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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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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 | |
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0.00 | 0.00% | 0.55 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:0881P GeneMedix PLC 27 August 2003 GENEMEDIX PLC Interim Results for the six months to 31st May 2003 GeneMedix plc ("GeneMedix" or "the Company"), the UK generic biopharmaceutical company with operations in Europe and Asia and with joint London and Singapore Stock Exchange listings, announces its interim results for the six months to 31st May 2003. GeneMedix is involved in the development and manufacture of therapeutic proteins using recombinant DNA technology and novel cell culture. Key highlights for the period * Collaborative Agreement signed with Antares Pharma to utilise injection devices for the delivery of proteins * Formation of a joint venture with Antibioticos Group and access to three major new products * Cash balances at period end - #3.4 million * Cost of operation for Group in line with expectation as cost control measures remain in force Post period * Collaborative Agreement signed with Penang Development Corporation of Malaysia to set up facility for the manufacture of human insulin. Milestone payment in excess of #2 million expected. * #1.5 million fundraising round completed Paul Edwards, Chief Executive Officer, commented: "The Company has created a position where we have the opportunity to develop a range of first and second generation biopharmaceutical products with the potential to make a major market impact in Europe and USA. However, as we commented last May, the Directors believe that we shall be unable to fund all our ongoing and proposed new activities from existing financial resources. We have therefore been actively progressing a number of major commercial and corporate initiatives which we expect will strengthen our cash position in the short and medium term." 27th August 2003 ENQUIRIES: GeneMedix plc Tel: 01638 663 320 Paul Edwards, Chief Executive Officer Bankside Consultants Tel: 020 7444 4140 Michael Padley / Susan Scott Chief Executive Officer's Statement In the first six months of the financial year, GeneMedix has continued to make progress with its infrastructure and product development programmes, and has broadened its product portfolio, although we have continued to manage our cash situation tightly. The Company is now in a position where we have the opportunity to develop a range of first and second generation biopharmaceutical products, with the potential to make a major market impact in Europe and USA. However, to pursue this strategy successfully, we will need to create a more substantial infrastructure and have the ability to fund this growth. To this end, we are in detailed discussions with a number of potential partners with the aim of gaining access to additional funding for our existing programmes, as well as the new opportunities to develop novel formulations or introduce new and complementary products into our infrastructure. Whilst these discussions are advancing we are exercising prudent cost control measures, which ensure that we are undertaking expenditure only on current development programmes. Corporate activities We were pleased to announce the signing of a Letter of Intent ("LoI") under which GMX and Penang Development Corporation (PDC) are working together to set up a company in Penang, Malaysia for the development, manufacture and commercialisation of human insulin. Under the LoI, GeneMedix has out-licensed its existing insulin know-how to a newly-formed Malaysian company and will use its expertise in the development of biopharmaceuticals and in the design, construction and operation of state-of-the-art manufacturing facilities to construct a facility built to international quality standards. The total anticipated investment of US$34 million is to be funded by a mixture of development loans, grants and an issue of equity in the newly formed company to local investors. PDC has made land available, and has assisted in gaining access to the development loans on attractive commercial terms and to grant funding. GeneMedix will out-license its insulin know-how to the newly-formed company in return for an up-front milestone payment and royalty fee payable on sales of bulk product. GeneMedix will retain a majority shareholding in the new company, which will be separately financed, and will complete the development of the full-scale industrial process and technology transfer into the facility at its own expense. Target completion date for the facility is mid 2005. We expect to announce the capitalisation of the new venture over the coming weeks, completion of which will trigger a milestone payment to GeneMedix of