MDC Annual Report 2024

Annual Report and Consolidated Financial Statement

For the Year Ended 31 March 2024

Registration number: 09928547

Independent, not-forprofit innovation centre for drug discovery –accelerating business growth, leading to improved outcomes for patients.

Our vision: Reshaping drug discovery for patient benefit.

Our purpose: Transforming great UK science into better treatments through partnership.

Based in Alderley Park, Cheshire.

Team of circa 150 specialists, with cuttingedge laboratory facilities.

Highly skilled and engaged Executive team and Board, with an international reputation and experience, covering every area of life sciences.

MDC’s strategic priorities remain focused on supporting the UK to realise its ambition to grow a thriving drug discovery sector, critical to the health, wealth, and resilience of the nation.

Chief Executive Officer’s Statement

Medicines Discovery Catapult (MDC) maintains its high impact, nationally strategic role in the UK bioscience sector. It delivers to the nation in three distinct ways: de-risking technology innovations in drug discovery, de-risking private investments in SME biotech companies, and developing and running national research and development (R&D) programmes. All of these are done through grant or commercial partnerships that create commercial value. Since its inception, MDC has now actively helped 300 UK companies across the UK to secure over £1bn in private R&D investment into the economy.

The Financial Year 2023/24 has been highly challenging for international biotech. It has seen a 50% decline in venture capital funding, driven by global economic forces and - in the UK - a rise in operating costs, driven by inflation and the scarcity of key resources in skills and space. This has led to reductions in commercial or innovation spending across the sector, which has had an impact on the revenues of service companies, including MDC. Never in MDC’s history has it been more important, therefore, for MDC to support and invest in its sector. Despite the difficult trading environment, we were in a strong financial position to continue to invest in our Discovery teams, increasing headcount by 25, which ensures we continue to build to support our sector.

The year has seen MDC support the successful launch or expansion of several national R&D programmes.

New multi-year programmes include a £30m initiative to combat antimicrobial resistance (PACE) - in partnership with the UK Charity LifeArc and Innovate UK - and the national deployment of clinical Total Body PET imaging systems (NPIP) - partnered with the Medical Research Council and Innovate UK. Both programmes deliver purposeful innovation in areas of international relevance and are designed to lower the barrier for

industry to work, deliver and invest in the UK. Expansions of existing programmes include increased funding to the charitypartnered Cystic Fibrosis Syndicate and the expansion of the Intracellular Drug Delivery Centre (IDDC), partnered with the Universities of Strathclyde and Liverpool, Imperial College London, and The Centre for Process Innovation (CPI). Preparations have also been made to extend and re-fund the successful international pharma-partnered Psychiatry Consortium. With this recognised expertise and track record, MDC has also been selected to launch the UK’s national Dementia Mission.

In its technology, MDC continues to translate biomarker innovation into new products and services. In the year, it has run successful projects and conducted market research that validates further investment in this area and will benefit biotech, pharma, and contract services companies in the future. It has also published its work in journals of note, demonstrating its applied scientific leadership. This is a clear example of how MDC is delivering on its vision to ‘Reshape drug discovery for patient benefit’.

MDC also continues to support earlystage companies in developing ‘criticalpath’ R&D programmes that help secure investment. It has also piloted new schemes for early-stage investment that are designed to de-risk follow-on and coinvestments from others.

MDC is directly affected by the economic challenges of the sector. Nevertheless, it has delivered significant year-on-year revenue growth in collaborative research and development and has delivered the introduction of new, directly awarded national programmes. It has also demonstrated the development and diffusion of new intellectual property through its first formal licensing contracts. MDC remains committed to investing its reserves in the generation of new highrisk technologies and supporting earlystage companies. These approaches will continue in the year to come, to sustain and serve the MDC’s long-term mission.

MDC remains focused on its purpose to transform great UK science into better treatments through partnership; adopting a team and public service-centred approach for the benefit of patients around the world and enabling a thriving biotech sector at home.

Professor Chris Molloy Chief Executive Officer

Medicines Discovery Catapult

Strategic Report for the Year Ended 31 March 2024

Introduction

Medicines Discovery

Catapult’s (MDC) vision is to reshape UK drug discovery for patient benefit, delivering on its purpose to transform great UK science into better treatments through partnership.

MDC has established a unique and vital presence within the UK medicines discovery community, working in collaboration with the sector, from SME therapeutic developers, technology innovators and large pharma and biotech companies, to academics and charities.

It is ideally placed to identify key areas where drug innovators need advanced skills to help them progress their drug discovery programmes and make game-changing medical breakthroughs to benefit patients.

MDC works with the sector to overcome the four key barriers impacting the UK’s drug discovery innovation capability, namely:

SECTOR-WIDE BARRIERS

Lack of Predictability of Pre-clinical Medicines Discovery

New technologies are needed; current preclinical disease models and biological assays provide inadequate representations of human diseases and how potential drug candidates will affect them.

Lack of Connectivity Across UK Life-Sciences Ecosystem

Enhancing connectivity is needed; the UK medicines R&D community is complex and fragmented. It does not naturally share knowledge or collaborate widely.

BARRIERS IMPACTING INDIVIDUAL DRUG INNOVATORS

Lack of Access to Essential Technologies and Skills

Access to essential technology is needed; innovators lack ready access to essential combinations of industry expertise, advanced analytical technologies and scarce informatics skills to take medicines into, and through, clinical development with quality and pace.

Lack of Access to World-Class Industry Skills in R&D

Access to R&D skills is needed; innovators lack ready access to scarce industry-class skills and expertise across project validation and critical-path R&D planning.

Through MDC’s work, it is making drug discovery more:

Predictable for the treatment of disease

in clinical trials Innovative with decision-making data

MDC is one year into its second Grant Funding Agreement (GFA) with Innovate UK and its impact is evident. Despite the challenging economic climate impacting the life sciences sector, MDC’s overall contribution to medicines discovery in the UK continues to grow.

through investment Collaborative to respond to future challenges

MDC has continued to scale and develop rapidly becoming a key pillar of the UK R&D landscape. It has continued to expand its impact; extending its portfolio of national programme delivery in areas of key patient need and remains a cornerstone of a revived community of drug R&D companies, supporting business growth throughout the UK.

