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Share Name | Share Symbol | Market | Type |
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Zimmer Biomet Holdings Inc | TG:ZIM | Tradegate | 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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0.00 | 0.00% | 101.55 | 102.55 | 103.10 | 0.00 | 07:37:42 |
RNS Number:8481M Zi Medical PLC 27 June 2003 ZI MEDICAL PLC ("ZI MEDICAL" OR "THE COMPANY") PRELIMINARY RESULTS FOR THE 12 MONTHS ENDED 31 DECEMBER 2002 (Specialist developer of innovative medical device technologies with an emphasis on drug infusion therapy) KEY POINTS *Distribution and collaboration agreements have recently been signed with Baxter, the major global healthcare company. *The loss for the period was #609,000 - broadly in line with budget. *As ZiMed Ltd. was acquired via a reverse takeover in April 2002, the results include approximately five months trading of BioLife Ventures plc. *Further developments of RedEye - the company's gravity infusion monitoring device - include a GSM communications module suitable for the home care market and a catheter monitoring system *The company is developing a range of syringe drivers using a new patented method of detecting back-pressure, a problem commonly suffered by existing products. The market for these devices is significant. *Zi Medical has developed and patented some key devices for use within the consumables used with syringe drivers, volumetric pumps and RedEye which it hopes to market within the coming year. The consumables represent a greater source of revenue for manufacturers than the associated hardware. *The board is seeking further partnering arrangements with large, well established medical device businesses to accelerate sales, rather than retaining its in-house sales capability. Executive chairman, Michael Fort comments "We are very excited about the potential of, not only our current product pipeline, but also the planned developments over the next two to three years. A National Audit Office report in 2000 identified that almost a third of all serious adverse events (SAEs) in hospitals relate to the giving of fluids in one form or another. ... We will continue to concentrate on exploiting areas in patient safety in fluid infusions as we believe that this market is one that will lead to optimum shareholder returns in the medium term. " Press Enquires: Michael Fort, Executive Chairman, Tel: 07976 849470 Zi Medical PLC Zoe Biddick, Biddicks Tel: 020 7448 1000 Chairman's Statement I am pleased to report the inaugural trading results of the group for the period ended 31st December 2002. I am also particularly pleased to be able to comment further on the recent signing of the distribution and collaboration agreements with Baxter Healthcare S.A., a member of the Baxter Healthcare Inc. Group. The results include approximately five months trading as Biolife Ventures plc prior to the reverse takeover of Zimed Limited and the placing and open offer detailed in the document to shareholders dated 18th April 2002. The loss for the financial period of #609,000 was broadly in line with our expectations at the time of the acquisition. Sales of Red-Eye, the group's patient monitoring system, by the internal sales force, were lower than expected for reasons detailed below in the Operational Review, but tight management of costs across all areas of the business kept the profit and loss account in line with budget. The group has made great strides in its product pipeline development. Further enhancements have been made to the Red-Eye portfolio particularly in the development of the GSM communications module that will be ready for launch later in 2003 in order to exploit opportunities within the homecare market. The development of a family of syringe driver products is particularly encouraging as we believe the size of the global market for such products will provide the group with strong growth opportunities in the medium term. We believe that the group's unique and patented mechanism for backpressure detection presents a strong marketing edge against current product offerings. This problem increases the risk of using existing syringe drivers and its resolution is perceived as a very positive development in the field. Great emphasis will be placed over the next twelve months on ensuring this particular area of our technology is exploited to the full. Additional further products in the intravenous (IV) safety portfolio are planned for development this year. The group's cash position has remained tight throughout the year. Our initial fund raising of #562,000 just over a year ago was supplemented by a further #180,000 in March this year. The financial market's appetite for an early stage technology business such as ours has not been keen to say the least, when combined with the general stock market malaise, raising funds has proved very difficult. However, the progress made to date with limited funds has been a great achievement, especially when this has been underscored with the recent technology transfer deal with Baxter Healthcare. In order to fully exploit the exciting opportunities for our products and to put the group on a sound financial footing for the foreseeable future it will be necessary for the group to raise additional funds before the end of the current financial year. The deal with Baxter Healthcare, signed on 20th June 2003 was the culmination of months of discussion and should be seen as high-level validation of the group's technology and its ability to develop products for the worldhealthcare markets. Baxter's position as a global leader in the medical devices business, with representation in all major countries of the world, will ensure that Red-Eye will be exploited to its full potential. Further, the technology collaboration deal will allow our group to access Baxter resources during product development and will further enhance our group's ability to develop first class products