Bioventix plc

("Bioventix" or "the Company")

Results for the year ended 30 June 2023

Bioventix plc (BVXP), a UK company specialising in the development and commercial supply of high-affinity monoclonal antibodies for applications in clinical diagnostics, announces its audited results for the year ended 30 June 2023.

Highlights:

• Revenue up 9% to £12.82 million (2022: £11.72 million)

• Profit before tax up 9% to £10.13 million (2022: £9.28 million)

• Cash at year end of £5.7 million (30 June 2022: £6.1 million)

• Second interim dividend of 90p per share (2022: 74p)

• Total dividends 152p per share (2022: 152p)

Introduction and Technology

Bioventix creates, manufactures and supplies high affinity sheep monoclonal antibodies (SMAs) for use in diagnostic applications.  Bioventix antibodies are preferred for use when they confer an improved test performance compared to other available antibodies. 

Most of our antibodies are used on blood-testing machines installed in hospitals and other laboratories around the world.  Bioventix makes antibodies using our SMA technology for supply to diagnostic companies for subsequent manufacture into reagent packs used on blood-testing machines.  These blood-testing machines are supplied by large multinational in vitro diagnostics (IVD) companies such as Roche Diagnostics, Siemens Healthineers, Abbott Diagnostics & Beckman Coulter.  Antibody-based blood tests are used to help diagnose many different conditions including, amongst others, heart disease, thyroid function, fertility, infectious disease and cancer. 

Testosterone is an example of a blood test where a Bioventix SMA has facilitated an improved test.  In 2003, it became clear that testosterone tests performed on automated IVD platforms were deficient.  Whilst the higher levels of testosterone in healthy adult males were accurately reported, the lower levels of testosterone in pre-pubescent boys and women were inaccurately reported.  In 2005, Bioventix created an antibody called testo3.6A3 which was evaluated by customers during 2006.  Evaluations were successful and following the necessary regulatory approvals, the first testosterone assays based on testo3.6A3 were launched in 2009.  A number of IVD companies now use this antibody for revised tests that more accurately measure lower levels of testosterone. 

Over the past 18 years, we have created and supplied approximately 20 different SMAs that are used by IVD companies around the world.  We currently sell a total of 15-20 grams of purified physical antibody per year, the vast majority of which is exported.  In addition to revenues from physical antibody supplies, the sale by our customers of diagnostic products (based on our antibodies) to their downstream end-users attracts a modest percentage royalty payable to Bioventix.  These downstream royalties currently account for approximately 70% of our annual revenue. 

Bioventix adopts one of two commercial approaches when creating new antibodies.  The first is own-risk antibody creation projects which gives Bioventix the complete freedom to commercialise the antibodies produced.  The second is contract antibody creation projects in partnership with customers who supply materials, know-how and funding and to create antibodies that can only be commercialised with the partner company.  In both cases, after initiation of a new project, it takes around a year for our scientists to create a panel of purified antibodies for evaluation by our customers.  The evaluation process at customers' laboratories generally requires the fabrication of prototype reagent packs which can be compared to other tests, for example the customer's existing commercial test or perhaps another "gold standard" method, on the assay machine platform being considered.  The process of subsequent development thereafter by our customers can take many years before registration or approval from the relevant authority, for example the US Food and Drug Administration (FDA) or EU authorities, is obtained and products can be sold to the benefit of the customers, and of course Bioventix, through the agreed sales royalty.  This does mean that there is a lead time of 4-10 years between our own research work and the receipt by Bioventix of royalty revenue from product sales.  However, because of the resource required to gain such approvals, after having achieved approval for an accurate diagnostic test using a Bioventix antibody, there is a natural incentive for continued antibody use.  This results in a barrier to entry for potential replacement antibodies which would require at least partial repetition of the approval process arising on a change from one antibody to another.  This barrier to antibody replacement arises from a combination of factors driven by the clinical criticality of the test and the potential consequences of making such a change which include the time and cost to register any changes required to validate the performance of the replacement antibody. 