Performance

MDC delivers to the nation and its community in three distinct ways:

De-risking inventions that boost R&D productivity

De-risking SME biotech companies that can then be invested in

Developing and running national R&D programmes that have global impact 1 2 3

This year, MDC has:

49 completed partnered R&D projects

Partners who have previously worked with MDC have subsequently raised private and public investment of

£346m

60 new partners supported across the UK

Active grant-funded portfolio worth

£48m

MDC continues to increase its focus and capabilities to support early clinical trials, developing and deploying assays to analyse partners’ clinical samples. It has also diversified further to support the sector and meet unmet patient needs by establishing and running six strategic, high-impact national R&D programmes across Antimicrobial Resistance (AMR), Psychiatry, Dementia, Cystic Fibrosis, Total Body Imaging and Complex Medicines.

The culmination of MDC’s influence since its inception is making a key impact on the sector.

5 compounds supported into the clinic

> 271 partnered projects

18

Cross-organisation thought leadership reports

£300m

SME licensing deal enabled with multinational pharma

6 assays supporting clinical development and delivery

260 partners supported

3 partner products to market

£1bn investment funding secured by SMEs post engagement

Largest diagnostics laboratory testing project in UK history

Processed up to 80,000 samples daily and > 20m total samples for COVID-19 Test and Trace at the Alderley Park Lighthouse Lab

Contributed to the creation of ~ 900 jobs

6 national programmes

> £95m grant income raised in collaboration with MDC

£34m public sector funding secured by supported SMEs post-engagement

The UK’s life sciences sector is vibrant, progressive, and successful. It is forging new paths into high-impact therapeutic areas and innovative new types of drugs.

It rests on a strong science base and is itself a seedbed and fertiliser for growth and established companies. It outperforms its regional competitors and has made good use of the increased flow of post-pandemic life sciences financing. There is also promise of significant future growth funding through the future deployment of UK pension funds.

However, over 2023/4 the sector has experienced reduced talent availability, services, and space, at a time of increased costs and reduced funding, with the early-stage innovation companies across the nation being hardest hit.

MDC has a critical role to play, providing the right environment to enable drug discovery companies to de-risk their assets and to attract scarce investment opportunities, both now and for future investment.

The external funding landscape created a difficult trading environment which impacted the mix of income within MDC. Despite the challenges, overall income grew marginally year on year due to diversification in income sources, including a high-impact increase in national programme delivery and the interest earned on reserves from the previous operation of the Lighthouse Laboratory in Alderley Park.

Impact on the Sector

MDC continues to focus its resources on delivering breakthrough science-based technologies that enable partners to progress their assets to the clinic and to discover new medicines in the UK. It also focuses on national sector collaborations - serving the UK’s Life Science strategy and the UK Science and Technology Framework - to realise the UK’s ambition to become a Science and Technology Superpower by 2030.

MDC supports its partners through the integrated and intelligent deployment of its advanced lab, informatic and partnership platforms:

LABORATORY

Biomarkers, Cellular Sciences and Translational Imaging.

INFORMATICS

PARTNERSHIPS:

National Programmes, and Virtual R&D.

MDC’s capabilities have been applied across key areas of focus; Oncology, Neuroscience, Infectious Disease, Immunology and Complex Medicines, whilst also supporting rare disease areas.

It provides decision-making data that enables partners to progress their assets to clinical and commercial exploitation, essential to the success of drug discovery. MDC’s strategic focus allows it to build translatable data packages that span preclinical to some clinical settings (such as patients benefitting from game-changing full-body scans via national PET imaging).

BIOMARKERS

Biomarker-enabled development programmes have a substantially higher success rate. They enable a full understanding of a candidate drug’s impact on biological processes that enable drug candidates to successfully progress from cells to animals and then to patients.

MDC is recognised as being at the forefront of technology advances in high-resolution biomarker technology, complemented by its proven ability to source biosamples through partnerships with leading clinical centres and its network of private providers.

A highlight this year has been the delivery of a large, multiplexed, multianalyte biomarkers study for an SME, delivering cross-platform Mass Spectrometry Imaging/DSP spatial transcriptomics/Bulk Mass Spectrometry data to fully characterise a pre-clinical Alzheimer’s Disease model.

MDC has also established the lab capability and associated processes to support exploratory clinical trial sample analysis, utilising advanced technologies, including mass spectrometry and spatial transcriptomics. The provision of this molecular biomarker analysis provides insights to enable our partners to gain a deeper understanding of their candidate molecules and to shape their clinical strategy.

CELLULAR SCIENCES

Drug development projects often fail because they were not tested on patient-relevant material early enough to understand likely biological responses.

MDC’s Cellular Sciences team supports partners through the deployment of a suite of human cell models and associated analytical methods, with a focus on neuroscience, immune biology, and complex medicine analysis. In the Intracellular Drug Delivery Centre (IDDC) collaborative programme (page 17), which encompasses two Catapults and three academic centres of excellence, MDC has evaluated a large number of novel lipid nanoparticle (LNP) formulations and the most promising LNP candidates are now progressing to testing in more complex pre-clinical systems.

MDC continues to evaluate and develop new methods with the potential to make drug discovery more predictive and cost-effective. Highlights from this year include the development and externalisation of a proprietary target engagement assay, and external partnerships with vendors and CROs aimed at introducing new microscopy methods for complex medicine analysis.

TRANSLATIONAL IMAGING

Translational Imaging is key to understanding how potential drug molecules will behave in the body and, therefore, the suitability of candidate drugs to progress into clinical development.

MDC has established a comprehensive pre-clinical imaging technology platform, augmented by a radiochemistry capability, through which cuttingedge imaging studies are delivered in support of our partners’ projects. Highlights from this year include a partner project focusing on the development of novel therapeutics for Huntington’s disease and several projects evaluating the biodistribution of novel drug delivery platforms.

To augment its pre-clinical capability, MDC has enabled and launched NPIP, which is the UK’s National Total Body PET imaging platform, developed in partnership with the Medical Research Council and Innovate UK (page 16). This will allow UK innovators to carry out exploratory clinical research, using the probes and learnings from preclinical research. NPIP will be available for national access and use, with MDC playing a central role in identifying and enabling the projects to run on the platform.

INFORMATICS

Informatics, including Artificial Intelligence (AI) and Data Science, is at the core of modern medicines discovery. Advanced technologies generate rich data sets that innovators can exploit to provide enormous value in understanding and treating disease. However, this value is only unlocked if the data can be readily accessed, interpreted, integrated with other data sources, and understood.

