Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for

the Year Ended 31 December 2021

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

Contents

Page

Company Information 1

Chairman’s Statement 3

Board of Directors and Senior Management 8

Strategic Report 10

Directors’ Report 18

Governance Report 24

Directors’ Remuneration Report 31

Independent Auditor’s Report 37

Consolidated Statement of Comprehensive Income 44

Consolidated Statement of Financial Position 45

Company Statement of Financial Position 46

Consolidated Statement of Changes in Equity 47

Company Statement of Changes in Equity 48

Consolidated Statement of Cash Flows 49

Company Statement of Cash Flows 50

Notes to the Financial Statements 51

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

Company Information

Directors

Dr Vladislav Sandler (Chief Executive Officer)

Professor Sir Marc Feldmann (Chairman)

Alexis Sandler (Non-Executive Director)

Peter Redmond (Non-Executive Director)

Company Secretary

Andrew Wright

Registered Office

5 Fleet Place London

EC4M 7RD

Registered Number (England and Wales)

08401609

Joint Brokers

SP Angel Corporate Finance LLP

Prince Frederick House

35-39 Maddox Street

London

W1S 2PP

Peterhouse Capital Limited

80 Cheapside

London

EC2V 6EE

Independent Auditor

PKF Littlejohn LLP

Statutory Auditor

15 Westferry Circus

Canary Wharf

London

E14 4HD

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

UK Solicitors

Cooley (UK) LLP

Dashwood

69 Old Broad Street

London

EC2M 1QS

US Solicitors

Rubin & Rudman LLP

50 Rowes Wharf

Boston

Massachusetts 0211

Principal Bankers

Metro Bank plc

One Southampton Row

London

WC1B 5HA

Registrar

Computershare Investor Services plc

The Pavilions

Bridgwater Road

Bristol

BS13 8AE

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

Chairman’s Statement

We achieved significant progress in our lead projects in 2021, having decided to focus on those

developments which we felt promised progression to human trials or other milestones most quickly. Key

to this was the work we have done on our CAR-T cell therapy for blood cancers, while we have also

taken our CDX antibody project forward following completion of the work carried out by Eli Lilly and

Company (“Lilly”) and the signing of a licensing agreement with Lilly for intellectual property developed

by it. Building on lines of research we had been developing previously, we have also filed a provisional

patent application for our Chimeric Bait Receptor (“CBR”) platform technology, a novel approach which

potentially has the capacity to cure most viral infections, both known and yet to appear, and certain

cancers.

As a result of this programme of activity and outstanding scientific work the Company now has a strong

roster of assets, and is firmly on the path to taking them to market.

Financially, as the accounts show, our operating loss rose to approximately £2.7 million over the period,

up from approximately £2.2 million in 2020. Operating costs remained very low for a biotechnology

company developing such cutting-edge assets as ours, but we have made strong progress largely thanks

to the quality and effectiveness of our scientific team and the expertise of our consultants.

Overall, however, the Group made a loss of £5,108,310 (2020: £2,095,023 loss) during the period under

review. Approximately half this figure arose in connection with the convertible loan facility through

which we raised £12 million during the period, which consisted in part of introductory, legal and exchange

listing fees, and in part of the discount on the market value of the shares issued upon conversion of the

debt to shares; this latter component is a non-cash loss arising for accounting reasons and contributed to

the increased reported loss for the year.

The convertible loan facility did not operate as we expected. Consequently, we decided to terminate the

facility through a partial repayment and replacement of the facility balance with conventional equity,

thanks to the efforts of our brokers. While this has proved to be expensive and our share price has fallen

back substantially, conventional sources of finance on this scale were not available at the time and these

arrangements have crucially enabled us to raise sufficient funds to take our key projects significantly

forward and to bring our lead CAR-T product candidate close to being ready, subject to the work now

being carried out, for human trials in the coming months.

I review progress and developments on our lead projects below. I shall refer to our other projects more

briefly, with the reasons for the priorities that we have selected.

CAR-T cell therapy

Our chimeric antigen receptor T-cells are developed to be a treatment for relapsed/refractory (“R/R”)

Acute Myeloid Leukaemia (“AML”), the most common form of leukaemia and one for which there are

currently no fully effective treatments. AML has a five-year survival rate of less than 30% in adults and

is currently treated using chemotherapy, rather than the potentially more effective form of therapy being

developed by Hemogenyx Pharmaceuticals.

Our CAR-T therapy is expected to be a novel form of immunotherapy that programmes a patient’s own

T-cells to recognise an antigen expressed by cancerous cells and hence destroy these cells. The product

we are developing, which we refer to as HEMO-CAR-T, was constructed using our proprietary humanised

monoclonal antibody against a target, the FLT3 protein, that is over-expressed in AML cells and can be

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

found on their surface. Testing has demonstrated that HEMO-CAR-T is able to effectively programme

human T-cells to identify and destroy human AML-derived cells both in vitro (in non-animal studies) and

in vivo (in animal studies).

We have made strong progress over the past two years in the development of HEMO-CAR-T. The

programme has seen very encouraging results to date and promises to represent a major breakthrough in

the treatment of AML. The Company is now focusing its greatest efforts on this asset, which remains

proprietary and wholly owned by the Company.

In January 2021, we announced that we had entered into a Master Translational Research Services

Agreement with the University of Pennsylvania (“Penn”) to advance HEMO-CAR-T toward and through

clinical trials. The collaboration with Penn, the world’s leading experts in CAR-T therapies, is of vital

importance and demonstrates the potential value of our development. The intended outcome of the

relationship is clinical proof of concept for HEMO-CAR-T.

