Caseware UK (AP4) 2023.0.135 2023.0.135 truetruetruetruetruetruefalse2023-01-012221truefalsefalse 11136706 2023-01-01 2023-12-31 11136706 2022-01-01 2022-12-31 11136706 2023-12-31 11136706 2022-12-31 11136706 2022-01-01 11136706 2 2023-01-01 2023-12-31 11136706 2 2022-01-01 2022-12-31 11136706 d:CompanySecretary1 2023-01-01 2023-12-31 11136706 d:Director1 2023-01-01 2023-12-31 11136706 d:Director2 2023-01-01 2023-12-31 11136706 d:Director3 2023-01-01 2023-12-31 11136706 d:Director4 2023-01-01 2023-12-31 11136706 d:RegisteredOffice 2023-01-01 2023-12-31 11136706 e:Buildings e:ShortLeaseholdAssets 2023-01-01 2023-12-31 11136706 e:Buildings e:ShortLeaseholdAssets 2023-12-31 11136706 e:Buildings e:ShortLeaseholdAssets 2022-12-31 11136706 e:OfficeEquipment 2023-01-01 2023-12-31 11136706 e:OfficeEquipment 2023-12-31 11136706 e:OfficeEquipment 2022-12-31 11136706 e:OfficeEquipment e:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 11136706 e:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 11136706 e:CurrentFinancialInstruments 2023-12-31 11136706 e:CurrentFinancialInstruments 2022-12-31 11136706 e:Non-currentFinancialInstruments 2023-12-31 11136706 e:Non-currentFinancialInstruments 2022-12-31 11136706 e:CurrentFinancialInstruments e:WithinOneYear 2023-12-31 11136706 e:CurrentFinancialInstruments e:WithinOneYear 2022-12-31 11136706 e:UKTax 2023-01-01 2023-12-31 11136706 e:UKTax 2022-01-01 2022-12-31 11136706 e:ShareCapital 2023-12-31 11136706 e:ShareCapital 2022-12-31 11136706 e:ShareCapital 2022-01-01 11136706 e:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 11136706 e:RetainedEarningsAccumulatedLosses 2023-12-31 11136706 e:RetainedEarningsAccumulatedLosses 2 2023-01-01 2023-12-31 11136706 e:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 11136706 e:RetainedEarningsAccumulatedLosses 2022-12-31 11136706 e:RetainedEarningsAccumulatedLosses 2022-01-01 11136706 e:RetainedEarningsAccumulatedLosses 2 2022-01-01 2022-12-31 11136706 d:OrdinaryShareClass1 2023-01-01 2023-12-31 11136706 d:OrdinaryShareClass1 2023-12-31 11136706 d:OrdinaryShareClass1 2022-12-31 11136706 d:FRS102 2023-01-01 2023-12-31 11136706 d:Audited 2023-01-01 2023-12-31 11136706 d:FullAccounts 2023-01-01 2023-12-31 11136706 d:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 11136706 e:WithinOneYear 2023-12-31 11136706 e:WithinOneYear 2022-12-31 11136706 e:BetweenOneFiveYears 2023-12-31 11136706 e:BetweenOneFiveYears 2022-12-31 11136706 e:MoreThanFiveYears 2023-12-31 11136706 e:MoreThanFiveYears 2022-12-31 11136706 2 2023-01-01 2023-12-31 11136706 f:PoundSterling 2023-01-01 2023-12-31 xbrli:shares iso4217:GBP xbrli:pure

Registered number: 11136706










Reneo Pharma Ltd










Annual report and financial statements

For the year ended 31 December 2023

 
Reneo Pharma Ltd
 

Company Information


Directors
Ashley F Hall 
Lynn M Purkins 
Michael P Cruse 
Gregory J Flesher 




Company secretary
Jennifer P Lam



Registered number
11136706



Registered office
Office 20, Second Floor Innovation House
Innovation Way

Discovery Park

Sandwich

Kent

CT13 9FF




Independent auditor
Kreston Reeves LLP
Chartered Accountants & Statutory Auditor

37 St Margaret's Street

Canterbury

Kent

CT1 2TU





 
Reneo Pharma Ltd
 

Contents



Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 27


 
Reneo Pharma Ltd
 

Strategic report
For the year ended 31 December 2023

The Directors present their Strategic Report for the year ended 31 December 2023.

