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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Groupe Crit | EU:CEN | Euronext | Ordinary Share |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 74.00 | 75.80 | 74.00 | 0.00 | 07:20:16 |
Hot Features
Premium
Cambridge, UK 30 September 2003 - CeNeS Pharmaceuticals plc (AIM:
CEN) today announced its unaudited interim financial results for the
six months ended 30 June 2003.
Operational highlights
* Sale of pharmaceutical products in a deal worth over £9m in May
2003.
* M6G for post-operative pain enters first of two Phase III trials
- first trial expected to complete in mid 2004.
* CNS5161 for neuropathic pain ready to enter Phase II trial -
trial expected to complete in late 2004.
* Termination of M6G joint venture with Elan Corporation plc
("Elan").
Financial review
* Net profit for the first half of 2003 of £0.9m (H1 2002: loss
£2.1m), including £3.2m profit on disposal of the pharmaceutical
products in May 2003.
* CeNeS now has at least two year's cash resources - cash resources
at period end of £8.2m.
Corporate review
* Admission of the Company's shares to be traded on AIM ("The
Alternative Investment Market") from 8 August 2003.
* In August 2003, CeNeS removed all long-term convertible debt from
its balance sheet after agreeing with Elan to the early
conversion of its convertible debt of approximately £13.5m into
20m CeNeS ordinary shares at 68 pence per share and the
subsequent placing of these shares with institutional investors
at 3.875 pence per share.
* At same time in August, Elan's 9.9% shareholding in CeNeS was
placed with institutional investors at 3.875 pence per share. As
a result Elan has no interest in CeNeS shares.
* Also in August, CeNeS completed a placing of 17.4m shares at
3.875 pence per share, raising £0.7m before expenses.
Commenting on the results, Alan Goodman, Chairman of CeNeS
Pharmaceuticals plc said:
"CeNeS is now well placed to move forward and deliver increased value
to shareholders. The company has strong management, a strong cash
position and a late stage clinical pipeline focused on the treatment
of pain. The CeNeS Board is reviewing several options to build from
this strong base. The Board believes the next 18 months will be an
exciting time for the Company as our two lead products progress
through their clinical trials."
Review of the six months ended 30 June 2003
Introduction
The year to date has seen CeNeS deliver on several key objectives
including the successful completion of its major restructuring
program. This has significantly strengthened the position of the
Company. CeNeS is now a well funded biotechnology company with a
clear therapeutic focus on the treatment of pain. The improved cash
position has been achieved principally by the sale of its
pharmaceutical products Diconal, Cyclimorph and Valoid for a
consideration of over £9m in May 2003.
In the first half of 2003 CeNeS has also completely terminated its
collaboration with Elan. As part of this process CeNeS successfully
negotiated the termination of its joint venture with Elan and also,
in the second half of 2003, the conversion into shares, and
subsequent placing with institutional investors, of Elan's
convertible loan stock. CeNeS has also placed Elan's 9.9%
shareholding with institutional investors.
CeNeS has subsequently announced the commencement of Phase III trials
for M6G and phase II trials for CNS 5161 and enters the second half
of 2003 with a clear and well funded clinical development programme.
Outlook
CeNeS has successfully undertaken a major restructuring against a
background of extremely tough market conditions. The termination of
the CeNeS /Elan relationship, our pain-focused late stage pipeline
and our strong cash position mean we are well positioned to move
forward.
Clinical development update
M6G - for the treatment of post-operative pain
M6G has commenced an initial Phase III trial, which we anticipate
will complete in mid-2004. The trial will seek to recruit 168
patients in hospitals in three European countries. The patients will
be suffering post-operative pain following knee surgery carried out
under spinal anesthesia. The prime objective of the study is to
compare the analgesic efficacy and duration of action of a range of
doses of M6G given intravenously, compared with placebo.
Subsequently, a second Phase III trial is then planned and it is
expected that an initial European product filing could be made in
late 2005.
Phase II clinical trials have already shown that M6G produces
equivalent analgesia to morphine to combat post-operative pain.
