RNS Number:7233S
Protherics PLC
02 December 2003
December 2, 2003
PROTHERICS PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
Protherics PLC, the international biopharmaceutical company, today announces its
interim results for the six months to 30 September 2003.
Highlights
*Existing operations profitable for second consecutive half year
*Acquisition of Enact Pharma PLC
*Turnover up 70% to #8.9 million (#5.3 million in first half 2002/03)
*Operating profit of #0.2 million, before goodwill amortisation of #0.3
million (#1.2 million loss in first half 2002/3)
*Excellent progress in clinical pipeline:
*VoraxazeTM - granted orphan drug status in Europe and the US
*Angiotensin Vaccine - new adjuvant boosts antibody response six fold in
animal studies
*CytoFab(R) - FDA agreement to progress to Phase III in severe sepsis
*NQO2 - formulation complete ahead of clinical trial in early 2004
Commenting on the results Stuart Wallis, Chairman, said:
"These results are testimony to the transformation of Protherics. We have
demonstrated profitability in our existing operations for the second successive
half-year. Our growing revenue stream, and increase in gross profits have
enabled us to absorb the acquisition of Enact Pharma PLC, which was completed in
June. We anticipate a strong performance in the second half.
"The acquisition of Enact will bring revenues in the current year from named
patient sales of Voraxaze, with full approval anticipated in 2005, and the NQO2
cancer project, which is about to enter the clinic.
"The paradigm of value has changed, favouring well financed businesses with a
later stage portfolio. In this environment, we believe Protherics is well
positioned for future growth".
For further information contact:
Protherics PLC +44 (0)20 7246 9950
Andrew Heath, Chief Executive +44 (0)7919 480 510
Barry Riley, Finance Director +44 (0)1928 518 000
Nick Staples, Corporate Affairs +44 (0)7919 480 510
The Maitland Consultancy +44 (0)20 7379 5151
Brian Hudspith
Michelle Jeffery
INTERIM STATEMENT
Turnover from continuing operations in the first half increased to #8.9 million,
an increase of 70% over the same period last year. The Group produced an
operating profit of #0.2 million (before goodwill amortisation of #0.3 million),
compared to an operating loss of #1.2 million (goodwill amortisation: nil) in
the corresponding period last year, and an operating loss of #0.6 million
(goodwill amortisation: nil) in the full year to 31 March 2003.
Marketed Products
CroFabTM - rattlesnake antivenin
Sales were #7.5 million in the half year, up from #3.9 million in the
corresponding six month period (an increase of 92%). With further orders in
hand, the company is confident of significant progress.
In the first half, process improvements in our facilities were offset by losses
in our outsourced filling and freeze drying operation, resulting in overall
margins being maintained at the levels of the previous year. Work is well
advanced to qualify an alternative contractor and a manufacturing supplement was
submitted to the FDA in November. We expect to be supplying product from the new
contractor early in the next financial year.
DigiFabTM - treatment for digoxin overdose
Sales were #0.5 million for the first half year, close to the #0.6 million in
the corresponding period last year. Sales are expected to increase significantly
in the second half as we concentrate on supplying more DigiFab to the market now
that the 'biting season' for CroFab is over. At the end of November, DigiFab
sales were #2.3 million and we are on course for a much stronger second half.
We have entered into a licensing agreement with Beacon Pharmaceuticals for the
marketing of DigiFab in Europe. We are planning to submit the DigiFab file to
the UK licensing authorities in mid 2004.
ViperaTAb(R) - common adder antivenin
Sales were #0.2 million in the six months, compared with #0.1 million in the
first half of last year. Our licensing agreement with Swedish Orphan
International has recently been extended to expand sales beyond Scandinavia into
the rest of Europe.
Prion Recognition (TSE testing)
At #0.6 million, licensing revenues from Enfer were in line with the previous
periods, as increasing volumes in Europe were offset by declines in pricing due
to higher levels of competition. Recent technological advances hold out the
promise of developing tests which are orders of magnitude more sensitive than
those currently in use. We are in active collaboration to link these new
approaches to our intellectual property. With these heightened levels of
sensitivity, the screening of human blood for CJD could be a new and potentially
large market.
