QCA Code Compliance

A full explanation of the Group’s business model and strategy and how they are executed is set out on pages 5 and 6 of the Company’s Annual Report for the year ended 31 December 2021 available to download here.

4D pharma is a pharmaceutical company developing Live Biotherapeutic Products (LBPs), a novel class of drug derived from the human gut microbiome. Our differentiated approach focuses on understanding mechanisms of action and the interactions of our LBPs with host biology, driven by our proprietary MicroRx® platform. This has generated a strong clinical and preclinical pipeline of single strain LBPs targeting major diseases across multiple therapeutic areas.

Our strategy is to lead the world in the development of Live Biotherapeutics, a novel and revolutionary class of medicines, creating an “end-to-end” microbiome company, from research to development and manufacture. We build upon our leading research and our discovery platform and seek to secure and consolidate our leading position by means of patent protection.

Our goal is to dramatically reduce overall clinical timelines: exploiting the enhanced safety profiles of therapeutics that originate from a healthy human, reducing pre-clinical testing and lead optimization timelines (4D targets its programs to be ready for patient trials within 24 months from concept); and allowing first-in-man clinical studies in patients as well as healthy individuals (which in turn allows us to mine clinically relevant data more swiftly).

With its own in house GMP-certified development and manufacture facility, 4D can address and control manufacture and delivery issues early on, to ensure against any loss of flexibility and pace of development and maintain speed to the clinic and is continually expanding and refining proprietary know-how key to the development of Live Biotherapeutics.

The Company maintains a dedicated email address which investors may use to contact the Company which, together with the Company’s address, are prominently displayed here on the Company's website. Directors seek to speak with institutional shareholders at least twice a year and the Board’s engagement with shareholders has influenced our capital structure. The Group also takes into consideration shareholder views and interests in its decision making. We have increased engagement with private investors through a number of channels, and endeavor to respond to all reasonable queries from investors to the best of our ability and within the limits of confidential or inside information.

A full explanation of the Group’s strategy and business model and how they are executed is set out on pages 5 and 6 of the Company’s Annual Report for the year ended 31 December 2021, available to download here. Over and above its shareholders and its employees, the Board believes the Group’s main stakeholder groups are its collaboration partners, suppliers, relevant regulatory authorities and the patients involved in the Group’s clinical development activities.

To support its world-leading research, the Group works with contract research organizations (CROs) and, in its collaborations, with leading academic institutions and commercial partners, as well as individual key opinion leaders (KOLs). In development, the Group works closely with its key third-party suppliers to continually enhance and improve the development process for our Live Biotherapeutics. In such a new and swiftly evolving field as Live Biotherapeutics an effective working relationship with regulatory authorities and clinicians is key to understand and indeed define the regulatory environment and clinical processes affecting Live Biotherapeutics.

The Group is aware of its corporate social responsibilities and the need to maintain effective working relationships across its broad range of stakeholder groups. The Group’s business model addresses the need to balance the interests and needs of all of these stakeholder groups while maintaining focus on the Board’s primary responsibility to promote the success of the Company for the benefit of its shareholders as a whole.

The Group seeks to engage regularly with its stakeholders and encourages two way dialogue to the advantage of all. We have invested in enhanced communication and video conferencing systems facilitating dialogue particularly with employees across the Group’s locations in five different jurisdictions. We have also held Group conferences to which employees and other key stakeholders are invited to discuss and share knowledge on all key aspects of the Group’s business.

The Group takes due account of any impact that its activities may have on the environment and seeks to minimise this impact wherever possible.

The Board is responsible for establishing and maintaining the Group’s systems of internal control. The primary responsibility for monitoring the quality of internal control has been delegated to the Audit and Risk Committee. A comprehensive statement on Risk and Risk Management is set out in the Company’s Annual Report for the year ended 31 December 2021 available to download here.

The Board members have a collective responsibility and legal obligation to promote the interests of the Company, and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the Chair of the Board.

A summary of the number of Board and committee meetings attended by each of the Directors during the last financial year is set out in the Company’s Annual Report for the year ended 31 December 2021 available to download here.

The Board consists of seven Directors, five of whom are Non-Executive. The names of the Directors, together with their biographical details, are set out here.

The Board has determined that each of Ed Baracchini, Axel Glasmacher, Sandy Macrae, Paul Maier and Katrin Rupalla is independent in character and judgement, and that there are no relationships or circumstances which could materially affect or interfere with the exercise of his independent judgement.

In identifying candidates for the Board of Directors the Company identifies both weaknesses and complementary attributes in the existing skill sets, experience and viewpoint of Directors to create overall balance across the Board. In doing so, during the previous year a lack of gender diversity was identified within the Board and positive first steps were taken towards redressing balance through the appointment of Dr. Katrin Rupalla in August 2020.

The Board is satisfied with its composition and the balance between Executive and Non-Executive Directors, which allows it to exercise objectivity in decision making and proper control of the Group’s business.

All members of the Board bring relevant sector, market and financial experience. The Board believes that its blend of relevant experience, skills and personal qualities and capabilities is sufficient to enable it to successfully execute its strategy.

The Board considers that its gender diversity is acceptable and will continue trying to balance its representation as roles on the Board become available.

All members of the Board bring relevant sector, market and financial experience. The Board believes that its blend of relevant experience, skills and personal qualities and capabilities is sufficient to enable it to successfully execute its strategy.

The names of the Directors, together with their biographical details, are set out here.

