RNS Number:4892S
GeneMedix PLC
26 November 2003
GeneMedix plc
Interim Results for the nine months to 31st August 2003
GeneMedix plc ("GeneMedix" or "the Company"), the UK biopharmaceutical company
with operations in Europe and Asia and with joint London and Singapore Stock
Exchange listings, announces its interim results for the nine months to 31st
August 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
* Collaborative Agreement signed with Penang Development Corporation of
Malaysia to set up a facility for the manufacture of human insulin.
Milestone payment in excess of #2 million expected.
* #1.5 million fundraising round completed
* Cash balances at period end - #3.1 million
Post period
* Letter of intent signed for contract manufacturing of additional
biopharmaceutical product in the Irish facility
* Significant progress in the Erythropoietin (EPO) process development
programme
Paul Edwards, Chief Executive Officer, commented:
"GeneMedix has continued to develop its potential to make a major market impact
in Europe and beyond with its range of biopharmaceutical products.
"It clearly remains a primary focus of the Directors to secure sufficient
funding to be able to develop all our programmes at the desired rate. We are
continuing to pursue a number of opportunities to obtain revenues or investment
from commercial or technology out-licensing collaborations. This is coupled with
other international initiatives to generate cash from under-utilised assets.
"The Board believes that the combination of our current portfolio of comparable
proteins and manufacturing capabilities offers significant potential for
GeneMedix and we remain confident that we shall be receiving cash in-flows in
the very short term to cover our immediate cash requirements."
26th November 2003
ENQUIRIES:
GeneMedix plc Tel: 01638 663 320
Paul Edwards, Chief Executive Officer
Bankside Consultants Tel: 020 7444 4140
Michael Padley / Susan Scott
Chief Executive Officer's Statement
GeneMedix has continued to develop its potential to make a major market impact
in Europe and beyond with a range of biopharmaceutical products.
We have made significant steps in our product development programme for EPO,
which have attracted the interest of a number of potential major commercial
licensing partners. This progress has been made against a background environment
which has highlighted the complexity of the technological issues surrounding the
establishment of comparable pharmaceuticals in Western Europe. However, we
remain confident that our clinical programmes are well designed and will enable
us to demonstrate comparability with the marketed product. We have always relied
on a strong scientific basis for the design of our clinical strategy, and the
scientific advice we recently received from the CPMP, the scientific advisory
body to the European Regulatory Agency, on the regulatory pathway for the
approval of our EPO, Epostim, has strengthened that belief.
We are also seeking to complete the validation of our Tullamore facility for the
production of EPO at the earliest opportunity, and to utilise to the full the
strong development team we have built up at the facility.
The programme for the development of our insulin technology has been
accelerated, and this will eventually be transferred into the facility we are
expecting to be built in Penang, Malaysia. This project requires a total
investment of $34 million, which will be funded entirely by South-East Asian
investors and the National and Regional Government of Malaysia. We anticipate
that the initial stage of funding will be completed in the next few weeks, which
will allow us to commence construction of the facility early in the New Year.
There is expected to be an upfront cash milestone to GeneMedix in excess of #2
million once this initial stage of funding has been completed.
It clearly remains a primary focus of the Directors to secure sufficient funding
to be able to develop all our programmes at the desired rate and it is evident
that we shall not be able to do this by relying solely on funds being generated
through the existing commercial operations. We are continuing to pursue a number
of opportunities to obtain revenues or investment from commercial or technology
out-licensing collaborations. This is coupled with other international
initiatives to generate cash from under-utilised assets. As part of one such
initiative, we are pleased to announce that we have signed a letter of intent to
contract-manufacture an additional biopharmaceutical, which should bring us
revenues from outside Western Europe in 2005.
In the meantime, we have continued to exercise prudent cost control measures and
are focusing predominantly on our main development programmes to preserve cash
balances. The investment in our Chinese facility has been completed, and
revalidation will commence shortly.
Financial review
Operating losses of #4.7 million and cash burn for the period were slightly
above expectation as we suffered badly from the strengthening of the euro and
the weakness of the dollar on our assets and liabilities in China and Ireland.
