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Share Name | Share Symbol | Market | Type |
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Tessellis spa | BIT:TSL | Italy | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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-0.016 | -2.47% | 0.631 | 0.629 | 0.637 | 0.654 | 0.628 | 0.654 | 1,155,174 | 17:00:00 |
RNS Number:0834J Tissue Science Laboratories PLC 24 March 2003 24 March 2003 Preliminary Results for the year ended 31 December 2002 Strong growth in revenues in 2002 - targeting positive operating cash flow by the end of 2003 Tissue Science Laboratories plc ('TSL'), the medical devices company specialising in human tissue replacement and repair products derived from porcine dermis, today announces its Preliminary Results for the year ended 31 December 2002. Financial Highlights - Continued strong growth in revenues for 2002, with product sales increasing by 90% to #3.1m (12 months to 31 December 2001: #1.6m) - Improved gross margins of 48% (12 months to 31 December 2001: 11%) - Reduced net loss for the year of #2.3 m (12 months to 31 December 2001: #3.4m including exceptional expenses of #0.4m) - significantly better than market expectations - Solid cash position maintained, with cash at the year end of #5.4m (2001: #8.7m); the Company currently foresees no requirement to seek external funding before reaching cash generation - Targeting positive operating cash flow by the end of 2003. Current trading in line with expectations Operational Highlights - Strong growth of urology/gynaecology sales through CR Bard in US and Europe; Pelvicol now represents annual worldwide sales for CR Bard of $10m (2001: $5m) - CR Bard to further increase sales force time and spend in 2003 - US marketing operation and commission-only sales force for hernia market established and expanded - recruitment ongoing and on track to achieve national US coverage by 1Q 2003. Significant growth opportunity identified in hernia repair and current demand from surgeons encouraging - Italian distributor signed-up in 2002; further distribution partner agreements expected in 2003 - 510k approval received in November 2002 for Permacol Surgical Implant for treatment of Rotator Cuff injuries of the shoulder. Initial launch in the UK, with a marketing partner being sought for other territories - Initial launch of PermacolTM Injection Urethral Bulking Agent in August 2002 in the UK - Completion and European regulatory validation achieved in November 2002 for new production facility in Swillington. Product shipped to customers in the US and Europe Commenting on the results, Martin Hunt, CEO of TSL, said: "This was our first full year as a publicly quoted company and has been one of substantial progress. We have made a significant investment in the business as planned and as a result, we are seeing the returns through increased revenues and margins in our core surgical and implant market, the launch of our first injectable product and the completion and commissioning of our new manufacturing unit. We continue to build the product platform to support further growth and we remain on course to achieve profitability without having to return to the market for external funding." Enquiries: TSL plc Tel: 01252 333 002 Martin Hunt, Chief Executive Financial Dynamics Tel: 020 7831 3113 Melanie Toyne-Sewell / Samantha Robbins Notes to Editors Background on TSL Founded in 1995 with headquarters in Aldershot, Hampshire, TSL has used its proprietary technology to launch successfully two different formulations of the product and build a development pipeline that addresses the large and fast growing surgical implant and woundcare markets. The Company floated in November 2001 and is listed on the Alternative Investment Market. TSL has a family of products based on the same core technology. Each product has been adapted, with unique properties, to make it suitable for use in different applications. PelvicolTM/PermacolTM Surgical Implant (SI) is sold by Bard in the US and Europe for urology and gynaecology applications; PermacolTM SI (general surgery) is sold for complex hernia repair in the US and Europe; PermacolTM SI (ENT, plastic and reconstruction) is sold in Europe for head and neck applications, with an expected US launch in 2003; PermacolTM Injection (UBA) is an injectable form of PermacolTM used as a urethral bulking agent to treat female stress incontinence. Further variations of the sheet and injectable forms of PermacolTM are being developed for facial augmentation and reconstruction, and wound therapy applications. Bard is a trademark of C.R. Bard, Inc. or an affiliate. Chief Executive's Statement Review of 2002 The year of 2002, our first full year as an AIM listed company, has been one of tangible progress for TSL. We have made significant investment in sales and marketing infrastructure, clinical research and manufacturing capacity as planned. As a result of this investment, we have increased revenues and margins in our core surgical implant market, launched our first injectable product and completed and commissioned our new manufacturing unit in Swillington, Yorkshire. Strategy & Outlook Our strategy remains focused on achieving sales growth through the commercialisation of our core technology by expanding existing product applications, exploiting new geographical markets and further developing our product portfolio. We will continue to invest in highly