Introduction
 
Reneo Pharma Ltd (the 'Company') was established in 2018 with operations in Sandwich, United Kingdom and is wholly owned by Reneo Pharmaceuticals, Inc. (the 'Parent') whose headquarter is in Irvine, California, United States.
The financial figures referenced in this report for the Parent are on a consolidated basis which includes the accounts of the Parent and the 'Company'; all intercompany transactions and balances have been eliminated.
The Company and the Parent entered into a research and development services agreement (Service Agreement) in October 2019, in which the Company provides research and development services related to pharmaceutical development such as chemistry, manufacturing and controls (CMC) and clinical development activities.
Reneo Pharmaceuticals, Inc. commenced operations on September 22, 2014 as a clinical-stage pharmaceutical company focused on the development and commercialisation of therapies for patients with rare genetic mitochondrial diseases, which are often associated with the inability of mitochondria to produce adenosine triphosphate (ATP). The Parent's lead product candidate, mavodelpar, is a potent and selective agonist of the peroxisome proliferator-activated receptor delta (PPAR?), which it in-licensed in December 2017. Mavodelpar has been shown to increase transcription of genes involved in mitochondrial function and increase fatty acid oxidation (FAO), and may increase production of new mitochondria.
On December 14, 2023, Reneo announced that its pivotal STRIDE study, a global, randomized, double-blind, placebo-controlled Phase 2b trial of mavodelpar in adult patients with PMM due to mtDNA defects, did not meet its primary or secondary efficacy endpoints. As a result, the Parent and the Company suspended the development activities for mavodelpar and implemented cash preservation activities, including a substantial workforce reduction. The Parent and the Company implemented a reduction in workforce in December 2023 and February 2024, and currently have eight full-time employees remaining in the USA and no employees in the UK.
In January 2024, the Parent’s Board of Directors (Board) retained an independent financial advisor to initiate a formal process to evaluate potential strategic alternatives focused on maximizing stockholder value, including, but not limited to, a merger, sale, other business combination, a strategic partnership with one or more parties, or the licensing, sale or divestiture of our assets.  
On May 10, 2024, the Parent entered into an Agreement and Plan of Merger with OnKure Therapeutics, Inc. to combine the companies in an all-stock transaction. The merger is anticipated to be completed in 2024. 
In addition, on May 10, 2024, the Board approved the dissolution of Reneo Pharma Ltd and the winding up of its affairs.

Business review
 
Since the Parent's inception in 2014, its operations have primarily focused on raising capital, establishing and protecting its intellectual property portfolio, organizing and staffing the company, business planning, and conducting preclinical and clinical development of and manufacturing development for mavodelpar. The Parent does not have any product candidates approved for sale, have not generated any revenue from product sales, and does not expect to generate revenues from the commercial sale of any products for the foreseeable future, if ever. Since inception, the Parent has incurred significant operating losses. Net losses were $77.4 million and $52.0 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the Parent had an accumulated deficit of $218.5 million, and cash, cash equivalents and short-term investments of $103.0 million. The Parent has funded operations primarily through the issuance and sale of equity securities.
 
Page 1

 
Reneo Pharma Ltd
 

Strategic report (continued)
For the year ended 31 December 2023


Principal risks and uncertainties
 
On May 10, 2024, the Parent entered into an Agreement and Plan of Merger with and into OnKure, Inc., a Delaware corporation (“OnKure”), with Merger Reneo and OnKure will cease to exist and NewCo as the surviving Entity. The Parent has begun evaluating and exploring a variety of strategic alternatives focused on maximizing stockholder value, including, but not limited to, a merger, sale, other business combination, a strategic partnership with one or more parties, or the licensing, sale or divestiture of our assets. Our ability to successfully execute on a strategic alternative is dependent on a number of factors and we may not be able to execute upon a transaction or other strategic alternative upon favorable terms within an advantageous timeframe and recognize significant value for these assets, if at all. 
Financial instruments, which potentially subject the Company to significant concentration of credit risk, consist primarily of cash, cash equivalents and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

Financial key performance indicators
 
     •Budget to actual 
     • Statement of cash flow
     • Operating expense comparison to prior quarter and prior year quarters based on
          o   Research and development 
          o   General administration expense
          o   Other income (expenses)


This report was approved by the board and signed on its behalf.



