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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Sphere Medical | LSE:SPHR | London | Ordinary Share | GB00B551W951 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.40 | 0.35 | 0.45 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMSPHR
RNS Number : 5027K
Sphere Medical Holding plc
22 September 2016
Dr Wolfgang Rencken, Chief Executive Officer, and Richard Wright, Chief Financial Officer, will host a presentation for analysts at 11.00am today at the Guildhall Room, 85 Gresham Street, London, EC2V 7NQ. There will be a conference call for remote users with a replay available afterwards. Dial-ins are: UK: +44 1452 555 566, ID: 63784001.
22 September 2016
Sphere Medical Holding plc
("Sphere Medical" or the "Company")
Interim Results for the six months ended 30 June 2016
Sphere Medical Holding plc (AIM: SPHR.L), an innovative point-of-care monitoring and diagnostic devices company, announces its unaudited interim results for the six months ended 30 June 2016.
Operational Highlights including Post Period End
-- Commercial sales of Proxima(TM) 3 in Germany and Belgium -- Increasing Proxima usage, with patient connections up 52% on H2 2015 -- Proxima 4 CE marking well advanced
o CE marking completed for three of the four components
-- Proxima 4 commercial launch preparations underway -- Exclusive distributor appointed for Proxima 4 in Italy
-- University Hospital Southampton time and motion study demonstrates statistically significant workflow benefits of using Proxima
-- Improved connectivity between Proxima and hospital data management systems -- New production facility opened in Wales and product manufacture commenced
Financial Highlights
-- Continued tight financial control with operating expenses below budget
o Total operating expenses GBP3.7 million before capitalisation (H1 2015: GBP3.5 million)
-- Increased confidence in commercial viability of Proxima
o Product development costs capitalised GBP1.1 million (H1 2015: GBPnil)
-- Loss before taxation GBP2.6 million (H1 2015: GBP3.5 million) -- Research and Development tax credit of GBP0.6 million received (H1 2015: GBPnil) -- Cash and cash equivalents of GBP6.6 million (2015: GBP12.8 million) at 30 June 2016
Commenting on the interim results, Dr Wolfgang Rencken, Chief Executive Officer of Sphere Medical, said: "The commercialisation of Proxima is advancing well. With the Company now poised to launch Proxima 4, we are at an exciting stage as we transition further into being a commercial organisation centred on serving our customers, generating growing revenues and moving towards the goals of cash generation and profitability . We will be focused on growing revenues as quickly as possible once Proxima 4 is launched. Discussions are continuing with more potential regional partners and over the coming months we aim to increase the geographic reach of Proxima. We look forward to continuing the development of Sphere Medical into a commercially successful company."
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
- Ends -
For further information, please contact:
Hot Features
Premium
Sphere Medical Holding Tel: +44 (0)1223 875
plc 222
Dr Wolfgang Rencken, Chief
Executive Officer
Richard Wright, Chief Financial
Officer
Panmure Gordon Tel: +44 (0) 20 7886
2500
Freddy Crossley (Corporate
Finance)
Duncan Monteith (Corporate
Finance)
Tom Salvesen (Corporate
Broking)
Consilium Strategic Communications Tel: +44 (0) 20 3709
5700
Mary-Jane Elliott spheremedical@consilium-comms.com
Chris Gardner
Ivar Milligan
Hendrik Thys
Notes for Editors
About Sphere Medical (AIM: SPHR.L)
Sphere Medical is an innovative point-of-care medical device company. Its Proxima platform measures blood gases, electrolytes and metabolites at the patient's bedside and aims to improve patient care and reduce health system costs. The device is currently sold directly to the critical care market via Sphere Medical's sales force in the UK, Germany, The Netherlands and Belgium. For further information, please visit www.spheremedical.com.
Chief Executive's Report
Introduction
The commercialisation of our Proxima platform is advancing well. We are now close to completing the CE-marking process, having received CE marks for three of the four components, and are preparing for the commercial launch of Proxima 4. This new generation of the product is a major advancement for the sales potential of the platform and incorporates additional analytes of glucose and sodium, plus it brings a number of important usability improvements, as well as enhanced connectivity.
Proxima 3 was launched primarily to obtain market feedback and there has been a good level of interest expressed in Proxima by clinicians, with more evaluations completed and increasing usage on patients.
Expanding geographic reach is a key part of our strategy for commercialising Proxima. In July 2016 we were very pleased to appoint Burke and Burke as exclusive distributor for Italy, and look forward to appointing more regional distributors in other key markets in Europe over the coming months.