a minimum of #2 million. In February we completed an Agreement with Antibioticos Spa of Milan, Italy, under which we gained exclusive access to three new cell lines for the production of Interferon-beta, G-CSF and human growth hormone, which currently have a worldwide market of US$ 4 billion. In March we announced a collaboration with Antares Pharma, Inc (Nasdaq: ANTR) through which Antares' current and future injection devices will be used to support our introduction of generic proteins into certain territories. We also continued to work closely with our partners, SkyePharma (LSE: SKP; Nasdaq: SKYE) in the development programme for a slow release version of interferon-alfa. Programmes The Company has continued to pursue a strategy of developing both "generic" versions of biopharmaceuticals that are due to come off patent in the EU and other territories, and "second generation" versions of these products by developing innovative formulations of our portfolio products with collaboration partners. To this end, we have continued with our development programmes for EPO and rhInsulin, as well as successfully completing our Malaysian clinical programme for GM-CSF. Also we have been engaged actively in dialogue with the CPMP regarding our programme for illustrating comparability between our version of EPO (Epostim) and the innovator product. Our approach to the registration of our products has been to rely on a strong scientific basis for the design of our clinical strategy, and having received scientific advice from the CPMP on the regulatory pathway for the production of Epostim, we are confident that our clinical programmes are well designed to enable comparability with the marketed product. However, when we take into account the demands of exhibiting consistent comparability with the marketed product, the outstanding patent issues and the time from submission of a dossier to receipt of final approvals, we believe it will be extremely difficult for any company to launch a generic version of EPO prior to 2006. In line with this conclusion, we have amended our launch forecasts for Epostim to late 2006. With regard to second generation products, we have been progressing our collaboration with SkyePharma, for the development of an extended release formulation of interferon alpha-2b, using SkyePharma's Depofoam(TM) injectable drug technology. Our recent collaboration with Antibioticos gives us access to G-CSF, Interferon-beta and human growth hormone, all of which have the potential to be successfully formulated as extended release versions. The potential to develop these "second generation", improved formulations is becoming an increasingly significant opportunity for the Company and forms the basis of a number of the discussions we are having currently with corporate partners. It is now evident that GM-CSF has not achieved a foothold in China and therefore does not provide an attractive market for a generic version of this protein. As such, we do not anticipate any significant sales of this product in China. We are evaluating currently a number of options to bring in new products and the setting up of contract manufacturing or development and, to this end, the facility has been shut for the past four months, whilst upgrades of some major items of plant have occurred. This process is nearing completion and we anticipate that an announcement regarding the future direction of the plant will be made over the coming months. Financial review Operating losses of #2.7 million and cash burn for the period were within expectations. There was little capital expenditure during the period except on the plant upgrades in China. Administration costs were up on Quarter 1 levels due to the high amount of corporate activity that occurred in the period. We also had a substantial amount of product manufactured for our collaboration with SKP, which caused an increase in our development costs on the previous quarter. These costs will not be sustained in the second half of the year. Cash balances at the end of the period were #3.4 million but we had a mini-fundraising round immediately post the period end, which brought in #1.5 million from a number of existing investors in South-East Asia. Current operating cash burn is approximately #1 million a quarter. Outlook Our twin strategy of developing both generic and second generation products offers significant potential for GeneMedix and it is the Board's intention to continue to follow this direction. However, as we commented last May, the Directors believe that we shall be unable to fund all our ongoing and proposed new activities from existing commercial activities, and are therefore looking to attract additional cash in-flows over the coming months to address the resulting funding shortfall. We have received interest from a number of parties regarding various degrees of collaboration