Idorsia Pharmaceuticals UK Limited
Financial Statements
For the year ended 31 December 2023
Pages for Filing with Registrar
Company Registration No. 13515638 (England and Wales)
Idorsia Pharmaceuticals UK Limited
Contents
Page
Balance sheet
1
Notes to the financial statements
2 - 12
Idorsia Pharmaceuticals UK Limited
Balance Sheet
As at 31 December 2023
Page 1
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
4
8,911
Current assets
Stock
334,217
-
Debtors
5
1,544,443
1,793,624
Cash at bank and in hand
775,221
456,624
2,653,881
2,250,248
Creditors: amounts falling due within one year
6
(1,685,669)
(1,476,867)
Net current assets
968,212
773,381
Net assets
977,123
773,381
Capital and reserves
Called up share capital
8
26,000
26,000
Share premium account
574,000
574,000
Other reserves
385,736
147,182
Profit and loss reserves
(8,613)
26,199
Total equity
977,123
773,381
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 24 September 2024 and are signed on its behalf by:
I Mamet
Director
Company Registration No. 13515638
Idorsia Pharmaceuticals UK Limited
Notes to the Financial Statements
For the year ended 31 December 2023
Page 2
1
Accounting policies
Company information
Idorsia Pharmaceuticals UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 20 Eastbourne Terrace, London, United Kingdom, W2 6LG.
1.1
Reporting period
The reporting period for the current financial statements is one year. The comparative financial statements were presented for a period longer than one year, due to the company being incorporated on 16 July 2021. For this reason, the comparative figures are not entirely comparable.
1.2
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Idorsia Ltd. These consolidated financial statements are available from its registered office, Hegenheimermattweg 91, 4123 Allschwill, Switzerland.
Idorsia Pharmaceuticals UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 3
1.3
Going concern
The company made a net loss of £40k for the year ended 31 December 2023 (2022: net profit of £26k) and had net assets at that date of £972k (2022: £773k). For the year ended 31 December 2023 the company continued to provide sales and marketing support to the group and during the year started providing sales externally.
The group have confirmed that they intend to continue to provide financial support for a period of at least twelve months from the date of signature of the financial statements and this support will extend to enable the company to trade and to meet its liabilities as they fall due for at least that period. The net amount due from parent undertaking at the period end has subsequently been paid post year-end.
As at 31 December 2023 the group have accumulated losses of CHF 3,143m. The group has incurred a net loss of CHF 298m (2022: CHF 828m) and negative cash flows from operations of CHF 629m (2022: CHF 859m). The group is so far funding operations through various financial instruments, mainly by issuance of equity as well as revenues generated from sales of operations and sales of license agreements. The group's operations will continue to require significant amounts of capital at least until 2025, at which time the group expects to reach breakeven.
While the group is actively seeking to raise additional funding, there can be no assurance the necessary financing will be available. The future trading activities of the group are dependent on events outside the group’s control. Should the group be in a position where it is unable to meet its liabilities as they fall due, the parent company may be unable to provide the financial support as previously set out, which may in turn result in Idorsia Pharmaceuticals UK Limited also being unable to meet its liabilities as they fall due. Management are closely monitoring the ongoing impact of the situation, however, due to the significant doubt that exists over the group’s ability to continue to trade for a period of at least 12 months from the date of approval of these financial statements, material uncertainty in relation to going concern exists.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. Services in the current period relate solely to the parent company. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates. For the sale of goods, turnover is recognised when the significant risks and rewards of ownership have transferred to the buyer,
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures and fittings
3 - 5 years straight-line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
Idorsia Pharmaceuticals UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 4
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stock
Stock are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stock to their present location and condition.
Stock held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stock over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
Idorsia Pharmaceuticals UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 5
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ 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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Idorsia Pharmaceuticals UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 6
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted based on the guidance codified in FASB ASC Topic 718. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
Idorsia Pharmaceuticals UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 7
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
1.15
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
2
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
22,800
18,500
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
14
6
Idorsia Pharmaceuticals UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 8
4
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2023
Additions
10,088
At 31 December 2023
10,088
Depreciation and impairment
At 1 January 2023
Depreciation charged in the year
1,177
At 31 December 2023
1,177
Carrying amount
At 31 December 2023
8,911
At 31 December 2022
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
50,981
Amounts owed by group undertakings
1,184,788
1,572,115
Other debtors
246,849
155,427
Prepayments and accrued income
8,328
15,334
1,490,946
1,742,876
Deferred tax asset
2,749
1,493,695
1,742,876
2023
2022
Amounts falling due after more than one year:
£
£
Other debtors
50,748
50,748
Total debtors
1,544,443
1,793,624
Idorsia Pharmaceuticals UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 9
6
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
753,681
440,583
Amounts owed to group undertakings
372,157
220,000
Corporation tax
60,642
39,892
Other taxation and social security
73,355
74,661
Other creditors
10,997
9,617
Accruals and deferred income
414,837
692,114
1,685,669
1,476,867
7
Share-based payment transactions
Equity instruments other than share options
During 2023, equity instruments other than share options were granted. The weighted average fair value of those instruments at the measurement date was 10.38 CHF.