Gregory J Flesher
CEO and Director

Date: 29 August 2024

Page 2

 
Reneo Pharma Ltd
 

 
Directors' report
For the year ended 31 December 2023

The Directors present their report and the financial statements for the year ended 31 December 2023.

Directors' responsibilities statement

The Directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the Directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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

Principal activity

The Company's principal activity during the year was the research and development of therapies for patients with rare genetic mitochondrial diseases.
The Company is now undertaking the winding up of its affairs. See note 2.3 to these financial statements.

Results and dividends

The profit for the year, after taxation, amounted to £445,967 (2022 - £406,748).

The Directors do not recommend the payment of a dividend for the year.

Directors

The Directors who served during the year were:

Ashley F Hall 
Lynn M Purkins 
Michael P Cruse 
Gregory J Flesher 

Page 3

 
Reneo Pharma Ltd
 

 
Directors' report (continued)
For the year ended 31 December 2023


Financial instruments

The Company is exposed to various financial risks arising in the normal course of business. It has adopted financial risk management policies and utilised a variety of techniques to manage its exposure to these risks.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall due. The Company’s objective in managing liquidity risk is to ensure that this does not arise. Having assessed future cash flow requirements the Company expects to be able to meet its financial obligations through the cash flows that are generated from the operating activities of the Reneo Pharmaceuticals, Inc. Group, of which the Company is an undertaking.
Cash at bank is held with creditworthy financial institutions that are licensed banks in the countries in which the company operates.
Interest rate risk
Interest rate risk arises from the potential change in interest rates that may have an adverse effect on the Company in the current reporting year or in future years. The Company’s exposure to interest rate risk is limited to the effects of the fluctuation in bank interest rate on cash and cash equivalents as well as rates on loans and borrowings. The interest rate risk arising from these facilities is considered by the directors to be minimal, and the Company has not entered into any derivative instruments designed to mitigate exposure to such risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. At the reporting date, the total receivables balance is £8,997,680 (2022 - £2,087,981), due from fellow Group undertakings.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset as at the end of the reporting period. None of the receivables are past due at reporting date.
Currency risk
The Company transacts the majority of its business in pounds sterling. In addition, the Company has created two bank accounts, one in pounds sterling and one in USD, to reduce its exposure to foreign exchange risk.
Price risk
Due to the nature of the financial instruments used by the Company there is no exposure to price risk, for example in respect of fluctuations in commodity or equity prices.

Qualifying third party indemnity provisions

The Company has not made qualifying third party indemnity provisions for the benefit of its directors.

Matters covered in the Strategic report

To comply with the Companies Act 2006, the Company provides in the Strategic Report, a review of the development and performance of the Company during the year, including key performance indicators, an update on future developments, and a description of the principal risks and uncertainties facing the Company.

Page 4

 
Reneo Pharma Ltd
 

 
Directors' report (continued)
For the year ended 31 December 2023

Disclosure of information to auditor

Each of the persons who are Directors at the time when this Directors' report is approved has confirmed that:
 
so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Post balance sheet events

On May 10, 2024, the Board approved the dissolution of Reneo Pharma Ltd and the winding up of its affairs.

Auditor

Under section 487(2) of the Companies Act 2006Kreston Reeves LLP will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board and signed on its behalf.
 





Gregory J Flesher
CEO and Director

Date: 29 August 2024

Page 5

 
Reneo Pharma Ltd
 

 
Independent auditor's report to the members of Reneo Pharma Ltd
 

Opinion

We have audited the financial statements of Reneo Pharma Ltd (the 'Company') for the year ended 31 December 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Emphasis of matter - basis of preparation

We draw attention to note 2.3 in the financial statements which explains that the directors intend to cease trading in the company and therfore do not consider it to be appropriate to adopt the going concern basis of accounting in preparing the financial statements. Accordingly the financial statements have been prepared on a basis other than going concern as described in note 2.3.
Our opinion is not modified in respect of this matter.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.