targeted product development and clinical programmes with a view to delivering further revenue growth in 2003 and beyond. We continue to build the platform to support further significant growth in 2003. We have sufficient cash resources at December 2002 and remain on course to achieve profitability and cash generation without the requirement for further external funding. Financial Review The Company increased its product sales by 90% to #3.1m (2001: #1.6m) with significant growth being achieved both in existing market sectors, principally urology/gynaecology, and through the development of new applications for PermacolTM sheet implant in the field of general surgery for hernia repair. Our commission-based sales team in the USA was established in June and expanded in the second half of the year. The team has made a significant contribution to revenue growth in the year with sales of #0.4m (2001: nil). A further milestone was reached with the launch of PermacolTM Injection for the treatment of female stress incontinence in the last quarter of the year. Gross margins improved to 48% (2001: 11%) reflecting our move from sub-contract to in-house manufacturing and the volume and sales mix benefits arising from the launch of larger sizes of PermacolTM surgical implant. Research and development expenditure of #1.4m (2001: #1.3m) was incurred in the year in respect of the clinical trial for PermacolTM Injection UBA and other product development activities. Administrative expenses increased largely due to increased investment in marketing of #0.7m (2001: #0.4m), reflecting the development of our business in the US and as a result of higher insurance premiums of #0.4m (2001: #0.1m). Net losses were #2.3m (2001: #3.4m including exceptional expenses of #0.4m). The second half of 2002 saw a steady weakening of the US dollar, a threat to our dollar revenue streams. The Board took steps to protect revenues by hedging a proportion of US dollar currency exposure. The basic loss per ordinary share of 10.5p compares to a loss per ordinary share of 25.6p for 2001. The Company retained a solid cash position as at December 2002 of #5.4m (2001: #8.7m). Overall, results were broadly in line with our revised forecasts in terms of total revenues and significantly better than expected in terms of retained losses and the Company's cash position. Operational Review Sales and Marketing Revenues for PermacolTM Surgical implant have grown strongly in 2002 and our strategy is to market this product either directly or through marketing or distribution partners according to the market and the surgical application being addressed. The current marketing position for PermacolTM Surgical Implant can be summarised as follows: PermacolTM Surgical Implant Marketing 2002/2003: Application Market Regulatory Route to Market Status Urology/Gynaecology Worldwide 510K Marketing partner - CR Bard Inc* General/Hernia UK CE Mark Direct UK sales team General/Hernia Europe CE Mark National level distributors for main European markets General/Hernia US 510K Direct 'commission only' US sales teams Cranio/Maxillo Facial TBA 510K Marketing partner - TBA Orthopaedic TBA 510K Marketing partner - TBA *Marketed as 'Pelvicol' PermacolTM Surgical Implant - Urology/Gynaecology - CR Bard Inc CR Bard has worldwide rights to the sheet form of our technology in the field of urology and gynaecology where it is used for pelvic floor repair and in the treatment of incontinence. Following the launch in Europe in 2000 and in the US in 2001, sales of PelvicolTM have grown strongly. In 2002, CR Bard's European and US operations recorded in-market sales growth of 114% and 100% respectively. The PelvicolTM brand now represents annual sales for Bard of $10m (2001: $5m). In 2002, total revenues to TSL on sales of PelvicolTM increased to #2.3m (2001: #1.4m). To support further sales growth and market penetration, Bard has increased both sales force time and marketing spend on PelvicolTM for 2003. As announced in January, we have signed an agreement with Bard to develop a new product in this field, for launch in the second half of 2003. - General Surgery - Hernia Repair Our direct sales and marketing team has been selling PermacolTM Surgical Implant in the UK since 1998 and has enjoyed considerable success in the field of hernia repair. With this in mind and in the absence of a marketing partner offering us synergy in general surgery, we launched our commission-only sales team in the US in June 2002, initially deploying 6 representatives. This team promotes PermacolTM for difficult and recurrent hernias where traditional mesh is either not indicated or has to be removed. The size of this market sector is estimated at $120m pa. The response from US general surgeons has been very positive and, as a result, we have built our team up more quickly than originally envisaged to 35 representatives by the end of 2002. From a zero base, we achieved US sales of $0.6m in 2002, with particular success from larger sizes of PermacolTM in response to demand from surgeons. We plan further recruitment and we anticipate continued sales growth in this key target market in 2003. - Cranio/Maxillo Facial - Head and Neck The TSL sales team in the UK has sold PermacolTM into the head and neck field since 1998 and has demonstrated the benefits of the technology in a range of surgical procedures. Since being awarded a 510k regulatory approval for the US market in January 2002, our strategy