In preparation for human trials, the Company engaged Quality Systems LLC (“Quality Systems”) to

oversee chemistry, manufacturing and controls processes and to assist with the compilation of regulatory

filings. Quality Systems is an expert in this field and has taken more than 30 cell and gene-based therapies

to Phase I/II of clinical trials.

In December 2021, we engaged leading contract manufacturing organisation WuXi Advanced Therapies

ATU (“WuXi ATU”) for product development and manufacturing of the DNA plasmids and viral vectors

required to manufacture HEMO-CAR-T cells to support Phase I clinical trials. This partnership is key in

accelerating the timeline to deliver this innovative therapy to patients in need of a more effective treatment

for AML. Work on these precursors for the creation of HEMO-CAR-T is now well advanced.

We are now at an advanced stage of completing our application for Investigational New Drug (“IND”)

status. Work on manufacturability, quality, safety and other key parts of the development of HEMO-CAR-

T has continued and we expect to be in a position scientifically to commence trials once the IND

designation has been granted.

CDX antibody

CDX is a bispecific antibody targeting a majority of forms of relapsed/refractory AML, a subset of ALL,

and myelodysplastic syndrome; it may also be used in conditioning patients for bone marrow transplants

in a more benign way compared to traditional chemotherapy and/or radiotherapy protocols. CDX was the

subject of our development collaboration with Lilly which concluded in 2021. The partnership resulted

in the selection of a clone of the antibody that is ready for IND-enabling studies, the final step before

applying for a licence to conduct clinical trials.

Effective and non-toxic conditioning may extend the use of bone marrow transplantation to older and

more frail patients and potentially target additional indications including autoimmune diseases, such as

lupus and multiple sclerosis, for which the risk of conventional bone marrow transplantation has been a

major road-block.

The potential applications of the CDX antibody have far wider potential than initially anticipated, and we

now believe that CDX may be used not only for conditioning for bone marrow transplants but also as a

direct treatment, or when used in combination with other existing treatments, for AML and other blood

cancers.

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

In October 2021 we secured an exclusive worldwide licence for all applications to intellectual property

developed by Lilly related to the final form of the CDX bispecific antibody. With patent protection now

secured (as described below), and following the valuable contributions made by Lilly, we believe that

CDX should attract significant interest from financial or strategic partners in taking the asset forward to

animal toxicology studies and ultimately clinical trials.

Following the year end, in January, the Company announced a partnership with Selexis SA (“Selexis”)

to leverage Selexis’s SUREtechnology Platform™ of protein expression technologies and modular

workflows to advance the Company’s CDX bispecific antibody toward human trials. The service

agreement will help the Company to reduce the time, effort, and costs associated with developing the cell

line for the antibody for the treatment of AML.

CBR

CBR is a novel platform technology that constitutes a new paradigm for treating viral infections and some

forms of cancer. The Company has been working on CBR since before the start of the COVID-19

pandemic, leveraging prior discoveries by the Company, and we have made considerable progress over

the course of 2021.

The essence of the CBR-based approach is to programme immune cells to destroy pathogens using a

novel type of modifiable synthetic receptor. We have ascertained that this approach can also potentially

be used to destroy malignant cells causing certain types of cancer, making it a broadly applicable and

exciting new class of therapy. Detailed work has been undertaken by our scientists to prove the efficacy

and widen the scope of the platform. We have achieved laboratory proof of concept for a CBR construct

that eliminates the SARS-CoV-2 virus responsible for COVID-19. The Company is planning to conduct

in vivo tests of the anti-SARS-CoV-2 CBR construct. Work also continues on a CBR construct for cancer.

Although work to date has been focussed on specific viruses, in particular SARS-CoV-2, the CBR

approach is applicable in principle to almost any form of virus. We believe it is likely to be of particular

value in combatting emerging or rare forms of viral infection, treating sufferers where effective vaccines

or anti-viral drugs have not yet been developed or have failed to be effective. These may include future

mutations of the SARS-CoV-2 virus and also new viruses that may cause new pandemics, referred to as

“Disease X”, which scientists have warned to be highly likely in the coming years.

Major advantages of our CBRs for combatting viral infections are: (1) the use of a bait makes CBRs

insensitive to mutations of the targeted virus, preventing the development of resistance; (2) CBRs are

made from naturally occurring receptors that are responsible for the function of immune cells and endow

the host’s own immune system with the ability to destroy invading pathogens; and (3) CBRs are modular

synthetic receptors that can be rapidly reconfigured to attack almost any virus, bacteria, or malignant

cells.

The Company has said relatively little about its work on CBR to date as it is a potentially broadly

applicable and highly valuable new method of creating immunotherapy treatments that is not comparable

to any other developments taking place, as far as we are aware. Now that we have achieved proof of

concept and a provisional patent application has been filed in relation to CBR we can consider business

development options. We believe that the technology should attract interest from a range of potential

partners with whom we can now hold more substantive conversations.

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Annual Report & Financial Statements for the

Year Ended 31 December 2021

Other assets

The Company’s portfolio also includes its licence to the Hu-PHEC cell therapy approach that was the

subject of CEO and Co-founder Dr Vladislav Sandler’s original discovery while working at Cornell

University, and its Advanced Hematopoietic Chimera (“AHC”) humanised mice that uniquely do not

suffer from graft-versus-host disease. These remain potentially valuable assets. Some work continues in

the background, including collaborations using our AHC as platforms for disease modelling. Shareholders

will be aware that we entered into joint ventures in 2018 to take these projects forward but these were

ultimately without result and the convertible loans to subsidiaries associated with them were repaid during

2021. However, our pragmatic focus has been on our lead assets and on becoming a clinical trial-stage

business.

