IXICO : ANNUAL REPORT 2022

Harnessing medical imaging data to advance human health.

IXICO plc

Annual Report and Accounts 2022

Advancing precision in neuroscience through innovation and investment

Highlights

Revenue

£8.6m

Gross Margin

60.7%

EBITDA

£1.5m

Orderbook

£16.0m

Cash

£5.8m

Debt

£nil

R&D Capitalised

£2.1m

Strategic Report Governance Report Financial Statements

Contents

Strategic Report

At a glance	02
Chair's statement	04
Chief Executive's statement	06
Investment case	10
Market review and opportunities	14
Business model	18
Our five-point strategic growth plan	20
Strategy in action	22
Stakeholder engagement	30
Our ESG journey	34
ESG in action	40
Financial review	42
Risk management	46
Principle risks and uncertainties	48

Governance

Board of Directors	52
Board activities	55
Directors' Report	56
Directors' Remuneration Report	59
Corporate Governance Report	61
Statement of Directors' Responsibilities	63

Financial Statements

Independent Auditor's Report	64
Consolidated Statement of Comprehensive Income	73
Consolidated Statement of Financial Position	74
Company Statement of Financial Position	75
Consolidated Statement of Changes in Equity	76
Company Statement of Changes in Equity	77
Consolidated and Company Statements of Cash Flows	78
Notes to the financial statements	79
Addresses and Advisers	108

01

At a glance

Strategic Report

Governance Report

Financial Statements

Advanced Analytics. Intelligent Insights.

Our purpose

To advance medicine and human health by turning data into clinically meaningful information, providing valuable new insights in neuroscience by supporting biopharmaceutical companies across all phases of neurology clinical research.

Our values

What we do

Innovate

We combine neurological expertise with cutting edge technology to deliver market leading analysis.

AI based algorithms objectively measure changes in neurological disease biomarkers to a

high degree of accuracy and sensitivity.

A combination of neurological disease specialists, imaging scientists and research engineers support our analysis offering.

Read more about our business model on page 18

Deploy and deliver

Our platform provides end to end imaging services to client trials.

We provide end-to-end iCRO services from imaging site qualification to site and project management, radiological and analysis services, scientific consultancy and data management.

Our CFR11 compliant TrialTracker enables seamless centralisation and analysis of data from imaging centres worldwide.

Add value

Trial tailored solutions support optimal decision making.

We adjust our service delivery to align with a client's specific trial requirements. This maximises biomarker analysis sensitivity and reduces trial costs for

the client.

Aspiration

Aspiration drives us to set ambitious goals in

Ability

Ability reflects the value we derive from

Agility

Agility is the ability to act rapidly to change

Accountability

Accountability is underpinned by taking

Our precision in neuroscience strategy

bringing life-changing treatments to patients sooner.

the diverse skills and experience of our colleagues to deliver greater value to our stakeholders.

and ensuring our people thrive on the opportunity to delight our clients.

personal responsibility and ownership of our work and understand its impact on our clients' clinical research programmes.

1		2
Build		Innovate

Read more about our

future strategy on pages 20-21

3

Penetrate

4

Bridge

5

Enhance

02

IXICO plc

Annual Report and Accounts 2022

03

Chair's statement

Strategic Report

Governance Report

Financial Statements

Focussing on investments and early phase trials is providing a bedrock for

a return to growth.

Setting a purpose-driven strategy designed to benefit all stakeholders.

See Charles' full bio on page 52

04

IXICO plc

Overview

As uncertainty around the globe continues, it is ever more important for companies to hold themselves accountable to increased investor and societal scrutiny with interest focussed not just on corporate financial returns but also on the benefits (or harm) that any company is delivering to society and the global environment. Businesses are rightly expected to be managed in

a manner accountable to both direct stakeholders (i.e. shareholders, clients, suppliers and employees) as well as the broader indirect stakeholders. It is with this perspective that the IXICO Board has sought to direct its governance activities over the past 12 months.

