substantial portfolio of platform-generated drugs, our work with big pharma and research collaborators, and our continued investment in state-of-the-art technology, we are showing every day how AI can be used to unlock the next wave of biopharma innovation.
We believe our leading platform will empower scientists to uncover novel treatments faster and with a higher probability of clinical success. Ultimately, our ambition is to facilitate the scaled development of new, more effective treatments for the patients who need them. I am confident in our ability to deliver on this mission.
Chief Executive Officer
We have delivered a strong operational performance, achieving the majority of our strategic objectives within budget and ending the year with cash at the top end of our stated guidance. With the business combination completed (notes 2.4 and 4 of the financial statements) and the Company listed on Euronext Amsterdam in April 2022, we are in a strong position to deliver on our stated objectives and to create shareholder value.
In 2023 we look forward to the results of BEN-2293 within atopic dermatitis and the upcoming Phase I study of BEN-8744 in ulcerative colitis while also continuing to drive progress across our broader development pipeline. We will also continue to invest and drive innovation across our Product & Technology stack in a targeted manner to retain our differentiated position. Against a macroeconomic backdrop of rising inflation and increasing financial pressures, we have reviewed and refined our spend profile to keep to our stated cash runway target of Q4 2024 whilst still delivering on the predefined objectives as at our interim results.
At BenevolentAI, we aim to monetise our platform through commercial collaborations and through developing our pipeline of wholly-owned assets with the aim of out-licensing, co-developing/co-commercialising or, potentially, eventually, commercialising in-house.
The Group’s revenues increased by £6.0 million to £10.6 million (2021: £4.6 million), primarily reflecting increased revenues from the AstraZeneca collaboration and the majority of this increase reflecting a second AI-enabled drug discovery collaboration that started in January 2022, combined with revenue from a one-year extension to the initial collaboration that began in late 2021. We also recognised three milestone payments in 2022 as AstraZeneca selected three additional novel targets in chronic kidney disease (one target) and idiopathic pulmonary fibrosis (two targets).
Alternative performance measures and normalised presentation
The normalised presentation of the Group performance can be found in the Consolidated statement of comprehensive income and explained further in note 2.4 of the financial statements.
Research and development (R&D) expenses
The Group’s investment in R&D is vital to its long-term growth strategy. Our spend can be split across two verticals: 1) Product & Technology, which helps scientists understand complex biology, predict targets and help design and develop drugs for disease and 2) Drug Discovery, where our team of scientists then use our technology stack to pick novel targets for disease before developing drugs for these targets. The output of this symbiotic relationship is in the form of collaborations, such as with AstraZeneca and our pipeline of now 15 named programmes. The normalised presentation of the Group performance can be found in the Consolidated statement of comprehensive income and explained further in note 2.4 of the financial statements.
Normalised product and technology spend, excluding share-based payments, for 2022 increased to £21.9 million (2021: £20.0 million) due to increased staff-related costs to support the continued expansion of the Benevolent Platform™. Reported product and technology spend in 2022 decreased to £24.3 million from £25.1 million in 2021 reflecting lower share-based payment expenses.
Normalised drug discovery spend, excluding share-based payments, for 2022 increased to £43.2 million (2021: £27.1 million). Reported drug discovery spend for 2022 increased to £47.6 million (2021: £31.8 million). The normalised increase was driven by advancing the BenevolentAI pipeline into later stages of development, particularly BEN-2293 and its progression through an adaptive Phase I/II clinical study, alongside BEN-8744 CTA filing enablement in December 2022. We also added a net 4 named programmes into our pipeline during the year.
General and administrative costs
With the business listing in 2022, we have made targeted investments in our operational structures to support our status as a listed business, particularly across finance, compliance, legal and risk activities. The Group continues to make material investments in building and protecting its IP portfolio (consisting of patents, trade secrets, copyright and trademarks). Finally, post-year end, we have also increased investment in our business development capabilities as our pipeline matures and reaches key value inflection points. Normalised business operations spend, excluding employee-related share-based payments, for 2022 has increased to £16.5 million (2021: £13.9 million). Reported business operations spend, excluding employee-related share-based payments, for 2022 has increased to £115.0 million from £27.6 million in 2021. The normalised increase reflects those additional costs related to listing readiness and operating as a public company highlighted above. These costs are expected to stay at these levels given the enhanced level of compliance and reporting obligations and previously discussed investments.
Share-based payments (SBPs)
Normalised SBP spend for 2022 has decreased to £23.7 million (2021: £51.4 million). Reported SBP spend for 2022 has decreased to £27.6 million (2021: £51.4 million). The normalised change is predominantly driven by the recognition of vested options under the legacy BEIS share incentive scheme for 2022 of £22.4 million (2021: £51.4 million). This includes a £6.5 million credit in relation to employer-related taxes in 2022 (2021: £12.4 million charge on initial recognition). In 2022, the Group initiated a new LTIP for which a £1.3 million charge has been recognised and which is expected to incur an ongoing SBP charge, inclusive of employer-related taxes, of between £6.2 million and £9.0 million based upon the share price as at the end of December.
The fair value charging methodology for the legacy BEIS plan has been re-assessed to reflect a now-known “point of exit” and a graded vesting profile. This correction has resulted in an additional £21.2 million SBP charge and restatement to 2021 profit and loss, with a corresponding credit to the share-based payment reserve and employer-related tax provision on 31 December 2021.
Normalised operating loss for 2022 decreased to £94.6 million (2021: £107.7 million). The reported operating loss for 2022 increased to £197.0 million (2021: £121.3 million) primarily due to the costs arising from the business combination, which are not expected to continue in 2023.
Finance income for 2022 has increased to £19.3 million (2021: £56,000). This is predominantly driven by the fair value revaluation of the warrant liabilities acquired through the Transaction, reflecting an increase in their value as of 31 December 2022 compared to the Transaction date of £17.
Nick Keher, Chief Financial Officer
T: +44(0) 203 781 9360
Fleur Wood – VP Investor Relations
T: +44(0) 203 781 9360
Rajin Kang – VP Communications
T: +44(0) 203 781 9360
Ben Atwell/Simon Conway/Victoria Foster Mitchell
T: +44 203 727 1000
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