Additional Phase II clinical studies in post-operative nausea and
vomiting have also shown that M6G reduced the incidence of nausea and
vomiting by more than 50% when compared directly with morphine. These
data have demonstrated that M6G induces equivalent analgesia to
morphine combined with an improved side effect profile. In particular
M6G appears to cause a significantly lower frequency and severity of
nausea and vomiting than morphine. If CeNeS is able to confirm in
larger phase III clinical trials that M6G causes fewer side effects
than morphine, but has equal analgesic efficacy, then it should
represent an attractive alternative for patients and healthcare
providers.
CNS 5161 - for the treatment of neuropathic pain
CeNeS has finalised plans for an extended Phase II trial of CNS 5161,
a novel compound for the treatment of neuropathic pain. The Phase II
trial will commence later in 2003 and results are expected in the
second half of 2004. An initial phase II study has been completed in
10 patients with chronic intractable neuropathic pain. This study
demonstrated that 0.25mg of CNS 5161 gave statistically significant
pain relief. The drug was well tolerated by the patients.
Interim results
The profit for the period was £0.9m (H1 2002: loss of £2.1m) which
includes a profit of £3.2m on the disposal of the pharmaceutical
products in May 2003. Cash and short term deposits at 30 June 2003
was £8.2m (H1 2002: £0.1m). The net increase in cash and short term
deposits for the period of £7.7m (H1 2002: decrease of £2.0m)
includes proceeds from the sale of the pharmaceutical products
Diconal, Cyclimorph and Valoid in May 2003.
Revenues for the period were £1.4m (H1 2002: 2.9m). The decrease was
due to the disposal of the pharmaceutical products in May 2003 and
one off revenues from other discontinued operations received in the
period to 30 June 2002.
Research and development costs in total decreased to £0.5m from
£1.6m. Costs incurred by discontinued operations decreased to £63,000
(H1 2002: £0.6m) and costs incurred by continuing operations
decreased to £0.5m (H1 2002: £1.0m) following the divestment of
non-core clinical development programmes and as a result of tight
cost control. Administration expenses in total decreased to £2.9m (H1
2002: £3.3m). Administrative expenses of continuing operations
decreased to £1.2m (H1 2002: £2.3m) due to cost savings made under
the restructuring plan. The exceptional goodwill write down in
discontinued operations arose following the acquisition of Elan's
minority share holding in CeNeS Bermuda Limited.
Other operating income for the period of £0.4m (H1 2002: £1m)
reflects the profit reported by CeNeS Bermuda Limited following the
write off of loans with Elan on cessation of the joint venture
arrangement. No development spend has been recharged by CeNeS or Elan
to the joint venture during the period. The profit on disposal of
discontinued operations of £3.2m (H1 2002: £0.5m) arose on the
disposal of the pharmaceutical products. Other interest receivable
and similar income of £0.2m (H1 2002: £0.4m) relates to the
unrealised foreign currency translation made on the conversion of the
dollar denominated long term convertible debt.
In August 2003 CeNeS and Elan agreed to convert the outstanding
convertible loan notes of US$21.7m (approx £13.5m) into approximately
20m CeNeS ordinary shares at an average price of $1.10 (£0.68) per
ordinary share. CeNeS agreed that as part of the transaction the
outstanding loan notes for the purposes of the conversion would
include interest rolled up to the term for each of the loan notes.
These shares were also placed with a group of institutional investors
at 3.875 pence per share. As a result, since August 2003, CeNeS'
balance sheet is free from any convertible debt. At the same time
CeNeS raised £675,000 before expenses through a placing with
investors of 17,441,296 ordinary shares of 1p each.
