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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Reliance Gen. | LSE:GMX | London | Ordinary Share | GB00B1MM9925 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.55 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:9773H
GeneMedix PLC
26 February 2003
GENEMEDIX PLC
Preliminary Results for the year ended 30th November 2002
GeneMedix plc ("GeneMedix" or "the Company"), the UK multi-sourced
biopharmaceutical company with operations in Europe and Asia and with joint
London and Singapore Stock Exchange listings, announces its preliminary results
for the year ended 30th November 2002. GeneMedix is involved in the development
and manufacture of therapeutic proteins using recombinant DNA technology and
novel cell culture.
Highlights:
* Commencement of development of "second generation" proteins:
* Collaboration with SkyePharma plc to develop extended release
formulation of interferon-alpha for Hepatitis
* Post period - Collaboration with Antibioticos Group announced today:
* Exclusive rights to Interferon-beta, G-CSF and human growth hormone
with combined market size in excess of $4 billion
* Joint venture European manufacturing facility
* First international patent filing utilising technology licensed from the
Shanghai Institute of Biochemistry and Cell Biology
* Formal opening of Irish manufacturing facility
* Production of EPO, for the treatment of anaemia, expected this year
* Sales of first product - GM-CSF in China
* Cash balances #6.6 million at period end - operational costs in line with
expectations
Paul Edwards, Chief Executive Officer, commented:
"Over the coming year, we are looking to continue to push forward aggressively
the development of our product pipeline, especially with the new collaborations
with SkyePharma and Antibioticos, and putting our manufacturing capabilities in
place. We are also looking to secure commercial partners for our products in the
key western markets.
"We are looking to strengthen our cash flow streams over the coming year by
obtaining up-front payments on commercial collaborations and licensing deals."
26th February 2003
ENQUIRIES:
GeneMedix plc Tel: 01638 663 320
Paul Edwards, Chief Executive Officer
College Hill Tel: 020 7457 2020
Nicholas Nelson
Clare Warren
Chairman's Statement
Operational Summary
In the 12 months to 30th November 2002, GeneMedix continued to make significant
progress with its product development programmes and its manufacturing and
distribution infrastructure. We completed the fit-out of a mammalian cell
manufacturing plant in Ireland and finalised a Joint Development Agreement with
SkyePharma to produce a slow release Interferon-alpha important for the
treatment of Hepatitis B & C.
Moreover, continued progress was achieved in our development programmes for
Erythropoietin (EPO), Interferon-alpha and synthetic human Insulin. The Company
has filed three international patents utilising technology licensed from our
partner, the Shanghai Institute of Biochemistry and Cell Biology (IBCB), and
made a patent application for a fast acting Insulin analogue. We launched our
first product, GM-CSF (Granulocyte Macrophage-Colony Stimulating Factor) under
the trade name NeustimTM into the Chinese market
These developments fit in with our strategy to develop a range of high value
therapeutic proteins that are comparable to products already marketed, and bring
them to the global market, with a particular emphasis on the lucrative European
territories. Our approach is to construct cost-effective manufacturing
facilities built and run to international pharmaceutical standards, utilising
technology developed by our corporate partners, IBCB. Our strategy is also to
develop "second generation" products using innovative formulations of our
portfolio products, to allow us to build sustainable growth in the global
marketplace.
We intend to address market opportunities and threats by developing a range of
these "second generation" proteins to compete with the new formulations being
launched by the innovator companies. We have already commenced this process with
the Joint Development Agreement we have in place with SkyePharma, to develop a
slow release interferon-alpha and shall continue to broaden our product
portfolio by in-licensing additional proteins. It is also our intention to
participate in the establishment of additional joint venture manufacturing
plants in Asia and Europe to produce these products. Whilst these activities
were not in our original business plan, we believe that by developing these
products we will be building a Company that has the ability to meet the long
term market needs, and has the potential to provide real benefits for the
shareholders.
