We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Biofusion | LSE:BFN | London | Ordinary Share | GB00B05L5X50 | 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% | 86.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
RNS Number:6747F
Biofusion PLC
15 October 2007
For immediate release 15 October 2007
BIOFUSION PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 JULY 2007
"A Strong Year of Growth"
Biofusion plc (AIM: BFN), the university IP commercialisation company that turns
world class research into business, is pleased to announce its Preliminary
Results for the year ended 31 July 2007.
Highlights:
* Trebled the research pipeline, for which we own exclusive rights, to #114m
(31 July 2006: #37m) by signing an exclusive 10 year pipeline agreement with
Cardiff University ("Cardiff"). Cardiff is one of the UK's leading research
intensive universities, ranked 7th in the most recent RAE (Research
Assessment Exercise) based rankings
* Expanded the business to include world class research in energy,
environment, engineering and IT
* Raised #7.8m to invest in Cardiff Intellectual Property ("IP"),
increasing total cash funds to #10.6m (31 July 2006: #5.9m)
* Increased the number of companies in our portfolio to 24 (31 July 2006:12)
* Created four new companies (31 July 2006: 2): Biohydrogen, Absynth
Biologics, Medella Therapeutics, Biofusion Licensing
* Exited our 9% shareholding in Plasso Technologies
* Invested or committed to invest up to #3.3m in 14 portfolio companies to
support their continued development.
Post Review End Highlights:
* In September 2007 announced that we had signed a co-investment Memorandum
of Understanding ("MoU") with Finance Wales which provides priority
access to Finance Wales' substantial investment funds
* In October 2007 announced that we had sold our 50% stakes in each of Cardiff
Protides and Cardiff Biologicals to Morvus Technology Ltd ("Morvus") in
return for a 20% shareholding in Morvus
* In October 2007 announced that we signed an exclusive licence agreement with
an undisclosed leading US reproductive testing laboratory to sell the Plan
Ahead test in the USA and Canada.
Commenting on this announcement, David Baynes, Chief Executive Officer of
Biofusion, said: "I am pleased to report on what has been a very active growth
period for Biofusion. The key highlight of the year was signing the exclusive
partnership with Cardiff University - this was a major endorsement to Biofusion
and strengthened our research and IP position significantly. We have also
expanded our business into sectors outside of healthcare and have created new
companies. We have been encouraged by the calibre of management teams that we
have been able to attract for our portfolio companies as they mature. We look
forward to further growth and some pipeline exits in the forthcoming year."
For further information please contact:
Biofusion +44 (0)114 275 5555
David Baynes, CEO
Buchanan Communications +44 (0)20 7466 5000
Lisa Baderoon / Mary-Jane Johnson / Catherine Breen
CHAIRMAN'S STATEMENT
I am delighted to announce Biofusion's results for the year ended 31 July 2007,
which has been a year of significant progress and expansion.
In this our last year under UK GAAP, before we transfer to International
Financial Reporting Standards (IFRS), we report turnover of #0.4m (2006: #0.3m),
and losses of #2.9m (2006: loss of #1.9m), which were broadly in line with
budgets. Under UK GAAP no allowance is made for the increase in the value of our
portfolio company investments, which are currently held at cost less impairment
in value. Going forward, increases in the fair value of our portfolio companies
will be shown in the profit and loss account, consistent with the approach taken
by our competitors.
Cardiff University
Our partnership with Cardiff is a significant milestone that has enabled us to
build on our successful partnership with the University of Sheffield, and secure
access to a second high quality Intellectual Property (IP) pipeline as well as
enabling us to expand our portfolio into non-life science sectors such as
engineering, energy, environment and computing.
Cardiff is the 7th ranked research intensive university in the UK and recently
announced its second Nobel Prize winner, Professor Sir Martin Evans who won the
Nobel Prize for Medicine in October 2007.
In conjunction with the Cardiff Agreement and the #7.8m Placing, Biofusion
created a dedicated investment fund of #8.2m, in a new wholly owned subsidiary,
Fusion Cardiff Limited, exclusively for investing in Cardiff portfolio
companies.
We now have exclusive IP pipeline agreements with two of the UK's top 10
research intensive universities and are confident that our model will continue
to be attractive to high quality research intensive universities both in the UK
and overseas.
Investments during the period
During the year we invested, or approved facilities for investments, of #3.3m,
which has been used to fund the creation of 4 new companies and the continued
development of 12 portfolio companies.
We continue to believe that our portfolio has a balanced mix of short, medium
and long term investments and that we remain committed to, and focused on, our
core strategy, which is to achieve high value exits from our portfolio of
companies, at the appropriate time, to realise their value to our shareholders.
Finance Wales MOU
Post year end on 21 September 2007 we signed an MoU with Finance Wales, the
provider of commercial funding to Wales-based businesses, detailing a
co-investment strategy for investing in opportunities arising from Biofusion's
exclusive IP pipeline agreement with Cardiff University. Finance Wales already
manages funds of more than #100m and has invested #75m in Wales.
Exits
During the year as part of the sale of Plasso Technology (UK) Limited (Plasso)
to Becton Dickinson and Company, Biofusion disposed of its 9% shareholding in
Plasso. Financial terms of the deal were not disclosed.
Post year end, on 10 October 2007, we announced that we had sold our equity
shareholdings in Cardiff Protides and Cardiff Biologicals to Morvus a privately
owned pharmaceutical company specialising in the discovery and development of
novel oncology therapies.
Morvus has raised over #3.4 million in equity finance to date and its most
recent funding, largely concluded in July 2007, valued Morvus at approximately
#12m, based on a price of 30p per share. As a result of the sale Biofusion now
owns 13,698,630 shares in Morvus, giving it a 20% shareholding in the enlarged
Morvus group.
Morvus' expertise in oncology based pharmaceutical development convinced us that
the new combined company could be a world leader in the provision of specialist
oncology drugs and provided the best opportunity for bringing Cardiff Protides'
and Cardiff Biologicals' lead compounds to market.
Directorate Change
In January 2007 Mr Mike Davies, who is Director of Physical and Financial
Resources for Cardiff University, became a Non-executive director of the Board.
We welcome him onto the Board of Biofusion.
Adoption of International Financial Reporting Standards
From 1 August 2007 Biofusion will adopt International Financial Reporting
Standards (IFRS). This will have a significant impact on the reporting of the
Company's financial performance, as changes in the carrying value of our
portfolio company investments will be recognised in the profit and loss account.
At present Biofusion carries all these investments at cost. The directors
believe this does not reflect the true value of the portfolio.
The adoption of IFRS will bring the company's reporting in line with its major
competitors.
Outlook
In fields as varied as drug discovery, alternative energy and engineering, we
now own the rights to a truly significant depth and quality of research from two
of the UK's leading universities. This has enabled us to create a growing
portfolio of companies based on some of the world's most advanced and exciting
science. Our focus continues to be to expand this portfolio, maximise the value
of these companies and then exit these companies, at the appropriate time,
either through trade sale or IPO.
We look forward with considerable optimism to the next financial year.