Portfolio of carried interests in divested non-core assets
Following the completion of the restructuring programme commenced in
late 2001, CeNeS now has carried interests in certain divested
non-core assets as set out below:
+-------------------------------------------------------------------+
| Asset disposed | | New owner/partner | CeNeS carried |
| | | | interest * |
|------------------+---+---------------------+----------------------|
| | | | |
|------------------+---+---------------------+----------------------|
| | | | |
|------------------+---+---------------------+----------------------|
| Ion channel | | Scion | Stage payments and |
| library | | Pharmaceuticals Inc | milestones |
| | | | |
|------------------+---+---------------------+----------------------|
| GGF2 - potential | | Acorda | Milestones and |
| treatment for | | Therapeutics, Inc | royalties |
| multiple | | | |
| sclerosis | | | |
| | | | |
| CEE 03 310 - | | Addex | Milestones and |
| potential | | Pharmaceuticals SA | royalties |
| treatment for | | | |
| sleep disorders | | | |
| and substance | | | |
| abuse | | | |
| | | | |
|------------------+---+---------------------+----------------------|
| Cognitive | | Cambridge Cognition | Stage payments and a |
| testing | | Limited | milestone payment |
| division | | | |
| | | | |
|------------------+---+---------------------+----------------------|
| AutoPatch | | Xention Discovery | Minority |
| technology and | | Limited | shareholding, loan |
| certain ion | | | note and certain |
| channel assets | | | rights over |
| | | | potential pain drug |
| | | | candidates arising |
| | | | from Xention's work |
+-------------------------------------------------------------------+
*The receipt of future milestones and/or royalties is dependent on
the successful progression of the divested asset/technology and as
such is not certain.
Neil Clark - Chief Operating Officer and Financial Director
30 September 2003
+-------------------------------------------------------------------------+
|Consolidated Profit and Loss| | | | |
|Account | | | | |
|----------------------------+-----+----------------+-----------+---------|
|For the six months to 30 | | | | |
|June 2003 | | | | |
|----------------------------+-----+----------------+-----------+---------|
| | |Six months |Six months |Year |
| | |ended |ended |ended |
| | |30 June |30 June |31 |
| | |2003 |2002 |December |
| | | | |2002 |
|----------------------------+-----+----------------+-----------+---------|
| | |Notes|(Unaudited) |(Unaudited)|(Audited)|
|--------------+-------------+-----+----------------+-----------+---------|
| | | | £'000| £'000| £'000|
|--------------+-------------+-----+----------------+-----------+---------|
|Turnover |-continuing | | 96| 244| 754|
|--------------+-------------+-----+----------------+-----------+---------|
| |-discontinued| | 1,329| 2,690| 4,478|
|--------------+-------------+-----+----------------+-----------+---------|
| | | | 1,425| 2,934| 5,232|
|--------------+-------------+-----+----------------+-----------+---------|
| | | | | | |
|--------------+-------------+-----+----------------+-----------+---------|
|Cost of sales |-continuing | | - | -| -|
|--------------+-------------+-----+----------------+-----------+---------|
| |-discontinued| | (683)| (942)| (1,802)|
|--------------+-------------+-----+----------------+-----------+---------|
| | | | (683)| (942)| (1,802)|
|--------------+-------------+-----+----------------+-----------+---------|
| | | | | | |
|--------------+-------------+-----+----------------+-----------+---------|
|Gross profit |-continuing | | 96| 244| 754|
|--------------+-------------+-----+----------------+-----------+---------|
| |-discontinued| | 646| 1,748| 2,676|
|--------------+-------------+-----+----------------+-----------+---------|
| | | | 742| 1,992| 3,430|
|--------------+-------------+-----+----------------+-----------+---------|
| | | | | | |
|--------------+-------------+-----+----------------+-----------+---------|
|Research and |-continuing | | (454)| (985)| (2,058)|
|development | | | | | |
|costs | | | | | |
|--------------+-------------+-----+----------------+-----------+---------|
| |-discontinued| | (63)| (644)| (1,478)|
|--------------+-------------+-----+----------------+-----------+---------|
| | | | (517)| (1,629)| (3,536)|
|--------------+-------------+-----+----------------+-----------+---------|
| | | | | | |