Patents

The Company continued to strengthen the legal protection of its pipeline assets through 2021.

In June 2021, the Company received US patent approval in relation to CDX, covering its method of use

for conditioning patients for bone marrow/hematopoietic stem cell transplantation. It also covers a subset

of sequences of monoclonal antibodies against target proteins existing on the surface of hematopoietic

stem cells/hematopoietic progenitors and/or a number of leukaemias. This patent solidifies the

Company’s leading position in the development of ground-breaking cancer-related therapies and protects

the Company’s intellectual property in this key asset.

In August 2021, the Company received US patent approval covering sequences of monoclonal antibodies

to the human FLT3/FLK2 receptor protein that is found on the surface of AML cells, hematopoietic (blood

forming) stem cells and progenitors, and dendritic cells. These monoclonal antibodies have allowed the

Company to develop both the bispecific CDX antibody and HEMO-CAR-T as treatments for AML as

well as potential treatments for other types of blood cancers, and CDX as a product for bone marrow

transplant conditioning.

The Company has made further patent applications in relation both to HEMO-CAR-T and to the CDX

bi-specific antibodies, the latter being a joint application with Lilly.

Following the period covered by these accounts, in March 2022, the Company filed a seminal provisional

patent application protecting its intellectual property rights in its CBR platform, as mentioned above.

Scientific and business advisers

The scientific advisory board, which I chair, continues to provide valuable guidance to the Company and

its scientists. During 2021 and into 2022 it has been particularly useful in shaping the Company’s intended

protocol for clinical trials of its CAR-T therapy, leveraging our advisers’ extensive experience. The

Company has now also bolstered its commercial expertise through the appointment in July 2021 of Dr

Alan E. Walts as a business adviser and board observer on an initial 12-month term. Dr Walts is a highly

qualified life sciences industry veteran, having served as a senior manager at Genzyme in a career there

lasting over 25 years. He is now a Venture Partner with Advent Life Sciences, a position he has held since

January 2014, and has positions with several other public, private and charitable life sciences

organisations. Dr Walts’s input has been instrumental in shaping the Company’s strategy for developing

its pipeline of assets, and in introducing the Company to several potential partners.

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

New laboratory premises

The Company recently occupied new premises in the Manhattanville Factory District of New York. The

premises, custom built to our requirements, are significantly larger than our original laboratory and

include two clean rooms, enabling us to carry out some procedures which we have until now had to

outsource to third parties. These will commence with the manufacturing of HEMO-CAR-T cells for

clinical trials in-house, a process that alone can save the Company over US$2 million compared with

outsourcing this work. They also open up the possibility of manufacturing cells for other organisations as

a potential source of revenue. The new laboratory will enable us to grow as we proceed to clinical trials

and commercialisation of our pipeline products, and has other advantages including proximity to

Columbia University and other life sciences institutions. It is gratifying that the Company’s highly

talented and dedicated scientific team now has the space and quality of facilities that it needs to further

its crucial work.

Conclusion

Overall, 2021 was an important year for Hemogenyx Pharmaceuticals in terms of product development

and strategic focus, and the present year has continued this positive progress. It remains for me to thank

our expert and committed team of scientists and our informed and influential group of scientific and

business advisers. We particularly look forward to taking our key CAR-T project toward human trials and

to seeking partnerships and other financing arrangements to further the development of our CDX and

CBR assets over the rest of 2022.

Prof Sir Marc Feldmann AC, FRS

MB BS, PhD, FRCP, FRCPath, FAA, F Med Sci

Chairman

29 April 2022

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

Board of Directors and Senior Management

Professor Sir Marc Feldmann – Non-Executive Director & Chairman – appointed 9 April 2018

Professor Sir Marc Feldmann is a pre-eminent medically trained immunologist at the University of

Oxford where he was Head of the Kennedy Institute of Rheumatology until 2014 and now Emeritus

Professor. He trained in medicine at Melbourne University and then earned a Ph.D. in Immunology at the

Walter & Eliza Hall Institute with Sir Gus Nossal, before working in London at the Imperial Cancer

Research Fund. Sir Marc's main research interests are immunoregulation, understanding mechanisms of

autoimmunity and the role of cytokines in disease, and working out how to fill unmet medical needs.

His work in London led to the generation of a new hypothesis for the mechanism of autoimmunity, linking

upregulated antigen presentation and cytokine expression. Testing this hypothesis led to the discovery,

with colleague Sir Ravinder Maini, of the pivotal role of TNFα (Tumour Necrosis Factor alpha) in the

pathogenesis of rheumatoid arthritis. This major discovery has revolutionised therapy not only of

rheumatoid arthritis but other chronic inflammatory diseases (e.g. inflammatory bowel disease, psoriasis,

and ankylosing spondylitis), and helped change the perception of monoclonal antibodies from niche

products to mainstream therapeutics. Anti-TNF therapeutics are the current leading drug class with 2016

sales exceeding US$36 billion.