Doug Liversidge CBE
Chairman
15 October 2007
Chief Executive's Review
This has been an excellent year for Biofusion in which we have continued to
expand both our university base and our portfolio of companies.
The Cardiff Pipeline
The Cardiff Agreement gives Biofusion exclusive rights, over 10 years, to all
Cardiff's rights to IP generated by Cardiff research, and to commercialise this
IP through the formation of portfolio companies. The Directors estimate that the
research spend available to Cardiff over the life of the Cardiff Agreement will
be well in excess of #1 billion. Biofusion will initially hold 100 per cent of
the equity in each new Cardiff portfolio company and will then allocate an
appropriate proportion to the academics involved in these companies.
Transferred Portfolio Companies
As part of the Agreement Cardiff's shareholding in seven existing companies (see
table below) were transferred to Biofusion, in return for loan notes of #1.4m
(#1.65m including the post year end transfer of Cardiff Biologicals).
Company name Potential fully diluted
Biofusion
Shareholding (%)
Abcellute Ltd 24.08
Art of Xen Ltd 31.58
Cardiff Protides Ltd 22.50
Insect Investigations Ltd 10.00
Medaphor Ltd 32.03
Muscagen Ltd 12.97
Q Chip Limited 20.35
Cardiff Biologicals* 25.00
*Cardiff Biologicals shareholding was transferred to Biofusion on 2 October 2007
Cardiff University, established in 1883 has an international reputation for the
quality of its teaching and research. In August 2004 Cardiff merged with the
renowned University of Wales College of Medicine, one of the UK's leading
medical schools, and now has more than 5,000 staff and 22,000 students.
A member of the exclusive Russell Group of research-led universities, Cardiff is:
* ranked 7th in the latest RAE (2001) based on average weighted RAE grade;
* ranked joint 8th in the latest RAE (2001) for the number of schools rated
"5" and "5*" (being the highest ratings) in areas which the Directors
consider to be the most likely to generate IP with commercialisation
potential; and
* ranked 5th in the Times Higher Education Supplement 2006 review of
university income generated from IP.
In the year to 31 July 2006 Cardiff had a research income of #77 million
representing a 51 per cent increase over the last two years and has invested
over #100 million in its infrastructure over the last five years. In July 2007
Cardiff announced that it was on course for a record breaking research income
year and had already secured research contract awards in excess of #100m.
Our portfolio companies
We now have 24 companies in our portfolio:
Portfolio companies as at 31 July 2006 12
New companies started/acquired in the year 13
Companies exited during the year 1
Portfolio companies as at 31 July 2007 24
New companies added post year end 1
Companies exited post year end 2
During the year we invested, or approved facilities for investment, in the
following portfolio companies
Year to 31 July 2007 Post period end
Invested Committed not yet Invested Outstanding
invested commitments
Abcellute #56k #200k #200k -
Absynth Biologics #140k #185k - #185k
Aperio #79k - - -
Asterion - #265k - #265k
Axordia #378k #115k #75k #40k
Biohydrogen #54k #146k #25k #121k
Cardiff Biologicals - - #200k -
Cardiff Protides - - #200k -
Celltran #161k #150k #75k #75k
Diurnal #126k #99k - #99k
Genophrenix #198k - - -
Lifestyle Choices #68k - - -
Medaphor #10k - - -
Medella #64k #256k - #256k
Phase Focus #314k #86k - #86k
Q-Chip #47k #78k - #78k
Total #1,695k #1,580k #775k #1,205k
Successes in our portfolio during the period include:
Asterion - Biofusion shareholding 34%
* Asterion is developing next-generation therapeutic proteins with superior
pharmacological profiles that will improve the current treatment options for
patients with chronic diseases. It owns a novel, patented therapeutic
platform technology, ProFuseTM, which has tremendous utility and versatility
and can be applied to a huge number of cytokine families and targets to
generate novel, IP-protected, next-generation biopharmaceutical products.
* Asterion's most advanced product is a long-acting growth hormone (GH)
agonist product for the treatment of growth disorders, which is being
developed in a strategic alliance with Ipsen. The company has internal
programmes for other cytokine targets which include erythropoietin
(AFTTM-EPO), G-CSF (AFTTM -GCSF), interferons (AFTTM -Inteferon Alpha and
AFTTM -Inteferon Beta) and leptin (AFTTM -Leptin).
* Post year end Asterion's technology, exemplified with GH, was published
in the world renowned scientific journal 'Nature Medicine'. The current
therapeutic procedure for GH replacement in adults and children requires
once daily injections of GH which are inconvenient, expensive and can be
painful. The Nature paper reports that tests with the Asterion version of
GH showed that a single injection promoted growth for 10 days, which is far
superior when compared with conventional GH. The ability to apply this
technology to create a wide variety of therapeutic proteins lead the
directors to believe that this technology can lead to a next generation of
recombinant protein therapeutics.
* During the year we strengthened Asterion's management team with the
appointment of Dr Kevin Bryett as Chairman, Dr Raymond Barlow as CEO and
Dr David Lawrence as a Non-executive Director.
* During the year we committed to invest a further #265k in Asterion
Simcyp - Biofusion shareholding 25%
* Simcyp's informatics platform and consultancy services enable
pharmaceutical companies to simulate drug behaviour in humans prior to running
clinical trials. The software uses virtual population data, rather than data
from just one 'average' individual. This allows patients at extreme risk from
adverse reaction to be identified at an early stage. In addition, potential
drug-drug interactions can also be predicted, thus enabling Pharmaceutical
companies to tailor their testing programmes on humans in an informed way.
Simcyp continues to expand its operations with turnover up 34% year on year at
#1.99m (2006: #1.48m) and profits up 39% to #0.53m (2006: #0.38m).
Diurnal - Biofusion shareholding 60%
* During the year Diurnal, which owns the patent rights to ChronocortTM, a
modified release formulation of hydrocortisone to treat adrenal insufficiency,
announced that Phoqus Pharmaceuticals Ltd, the speciality pharmaceutical company
with whom it is developing ChronocortTM, had raised #6.5m, gross of expenses, to
progress ChronocortTM into Phase III clinical trials. The product is designed to
release hormone at concentrations that mimic the natural level of hormone in the
body. This is considered very important in controlling disease symptoms and
reducing unwanted side effects. ChronocortTM, which has European Orphan
Medicinal Product designation, is expected to be ready for market within two
years generating significant royalty revenues for Diurnal in a market worth in
excess of #100m.
* During the year we invested #126k and committed to a further investment
of #99k to expand its product pipeline and fund development work on three
additional patented products.
Phase Focus - Biofusion shareholding 56%
* Phase Focus is developing an alternative approach to microscopy and
imaging that does not require sophisticated lenses and has applications in
optical, x-ray and electron microscopy, amongst others. Phase Focus, owns the
rights to patents for a process that can generate high definition images of an
object without the need for the high quality lenses that account for a
significant element of the cost of high-performance microscopes. The directors
believe that Phase Focus' breakthrough technology has the potential to create a
new generation of 'lensless' microscopes, which will produce better images at a
lower cost in a market which is forecast to grow to $1.6 billion by 2009.