We had accelerated depreciation on a number of items of industrial plant, which
were replaced as part of our upgrade programme in China, but all other costs
were as planned. There has been little additional capital expenditure during the
period except on the plant validation in China and Ireland. There were no
revenues in the period.
Administration costs were mainly inflated by a foreign exchange loss of #430k,
the accelerated depreciation, and some anticipated increased costs of insurance
and legal services.
The cash balances at the end of the period of #3.1 million were equally affected
by the foreign exchange losses. In the period we had a mini-fundraising round,
which brought in #1.5 million from a number of existing investors in South-East
Asia. Current operating cash burn, excluding foreign exchange effects on the
retranslation of monetary items, is approximately #1.3 million a quarter. To
bolster finances, we are expecting to have additional cash funds from the
insulin project in Penang referred to above available to us very shortly.
Outlook
The Board believes that the combination of our current portfolio of comparable
proteins and manufacturing capabilities offer significant potential for
GeneMedix. We are especially excited about the advances we have made recently in
the development of our EPO technology and our resulting ability to bring in a
significant commercial partner. Although it is clear that we are unable to fund
all our activities from existing commercial activities, we are confident that we
shall be receiving cash in-flows in the very short term to cover our immediate
cash requirements.
As we said in our press release of 27th August, we are in discussion with a
number of parties regarding various degrees of collaboration and we continue
actively to progress a number of these. We are also continuing to explore with
our financial advisors, Nomura International, a broad range of strategic options
available to the Company to maximise value for shareholders from our extensive
portfolio of biopharmaceuticals.
Consolidated Profit & Loss Account
For the 9 months ended 31 August 2003
Notes Unaudited Unaudited Audited
9 months to 9 months to 12 months to
31 August 31 August 30 November
2003 2002 2002
# # #
Turnover 23,552 126,013 155,566
Cost of sales (9,607) (50,132) (91,719)
__________ __________ __________
Gross profit 13,945 75,881 63,847
Administrative expenses (3,315,263) (2,112,648) (3,509,446)
Research and development (1,452,688) (1,649,113) (2,009,851)
Exceptional research and development - (3,250,000) (3,250,000)
__________ __________ __________
Total research and development costs (1,452,688) (4,899,113) (5,259,851)
__________ __________ __________
Total operating expenses (4,767,951) (7,011,761) (8,769,297)
Operating loss (4,754,006) (6,935,880) (8,705,450)
Interest receivable 63,332 299,787 229,641
Interest payable (286,154) (62,646) (134,839)
__________ __________ __________
Loss on ordinary activities before taxation (4,976,828) (6,698,739) (8,610,648)
Tax on loss on ordinary activities - - -
__________ __________ __________
Loss on ordinary activities after taxation (4,976,828) (6,698,739) (8,610,648)
Equity minority interests 126,892 111,168 138,003
__________ __________ __________
Loss for the period (4,849,936) (6,587,571) (8,472,645)
__________ __________ __________
Loss per share - basic and diluted (1.7p) (2.3p) (2.9p)
__________ __________ __________
All of the results relate to continuing operations.