Sales
Sphere Medical has a dedicated sales force in the UK, Germany, The Netherlands and Belgium focussing initially on obtaining direct feedback from the market on Proxima 3. With the launch of Proxima 4 approaching, we are entering a phase of increasing our commercial footprint by adding regional distributors.
Following on from the first commercial sale of Proxima in the UK in 2015, in January 2016 we achieved the first commercial sale in Germany and in August 2016 this was followed by a first sale in Belgium.
Interest in Proxima continues to grow, with more hospitals evaluating Proxima in the first six months of 2016 than in the same period in 2015, and the number of patients being connected to the product increasing by 52% over the second half of 2015. To date Proxima has been connected to around 150 patients. Our marketing and sales activities have led to a healthy pipeline for Proxima 4, with a large proportion of hospitals that have evaluated Proxima 3 indicating an interest in the enhanced Proxima 4 product.
Development
Proxima 4 is Sphere Medical's next generation of patient-attached blood gas analyser. The sensor panel has been expanded to include glucose and sodium. This will significantly expand the list of conditions for which monitoring with Proxima is best suited, expanding the market opportunity for its application. In addition, there are a number of important usability improvements. Connectivity has also been improved, with connectivity now available between Proxima and Conworx and CliniSys data management systems. These systems are used extensively in European hospitals and beyond and this improvement will enable the seamless transfer of test results from Proxima into patient records and laboratory information systems. We believe Proxima 4 will increase the addressable market fourfold compared to Proxima 3.
Proxima 4 is a major step forward in the product evolution. We have a strong development pipeline focusing on adding further workflow improvements and lactate as the next step. As with glucose and sodium, adding lactate will further expand the range of conditions for which Proxima is best suited.
Distribution strategy
We recognise that the quickest and most economical way of achieving a rapid roll-out of Proxima into major markets around the world is to establish partnering arrangements. Our strategy is to put in place distributors for the key European markets first while keeping a direct sales presence for continued market feedback, and then expand into other major markets as we complete registration in those territories.
In July 2016, we were pleased to appoint our first European distributor, Burke and Burke, in Italy. Burke and Burke has considerable experience in point of care devices and already markets a number of medical devices, including complex ventilation devices and anaesthesia monitoring devices, to critical care units in hospitals throughout Italy. Under the terms of the distribution agreement, Burke and Burke will commence marketing of Proxima 4 as soon as it is launched and will place an initial order for Proxima 4 monitors and consumables.
Over the coming months, we will aim to put in place distributors for other key European markets. In the longer term, we plan to distribute Proxima in major markets around the world. We have initiated a project to look at the regulatory options for registering in the US.
Time and motion Study
In conjunction with University Hospital Southampton, we have conducted a time and motion study to investigate the workflow impacts of Proxima in a highly optimised cardiac intensive care unit. Results were presented at the British Association of Critical Care Nurses annual conference earlier this month. The study involved 20 patients and showed a statistically significant reduction in total time taken to deliver results to the bedside by using Proxima compared with the existing standard process in a highly optimised, well equipped cardiac ICU involving near-patient benchtop blood gas analysers. This confirms the significant workflow benefits from using Proxima on unstable patients requiring frequent blood gas measurements.
Production
Our production facility in St Asaph, North Wales, opened in February 2016 and has already commenced production of Proxima components within a very short space of time. Over the next 12 to 18 months the Company plans to gradually transfer more elements of the production process from its site at Harston, Cambridge to St Asaph. Over the next couple of years, we plan to substantially lower the cost of goods.
Intellectual property
Work continues to maintain and strengthen the Company's intellectual property portfolio. The Proxima trademark is now registered across the EU and we have over 20 patents granted or in-application.
Financial review
Operating expenses were GBP3.7 million (H1 2015: GBP3.5 million) before capitalisation. Reflecting the commercialisation stage of Proxima, sales and marketing expenses increased from GBP0.5 million in H1 2015 to GBP0.7 million in H1 2016 and production overheads increased over the same period by GBP50,000 to GBP0.7 million. Administrative expenses remained stable at GBP1.0 million. Product development costs of GBP0.1 million (H1 2015: GBP1.2 million) were expensed in the period and GBP1.1 million (2015 H1: GBPnil) of product development costs were capitalised, reflecting increased confidence in the commercial viability of Proxima.
The loss for the period was GBP2.6 million (H1 2015: GBP3.5 million). The basic and fully diluted loss per share for the period was 1.4 pence (H1 2015: 4.0 pence).