Given what was a challenging year for IXICO, the Board is particularly pleased with how the Group has enhanced its focus and purpose.

IXICO has invested in technologies that elevate insights into the safety and efficacy of urgently needed new drugs in neurological disease areas. This investment enhances the likelihood of our biopharmaceutical clients bringing disease modifying drugs to rapidly increasing populations of AD, PD, HD and other rare and orphan neurological diseases.

Delivering the groundwork for future growth

Despite the cancellation of three large client trials between March 2021 and January 2022, the Group has delivered a year of stable revenues and continued strong EBITDA. As important, we have further accelerated the diversification of those clients and projects that constitute our order book, something the Board identified in 2020 as a key priority to build the project pipeline that underpins future growth.

Developments and breakthroughs in scientific understanding of neurological disease in the drug development process continue, but so also do drug development failures. Neurological clinical trials will fail and so having an order book sufficiently diversified across projects, clients and trial phases is essential to deliver sustainable growth and to build operational scale.

The Group has delivered this despite the post-COVID challenges arising from an increasingly active jobs market and inflationary headwinds. Those companies that have responded best to such challenges are those that foresaw them and acted proactively to address them. The Board is proud that IXICO was one such company.

During the year we further improved our hybrid working model. Recognising that communication avenues between clients and suppliers are changing, we have adjusted our commercial approach accordingly. We also appreciate the pressures experienced by our employees due to the cost-of-living crisis and are proactively supporting them.

As IXICO continues to scale and implements new market needed solutions in image biomarker analysis, the Board believes it is most important to expand our commercial reach to drive increased client diversification and penetration. Broadening market awareness of the IXICO brand, particularly across North America, is critical to ensure our market leading offering is understood and accessible by an increasing share of the available market

Governance and people

IXICO's future depends on our people and the Board thanks all our employees for their hard work, dedication and flexibility. As a Group we continue to promote our values - Aspiration, Ability, Agility and Accountability

• to augment our positive, motivated, and effective culture and align our team with our purpose.

The Board has been closely involved as the Group has renewed its five-year strategy for the period 2022-27, meeting formally nine times during the year with several additional ad-hoc meetings to discuss specific topics. The Group uses the ten principles outlined in the Quoted Companies Alliance ('QCA') Corporate Governance Code to ensure

it maintains appropriate governance arrangements and the Board conducts itself in a manner which places IXICO's values and the QCA principles at the core of our culture.

Annual Report and Accounts 2022

At the 2023 Annual General Meeting ('AGM'), in accordance with the Company's Articles of Association, Giulio Cerroni will stand for re-election and Kate Rogers will stand for election, supported by the Board of Directors' recommendation.

Shareholders

The Group has an impressive list of leading institutions who have joined our shareholder register over the last few years, and we would like to thank all our shareholders for their continued support and enthusiasm.

Outlook

The Board remains focussed on the Group's opportunity to grow and is delighted with the progress made over the last 12 months in building up its order book following client trial failures.

We expect to continue this progress over the coming 12 months. While 2023 will see a short-term contraction in revenues as the full impact of recent client trial failures is felt in the Group's short-term revenues, continued traction in the market, coupled with successful wins of new early phase trials, should provide the bedrock for a return to growth over the medium and long term.

IXICO is well positioned in its market which continues to grow and attract new investment in the global pursuit of therapies to neurological diseases that impact the lives of millions of people and impose significant social and economic burdens. We are a small but important part of the solution to this high unmet medical need and the Board are proud of the way that the Group approaches its business activities with this significant responsibility held firmly at the front of mind.

Charles Spicer

Non-Executive Chair

6 December 2022

05

Chief Executive's statement

Strategic Report

Governance Report

Financial Statements

Building on the successes of previous years.

Executing our five year precision in neuroscience strategy.