has been to identify an appropriate marketing partner for PermacolTM Surgical Implant in this field, worth an estimated $60m pa. Discussions with potential partners are ongoing and we remain confident that the right deal for TSL will be completed in the short to medium term. Whilst our preference is for a marketing partner to be appointed, in the event that a distribution deal is not completed in the above time frame, our strategy, as stated in the interim results, will be to market PermacolTM in this field directly via our commission-based sales team in the US. - Orthopaedic - Rotator Cuff Repair In November, we announced the award of another 510k approval for PermacolTM Surgical Implant for the treatment of rotator cuff injuries of the shoulder. This condition is a common occurrence with age or overuse, and as a result of sporting injuries. Severe cases can require surgical intervention and repair. In the US, there are some 300,000 rotator cuff injuries every year, 15% of which suffer from post surgical tearing. We estimate that the immediate target market in the US for TSL is worth between $45m and $70m per annum. Our sales team in the UK have been targeting this surgical procedure with success during 2002, and we are actively seeking a marketing partner to exploit this opportunity in the US and other key markets. - PermacolTM Injection - Urethral Bulking Agent In August, we announced the limited European launch of our first injectable product for the treatment of female stress incontinence, an area of significant unmet medical need. Marketed directly in the UK by our sales team, our first sales of this product were made by the year-end. Our strategy is to focus sales and marketing resource on this area in the coming year and we will rollout the product into the core European markets as distributors are identified and signed. The key market for this product will, however, be the USA with an estimated 7.7m sufferers of this condition. Our current clinical activity is expected to support US regulatory submission in 2003 for product approval anticipated in 2004. Clinical Programmes - PermacolTM Injection (Urethral Bulking Agent) Patient recruitment for this major clinical trial was completed in June. A twelve-month period of patient follow-up will result in a submission to the FDA for a PMA (Pre-Marketing Approval) by the end of 2003 with product approval anticipated in late 2004. - Pilot clinical studies Utilising our in-house resource, we continue to conduct our own pilot studies and to work with surgeons in assessing our technology for particular applications. During 2002, several such studies have been completed and submitted for publication in peer review journals. This is a highly cost effective way to generate clinical data and we will continue to invest in this area in 2003. Research Whilst TSL is principally focused on development at this stage in its evolution, we also have research programmes running in academic institutions, for which we have secured Government grants. We have a SMART award from the DTI to investigate the growth of cells in our collagen matrix, and a MedLINK award from the NHS, in conjunction with Northwick Park Institute for Medical Research, looking at how such cellular infiltration could be applied to wound care products. We expect to be in a position to review the technical outcome and commercial potential of these programmes in late 2003. Regulatory During the year, we have been active in making regulatory submissions to gain access to new markets such as Canada, Australia, and Korea. Once gained, these approvals will represent a useful extension to the marketing potential of our products. Manufacturing 2002 saw a major step forward for TSL with the completion and regulatory validation of our new production facility at Swillington, Yorkshire. Building and fit-out was completed on budget and the operation has been designed to meet FDA requirements, accepted as being the most rigorous medical device approval standards. European regulatory validation of the facility was completed in November when qualification of the production unit to the new ISO 9000 2000 standard was achieved. The first shipment of product from the facility has now been delivered to customers. This represents a commendable achievement for our manufacturing, regulatory and quality assurance teams and we thank them for their considerable endeavours in the year. Staff The year saw further investment in the TSL team, particularly in the areas of marketing, new product development and manufacturing. We are delighted with the progress made during the year, which has only been made possible by our ability to attract and retain high calibre staff. On behalf of the Board, I thank the entire TSL team for their continuing efforts and look forward to further success in the coming year. Current Trading and Outlook In September we updated the financial markets with our expectations for our business in 2003, with full year revenue growth in 2003 expected at a comparable rate to that achieved in 2002. I am pleased to report that current trading remains in line with these expectations. Martin Hunt Chief Executive Officer Tissue Science Laboratories plc Consolidated Profit & Loss Accounts for the Year Ended 31 December 2002 Year Ended Year Ended 31 December 31 December 2002 2001 (Audited) (Audited) #000s #000s ______ ______ TURNOVER: 3,167 1,706 Cost of Sales (1,651) (1,512) Gross Profit 1,516 