This has led to much scientific recognition, for example election to the Royal Society and Academy of

Medical Sciences in London, the National Academy of Sciences USA and the Australian Academy of

Science, and multiple major International prizes including the Crafoord Prize of the Royal Swedish

Academy of Sciences, the Albert Lasker Clinical Research Award (NY), the Ernst Schering Prize, the

Paul Janssen Award for Biomedical Research, and the Canada-Gairdner Award. He was also the first

recipient in biology or medicine of the EU/European Patent Office Inventor of the Year Award in the

Lifetime Achievement category. In addition, Sir Marc has advised more than 20 of the largest

pharmaceutical and biotech companies in the world and has mentored some of the most successful

scientists, many of whom have become senior figures in the commercial pharmaceutical world. Sir Marc

was knighted in the 2010 Queen's Birthday Honours, and was honoured in Australia with the knighthood

equivalent, the Companion of the Order of Australia.

Sir Marc has been at the forefront of promoting effective scientific-medical-pharmaceutical interactions.

He has built up a huge network of friends and collaborators who meet regularly in Oxford and who will

help Hemogenyx Pharmaceuticals to grow and enter clinical trials.

Dr Vladislav Sandler – Chief Executive Officer – appointed 4 October 2017

Dr Vladislav Sandler is the Co-Founder and CEO of Hemogenyx Pharmaceuticals and a research

Assistant Professor at the State University of New York (SUNY) Downstate. Dr Sandler is a widely

published stem cell scientist with decades of experience in scientific research. In particular, Dr Sandler

has extensive experience developing novel methods of direct reprogramming of somatic cells into

functional and engraftable hematopoietic stem cells, as well as developing novel sources of pluri- and

multi-potent cells.

Dr Sandler has conducted his research in Russia, Israel, Canada and the United States, including at the

Children's Hospital at Harvard Medical School, the Salk Institute for Biological Sciences, Harvard

University and Albert Einstein College of Medicine, among others. He also led a team of scientists at

Advanced Cell Technologies, Inc. and was most recently on the faculty of Weill Cornell Medical College.

While at Cornell, Dr Sandler made the significant discovery that the cells that give rise to blood stem

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

cells during mammalian development continue to exist after birth, and he developed the method of

isolation of these cells from humans. As a result of this important work, Dr Sandler was awarded the

inaugural Daedalus Fund Award for Innovation at Cornell. He went on to found Hemogenyx

Pharmaceuticals in order to further pursue this significant scientific discovery and his dedication to the

translation of science into clinical practice.

Dr Sandler has published numerous peer-reviewed papers and has received a number of awards and

fellowships for his scientific research. Dr Sandler received his PhD from the University of British

Columbia. He is a member of the International Society for Stem Cell Research.

Alexis Sandler – Non-Executive Director – appointed 4 October 2017

Alexis M. Sandler is the co-founder of Hemogenyx Pharmaceuticals, for which she has served as the

Chief Operating Officer. Ms Sandler is an attorney specialising in intellectual property, with 20 years of

experience representing a range companies and institutions.

Ms Sandler is the Vice President and General Counsel of Pace University. A talented and respected

attorney with a wide range of experience and expertise, Ms Sandler previously served for nearly a decade

as in-house counsel for The Museum of Modern Art. Prior to that, she worked as the director of business

and legal affairs for a major media and entertainment company, and in private practice for several

prominent law firms.

Ms Sandler received her AB from Harvard University and her JD from the UCLA School of Law and is

a member of the State Bar of New York and the State Bar of California.

Peter Redmond – Non-Executive Director – appointed 4 October 2017

Peter Redmond is a corporate financier with some 40 years’ experience in corporate finance and venture

capital. He has acted on and assisted a wide range of companies to attain a listing over many years on the

former Unlisted Securities Market, the Main Market of the London Stock Exchange and AIM, whether

by IPO or in many cases via reverse takeovers, across a wide range of sectors, ranging from technology

through financial services to natural resources and, in recent years has done so as a director and investor

of the companies concerned.

He was a founder director of Cleeve Capital plc (now BigBlu Operations Limited) and Mithril Capital

plc, both formerly listed on AIM prior to reverse takeovers, and of Silver Falcon plc, the Company into

which Hemogenyx Pharmaceuticals reversed, and he took a leading role in negotiating and effecting the

reverse takeover. He undertook the same role in the rescue, reconstruction and refinancing of AIM-quoted

3Legs Resources plc (now SalvaRx Group plc) and now Standard Listed URA Holdings plc and several

other companies, and took a significant active part in fundraising for the above companies.

He is currently a director of Standard Listed URA Holdings plc.

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

Directors’ Strategic Report for the year ended 31 December 2021

The Directors present their Strategic Report of Hemogenyx Pharmaceuticals plc for the year ended 31

December 2021.

Introduction

This Strategic Report comprises a number of sections, namely: the Group’s objectives, the Group’s

strategy and business model, a review of the Group’s business using key performance indicators, and the

principal risks and uncertainties facing the business. The disclosures under s172 of the Companies Act

2006 are included in the Governance Report.

Objectives

The Group’s objective is to develop breakthrough therapies for the treatment of blood and autoimmune

diseases and of viral infections.

Strategy and Business Model

The Group’s long-term strategy is to create a suite of products to address current problems associated

with the treatment of blood disorders such as cancers and autoimmune diseases, with viral infections, and

with bone marrow – or hematopoietic stem cell – transplants. The latter represents an important part of

the solution to treating blood-related diseases, with the opportunity to improve outcomes through reduced

blood stem cell transplant rejection and relapse, and if successful potentially provides long-term cures for

these diseases.

The Group’s business model aims to advance its therapies through clinical proof-of-concept, taking them

towards a final stage of development. A goal is the licensing of one or more of its therapies to partners in

return for potential upfront payments, research funding support, success milestone and royalty payments.

