Interim Results

RNS Number:3303Q
Proteome Sciences PLC
30 September 2003


                             Proteome Sciences plc

                                PRESS RELEASE

                                                            30th September 2003

               INTERIM RESULTS FOR THE 6 MONTHS TO 30TH JUNE 2003

                                   HIGHLIGHTS

 *  Interim results

   *Integration of proteomics activities in Frankfurt with existing London
    facilities completed.

   *Strong scientific progress being made, particularly with chemistry based
    technologies acquired from Aventis.

   *Out-licensed BSEand TSE biomarkers to IDEXX Laboratories Inc. in April.

   *PST(R) membrane protein technology attracting considerable commercial and
    scientific interest.

   *Headline loss excluding non-cash operating expenses #2.27 million (2002:
    #1.28 million) reflecting additional costs since acquisition of Aventis
    proteomics activities.

   *Non-cash expenses of #963K (2002: #96K).

   *Company remains well funded with low and predictable cash burn following
    #5.8 million Placing in June

   *Cash balance at 30 June 2003 of #8.0 million


 *  Commercialisation

   *Further commercialisation and applications expected from stroke
    biomarkers for high throughput screening and for CJD/vCJD markers for
    clinical and blood screening applications.

   *Commercialisation strategies to outlicense Sensitizer(R) reagents and VeriQ
    antibodies for high volume and high margin applications running to plan.

   *Other disease programmes also on track to become revenue generating.

 *  Current Outlook

   *Product development programmes at BioSite Inc.and IDEXX Laboratories Inc.
    making excellent progress in line with best expectations.

   *Proprietary technologies included within ProteoSHOP™ toolbox will
    accelerate discovery programmes and commercialisation process.

   *Defined strategy to focus on proteins in disease has now started to
    deliver results and will increase newsflow and commercialisation activity.


 *  Intronn Inc.

   *Received two grants totalling $1.14 million for preclinical studies in
    haemophilia A and cystic fibrosis.

   *Research collaboration with ProBioGen, Inc. to use SMART(R) in cell line
    development programme.

   *Well positioned to address new range of substantial commercial
    applications.



Commenting on these results, Christopher Pearce, Chief Executive of Proteome
Sciences, said:

        "Our focus on proteins in disease combined with our own proprietary
        research and valuable collaborations with academia has resulted in
        Proteome Sciences achieving a position of global leadership in applied
        proteomics for human diseases in 2003. This has been reflected by the
        Company having concluded two significant licensing deals to date and
        with further announcements expected later in the year.

        "Proteome Sciences has come a long way over the last twelve months and
        with the prospects for proteomics and the related commercial
        opportunities becoming increasingly recognised, the outlook for Proteome
        Sciences continues to improve".

                                      ENDS

Attached: Full text of interim statement, unaudited consolidated profit and loss
account and notes to the financial information.

For further information please contact:

Proteome Sciences plc
www.proteome.co.uk
Christopher Pearce, Chief Executive     Tel: [phone]
                                        Email: [e-mail]

Public Relations for Proteome Sciences
IKON Associates
Adrian Shaw                             Tel:  [phone]
                                        Mobile: [phone]
                                        Email: [e-mail]



Notes to Editors:

Proteome Sciences plc applies high sensitivity proteomics to identify and
characterise differential protein expression in diseases for diagnostic,
prognostic and therapeutic applications. It has to date developed sensitive
blood assays for stroke, nvCJD, BSE and solid organ transplant rejection.

The main focus of its research currently addresses neurological,
neurodegenerative, diabetes/obesity, oncology and cardiovascular conditions.
Commercialisation of these programmes will be effected through strategic
alliances and licensing agreements.

Proteome Sciences is headquartered in Cobham, Surrey in the UK and has
laboratories at Kings College Hospital, London and in Frankfurt. It employs 40
full time scientists in addition to its corporate and business development
staff. The Company has been listed on the Alternative Investment Market since
1994.


Chairman's Statement

I am very pleased to report that Proteome Sciences has enjoyed a particularly
successful period both scientifically, corporately and commercially.