* During the year we invested #314k in Phase Focus and committed to invest
a further #86k
Absynth Biologics - Biofusion shareholding 60%
* During the year we created Absynth Biologics, which is developing
vaccines and antibodies to treat infections caused by the bacterium
Staphylococcus aureus (S. aureus), including its more difficult-to-treat
drug-resistant form, methicillin-resistant S. aureus (MRSA). Hospital acquired
infections are an increasing public health concern and are responsible for a
rise in the number of hospital deaths. Absynth's unique patented technology has
been developed at the University of Sheffield and initially is being used to
develop an MSRA vaccine and antibodies to treat significant MRSA related
infections as well as other applications.
* During the year we invested #140k in Absynth Biologics and committed to
invest a further #185k
Axordia - Biofusion shareholding 45%
* Axordia, one of the UK's leading stem cell companies, announced it had
received significant support for its research programme, in collaboration with
Sheffield and Lombard Medical Technologies, through a #0.9m grant from the DTI
and MRC, for the development, through to clinical trials, of a regenerative
stent - a new generation treatment for cardiovascular disease. Axordia also
announced its participation in the European Commission "ESTOOLS" programme.
ESTOOLS is a world leading Euro12m stem cell research initiative that will advance
the fundamental understanding and biomedical applications of human embryonic
stem cells.
* Axordia is a major partner in the London Project to Cure Blindness, to
which Axordia will be supplying all the RPE cell lines. This Project that has
funding of #4m, plans to complete human trials to cure Age Related Macular
Degeneration (AMD) within 4 years.
* During the year we invested #378k in Axordia taking our shareholding to
45%
Q-Chip - Biofusion shareholding 10%
* Q-Chip develops advanced life science and therapeutic products using its
proprietary MicroPlant platform for the production of precision loaded
polymer microspheres. In July 2007 Q-Chip secured #2m of equity investment
from groups including CPF, E-Synergy, Finance Wales, John Moulton and
Biofusion. This investment should enable Q Chip to develop and exploit three
core precision microsphere products:
* ReaX - for advanced bead based molecular reagents and cell assays
* BiologiX - benign and efficient encapsulation system for the delivery
and sustained release of biopharmaceutical drugs
* IonX - microsphere system for delivery and controlled release of small
molecule therapies.
* During the year we invested #47k in Q-Chip and committed to invest a
further #78k
Magnomatics - Biofusion shareholding 54%
* In April 2007 we announced that we had taken over the University of
Sheffield's 55% shareholding in one of their non-life science spin out
companies, Magnomatics Ltd ("Magnomatics"). Magnomatics specialises in the
development of novel high-torque magnetic gearboxes, motors and generators for
use within wind turbine power generation, transportation and domestic energy
products.
* High-torque mechanical gearboxes, such as those used in the expanding
domestic and industrial wind power generation market, can suffer expensive
permanent damage if a gusting wind applies too great a load to their mechanical
drive systems. Magnomatics patented 'pseudo' direct drive motor/generator
systems removes the risk of expensive damage from high winds with the added
benefit of being lighter, lubrication free and more efficient than a
conventional high torque gearbox. The technology has additional applications in
the aerospace and hybrid vehicle markets.
* Magnomatics trades profitably.
Biohydrogen - Biofusion shareholding 60%
* In April we announced the creation of Biohydrogen Limited ("Biohydrogen
"), which is developing a metabolically engineered microbial production method
for producing hydrogen from fermentable sugars and water. Initial results
indicate that this unique method of production has the potential to be at the
forefront of new low carbon fuel technology developments.
* There is significant interest in all forms of renewable 'clean' energy
technologies to combat global warming, in response to the depletion of and
increasing price of fossil fuels and to address energy security problems.
Biohydrogen aims to develop a unique microbiological method of producing
hydrogen for the industrial hydrogen market and any future hydrogen energy
related market.
* The company's offices and laboratories are based in Sheffield's
Bioincubator.
* During the year we invested #54k in Biohydrogen and committed to invest
a further #146k
Abcellute - Biofusion shareholding 34%
* Abcellute's patent protected cell stabilising platform technology
enables the non-frozen preservation and transport of live organ-derived cells
without the loss of viability or function. The Abcellute product is currently
being sold to pharmaceutical companies in the UK, Europe and Japan for
pre-clinical drug testing and the company is actively expanding these sales to
Asia and the USA. In the long-term, the company plans to develop the
preservation technology to provide products for cell-based therapeutics.
* During the year we invested #56k in Abcellute and then subsequent to the
year end, Abcellute raised #400k from Biofusion (#200k) and Finance Wales
(#200k), increasing Biofusion's shareholding to 34%.
Plasso Technology - Biofusion shareholding 9%
* During the year as part of the sale of Plasso Technology (UK) Limited
(Plasso) to Becton, Dickinson and Company), Biofusion disposed of its 9%
shareholding in Plasso. Financial terms of the deal were not disclosed.
Lifestyle Choices - Biofusion shareholding 60%
* Lifestyle Choices sells the Plan Ahead test which is a patented triple
hormone ovarian reserve test that helps a women to make a more informed decision
about whether to try for a baby sooner rather than later.
* In October 2007 Lifestyle Choices announced it had signed a licence
agreement with an undisclosed leading US reproductive diagnostics company (the "
Partner"), for the exclusive rights to sell the Lifestyle Choices' Plan Ahead
test, which helps measure a woman's egg reserves, in North America and Canada.
Under the terms of the agreement, the Partner will be given exclusive rights to
market, sell and distribute Plan Ahead in North America and Canada through its
extensive network of specialty physicians. Lifestyles Choices will receive an
agreed fee, on a sliding scale, per test that is sold with a commitment by the
Partner to selling an agreed minimum number of tests per year. The Partner
expects to commence sales of the Plan Ahead test at the end of 2007.
Subsequent to the year end we announced the addition of one more company to our
portfolio, an investment in two companies and the sale of two companies to
Morvus:
Cardiff Biologicals - Biofusion shareholding 50%
* In September, as part of the Cardiff agreement, we took over Cardiff's
25% share holding in Cardiff Biologicals. Cardiff Biological's technology is
based on Professor Wen Jiang's research specialising in anti-angiogenesis
products for the treatment of cancer. Their lead compound is KVE702, a novel,
hybrid molecule combining anti-angiogenic activity and endothelial cell
regulatory activity. KVE702 has completed its research phase and is now ready to
enter full development. This protein comprises two functional sequences each
with a different mode of action and so has the potential for dual action giving
rise to a greater anti-angiogenic activity.
* Subsequent to taking over the University's 25% shareholding, Biofusion
invested #200k, increasing our shareholding to 50%.
Cardiff Protides - Biofusion shareholding 50%
* Cardiff Protide's technology is based on Professor Christopher
McGuigan's research which enables the discovery of new and improved nucleoside
based drugs. This approach has been successfully utilised with a number of major
pharmaceutical companies in the anti-viral field and has more recently been
applied in the anti-cancer field. Cardiff Protide's vision is to become a
leading developer of cutting edge nucleoside based pharmaceuticals targeted at
areas of unmet medical need, initially for the treatment of cancer.