Page 6

 
Reneo Pharma Ltd
 

 
Independent auditor's report to the members of Reneo Pharma Ltd (continued)


Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's report thereon. The Directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors

As explained more fully in the Directors' responsibilities statement set out on page 3, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 
Reneo Pharma Ltd
 

 
Independent auditor's report to the members of Reneo Pharma Ltd (continued)


Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the company and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to patent, health and safety, anti-bribery and employment law; in addition to regulations applicable to the research and development undertaken by the company. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and taxation legislation. 
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to the posting of inappropriate journal entries to manipulate profit or loss. Audit procedures performed by the engagement team included:
 
Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud, and review of the reports made by management; and
Assessment of identified fraud risk factors; and
Challenging assumptions and judgements made by management in its significant accounting estimates; and
Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and
Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and
Reading minutes of meetings of those charged with governance, and reviewing correspondence with relevant tax and regulatory authorities; and
Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
 
Page 8

 
Reneo Pharma Ltd
 

 
Independent auditor's report to the members of Reneo Pharma Ltd (continued)




As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:


Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.
Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.


We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


Use of our report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Mark Attwood FCCA (Senior statutory auditor)
  
for and on behalf of
Kreston Reeves LLP
 
Chartered Accountants
Statutory Auditor
  
Canterbury

29 August 2024
Page 9

 
Reneo Pharma Ltd
 

Statement of comprehensive income
For the year ended 31 December 2023

2023
2022
Note
£
£

  

Turnover
 4 
33,301,776
22,834,470

Gross profit
  
33,301,776
22,834,470

Administrative expenses
  
(32,863,271)
(22,621,731)

Operating profit
 5 
438,505
212,739

Interest receivable and similar income
 9 
7,462
-

Profit before tax
  
445,967
212,739

Tax on profit
 10 
-
194,009

Profit for the financial year
  
445,967
406,748

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 13 to 27 form part of these financial statements.

Page 10

 
Reneo Pharma Ltd
Registered number: 11136706

Balance sheet
As at 31 December 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 11 
9,463
214,942

Current assets
  

Debtors: amounts falling due after more than one year
 12 
-
7,383

Debtors: amounts falling due within one year
 12 
11,608,204
4,745,499

Cash at bank and in hand
 13 
2,293,207
2,817,434

  
13,901,411
7,570,316

Creditors: amounts falling due within one year
 14 
(9,700,103)
(4,574,841)

Net current assets
  
 
 
4,201,308
 
 
2,995,475

  

Net assets
  
4,210,771
3,210,417


Capital and reserves
  

Called up share capital 
 15 
1
1

Profit and loss account
 16 
4,210,770
3,210,416

  
4,210,771
3,210,417


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




Gregory J Flesher
CEO and Director

Date: 29 August 2024

The notes on pages 13 to 27 form part of these financial statements.

Page 11

 
Reneo Pharma Ltd
 

Statement of changes in equity
For the year ended 31 December 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2022
1
2,236,915
2,236,916



Profit for the year
-
406,748
406,748

Capital contribution - share options
-
566,753
566,753



At 1 January 2023
1
3,210,416
3,210,417



Profit for the year
-
445,967
445,967

Capital contribution - share options
-
554,387
554,387


At 31 December 2023
1
4,210,770
4,210,771


The notes on pages 13 to 27 form part of these financial statements.

Page 12

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

1.


General information

Reneo Pharma Ltd (the 'Company') is a private company limited by shares and is registered in England with the registration number 11136706. The address of the registered office is Office 20, Second Floor Innovation House, Innovation Way, Discovery Park, Sandwich, Kent, England, CT13 9FF.
The company's principal activity was the research and development of therapies for patients with rare genetic mitochondrial diseases. Further information on the activities of the company is included as part of the Strategic Report on pages 1 to 2. 
Following the period end, the Company is now undertaking the winding up of its affairs. See note 2.3.

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 financial statements are rounded to the nearest pound.

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

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Reneo Pharmaceuticals, Inc. as at 31 December 2023 and these financial statements may be obtained from www.reneopharma.com.

Page 13

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.3

Going concern

As explained in the Strategic Report, on December 14, 2023, Reneo Pharmaceuticals, Inc. announced that its pivotal STRIDE study, a global, randomized, double-blind, placebo-controlled Phase 2b trial of mavodelpar in adult patients with PMM due to mtDNA defects, did not meet its primary or secondary efficacy endpoints. As a result, the parent company suspended the development activities for mavodelpar and implemented cash preservation activities, including a substantial workforce reduction.
In January 2024, the parent company’s Board of Directors (Board) retained an independent financial advisor to initiate a formal process to evaluate potential strategic alternatives focused on maximizing stockholder value, including, but not limited to, a merger, sale, other business combination, a strategic partnership with one or more parties, or the licensing, sale or divestiture of our assets. 
On May 10, 2024, the Board approved the dissolution of the Company and the winding up of its affairs.
These financial statements are therefore prepared on a basis other than going concern.