in the areas of IV safety and ensure that they are commercialised on a very broad geographical front. Whilst the details of the contracts must remain confidential for commercial reasons, I can report that the royalty structure and contract minimum quantities will provide the business with an income stream for the foreseeable future. That George Gallagher and his team have been able, in such a relatively short period of time, not only to develop these new technologies but also to close deals with multi national businesses is a testament to their abilities, both technical and commercial. The group remains in discussions with a number of other major healthcare businesses and we hope to be able to announce further developments later in the year. Subject to our ability to raise the necessary funds in the short term, I remain very confident in the group's prospects for the medium to long term. We are very excited about the potential of, not only our current product pipeline, but also the planned developments over the next two to three years. We will continue to concentrate on exploiting areas in patient safety in fluid infusions, as we believe that this market is one that will lead to optimum shareholder returns in the medium term. Michael J Fort Executive Chairman Operational Review Following the acquisition of Zimed Limited and the subsequent fund raising, it had been the group's intention to complete the vertical integration of the business as a medical devices solutions provider with the Red-Eye patient monitoring system as the group's initial product offering. To this end, the group recruited a small sales force in October 2002 to promote the product direct to end-users, principally NHS hospitals. While the feedback from what was effectively the first exhaustive field trial of RedEye proved extremely useful, it also confirmed the difficulties facing a small company trying to break into a mature market. It quickly became apparent that the cash resources at the group's disposal were less than adequate to make the required impact in the UK hospital market. It was therefore decided that the sales force would be dismantled and that all efforts would be directed to the core competencies of product development. At the same time, business development activity was increased at a corporate level in order to seek out partnering arrangements with large, well-established medical device businesses, with the profile to exploit markets much more effectively. The group's strengths lie in its abilities to develop innovative medical device technologies based on current delivery methods, particularly in the areas of patient safety in drug infusion therapy. A National Audit Office Report from 2000 identified that almost a third of all serious adverse events (SAEs) in hospitals related to the giving of fluids in one form or another. The group, having identified a need in this device area, set out to build a portfolio of products, specialising in exploiting the need that clearly existed, namely: Red-Eye Further work has been undertaken on developing the Red-Eye family of products that now include a catheter monitoring system, a GSM network model that is particularly applicable to markets where homecare is a specific requirement, together with various peripheral adaptations. It is believed, from market intelligence gathered from the direct sales experience mentioned above together with research undertaken at the time of the acquisition that the potential market for Red-Eye in the UK alone is in the region of #15m per annum for the basic product at market values. Your Board believes that the recent announcement of the Baxter Healthcare contract to distribute Red-Eye is the optimum way to exploit this market and other markets in Western Europe and the rest of the world. The fact that one of the world's leading medical devices businesses has chosen to exploit our product is proof of concept of the market niche for the product. Syringe Driver Family The syringe driver market globally is very large - market estimates vary from $500m to almost $1bn. However, product development is, at best, sporadic with the main players relying on existing products, which have dominated the market for a least a decade. The group has developed a family of syringe drivers with a new patented method of detecting back-pressure in such devices - a problem with existing syringes that is a cause of a high number of serious adverse events (SAEs) each year. Zi-Medical's unique, modern product design puts the end-user first. This is particularly important with ambulatory drivers where the patient wears the product for days at a time. In therapeutic areas such as thalassemia, where there is a high concentration of younger users, it is critical for the product to appeal to the patient in order that they continue to use it. The group's development pipeline includes an ambulatory driver with a very small footprint - ideal for the thalassemia market; a standard sized ambulatory driver for the general infusion of products where there is a need for patient mobility; a low cost bedside driver to exploit the emerging countries markets, and a standard bedside driver. It is believed that exploitation of this area of product development offers the group the shortest route to profitability. Other Product Developments Whilst developing the two key product areas described above, other opportunities have presented themselves to the group. The consumables, used both in syringe drivers, volumetric pumps and Red-Eye are a bigger source of revenue for the manufacturers than the hardware itself. To this end the group has developed and patented some key devices contained within the consumables that it hopes to market within the coming year. Similarly, with the emphasis on patient safety, further early stage opportunities are being investigated. In all cases, it is planned that each new area for product development should be able to be commercially exploited within eighteen months of work