Operational Review and Outlook

The operational review and outlook are set out in the Chairman’s Statement.

Financial Review

The Group incurred a loss for the year to 31 December 2021 of £5,108,310 (31 December 2020 – loss

of £2,095,023).

In the year to 31 December 2021 the loss mainly arose from operational expenses pursuing the Group’s

objectives listed above as well as salaries, consulting and professional fees, and general administration

expenses. These expenses have been met from the proceeds of the issue of convertible loans and equity

placings. The Group received other income of £99,943 (2020 – £85,237) from collaborations with

partners, and £71,932 (2020: nil) from the forgiveness of a loan under the United States Payment

Protection Program in 2021 for a total of £171,875 (2020 – £85,237). Finance costs connected with the

convertible loan arrangement have been expensed to profit or loss in ull in the year, following the

cessation of that acility, which would otherwise have been deferred and spread over the life of the

convertible loans.

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Annual Report & Financial Statements for the

Year Ended 31 December 2021

Cash flow and cash position

Cash used in operations totalled £2,627,298 (31 December 2020: £1,798,404).

As at 31 December 2021, the Group had a cash balance of £6,840,969 (31 December 2020: £1,812,299).

Key Performance Indicators

The Directors have identified the KPIs below that they feel are the most vital measurements for the Group

to monitor given its current stage of development. KPIs are monitored on an annual basis to ensure that

they remain the most important and relevant measure of performance and progress.

Cash management

The Group supplemented its funding with proceeds totalling £12,000,000 resulting from the issuance of

convertible loans that took place in the year. The lender converted £10,400,000 of such loan into shares

of the Company and we repaid the remaining £1,600,000. We also repaid loans to Orgenesis Inc. during

2021, such that at 31 December 2021 there was no outstanding indebtedness. The cash position at 31

December 2021 was £6,840,969 (31 December 2020: £1,812,299).

The Group carefully plans expenditure with rolling cash flow forecasts and tight financial control. The

Group takes a collaborative cost sharing approach with business partners and avoids long-term

commitments as far as possible.

Intellectual property

The Group will focus on developing new conditioning treatments, drugs and cell therapy products for

blood and autoimmune diseases, HSC/BM transplantation, and viral infections. The Group, or its

licensors, has applied for patents to protect its proprietary technology and future products, which are in

varying stages of development.

The success of the Group will depend largely on the Group’s ability to implement successful drug

development programmes, obtain the required regulatory approvals (in various territories), protect and

exploit its own intellectual property and know-how, and the intellectual property and know-how licensed

to it, and to generate a cash flow in accordance with the strategy of the Group. Intellectual property is

protected by the Group through taking a pro-active approach to filing patents over its products and

technologies, as well as the diligent maintenance and protection of such patents and licences.

The Group patent portfolio currently includes:

CDX bi-specific antibodies

The patent application relating to CDX bi-specific antibodies was filed by Hemogenyx Pharmaceuticals

LLC in the USA on 4 April 2016 ("CDX Patent") and awarded as Patent Number US 11,021,536 B2 on

1 June 2021. The invention summarised in the patent application is a method of eliminating hematopoietic

stem cells/hematopoietic progenitors ("HSC"/"HP") in a patient using bi-specific antibodies specifically

binding to a protein predominantly expressed on the surface of HSC/HP and to a protein uniquely

expressed on a surface of immune cells. The bound bi-specific antibodies redirect immune cells to

eliminate HSC/HP. The invention relates to the required conditioning of a patient prior to a BM/HSC

transplant. In this respect, the invention serves two main purposes:

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Annual Report & Financial Statements for the

Year Ended 31 December 2021

▪ it provides adequate immunosuppression of the patient and clears sufficient niche space in the

bone marrow for the transplant of HSC. This allows transplanted cells to engraft in the recipient;

and

▪ it could potentially help to eradicate the source of malignancy.

On April 4 2017, a PCT (Patent Cooperation Treaty) application was filed by Hemogenyx

Pharmaceuticals which includes additional claims that extend the CDX Patent set out in the provisional

patent application. These claims protect specific sequences of several high-quality clones discovered and

validated by the Group. The claim extension transforms the original "method" provisional patent

application into a "composition of matter" PCT application. An additional composition of matter patent

application (covering novel sequences of the antibodies discovered and validated by the Company in

collaboration with Lilly) has been filed following completion of the Lilly collaboration agreement.

Monoclonal antibodies

In July 2019 the Group filed a composition of matter patent application entitled MONOCLONAL

ANTIBODIES TO HUMAN FLT3/FLK2 RECEPTOR PROTEIN in relation to newly-discovered

monoclonal antibodies against a target protein expressed on the surface of hematopoietic stem

cells/hematopoietic progenitors and a number of leukaemias, such as AML. The patent was granted on

31 August 2021 as Patent Number US 11,104,738. This patent covers composition of matter (sequences)

of monoclonal antibodies to the human FLT3/FLK2 receptor protein that is found on the surface of acute

myeloid leukemia (AML) cells, hematopoietic (blood forming) stem cells and progenitors (HSC/HP),

and dendritic cells. It also covers a method of application of the Group’s bi-specific CDX antibodies for

conditioning patients for bone marrow transplantation.

Hu-PHEC cell therapy

The patent relating to Hu-PHEC was filed by Cornell University ("Cornell Patent") in several

jurisdictions on 13 November 2014. The patent was approved and issued in the United States of America

on 25 February 2020 and published by the European Patent Office on 13 May 2020. The invention

summarises a method of isolation and identification of post-natal hemogenic endothelial cells, as well as

the provision of substantially purified populations of post-natal hemogenic endothelial cells,

compositions of post-natal endothelial cells and methods to utilise post-natal hemogenic endothelial cells

to regenerate the hematopoietic system in a patient.