This year, MDC has delivered two projects that utilise Large Language Models (LLMs): one as a classic, enterprise secure, chat-based application; the second that uses LLMs for granular information extraction.

Aligned to MDC’s lab activities, bespoke image analysis pipelines to support advanced microscopy and preclinical imaging projects are being developed.

MDC is also exploring the frontiers of informatics through participation in a collaborative multi-party Quantum Computing grant-funded project and in crossCatapult initiatives to evaluate the AI and Quantum preparedness of our sector.

PARTNERSHIPS

A key strength of MDC is the ability to respond quickly to areas of need and to address national and global challenges in medicines discovery. The fragmented UK drug discovery community benefits from the commitment of MDC as an independent connector to ensure its potential is realised.

MDC is able to lead the identification and implementation of strategic national R&D programmes, creating enabling environments that support innovators from across charities, patients, clinical key opinion leaders, industry, and academia, to address highrisk future patient, technology, and sector needs. It does so via its partnership teams and enabling its strategic levers, working holistically across MDC’s capabilities and technologies, underpinned by its experts.

MDC has diversified and made further impact in this space with a portfolio of six national R&D strategic initiatives, including four new national programme launches this year alone. The portfolio of national initiatives covers:

MDC’s partnership reach extends beyond its portfolio of national programmes, connecting the community with impact in other key areas.

In motor neurone disease (MND) drug discovery and development research, MDC, MND Association and My Name’5 Doddie Foundation partnered to generate new guidance for the MND drug discovery community. Its white paper -

“Guiding principles for drug discovery and development in amyotrophic lateral sclerosis” - is an expert-led report outlining a consensus-based approach to de-risk clinical trials of novel therapeutics by an enhanced evidencedbased approach to pre-clinical studies.

As with many other neurodegenerative diseases, the history of MND clinical trials is filled with negative or, at best, modestly positive outcomes. With many potential drug targets emerging from the explosion of new knowledge about MND in recent years, the Guiding Principles will improve the translation of new therapies from the lab, help the drug development community to ‘pick winners’ for clinical trials and hopefully result in more effective therapies for this devastating disease.

Dr Brian Dickie MBE Director of Research at the MND Association

MDC has provided early-stage discovery ventures with strategic support for success, via the Accelerate@Babraham, a start-up competition run by the Cambridgebased Babraham Research Campus. The 2023 cohort included six companies that will benefit from a bespoke three-month scientific, business, and technical support programme. MDC is a strategic partner of Accelerate@Babraham. It worked with the winning companies to identify opportunities for success, defined the line of sight to the clinic and de-risked their discovery projects to benefit patient health.

Spotlight On National Programme Portfolio

Neuroscience

Psychiatry Consortium

Psychiatry Consortium

Addressing the unmet therapeutic needs of people living with mental health conditions.

BACKGROUND

The Psychiatry Consortium, managed by MDC, is a strategic collaboration of leading medical research charities, pharmaceutical companies and contract research organisations (CROs). It focuses on the challenge of identifying and validating novel drug targets to address the unmet therapeutic needs of people living with mental health conditions.

IMPACT

Established in 2019, the Consortium has focused on de-risking, in a pre-competitive setting, targets for drug development for mental health conditions. The first term of the Consortium is now concluded, having culminated in the Consortium raising £1.3m in research funding committed to projects, and has engaged with over 400 research institutions.

The second term of the Consortium is in development; it will maintain the focus on Target Validation and aims to include new workstreams, such as Grand Challenges. The engagement activities to raise awareness of mental health and maximising opportunities arising in the field, remain an important part of the initiative.

Raising £1.3m in research funding committed to projects.

Dementia Mission

Dementia Mission

MDC is appointed to launch the UK’s national Dementia Initiative.

BACKGROUND

MDC has been appointed as a Delivery Partner of the Government’s Dame Barbara Windsor Dementia Mission, announced at a round table event at 10 Downing Street in March 2024.

Finding successful treatments for dementia is a monumental challenge, with key obstacles including ensuring better patient categorisation between types of dementia and developing more efficient methods of assessing drug effectiveness.

IMPACT

MDC will lay a crucial foundation for the Dementia Mission: the ‘Neurodegeneration Initiative’ (NI). The NI will help others develop tools to identify at-risk patients, boost the number and speed of clinical trials in dementia, and bind global industry and partnerships to a range of UK initiatives. By supporting the launch of the Mission, MDC will ensure it is able to deliver a transformative, industry-enabling approach to dementia research.

MDC looks forward to working with all the Mission’s many stakeholders to help bring a transformative approach to dementia R&D.

Professor

Chris Molloy

Chief Executive Officer Medicines Discovery

Catapult

Infectious Disease

Antimicrobial Resistance (AMR)

Addressing the global threat of Antimicrobial Resistance.

BACKGROUND I am delighted that through PACE, Medicines Discovery Catapult, LifeArc and Innovate UK will give our science community greater ability to break down the technical, financial and regulatory barriers that have prevented the breakthroughs that our modern medical systems rely on.

MDC, Innovate UK, and LifeArc joined forces to create PACE (Pathways to Antimicrobial Clinical Efficacy), a £30m initiative supporting early-stage innovation against antimicrobial resistance (AMR) to save lives. Launched in October 2023, PACE aims to support early-stage innovation in AMR, driving the development of new tests and treatments to tackle deadly infections.

AMR is one of the top ten global health threats, with a vast economic impact.

There is an urgent need to grow a pipeline of high-quality antimicrobial drugs and associated diagnostics to address AMR and protect the lives of people worldwide.

Professor Dame Sally Davies

UK Special Envoy on Antimicrobial Resistance

IMPACT

PACE represents the UK’s largest public-private initiative targeting early-stage antimicrobial drug and diagnostic discovery.

A round-table event with key sector representatives was held during AMR awareness week in November 2023 to highlight the challenges and opportunities the drug discovery community faces.

Its first funding call, with up to £10m available to support innovators developing new antimicrobials, resulted in over 170 Expressions of Interest (EOI) received from Academics and SMEs globally. Around 40% of these EOIs were from the UK, with the remainder split across 24 different countries. The review of EOIs is ongoing and will progress to invitations to submit full applications.

Through PACE, nine new job roles have also been created to harness and grow specialist AMR talent, with five roles bolstering the North-West region where MDC is headquartered. This represents a boost to the global AMR drug discovery workforce globally.