commencing on its development. Financing All the plans mentioned above are clearly dependent upon the group's ability to continue to fund them. Whilst the cash position has been tight since inception, the termination of the internal sales force will save the business almost #250,000 per annum - money that is better invested in exploitation of the group's intellectual property portfolio. Each new product that is launched costs approximately #250,000 to develop to a stage that is presentable to potential partners and customers. From that point onwards a specific product development plan can be formed whereby the customer co-funds the development of the product to launch. It is critical however, that at this early stage of the group's development it is not starved of the funds that it needs to take it's existing product offerings to customer presentation stage. To this end a further round of fund raising later in this financial year is necessary. It is fundamental that the cash invested thus far can evolve into a serious product portfolio that will take the group into profit in the medium term. Board Composition Immediately following the year-end, Rhys Owen, the group's part-time managing director resigned to pursue other business interests. Steve Stocks, appointed to supervise the sales force resigned in May following the board's decision to end internal sales and concentrate instead on partnering agreements. We wish them both well and thank them for their contributions during their relatively short tenures. The current executive board comprises Michael Fort, Chairman and George Gallagher, Managing Director. We recognise the need to strengthen this area further and to add to the non-executive capacity with the appointment of at least one further member to the board in the short term. Consolidated profit and loss account for the year ended 31 December 2002 Year ended Year ended Year ended 9 month period ended 31 December 31 December 31 December 31 December 2002 2002 2002 2001 Existing Acquisitions Continuing Continuing operations operations operations #000 #000 #000 #000 Turnover - 43 43 - Cost of - (19) (19) - sales =============== =============== =============== =============== Gross profit - 24 24 - Administrative (116) (519) (635) (63) expenses --------------- --------------- --------------- --------------- Group (116) (495) (611) (63) operating loss Interest 13 7 receivable and similar income Interest (11) - payable and similar charges --------------- --------------- Loss on (609) (56) ordinary activities before taxation Tax on loss on - - ordinary activities --------------- --------------- Retained loss (609) (56) for the financial period =============== =============== Loss per ordinary share Basic and 2.02p 0.48p diluted =============== =============== The Group has no recognised gains or losses for the year (2001:period) other than those stated above and therefore no separate statement of total recognised gains and losses has been presented. The results above also represent the historical cost loss. Consolidated balance sheet at 31 December 2002 2002 2001 #000 #000 #000 #000 Fixed assets Intangible 1,871 - assets Tangible 32 - assets -------------- -------------- --- 1,903 - Current assets Stocks 40 - Debtors 51 4 Cash at bank 104 502 and in hand -------------- -------------- 195 506 Creditors: amounts falling due within one year (222) (13) -------------- -------------- Net current (27) 493 (liabilities) /assets -------------- -------------- Total assets 1,876 493 less current liabilities Creditors: amounts falling due after more than one (34) - year -------------- -------------- Net assets 1,842 493 ============== ============== Capital and reserves Called up 792 270 share capital Share premium 705 279 account Merger 1,010 - reserve Profit and (665) (56) loss account -------------- -------------- Equity 1,842 493 shareholders' funds ============== ============== Consolidated cash flow statement for the year ended 31 December 2002 Year ended Period ended 31 December 31 December 2002 2001 #000 #000 Net cash outflow from operating (623) (54) activities Return on investments and 2 7 servicing of finance Capital expenditure and (28) - financial investment Acquisitions and disposals (320) - -------------------- ------------------- Cash outflow before financing (969) (47) Financing 532 549 -------------------- ------------------- Decrease/(increase) in cash in (437) 502 the period ==================== =================== Reconciliation of net cash flow to movement in net funds for the year ended 31 December 2002 Year ended Period ended 31 December 31 December 2002 2001 #000 #000 (Decrease)/increase in cash in (437) 502 the period -------------------- ------------------- Movement in net funds in the (437) 502 period Net funds at the start of the 502 - period -------------------- ------------------- Net funds at the end of the 65 502 period ==================== =================== Notes (forming part of the financial statements) 1. *Basis of preparation The Group suffered a loss on ordinary activities for the year of #609,000 (2001: loss of #56,000) although at the current level of investment in development activities, the directors are confident that the Group will turn to profitability in the medium term. The directors estimate that the Group's funding requirements, in order to continue to exploit the current commercial opportunities over the next 12 months are in the region of #0.5m to #0.75m, against which a current bank overdraft facility of #30,000 exists. The directors are of the opinion that the recent signing of the distribution and collaboration agreements with Baxter Healthcare S.A. leave the Group well placed to approach new private investors in the short term for additional funding later in 2003 which they believe will generate sufficient working capital facilities to satisfy the forecast funding requirements. Until such time, the directors have identified a number of options to continue within its facilities. Although there can be no certainty that sufficient equity funding will be available, the directors believe it to be appropriate to prepare the financial statements on a going concern basis since they are confident that the Group will be able to secure additional funding for the next 12 months to enable it to continue to meet its debts as they fall due. The financial statements do not include any adjustments that would result from the going concern basis of preparation being inappropriate. 