Proteomics

The Company has expanded its research profile from historically funding
exclusive collaborative agreements with leading academic centres of excellence,
to establishing a global leadership position in 2003 in applied proteomics for
human diseases through its own proprietary research and from its ongoing
collaborations with academia. The integration of the Aventis proteomics
activities in Frankfurt with the facilities in London has been completed and
Proteome Sciences has developed and progressed a considerable way over a short
time horizon.

Proteome Sciences has intentionally followed a cautious approach with a
deliberately low and conservative cash burn until such time as the importance of
proteins and proteomics became clear after the sequencing of the human genome.
As a consequence the Company was ideally positioned to rapidly scale up its
proprietary capabilities in proteomics, once again with a highly controlled rate
of cash burn but against a background of impending commercialisation of the
existing research programmes.

Over the same period, the executive management team was completed by the
appointment of Dr. Sandra Steiner as Research and Development Director in June
2003, joining James Green, Commercial Director and Dr. Ian Pike, Business
Development Director.

From the research programmes, the stroke biomarkers in blood were successfully
out-licensed to Biosite Inc., a world leader in point of care diagnostics and in
April 2003 the biomarkers in blood to IDEXX Laboratories Inc., a global leader
in veterinary diagnostics, to detect BSE in live cattle and TSE's in other
animals. The Proteome Sciences business model has been extended to commercialise
the chemistry based technologies acquired with the Aventis proteomics facilities
in Frankfurt in July 2002 including PST(R), TMT™, and Sensitizer™.
PST(R) which was launched in San Diego and Lyon in April and at Bio 2003 in
Washington in June, has attracted considerable commercial and scientific
interest.

The Company has further developed its proprietary technologies which are being
promoted under the ProteoSHOP™ brand - Proteome Sciences High Output
Proteomics - this includes gel based and gel-free systems uniquely providing
high sensitivity with high throughput capabilities to rapidly identify novel
markers and targets for diagnostic, prognostic, drug validation and therapeutic
uses, across all protein classes.

Over the next few months, it is expected that there will be a strong continuing
news flow from further commercialisation and applications from the blood
biomarkers already licensed in stroke where the rights have been retained for
high throughput screening of blood transfusions and also from CJD/vCJD markers
for both clinical and blood screening applications.

The potential scale of the opportunities available to the Company is illustrated
by reference to Biosite's announcement in July 2003 in respect of its Triage BNP
Test, which is being used in more than 1,700 US hospitals. By out-licensing the
BNP test to Beckman Coulter Inc. for the high throughput immunoassay systems,
the test will be used on Beckman Coulter's 200,000 installed systems worldwide
and is expected to be available in the first quarter of 2004. Proteome Sciences
will out-license the high throughput applications for its stroke biomarkers to
the major players in the field.

In addition to stroke and TSE's, other disease programmes at Proteome Sciences
will become revenue generating, through funded research and strategic alliances
with pharmaceutical and diagnostics industry partners, using the ProteoSHOP&
trade; toolbox to provide highly effective and novel solutions for detailed
analysis and identification of membrane proteins. The non-core technologies
including Sensitizer(R) reagents and Veri-Q antibodies will be out-licensed for
use in applications which are both high volume and offer high margins, and
should deliver strong cash flow contributions. Further announcements are
expected later this year.

The commercialisation process is beginning to have a significant effect on the
business and will shift the equilibrium from being cash absorbing pre-2003, into
revenue in the current year and then generating both revenue and royalties in
2004. This will be made up from a combination of out-licenses with upfront
payments and milestones, funded research, strategic alliances, grants and
proprietary technology income from Sensitizer™ and Veri-Q.

Corporate

In June, having been approached by institutional investors, #5.8m was raised by
way of a 5% placing at 122p under the authority granted by shareholders at last
year's AGM. The Company continues to be well funded, and as discussed earlier,
has a low and predictable rate of cash burn with no major capital expenditure
envisaged for the foreseeable future.


Intronn Inc

Intronn has continued to make strong progress across its research programmes and
the development of its library assay system for screening pre-transplicing
molecules (PTMs). The company has gained considerable recognition from
publications and at scientific meetings over the period and has been awarded two
Phase 1 SBIR grants from the National Institutes of Health in the USA to date in
2003.The first of these was from the National Heart, Lung and Blood Institute
for $605,791 to fund pre-clinical studies in haemophilia 4. The second was from
the National Institute of Diabetes and Digestive Kidney Disease for $536,801 to
conduct studies in cystic fibrosis in the final stages of pre-clinical
development for clinical trials.