Progress through PACE will mean the UK can contribute towards a more robust pipeline of tests and treatments, cementing its place as a global leader in life sciences and ultimately contributing to better patient outcomes.

Cystic Fibrosis Antimicrobial Resistance Syndicate (CF-AMR Syndicate)

Meeting unmet patient needs through collaboration.

BACKGROUND

In 2019, Medicines Discovery Catapult joined forces with Cystic Fibrosis Trust to form the Cystic Fibrosis (CF) Syndicate in Antimicrobial Resistance (AMR). The Syndicate recently expanded into a two-year strategic alliance, welcoming LifeArc into a tripartite managing partnership. The CF-AMR Syndicate is a £4m programme aimed at accelerating the translation and adoption of new CF antimicrobials and diagnostics to the clinic through collaboration to bring new treatments to people with CF faster.

IMPACT

This year, the Collaborative Discovery Programme was launched with six organisations selected; the projects target highly problematic pathogens in lung infections in CF, spanning small molecules, peptides, and protein therapeutic approaches.

The CF-AMR syndicate continues to support innovators through the provision of samples from the UK CF Infection Biorepository and via the publication of Diagnostic Target Product Profiles (TPPs). It has engaged the community by delivering key events and continues to grow its network and knowledge exchange reach, with over 200 members. The CF-AMR Syndicate continues to provide strategic advice and support to help catalyse translational efforts in medicines discovery including acting on the advisory board of PIPE-CF, a strategic research centre focused on developing and validating improved preclinical models for antibacterial drug discovery.

Being invited to contribute to the development of the TPPs has provided much-needed reassurance that the demand for new or improved antibiotics for people with CF is still recognised as a critical requirement.

Simon (adult with CF)

A grant of £32m over seven years.

National PET Imaging

Patients benefit from game-changing full-body scans to provide a richer picture of human health for clinical research.

BACKGROUND

The UK’s first-of-its-kind national total-body positron emission tomography (PET) imaging platform (NPIP) for drug discovery was launched in partnership between MDC, the Medical Research Council (MRC) and Innovate UK in October 2023.

Total-body PET can provide a holistic view of an individual’s body to enable a greater understanding of multi-organ, complex disease progression.

IMPACT

With £32m grant funding from UKRI infrastructure fund over seven years, NPIP sets a new standard of excellence for UK medical imaging research. By facilitating access to total-body PET imaging for clinicians, academics, and industry, NPIP will help accelerate discoveries, leading to more advances for UK researchers and better outcomes for patients, improving the calibre of healthcare now and in the long term. This technology can facilitate many novel research opportunities that could not ordinarily be achieved due to the shorter duration scans and lower doses to the patient.

The National PET Imaging Platform is an exciting and innovative way to help improve imaging in medical research. Advancements in imaging technologies will ultimately improve research and diagnostic capabilities in the UK, which will hopefully result in more effective disease diagnosis and kinder treatments in the future.

Dr Michele Afif CEO of The Brain Tumour Charity

IDDC

Complex Medicines

Catapults and leading universities across the UK establish a novel intracellular drug delivery centre.

BACKGROUND

In partnership with CPI, MDC, the Universities of Strathclyde, Liverpool, and Imperial College London have established a brand-new Intracellular Drug Delivery Centre (IDDC) to help develop novel drug delivery technologies and support promising RNA vaccines and therapeutics.

IMPACT

Funded by Innovate UK’s Transforming Medicines

Manufacturing programme, with a grant of £10m over three years, the Centre provides a single point of entry for drug discovery and development innovators to access new capabilities in intracellular drug delivery.

The partnership is the first of its kind in the UK. It investigates and develops new lipid nanoparticle (LNP) formulations for the delivery of RNA medicine and a framework to develop nextgeneration nano-delivery systems. The Centre will help predict the stability, efficacy, performance and any potential adverse reactions of RNA vaccines and therapeutics. This will help unlock the potential of RNA-based medicines, creating greater access to cutting-edge, cost-effective vaccines and therapeutics for patient benefit.

Involvement in this important initiative will enable further development of our expertise in preclinical characterisation of LNPs and complex medicines, allowing us to continue serving our community of innovators in this critical area of drug discovery.

Dr Martin Main Chief Scientific Officer Medicines Discovery Catapult

A grant of £10m over three years.

Sector Conversation

In addition to driving national initiatives, MDC continues to drive the national conversation, harnessing its expertise to produce an ongoing range of effective thought leadership initiatives to provide critical commentary and guidance for the sector.

MDC, the Association of the British Pharmaceutical Industry (ABPI) and the BioIndustry Association (BIA)

has evolved and identifies the current challenges facing the community. The report highlights that through open collaboration, using the combined expertise and resources available across the ecosystem and investor community, the UK can foster a dynamic, sustainable medicines discovery sector, delivering patient benefit and economic growth.

This year, MDC again partnered with the UK BioIndustry Association and the Wellcome Sanger Institute to produce Genomics Nation 2023, a report that highlights the strengths and opportunities of this vibrant UK ecosystem of entrepreneurs, spinouts, and scaleups.  The report shows that the UK is on the cusp of a new era in genomics, propelled by emerging technologies, investment, and a maturing industry ripe for growth.

Each year, MDC aims to connect the community by running a short series of weekly webinars; ‘MDC Connects’ ‘Unlocking the Secrets of Medicine Commercialisation’ was the focus of this series, outlining the journey from innovation to commercialisation, led by experts from the community and within MDC.

MDC has developed an approach working across the entire sector, using extensive knowledge of the R&D landscape, creating valuable collaborations, and catalysing new connections across the ecosystem. A diverse and extensive engagement strategy is in place, encompassing; media outreach, thought leader reports, the hosting of round table events and attendance at key scientific events. MDC continues to publish scientific research in key peer-reviewed publications, showcasing the expertise of its people and primary research on markets and areas of scientific speciality. It reflects the needs of UK biotech and has developed an authoritative influential voice. In the last year, MDC has published 8 scientific papers, released 19 news releases, and has published 9 thought leader articles. MDC colleagues have delivered over 185 engagement opportunities via event attendance, exhibitions and scientific poster presentations. In addition, MDC experts have joined expert panels, chaired events, and led speaker slots at key scientific conferences.