194 Selling & Distribution costs (644) (302) Administrative Expenses Research and development costs (1,397) (1,293) Other administrative expenses (2,287) (1,522) Exceptional administrative expenses - (184) Total administrative expenses (3,684) (2,999) Operating Loss (2,812) (3,107) Interest Receivable 217 28 Interest Payable & similar charges Bank & finance lease interest (20) (54) Exceptional finance costs - (239) LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (2,615) (3,372) ______ ______ Tax on ordinary activities 285 - RETAINED LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (2,330) (3,372) ______ ______ Basic loss per ordinary share (pence) 10.5 25.6 All amounts relate to continuing operations. There were no recognised gains and losses for the current or preceding period other than those included in the profit and loss account. No dividend has been paid or is payable in either the current or prior periods. Tissue Science Laboratories plc Consolidated Balance Sheet as at 31 December 2002 Year Ended Year Ended 31 December 31 December 2002 2001 (Audited) (Audited) #000s #000s ______ ______ Fixed Assets Tangible assets 1,576 857 Current Assets Stocks 386 172 Debtors 1,005 875 Cash at bank and in hand 5,445 8,711 6,836 9,758 Creditors: amounts falling due within one year (1,824) (1,925) NET CURRENT ASSETS 5,012 7,833 Total assets less current liabilities 6,588 8,690 Creditors: amounts falling due after more than one year (346) (176) NET ASSETS 6,242 8,514 ______ ______ CAPITAL & RESERVES Called up share capital 2,212 2,212 Share premium account 12,477 12,477 Shares to be issued 104 46 Merger reserve 545 545 Profit & loss account (9,096) (6,766) EQUITY SHAREHOLDERS' FUNDS 6,242 8,514 ______ ______ Tissue Science Laboratories plc Consolidated Cash Flow Statement for the year ended 31 December 2002 Year Ended Year Ended 31 December 31 December 2002 2001 (Audited) (Audited) #000s #000s ______ ______ Net cash outflow from operating activities (2,889) (2,274) Returns on investment and servicing of Finance 195 (265) Taxation 285 - Capital expenditure & financial investment (1,018) (626) Cash outflow before use of liquid resources & financing (3,426) (3,165) Financing Net cash inflow from financing 205 11,720 (Decrease)/increase in cash in the period (3,222) 8,555 RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET FUNDS (Decrease)/increase in cash in the period (3,222) 8,555 Cash (inflow) from movement in debt & lease financing (205) (249) Change in net funds resulting from cash flows (3,427) 8,306 New finance leases (19) - Currency translation difference (43) (5) Movement in net funds in the period (3,489) 8,301 Net funds brought forward 8,435 134 Net funds carried forward 4,946 8,435 Tissue Science Laboratories plc Notes 1. ACCOUNTING POLICIES AND BASIS OF PREPARATION The financial information set out in this announcement does not constitute the Company's statutory accounts for the year ended 31 December 2002 or for the year ended 31 December 2001, but is derived from those accounts. Statutory accounts for the year ended 31 December 2001 have been delivered to the Registrar of Companies and those for the year ended 31 December 2002 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under s237(2) of (3) Companies Act 1985. The financial statements for the year ended 31 December 2002 have been prepared after taking into account the financial reporting standard FRS 19, Deferred tax. The adoption of FRS 19 has had no impact on the Company's financial statements. The accounting policies adopted are consistent with those adopted in the previous period except for the application of FRS 19. 2. TURNOVER Year ended Year ended 31 December 31 December 2002 2001 (Audited) (Audited) #000s #000s ______ ______ A geographical analysis of turnover by destination is as follows: United Kingdom 383 183 Europe 634 221 USA 2,150 1,302 3,167 1,706 ______ ______ An analysis of turnover by class of business is as follows: Product sales 3,105 1,636 Milestone income 62 70 3,167 1,706 ______ ______ 3. EXCEPTIONAL ITEMS Year ended Year ended 31 December 31 December 2002 2001 (Audited) (Audited) #000s #000s ______ ______ Administrative expenses Patent cost written off - 130 Flotation costs not chargeable to share premium account - 54 - 184 Interest payable and similar charges Costs associated with obtaining bridging loan finance - 239 4. LOSS PER SHARE Year ended Year ended 31 December 31 December 2002 2001 (Audited) (Audited) #000s #000s ______ ______ Loss per ordinary share has been calculated based on the weighted average number of ordinary shares in issue during the period Loss for the period (2,330) (3,372) Basic loss attributable to ordinary shareholders (2,330) (3,372) Weighted average number of ordinary shares 22,119,338 13,161,477 Loss per share 10.5p 25.6p 5. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES Year ended Year ended 31 December 31 December 2002 2001 (Audited) (Audited) #000s #000s ______ ______ Operating loss (2,812) (3,107) Depreciation and impairment of tangible fixed assets 322 297 (Increase) in debtors (127) (716) (Increase) in stocks (213) (115) (Decrease)/increase in creditors (157) 1,316 Profit on disposal of fixed assets (4) Foreign exchange loss/gain 43 5 Shares to be issued 59 46 (2,889) (2,274) This information is provided by RNS The company news service from the London Stock Exchange END FR MGGZFRMVGFZM
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