|--------------+-------------+-----+----------------+-----------+---------|
|Administrative|-continuing | | (1,215)| (2,299)| (4,381)|
|expenses | | | | | |
|--------------+-------------+-----+----------------+-----------+---------|
| |-exceptional | | - | - | (1,731)|
| |goodwill | | | | |
| |write down | | | | |
| |in continuing| | | | |
| |operations | | | | |
|--------------+-------------+-----+----------------+-----------+---------|
| |-discontinued| | (1,251)| (1,017)| (1,807)|
|--------------+-------------+-----+----------------+-----------+---------|
| |-exceptional |5 | (413)| - | - |
| |goodwill | | | | |
| |write down | | | | |
| |in | | | | |
| |discontinued | | | | |
| |operations | | | | |
|--------------+-------------+-----+----------------+-----------+---------|
| | | | (2,879)| (3,316)| (7,919)|
|--------------+-------------+-----+----------------+-----------+---------|
| | | | | | |
|--------------+-------------+-----+----------------+-----------+---------|
|Other | |5 | | 1,097| 1,574|
|operating | | | 422 | | |
|income | | | | | |
|--------------+-------------+-----+----------------+-----------+---------|
| | | | | | |
|--------------+-------------+-----+----------------+-----------+---------|
|Operating |-continuing | | (1,151)| (1,943)| (5,842)|
|(loss)/profit | | | | | |
|--------------+-------------+-----+----------------+-----------+---------|
| |-discontinued| | (1,081)| 87| (609)|
|--------------+-------------+-----+----------------+-----------+---------|
| | | | (2,232)| (1,856)| (6,451)|
|----------------------------+-----+----------------+-----------+---------|
| | | | | |
|----------------------------+-----+----------------+-----------+---------|
|Share of operating loss of |5 | - | (990)| (1,391)|
|joint venture | | | | |
|----------------------------+-----+----------------+-----------+---------|
|Profit on disposal of |6 | 3,171| 468| 553|
|discontinued operation | | | | |
|----------------------------+-----+----------------+-----------+---------|
|Interest | | (245)| (193)| (445)|
|(payable)/receivable (net) | | | | |
|----------------------------+-----+----------------+-----------+---------|
|Other interest receivable | | 245| 438| 1,186|
|and similar income | | | | |
|----------------------------+-----+----------------+-----------+---------|
|Profit/(loss) on ordinary | | 939| (2,133)| (6,548)|
|activities before taxation | | | | |
|----------------------------+-----+----------------+-----------+---------|
|Taxation | | - | -| 226|
|----------------------------+-----+----------------+-----------+---------|
|Profit/(loss) on ordinary | | 939| (2,133)| (6,322)|
|activities after taxation | | | | |
|----------------------------+-----+----------------+-----------+---------|
|Minority interest | | - | 64| 64|
|----------------------------+-----+----------------+-----------+---------|
|Profit/(loss) for the period| | 939| (2,069)| (6,258)|
|----------------------------+-----+----------------+-----------+---------|
|Profit/(loss) per ordinary |4 | 0.5p| (1.2p)| (3.7p)|
|share (basic and diluted) | | | | |
+-------------------------------------------------------------------------+
+-------------------------------------------------------------------+
| Consolidated statement | Six months | Six | Year ended |
| of total recognised | ended 30 June | months | 31 |
| gains and losses | | ended 30 | December |
| | | June | |
|--------------------------+----------------+----------+------------|
| For the six months to 30 | 2003 | 2002 | 2002 |
| June 2003 | | | |
|--------------------------+----------------+----------+------------|
| | £'000 | £'000 | £'000 |
|--------------------------+----------------+----------+------------|
| | | | |
|--------------------------+----------------+----------+------------|
| Profit/(loss) for the | 939 | (2,069) | (6,258) |
| period | | | |
|--------------------------+----------------+----------+------------|
| (Loss)/gain on foreign | | 62 | 18 |
| currency translation | (11) | | |
|--------------------------+----------------+----------+------------|
| | | | |
|--------------------------+----------------+----------+------------|
| Total recognised | 928 | (2,007) | (6,240) |
| gains/(losses) for the | | | |
| period | | | |
+-------------------------------------------------------------------+
+-------------------------------------------------------------------+
| Consolidated Balance Sheet |
|-------------------------------------------------------------------|
| As at 30 June 2003 |