Recognition

MDC’s work in the sector has been recognised at the 2023 OBN Awards, being named as winner of the ‘Best Industry Support Partner’ of the Year Award. It received the accolade in recognition of the pivotal role it plays in supporting R&D companies in the life science sector.

The award for ‘Non-Profit Life Science Innovation Enablers’ was presented to MDC at the One Nucleus 2023 Awards. This award was given in recognition of MDC’s work to build innovation ecosystems and the impactful strategies it develops to engage with the community.

MDC remains committed to delivering what the community asks of us. We are proud to be part of an ecosystem of innovators and will continue to serve the sector with the support it needs to deliver new medicines to patients faster.

Professor Chris Molloy Chief Executive Officer Medicines Discovery Catapult

Financial Review

This has been

a challenging financial year across the sector.

The impact of inflation growth and the associated rise in the cost of funding saw a reduction in funding in the sector and ultimately a reduction in commercial services demand. However, MDC has seen an increase in income year on year through a diversification of income sources, particularly through our support of national programmes. We have been able to continue to build on our ambition this year with investment in our people growing our headcount by 23% year on year to build capacity for continuing innovation, and investment in assets.

Income

Whilst the year has proven to be challenging in our commercial services, we have seen modest growth overall in our income with growth in turnover of £650k to £17,829k (22/23 £17,179k). This is due to an increase in our underlying core grant year on year, a significant increase in our grant income driven by our role in the delivery of national programmes such as IDDC, NPIP, PACE and the Dementia Mission.

Other income is mainly driven by income from the research and development expenditure credit (‘RDEC’). RDEC has reduced year on year from £619k to £368k as 22/23 benefitted from recognition of two years RDEC.

Interest income increased significantly due to the investment of reserves in cash deposits. In Q4 we appointed Cazenove to support the future management of our reserves.

Expenditure

Expenditure from continuing operations increased by £1,961k to £20,407k (22/23 £18,445k) driven predominantly by an increase in pay costs reflecting our investment in our capabilities. Pay costs, including training for the year were £11,344k growing £2,046k year on year. During the year we recognised the commitment of our people through the introduction of private medical insurance and private health insurance along with support during the cost of living crisis.

We experienced increased costs relating to our support of national programmes particularly across communications, marketing and consultancy. However, we have benefited from savings in utilities due to a combination of rates decreasing and a focus on utilisation and reductions in our depreciation charges.

Net Assets

Group net assets for the year were £40,263k (22/23 £41,458k) reflecting our strong financial position. The majority of the net asset position was held in cash, £38,991k (22/23 £41,979k).

Financial Outlook

MDC has a robust 5 year planning process that considers potential scenarios to stress test our planning. Financial sustainability is a key pillar of our strategy and is crucial in ensuring that we can continue to build on our ambition to continue to invest in our own innovation and within our sector.

We have shown in 23/24 that we are using our reserves to invest in our people and our science, and we will continue to do that over the coming five years. We will continue to diversify our income streams and ensure that we are generating earnings for reinvestment to invest across a range of opportunities to continue to amplify the potential of UK life sciences.

Principal Risks and Uncertainties

MDC operates a robust risk framework that seeks to mitigate risk to acceptable levels. The broader environment continues to introduce uncertainty in relation to access to funding and cost pressures along with the risk of being unable to realise appropriate levels of returns.

Risk

Long-term funding Innovate UK:

• A reduction in government funding or change in policy continues to be a risk to MDC. This would have a significant impact on our ability to continue to support innovation in the sector

• Failure to deliver against KPIs agreed under the Grant Funding Agreement

Reduction in collaborative R&D grant and commercial income:

MDC is reliant on a diversified portfolio of revenue streams to ensure we can deliver our ambitions. Reductions in accessible, suitably funded research and commercial contracts would impact our ability to deliver our strategy.

Mitigation

• Ongoing monitoring of delivery against Key Performance Indicators (KPIs)

• Continuing support from central government and recognition of the important of Catapults as part of the long-term UK innovation ecosystem

• A reserves strategy which allows us to maintain an appropriate level of cash to provide MDC with a short-term buffer against external changes in our funding

• Co-operation with key grant bodies to ensure we can access a variety of funding sources to progress innovation

• An attractive commercial proposition which provides access to cutting-edge technology and science with an ethos of collaboration and delivery excellence

• A reserves strategy which allows us to maintain an appropriate level of cash to provide MDC with a short-term buffer against externally led changes in our revenue

• Diversification of income streams to include licensing income from Intellectual Property (IP) assets

Inflation and cost growth:

Whilst inflation has reduced over the past 12 months the inflation rate is still at a higher rate than the targeted 2%. We are also experiencing cost growth whilst we continue to invest in our science and supporting our sector.

Investment Risk:

MDC has significant cash reserves which are part of our plans to continue to build on the financial sustainability of our business model. We have plans to invest these funds as follows:

• Treasury investment of cash

• Investment in our own internal assets

• Investment in our sector through investing in third parties

Cyber:

We have a low appetite for cyber risk and, therefore, take a conservative approach to our data security. It is important to us that our customers and partners can be confident that their data is safe with us, and that MDC maintains its service levels.

People:

• Ability to attract and retain key skills into MDC in a competitive employment market

• Skills shortage in specific areas of AMR and complex medicines

• Lack of succession for key roles

• Our equipment is a significant element of our costs we continually review our equipment usage and are engaging in Green Lab practices

• Continually reviewing our cost base and ensuring that we have value for money at the heart of our decision-making and a strong business case ethos

• The Investment Committee, an Executive sub-committee oversees key investments using our reserves

• Adherence to the Treasury policy to support effective investment of reserves to serve the needs of the organisation

• Appointment of Cazenove to support our investment strategy

• Regular monitoring of the investment portfolio

• Regular independent cyber audits to test MDC’s defences against cyber-attacks

• Implementation of a data management approach that ensures all data is securely backed up and accessible

• A business continuity and disaster recovery policy which ensures we test regularly to ensure we are prepared for every eventuality

• Focus on developing and progressing internal talent

• Increase organisational and individual Leadership effectiveness

• Focus on future sector skills initiatives in scarce skill areas such as AMR and complex medicines

Governance and Management

Principal Activities and Purpose

MDC is a not-for-profit company limited by guarantee, established in December 2015, with a grant from Innovate UK. Its principal activity is to transform the UK’s capability for innovation in drug discovery, by supporting the drug discovery community - including large, medium, and small biotech companies - operating in the life sciences with their innovative research and development. MDC does this by identifying the barriers facing UK life-science businesses and developing strategic interventions to address these challenges.

