04 November 2004
For Immediate Release 4th November 2004
Annual General Meeting of Provalis plc
Provalis plc (LSE: PRO and NASDAQ: PVLS), the Medical Diagnostics and
Pharmaceuticals Group, announces that all resolutions proposed at today's
Annual General Meeting were duly passed.
Following the formal proceedings Frank Harding, Chairman, made a statement
which contained the following highlights:
*First shipments of in2itTM A1c to the US planned for this month
*US demand for in2itTM A1c continues to grow strongly
*Current trading in line with market expectations and ahead of prior year
*Placing in September 2004 raised #2.5m (net); cash position remains
*2005 to see significant progress towards emergence as sustainable,
growing and profitable healthcare group
The full text of Frank Harding's statement is as follows:
"The highlight of the last 12 months was undoubtedly the completion of the
development of in2itTM, our fully automated diagnostic test platform. In August
the US FDA granted marketing clearance, CLIA waiver and prescription home use
approval for in2itTM A1c, the first test for use on the platform, an excellent
achievement by our Medical Diagnostics business which gave us the ideal start to
the new financial year.
As previously reported, Provalis otherwise had a solid year in 2004. The
Pharmaceuticals business achieved record sales, assisted by the continuing
strong performance of Diclomax(R), its leading product, and the first full year of
contribution from its business in Ireland. The Medical Diagnostics business had
a more mixed year, although sales of Glycosal(R) did improve in the second half of
Turning now to the current year, trading is ahead of the same period last year
and remains in line with market expectations.
Our Medical Diagnostic business has obviously concentrated its efforts on
preparing in2itTM A1c for launch onto the US market. We have been delighted by
the exceptionally strong response from the US healthcare market, with orders
continuing to grow strongly. I would like to take this opportunity to
congratulate our US based sales team, which has used its extensive experience of
the US diagnostic point of care market to both build customer awareness of the
product and generate significant orders.
The launch quantities ordered by our customers are considerably higher than we
first anticipated. Whilst welcome, this meant that we have had to increase our
manufacturing capacity and component inventory more quickly and more extensively
than we had originally planned. As a result of the considerable efforts of our
Medical Diagnostics team, and with assistance from our component suppliers and
manufacturing partners, I am delighted to announce that the first shipments of
in2itTM A1c to the US are planned for later this month.
As you would expect, we are in close contact with a number of sub-distributors
in the US and they are reporting high levels of demand from their customers, the
physicians' offices, diabetic clinics and pharmacy chains that will actually use
in2itTM A1c. These sub-distributors expect to have the product in the hands of
these users shortly after they themselves receive first shipments from us. This
is extremely positive news, as it is their customers regular usage of the in2itTM
A1c tests that will drive the ultimate success of the product.
The US market gives Provalis the highest margins on sales of in2itTM, and the US
demand is such that it is likely to take all of our manufacturing capacity for
the product until the summer of 2005. We do, however, expect to gain European
regulatory approval shortly and, as we are already in discussions with a number
of pan-European distributors, we will be in a position to launch in2itTMA1c in
Europe as soon as capacity is available.
Our pharmaceutical sales force remains very active in both the UK and Ireland.
This sales force is a valuable asset for the Group, and allows us to respond
quickly to market opportunities. Calceos(R), our osteoporosis product, was
presented with such an opportunity earlier in the year by the NICE
recommendation to limit the use of hormone replacement therapy, which is used to
treat the same condition. We immediately raised the profile of the product
within our sales force, and are now seeing continuing sales growth as a result.
In a similar way, when Vioxx(R), the market leader of the COX 2 products that have
taken significant market share from NSAID's such as Diclomax(R) over the last few
years, was permanently withdrawn from the market by Merck last month, we were
presented with an unexpected, but very welcome, opportunity and immediately
commenced a major new campaign to promote Diclomax(R) . Although this campaign has
only just started, we have seen some early signs of a potential increase in
demand for Diclomax(R).
This is encouraging, but we do remain relatively cautious about the effect on
the resulting value of Diclomax(R) sales because the NSAID market in the UK is now
seeing increased generic competition. It is too early to determine what long
term effect this increased competition will have, but we are seeing some impact
on the sales margin we are able to achieve for Diclomax(R). We hope that this will
be mitigated by increased sales resulting from the new marketing campaign I have
just referred to.