2. Loss per share The calculation of loss per share is based on basic and diluted losses of #609,000 (9 months ended 31 December 2001: #56,000 loss) and basic and diluted ordinary shares of 30,113,376 (2001: 11,642,827) being the weighted average number of shares in issue during the year (2001: period). 3. Acquisitions and disposals On 14 May 2002 the Company acquired the entire share capital of Zimed Limited comprising net liabilities of #291,000 for a total cost of #1,600,000. The issued share capital of Zimed Limited is #1,000 which is fully paid up. The net liabilities acquired are set out below: Book and fair value at 14 May 2002 #000 Fixed assets 66 Current assets 62 --------------- Total assets 128 Creditors (419) --------------- Net liabilities (291) Goodwill 1,891 --------------- Total cost of acquisition (including fees of #250,000) 1,600 =============== Satisfied by: Issue of 18,000,000 initial consideration ordinary 1,350 shares at 7.5p per share Issue of 353,336 ordinary shares at 7.5p per share in 27 lieu of fees Cash 223 === --------------- 1,600 === =============== In addition to the initial consideration, a maximum deferred consideration of #420,000 is payable via the issue of a further 5,600,000 2p ordinary shares at 7.5 per share. The conditions attached to the deferred consideration are in two elements as follows: (i) If the turnover for the Group for the 12 month period ended 30 April 2003 exceeded #175,000 then a maximum of 2,800,000 2p ordinary shares would have been issued at 7.5 per share (#210,000). Since the actual turnover for the 12 month period ended 30 April 2003 did not exceed #175,000 this element of the deferred consideration has expired. ii. If the turnover for the Group for the 12 month period ending 30 April 2004 reaches #2,000,000, then a maximum additional consideration of 2,800,000 2p ordinary shares will be issued at 7.5p per share (#210,000). The payment of this element of the deferred consideration is dependent on the turnover for the 12 month period ending 30 April 2004 exceeding #1,000,0000 with consideration being payable on a pro rata basis for turnover between #1,000,000 and #2,000,000. The profit and loss account of Zimed Limited for the period 1 January 2002 to 14 May 2002 included turnover of #9,000 and a loss after taxation of #92,000. The loss on ordinary activities for the 9 month period ended 31 December 2001 was #118,000. 4. Reconciliation of movements in shareholders' funds Group Year ended 31 December 2002 #000 Loss for the year (609) New share capital subscribed 1,958 ------------------ 1,349 Opening shareholders' funds 493 ------------------ Closing shareholders' funds 1,842 ================== 5. Reconciliation of operating loss to operating cash flows Year ended 31 Period ended 31 December 2002 December 2001 #000 #000 Operating loss (611) (63) Depreciation 20 - Amortisation 62 - Decrease in stock 6 - Increase in debtors (31) (4) (Decrease)/increase in (69) 13 creditors ------------------ ---------------- Net cash outflow from operating (623) (54) activities ================== ================ 6. *Analysis of cash flows for headings netted in the cash flow statement Year ended Period ended 31 December 31 December 2002 2001 #000 #000 Returns on investments and servicing of finance Interest received 13 7 Interest paid (11) - --------------- ---------------- Net cash inflow from returns on investment and servicing of finance 2 7 =============== ================ Capital expenditure and financial investment Payments to acquire tangible fixed (28) - assets --------------- ---------------- Net cash outflow from capital expenditure and financial investment (28) - =============== ================ Acquisitions and disposals Payments to acquire subsidiary (223) - undertaking Net overdraft acquired with (97) - subsidiary --------------- ---------------- Net cash outflow from acquisitions and (320) - disposals =============== ================ Financing Issue of share capital 581 549 Capital element of finance leases (2) - Repayment of bank loans (47) - --------------- ---------------- Net cash inflow from financing 532 549 =============== ================ 7. Reconciliation of net cash flow to movement in net funds #000 Decrease in cash during the year (437) Cash outflow in respect of repayment of loans and 49 finance leases ---------------- Change in net funds resulting from cashflows (388) Loans and finance leases acquired with subsidiary (92) ---------------- Change in net funds (480) Net funds at 1 January 2002 502 ---------------- Net funds at 31 December 2002 22 ================ 8. Analysis of changes in net funds At 1 Cash Acquisitions At 31 December (excluding cash 2002 and overdrafts) January flows 2002 #000 #000 #000 #000 Cash at 502 (398) - 104 bank and in hand Overdraft - (39) - (39) --------------- ------------- --------------- --------------- 502 (437) - 65 Debt due - 17 (28) (11) within 1 year Debt due - 30 (60) (30) greater than 1 year Finance - 2 (4) (2) leases --------------- ------------- --------------- --------------- 502 (388) (92) 22 =============== ============= =============== =============== 9. This report is being sent out to shareholders and copies will be made available at the Company's registered office, Unit 4, St Asaph Business Park, St Asaph, Denbighshire LL17 0LJ. ENDS This information is provided by RNS The company news service from the London Stock Exchange END FR KGGZVVVKGFZM
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