Statement of Corporate Governance

MDC’s governance structure ensures that it can achieve its strategic ambitions in a transparent, sustainable, and riskassessed way. The senior governing body for MDC is its Board of Directors, and to aid in the delivery of its duties, the Board has established three core Board sub-committees: the Audit and Risk Management Committee, the Portfolio and Impact Committee and the Remuneration and Nominations Committee. All Board Committees meet at least two times per year.

MDC is a not-for-profit company

Board of Directors

Audit and Risk Management Committee

Supervises internal and external audit and overseas the risk and governance framework to safeguard MDC’s systems and ensure a robust risk framework is in place.

Portfolio and Impact Committee

Provides assurance that the programmes and projects selected by the Executive are aligned to corporate objectives and applicable governance processes.

Executive

Develops strategies, plans and budgets for approval by the Board of Directors. Assists the Chief Executive Officer in managing MDC to achieve its strategic aims and objectives. The Executive meet monthly.

The Board of Directors

The Board of Directors has overall responsibility for ensuring that MDC fulfils its mission and strategy and complies with its incorporation documentation, the Grant Funding Agreement and all relevant legislation and regulations. It also expressly determines those matters to be reserved for direct Board oversight, and those which are delegated to management and the level of management at which key decisions can be made. As of 31 March 2024, the Board of Directors comprised one Executive Director, the Non-Executive Chairman and eight independent Non-Executive Directors, further specified below.

Professor Carole Longson MBE

Appointed: June 2016

Role: Deputy Chair of the Board and a member of both Audit and Risk Management Committee and Portfolio and Impact Committee

Graham Clarke

Appointed: April 2020

Role: Member of Audit and Risk Management Committee and Remuneration and Nomination Committee

Professor Sir Alex Markham

Appointed: June 2016

Role: Member of Portfolio and Impact Committee

Lynne Robb

Appointed: January 2019

Role: Chair of Audit and Risk Management Committee

Dr Robin Brown

Appointed: July 2018

Renumeration and Nominations

Committee

Responsible for setting remuneration policy and remuneration of individual Directors and senior executives. Also focuses on skills, knowledge, experience and diversity of the Board.

Role: Chairman of the Board

Alistair Macdonald

Appointed: April 2020

Role: Chair of Portfolio and Impact Committee

Professor Chris Molloy

Appointed: November 2016

Role: Chief Executive Officer

Professor Chris Reilly

Appointed: June 2016

Role: Chair of Remuneration and Nomination Committee

Paul Beastall

Appointed: November 2022

Role: Member of Portfolio and Impact Committee, Remuneration and Nominations Committee and Innovate UK Nominated Director.

Susan Wallcraft

Appointed: April 2020

Role: Member of Audit and Risk Management Committee

Executive Team

The Executive team, which includes the Chief Executive Officer, is responsible for the day-to-day management of MDC, in accordance with the duties delegated by the Board under the MDC Delegation of Authority Policy. It develops the strategy, financial and operational plans for the MDC group, as overseen by the Board.

As of 31 March 2024, the Executive team is comprised of the following members:

Member Role

Professor Chris Molloy Chief Executive Officer

Robert Sherville-Payne General Counsel and Company Secretary

Clare Atherton Chief People Officer

Dr Nicola Heron Chief Strategy Officer

Dr Martin Main Chief Scientific Officer

Sinéad McCormack Chief Financial Officer

Employee Engagement

MDC’s people are key to the delivery of its impact, for the benefit of the sector.

MDC’s objective is to attract, retain, engage, and mobilise the right people to the right place at the right cost. It also strives to build a great place to work, with an exceptional employment experience, where valuing each other and our communities is paramount.

MDC has delivered a plethora of initiatives this year to deliver upon its people objectives. This includes:

• Focus on developing and progressing internal talent

• Providing enhanced employee benefits

• Implementing a grading and pay banding structure to ensure MDC is internally fair, and externally competitive

• Developed and implemented a Science Career Pathway

• Rolling out an employee survey, taking action on the key areas of focus identified

• Investing in Management and Leadership development, to enhance the employee experience

• ED&I - made significant progress along our ED&I developed from an Inclusive Employers audit

• Focus on future sector skills initiatives in scarce skill areas such as AMR and complex medicines

The culmination of MDC’s people strategy has resulted in positive outcome measures for the year. This includes an engaged workforce as demonstrated by employee engagement of 67% (employee survey) and participation of 82%.

MDC’s attrition is 11.9%, down by 16 percentage points year-on-year, with a 20% employee growth year-on-year. The gender split is 60% female 40% male.

Environment Social and Governance (ESG)

This year, MDC cemented its commitment to its Environment Social and Governance (ESG) mission, laying its foundations with the launch of its ESG strategy.

Aligned to its corporate vision and purpose, MDC seeks to build sustainable and ethical practices into everything it does, while delivering its purpose responsibly.

MDC is working on many initiatives to support its ESG strategy, to deliver meaningfully against its goals. The full scope of which, is detailed in its Vision and Commitment to ESG Strategy document.

It was brilliant to have so many school children with us to celebrate British Science Week. One of our core objectives here at the museum is to ignite curiosity, showcasing the world-changing ideas that have been achieved through scientific discovery, innovation, and wonder. Working with MDC and other partners meant we were able to inspire more young people to consider careers in STEM and showcase the wealth of opportunities available for everyone to develop lifechanging skills.

Robyn Main Learning Coordinator at the Manchester Science and Industry Museum

ESG Purpose

Actively enhancing and supporting MDC’s reputation, culture and delivery through positive environmental, people and decision-making actions

ESG Strategy

To understand and sustainably manage the impact MDC has on the environment, the community and its people

ESG Priorities

1. Drive sustainability for a better future

2. Be an open, inclusive organisation and a great place to work

3. Operate responsibly, ethically and with transparency

Approach

ENVIRONMENTAL

Optimise its physical impact by reducing waste and emissions

Be an advocate for sustainability

SOCIAL

Great workplace for all its employees

Promote equality, diversity and inclusion and connection with the community

Clarity of purpose and connectivity

GOVERNANCE

Build transparency across its business

Operate responsibly, and ethically, with transparency

Actively manage risks and opportunities

Partnering with MOSI / IRIS webinar

Directors’

The Directors present their report and the consolidated financial statements for the year ending 31 March 2024.