* Subsequent to the year end Biofusion invested #200k, increasing our
shareholding to 50%.
Sale of Cardiff Protides and Cardiff Biologicals to Morvus
* On 10 October 2007 Morvus, a privately owned pharmaceutical company
specialising in the discovery and development of novel oncology therapies,
acquired Biofusion's shareholdings in Cardiff Protides and Cardiff Biologicals.
* Morvus' facilities at their new laboratories in Wales, combined with
their expertise in pharmaceutical development, convinced the board of Biofusion
that the new combined company could be a world leader in the provision of
specialist oncology drugs and provided the best opportunity for bringing Cardiff
Protides and Cardiff Biologicals exciting lead compounds to market.
* Morvus has raised over #3.4 million in equity finance to date and it's
most recent funding, largely concluded in July 2007, valued Morvus at
approximately #12m, based on a price of 30p per share. As a result of the sale
Biofusion now owns 13,698,630 shares in Morvus, giving it a 20% shareholding in
the enlarged company.
* However, the valuation of the transaction is based on Morvus' last
funding round and given that these shares were privately held, the directors of
Biofusion will take a conservative view to recognising this value in Biofusion's
accounts. Our intention will be to re-evaluate this value at Morvus' next third
party funding round.
Financial Review
Results
* The group's reported loss for the year increased by 53% to #2.9m (2006:
#1.9m), but was broadly in line with budget. The losses reflect the
incremental costs of the Cardiff operations for the last six months of the
financial year and an increase in the number of portfolio companies
classified as subsidiaries, for which overheads and losses are consolidated
into the group's results.
* Turnover has increased by 26% to #351k (2006: #279k) and represents the
amounts charged to associated companies for management services provided and
the turnover of consolidated portfolio companies. The gross profit margin of
91% is consistent with 2006.
* Administrative expenses for the year, before exceptional items, were #3.0m
(2006: #1.4m). This increase was due to the following:
* incremental costs associated with operations established alongside
Cardiff University, within the Fusion Cardiff subsidiary #170k;
* increased expenditure incurred in newly acquired/created portfolio
subsidiaries #208k;
* increased expenditure in existing portfolio subsidiaries #584k (2006:
#285k) as they continue through their research and development phases; and
* impairment of fixed asset investments #653k.
* As a result of the Cardiff University pipeline agreement, an intangible
asset of #15.9m was recognised in accordance with FRS10 "Goodwill and
intangible assets". The asset is being amortised on a straight line basis
through the profit and loss account over the length of the agreement. The
charge of #0.9m has been represented within exceptional items by virtue of
its size in comparison to normal administrative expenses.
* The Company's adoption of FRS20 "Share-based payments" has resulted in a
prior year restatement and exceptional charge of #1.3m. This principally
relates to the warrants granted to NPI Ventures on 23 March 2006. This
charge has no impact on net assets and will not be recurring. Also included
in the prior year was a #0.2m net credit following the impairment of
goodwill relating to the acquisition of Bioacta Limited and the release of
related loan notes and accrued interest.
* Interest income increased 53% to #535k (2006: #349k) as a result of the
increase in the group's cash holdings and interest relating to loans made to
the group's portfolio companies. Interest payable of #195k (2006: #102k)
relates to interest accrued on the loan notes used to purchase the group's
shareholding in portfolio companies acquired as part of the Sheffield and
Cardiff agreements. These amounts are only payable in the event of an exit,
and are not considered to be a current liability.
* During the year investments on the balance sheet increased to #4.5m (2006:
#3.4m). The increase in the year was made up of both equity investments and
convertible loan investments, plus accrued interest, in a number of our
portfolio companies. The principal increase was the #1.4m acquisition of the
interests in seven companies associated with the Cardiff Agreement.
* Amounts falling due greater than one year rose to #3.3m (2006: #2.0m). The
increase is the net impact of loan notes of #1.4m issued as part of the
Cardiff Agreement from the acquisition of the seven companies plus accrued
interest arising in the year and a #0.4m repayment of a loan note to the
University of Sheffield following the disposal of the holding in Plasso
Technology Limited.
* Net cash outflow before financing was consistent with the prior year at
#2.3m. Fund raising net of share issue costs raised #7.0m leaving a closing
cash balance of #10.6m (2006: #5.9m) which is sufficient to support the
current portfolio of companies, planned creation of new portfolio companies
and central overheads beyond the next twelve months.
Fundraising
* The key fundraising event of the year was a placing of 5.3m shares at a
share price of #1.45 which raised #7.8m. The costs of this fund raising were
#0.8m, all of which were taken to the share premium account, leaving net
funds raised of #7.0m.
* As part of the consideration for the Cardiff Agreement 11.0m shares were
issued at a price of #1.45 giving a total value of #15.9m. Following the
completion of this Agreement Cardiff University owns 30% of the issued share
capital of the company. The University of Sheffield now owns 25%, management
own 11% and institutional investors, the remaining 34%.
Post year end
* Trading has continued in line with expectations since the year end.
David Baynes
Chief Executive
15 October 2007
The financial information set out below does not constitute the group's
statutory accounts for the years ended 31 July 2007 or 2006 but is derived from
those accounts. Statutory accounts for 2006 have been delivered to the Registrar
of Companies, and those for 2007 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 section 237(2) or
(3) of the Companies Act 1985.
Consolidated profit and loss account
for the year ended 31 July 2007
Restated
Note 2007 2007 2007 2006
#000 #000 #000 #000
Continuing Acquisitions Total
Operations
Turnover 2 301 50 351 279
Cost of sales (17) (15) (32) (23)
Gross profit 284 35 319 256
Administrative expenses
- normal 3 (2,806) (208) (3,014) (1,402)
- exceptional 4 (903) - (903) (1,158)
(3,709) (208) (3,917) (2,560)
Operating Loss (3,425) (173) (3,598) (2,304)
Surplus on disposal of fixed asset
investments 58 -
Interest receivable and similar income 7 535 349
Interest payable and similar charges 8 (195) (102)
Loss on ordinary activities before 3 (3,200) (2,057)
taxation
Tax on loss on ordinary activities 9 - -
Minority interests 20 310 110
Loss for the financial year (2,890) (1,947)
Basic and diluted loss per share 10 (9.68p) (10.08p)
There is no difference between the loss on ordinary activities before taxation and the loss for the years
stated above and their historical cost equivalents.
Consolidated statement of total
recognised gains and losses
for the year ended 31 July 2007
Restated
Note 2007 2006
#000 #000
Loss for the financial year (2,890) (1,947)
Total recognised losses for the year (2,890) (1,947)
Prior year adjustment 4 (1,339) -
Total losses recognised since last annual (4,229) (1,947)
report
The notes form part of these financial statements.