Although GM-CSF has never been seen as a major product for the Company since its
launch into the Chinese market, we have seen a great deal of competition from
the more popular G-CSF. We have also witnessed significant price erosion for
this product and some of the other biopharmaceuticals in both the Chinese and
Indian markets, due to oversupply of locally produced product. We believe that
the most effective way of obtaining premium pricing for this product in most of
these markets is to enter with a western registered version, although we are
still exploring opportunistic revenues in certain markets.
Manufacturing
The Company has constructed a state-of-the-art mammalian fermentation facility
in Ireland, which was formally opened in June 2002. Commissioning and
validation procedures are well underway and the process development of its first
mammalian cell derived product, Erythropoietin (EPO), is nearing completion,
ready for transfer into this facility in mid 2003.
We have also gained access to a microbial fermentation plant through our
recently announced collaboration with Antibioticos (see below).
We entered into an important Manufacturing Agreement with Gland Pharmaceuticals
(Gland), one of India's leading suppliers of speciality pharmaceutical products.
Under the Manufacturing Agreement, Gland will use its specialised
manufacturing operations to provide product in presentations such as pre-filled
syringes, initially for the Asian market but then for the global market, as
product approvals are granted. Current customers of Gland include Schering
Plough (India), Aventis (India) and several large Indian Pharma companies.
Preparations for Gland to manufacture the Company's products are well underway.
Under an additional Sales and Distribution Agreement with Gland we added India
to the Company's commercial network, which already covered China and the ASEAN
territories.
Product development
Product development on the Company's other biopharmaceutical products from
multiple sources has continued to be a high priority for GeneMedix. The process
development of Interferon-alpha-2b for our own comparative product and for new
molecule development, has progressed steadily and we expect to announce
significant steps forward in accessing an insulin facility to supply the
shortage of human insulin in Eastern territories.
It has always been the Company's stated objective to develop innovative
formulations of its recombinant proteins to allow it to compete more
successfully against "second generation" therapeutic proteins, especially in
Europe and the US. To this end, in July 2002 the Company announced a joint
collaboration with SkyePharma (LSE: SKP; Nasdaq: SKYE) for the development of an
extended release formulation of interferon alpha-2b using SkyePharma's proven
DepoFoamTM injectable drug delivery technology.
Therapeutic proteins are usually degraded rapidly inside the body. SkyePharma's
proven DepoFoamTM extended release injectable technology, combined with
GeneMedix' recombinant interferon alpha-2b, has the possibility to deliver
therapeutic doses of the protein in a controlled manner for a period up to 28
days from a single injection. This would represent a considerable benefit to
patients with Hepatitis C whose current treatment may require injection of
interferon alpha-2b every few days. This collaboration is very exciting for
GeneMedix, as the Company has gained access to a project that has already shown
promising early results, and uses a combination of two proven technologies.
We are also aggressively pursuing our stated aim of adding additional
therapeutic proteins to our existing portfolio, and are looking to access
additional manufacturing facilities in Europe and Asia.
Regulatory submissions
We have been in discussions with regulatory authorities in China, India and
Malaysia, and have established the regulatory requirements for gaining product
approvals in these territories.
We are continuing to work proactively with the regulatory authorities and
through the European Generics Association (EGA) to establish the regulatory
approval process for our products within the European Union and have been
formulating a robust clinical strategy that we believe will provide scientific
evidence that our products are comparable to those already marketed. Whilst the
European regulatory authorities have not yet provided a definitive process for
the approval of "biogenerics", we strongly believe that the dossiers that we
will submit will clearly demonstrate comparability with the innovator product.
Post period event - Joint collaboration with Antibioticos
We also announced today that we have gained exclusive access through a
collaboration with Antibioticos Group of Milan, Italy, to three exciting new
proteins, Interferon-beta, G-CSF and human growth hormone, and will have a
minority share in a European manufacturing facility.
Interferon-beta is widely used for the treatment of the "relapsing, remitting"
form of Multiple Sclerosis. This type is characterized by alternating acute
episodes and partial or complete recovery. Interferon-beta is produced using
mammalian fermentation and market leaders include Biogen, Serono and Schering
AG. GeneMedix will use its expertise in process development of mammalian
cultures to produce an industrial scale process from the cell lines acquired.