R & D pipeline update
Voraxaze - for methotrexate toxicity
Our first batch of Voraxaze has been manufactured to GMP enabling the global
distribution of Voraxaze on a named patient basis outside of the US. We have
appointed IDIS as our named patient sales distributor for Voraxaze. Named
patient sales in Europe are expected to start in December 2003.
We plan to submit licensing applications to the US and European authorities
during the first half of the next financial year and with orphan drug status
recently granted in both Europe and the US, we are hopeful of an expedited
review.
CytoFab(R) - for sepsis from severe infections
An end of Phase II meeting was held with the FDA in September, attended by
Protherics and independent experts in the field. This resulted in an agreed
programme that reduces the size, timeframe and cost of progressing the
development of CytoFab into Phase III. Protherics is currently reappraising its
CytoFab licensing strategy following this excellent news.
Angiotensin Vaccine - for high blood pressure
In a Phase II study that reported in March 2002, we showed that Angiotensin
Vaccine has clear effects on the renin angiotensin system, which is important in
the control of blood pressure. Following those successful trial results,
Protherics is collaborating with two leading vaccine companies to optimise the
formulation of Angiotensin Vaccine. Encouraging results in animals show a
six-fold increase in antibody response using new, proprietary adjuvants when
compared to earlier formulations. A clinical programme with the optimised
formulations will commence in 2004.
NQO2 - targeted small molecule therapy for colorectal and liver cancer
This programme is about to enter its first Phase I/II clinical trial. In
January, Cancer Research UK will start recruiting 20-40 patients into a
two-centre descriptive trial in colorectal and liver cancer. Product safety is
the primary endpoint, and although this trial has not been powered to
demonstrate statistical significance, secondary endpoints will also be
evaluated. The trial is expected to report in the first half of 2005.
R & D organisation
Protherics currently has several projects in pre-clinical development. Amongst
these are:
*VEGF vaccine to prevent the spread of a primary tumour
*A metalloorganics programme for cancer
*A vaccine for kidney failure
*A nanotechnology approach to regenerating nerve growth in nerve and
spinal cord damage
Dr Tony Atkinson, formerly Chief Executive of Enact and a Board member of
Protherics, has been charged to review our pre-clinical programmes and their
funding requirements. This broad remit includes a portfolio review and a review
of our current research facilities and staffing. This review will report early
in 2004 and further announcements will be made in due course.
Operations
We have now completed a pilot manufacturing facility at our site in Wales, which
has already allowed us to develop and implement significant process
improvements. An ongoing expansion of our main production facility will allow us
to manufacture both CroFab and DigiFab in parallel at key stages in the process.
This will enable us, from next year, to supply more product and reduce levels of
in-process inventory while building stocks of finished goods. Further process
development work is underway on a new manufacturing process for CroFab which,
when approved, is expected to further reduce costs.
Acquisition of Enact Pharma PLC
In June 2003, we acquired Enact, an OFEX traded company, for #8.3 million
(including expenses), of which #7.2 million was financed by unlisted convertible
debt with a 6% coupon. Enact's leading products, Voraxaze and the NQO2
programme, strengthen Protherics' development pipeline, and significantly
increase news flow over the next 12-18 months. The integration of Enact is
almost complete, and the review underway should resolve outstanding matters
within the next six months.
FINANCIAL REVIEW
Our existing operations produced an operating profit of #0.7 million in the half
year, while the Enact acquisition produced an operating loss of #0.5 million,
before goodwill amortisation of #0.3 million. Research and development
expenditure at #1.2 million was similar to the corresponding six month period,
and this will increase in the second half of the year. Our general and
administrative expenditure is increasing according to budget, reflecting more
investment in IT and regulatory capability, and the absorption of the Enact
acquisition. Overall, the Group had a small profit after tax and minority
interests of #0.1 million compared to a #1.2 million loss in the corresponding
period last year and a loss of #0.2 million for the whole of the last financial
year.