The net cash outflow from operating and investing activities in the period was GBP3.3 million, in line with H1 2015. This was after the receipt of a research and development tax credit of GBP0.6 million (H1 2015: GBPnil). Net cash and cash equivalents at 30 June 2016 was GBP6.6 million (30 June 2015: GBP12.8 million).
The Team at Sphere Medical
Sphere Medical continues to benefit from the hard work and expertise of its employees who, with the Board, are fully committed to making Sphere Medical a successful commercial medical device company.
We would like to take this opportunity to thank all our employees and management for their continued commitment and shareholders for their on-going support of Sphere Medical.
Outlook
With the Company now close to completing the CE-marking process and launch of Proxima 4, it is at an exciting stage of its transition into a commercial organisation centred on serving its customers, generating growing revenues and moving towards the goals of substantial cash generation and profitability. We will be focused on growing revenues as quickly as possible once Proxima 4 is launched. The coming months will also bring discussions with more potential distribution partners to increase the geographic reach of Proxima. We look forward to continuing the development of Sphere Medical into a commercially successful company.
Dr Wolfgang Rencken
Chief Executive Officer
Consolidated Statement of Comprehensive Income
for the 6 months to 30 June 2016
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Notes Unaudited Unaudited Audited
------------------------------ ------ ------------------- ---------------------- -------------
Revenue 6 10 15
Cost of sales (3) - (2)
------------------------------ ------ ------------------- ---------------------- -------------
Gross profit 3 10 13
------------------------------ ------ ------------------- ---------------------- -------------
Product development (117) (1,174) (1,328)
Quality and Regulatory
expenses (175) (177) (347)
Production overheads (670) (620) (1,279)
Selling and marketing
expenses (681) (508) (978)
Administrative expenses (1,003) (1,016) (2,194)
Operating expenses
(net) (2,646) (3,495) (6,126)
------------------------------ ------ ------------------- ---------------------- -------------
Operating loss (2,643) (3,485) (6,113)
Finance income 45 19 91
Finance costs - - -
------------------------------ ------ ------------------- ---------------------- -------------
Loss before taxation (2,598) (3,466) (6,022)
Tax credit 556 - 557
------------------------------ ------ ------------------- ---------------------- -------------
Loss and total comprehensive
income for the period
attributable to the
equity holders of
the parent (2,042) (3,466) (5,465)
------------------------------ ------ ------------------- ---------------------- -------------
Loss per share attributable
to the equity holders
of the parent
Basic and diluted 4 (1.4p) (4.0p) (4.8p)
------------------------------ ------ ------------------- ---------------------- -------------
Total comprehensive income equates to the loss for the period reported above.
All amounts derive from continuing operations.
The accompanying notes form an integral part of this Consolidated Statement of Comprehensive Income.
Consolidated Statement of Financial Position
at 30 June 2016
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Notes Unaudited Unaudited Audited
------------------------------ ------ ----------- ----------- ------------
ASSETS
Non-current assets
Property, plant and
equipment 214 101 103
Intangible assets 2,030 13 896
------------------------------ ------ ----------- ----------- ------------
2,244 114 999
Current assets
Inventories 433 275 384
Trade and other receivables 150 182 127
Cash and cash equivalents 6,637 12,751 10,028
------------------------------ ------ ----------- ----------- ------------
Total assets 9,464 13,322 11,538
------------------------------ ------ ----------- ----------- ------------
EQUITY
Called up share capital 5 1,418 1,418 1,418
Share premium account 58,031 58,102 58,102
Other reserve 2,803 2,835 2,786
Profit and loss account (53,611) (49,845) (51,693)
------------------------------ ------ ----------- ----------- ------------
Equity shareholders'
funds 8,641 12,510 10,613
------------------------------ ------ ----------- ----------- ------------
LIABILITIES
Current liabilities
Trade and other payables 823 812 925
Total liabilities 823 812 925
------------------------------ ------ ----------- ----------- ------------
Total equity and liabilities 9,464 13,322 11,538
------------------------------ ------ ----------- ----------- ------------
The accompanying notes form an integral part of this Consolidated Statement of Financial Position.