Another consequence of the lengthy approval process is that the revenue for the current accounting period is derived from antibodies created many years ago.  Indeed, revenue growth over the next few years from, for example the troponin antibodies, will come from research work already carried out more than ten years ago.  By the same dynamics, the current research work active at our laboratories now is more likely to generate sales in the period 2028-2038. 

2022/2023 Financial Results

We are pleased to report our results for the financial year ended 30 June 2023.  Revenues for the year increased by 9% to £12.8 million (2021/22: £11.7 million).  Profits before tax for the year also increased by 9% to £10.1 million (2021/22; £9.3million).  Cash balances at the year-end were £5.7 million (30 June 2022 £6.1 million). 

Our most significant revenue stream continues to come from the vitamin D antibody called vitD3.5H10.  This antibody is used by a number of small, medium and large diagnostic companies around the world for use in vitamin D deficiency testing.  Sales of vitD3.5H10 increased by 7% to £5.8 million which reflects analysts' expectation for a relatively mature global IVD market. 

Sales of our other core historic antibodies are featured below with the respective percentage increase/decrease from 2021/22:

-              T3 (tri-iodothyronine): £.1.14 million (+23%)

-              biotins and biotin blockers: £0.85 million (-5%)

-              progesterone: £0.75 million (+21%)

-              estradiol: £0.56 million (-6%)

-              testosterone: £0.46 million (-3%)

-              drug-testing antibodies: £0.40 million (+6%)

Troponin is the preferred biomarker to help diagnose heart attacks.  Under an antibody creation contract previously undertaken with a company subsequently acquired by Siemens, SMAs were created that facilitated an improved troponin test that was launched by Siemens in 2017.  Total troponin antibody sales from Siemens Healthineers and another separate technology sub-license increased by 30% during the year to £1.61 million (2021/22: £1.23 million).  Whilst the percentage growth is less than last year, we have no reason to doubt that prospective troponin sales in 2024 and beyond will increase in line with analysts' forecast until June 2032 when contractual payments from our contract with Siemens will cease.

Our shipments of physical antibody to China continued to increase.  Some sales are made directly but the majority are made through five appointed distributors.  Regulatory approvals for domestic Chinese customers have considerable lead times but we continue to see modest increases in royalty payments flowing from these customers.  The prospects for further growth in China are good although we detect pressure on downstream final assay prices that has resulted from aggressive purchasing on the part of centralised procurement organisations.  This could exert pressure on Bioventix as we supply relatively high-cost reagents.  We also recognise that continued antibody technology development in China and elsewhere constitutes a longer-term threat.  In addition, relative global geopolitical stability will be important for the continued trade in technology products such as our antibodies. 

We estimate that between 50% and 60% of our total revenue is either directly linked to US Dollars via physical product pricing in Dollars or indirectly linked to US Dollars via royalties based on downstream Dollar sales.  The remainder of the currency split is dominated by Euros and important Asian currencies.  In past year, exchange rates have been relatively stable compared to the previous 12 months.  Our view continues to be that hedging mechanisms would not, in the longer term, add value and may have the potential to add risk to our business.  Consequently, future movements in exchange rates may therefore affect our Sterling revenues. 

Cash Flows and Dividends

As reported above, the performance of the business during the year generated cash balances at the year-end of £5.7 million and royalties received during quarter 3 of 2023 have added to this balance. 

The Board has determined that it is appropriate to maintain the established dividend policy in the immediate future.  For the current year, the Board is pleased to announce a second interim dividend of 90 pence per share which, when added to the first interim dividend of 62 pence per share makes a total of 152 pence per share for the current year. 

Our view continues to be that maintaining a cash balance of approximately £5 million is sufficient to facilitate operational and strategic agility both with respect to possible corporate or technological opportunities that might arise in the foreseeable future.  We have therefore decided to distribute surplus cash in our second interim dividend thereby maintaining our total distribution to shareholders at 152 pence per share, the same value as that paid for the previous financial year   

Accordingly, a dividend of 90 pence per share will be paid in November 2023.  The shares will be marked ex-dividend on 9 November 2023 and the dividend will be paid on 24 November 2023 to shareholders on the register at close of business on 10 November 2023.