Consolidated Statement of Total Recognised Gains and Losses
For the 9 months to 31 August 2003
Notes Unaudited Unaudited Audited
9 months to 9 months to 12 months to
31 August 31 August 30 November
2003 2002 2002
# # #
Loss for the period (4,849,936) (6,587,571) (8,472,645)
Exchange adjustments offset in reserves (22,080) (192,554) (177,398)
__________ __________ __________
Total gains and losses recognised for the period (4,872,016) (6,780,125) (8,650,043)
Prior year adjustment - (983,679) (983,679)
__________ __________ __________
Total gains and losses recognised for the period (4,872,016) (7,763,804) (9,633,722)
__________ __________ __________
Consolidated Balance Sheet
As at 31 August 2003
Notes Unaudited Unaudited Audited
As at As at As at
31 August 31 August 30 November
2003 2002 2002
# # #
Fixed assets
Intangible fixed assets 7,812,508 4,200,097 4,121,335
Tangible fixed assets 7,390,650 6,646,835 7,095,090
Investment 2 11,607 - -
__________ __________ __________
15,214,765 10,846,932 11,216,425
__________ __________ __________
Current assets
Stock 99,251 140,491 146,402
Debtors - due within one year 1,223,810 1,209,248 788,695
Cash at bank and in hand 3,104,557 7,859,487 6,583,428
__________ __________ __________
4,427,618 9,209,226 7,518,525
Creditors: amounts falling due (2,712,734) (1,722,813) (2,145,890)
within one year
__________ __________ __________
Net current assets 1,714,884 7,486,413 5,372,635
__________ __________ __________
Total assets less current liabilities 16,929,649 18,333,345 16,589,060
Creditors: amounts falling due after one (1,311,172) (1,385,416) (1,454,041)
year
Debentures - convertible loan notes (7,355,968) (3,250,000) (3,319,007)
Provisions for liabilities and charges (30,907) (33,701) (42,753)
__________ __________ __________
Net assets 8,231,602 13,664,228 11,773,259
__________ __________ __________
Share capital and reserves
Called-up share capital 2,989,858 2,901,028 2,901,028
Share premium account 21,599,685 20,223,904 20,223,904
Profit and loss account (16,729,701) (9,996,768) (11,857,685)
__________ __________ __________
Equity shareholders' funds 7,859,842 13,128,164 11,267,247
Equity minority interests 371,760 536,064 506,012
__________ __________ __________
Total capital employed 8,231,602 13,664,228 11,773,259
__________ __________ __________
Consolidated Cashflow Statement
For the 9 months ended 31 August 2003
Unaudited Unaudited Audited
9 months to 9 months to 12 months to
31 August 31 August 30 November
2003 2002 2002
# # #
Net cash outflow from operating activities (4,797,464) (4,078,347) (4,545,261)
Returns on investments and servicing of (34,549) 316,698 169,846
finance
Capital expenditure (661,538) (3,098,392) (4,082,257)
Acquisitions and disposals - - -
__________ __________ __________
Cash outflow before management of liquid (5,493,551) (6,860,041) (8,457,672)
resources and financing
Management of liquid resources 3,503,293 4,884,995 6,287,145
Financing 1,811,033 1,884,658 2,206,907
__________ __________ __________
(Decrease)/Increase in cash in the period (179,225) (90,388) 36,380
__________ __________ __________
Note to cash flow
Reconciliation of Operating Loss to Net cash Outflow from
Operating Activities
Unaudited Unaudited Audited
9 months to 9 months to 12 months to
31 August 31 August 30 November
2003 2002 2002
# # #
Operating loss (4,754,006) (6,935,880) (8,705,450)
Depreciation charge 618,466 294,226 515,689
Amortisation 237,287 237,287 3,566,382
Increase in stock 47,151 (67,984) (73,895)
Increase in Debtors (451,145) (1,020,709) (374,816)
(Decrease)/Increase in Creditors (483,371) 287,086 640,150
(Decrease)/Increase in Provisions (11,846) (122,373) (113,321)
Non-cash exceptional research and - 3,250,000 -
development expenditure
__________ __________ __________
Net cash outflow from operating activities (4,797,464) (4,078,347) (4,545,261)
_________ _________ __________
NOTES
1. Basis of preparation
The 9-month figures to 31 August 2003 and 31 August 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 has 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 interim
report should be read in conjunction with the statutory accounts for the year
ended 30 November 2002.
The Directors estimate that cash and short term investments held at the date of
approval of the financial statements 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 financial statements. Accordingly, the
Directors currently plan to secure additional funds, by raising further finance
or by entering into 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 financial statements 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 short period of the date of the announcement of the interim
results. The financial statements do not include any adjustment that would
result if the Company were unsuccessful in raising adequate additional funds.
2. Investment
This represents GeneMedix investment in the 25:75 Joint Venture with
Antibioticos.
3. We were unable to pay a dividend in the period.
4. Further copies are available from the Group's head office - Rosalind
Franklin House, Fordham Road, Newmarket, Suffolk, CB8 7XN
This information is provided by RNS
The company news service from the London Stock Exchange
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