and we are actively progressing a number of these initiatives. In the light of these current discussions, we have instructed our financial advisors, Nomura International, to examine a broad range of strategic options available to the Company to maximise value for shareholders from our extensive development portfolio. Consolidated Profit & Loss Account For the 6 months ended 31 May 2003 Notes Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 May 31 May 30 November 2003 2002 2002 (restated)* # # # Turnover 22,664 94,224 155,566 Cost of sales (9,245) (32,176) (91,719) __________ __________ __________ Gross profit 13,419 62,048 63,847 Administrative expenses (1,783,348) (1,406,610) (3,509,446) Research and development 1 (927,194) (1,177,389) (2,009,851) Exceptional research and development 1 - - (3,250,000) __________ __________ __________ Total research and development costs (927,194) (1,177,389) (5,259,851) __________ __________ __________ Total operating expenses (2,710,542) (2,583,999) (8,769,297) Operating loss (2,697,123) (2,521,951) (8,705,450) Interest receivable 37,522 217,306 229,641 Interest payable (184,597) (13,824) (134,839) __________ __________ __________ Loss on ordinary activities before taxation (2,844,198) (2,318,469) (8,610,648) Tax on loss on ordinary activities - - - __________ __________ __________ Loss on ordinary activities after taxation (2,844,198) (2,318,469) (8,610,648) Equity minority interests 61,620 83,707 138,003 __________ __________ __________ Loss for the period (2,782,578) (2,234,762) (8,472,645) __________ __________ __________ Loss per share - basic and diluted (1.0p) (0.8p) (2.9p) __________ __________ __________ All of the results relate to continuing operations. Consolidated Statement of Total Recognised Gains and Losses For the 6 months to 31 May 2003 Notes Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 May 31 May 30 November 2003 2002 2002 (restated)* # # # Loss for the period (2,782,578) (2,234,762) (8,472,645) Exchange adjustments offset in reserves (81,020) (53,512) (177,398) __________ __________ __________ Total gains and losses recognised for the period (2,863,598) (2,288,274) (8,650,043) Prior year adjustment 1 - (983,679) (983,679) __________ __________ __________ Total gains and losses recognised for the period (2,863,598) (3,271,953) (9,633,722) __________ __________ __________ * See Note 1 Consolidated Balance Sheet As at 31 May 2003 Notes Unaudited Unaudited Audited As at As at As at 31 May 31 May 30 November 2003 2002 2002 (restated)* # # # Fixed assets Intangible fixed assets 7,813,144 4,279,526 4,121,335 Tangible fixed assets 7,564,625 6,277,186 7,095,090 Investment 2 11,607 - - __________ __________ __________ 15,389,376 10,556,712 11,216,425 __________ __________ __________ Current assets Stock 195,270 120,206 146,402 Debtors - due within one year 1,069,245 604,973 788,695 Cash at bank and in hand 3,416,430 9,391,373 6,583,428 __________ __________ __________ 4,680,945 10,116,552 7.518,525 Creditors: amounts falling due within one (2,330,096) (1,504,476) (2,145,890) year __________ __________ __________ Net current assets 2,350,849 8,612,076 5,372,635 __________ __________ __________ Total assets less current liabilities 17,740,225 19,168,788 16,589,060 Creditors: amounts falling due after one (1,600,993) (838,889) (1,454,041) year Debentures - convertible loan notes (7,276,193) - (3,319,007) Provisions for liabilities and charges (42,005) (99,280) (42,753) __________ __________ __________ Net assets 8,821,034 18,230,619 11,773,259 __________ __________ __________ Share capital and reserves Called-up share capital 2,901,028 2,901,028 2,901,028 Share premium account 20,223,904 20,223,904 20,223,904 Profit and loss account 1 (14,721,283) (5,495,917) (11,857,685) __________ __________ __________ Equity shareholders' funds 8,403,649 17,629,015 11,267,247 Equity minority interests 417,385 601,604 506,012 __________ __________ __________ Total capital employed 8,821,034 18,230,619 11,773,259 __________ __________ __________ * See Note 1 Consolidated Cashflow Statement For the 6 months ended 31 May 2003 Notes Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 May 31 May 30 November 2003 2002 2002 (restated)* # # # Net cash outflow from operating activities (3,261,085) (1,195,038) (4,545,261) Returns on investments and servicing of (29,918) 287,347 169,846 finance Capital expenditure (496,818) (2,505,080) (4,082,257) Acquisitions and disposals - - - __________ __________ __________ Cash outflow before management of liquid (3,787,821) (3,412,771) (8,457,672) resources and financing Management of liquid resources 3,465,769 3,541,754 6,287,145 Financing 344,770 (39,040) 2,206,907 __________ __________ __________ Increase in cash in the period 22,718 89,943 36,380 __________ __________ __________ * See Note 1 Note to cash flow Reconciliation