Consolidated balance sheet
at 31 July 2007
Note 2007 2007 2006 2006
#000 #000 #000 #000
Fixed assets
Intangible assets 11 15,204 68
Tangible assets 12 41 25
Investments 13 4,510 3,370
19,755 3,463
Current assets
Stock 14 6 7
Debtors 15 789 569
Cash at bank and in hand 10,600 5,883
11,395 6,459
Creditors: amounts falling due within 16 (403) (197)
one year
Net current assets 10,992 6,262
Total assets less current liabilities 30,747 9,725
Creditors: amounts falling due after more 17 (3,293) (2,038)
than one year
Net assets 27,454 7,687
Capital and reserves
Called up share capital 18 367 203
Capital reserve 19 2 2
Share premium 19 31,671 8,906
Capital redemption reserve 19 1 1
Profit and loss account 19 (4,244) (1,370)
Shareholders' funds 27,797 7,742
Minority interest 20 (343) (55)
27,454 7,687
These financial statements were approved by the board of Directors on 15 October
2007 and were signed on its behalf by the Chairman:
DOUG LIVERSIDGE CBE
CHAIRMAN
Company balance sheet
at 31 July 2007
Note 2007 2007 2006 2006
#000 #000 #000 #000
Fixed assets
Tangible assets 12 23 -
Investments 13 2 1
25 1
Current assets
Debtors 15 31,885 8,917
31,885 8,917
Creditors: amounts falling due within 16 (63) -
one year
Net current assets 31,822 8,917
Net assets 31,847 8,918
Capital and reserves
Called up share capital 18 367 203
Share premium 19 31,671 8,906
Capital redemption reserve 19 1 1
Profit and loss account 19 (192) (192)
Shareholders' funds 31,847 8,918
These financial statements were approved by the board of Directors on 15 October
2007 and were signed on its behalf by the Chairman:
DOUG LIVERSIDGE CBE
CHAIRMAN
Cash flow statement
for the year ended 31 July 2007
Note 2007 2006
#000 #000
Net cash outflow from operating activities 23 (2,279) (943)
Returns on investment and servicing of finance
Interest received 535 349
Taxation - -
Capital expenditure and financial investments
Payments for tangible fixed assets (28) (13)
Payments for fixed assets investments (833) (1,561)
Payments for intangible fixed assets (118) -
Proceeds from sales of fixed assets investments 377 -
Net cash outflow from capital expenditure and financial (602) (1,574)
investment
Net cash outflow before financing and acquisitions (2,346) (2,168)
Acquisitions
Payments to acquire investments in subsidiary undertakings (6) (128)
Net cash acquired with subsidiaries 29 26
23 (102)
Net cash outflow before financing (2,323) (2,270)
Financing
Issue of ordinary share capital 7,757 2,000
Share issue costs (717) (72)
7,040 1,928
Increase/(decrease) in cash in the period 23 4,717 (342)
NOTES TO THE FINANCIAL STATEMENTS
1 Accounting policies
The following accounting policies have been applied consistently in dealing with
items which are considered material in relation to the financial statements,
except as noted below.
In these financial statements the following new standard has been adopted for
the first time:
* FRS 20 "Share-based payments"
The accounting policies under this new standard are set out below together with
an indication of the effect of its adoption.
The company operates an equity-settled, share-based compensation plan for its
Directors and has also issued warrants for the purchase of shares in respect of
the side fund established by NPI Ventures. The fair value of the share-based
compensation has been recognised as an expense. The total amount to be expensed
over the vesting period is determined by reference to the fair value of the
share options or warrants granted. Fair value has been determined by reference
to the Black-Scholes option pricing model.
The adoption of FRS 20 has resulted in a prior year adjustment which reduced the
profit for the prior year by #1,339,000 and increased profit and loss reserves
by the corresponding amount. There was no impact on the Group's net assets.
Basis of preparation
The financial statements have been prepared in accordance with applicable
accounting standards, under the historical cost accounting rules and with the
requirements of the Companies Act 1985, except as explained below.
The financial statements are prepared on a going concern basis. Cash balances at
31 July 2007 amount to #10,600,000 (2006: #5,900,000). The balances are
considered sufficient to meet expenditure for at least the next twelve months
from the date of these financial statements. In addition the company's forecast
expenditure includes amounts of a discretionary basis in relation to potential
investments.
Basis of consolidation
The consolidated financial statements include the financial statements of the
company and its subsidiary undertakings made up to 31 July 2007. The
acquisition method of accounting has been adopted. Under this method, the
results of subsidiary undertakings acquired or disposed of in the year are
included in the consolidated profit and loss account from the date of
acquisition or up to the date of disposal.
Those investments that are associated undertakings are carried at cost in
accordance with the group's normal policy and are not equity accounted as
required by the Companies Act 1985. The Directors consider that as these
investments are held as part of the group's portfolio, with a view to the
ultimate realisation of capital gains, equity accounting would not give a true
and fair view of the group's interest in these investments.
The accounting treatment adopted is in line with FRS 9 "Associates and joint
ventures", with respect to investment funds. The directors have decided not to
quantify the effect of the different treatment due to the significant increase
in the number of investments in the year.
Merger accounting has been adopted to consolidate the subsidiary Biofusion
Trading Limited under the provisions of FRS 6 "Acquisitions and Mergers".
Turnover
Turnover, comprising fees for various advisory and fund management services, is
recognised in the profit and loss account when the related services are
performed and when considered recoverable. All turnover is generated within the
United Kingdom and is stated exclusive of value added tax.
Goodwill
Goodwill arising on the acquisition of subsidiary undertakings, representing the
excess fair value of the consideration given over the fair value of the
identifiable assets and liabilities acquired, is capitalised and written off on
a straight line basis over its useful economic life, which is ten years.
Provision is made for impairment.
Intellectual property, patents and licences purchased by the company are
amortised to nil by equal annual instalments over their useful economic lives,
generally their respective unexpired periods, which are ten years.
The intellectual property pipeline with Cardiff University has been recognised
in accordance with FRS 10 "Goodwill and intangible assets" as an intangible
asset. The asset is amortised on a straight line basis over the ten year
agreement, with provision made for any impairment when required.
Investments
Investments are stated at historic cost less any provision for impairment in
value and are held for long-term investment purposes. Investments are classified
as equity investments and loans which are convertible to equity in the future.
Provisions are based upon an assessment of events or changes in circumstances
that indicate that an impairment has occurred. This includes the performance and
/or prospects (including financial prospects) of the investee company being
significantly below the expectations on which the investment was based, a
significant adverse change in the markets in which the investee company operates
or a deterioration in general market conditions and the value implied by third
party external funding in the year.
Stocks
Stocks are stated at the lower of cost and net realisable value.
Fixed assets and depreciation
Depreciation is provided to write off the cost, less the estimated residual
value of tangible fixed assets by equal instalments over their estimated useful
economic lives as follows:
Computer equipment - 25% per annum
Office equipment - 33% per annum
Payments on account
Payments on account represent transfer of funds in advance to the University of
Sheffield held on the balance sheet of Biofusion Trading Ltd. The payments on
account are held at cost, less any amounts transferred to equity investments on
account of the acquisition of interests in spin out companies from the
University of Sheffield Life Science department.