|-------------------------------------------------------------------|
| |
|-------------------------------------------------------------------|
| | | 30 June | 30 June | 31 |
| | | 2003 | 2002 | December |
| | | | | 2002 |
|-------------------+-------+-------------+-------------+-----------|
| | Notes | (Unaudited) | (Unaudited) | (Audited) |
|-------------------+-------+-------------+-------------+-----------|
| | | £'000 | £'000 | £'000 |
|-------------------+-------+-------------+-------------+-----------|
| Fixed assets | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Intangible assets | 2 | 7,188 | 16,450 | 13,309 |
|-------------------+-------+-------------+-------------+-----------|
| Tangible assets | | 7 | 300 | 43 |
|-------------------+-------+-------------+-------------+-----------|
| | | 7,195 | 16,750 | 13,352 |
|-------------------+-------+-------------+-------------+-----------|
| | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Current assets | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Stocks | | - | 663 | 888 |
|-------------------+-------+-------------+-------------+-----------|
| Debtors - amounts | | 148 | 683 | 2,142 |
| falling due after | | | | |
| more than one | | | | |
| year | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Debtors - amounts | | 977 | 2,773 | 1,247 |
| falling due | | | | |
| within one year | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Short term | | 7,500 | - | - |
| investments | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Cash at bank and | | 677 | 137 | 480 |
| in hand | | | | |
|-------------------+-------+-------------+-------------+-----------|
| | | 9,302 | 4,256 | 4,757 |
|-------------------+-------+-------------+-------------+-----------|
| | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Creditors - | | (1,413) | (2,522) | (2,145) |
| amounts falling | | | | |
| due within one | | | | |
| year | | | | |
|-------------------+-------+-------------+-------------+-----------|
| | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Net current | | 7,889 | 1,734 | 2,612 |
| assets | | | | |
|-------------------+-------+-------------+-------------+-----------|
| | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Total assets less | | 15,084 | 18,484 | 15,964 |
| current | | | | |
| liabilities | | | | |
|-------------------+-------+-------------+-------------+-----------|
| | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Creditors - | | | | |
| amounts falling | | | | |
| due after more | | | | |
| than one year | | | | |
|-------------------+-------+-------------+-------------+-----------|
| 5% convertible | 3,9 | (7,994) | (8,453) | (7,995) |
| unsecured | | | | |
| exchangeable loan | | | | |
| stock 2009 | | | | |
|-------------------+-------+-------------+-------------+-----------|
| 7% convertible | 3,9 | (1,818) | (727) | (1,801) |
| unsecured | | | | |
| exchangeable loan | | | | |
| stock 2007 | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Other creditors | | (632) | (876) | (663) |
|-------------------+-------+-------------+-------------+-----------|
| | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Share of net | | - | (1,469) | (1,793) |
| liabilities in | | | | |
| joint venture | | | | |
|-------------------+-------+-------------+-------------+-----------|
| | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Net assets | | 4,640 | 6,959 | 3,712 |
|-------------------+-------+-------------+-------------+-----------|
| | | | | |
|-------------------+-------+-------------+-------------+-----------|
| | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Capital and | | | | |
| reserves | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Called up share | | 17,441 | 17,041 | 17,441 |
| capital | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Share capital to | | 5,219 | 5,219 | 5,219 |
| be issued | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Share premium | | 86,235 | 85,635 | 86,235 |
| account | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Profit and loss | | (114,662) | (111,357) | (115,590) |
| account | | | | |
|-------------------+-------+-------------+-------------+-----------|
| Other reserves | | 10,407 | 10,421 | 10,407 |
|-------------------+-------+-------------+-------------+-----------|
| Total capital | | 4,640 | 6,959 | 3,712 |
| employed | | | | |
+-------------------------------------------------------------------+