Changes in the rate of Corporation Tax came into effect from 1 April 2023 increasing the rate of tax from 19% to 25%. This affected the business for the last quarter of 2022/23 and will reduce full year cashflows in 2023/24.

Research and Future Developments

Over the next few years, the continued commercial development of the new troponin assays and their roll out by our customers will have the most significant influence on Bioventix sales. 

We have undertaken a range of new research projects over the previous few years and in the table below we have illustrated our current view of their potential value and probability of success: 

Whilst antibodies in the future pipeline are at stages of testing and development that do not allow us to make any prediction about their definitive value and influence on future revenues there has still been encouraging progress. 

Over the last few years, a considerable amount of lab resource has been allocated to the tau project and Alzheimer's disease (AD) diagnostics.  AD is a complex disease that manifests itself differently across the patient population.  At a cellular level, nerve cells (neurons) become associated with amyloid (A) plaques that build up outside the neurons.  This is followed by the build-up of tau (T) tangles inside the neurons.  These pathological processes then result in neuronal cell death and the symptoms of neurodegeneration (N) that accompany this.  This "ATN" framework is used by neurologists to define the disease pathway that progresses many years before patient symptoms become more obvious. 

Recent clinical trials of AD therapeutics have produced remarkable results and there are now two therapeutic agents (Lecanemab from EISAI Pharma and Donenamab from Eli Lilly) that whilst not a cure, have been demonstrated to slow the disease process.  Patients presenting early in the ATN pathway appear to benefit most from therapy and ATN assessments can therefore be used to screen for patients suitable for therapy and also for monitoring patients whilst on therapy. 

The ATN status of patients can be defined with the use of PET scans using appropriate amyloid and/or tau contrast agents together with other assays for biomarkers in cerebral spinal fluid.  It would be desirable if such diagnostic procedures could be replaced or augmented with cheaper convenient blood tests. 

Bioventix has been working with the University of Gothenburg since early 2020 to create new antibodies to tau and to develop prototype assays for use in AD. 

A leading blood biomarker for "A" is a phosphorylated form of tau called pTau217.  A prototype assay from Gothenburg using an SMA has now been established which has performed well with frozen patient samples from a number of different cohorts.  The "effect size" (AD patients relative to controls) has been x2-4 which is similar to other leading groups and likely to be clinically useful.  The percentage of false positives and false negatives is also relatively modest confirming potential clinical utility. 

For more scientific detail, see: "A novel ultrasensitive assay for plasma p-tau217: performance in individuals with subjective cognitive decline and early Alzheimer's disease", Fernando Gonzalez-Ortiz, Journal of the Alzheimer's Association, accepted for publication October 2023. 

A novel blood-based prototype assay for neurodegeneration (N) using another Tau SMA has also been developed in Gothenburg.  This work clearly supports the potential utility of this blood test and further work is on-going in Gothenburg with further publications planned. 

For more detailed scientific information, see:

"Brain-derived tau: a novel blood-based biomarker for Alzheimer's disease-type neurodegeneration", Fernando Gonzalez-Ortiz, BRAIN 2022: 00, and:

"Levels of plasma brain-derived tau and p-tau181 in Alzheimer's disease and rapidly progressive dementias", Fernando Gonzalez-Ortiz, Journal of the Alzheimer's Association, accepted for publication October 2023". 

Precisely how Alzheimer's therapies will be adopted in the future and how blood tests will be used to support these therapies will become clearer over the coming years.  It is quite likely that large IVD companies will be part of this development and we have already sent sample SMAs to some interested parties, accepting that other tau antibodies and assays already exist.  Expert neurology centres are likely to adopt "research use only" tests in advance of the availability of other tests through hospital-orientated IVD companies.  The prototype Gothenburg tests are run on Quanterix (Billerica, MA) machines and so a partnership with Quanterix would be desirable in this research use field. 