Granulocyte Colony Stimulating Factor (G-CSF) is a potent stimulator of bone
marrow cells, especially those of neutrophil lineage, and may be marketed
alongside Neustim (GeneMedix GM-CSF) product. It is widely used in chemotherapy
induced neutropenia caused by cancer treatment. The world-wide market is
currently dominated by Amgen (filgrastim) and Chugai (lenograstim).
Recombinant Human Growth Hormone (rhGH) is for the treatment of short stature in
adults and children. Pharmacia, Lilly, Novo Nordisk and Serono are the main
players in this market. The global market for the three new products exceeds $4
billion.
Antibioticos and GeneMedix have formed a 75% / 25% Joint Venture and will be
constructing a state-of-the-art bacterial fermentation facility in Leon in Spain
at a total investment of Euro25m. This will be used for the contract manufacture of
GeneMedix's bulk Interferon-alpha, as well as the manufacture and supply of bulk
G-CSF and rhGH. Plant design has been largely completed and construction will
commence over the coming months.
GeneMedix will satisfy its 25% contribution by making capital contributions to
the Joint Venture totalling Euro6.25m in a number of equal instalments in the
period from mid 2003 to early 2005. GeneMedix will also issue 4% convertible
loan notes convertible into between 24 million and 32 million ordinary GeneMedix
shares in late 2003 and 2004 and will make agreed royalty payments on the sales
of its newly acquired molecules.
The bulk proteins will be supplied on an exclusive basis to GeneMedix, who will
be responsible for the secondary manufacture, regulatory submissions and
distribution of finished product, which it will do in conjunction with
commercial partners
Financial Review
The Group's operating loss for the 12 months ended 30th November 2002 was
#8,705,450. We now have 15 employees in Ireland, with 18 at Head Office and 34
in China. Turnover for the period, arising from initial sales of our first
product, NeustimTM, totalled #155,566 in the period.
We incurred #2,009,851 (2001 #783,578) of expenditure on development and
clinical programmes for our portfolio of comparative biologics. In addition to
this, in order to gain access to SkyePharma's DepofoamTM technology, we issued
a convertible loan note for a total value of #3,250,000, convertible into
between 8.3 and 11.2 million ordinary GeneMedix shares.
Expenditure was accelerated in the second quarter of 2002 to bring our principal
EPO and Interferon-alpha programmes closer to completion so as to ensure that
material will be available for clinical trials at the earliest opportunity.
Group cash balances at the end of the period were #6,583,428. To the end of the
period we had spent #4.25m on our EPO facility out of a total planned
expenditure of #4.5m. We drew down #2m in the period under a sale and lease
back arrangement with a major Irish bank, which has allowed us a deferment of
this expenditure over a five year period.
Our accounting policy for the Development of Technology Processes has
historically been to capitalise all amounts spent and amortise them over a ten
year period once the products are in commercial production. This reflects the
quality of the underlying technology, the clearly established commercial
potential of multi-sourced biopharmaceutical products in the global marketplace,
and the fact that the value of our plant and machinery is greatly enhanced by
the quality industrial process. However, following a review of our accounting
policies, we have decided to simplify our approach to accounting for the cost of
process development and expense them in the accounting period in which they are
incurred. As a result we have decided to write off all such costs through the
Profit and Loss Account. Under this revised policy, we have expensed a total of
#5,259,851 in the current financial period, with #983,679 incurred in previous
financial years, accounted for as a prior year adjustment. This in no way
reflects any impairment in the value of the technology, and means that we may
move into profitability at an earlier stage and operate at higher margins once
our products have been launched.
Outlook
Over the coming year, we are looking to continue to push forward aggressively
the development of our product pipeline, especially with the new collaborations
with SkyePharma and Antibioticos and putting our manufacturing capabilities in
place. We are also looking to secure commercial partners for our products in the
key western markets. We are looking to strengthen our cash flow streams over
the coming year by obtaining up-front payments on such commercial licensing
deals by broadening the reach of current ones. We are also seeking to use our
current excess capacity in our China facility for contract manufacturing to
generate opportunistic revenues.