The company operates equity-settled, share-based compensation plans, under which the company receives services from employees as consideration for equity instruments in the designated group company. The awards are granted by the group and the company has no obligation to settle the awards. Equity-settled share-based payments are measured at fair value based on the guidance codified in FASB ASC Topic 718, Compensation - Stock Compensation. Consequently, costs are recognized in earnings over the requisite service period based on the grant-date fair value of these options and awards. The grant date fair value of restricted share units ("RSU") granted under Restricted Share Plan ("RSP") is determined based on the closing share price of the Group's share at the grant date, adjusted for expected dividend distributions and discounted over the requisite service period.
The grant-date fair value of options granted under the Standard Share Options Plans ("the SSOP") is estimated at the grant date using a Black-Scholes options pricing model. The closing share price on the date of grant is used for the valuation. The expected term of an option is the remaining time from the grant date until options are expected to be exercised by participants. The Group recognises share based compensation costs considering actual forfeitures. Detailed model input assumptions are available in the parent company's audited financial statements
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
The value of the share capital reserve at year-end is £385,736 (2022: £147,182). A total of £238,554 (2022: £147,182) was expensed during the year.
Idorsia Pharmaceuticals UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
7
Share-based payment transactions
(Continued)
Page 10
Group share-based payments
The company’s employees participate in a group share based payment plan, and recognises and measures its share based payment expense as a pro rata allocation of the expense recognised for the group. The allocation is based on the number of employees benefiting from the share based payment plan employed by each group entity and assumes all employees will remain in employment and benefit fully from being in the share purchase plan.
Since the Company has no obligation to settle the share-based payment transactions among group entities, therefore when the Company receives employee services, it recognises a corresponding increase in equity as a contribution from the parent Idorsia Limited.
8
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
26,000
26,000
26,000
26,000
The company has issued 26,000 ordinary shares during the prior financial period.
25,000 shares were allotted on incorporation for their nominal value of £25,000.
1,000 shares were allotted on 01 June 2022 for a total consideration of £575,000. The nominal values of these share were £1,000 and the aggregate premium paid for these were £574,000.
The aggregate nominal value of ordinary shares at the period end is £26,000 and aggregate share premium is £574,000.
9
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Material uncertainty related to going concern
We draw attention to Note 1.3 in the financial statements, which indicates that the company is reliant upon continued support from its parent company who have confirmed it is their current intention to provide this support. The Group, of which the company is a wholly owned subsidiary, does not have sufficient long-term facilities in place to fund its trading activities and may need further fundraising to continue in business. Due to a period of adverse trading, the headroom in place around these facilities is uncertain, which could affect the ability of the parent company to provide support. As stated in Note 1.3, these events or conditions along with the other matters set out in this note, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Senior Statutory Auditor:
Darren Jordan
Statutory Auditor:
Moore Kingston Smith LLP
Idorsia Pharmaceuticals UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 11
10
Financial commitments, guarantees and contingent liabilities
During the year the company has entered into an contract whereby they will incur monthly consultancy costs over several instalments. At the year end the company had a monthly commitment of £174k, which can increase up to £491k per month in year 2 or as agreed between the parties in a change order. The contract is in place for a minimum of 24 months from January 2023, after which the company has the option to terminate the agreement with a notice period of 180 days.
Idorsia Pharmaceuticals UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 12
11
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
Land & Buildings
583,599
314,745
12
Related party transactions
The group has taken advantage of the exemption in The Financial Reporting Standard applicable in the UK and Republic of Ireland ("FRS 102") from the requirement to disclose transactions with wholly owned group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company.
13
Parent company
The ultimate controlling party is Idorsia Ltd, Switzerland by virtue of their sole shareholding and voting rights. The financial statements of the company are consolidated in the financial statements of Idorsia Ltd. These consolidated financial statements are available from its registered office, Hegenheimermattweg 91, 4123 Allschwill, Switzerland.
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