Advanced Hematopoietic Chimeras

The provisional patent application relating to the Group’s proprietary humanised mouse model, the

Advanced Hematopoietic Chimera, is an application filed by Dr Sandler and Dr Rita Simone in the USA

on 20 February 2018 ("AHC Patent"). The invention summarised in the patent application is mice whose

hematopoietic system is at least 40% humanised and methods for preparing the same. The patent was

assigned to the Group’s subsidiary Immugenyx LLC on 24 May 2018. In June 2019 the Group announced

that Immugenyx LLC has further refined its work to develop the Advanced peripheral blood

Hematopoietic Chimera ("ApbHC") as a research and development tool. The major advantage of the

ApbHC compared to other humanised mouse models known to the Group is the absence of Graft versus

Host Disease, a disease that complicates and often renders impossible the efficient use of peripheral blood

mononuclear cells in transplanted mice. The ApbHC can potentially be used for testing multi-specific

antibodies, including its own bi-specific CDX antibody, as well as for the development and testing of

new cell therapies involving immune cell programming such as CAR-T. ApbHC can also potentially be

used for the modeling of autoimmune diseases, such as Systemic Lupus Erythematosus (aka Lupus), with

a goal of developing fundamentally new treatments for those diseases.

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Annual Report & Financial Statements for the

Year Ended 31 December 2021

Chimeric Bait Receptor

In March 2022, the Company filed a seminal provisional patent application protecting its rights to the

intellectual property covering CBR.

Product development

The Group develops therapies to transform bone marrow and blood stem cell transplant procedures. These

therapies aim to replace the need for existing methods of preparation of patients for transplantation, such

as chemotherapy and radiation treatments, and at the same time address the problem of finding matching

stem cell donors whilst reducing the risk of blood stem cell rejection after transplantation.

The Group’s key products, CDX antibodies, CAR-T therapy, the CBR platform, and Hu-PHEC cell

therapy, are currently in preclinical development. In addition, the Group’s AHC product is currently the

subject of collaborations with other pharmaceutical companies to evaluate AHCs’ effectiveness as

platforms for disease modelling and drug discovery.

The Directors monitor product development through pre-clinical results. The CDX and CAR-T products

have been successfully evaluated in the Group’s proprietary humanised mouse model, achieving proof of

concept. Furthermore, we have achieved a notable demonstration of CDX’s activity versus AML cells in

vitro and in vivo. If successful, the Company may be able to use the CDX and/or CAR-T products to

eliminate R/R AML in patients who qualify for bone marrow transplantation. The Company is also

investigating the possibility of using its CDX antibodies in combination with other treatments for AML

to increase their effectiveness. A CBR construct designed to target SARS-CoV-2 has been tested in vitro.

Diversity

Hemogenyx Pharmaceuticals is committed to workplace diversity which includes but is not limited to

gender, age, ethnicity and cultural background.

Hemogenyx Pharmaceuticals’ Diversity Policy defines initiatives which assist the Company in

maintaining and improving the diversity of its workforce. The table below highlights the proportion of

women engaged by the Group:

Men

Women

Organisation as a whole

Executive management team

Board

Board of Advisors

The Group engages the services of a Board of Advisors who are highly experienced in both the clinical

development of treatments and regulatory processes to commercialisation. In addition to Professor Sir

Marc Feldmann, who runs the Board of Advisors in addition to his role as Chairman, the advisors are:

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

Dr H. Michael Shepard, Ph.D.

SCIENTIFIC ADVISOR

▪ Led the discovery and development of many successful cancer treatments

including Herceptin/trastuzumab – annual sales exceed $6.5 billion worldwide

▪ Received Harvard Medical School's prestigious Warren Alpert Prize in recognition

of contributions to the field of cancer treatment research

▪ Founded NewBiotics, Inc., acquired by Kiadis Pharma

▪ Founded BioLogix, acquired by Symphogen

Dr Koen van Besien M.D.

CLINICAL ADVISOR

▪ Professor of Medicine and Director of the Stem Cell Transplant Program at NYP-Weill Cornell

College of Medicine

▪ Developed novel methods of transplantation for those patients who lack matching donors

▪ >200 publications in peer reviewed journals

▪ Editor in Chief of the journal Leukemia and Lymphoma

Corporate Responsibility

We have defined the scope of our Group’s responsible business practices as falling within the following

key focus areas:

▪ Health and Safety – ensuring the safety and well-being of our staff

▪ Environment – managing our environmental impact areas of waste, energy and water

▪ Employees – supporting our people to develop and flourish within the business

▪ Community – positive interaction with the communities in which we operate

▪ Ethical Standards – operating to the highest ethical standards

We remain committed to ensuring these activities become embedded in how we operate and contribute

towards the success of our business. This includes not only identifying and managing business risk but

exploring opportunities to add value to the business.

Greenhouse Gas Emissions

Given the nature of its activities, there is limited scope for the Group to have a major impact on

environmental matters. Nevertheless, the Directors are mindful of their responsibilities in this regard and

strive to seek opportunities where improvements may be made; these are generally concentrated in areas

of energy conservation, recycling and waste control.