Consolidated Statement of Cash Flow
for the 6 months to 30 June 2016
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Notes Unaudited Unaudited Audited
--------------------------- ------ ----------- ----------- -------------
Operating activities 6 (2,069) (3,253) (5,117)
--------------------------- ------ ----------- ----------- -------------
Cash flows from investing
activities
Purchase of property,
plant and equipment (157) (57) (101)
Purchase of intangible
assets (1,139) (7) (892)
Interest received 45 19 91
--------------------------- ------ ----------- ----------- -------------
(1,251) (45) (902)
--------------------------- ------ ----------- ----------- -------------
Cash flows from financing
activities
Issue of share capital - 13,176 13,176
Issue expenses (71) (830) (830)
(Discharge) of finance
lease liabilities - - (2)
(71) 12,346 12,344
--------------------------- ------ ----------- ----------- -------------
Net change in cash
and cash equivalents
in the period (3,391) 9,048 6,325
Cash and cash equivalents
at beginning of period 10,028 3,703 3,703
--------------------------- ------ ----------- ----------- -------------
Cash and cash equivalents
at end of period 6,637 12,751 10,028
--------------------------- ------ ----------- ----------- -------------
The accompanying notes form an integral part of this Consolidated Statement of Cash Flow.
Consolidated Statement of Changes in Equity
for the 6 months to 30 June 2016
Share
capital
(Note Share Other Retained Total
5) premium reserve loss equity
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------ --------- --------- --------- --------- ---------
12 months ended 31 December
2015 - Audited
Balance as at 31
December 2014 594 46,580 2,933 (46,503) 3,604
Loss for the year
ended 31 December
2015 - - - (5,465) (5,465)
------------------------ --------- --------- --------- --------- ---------
Total comprehensive
income for the year
ended 31 December
2015 - - - (5,465) (5,465)
Employee share-based
compensation - - 128 - 128
Issue expenses - (830) - - (830)
Issue of share capital 824 12,352 - - 13,176
Reclassification
following lapse of
options - - (275) 275 -
------------------------ --------- --------- --------- --------- ---------
Transactions with
owners 824 11,522 (147) 275 12,474
------------------------ --------- --------- --------- --------- ---------
Balance as at 31
December 2015 1,418 58,102 2,786 (51,693) 10,613
------------------------ --------- --------- --------- --------- ---------
6 months ended 30 June
2016 - Unaudited
Total comprehensive
income for the 6
months ended 30 June
2016 - - - (2,042) (2,042)
Issue of share capital - - - - -
Issue expenses - (71) - - (71)
Employee share-based
compensation - - 141 - 141
Reclassification
following lapse of
options - - (124) 124 -
------------------------ --------- --------- --------- --------- ---------
Transactions with
owners - (71) 17 (1,918) (1,972)
------------------------ --------- --------- --------- --------- ---------
Balance as at 30
June 2016 1,418 58,031 2,803 (53,611) 8,641
------------------------ --------- --------- --------- --------- ---------
Share
capital
(Note Share Other Retained Total
5) premium reserve loss equity
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------ --------- --------- --------- --------- ---------
6 months ended 30 June
2015 - Unaudited
Balance as at 31
December 2014 594 46,580 2,933 (46,503) 3,604
------------------------ --------- --------- --------- --------- ---------
Total comprehensive
income for the 6
months ended 30 June
2015 - - - (3,466) (3,466)
Issue of share capital 824 12,352 - - 13,176
Issue expenses (830) (830)
Employee share-based
compensation - - 26 - 26
Reclassification
following lapse of
options - - (124) 124 -
------------------------ --------- --------- --------- --------- ---------
Transactions with
owners 824 11,522 (98) 124 12,372
------------------------ --------- --------- --------- --------- ---------
Balance as at 30
June 2015 1,418 58,102 2,835 (49,845) 12,510
------------------------ --------- --------- --------- --------- ---------
The accompanying notes are an integral part of this Consolidated Statement of Changes in Equity.
Notes to the Interim Financial Statements
1. Nature of financial information
These half year financial statements, which were approved by the Board on 21 September 2016, are unaudited and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006.
The financial statements have been prepared under the historical cost convention and in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRSs) as adopted by the European Union. These interim financial statements do not contain all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at the year ended 31 December 2015.
Statutory accounts for the Group and the Company for the year ended 31 December 2015, which contain an unqualified audit report from Grant Thornton UK LLP, have been delivered to the Registrar of Companies and did not contain statements under section 498(2) or section 498(3) of the Companies Act 2006. The comparative financial information for that period has been extracted from such accounts.
The comparative information for the six months ended 30 June 2015 has been extracted from the unaudited management accounts and is correspondingly shown as unaudited.
Going concern
At 30 June 2016 the cash balance available to the Group was GBP6.6 million and the net cash outflow from operating activities and investing activities in the six months ended 30 June 2016 was GBP3.3 million.