An article in the August issue of Nature Medicine shows for the first time the
phenotypic correction of a genetic defect by RNA using SMaRT(R) in knock out
haemophilia mice. ProBioGen, Inc. entered into a research collaboration with
Intronn to use SMaRT(R) in its cell line development programme and the NCI grant
in molecular imaging has accelerated the potential for SMaRT(R) to address a new
range of substantial commercial applications.

Veri-Q Inc

Extended development is under way at Veri-Q relating to the research into the
protecting/de-protecting groups in synthetic oligonucleotides and the
commercialisation strategy being pursued is running to plan with further
announcements expected later in the year.

Financial Results

The financial results for the six months to June 2003, which include the former
Aventis proteomics activities in Frankfurt for the first time, show a Headline
Loss (operating loss before non-cash operating expenses) of #2,267,873 compared
with #1,283,333 in the corresponding period in 2002. Non-cash operating expenses
were #962,573 against #96,153 in 2002. The period to 30th June 2003 also
contains a share of associates' loss at Intronn, Inc of #352,096 (2002:
#127,324). Cash at 30th June 2003 stood at #8m.

Future Prospects

The importance and value of proteins have greatly increased since the
revelations of the human genome in 2001 and proteomics is poised to play a key
role in unlocking value from functional genomics and protein expression. The
unique ProteoSHOP tool box that has been developed provides Proteome Sciences
with a considerable advantage to exploit the discovery of high value protein
biomarkers with commercial partners and which will accelerate the process of
diagnostic, prognostic and therapeutic applications.

The Company has come a very long way over the last twelve months and the
prospects for our proteomics technology and its application in human diseases
look increasingly attractive. The strategy to concentrate on proteins and
protein modifications in disease, rather than on genomics has now started to
deliver the results that had been envisaged when the original research and
business strategy was implemented and this will result in an accelerating news
flow and commercialisation process. The prospects for proteomics and the
position that Proteome Sciences has established addressing human diseases
continue to improve.

R.Steve Harris 30th September, 2003
Chairman





Unaudited Consolidated Profit and Loss Account
For the Six Months ended 30th June, 2003


                            Six months ended   Six months ended  Year ended 31st 
                             30th June 2003     30th June 2002    December 2002
                                    #                   #              #

    Turnover

    Existing Operations          108,720           34,691          100,057

    Acquisitions                       -                -           71,344
                                      ----    -------------     ------------

                                 108,720           34,691          171,401

    Cost of Sales                (64,571)         (24,631)        (131,753)
                                ----------       ----------      -----------

    Gross Profit                  44,149           10,060           39,648
                                  --------         --------        ---------

    Operating Costs           (2,345,831)      (1,294,874)      (3,527,300)
    excluding non-cash
    items


    Amortisation of             (324,480)               -         (324,480)
    Goodwill

    Depreciation                (301,271)         (79,342)        (369,845)

    N.I. on Notional            (336,822)         (16,811)         (16,207)
    Share Option Gains            --------         --------        ---------

    Total Operating           (3,308,404)      (1,391,027)      (4,237,832)
    Expenses                 -------------    -------------    -------------

    Operating Loss            (3,264,255)      (1,380,967)       4,198,184
                             -------------    -------------     ------------

    Existing Operations       (3,264,255)      (1,380,967)      (2,870,701)

    Acquisitions                       -                -       (1,327,483)
                                       ---  ---------------    -------------

    Continuing                (3,264,255)      (1,380,967)      (4,198,184)
    Operations

    Share of Associate's        (352,096)        (127,324)        (322,128)
    Operating Loss

    Interest Receivable           37,369            7,321           85,259

    Interest Payable and          (3,560)          (6,395)         (11,018)
    Similar Charges              ---------  ---------------  ---------------

    Loss on Ordinary          (3,582,542)      (1,507,365)      (4,446,071)
    Activities before
    Taxation

    Tax on Loss on                     -                -          336,485
    Ordinary Activities    ---------------  ---------------   --------------

    Loss for the              (3,582,542)      (1,507,365)      (4,109,586)
    Financial Period         -------------    -------------    -------------