+---------------------------------------------------------------------+
|Consolidated Cash Flow Statement |
|---------------------------------------------------------------------|
|For the six months to 30 June 2003 |
|---------------------------------------------------------------------|
| | |Six months |Six months |Year |
| | |ended |ended |ended |
| | |30 June |30 June |31 |
| | |2003 |2002 |December |
| | | | |2002 |
|-------------------+-----+----------------+----------------+---------|
| |Notes|(Unaudited) |(Unaudited) |(Audited)|
|-------------------+-----+----------------+----------------+---------|
| | | £'000| £'000| £'000|
|-------------------+-----+----------------+----------------+---------|
|Net cash outflow |7 | (1,219)| (3,126)| (5,005)|
|from operating | | | | |
|activities | | | | |
|-------------------+-----+----------------+----------------+---------|
| | | | | |
|-------------------+-----+----------------+----------------+---------|
|Returns on | | | | |
|investments and | | | | |
|servicing of | | | | |
|finance | | | | |
|-------------------+-----+----------------+----------------+---------|
|Interest received | | 30| 41| 49|
|-------------------+-----+----------------+----------------+---------|
|Interest paid | | (16)| (14)| (15)|
|-------------------+-----+----------------+----------------+---------|
|Interest element of| | | (7)| (8)|
|finance lease | | - | | |
|rental payments | | | | |
|-------------------+-----+----------------+----------------+---------|
|Net cash inflow | | 14| 20| 26|
|from returns on | | | | |
|investment | | | | |
|-------------------+-----+----------------+----------------+---------|
|and servicing of | | | | |
|finance | | | | |
|-------------------+-----+----------------+----------------+---------|
| | | | | |
|-------------------+-----+----------------+----------------+---------|
|Taxation | | | | |
|-------------------+-----+----------------+----------------+---------|
|Research and | | | | 962|
|development tax | | - | - | |
|credit | | | | |
|-------------------+-----+----------------+----------------+---------|
| | | | | |
|-------------------+-----+----------------+----------------+---------|
|Capital expenditure| | | | |
|and financial | | | | |
|investments | | | | |
|-------------------+-----+----------------+----------------+---------|
|Payment to acquire | | | (9)| (16)|
|tangible fixed | | - | | |
|assets | | | | |
|-------------------+-----+----------------+----------------+---------|
|Payment to acquire | | | | (1,000)|
|intangible fixed | | - | - | |
|assets | | | | |
|-------------------+-----+----------------+----------------+---------|
|Receipts from sale | | 1| 140| 354|
|of tangible fixed | | | | |
|assets | | | | |
|-------------------+-----+----------------+----------------+---------|
|Net cash | | 1| 131| (662)|
|inflow/(outflow) | | | | |
|from capital | | | | |
|expenditure | | | | |
|-------------------+-----+----------------+----------------+---------|
|and financial | | | | |
|investment | | | | |
|-------------------+-----+----------------+----------------+---------|
| | | | | |
|-------------------+-----+----------------+----------------+---------|
|Acquisitions and | | | | |
|disposals | | | | |
|-------------------+-----+----------------+----------------+---------|
|Sale of |6 | 8,939| -| -|
|pharmaceutical | | | | |
|products | | | | |
|-------------------+-----+----------------+----------------+---------|
|Proceeds from sale | | | 488| 488|
|of subsidiary | | - | | |
|undertaking | | | | |
|-------------------+-----+----------------+----------------+---------|
|Net cash inflow | | 8,939| 488| 488|
|from acquisitions | | | | |
|and disposals | | | | |
|-------------------+-----+----------------+----------------+---------|
|Cash | | 7,735| (2,487)| (4,191)|
|inflow/(outflow) | | | | |
|before use of | | | | |
|liquid resources | | | | |
|and financing | | | | |
|-------------------+-----+----------------+----------------+---------|
|Increase in | | (7,500)| -| -|
|short-term deposits| | | | |
|with banks | | | | |
|-------------------+-----+----------------+----------------+---------|
|Net cash | | 235| (2,487)| (4,191)|
|inflow/(outflow) | | | | |
|before financing | | | | |
|-------------------+-----+----------------+----------------+---------|
| | | | | |
|-------------------+-----+----------------+----------------+---------|
|Financing | | | | |
|-------------------+-----+----------------+----------------+---------|