The Group produced a net cash inflow from operating activities of #0.4 million
compared to an outflow of #0.6 million in the corresponding six month period. A
net #2.8 million was raised to settle the costs of the Enact acquisition, and
pay down the debt and liabilities assumed. After these transactions, and capital
expenditure, cash balances increased by #0.3 million over the half year period
to #3.0 million. The balance sheet now shows the effects of the Enact
acquisition, which generated goodwill of #10.0 million, and #7.0 million of 6%
unlisted convertible loan notes notes (#7.2 million before expenses), which
largely financed the acquisition.
OUTLOOK
We expect the second half of the current financial year to show continued solid
progress, with a higher level of product shipments planned and named patient
sales of Voraxaze. The seasonal production shift from CroFab to DigiFab will
also benefit margins. We expect our strengthening financial performance to
provide Protherics with the resources to reinvest in the future of the company
as we progress our exciting R&D pipeline.
Notes for Editors:
Protherics PLC
Protherics PLC was formed in September 1999 from the merger of Proteus
International plc and Therapeutic Antibodies Inc. Protherics is an international
biopharmaceutical company, engaged in the development, production and
commercialisation of immunopharmaceuticals and cancer therapies.
The Company's ordinary shares are listed on the Official List of the UK Listing
Authority and are traded on the London Stock Exchange. (PTI.L)
An electronic version of this will be available at: www.protherics.com
This release, and oral statements made from time to time by Company
representatives concerning the subject matter hereof, may contain so-called
"forward looking statements". These statements can be identified by introductory
words such as "expects", "plans", "will", "estimates", "forecasts", "projects",
words of similar meaning, and by the fact that they do not relate strictly to
historical or current facts. Forward-looking statements frequently are
discussing the Company's growth strategy, operating and financial goals, plans
relating to regulatory submissions and approvals and development programs. Many
factors may cause actual results to differ from the Company's forward-looking
statements, including inaccurate assumptions and a broad variety of risks and
uncertainties, some of which are known and others of which are not. Those and
other risks are described in the Company's filings with the Securities and
Exchange Commission, copies of which are available from the SEC or may be
obtained upon request from the Company. No forward-looking statement is a
guarantee of future results or events, and one should avoid placing undue
reliance on such statements.
CONSOLIDATED PROFIT & LOSS ACCOUNT (UNAUDITED)
For the six months ended 30 September 2003
Six months Six months Six months Six months Twelve months
ended ended ended ended ended
30 September 30 September 30 September 30 September 31 March
2003 2003 2003 2002 2003
Existing Acquired
operations operations Total
Notes #'000 #'000 #'000 #'000 #'000
Turnover 8,915 6 8,921 5,259 11,270
Cost of sales (4,703) - (4,703) (3,285) (5,920)
-------- -------- -------- -------- ---------
Gross profit 4,212 6 4,218 1,974 5,350
Administrative
expenses
Research and (830) (345) (1,175) (1,089) (1,591)
development
General & (2,698) (160) (2,858) (2,050) (4,363)
administrative -------- -------- -------- -------- ---------
(3,528) (505) (4,033) (3,139) (5,954)
Goodwill amortisation - (283) (283) - -
-------- -------- -------- -------- ---------
Total administrative (3,528) (788) (4,316) (3,139) (5,954)
expenses -------- -------- -------- -------- ---------
Operating profit/(loss)
Before goodwill 684 (499) 185 (1,165) (604)
amortisation
Goodwill amortisation - (283) (283) - -
-------- -------- -------- -------- ---------
Total operating
profit/(loss) 684 (782) (98) (1,165) (604)
Interest receivable 28 59 100
Interest payable (194) (46) (95)
-------- -------- ---------
Loss on ordinary
activities before
taxation (264) (1,152) (599)
Taxation for
the period 3 294 - 361
-------- -------- ---------
Profit/(loss) on
ordinary activities
after taxation 30 (1,152) (238)
Equity minority
interests 36 - -
-------- -------- ---------
Profit/(loss) for
the financial 66 (1,152) (238)
period -------- -------- ---------
Pence Pence Pence
Earnings/(loss)
per share
Basic and diluted 2 0.03 (0.61) (0.13)
Basic and diluted,
before goodwill 0.17 (0.61) (0.13)
amortisation 2
All the above activities relate to continuing operations.