Research and development expenditure
Expenditure on research and development is written off to the profit and loss
account in the year in which it is incurred.
Pension commitments
The group makes defined contributions to employees' approved personal pension
plans. Contributions are charged to the profit and loss account in the period in
which payments are payable to the pension funds.
Deferred taxation
Provision is made in full for deferred tax liabilities that arise from timing
differences where transactions or events, that result in an obligation to pay
more tax in the future, have occurred by the balance sheet date. Deferred tax
assets are recognised to the extent that it is considered more likely than not
that they will be recoverable. Deferred tax is measured at the average tax
rates that are expected to apply in periods in which the timing differences are
expected to reverse based on the tax rates and laws that have been enacted or
substantially enacted by the balance sheet date. Deferred tax assets and
liabilities are not discounted.
Financial Instruments
Currently, the group does not enter into derivative financial instruments.
Financial assets and financial liabilities are recognised and cease to be
recognised on the basis of when the related titles pass to or from the group.
Financial assets are stated at the lower of cost to the group, less provision
for amortisation and impairment.
2 Turnover
Turnover and loss on ordinary activities before taxation are derived entirely
from the principal activities within the United Kingdom.
3 Loss on ordinary activities before taxation
2007 2006
#000 #000
Loss on ordinary activities before taxation is stated after charging /
(crediting)
Depreciation and other amounts written off tangible fixed assets 12 4
Loss on sale of fixed assets - 1
Amortisation of intangible fixed assets 903 55
Profit on deemed disposal of subsidiary (8) (5)
Impairment of fixed asset investments 652 -
Profit on deemed disposal of subsidiary (8) (5)
Auditors' remuneration:
Audit of financial statements - group 18 15
Audit of financial statements - subsidiaries 8 4
Review of interim financial statements 9 5
Services relating to corporate finance transactions 55 -
4 Exceptional Items
2007 2006
#000 #000
Share-based payments 16 1,339
Goodwill amortisation 887 -
Goodwill impairment/loan note waiver - (181)
903 1,158
Following the adoption of FRS 20 "Share-based payments", a prior year adjustment
of #1,339,000 was charged to the profit and loss account and increased profit
and loss reserves by the corresponding amount. There was no impact on the
group's net assets. The charge relates primarily to the warrants granted to NPI
Ventures on 23 March 2006.
The goodwill amortisation charge of #887,000 represents the amortisation of the
Cardiff intellectual property pipeline for the period from 9 January 2007.
The goodwill impairment and loan note waiver in 2006 arose following an
impairment review of Bioacta Ltd.
5 Remuneration of directors
2007 2006
#000 #000
Directors' emoluments 529 434
529 434
Company contributions to money purchase pension schemes 40 35
569 469
The aggregate of emoluments of the highest paid director was #159,234 (2006:
#125,152) and company pension contributions of #14,700 (2006: #12,500) were
accrued for payment to be made to a money purchase scheme on his behalf.
Number of directors
2007 2006
Retirement benefits are accruing to the following number of directors under:
Money purchase schemes 3 3
6 Staff numbers and costs
The average number of persons employed by the group (including directors) during the year, analysed by
category, was as follows:
Number of employees
2007 2006
Directors 9 8
Staff 4 2
13 10
The aggregate payroll costs of these persons were as follows:
2007 2006
#000 #000
Wages and salaries 614 488
Social security costs 68 51
Other pension costs 40 35
722 574
7 Interest receivable and similar income
2007 2006
#000 #000
Bank interest receivable 467 261
Interest on loans to associated undertakings 68 88
535 349
8 Interest payable and similar charges
2007 2006
#000 #000
Interest on loans from related parties 195 102
9 Tax on loss on ordinary activities
Analysis of charge in year
2007 2006
#000 #000
Current tax
UK corporation tax on loss of the period - -
Adjustments in respect of prior year - -
Tax on loss on ordinary activities - -
No deferred tax asset has been recognised in respect of trading losses carried
forward due to the uncertainty of the availability of future taxable profits
from which the trading losses can be deducted. The total amount unprovided at
31 July 2007 is #1,092,000 (2006: #481,000).
2007 2006
#000 #000
Accelerated capital allowances - 1
Tax losses carried forward (1,114) (482)
(1,114) (481)
Factors affecting the tax charge for the current period.
Current tax on income for the period is lower (2006: lower) than the standard
rate of corporation tax in the UK (20%),(2006: 19%.). The differences are
explained below.
2007 2006
#000 #000
Current tax reconciliation
Loss on ordinary activities before tax (3,200) (2,057)
Current tax at 20% (2006: 19%) (640) (391)
Effects of:
Expenses not deductible for tax purposes 8 6
Capital allowances for period in excess of depreciation - -
Unutilised tax losses 632 385
Total current tax charge (see above) - -
10 Basic and fully diluted loss per ordinary share
2007 2006
No. No.
Number of shares
Basic weighted average number of shares in issue 29,852,493 19,318,799
Loss retained in the year (2,890) (1,947)
The basic loss per share is based on the weighted average number of ordinary
shares in issue during the year. This included 20,316,429 shares in issue
throughout the year, and 16,347,538 shares issued on 9 January 2007 which were
included for seven months of the year.
The calculation of diluted loss per ordinary share is identical to that used for
basic loss per share. This is because the exercise of options would have the
effect of reducing the loss per ordinary share and is therefore not dilutive
under the terms of FRS 14 "Earnings per share".
11 Intangible fixed assets
Group IP rights Goodwill Total
#000 #000 #000
Cost
At 1 August 2006 - 599 599
Additions - Purchased intellectual property 16,064 - 16,064
Additions - Negative goodwill on acquisition - (25) (25)
At 31 July 2007 16,064 574 16,638
Accumulated amortisation
At 1 August 2006 - (531) (531)
Charge for the year (898) (5) (903)
At 31 July 2007 (898) (536) (1,434)
Net book value
At 31 July 2007 15,166 38 15,204
At 31 July 2006 - 68 68
The intellectual property rights in the year arises from the acquisition of the
Cardiff University pipeline, #15,946,000 and intellectual property acquired from
the University of Sheffield in relation to certain subsidiary undertakings,
#118,000.
Goodwill relates to that generated on the acquisition of the group's
subsidiaries, Bioacta Ltd (fully written down), Diurnal Ltd and Lifestyle
Choices Ltd. The negative goodwill on acquisition arose when Biofusion acquired
a 55% shareholding in Magnomatics Ltd from the University of Sheffield (see note
24).
Intangible fixed assets are written down over their useful economic lives,
subject to annual impairment reviews. The charge for the year includes #887,000
in relation to the Cardiff University pipeline, written down over ten years from
the commencement of the agreement in January 2007.