Principal Risks and Uncertainties

The Group operates in an uncertain environment and is subject to a number of risk factors. The Directors

have carried out a robust assessment of the principal risks facing the Group, including those that threaten

its business model, future performance, solvency or liquidity. They consider the following risk factors

are of particular relevance to the Group’s activities and to any investment in the Group. It should be noted

that the list is not exhaustive and that other risk factors not presently known or currently deemed

immaterial may apply.

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

The risk factors are summarised below:

Risks relating to the Group’s business strategy

The Group’s business is relatively undeveloped

The operations of Hemogenyx Pharmaceuticals are at a relatively early stage and, to date, no commercial

sales of its products have been made. The ability of the Group to achieve commercialisation is dependent

on a number of factors, many of which are outside of the Group’s control. Examples of factors outside of

the Group’s control are capital market conditions, FDA approval and competition.

Business strategy of the Group

The development of clinical products for new medical treatments is inherently uncertain, with high failure

rates in clinical studies for both early and late stage development products and such clinical studies can

be expensive, time-consuming and complicated and there is no certainty as to the outcome of such

studies. Even once clinical studies have been successfully carried out, later phase trials may not

successfully replicate or improve on such outcomes.

Staffing and key personnel

The Group is reliant on a number of the key personnel, in particular Dr Vladislav Sandler who is the

founder of Hemogenyx Pharmaceuticals (refer to Corporate Governance Report for further detail). Whilst

the Group has endeavoured to ensure that it has contractual arrangements which include non-compete

restrictions in place with such persons to lessen the risk of them ceasing to be involved with the Group,

in the event that the Group was to lose the services of such individuals, its results could be adversely

affected.

Costs of commercialisation

The ability of the Group to bring its products to first commercial sale will be dependent in part on the

overall costs of manufacturing and the costs involved could be significant and there is no guarantee that

the sale prices achievable for its products will be viable and sustainable.

Clinical studies and timelines risk

Hemogenyx Pharmaceuticals is currently progressing its product candidates through preclinical

development. Although encouraging results have been achieved so far, there can be no certainty that

these results can be reproduced in clinical trials. The monies raised in the Placings and Subscriptions,

as well as the Orgenesis and Mint Capital convertible loans, are intended to support those preclinical

development activities.

The development of clinical products for new medical treatments is inherently uncertain, with high

failure rates in clinical studies for both early- and late-stage development products. Furthermore, such

clinical studies (Phase 1, Phase 2a/2b, Phase 3) are typically expensive, complex, can take considerable

time to complete and have uncertain outcomes.

Furthermore, as a result of adverse, undesirable, unintended or inconclusive results from any testing or

clinical trials (which have yet to be designed), the future progress, planning and potential treatment

outcome of the products and clinical programmes may be affected and may potentially prevent or limit

the commercial use of one, many or all of the Company's products. In addition, later phase clinical trials

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

may fail to show the desired safety and efficacy obtained in earlier studies, and a successful

completion of one stage of clinical development of an investigational clinical product does not ensure

that subsequent stages of clinical development will be successful.

Failure can occur at any stage of clinical development and, as a result, enforced delays to the clinical

development plan could delay or prevent commercialisation of the Company's product candidates.

Various factors associated with the potential failure or delay in completing a clinical programme include,

but are not limited to:

▪ Delays in securing clinical investigators or clinical study sites;

▪ Delays in securing any regulatory authority, hospital ethics committee, or institutional review

board approval or approvals necessary to commence a clinical study;

▪ Delays or failure to recruit a sufficient number of clinical study participants in accordance with

the clinical study protocol;

▪ Difficulty or inability to monitor subjects adequately during or after treatment;

▪ Inability to replicate in Phase 3 controlled studies any safety and efficacy data obtained from

controlled Phase 2a/2b clinical studies;

▪ Difficulty or inability to secure clinical investigator compliance to follow the approved clinical

study protocol; and

▪ Unexpected adverse events or any other safety or related issues.

Research and development risk

The Group operates in the biotechnology and bio-pharmaceutical development sectors and carries out

complex scientific research. If the research or preclinical testing or clinical trials of any of Hemogenyx

Pharmaceuticals’ product candidates fail, meaning that these candidates will not be licensed or marketed,

this would result in a complete absence of revenue from these failed candidates. Positive results from

preclinical and early clinical studies do not guarantee positive results from clinical trials required to

permit application for regulatory approval. Furthermore, the Group may discontinue the development

of candidates if results are not positive or unlikely to further its progress towards a meaningful outcome

or collaboration.

Intellectual property (IP) infringement

The Group may be subject to future litigation concerning its own IP and the IP of others. Adverse

judgements in relation to its IP would likely have negative outcomes for its results of operations.

Intellectual property (IP) control

The Group is partially reliant on an exclusive, world-wide licence of a patent from Cornell University for

its Hu-PHEC line of business. The exclusivity and exploitable territory for this licence depend on the Group

meeting various developmental milestones.

Environmental and other regulatory requirements

The event of a breach with any environmental or regulatory requirements may give rise to reputational,

financial or other sanctions against the Group, and therefore the Board considers these risks seriously and

designs, maintains and reviews its policies and processes so as to mitigate or avoid these risks. Whilst the

Board has a good record of compliance, there is no assurance that the Group’s activities will always be

compliant.

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

Financing

The Group’s ability to develop its product through to commercial sale will depend upon the Group’s

ability to obtain financing primarily through a further raising of new equity capital. Although the Group

has been successful in raising new equity capital, there can be no guarantee that it will be able to do so in

the future. The Group may not be successful in procuring the requisite funds on terms which are

acceptable to it (or at all) and, if such funding is unavailable, would raise questions over its ability to

further develop its products through to commercialisation. Further, Shareholders’ holdings of Ordinary

Shares may be materially diluted if debt financing is not available.

