RNS Number:6548L
GeneMedix PLC
29 May 2003
GENEMEDIX PLC
Quarter 1 Results for the three months to 28th February 2003
GeneMedix plc ("GeneMedix" or "the Company"), the UK generic biopharmaceutical
company with operations in Europe and Asia and with joint London and Singapore
Stock Exchange listings, announces its quarter 1 results for the three months to
28th February 2003. GeneMedix is involved in the development and manufacture of
therapeutic proteins using recombinant DNA technology and novel cell culture.
Key highlights for the period
* Collaboration with Antibioticos Group to acquire exclusive rights to
additional proteins
* Formation of a joint venture with Antibioticos Group to construct a
bacterial fermentation facility in Spain
* Cash balances at period end - #5.3 million
* Cost of operation for Group in line with expectation
Post period
* Collaborative Agreement signed with Antares Pharma to utilise injection
devices for the delivery of proteins
Paul Edwards, Chief Executive Officer, commented:
"GeneMedix has expanded its product pipeline and future manufacturing capability
through its collaboration with Antibioticos in addition to the significant
progress we continue to make with our development programmes."
"We have also been actively progressing a number of commercial and corporate
activities, which we anticipate will strengthen our cash position over the
coming months."
29 May 2003
ENQUIRIES:
GeneMedix plc Tel: 01638 663 320
Paul Edwards, Chief Executive Officer
College Hill Tel: 020 7457 2020
Nicholas Nelson
Clare Warren
Chief Executive Officer's Statement
In the first quarter of the financial year, GeneMedix continued to make
significant progress with is product development programmes and infrastructure.
We were also pleased to announce in February that, via a collaboration with
Antibioticos Spa of Milan, Italy, we have gained exclusive access to three new
cell lines for the production of Interferon-beta, G-CSF and human growth
hormone, which currently have a worldwide market of US$ 4 billion. This now
provides us with a portfolio of nine proteins, in addition to the access we have
to new inventions from our corporate partners at the Shanghai Institute of
Biochemistry and Cell Biology ("IBCB"). The Antibioticos deal also gives us
future access to additional microbial manufacturing capabilities by agreeing to
construct a joint venture facility in Spain, in which we will be the minority
partner. We have also continued to work closely with our partners, SkyePharma
(LSE: SKP; Nasdaq: SKYE) in the development programme for a slow release version
of interferon-alfa.
Since the end of the reporting period, we have also announced a collaboration
with Antares Pharma, Inc (Nasdaq: ANTR) through which Antares' current and
future injection devices will be used to support our introduction of generic
proteins into certain territories.
These developments fit in with our strategy to develop a range of high value
therapeutic proteins that are comparable to products already marketed. We aim to
introduce them globally with a particular emphasis on the potentially lucrative
European territories. Our approach is to construct cost-effective manufacturing
facilities, built and run to international pharmaceutical standards utilising
technology developed by our corporate partners, IBCB. Our strategy is also to
develop innovative formulations of our portfolio products, allowing us to build
sustainable growth in the global marketplace.
Financial review
As we anticipated in our last preliminary statement, sales for GM-CSF in China
were modest, and we reiterate our strategy of focussing on the development of
western registered products to obtain premium pricing in the developing markets.
Our losses and cash burn for the quarter were within expectations, leaving us
with a cash balance of #5.3 million at the end of the period.
Outlook
As also commented last February, the Directors believe that we shall be unable
to fund our ongoing and proposed activities from existing commercial activities,
and would therefore be looking to attract additional cash in-flows over the
coming months to address the resulting funding shortfall. To this end, we have
been actively progressing a number of commercial and corporate activities, which
we anticipate will strengthen our cash position over the coming months.