12 Tangible assets
Group Company
computer computer
equipment
equipment #000
#000
Cost
At 1 August 2006 34 -
Additions 28 7
Acquired with subsidiary undertaking - 21
At 31 July 2007 62 28
Accumulated Depreciation
At beginning of year (9) -
Charge for year (12) (5)
At end of year (21) (5)
Net book value
At 31 July 2007 41 23
At 31 July 2006 25 -
13 Investments
Group Equity Loans Total
#000 #000 #000
Cost
At 1 August 2006 2,242 1,128 3,370
Additions 1,761 388 2,149
Transfers 634 (634) -
Disposals (357) - (357)
At 31 July 2007 4,280 882 5,162
Provision for impairment
At 1 August 2006 - - -
Charge for year 652 - 652
At 31 July 2007 652 - 652
Net book values 3,628 882 4,510
At 31 July 2007
At 31 July 2006 2,242 1,128 3,370
Investments relate to shareholdings in portfolio companies below 50%. In
accordance with the group's accounting policies, these amounts are held at cost
less any provision for impairment.
The value of participating interests comprises of investments in associates
#4,510,000 (2006; #3,012,000) and other investments #nil (2006; #357,000).
Company Shares in group
undertakings
#000
Cost and net book value
At 1 August 2006 1
Additions 1
At 31 July 2007 2
Shares in group undertakings represent the company's investment in Biofusion
Trading Ltd.
During the year Fusion Cardiff Ltd was incorporated and the company owns 100% of
the issued share capital. In addition the company acquired a 10% holding in
Bitecic Limited which is a collaboration between industry, universities and
expert clinicians in the Yorkshire region.
The group's interest in companies at the year end is as follows:
Country of Principal Holding Class of
Incorporation Activity shares held
Subsidiary undertakings
Biofusion Trading Limited United Kingdom Holding company 100% Ordinary
Fusion Cardiff Limited United Kingdom Holding company 100% Ordinary
Biofusion Licensing United Kingdom Licensing 100% Ordinary
(Sheffield) Limited*
Phase Focus Limited* United Kingdom Lensless microscopy 56% Ordinary
Mantelum Limited* United Kingdom IP development company 100% Ordinary
Absynth Biologics Limited* United Kingdom MRSA vaccines 60% Ordinary
BioHydrogen Limited* United Kingdom Hydrogen production 60% Ordinary
Medella Therapeutics United Kingdom Cancer therapeutics 60% Ordinary
Limited*
Lifestyle Choices Limited* United Kingdom Ovarian reserve measurement 60% Ordinary
Diurnal Limited* United Kingdom Hormone replacement 60% Ordinary
Genophrenix Limited* United Kingdom Identification of Schizophrenia targets 60% Ordinary
Magnomatics Limited* United Kingdom Magnetic devices 54% Ordinary
Bioacta Limited* United Kingdom Angiogenesis compounds 52% Ordinary
Participating interests
Adjuvantix Ltd* United Kingdom Vaccine adjuvants 49% Ordinary
Asterion Ltd* United Kingdom Cytokine therapies 34% Ordinary
Axordia Ltd* United Kingdom Stem cell therapy 45% Ordinary
Celltran Ltd* United Kingdom Chronic wound therapy 15% Ordinary
Simcyp Ltd* United Kingdom Drug metabolism 25% Ordinary
Bitecic Ltd United Kingdom Clinical research and support 10% Ordinary
Abcellute Ltd United Kingdom Cell stabilising technology 24% Ordinary
Art of Xen Ltd United Kingdom Medical use of xenon gas 32% Ordinary
Cardiff Protides Ltd United Kingdom Nucleoside drugs 23% Ordinary
I2L Research Ltd United Kingdom Pesticide testing 10% Ordinary
Medaphor Ltd United Kingdom Medical training solutions 32% Ordinary
Muscagen Ltd United Kingdom Drug discovery 13% Ordinary
Q Chip Ltd United Kingdom Life science and therapeutic products 10% Ordinary
Aperio Diagnostics Ltd* United Kingdom Cervical cancer detection 14% Ordinary
* Held indirectly by Biofusion Trading Ltd
- Held indirectly by Fusion Cardiff Ltd
14 Stock
Group Company
2007 2006 2007 2006
#000 #000 #000 #000
Finished goods and goods for resale 6 7 - -
15 Debtors
Group Company
2007 2006 2007 2006
#000 #000 #000 #000
Trade debtors 243 85 - -
Amounts due from associated undertakings - 16 - -
Amounts due from group undertakings - - 31,856 8,917
Other tax and social security 36 19 - -
Other debtors 8 1 - -
Payments on account 296 388 - -
Prepayments and accrued income 206 60 29 -
789 569 31,885 8,917
16 Creditors: amounts falling due within one year
Group Company
2007 2006 2007 2006
#000 #000 #000 #000
Trade creditors 189 87 - -
Other creditors - 21 - -
Other tax and social security 6 - - -
Accruals and deferred income 208 89 63 -
403 197 63 -
17 Creditors: amounts falling due after more than one year
Group Company
2007 2006 2007 2006
#000 #000 #000 #000
Amounts owed to related parties 3,293 2,038 - -
3,293 2,038 - -
The amount of #3,293,000 due at 31 July 2007 includes #1,754,000 (2006:
#1,977,000) and #1,474,000 (2006: #nil) that relates to loan notes and accrued
interest due to the University of Sheffield and Cardiff University respectively
arising from the purchase of the group's interest in its portfolio of spin out
companies. These amounts are repayable on the earlier of the sale by Biofusion
of the underlying share capital in the company, or the company making dividend
payments or ten years from the day of issue. These amounts are only payable to
the extent that any gain or dividend is received by Biofusion and can be
cancelled by Biofusion by the return of the shares to which they relate to the
University of Sheffield or Cardiff University respectively.
18 Called up share capital
Number of 2007 Number of 2006
shares shares
#0000 #000
Authorised
Equity: Ordinary shares of #0.01 each 40,000,000 400 30,000,000 400
400 400
Allotted, called up and fully paid
Equity: Ordinary shares of #0.01 each 36,663,967 367 20,316,429 203
367 203
Ordinary shares
#000
Balance brought forward 203
Issue of shares 164
Balance carried forward 367
As part of the Cardiff University pipeline dated 9 January 2007, Biofusion
issued 10,997,541 new Ordinary Shares of 1pence each to Cardiff University at
#1.45 per share. In addition to this, Biofusion placed 5,349,997 New Ordinary
Shares of 1 pence each with institutional investors at #1.45 per share which
raised #7,757,000 before expenses.
The costs of the combined share issue amounted to #775,000 and have been charged
to the share premium account. These costs related to legal and brokerage fees
incurred on the transaction (see note 19).
19 Reserves
Group Profit and loss Share premium Capital Redemption Capital
account account reserve Reserve
#000 #000 #000 #000
Balance brought forward 1,370 8,906 1 2
Issued during the year - 23,540 - -
Cost of share issue - (775) - -
Share-based payments (16) - - -
Loss for the financial year 2,890 - - -
Balance carried forward 4,244 31,671 1 2
The capital reserve represents differences on consolidation under merger
accounting.