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue 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 must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

Turnover represents amounts research and development costs recharged to the parent undertaking, Reneo Pharmaceuticals, Inc.

 
2.5

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is pounds sterling.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Page 14

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)


2.5
Foreign currency translation (continued)


Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the statement of comprehensive income within 'other operating income'.

 
2.6

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.7

Research and development

All research and development costs are expensed as incurred.

 
2.8

Interest income

Interest income is recognised in the Statement of Comprehensive Income using the effective interest method.

 
2.9

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 15

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.10

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.

 
2.11

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 16

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.12

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

The estimated useful lives range as follows:

Short-term leasehold property
-
5 years
Office equipment
-
3 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.13

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.14

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.15

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 17

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.16

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the Company's Balance sheet when the Company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
 
Page 18

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)


2.16
Financial instruments (continued)


Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires the Directors to make judgements, estimates and assumptions that can affect the amounts reported for assets and liabilities, and the results for the period. The nature of estimation is such though that actual outcomes could differ significantly from those estimates.
The following judgements have had the most significant impact on amounts recognised in the financial statements:
Contract accounting
The Company recognises expenditure on research and development contracts based on the percentage of completion at the reporting date. For sponsored research contracts the Directors estimate that due to their short term nature, the contracted research occurs predominately evenly throughout the contract term. For manufacturing and non-clinical contracts the percentage completion is estimated by the Directors based upon the assessment of the project management team and external confirmations received.
Share based payments
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The estimation of fair value requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield. See note 17 for further details.

Page 19

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

4.


Turnover

The whole of the turnover is attributable to the principal activity of the Company, and represents research and development costs recharged to the parent undertaking, Reneo Pharmaceuticals, Inc.

All turnover arose within the United States of America.


5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Research & development charged as an expense
26,106,437
18,913,601

Exchange differences
169,762
340,401

Other operating lease rentals
122,237
28,505


6.


Auditor's remuneration

During the year, the Company obtained the following services from the Company's auditor:


2023
2022
£
£

Fees payable to the Company's auditor for the audit of the Company's financial statements
13,750
9,000

Page 20

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

7.


Employees

Staff costs, including Directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
3,100,132
2,511,428

Social security costs
304,820
255,435

Cost of defined contribution scheme
68,645
49,258

3,473,597
2,816,121


Included in wages and salaries is an expense of £554,387 (2022 - £566,753) in respect of share based payments, see note 17.

The average monthly number of employees, including the Directors, during the year was as follows:


        2023
        2022
            No.
            No.







Management
17
16



Operations
4
4



Administrative
1
1

22
21


8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
307,881
525,118

Company contributions to defined contribution pension schemes
41,811
2,201

349,692
527,319


During the year retirement benefits were accruing to 1 Directors (2022 - 1) in respect of defined contribution pension schemes.

The highest paid Director received remuneration of £307,881 (2022 - £525,118).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to £41,811 (2022 - £2,201).

Page 21

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

9.


Interest receivable

2023
2022
£
£


Other interest receivable
7,462
-

Page 22

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

10.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
-
-

Adjustments in respect of previous periods
-
(194,009)


Total current tax
-
(194,009)

Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
445,967
212,739


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
104,802
40,420

Effects of:


Capital allowances for year in excess of depreciation
4,022
(39,553)

Utilisation of tax losses
(214,102)
(108,551)

Adjustments to tax charge in respect of prior periods - R&D Claim (Credit)
-
(194,008)

Tax deduction arising from exercise of employee options
29,587
100,023

Other differences leading to an increase (decrease) in the tax charge
75,691
7,660

Total tax charge for the year
-
(194,009)


In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate
would increase to 25% (rather than remaining at 19%, as previously enacted). This new law was
substantively enacted on 24 May 2021.


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 23

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

11.