Directors of the company

The Directors who held office during the year were as follows:

R J Brown

C M Longson

A F Markham

C R Molloy

C Reilly

L Robb

G J Clarke

A J Macdonald

S J Wallcraft

P V E Beastall

Company Secretary

R Sherville-Payne

Matters covered in the Strategic Report

The Group’s business environment and risks, together with details of monitoring undertaken by the Directors and future developments are dealt with elsewhere in the Strategic Report.

Dividends

Medicines Discovery Catapult (MDC) is designed to re-invest any profit within the Company to ensure maximum resources are utilised to support medicine research and innovation. As governed by the Memorandum of Association, no portion of the income of the Company shall be paid or transferred to any Members of the Company except where it is payment in good faith for remuneration for services rendered or repayment of out-of-pocket expenses to Directors.

Equality, Diversity and Inclusion (ED&I)

MDC is an inclusive employer providing a workplace that values and respects the diversity of its employees. It is a place where individuals of all backgrounds, abilities, and identities feel welcomed, supported, and included. Everyone has an equal opportunity for growth, development, and success, regardless of their race, gender, age, sexual orientation, disability and/or other characteristics.

Going concern

The forecasts indicate that the Group will have sufficient cash reserves for all its future anticipated activities. Based on this information, the Directors consider it appropriate to prepare the financial statements on a going concern basis.

Disclosure of information to the auditor

Each Director has taken the steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the company’s auditor is aware of that information. The Directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditors

The auditor, Beever and Struthers will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Approved by the Board on and signed on its behalf by:

23/07/2024

R J Brown, Director

Statement of Directors’ Responsibilities

The Directors are responsible for preparing the Strategic Report, 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 group and company and of the surplus or deficit of the group for that period. In preparing these financial statements, the Directors are required to:

• Select suitable accounting policies and apply them consistently;

• Make judgements and accounting estimates that are reasonable and prudent;

• State whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

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

Section 3

Independent Auditor’s Report

Independent Auditor’s Report

Opinion

We have audited the financial statements of Medicines Discovery Catapult Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 31 March 2024 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 group’s and of the parent company’s affairs as at 31 March 2024 and of the group’s loss for the year then ended;

• Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;

• 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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’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.

Conclusions Relating to Going Concern

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s or the parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

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. Our 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinions 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 group and the parent 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• The parent company 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.

.

Independent Auditor’s Report

Responsibilities of Directors

As explained more fully in the directors’ responsibilities statement, 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 group’s and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

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:

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements based on our understanding of the Company and through discussion with the Directors and other management (as required by auditing standards).

To assist with identifying and assessing risks associated with material misstatements, including fraud and non compliance of laws and regulations, we carried out the following procedures;

• The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• We identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the industry and supply sector;

• We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

• Identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• Making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud.

To address the risk of fraud through management bias and override of controls, we:

• Performed analytical procedures to identify any unusual or unexpected relationships;

• Tested journal entries to identify unusual transactions;

• Assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

• Investigated the rationale behind significant or unusual transactions.

Independent Auditor’s Report

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• Agreeing financial statement disclosures to underlying supporting documentation;

• Reading the minutes of meetings of those charged with governance; and

• Enquiring of management as to actual and potential litigation and claims.

There are inherent limitations in the audit procedures described above. We did not identify any such irregularities however as with any audit, there remained a higher risk of non-detection of irregularities due to fraud, as these may involve deliberate concealment, collusion, forger, intentional omissions, misrepresentations, or the override of internal controls.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities.

This description forms part of our auditor’s report.

Use of Our Report

This report is made solely to the group’s members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the group’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 group and the group’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Suzanne Lomax BA FCA (Senior Statutory Auditor)

For and on behalf of Beever & Struthers

Chartered accountants and statutory auditor

The Beehive Lions Drive Shadsworth Business Park Blackburn BB1 2QS

The Financial Statements for the Year Ended 31 March 2024

Consolidated Profit and Loss Account for the Year Ended 31 March 2024

In the current year, all activities of the group are from continuing operations.

The Financial Statements for the Year Ended 31 March 2024

Consolidated Balance Sheet as at 31 March 2024

23/07/2024

Dr R J. Brown, Director

The Financial Statements for the Year Ended 31 March 2024

Balance Sheet as at 31 March 2024 The loss for the financial year of the parent company was £1,443,009 (2023: profit £33,415,998).

23/07/2024

The Financial Statements for the Year Ended 31 March 2024

Consolidated Statement of Changes in Equity for the Year Ended 31 March 2024

Statement of Changes in Equity for the Year Ended 31 March 2024

The notes on pages 37 to 52 form an integral part of these financial statements.

The Financial Statements for the Year Ended 31 March 2024

Consolidated Statement of Cash Flows for the Year Ended 31 March 2024

The notes on pages 37 to 52 form an integral part of these financial statements.

The Financial Statements for the Year Ended 31 March 2024

Notes to the Financial Statements for the Year Ended 31 March 2024

1. General Information

The company is a company limited by guarantee, incorporated in England and Wales, and consequently does not have share capital. Each of the members is liable to contribute an amount not exceeding £1 towards the assets of the company in the event of liquidation.

The address of its registered office is:

Block 35G Mereside

Alderley Park

Alderley Edge

Macclesfield

Cheshire SK10 4ZF

2. Accounting Policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of Compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 - ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ and the Companies Act 2006.

Basis of Preparation

These financial statements have been prepared using the historical cost convention.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Summary of Disclosure Exemptions

Medicines Discovery Catapult Limited meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemptions available to it in respect of its separate financial statements. Exemption has been taken in relation to the preparation of a statement of cash flows.

Basis of Consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 March 2024. No Profit and Loss account is presented for the company as permitted by section 408 of the Companies Act 2006.

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Going Concern

After reviewing the group’s forecasts and projections, the Directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future with the continued funding from Innovate UK. The group therefore continues to adopt the going concern basis in preparing its financial statements.

Critical Accounting Judgements and Key Sources of Estimation Uncertainty

In the application of the group’s accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The Financial Statements for the Year Ended 31 March 2024

Notes to the Financial Statements for the Year Ended 31 March 2024

Judgements

No significant judgements have been made by management in preparing these financial statements.