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (UNAUDITED)
For the six months ended 30 September 2003
Six months Six months Twelve months
ended ended ended
30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Profit/(loss) for the 66 (1,152) (238)
period
Currency translation
differences on 405 298 435
foreign currency equity ---------- ---------- ----------
investments
Total recognised gains/
(losses) in 471 (854) 197
the period ---------- ---------- ----------
CONSOLIDATED BALANCED SHEET (UNAUDITED)
at 30 September 2003
30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Fixed assets
Intangible fixed assets 10,474 940 873
Tangible fixed assets 6,780 4,275 5,351
--------- -------- ---------
17,254 5,215 6,224
--------- -------- ---------
Current assets
Stocks 8,319 4,939 7,085
Debtors 4,504 2,012 3,269
Deferred taxation asset due
beyond 464 - 191
one year
Investments 1 - -
Cash at bank 3,039 5,369 2,756
--------- -------- ---------
16,327 12,320 13,301
Creditors - amounts falling due
within one year (11,792) (7,422) (8,470)
--------- -------- ---------
Net current assets 4,535 4,898 4,831
--------- -------- ---------
Total assets less current 21,789 10,113 11,055
liabilities
Creditors - amounts falling due
after more than one year
6% Convertible loan notes (7,042) - -
Other (1,121) (826) (717)
--------- -------- ---------
(8,163) (826) (717)
--------- -------- ---------
Net assets 13,626 9,287 10,338
--------- -------- ---------
Capital and reserves
Called up equity share capital 4,141 3,765 3,765
Share premium account 65,791 63,350 63,350
Other reserves 51,163 51,163 51,163
Profit and loss account (107,469) (108,991) (107,940)
--------- -------- ---------
Equity shareholders' funds 13,626 9,287 10,338
--------- -------- ---------
RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS (UNAUDITED)
Six months Six months Twelve months
ended ended ended
30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Profit/(loss) for
the financial
period 66 (1,152) (238)
Currency
translation
differences on
foreign currency
net investments 405 298 435
Issues of shares,
net 2,817 - -
--------- -------- ---------
Net increase in
shareholders'
funds 3,288 (854) 197
Opening equity
shareholders'
funds 10,338 10,141 10,141
--------- -------- ---------
Closing equity
shareholders'
funds 13,626 9,287 10,338
--------- -------- ---------
CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
For the six months ended 30 September 2003
Six months to Six months to Twelve months to
30 September 30 September 31 March 2003
2003 2002
#'000 #'000 #'000 #'000 #'000 #'000
Net cash inflow/ 365 (566) (1,723)
(outflow) from
operating
activities
Net cash (45) 14 5
(outflow)/inflow
from
returns on
investments and
servicing of
finance
Net cash inflow - 582 582
from taxation
Net cash outflow (1,033) (509) (1,840)
from capital
expenditure and
financial
investment
Net cash outflow (1,331) - -
from
acquisitions and
disposals
------- ------- ------- ------- ------- -------
Net cash outflow (2,044) (479) (2,976)
before
financing
Financing
Issue of share 2,817 - -
capital, net
Payment on notes (610) (379) (484)
payable and
finance leases
Loans taken out 120 16 (51)
Net cash inflow/ 2,327 (363) (535)
(outflow) from
financing
------- ------- ------- ------- ------- -------
Increase/ 283 (842) (3,511)
(decrease) in
cash
------- ------- ------- ------- ------- -------
RECONCILIATION OF OPERATING LOSS TO NET CASH INFLOW / (OUTFLOW) FROM OPERATING
ACTIVITIES (UNAUDITED)
Six months Six months Twelve months
ended ended ended
30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Operating loss (98) (1,165) (604)
Depreciation and 986 471 1,025
amortisation
Loss/(profit) on 23 7 (2)
disposal of
tangible fixed
assets
Deferred grant (29) (27) (101)
income
Grant received 31 - 122
Movement in stocks (1,170) (948) (3,092)
Movement in
debtors and
creditors 622 1,096 929