ErdotinTM, our new mucolytic product for use in a number of respiratory
illnesses, continues to progress through registration. We remain on schedule to
launch the product early in 2005.
Pleasingly, despite the considerable activities of the last year, our cash
position is healthy. At the year end, we had cash and short term deposits of
#1.8 million with an unutilised bank facility for up to a further #3.0 million.
We have since raised a further #2.5 million (net of expenses) through the
placing announced in September, which will be used to meet the US demand for
in2itTM A1c. In addition, we still have #0.7 million conditionally available
under the Grant from the Welsh Assembly, and the sales performance of our
Pharmaceutical business during 2004 means that we have now qualified to receive
the maximum final payment of #2.0 million from Dr Falk Pharma in January 2005.
It must also be remembered that later this month we make the final payments for
Diclomax(R); since the end of 2001, these payments to Pfizer have totalled #4.6
million each year, money that from December onwards will be retained within the
With the first shipments of in2itTM A1c now imminent, further tests being
developed for the in2itTM platform and the planned launch of ErdotinTM, 2005
promises to be a busy and productive year for Provalis. We anticipate 2005 as
being the year which sees significant progress towards Provalis' emergence as a
sustainable, growing and profitable healthcare group.
A further update on Provalis' progress will be given at the announcement of our
interim results, which are due in March
Provalis' Internet Website ; http://www.provalis.com
"Safe Harbor" Statement under the US Private Securities Litigation Reform Act of
1995: Statements in this announcement that relate to future plans, expectations,
events, performances and the like are forward-looking statements as defined in
the US Private Securities Litigation Reform Act of 1995. Actual results of
events could differ materially from those described in the forward-looking
statements due to a variety of factors. Such factors include, among others: the
viability of the Group's products, which are at various stages of development;
the generation of sufficient operating cash flow by the Group's pharmaceutical
and medical diagnostic businesses to finance the ongoing development of these
businesses as well as the Group's research and development activities; the
success of the Group's research and development strategy and activities;
uncertainties related to future clinical trial results and the associated
regulatory process; the execution and success of collaborative agreements with
third parties; availability and level of reimbursement for the Group's products
from government health administration authorities or other third-party payors;
the rate of net cash utilisation within the Group and, hence, the Group's
possible need for additional capital in the short, medium and/or long term; the
Group's intellectual property position and the success of patent applications
for its products and technologies; the Group's dependence on key personnel;
general business and economic conditions; the impact of future laws, regulations
and policies; stock market trends in the Group's sector; and other factors
beyond the Group's control that may cause the Group's available capital
resources to be used more quickly than expected. These and other factors that
could affect the Company's future results are more fully described in its
filings with the US Securities and Exchange Commission, in particular the latest
20-F filing, copies of which are available from the Company Secretary at the
Company's registered address.
For further information:-
Dr Phil Gould, Chief Executive Officer, Provalis plc, Tel: 01244 833463
Mr Peter Bream, Finance Director, Provalis plc, Tel: 01244 833552
Mr Lee Greenbury, Company Secretary, Provalis plc, Tel: 01244 833402
Lisa Baderoon, Buchanan Communications, Tel: 020 7466 5000
Notes to Editors
Provalis plc (LSE: PRO; NASDAQ: PVLS) is a diversified healthcare group with two
* Medical Diagnostics - develops medical diagnostic products
for chronic disease management for sale to world markets. The business'
principal products are currently Glycosal(R) and Osteosal(R) in the areas of
diabetes and osteoporosis respectively, with the first shipments of in2itTM A1c,
the business' next generation diabetes management system, to be made to the US
market before the end of 2004.
* Pharmaceuticals - sells and markets its own, and third
party, branded prescription medicines in the UK and Ireland to GPs and hospitals
through its own regionally managed sales force. The business' principal product
is Diclomax(R), a medicine for use in the treatment of musculo-skeletal disorders,
and it also sells products in the areas of gastroenterology, osteoporosis,
migraine and dermatology.
This information is provided by RNS
The company news service from the London Stock Exchange