Tangible fixed assets





Short-term leasehold property
Office equipment
Total

£
£
£



Cost


At 1 January 2023
197,682
40,566
238,248


Additions
122,886
27,404
150,290


Disposals
(320,568)
(54,658)
(375,226)



At 31 December 2023

-
13,312
13,312



Depreciation


At 1 January 2023
-
23,306
23,306


Charge for the year on owned assets
64,114
12,060
76,174


Disposals
(64,114)
(31,517)
(95,631)



At 31 December 2023

-
3,849
3,849



Net book value



At 31 December 2023
-
9,463
9,463



At 31 December 2022
197,682
17,260
214,942


12.


Debtors

2023
2022
£
£

Due after more than one year

Other debtors
-
7,383


2023
2022
£
£

Due within one year

Amounts owed by group undertakings
8,997,680
2,087,901

Other debtors
1,906,015
1,286,689

Prepayments and accrued income
704,509
1,370,909

11,608,204
4,745,499


Page 24

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

13.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
2,293,207
2,817,434



14.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
4,936,009
1,192,248

Other taxation and social security
667,215
269,872

Other creditors
165,985
73,190

Accruals and deferred income
3,930,894
3,039,531

9,700,103
4,574,841



15.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



100 (2022 - 100) Ordinary shares of £0.01 each
1
1



16.


Reserves

Profit and loss account

This reserve comprises all current and prior period retained profits and losses after deducting any distributions made to the Company’s shareholders.

Page 25

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

17.


Share-based payments

i) Share option scheme
The Company operates a share option scheme for employees who receive part of their remuneration in the form of share based payments. Under the terms of the scheme each option provides the holder to acquire shares in the Company's parent undertaking, Reneo Pharmaceuticals, Inc.
One quarter of the option shares vest 12 months from the vesting commencement date. One thirty sixth of the remaining option shares vest on a monthly basis thereafter. Each option will lapse on or after the tenth anniversary of the date of grant. There are no performance related conditions attached to the options.
The fair value of the share options granted has been measured through the use of the Black-Scholes pricing model. The total share option expense recognised in the statement of comprehensive income for the period was £554,387 (2022 - £526,441).
ii) Save As You Earn ('SAYE') scheme
In 2021, a SAYE scheme was introduced by the Company in which the participants purchase shares in the ultimate holding company.
The fair value of the share options granted has been measured through the use of the Black-Scholes pricing model. There were no shares granted under SAYE plan as of 31 December 2023. The total share option expense recognised in the statement of comprehensive income for the period was £NIL (2022 - £40,312).
ii) Performance-Based Restricted Share Options ('PSO')
The PSOs vest based on the Company achieving certain regulatory milestones and are subject to the employee’s continued employment with the Company through the achievement date. The fair value of the awards was based on the value of the groups shares at the grant date of the award and expense recognition is based on the probability of achieving the performance conditions. Share based compensation expense is adjusted in future periods for subsequent changes in the expected outcome of the performance conditions.
Management concluded that achievement of the performance conditions was not probable as of 31 December 2023. As such the share options have not vested and therefore no share option expense is recognised for the year ended 31 December 2023 in connection with the PSOs. 


18.


Pension commitments

The Company operates a defined contributions pension scheme. The pension cost charge represents contributions payable by the Company to the fund and amounted to £68,645 (2022 - £49,258). Contributions totalling £13,460 (2022 - £NIL) were payable to the fund at the balance sheet date.

Page 26

 
Reneo Pharma Ltd
 

 
Notes to the financial statements
For the year ended 31 December 2023

19.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
-
47,667

Later than 1 year and not later than 5 years
-
212,333

Later than 5 years
-
-

-
260,000


20.


Related party transactions

The Company is exempt from disclosing related party transactions with other companies that are wholly owned within the group.


21.


Controlling party

The Company is a wholly owned subsidiary of Reneo Pharmaceuticals, Inc. a company incorporated in The United States of America. 
The only group of undertakings for which group accounts are drawn up and of which the Company is included is the group headed by Reneo Pharmaceuticals, Inc. Reneo Pharmaceuticals, Inc. is registered at 18575 Jamboree Road, Suite 275-S, Irvine, CA 92612, USA.
Copies of the financial statements of Reneo Pharmaceuticals, Inc. are available to the public and may be obtained from www.reneopharma.com.


Page 27