In order to maintain our aggressive plan to be one of the first players in the
multi-sourced biopharmaceuticals market, your Board believes that it will be
necessary to secure finance over the next 12 months in addition to the Group's
existing cash balances and bank facilities, especially to fund these new and
exciting programmes. As previously indicated, we will look to obtain additional
finance through up-front and milestone payments from commercial agreements for
our existing development portfolio. Depending on the levels and timing of such
payments, we will also consider other sources of funding, potentially including
equity financing.
CONSOLIDATED PROFIT & LOSS ACCOUNT
For the 12 months ended 30 November 2002
Notes 2002 2001
Unaudited Audited
(restated)
# #
Turnover 155,566 -
Cost of sales (91,719) -
__________ __________
Gross profit 63,847 -
Administrative expenses (3,509,446) (2,388,003)
Research and development costs (2,009,851) (783,578)
Exceptional research and development (3,250,000) -
__________ __________
Total research and development costs (5,259,851) (783,578)
__________ __________
Total operating expenses (8,769,297) (3,171,581)
Operating loss
Existing operations (8,705,450) (2,658,871)
Acquisitions - (512,710)
__________ __________
Loss before interest and taxation (8,705,450) (3,171,581)
Interest receivable 229,641 798,823
Interest payable (134,839) (15,432)
__________ __________
Loss on ordinary activities before taxation 4 (8,610,648) (2,388,190)
Tax on loss on ordinary activities - -
__________ __________
Loss on ordinary activities after taxation
(2,388,190)
(8,610,648)
Minority interests 138,003 122,631
__________ __________
Loss for the year (8,472,645) (2,265,559)
__________ __________
Loss per share - basic and diluted (2.9p) (0.8p)
__________ __________
All of the results relate to continuing operations.
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the 12 months to 30 November 2002
2002 2001
Unaudited Audited
(restated)
# #
Loss for the financial year (8,472,645) (2,265,559)
(Loss) / gain on foreign currency translation (177,398) 117,063
__________ __________
Total gains and losses recognised for the year (8,650,043) (2,148,496)
Prior year adjustment (see note 1) (983,679) -
__________ __________
Total gains and losses recognised since last annual report and (9,633,722) (2,148,496)
accounts
__________ __________
CONSOLIDATED BALANCE SHEET
As at 30 November 2002
Notes 2002 2001
Unaudited Audited
(restated)
# #
Fixed assets
Intangible assets 4,121,335 4,437,717
Tangible assets 7,095,090 3,876,141
__________ __________
11,216,425 8,313,858
__________ __________
Current assets
Stock 146,402 72,507
Debtors - due within one year 788,695 398,875
Cash at bank and in hand 6,583,428 12,846,638
__________ __________
7,518,525 13,318,020
Creditors: amounts falling due within one year (2,145,890) (872,253)
__________ __________
Net current assets 5,372,635 12,445,767
__________ __________
Total assets less current liabilities 16,589,060 20,759,625
Creditors: amounts falling due after one year (1,454,041) -
Debenture - 5% 2 years convertible (3,319,007) -
Provisions for liabilities and charges (42,753) (156,074)
__________ __________
Net assets 11,773,259 20,603,551
__________ __________
Share capital and reserves
Called-up share capital 2,901,028 2,897,045
Share premium account 20,223,904 20,211,001
Profit and loss account 4 (11,857,685) (3,207,643)
__________ __________
Shareholders' funds 11,267,247 19,900,403
Minority interests 506,012 703,148
__________ __________
Total capital employed 11,773,259 20,603,551
__________ __________
CONSOLIDATED CASH FLOW STATEMENT
For the 12 months to 30 November 2002
2002 2001
Unaudited Audited
(restated)
# #
Net cash outflow from operating activities (4,545,261) (3,230,011)
Returns on investments and servicing of finance 169,846 774,331
Capital expenditure (4,082,257) (813,451)
Acquisitions and disposals - (6,088,597)
__________ __________
(8,457,672) (9,357,728)
Cash outflow before management of liquid resources and financing
Management of liquid resources 6,287,145 (9,276,997)
Financing 2,206,907 1,876
__________ __________
Increase / (decrease) in cash in the year 36,380 (18,632,849)
__________ __________
Note to cash flow
RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
2002 2001
Unaudited Audited
(restated)
# #
Operating loss (8,705,450) (3,171,581)
Depreciation 515,690 201,346
Goodwill amortisation 316,382 290,017
Increase in stock (73,895) (66,656)
Increase / (decrease) in debtors (374,816) (69,578)
Increase / (decrease) in creditors 640,149 (224,399)
Decrease in provisions (NIC payable on share options) (113,321) (189,160)
Non-cash exceptional research and development 3,250,000 -
__________ __________
Net cash outflow from operating activities (4,545,261) (3,230,011)
__________ __________
NOTES
1. The preliminary financial statements have been prepared in accordance
with UK Generally Accepted Accounting Principles ("UK GAAP") on the basis of the
accounting policies set out in the Group's 2001 annual report, expect for the
item referred to below. The preliminary financial statements are unaudited.
Basis of preparation - going concern
As set out in the Chairman's statement, the increase in the number of products
in our portfolio and the new manufacturing facilities will increase the Group's
requirement for additional funds. Accordingly, the directors plan to raise
further finance, at the appropriate time, through the out-licensing of our
products and, depending on the level and timing of such payments, through other
sources of funding, potentially including further issues of share capital. The
directors are confident that such further funds will be available to meet the
requirements of the business for the foreseeable future. The financial
information in this preliminary statement is prepared on the going concern
basis.
Prior year adjustment
The financial statements reflect a prior year adjustment in relation to the
accounting for development expenditure. Since commencing business the
accounting policy of the Company has been to write such expenditure off, except
where the Directors are satisfied as to the technical, commercial and financial
viability of individual projects. The application of this policy resulted in
#983,679 of capitalised development costs in the balance sheet of the Company at
30 November 2001. This policy was consistent with the requirements of SSAP13 -
Accounting for Research and Development.
During the current year, management reviewed the policy relating to the
accounting for development expenditure, in accordance with FRS18 - Accounting
Policies, to ensure that the policy remains appropriate to the Company's
circumstances. The Board has reviewed the treatment of development costs by
other similar companies and believes that expensing development costs as they
are incurred is the most appropriate treatment.
The change in the accounting policy resulted in the Company writing off the
development expenditure incurred during the current period of #5,259,851 (2001:
restated - #783,578, 2000: restated - #200,101; 2001: net assets restated -
#20,603,551; 2000: net assets restated - #22,047,023).
2. The 12-month figures to 30 November 2002 are unaudited. The
comparative figures for the year ended 30 November 2001 are not statutory
accounts but are extracted from the audited statutory accounts. The statutory
accounts for the year ended 30 November 2001 have been filed with the Registrar
of Companies. They received an unqualified audit report which did not contain a
statement under S237(2) or S237(5) of the Companies Act 1985. This preliminary
report should be read in conjunction with the statutory accounts for the year
ended 30 November 2001.
3. The directors elected not to pay a dividend in the period.
4. Profit and loss account
12 months to
30 November 2002
#
Loss brought forward (2,223,964)
Prior year adjustment (983,679)
As at 1st December restated (3,207,643)
Loss for the year (8,472,645)
Exchange difference (177,397)
Loss carried forward (11,857,685)
5. The loss per share is based on the loss of #8,472,645 (2001 #2,265,559)
and the weighted average number of shares in the period of 289,971,820(2001 -
289,693,591).
6. Further copies are available from the Group's head office - Rosalind
Franklin House, Fordham Road, Newmarket, CB8 7XN
This information is provided by RNS
The company news service from the London Stock Exchange
END
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