of Operating Loss to Net cash Outflow from Operating Activities Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 May 31 May 30 November 2003 2002 2002 (restated)* # # # Operating loss (2,697,123) (2,521,951) (8,705,450) Depreciation charge 408,157 180,822 515,689 Amortisation 158,191 158,191 3,566,382 Increase in stock (48,868) (47,699) (73,895) Increase in Debtors (296,580) (344,685) (374,816) (Decrease)/Increase in Creditors (784,115) 1,437,078 640,150 (Decrease)/increase in Provisions (747) (56,794) (113,321) __________ __________ __________ Net cash outflow from operating activities (3,261,085) (1,195,038) (4,545,261) _________ _________ __________ NOTES 1. Prior period adjustment The accounts for the six months ended 30 May 2002 reflect a prior period adjustment in relation to the accounting for development expenditure. On commencing business the accounting policy of the Company was to write such expenditure off, except where the Directors were satisfied as to the technical, commercial and financial viability of individual projects. The application of this policy resulted in #2,161,068 of capitalised development costs in the balance sheet of the Company at 31 May 2002, to be amortised over the relevant period of the commercial production. This policy is consistent with the requirement of SSAP13 'Accounting for Research and Development'. During the year ended 30 November 2002, management reviewed the policy relating to the accounting for development expenditure, in accordance with FRS18 'Accounting Policies', to ensure that the policy remained appropriate to the Company's circumstances. The Board reviewed the treatment of development costs by other similar companies and decided that expensing development costs as they are incurred was the most appropriate treatment, and the statutory accounts for the year ended 30 November 2002 were restated to reflect this change in accounting policy. The comparative information presented for 6 months ended 31 May 2002 is therefore restated, and the change in the accounting policy has resulted in an increase to the net loss for that period, and a decrease in net assets, of #1,177,389. Profit and loss account Unaudited 6 months to 31 May 2002 # Loss brought forward (2,223,964) Prior year adjustment (983,679) __________ As at 1 December restated (3,207,643) Retained loss for the period (2,234,762) Exchange difference (53,512) __________ Loss carried forward (5,495,917) _________ 2. Investment This represents GeneMedix investment in the 25:75 Joint Venture with Antibioticos. 3. Basis of preparation The 6-month figures to 31 May 2003 and 31 May 2002 are unaudited. The comparative figures for the year ended 30 November 2002 are not statutory accounts but are extracted from the audited statutory accounts. The statutory accounts for the year ended 30 November 2002 has been filed with the Registrar of Companies. They received an unqualified audit report which did not contain a statement under S237(2) or S237(3) of the Companies Act 1985. The interim report should be read in conjunction with the statutory accounts for the year ended 30 November 2002. The Directors estimate that cash and short term investments held at the date of approval of the financial statements within the Group are not sufficient to continue funding the trading activities of the Group for a further twelve months from the date of approval of the financial statements. Accordingly, the Directors currently plan to secure additional funds, by raising further finance or by entering into commercial agreements, which the Directors expect would enable the Group to continue its activities for the foreseeable future. There is uncertainty over the amount of funds which would be obtained and whether they would be received within the expected timescale. However, the Directors believe that the Company will be able to obtain such additional funds and therefore that it is appropriate that these financial statements are prepared on the going concern basis. This basis of preparation assumes that the Company and its subsidiaries will continue in operational existence for the foreseeable future, the validity of which depends on GeneMedix plc being able to obtain adequate funds to continue its activities. The Company is pursuing a number of initiatives, which the Company expects to provide the opportunity to strengthen its cash position. The financial statements do not include any adjustment that would result if the Company were unsuccessful in raising adequate additional funds. 4. We were unable to pay a dividend in the period. 5. Further copies are available from the Group's head office - Rosalind Franklin House, Fordham Road, Newmarket, Suffolk, CB8 7XN This information is provided by RNS The company news service from the London Stock Exchange END IR PUUCWRUPWGAM
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