--------- -------- ---------
Net cash
inflow/(outflow)
from operating
activities 365 (566) (1,723)
--------- -------- ---------
NOTES TO THE INTERIM STATEMENTS
1. *The interim financial statements which have been approved by the directors,
have been prepared on the basis of the accounting policies set out in the
Group's 2003 financial statements. The interim financial statements are
unaudited and do not constitute full financial information as defined in
Section 240 of the Companies Act 1985 (as amended). The comparative figures
for the year ended 31 March 2003 and the six months ended 30 September 2002
do not comprise full financial statements. The comparative figures for the
year ended 31 March 2003 have been abridged from the full Group accounts for
the year ended on that date, on which the auditors gave an unqualified
report. The 2003 accounts have been delivered to the Registrar of Companies.
2. *Earnings per share for the six months ended 30 September 2003 is based on
attributable profits of #66,000 (2002 : losses of #1,152,000) and on the
weighted average number of shares in issue during the period of 203,104,824
(2002 : 190,364,364). Loss per share for the twelve months ended 31 March
2003 is based on attributable losses of #238,000 and a weighted average
number of shares in issue of 190,364,364. The weighted average number of
shares in issue for both the six months ended 30 September 2002 and twelve
months ended 31 March 2003 have been adjusted for the cash placing and open
offer during the six months ended 30 September 2003 in accordance with
Financial Reporting Standard 14, Earnings per share. This has had no effect
on the loss per share previously reported for these periods.
Fully diluted profit per share for the six months ended 30 September 2003 is
based on attributable profits of #66,000 and on the weighted average number
of shares in issue during the period of 203,256,110. Losses per share were
anti-dilutive in the six months ended 30 September 2002 and the year ended
31 March 2003.
Supplementary earnings per share has been calculated to exclude the effect
of goodwill amortisation. This adjusted number has been provided in order
that the effects of goodwill amortisation, which is a significant non cash
balance in the profit and loss account, can be fully appreciated.
Six months Six months Twelve months
ended ended ended
30 September 30 September 31 March
2003 2002 2003
#'000 #'000 #'000
Profit / (loss)
for the period
retained for
equity
shareholders 66 (1,152) (238)
Add back: goodwill
amortization (0.14
pence per share) 283 - -
--------- -------- ---------
349 (1,152) (238)
--------- -------- ---------
3. *#28,000 of the tax credit arising in the period to 30 September 2003 is a
result of research and development expenditure claimed under the Finance Act
2000 (2002: nil). In addition, a deferred tax asset of #266,000 has been
recognised at 30 September which relates to trading losses in the United
States (2002: nil). This has been recognised following the continued
development of the Groups products during the past six months and the
directors are of the opinion, based on recent and forecast trading, that the
level of profits in the United States in the forthcoming years will lead to
the realisation of this asset.
4. *During the period, the group purchased Enact Pharma plc ("Enact"), for a
total consideration of #8,279,000. The provisional fair value of Enact's
assets was a net liability of #1,710,000 resulting in goodwill arising from
the transaction of #9,989,000.
5. *Copies of this statement are being sent to all shareholders and will be
available to the public at the Company's registered office at The Heath
Business and Technical Park, Runcorn, Cheshire, WA7 4QF.
This information is provided by RNS
The company news service from the London Stock Exchange
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