Company Profit and loss Share premium account Capital Redemption
account reserve
2007 2007 2007
#000 #000 #000
Balance brought forward (192) 8,906 1
Issued during the year - 23,540 -
Cost of share issue - (775) -
Balance carried forward (192) 31,671 1
As permitted by section 230 of the Companies Act 1985, the company's profit and
loss account has not been included in these financial statements. The company's
result for the financial year was a #nil (2006: loss of #192,000).
20 Minority interests
2007 2006
#000 #000
Balance brought forward (55) 2
Deemed disposal (6) (13)
Introduced at acquisition 28 6
Gain on dilution - 60
Share of loss in the year (310) (110)
Balance carried forward (343) (55)
Minority interests of #343,000 represent the minority share of Bioacta, Life
Style Choices, Phase Focus, Genophrenix, Diurnal, Magnomatics, BioHydrogen,
Medella Therapeutics, Absynth Biologics and Mantelum's losses generated since
the date of acquisition or incorporation of these companies, less any amount
invested in these companies by the minority shareholders. The deemed disposal
represents the reduction in Biofusion's shareholding in Phase Focus.
21 Related party transactions
During the year, Biofusion purchased administrative and other services from
Sheffield University Enterprises Ltd (SUEL), a wholly owned subsidiary of the
University of Sheffield, totalling #19,000k (2006: #7,000). In addition,
Biofusion provided support services to SUEL during the year of #120,000 (2006:
#180,000). At 31 July 2007 the balance due from SUEL was #217,000 (2006:
#71,000).
In addition, under the terms of the Agreement dated January 2005 Biofusion paid
the University of Sheffield #120,000 (2006: #130,000) as payments on account for
intellectual property. Biofusion Trading Ltd purchased IP from the University
during the year with a total value of #118,000. These payments were taken
against payments on account.
Under the terms of the Agreement dated January 2007 Biofusion paid Cardiff
University #118,000 as payments to support the management of the intellectual
property pipeline. At 31 July 2007 the balance due to Cardiff University was
#3,000.
During the year Biofusion has continued to accrue for interest due on loans in
respect of the purchase of the original portfolio companies from both the
University of Sheffield and Cardiff University.
During the year, the company supplied management services to companies in which
it held a participating interest totalling #11,000 (2006: #48,000).
22 Reconciliation of movements in shareholders' funds
Restated
Group 2007 2006
#000 #000
Loss for the financial year (2,890) (1,947)
Share-based payments 16 1,340
Proceeds from share issue 23,704 2,000
Costs of share issue (775) (73)
Net increase in shareholders' funds 20,055 1,320
Opening shareholders' funds / (deficit) 7,742 6,422
Closing shareholders' funds 27,797 7,742
Company 2007 2006
#000 #000
Loss for the financial year - (192)
Proceeds from share issue 23,704 2,000
Costs of share issue (775) (72)
Net increase in shareholders' funds 22,929 1,736
Opening shareholders' funds 8,918 7,182
Closing shareholders' funds 31,847 8,918
23 Notes to the cash flow statement
2007 2006
(i) Reconciliation of operating loss to operating cash #000 #000
flow
Operating loss (3,598) (2,304)
Amortisation of goodwill 903 55
Share-based payment 16 1,339
Impairment losses 652 421
Deemed profit on disposal (8) (5)
Depreciation 12 4
Loss on sale of fixed assets - 1
Profit on sale of fixed asset investments 58 -
Decrease/(increase) in stock 1 (7)
(Increase)/decrease in debtors (177) 40
Increase in creditors (138) (487)
Net cash outflow from operating activities (2,279) (943)
(ii) Reconciliation of net cash flow to movement in net
funds
Increase/(decrease) in cash in the period 4,717 (342)
Non cash movement on loan notes (1,612) 444
Decrease in debt 357 -
Increase in net funds 3,462 102
Opening net funds 3,845 3,743
Closing net funds 7,307 3,845
(iii) Net funds
Cash 10,600 5,883
Loan notes (3,293) (2,038)
Opening net funds 7,307 3,845
24 Acquisitions
During the year Biofusion established a number of new companies and acquired a
54.6% shareholding in Magnomatics Ltd from the University of Sheffield.
The fair value and book value of assets acquired on 24 January 2007 were:
Book and Fair Value
24 January 2007
#000
Current Assets
Debtors 43
Cash at bank and in hand 29
72
Creditors amounts falling due within one year 11
Net assets 61
Net consideration 8
Net assets acquired 33
Negative goodwill arising on acquisition (25)
25 Share-based payments
During the year no new share options or share warrants were issued.
Details of the share options held by directors are set out within the Report on
Directors' Remuneration.
On 23 March 2006, as part of a #10m Side Fund agreement, Biofusion issued the
following warrants to NPI Ventures:
(i) 1,225,000 Ordinary Shares with an exercise price of #1.50;
(ii) 1,225,000 Ordinary Shares with an exercise price of #1.60;
(iii) 612,500 Ordinary Shares with an exercise price of #1.80; and
(iv) 612,500 Ordinary Shares with an exercise price of #2.20;
All of the Warrants are exercisable at any time commencing on the first
anniversary of the associated Warrant Deed and on or before the tenth
anniversary of the date of the Warrant Deed.
The fair value of the share based options and warrants are recognised as an
expense through the profit and loss account over the relevant vesting periods.
The charge in the current year was #16,000 (2006: #1,339,000).
The fair values are determined by using the Black-Scholes option pricing model
and the assumptions used at the fair value measurement date are shown in the
table below:
Directors NPI
Share price at grant 150.00p 152.25p
Dividend yield 0.0% 0.0%
Expected volatility 18.52% 18.85%
Term to maturity 6.5 years 5.5 years
Risk free interest rate 4.46% 4.28%
Number of shares under option 299,997 3,675,000
The expected volatility was benchmarked against an index of similar companies in
the biotech index as no historic data was available for the company at the grant
date.
26 Post balance sheet events
On 15 August 2007, the company invested #75,000 in Celltran as part of a #1m
syndicated loan, with a further #75,000 due once certain milestones are
achieved.
On 17 September 2007, the company invested #200,000 in Abcellute as part of a
#400,000 funding round with Finance Wales. As a result of the funding round
Biofusion's holding in Abcellute increased to 34%.
On 21 September 2007, Biofusion announced it had signed a Memorandum of
Understanding with Finance Wales. The agreement detailed a co-investment
strategy for investing in spin-out companies formed as part of the IP pipeline
agreement with Cardiff University.
On 2 October 2007, Biofusion announced that Cardiff University had transferred
its 25% holding in Cardiff Biologicals to Biofusion for a loan note to the value
of #250,000. Subsequently Biofusion invested #200,000 in Cardiff Biologicals to
increase its holding to 50%.
On 2 October 2007, Biofusion invested #200,000 in Cardiff Protides to increase
its holding to 50%.
On 9 October 2007, Biofusion sold its holdings in Cardiff Biologicals and
Cardiff Protides to Morvus Technology Limited, a privately owned pharmaceutical
company. In consideration for the transaction Biofusion now owns a 20% holding
in Morvus.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR OKBKNOBDDOKD
1 Year Biofusion Chart |
1 Month Biofusion Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