Pre-Diagnostics, in Oslo, and their clinical collaborators have two amyloid beta assays based on Bioventix antibodies available for research use.  A current focus for Pre-Diagnostics is ARIA (amyloid related imaging abnormality) which is an important side-effect of new anti-amyloid drugs for Alzheimer's.  Pre-Diagnostics assays relate to amyloid metabolism and could help screen for ARIA vulnerable patients, before or during treatment. 

Our partners at CardiNor, also in Oslo, have continued with their work to try and identify the possible utility of secretoneurin in heart failure patients and in particular those patients who might be candidates for implantable cardiac devices (ICDs). 

Our pyrene lateral flow system for industrial pollution biomonitoring completed a second field trial at a UK industrial site during quarter 2 of 2023.  This went well and we plan to conduct additional site studies during 2024.  The progress of the pyrene project has encouraged us to develop additional assays for benzene and isocyanates, also in the field of industrial health and safety.  Benzene exposure is of relevance to the petroleum industry and isocyanates are hazardous chemicals used in the manufacture of polyurethane paints and plastics.  This work will continue into 2024 and 2025. 

Future Strategy

We have previously identified diagnostic biomarkers that we believe suit our antibody technology and have found academic collaborators who have seen merit in working with Bioventix.  The tau project and our collaboration with the University of Gothenburg is an excellent example of this strategy and we will seek additional such opportunities in the future. 

We will continue to rely on our core SMA antibody creation technology which consistently helps us to create superior antibodies for our research projects.  We are also incorporating additional newer technologies where such technologies are helpful to us.  We have successfully created "sandwich" assay formats for pyrene and THC/cannabis using a combination of primary SMA technology and a secondary synthetic "anti-complex" antibody created using the "antibody library" technology of a third party.  The synergy of the two technologies provided unique solutions to pyrene and THC/cannabis and we will seek more such opportunities in the field of small molecule detection. 

The Bioventix Team and Facility

The composition of the Bioventix team of 12 full-time equivalents has remained stable over the year facilitating excellent performance and know-how retention.  The past few years have been a challenging period for everyone and we are very grateful to the team at Bioventix for their dedication over this period.  This has allowed us to adapt and modify our business to cope with changing circumstances and to maintain the progress of our business. 

Supply chain issues relating to plastics and chemical reagents have eased considerably since the pandemic but price increases have been imposed by most suppliers.  This has added further incentive to increase the productivity of our manufacturing processes. 

Change of Name of Nominated Adviser and Broker

The Company also announces that its Nominated Adviser (NOMAD) and Broker has changed its name to Cavendish Capital Markets Limited following completion of its own corporate merger.

Conclusion and Outlook

We are pleased with our financial results for the year which we believe reflect steady growth in the use of our established products and the continued roll-out of the high sensitivity troponin assays. 

Excellent technical progress has been made with our research projects and we anticipate that our pipeline of opportunities will create additional shareholder value in the later 2020s and 2030s and we look forward to further progress in the years ahead. 

For further information please contact:

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

STATEMENT OF COMPREHENSIVE INCOME FOR YEAR ENDED 30 JUNE 2023

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2023

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2023

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2022

STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 30 JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023

1.      General information

Bioventix Plc (04923945), a company creating and manufacturing sheep monoclonal antibodies, is a public limited company registered in England and Wales. The Registered Office is 27-28 Eastcastle Street, London, W1W 8DH and its principal place of business is 7 Romans Business Park, East Street, Farnham GU9 7SX.

2.       Accounting policies

2.1   Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

2.2   Revenue

Turnover is recognised for product supplied or services rendered to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria determine when turnover will be recognised:

Direct sales

Direct sales are generally recognised at the date of dispatch unless contractual terms with customers state that risk and title pass on delivery of goods, in which case revenue is recognised on delivery.

R&D income

Subcontracted R&D income is recognised based upon the stage of completion at the year-end.

Licence revenue and royalties

Annual licence revenue is recognised, in full, based upon the date of invoice. Royalties are accrued over period to which they relate and revenue is recognised based upon returns and notifications received from customers. In the event that subsequent adjustments to royalties are identified they are recognised in the period in which they are identified.