Market conditions

Market conditions, including general economic conditions and their effect on exchange rates, interest

rates and inflations rates, may impact the ultimate value of the Group regardless of its operating

performance. The Group also faces competition from other organisations, some of which may have

greater resources or be more established in a particular territory. The Board considers and reviews all

market conditions to try and mitigate any risks that may arise from these.

Political and country risk – UK departure from the EU

The departure of the UK from the EU is now complete and impact on the business, whose current

operations are principally in the US, has been negligible. Any further changes in international trade, tariff

and import/export regulations as a result of Brexit or otherwise may impose unexpected duty costs or

other non-tariff barriers on the Group. The Company is monitoring matters and will seek advice, where

necessary, as to how to mitigate the risks arising.

Pandemic and business disruption risk

The Company may be affected by disruptions to its operations in one or more locations, particularly in

the near future in light of responses to the novel coronavirus or other potential pandemics. The Company’s

New York operations are classed as an essential business and have not been subject to closure, and work

has continued to date with prudent hygiene and distancing measures in place including limited work in

the laboratory on rota and work from home. All laboratory staff have been fully vaccinated. The Company

is allowing for extended delivery times for some supplies, and for slower progress with collaboration

partners. The Board and UK management continue to operate remotely, as usual. At present the Company

believes that there should be no significant material disruption to its work, but the Board continues to

monitor these risks and the Company’s business continuity plans.

Approved by the Board on 29 April 2022

Dr Vladislav Sandler

CEO

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

Directors’ Report for the year ended 31 December 2021

The Directors present their report with the audited financial statements of the Group for the year ended

31 December 2021.

The Company’s Ordinary Shares were admitted to listing on the London Stock Exchange under the name

Silver Falcon plc, on the Official List pursuant to Chapters 14 of the Listing Rules, which sets out the

requirements for Standard Listings, on 9 November 2015.

On 4 October 2017 the Company’s shareholders voted in favour of acquiring the biotechnology company

Hemogenyx Pharmaceuticals Limited, with shares being readmitted to trading on 5 October 2017 under

the name Hemogenyx Pharmaceuticals plc.

Principal Activity

The Group’s principal activity is the discovery, development and commercialisation of a suite of products

to address current problems associated with the treatment of blood disorders such as cancers and

autoimmune diseases, with viral infections, and with bone marrow, or hematopoietic stem cell,

transplants. The company's leading technologies aim to change the way in which bone

marrow/hematopoietic stem cell ("BM"/"HSC") transplants are performed and improve their efficacy.

Hemogenyx Pharmaceuticals’ distinct and complementary products include immunotherapy product

candidates for the treatment of AML and other blood malignancies and patient conditioning – the CDX

bi-specific antibody and CAR-T therapy, and a cell therapy product for BM/HSC transplantation – the

Hu-PHEC. Each of these products holds the potential to revolutionise the way BM/HSC transplants are

being performed or diseases of the blood are treated, offering solutions that mitigate the dangers and

limitations associated with the current standard of care. Additionally, the Group is developing CBR, a

novel platform technology potentially capable of programming immune cells to attract and destroy a wide

range of viruses and malignant (cancer-causing) cells.

The Group has three companies that are located outside of the UK. The principal laboratory of the Group

is located in Manhattan, New York, USA. The Group also had a subsidiary in Liège, Belgium that was

dissolved on 30 March 2022.

Results and Dividends

The Consolidated Statement of Comprehensive Income set out on page 44 shows a loss for the year

amounting to £5,108,310 (2020: loss of £2,095,023). The Directors do not propose a dividend in respect

of the year ended 31 December 2021 (31 December 2020: nil).

Directors and Directors’ Interests

The Directors who held office during the year and up to the date of this report were as follows:

Date Appointed

Date Resigned

Professor Sir Marc Feldmann

9 April 2018

Dr Vladislav Sandler

4 October 2017

Alexis Sandler

4 October 2017

Peter Redmond

29 July 2015

Hemogenyx Pharmaceuticals plc

Annual Report & Financial Statements for the

Year Ended 31 December 2021

The Directors of the Company who held office at 31 December 2021 had the following beneficial interests

in the Ordinary shares of the Company at 31 December 2021 according to the register of directors’

interests:

Director

At 31 December 2021

At 31 December 2020

Professor Sir Marc Feldmann

Peter Redmond*

5,596,270

Dr Vladislav Sandler

41,544,677

Alexis Sandler

75,090,685

* Peter Redmond holds the majority of these shares through Catalyst Corporate Consultants Ltd of which

he is the sole shareholder.

At the date of this report, there have been no further changes to the Directors’ beneficial interest in the

Ordinary shares of the Company as disclosed in the table above.

According to the Register of Directors’ Interests, no rights to subscribe for shares in or debentures of

Group companies were granted to any of the Directors or their immediate families, or exercised by them,

during the financial year, save for the annual grant of 10,000 ownership units in Immugenyx LLC due to

Dr Vladislav Sandler under the terms of his appointment as CEO and Chief Scientific Officer of that

company. Grants of options are as indicated below (see Note 20 for detail on option plans):

Options

Date of grant

Number of

options at start

of year

Options granted

or acquired

during year

Options lapsed

during year

Number of

options at end of

year

Professor Sir

Marc Feldmann

9 Apr 2018

18,002,568

Dr Vladislav Sandler

20 August 2020

5,000,000