The Group's revenues from sales of products are not expected to be sufficient for the Group to become cash generative from commercial operations over the next 12 months. The Board's confidence that the development and commercialisation of the Group's principal product, Proxima, will prove to be successful has been increased by positive feedback Proxima has received in the market, including its first sales, and by the good progress that has been made towards launching Proxima 4 in Europe.
The Group may need to raise additional finance before it becomes cash generative. The Group has a good track record of being able to raise additional finance when it has needed to do so. The Board of Directors has concluded that the combination of these circumstances represents a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern and, therefore that it may be unable to realise its assets and discharge its liabilities in the normal course of business.
Nevertheless, based on the GBP6.6 million of cash and cash equivalents as at 30 June 2016, the 2016 budget approved by the Board of Directors, the business plan for the next several years and the Company's track record in raising additional finance, the Board of Directors continues to believe it is appropriate to adopt the going concern basis of accounting in preparing these financial statements.
2. Significant accounting estimates and judgements
Share options and warrants
Share options are granted over a discretionary period and vest in tranches over a three-year period. The fair value of options is determined using the Black-Scholes valuation model, which requires a number of estimates and assumptions. The significant inputs into the model are the share price at the date of grant, the exercise price, the expected option life, the expected volatility and the risk-free interest rate.
Deferred tax asset
The Board uses its judgement in the assessment of the extent, if any, to which to recognise the deferred tax asset, based on the forecast trading performance and the expected use of trading losses.
Research and development expenditure
The Board uses its judgement in the assessment of the extent, if any, to which expenditure is identified as development expenditure rather than research expenditure. Key to this judgement is assessing whether or not the asset will generate probable future economic benefits and determining that the Group has adequate technical, financial and other resources to complete the development. Having launched Proxima 3 and achieved the first commercial sale the Directors reassessed the technical and commercial feasibility of the Proxima system and decided that the conditions for capitalising development costs had been met.
3. Principal accounting policies
The accounting policies for the six months ended 30 June 2016 are unchanged from those set out in the financial statements for the year ended 31 December 2015.
The financial statements consolidate the financial statements of Sphere Medical Holding plc and its subsidiary undertaking Sphere Medical Limited.
4. Loss per share
Fully diluted loss per share is calculated after showing the effect of outstanding options in issue. As the effect of the options would be to reduce the loss per share, the diluted loss per share is the same as the undiluted loss per share.
Calculation of loss per share is based on the following loss and numbers of shares:
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Unaudited Unaudited Audited
----------------------------- ----------- ----------- -------------
Loss attributable to equity
holders in the Company (2,042) (3,466) (5,465)
----------------------------- ----------- ----------- -------------
Number Number Number
('000) ('000) ('000)
----------------------------- -------- -------- --------
Weighted average number
of equity shares in issue:
----------------------------- -------- -------- --------
For basic loss per share 141,758 86,704 114,457
----------------------------- -------- -------- --------
5. Share capital
6 months to 12 months to
6 months to 30 June 2015 31 December
30 June 2016 Unaudited 2015
Unaudited Audited
------------- ---------------------------- -------------------------- ------------- -------------
Number Start End of Start End of Start End of
of shares of period period of period period of period period
------------- ------------- ------------- ----------- ------------- ------------- -------------
Issued
and
fully
paid
Ordinary
Shares
of GBP0.01 141,757,872 141,757,872 59,405,290 141,757,872 59,405,290 141,757,872
------------- ------------- ------------- ----------- ------------- ------------- -------------
Nominal
value
Ordinary GBP1,417,579 GBP1,417,579 GBP594,052 GBP1,417,579 GBP594,052 GBP1,417,579
Shares
of GBP0.01
------------- ------------- ------------- ----------- ------------- ------------- -------------
6. Reconciliation of operating loss to operating cash flows
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Unaudited Unaudited Audited
----------------------------- ----------- ----------- -------------
Operating activities -
loss for the period before
interest and tax (2,643) (3,485) (6,113)
Depreciation included in
expenses 45 64 106
Amortisation included in
expenses 6 6 8
Share-based payments 141 26 128
Change in inventory (49) (60) (169)
Change in trade and other
receivables (23) 22 77
Change in trade and other
payables (102) 174 289
Taxes received 556 - 557
----------------------------- ----------- ----------- -------------
(2,069) (3,253) (5,117)
----------------------------- ----------- ----------- -------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAPNFALKKEFF
(END) Dow Jones Newswires
September 22, 2016 02:01 ET (06:01 GMT)
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