Consolidated Profit & Loss Account
For the 3 months ended 28 February 2003
3 months to 3 months to 12 months
to
Notes 28 February 28 February 30 November
2003 2002 2002
(restated)*
# # #
Turnover 21,977 58,897 155,566
Cost of sales (9,384) (18,701) (91,719)
__________ __________ __________
Gross profit 12,593 40,196 63,847
Administrative expenses (689,482) (741,503) (3,509,446)
Research and development 1 (341,794) (293,545) (2,009,851)
Exceptional research and development 1 - - (3,250,000)
__________ __________ __________
Total research and development costs (341,794) (293,545) (5,259,851)
__________ __________ __________
Total operating expenses (1,031,276) (1,035,048) (8,769,297)
Operating loss (1,018,683) (994,852) (8,705,450)
Interest receivable 26,533 112,178 229,641
Interest payable (69,376) (1,178) (134,839)
__________ __________ __________
Loss on ordinary activities before taxation (1,061,526) (883,852) (8,610,648)
Tax on loss on ordinary activities - - -
__________ __________ __________
Loss on ordinary activities after taxation (1,061,526) (883,852) (8,610,648)
Equity minority interests 24,305 20,920 138,003
__________ __________ __________
Loss for the period (1,037,221) (862,932) (8,472,645)
__________ __________ __________
Loss per share - basic and diluted (0.4p) (0.3p) (2.9p)
__________ __________ __________
All of the results relate to continuing operations.
Consolidated Statement of Total Recognised Gains and Losses
Fort the 3 months to 28 February 2003
3 months to 3 months to 12 months to 30
28 February 28 February November 2002
2003 2002
(restated)*
# # #
Loss for the period (1,037,221) (862,932) (8,472,645)
Exchange adjustments offset in reserves (17,762) 17,855 (177,398)
__________ __________ __________
Total gains and losses recognised for the (1,054,983) (845,077) (8,650,043)
periods
Prior year adjustment 1 - (983,679) (983,679)
__________ __________ __________
Total gains and losses recognised for the (1,054,983) (1,828,756) (9,633,722)
periods __________ __________ __________
* See Note 1
Consolidated Balance Sheet
as at 28 February 2003
Notes 3 months to 3 months to 12 months to
28 February 28 February 30 November
2003 2002 2002
(restated)*
# # #
Fixed assets
Intangible fixed assets 4,042,239 4,358,622 4,121,335
Tangible fixed assets 7,444,004 4,867,813 7,095,090
__________ __________ __________
11,486,243 9,226,435 11,216,425
__________ __________ __________
Current assets
Stock 197,997 142,051 146,402
Debtors - due within one year 1,029,412 469,380 788,695
Cash at bank and in hand 5,267,851 10,963,809 6,583,428
__________ __________ __________
6,495,260 11,575,240 7,518,525
Creditors: amounts falling due within one (2,439,308) (900,988) (2,145,890)
year
__________ __________ __________
Net current assets 4,055,952 10,674,252 5,372,635
__________ __________ __________
Total assets less current liabilities 15,542,195 19,900,687 16,589,060
Creditors: amounts falling due after one year (1,454,558) - (1,454,041)
Debenture - 5% 2 years convertible (3,359,075) - (3,319,007)
Provisions for liabilities and charges (40,512) (157,182) (42,753)
__________ __________ __________
Net assets 10,688,050 19,743,505 11,773,259
__________ __________ __________
Share capital and reserves
Called-up share capital 2,901,028 2,897,045 2,901,028
Share premium account 20,223,904 20,211,001 20,223,904
Profit and loss account 1 (12,912,666) (4,052,720) (11,857,685)
__________ __________ __________
Equity shareholders' funds 10,212,266 19,055,326 11,267,247
Equity minority interests 475,784 688,179 506,012
__________ __________ __________
Total capital employed 10,688,050 19,743,505 11,773,259
__________ __________ __________
* See Note 1
Consolidated Cash Flow Statement
For three months ended 28 February 2003
Notes 3 months to 3 months to 12 months to
28 February 28 February 30 November
2003 2002 2002
(restated)*
# # #
Net cash outflow from operating activities (1,175,103) (1,188,045) (4,545,261)
Returns on investments and servicing of 18,227 120,231 169,846
finance
Capital expenditure (557,120) (1,072,761) (4,082,257)
Acquisitions and disposals - - -
__________ __________ __________
Cash outflow before management of liquid (1,713,996) (2,140,575) (8,457,672)
resources and financing
Management of liquid resources 2,119,933 1,960,589 6,287,145
Financing 235,481 256,498 2,206,907
__________ __________ __________
Increase in cash in the period 641,418 76,512 36,380
__________ __________ __________
* See Note 1
Reconciliation of Operating Loss to Net Cash Outflow from Operating Activities