    Loss per Share                          

    Headline Loss per              (1.99p)          (1.39p)          (2.97p)
    Share (Note 3c)            -----------      -----------      -----------

    Basic and diluted              (3.14p)          (1.64p)          (3.96p)
    (note 3a)                  -----------  ---------------   --------------

                                                   

Unaudited consolidated balance sheet
As at 30th June, 2003

                                               2003               2002
                                                  #                  #

Fixed Assets
Goodwill                                  5,840,641                  -
Tangible assets                           1,280,729            572,388
Associates                                  574,826          1,221,417
Other investments                           225,756            225,756
                                        -------------      -------------

                                          7,921,952          2,019,561
                                         ------------       ------------
Current Assets
Debtors                                     383,294             43,853
Cash held on deposit as short             1,164,162          2,032,637
term investment
Cash at bank and in hand                  6,749,536            556,101
                                       --------------      -------------

                                          8,296,992          2,632,591
                                       --------------       ------------

Creditors : Amounts falling              (1,750,272)          (831,181)
due within one year
                                           ________           ________
Net current assets
                                          6,546,720          1,801,410
                                         ------------       ------------

Total assets less current                14,468,672          3,820,971
liabilities
Creditors : Amounts falling
due after more than one year               (110,000)          (127,705)
                                      ---------------        -----------

Net assets                               14,358,672          3,693,266
                                        -------------       ------------

Capital and reserves
Called-up share capital                   1,189,211            961,153
Share premium account                    21,331,605         15,516,629
Other reserve                            10,755,000                  -
Profit and loss account                 (18,917,144)       (12,792,604)
Equity minority interests                         -              8,088
                                ---------------------  -----------------
Equity shareholder's funds               14,358,672          3,693,266
                                        -------------     --------------





Notes to the Financial Information

1. There has been no change to any of the accounting policies set out in
   the 2002 statutory accounts.

2. Following the loss of #3,582,542 incurred in the period, the
   Directors do not recommend the payment of a dividend.

3. a. The calculation of the loss per share for the six months
      ended 30th June 2003 is based on the loss for the financial
      period of #3,582,542 and on 114,248,076 Ordinary Shares, being
      the weighted average number of shares in issue and ranking for
      dividend during the period (six months ended 30th June 2002 -
      loss #1,507,365, number of Ordinary Shares in issue and ranking
      for dividend, 92,297,005).

   b. The calculation of the loss per share for the year ended 31st
      December 2002 is based on the loss for the year of #4,109,586
      and on 103,672,012 Ordinary Shares, being the weighted average
      number of shares in issue and ranking for dividend during the
      year.

   c. The losses used to calculate the headline loss per share are
      as follows :

                                       Six Months     Six Months    Year Ended
                                       Ended 30th     Ended 30th   31st December   
                                       June, 2003     June, 2002       2002 

                                              #              #               #



        Loss for the Financial       (3,582,542)    (1,507,365)     (4,109,586)
        Period

        Add back :
        Amortisation of Goodwill        324,480              -         324,480
        Depreciation                    301,271         79,342         369,845
        National Insurance on
        Notional Share Option
        Gains                           336,822         16,811          16,207

        Share of Associates
        Operating Loss                  352,096        127,324         322,128
                                    -------------  -------------   -------------

        Headline Loss                (2,267,873)    (1,283,888)     (3,076,926)
                                    =============  =============   =============

      The Headline loss per share is considered by the Directors to
      be a more meaningful measurement of financial performance than
      the basic loss per share as it excludes goodwill amortisation
      and other non-cash items and better reflects the cash outflow of
      the business.

4. Formal completion of the acquisition of Xzillion Proteomics GmbH &
   Co. KG (Xzillion) did not take place until the 4th July 2002 and the
   figures for the six months to the 30 June 2002 do not include the
   results of Xzillion.

5. The preceding financial information does not constitute statutory
   accounts as defined in Section 240 of the Companies Act 1985. The
   financial information for the year to 31st December 2002 is based on the
   statutory accounts for that year. These accounts, upon which the
   auditors issued an unqualified opinion, and which did not contain any
   statement under Section 237(2) or (3) of the Companies Act 1985, have
   been delivered to the Registrar of Companies.






                      This information is provided by RNS
            The company news service from the London Stock Exchange

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