Given its composition and flexibility, the Board has been able, since the admission of the Company’s shares to trading on AIM, to maintain a regular evaluation of its effectiveness and that of its Committees. It is believed that the Board and its Committees have functioned well throughout this period, meeting with appropriate regularity and with Directors free to voice differing opinions. In particular, the Board still considers its composition to be appropriate (in view of the size and requirements of the Group’s business, and the need to maintain a practical balance between executives and non-executives). As the business of the Group grows and evolves, the Board continues to actively consider potential candidates to occupy Board positions.

The Board recognizes the need, and strives, to promote a corporate culture based on strong ethical and moral values, maintaining high standards of integrity and probity in the conduct of the Group’s operations. This culture is promoted throughout its employees and relevant suppliers and contractors and is underpinned by the implementation and regular review, enforcement and documentation of relevant policies, including health and safety and environmental policies and share dealing and anti-corruption policies.

The Group is committed to providing a safe environment for its employees and all other relevant parties for which the Group is responsible. An open culture is encouraged within the Group, with regular communications to staff regarding progress and staff feedback regularly sought. The Company’s management team regularly monitors the Group’s cultural environment and seeks to address any concerns than may arise, escalating these to Board level as necessary.

The Group encourages its employees to understand all aspects of the Group’s business and seeks to remunerate its employees fairly, being flexible where practicable. The Group gives full and fair consideration to applications for employment received regardless of age, gender, color, ethnicity, disability, nationality, religious beliefs, transgender status or sexual orientation. The Board takes account of employees’ interests when making decisions, and suggestions from employees aimed at improving the Group’s performance are welcomed.

To support its world-leading research, the Group works with contract research organizations and, in its collaborations, with leading academic institutions and commercial partners, as well as individual key opinion leaders. In development, the Group works closely with its key third party suppliers to continually enhance and improve the development process for our Live Biotherapeutics. In such a new and swiftly evolving field as Live Biotherapeutics an effective working relationship with regulatory authorities and clinicians is key to understand and indeed define the regulatory environment and clinical processes affecting Live Biotherapeutics.

The Group is aware of its corporate social responsibilities and the need to maintain effective working relationships across its broad range of stakeholder groups. The Group’s business model addresses the need to balance the interests and needs of all of these stakeholder groups while maintaining focus on the Board’s primary responsibility to promote the success of the Company for the benefit of its shareholders as a whole.

The Group takes due account of any impact that its activities may have on the environment and seeks to minimize this impact wherever possible.

Details of our commitment to our wider stakeholders and social responsibilities is included in the Company's Annual Report for the year ended 31 December 2021 in the Strategic Report: Director and Chairperson’s statements under the Section 172 Companies Act 2006 header.

The Board’s primary objective is to focus on adding value to the assets of the Group by identifying and assessing business opportunities and ensuring that potential risks are identified, monitored and controlled.

Material issues are reserved to a decision of the Board, including approval (and review of performance) of the Group’s strategic aims and objectives; approval of the annual operating and capital expenditure budgets (and any material changes to them); approval of all financial statements and results; and maintenance of a sound system of internal control and risk management. The implementation of Board decisions and day-to-day operations of the Group are delegated to Executive Directors.

The Chairperson, Axel Glasmacher, is responsible for the leadership of the Board, ensuring its effectiveness in all aspects of its functions and, within that role, for promoting good governance throughout the Group and ensuring effective communication with shareholders.

The Chief Executive Officer, Duncan Peyton, leads the Group’s management team and is responsible, together with the Chief Scientific Officer Dr. Alex Stevenson, for implementing and delivering the Group’s strategy and the operational decisions agreed by the Board, and the day-to-day operation of the Group.

As an AIM-listed company, the Board has approved the adoption of the QCA Code as its governance framework against which this statement has been prepared and will monitor the suitability of this code on at least an annual basis and revise its governance framework as appropriate as the Group evolves.

The Board meets both at regular intervals and also at short notice to consider specific matters (for example proposed material transactions). The Board receives appropriate and timely information prior to each meeting, with a formal agenda and Board and Committee papers being distributed several days before meetings take place. Any Director may challenge Group proposals and decisions are taken democratically after discussion.

Any Director who feels that any concern remains unresolved after discussion may ask for that concern to be noted in the minutes of the meeting. Any specific actions arising from such meetings are agreed by the Board and then followed up by management.

The Non-Executive Directors constructively challenge and help develop proposals on strategy and bring strong, independent judgement, knowledge and experience to the Board’s deliberations. The Directors are given access to independent professional advice at the Group’s expense when the Directors deem it is necessary in order for them to carry out their responsibilities.

The Group has effective procedures in place to deal with conflicts of interest. The Board is aware of other commitments of its Directors and changes to these commitments are reported to the Board.

Each of the Directors is subject to retirement by rotation and re-election in accordance with the articles of association of the Company. All Directors appointed by the Board are subject to election by shareholders at the first Annual General Meeting after their appointment.

We are committed to communicating openly with our shareholders to ensure that our strategy and performance are clearly understood. The Directors seek to engage with institutional shareholders at least twice a year. In addition, all shareholders can attend the Company’s Annual General Meeting, where there is an opportunity to question the Directors as part of the agenda, or more informally after the meeting. A range of corporate information (including all 4D announcements) is also available to shareholders, investors and the public on our website.

The Company maintains a dedicated email address which investors may use to contact the Company which, together with the Company’s address, are prominently displayed here on the Company's website.

Communication with shareholders is seen as an important part of the Board’s responsibilities, and care is taken to ensure that all price sensitive information is made available to all shareholders at the same time. Responsibility for investor relations rests with the Chief Executive Officer.

Reports for the year ended 31 December 2021 from the Chairman of the Audit and Risk Committee and the Chairman of the Remuneration Committee are in the Company’s Annual Report available to download here.

Notices of all of the Company’s previous general meetings can be found here and the results of each such meeting are posted immediately to the Company’s RNS feed.