Dilapidations Provisions

Determining the value of the dilapidation’s provisions included in the balance sheet requires estimation of future costs for restoring the premises to their original condition. These estimates are specific to each facility and based on independent third party advice.

Revenue Recognition

Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the group.

The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity, upon completion of a contract and specific criteria have been met for each of the group’s activities.

Government Grants

Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.

Foreign Currency Transactions and Balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

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

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Research and development tax credits are recorded gross within operating income with the respective tax charge in the tax account. Where claims have yet to be submitted to HMRC, estimates are used based on a review of project activity in the reporting period.

Intangible Assets

Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated, using the straight line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful lives, as follows:

External Licenses: 5 years

The assets are reviewed for impairment where market conditions indicate that the residual value, useful life or amortisation rate have changed.

Tangible Assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

The Financial Statements for the Year Ended 31 March 2024

Notes to the Financial Statements for the Year Ended 31 March 2024

Depreciation

Depreciation is charged so as to write off the cost of assets over their estimated useful lives, as follows:

Asset Class Depreciation Method and Rate

Short term leasehold improvements

Furniture, fittings and equipment

Investments

Over the length of the lease10 years 1 - 5 years straight line

Investments in equity shares, relating to subsidiaries, are measured at cost less impairment.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Debtors

Trade debtors are amounts due from customers for services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the debtors.

Creditors

Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Creditors are recognised initially at the transaction price, and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

Provisions

Provisions are recognised when the group has an obligation at the reporting date as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Defined Contribution Pension Obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial Instruments

A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument.

Basic financial instruments are initially recognised at the transaction price.

Financial assets that are measured at cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.

For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics.

Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.

The Financial Statements for the Year Ended 31 March 2024

3. Revenue

The analysis of the group’s revenue for the year from continuing and discontinuing operations is as follows:

Included in turnover is amounts of £206,709 (2023: £351,998) relating to turnover outside of the United Kingdom.

4. Other Operating Income

The analysis of the group’s other operating income for the year is as follows:

Other operating income primarily relates to gross income received under the research and development expenditure credit scheme (RDEC).

Prior year included amounts in respect of 2 financial years 2022 and 2023, with current year reflecting estimates for 2024 only.

The Financial Statements for the Year Ended 31 March 2024

5. Operating (deficit)/surplus

Arrived at after charging

6. Discontinued Operations

For the prior year ending 31 March 2023, the group included discontinued operations relating to the demobilisation of the government COVID-19 testing service. The subsidiary Medicines Discovery Catapult Services Limited entered liquidation on the 13 March 2023. During the prior year, revenue totalling £11,621 and loss before tax of £601,869 contributed to the Group’s results. Included in other debtors was an amount due to the parent company MDC Ltd of £152,040 equal to the remaining net assets.

The Financial Statements for the Year Ended 31 March 2024

9. Staff Costs

Group

The aggregate payroll costs (including Directors’ remuneration) were as follows:

The average number of persons employed by the group (including Directors) during the year, analysed by category was as follows:

Company

The

(including Directors’ remuneration) were as follows:

The Financial Statements for the Year Ended 31 March 2024

The average number of persons employed by the group (including Directors) during the year, analysed by category was as follows:

10. Directors’ Renumeration

The Directors remuneration for the year was as follows:

During the year the number of Directors who were receiving benefits was as follows:

In respect of the highest paid Director.

The Financial Statements for the Year Ended 31 March 2024

11. Taxation

The Financial Statements for the Year Ended 31 March 2024

Factors affecting tax charge for the year

The tax assessed for the year is lower than in 2023 - the standard rate of corporation tax in the UK is 25% (2023 - 19%). The differences are explained below:

on ordinary activities before tax

(Loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (19% in 2023)

Factors that may affect future tax charges

The enacted rate of corporation tax for periods commencing post 1 April 2023 has increased to 25%. This has been used in the calculations of the unprovided deferred tax asset.

(181,043)

The Financial Statements for the Year Ended 31 March 2024

The Financial Statements for the Year Ended 31 March 2024

12. Intangible Assets

There was no amortisation in the year due to the contract commencement date being 31 March, 2024. Amortisation will commence during the forthcoming financial year.

The Financial Statements for the Year Ended 31 March 2024

13. Tangible Assets

The Financial Statements for the Year Ended 31 March 2024

Details of Undertakings Details of the investments (including principal place of business of unincorporated entities) in which the

of the nominal value of any class of share capital are as follows:

The Financial Statements for the Year Ended 31 March 2024

The Financial Statements for the Year Ended 31 March 2024

18. Creditors

19. Provision

Provisions for both the Group and Company relate to amounts reserved for dilapidation expenditure. This will be reviewed periodically based on a market assessment by independent consultants and adjusted annually for inflation over the term of the lease to March 2028. The provision is considered to be a reasonable estimate based on market valuation as at 31 March 2024.

The Financial Statements for the Year Ended 31 March 2024

20. Pensions and Other Schemes

Defined Contribution Pension Scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £764,125 (2023 - £781,958).

Contributions totalling £112,243 (2023 - £89,801) were payable to the scheme at the end of the year and are included in creditors.

21. Reserves

Profit and Loss Account

This reserve records retained earnings and accumulated losses.

22. Obligations Under Leases and Hire Purchase Contracts

Group Operating Leases

The total of future minimum lease payments is as follows:

23. Related Party Transactions

Group

During the year, the group had no related party transactions (2023: nil).

Company

In the year, the company charged its subsidiary Medicines Discovery Catapult Services Commercial Ltd

£2,572,509 (2023: £2,728,196) for operating expenditure directly incurred on commercial projects. Management charges were also charged apportioned for operating expenditure directly incurred on commercial projects. Management charges were also charged apportioned using a headcount methodology. At the year end £247,862 (2023:£695,409) was outstanding and included within debtors. The receivable is unsecured, repayable on demand and is interest free.

24. Company Status

The company is a private company limited by guarantee and consequently does not have share capital. Each of the members is liable to contribute an amount not exceeding £1 towards the assets of the company in the event of liquidation.

Company Operating Leases

The total of future minimum lease payments is as follows:

The amount of non-cancellable operating lease payments recognised as an expense during the year in both the Group and Company was £657,094 (2023 - £620,218)