See Giulio's full bio on page 52

06

IXICO plc

A year of achievement

We have delivered 2022 revenues of £8.6 million at a gross margin of over

60% and achieved EBITDA profitability of £1.5 million, an EBITDA margin of 18%. We have simultaneously enhanced the capabilities and global reach of IXICO as a specialist neuroimaging CRO. Building on the resilience demonstrated by the Group in recent years, our strong balance sheet supports the execution of our renewed five-year strategic plan to commercialise and deploy a 'broad and deep' portfolio of specialist neuroimaging services. Specifically, this includes the analysis of neuroimaging biomarkers as objective measures to improve patient selection, monitor patient safety and determine efficacy of new potential investigative treatments.

I am pleased to highlight several of these achievements and share details of the strategic pillars that underpin our ambitious goals for the period 2022 to 2027.

Delivering on our purpose

Our purpose is to enable the advance of medicine and human health

in an increasingly broad range of neurodegenerative diseases. New services developed in our data analytics offering during 2022 have further strengthened our position to deliver on this purpose, underlined by over £12 million of new contracts signed during the year with new and existing clients.

During the year, I have articulated our Precision in Neuroscience strategy for the period 2022 to 2027, focussing on precision in neuroscience. The detail of this is shown across the coming pages. This reflects the completion of the five-year strategy that I set out on joining IXICO in 2017, which has driven substantial development of our scientific, technological and operational capabilities.

This has seen a more than doubling of our revenues and a rapid move to profitability, all of which strengthen our ability to support our clients and deliver on our purpose.

This strategic renewal comes at a time when the Group has faced significant short-term challenges following client decisions to halt three large trials being supported by the Group; but also at a time when significant breakthroughs are being seen which enhance the medium and long- term opportunity for us. These include the increased adoption of imaging biomarkers in neurological diseases clinical trial protocols, together with new scientific approaches to addressing these diseases. These advances, alongside an aging global population and escalating associated healthcare costs are further developing the market opportunity for our services. In particular, we see promising momentum and opportunity

in clinical development programmes of new investigative treatments for Alzheimer's disease.

Patient need, societal benefit, and market opportunity

We are achieving our purpose by building our specialist position in neurodegenerative conditions, which continues to be a focus of significant R&D investment by the global biopharmaceutical industry.

Clinical development in neurology is recognised as amongst the most challenging of therapeutic areas and will frequently mean that clinical trials will not reach regulatory approval. However, the potential quality of life benefits of new treatments to many millions of patients and families, and to society in general, supports the conviction that we are on a path of continued and accelerating clinical development and healthcare system investments in neurological conditions.

Annual Report and Accounts 2022

IXICO is well positioned to capitalise on the expected corresponding growing demand for neuroimaging biomarker analytics services. In addition to our strong innovation roadmap, we continue to invest in our technology and operational capabilities.

As we address an increasing number of client opportunities, it is important to demonstrate our ability to deliver our services, efficiently and at scale; accompanied by a secure and resilient infrastructure. In recent years, we have made significant capital investments in both our IT infrastructure and in the development of our next generation, Microsoft Azure-cloud based, TrialTracker platform. This will be deployed in 2023, enabling greater agility, enhanced client service levels and support new commercial services to support our long-term growth ambitions.

Executing on our forward-looking strategy

Our goal over the next five-year period is to establish IXICO as a global neuroimaging specialist CRO of scale. Our strategy is to continue to build a leadership position in rare diseases, such as Huntington's disease, whilst capitalising on the growing demand for neuroimaging services in Alzheimer's disease, Parkinson's disease and Multiple Sclerosis. Having established agreements for neuroimaging services with an increasing portfolio of leading biopharmaceutical clients, these act as a 'springboard for growth' by enhancing access to new prospective clinical trials being initiated in these large adjacent therapeutic areas.

As we enter the new year with £5.8m cash and remain debt free, our strong balance sheet enables us to support the necessary investments required to support the five pillars underpinning our ambitious growth strategy for the period 2022 to 2027.

07