3 months to 3 months to 12 months to
28 February 28 February 30 November
2003 2002 2002
(restated)*
# # #
Operating loss (1,018,683) (994,852) (8,705,450)
Depreciation charge 208,207 81,086 515,689
Amortisation 79,096 79,096 3,566,382
Increase in stock (51,596) (69,543) (73,895)
Increase in Debtors (256,585) (56,047) (374,816)
(Decrease)/Increase in Creditors (133,301) (228,893) 640,150
(Decrease)/increase in Provisions (2,241) 1,108 (113,321)
__________ __________ __________
Net cash outflow from operating activities (1,175,103) (1,188,045) (4,545,261)
_________ _________ __________
* See Note 1
NOTES
1. Prior period adjustment
The accounts reflect a prior period adjustment in relation to the accounting for
development expenditure. On commencing business the accounting policy of the
Company was to write such expenditure off, except where the Directors were
satisfied as to the technical, commercial and financial viability of individual
projects. The application of this policy resulted in #1,277,224 of capitalised
development costs in the balance sheet of the Company at 28 February 2002, to be
amortised over the relevant period of the commercial production. This policy is
consistent with the requirement of SSAP13 'Accounting for Research and
Development'.
During the year ended 30 November 2002, management reviewed the policy relating
to the accounting for development expenditure, in accordance with FRS18
'Accounting Policies', to ensure that the policy remained appropriate to the
Company's circumstances. The Board reviewed the treatment of development costs
by other similar companies and decided that expensing development costs as they
are incurred was the most appropriate treatment, and the statutory accounts for
the year ended 30 November 2002 were restated to reflect this change in
accounting policy. The comparative information presented for the quarter ended
28 February 2002 is therefore restated, and the change in the accounting policy
has resulted in an increase to the net loss for that period, and a decrease in
net assets, of #293,545.
Profit and loss account
3 months to
28 February 2002
#
Loss brought forward (2,223,964)
Prior year adjustment (983,679)
__________
As at 1 December restated (3,207,643)
Retained loss for the period (862,932)
Exchange difference 17,855
__________
Loss carried forward (4,052,720)
_________
2. Basis of preparation
The 3-month figures to 28 February 2003 and 28 February 2002 are unaudited. The
comparative figures for the year ended 30 November 2002 are not statutory
accounts but are extracted from the audited statutory accounts. The statutory
accounts for the year ended 30 November 2002 have not been filed with the
Registrar of Companies. They received an unqualified audit report which did not
contain a statement under S237(2) or S237(3) of the Companies Act 1985. The
quarterly report should be read in conjunction with the statutory accounts for
the year ended 30 November 2002.
3. Going concern
The Directors estimate that cash and short term investments held at the date of
approval of the quarterly results within the Group are not sufficient to
continue funding the trading activities of the Group for a further twelve months
from the date of approval of the quarterly results. Accordingly, the Directors
currently plan to secure additional funds, by raising further finance or by
entering into commercial agreements, which the Directors expect would enable the
Group to continue its activities for the foreseeable future. There is
uncertainty over the amount of funds which would be obtained and whether they
would be received within the expected timescale. However, the Directors believe
that the Company will be able to obtain such additional funds and therefore that
it is appropriate that these quarterly results are prepared on the going concern
basis. This basis of preparation assumes that the Company and its subsidiaries
will continue in operational existence for the foreseeable future, the validity
of which depends on GeneMedix plc being able to obtain adequate funds to
continue its activities and which the Directors expect will be concluded within
a few weeks of the date of the approval of the quarterly results. The quarterly
results do not include any adjustment that would result if the Company were
unsuccessful in raising adequate additional funds.
4. The Directors elected not to pay a dividend in the period.
5. Further copies are available from the Group's head office - Rosalind
Franklin House, Fordham Road, Newmarket, Suffolk, CB8 7XN.
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