|Issue of ordinary | | | 5| 1,005|
|share capital | | - | | |
|-------------------+-----+----------------+----------------+---------|
|Repayment of loans | | (30)| (31)| (61)|
|-------------------+-----+----------------+----------------+---------|
|Issue of | | | 683| 1,794|
|convertible loan | | - | | |
|note | | | | |
|-------------------+-----+----------------+----------------+---------|
|Capital element of | | (8)| (194)| (228)|
|finance lease | | | | |
|rentals | | | | |
|-------------------+-----+----------------+----------------+---------|
|Net cash | | (38)| 463| 2,510|
|(outflow)/inflow | | | | |
|from financing | | | | |
|-------------------+-----+----------------+----------------+---------|
|Increase/(decrease)| | 197| (2,024)| (1,681)|
|in cash | | | | |
|-------------------+-----+----------------+----------------+---------|
| | | | | |
+---------------------------------------------------------------------+
+-------------------------------------------------------------------+
| Reconciliation of Net Cash Flow to Movement in Net Debt |
|-------------------------------------------------------------------|
| For the six months to 30 June 2003 |
|-------------------------------------------------------------------|
| | | Six months | Six months | Year |
| | | ended | ended | ended |
| | | 30 June | 30 June | 31 |
| | | 2003 | 2002 | December |
| | | | | 2002 |
|-----------------------+---+-------------+-------------+-----------|
| | | (Unaudited) | (Unaudited) | (Audited) |
|-----------------------+---+-------------+-------------+-----------|
| | | £'000 | £'000 | £'000 |
|-----------------------+---+-------------+-------------+-----------|
| | | | | |
|-----------------------+---+-------------+-------------+-----------|
| Increase/(decrease) | | 197 | (2,024) | (1,681) |
| in cash in the period | | | | |
|-----------------------+---+-------------+-------------+-----------|
| Cash outflow/(inflow) | | 38 | (451) | (1,505) |
| due to changes in | | | | |
| debt and finance | | | | |
| leasing | | | | |
|-----------------------+---+-------------+-------------+-----------|
| Movements in deposits | | 7,500 | - | - |
|-----------------------+---+-------------+-------------+-----------|
| Change in net debt | | 7,735 | (2,475) | (3,186) |
| resulting from cash | | | | |
| flows | | | | |
|-----------------------+---+-------------+-------------+-----------|
| Non-cash items | | (15) | 219 | 715 |
|-----------------------+---+-------------+-------------+-----------|
| Movement in net debt | | 7,720 | (2,256) | (2,471) |
|-----------------------+---+-------------+-------------+-----------|
| Net debt brought | | (9,503) | (7,032) | (7,032) |
| forward | | | | |
|-----------------------+---+-------------+-------------+-----------|
| Net debt carried | 8 | (1,783) | (9,288) | (9,503) |
| forward | | | | |
+-------------------------------------------------------------------+
Notes to the Interim Financial Statements
For the six months to 30 June 2003
1. Accounting policies
Basis of preparation
These interim statements have been prepared on a consistent basis
with the financial statements for the year ended 31 December 2002.
Compliance with FRS2 "Accounting for subsidiary undertakings"
requires a departure from the Companies Act 1985 relating to the
calculation of goodwill and an explanation of this departure is given
in note 5 below.
These interim statements do not constitute statutory financial
statements within the meaning of Section 240 of the Companies Act
1985. Results for the six month periods ended 30 June 2003 and 30
June 2002 have not been audited. The results for the year ended 31
December 2002 have been extracted from the statutory financial
statements that have been filed with the Registrar of Companies and
upon which the auditors reported without qualification.
2. Intangible fixed assets
Intangible assets of £7.2m comprise goodwill arising on the
acquisition of CeNeS Limited by Core Group.
3. Creditors
Creditors include a provision of £0.9m against future lease costs in
respect of property leased by CeNeS Drug Delivery Limited of which
£0.5m is included in creditors due after more than one year.
Creditors due after more than one year also include £8.0m relating to
a convertible unsecured loan note which has a fixed term of 8 years
and bears an interest rate of 5% and £1.8m relating to a convertible
unsecured loan note which has a fixed term of 6 years and bears an
interest rate of 7%. Pursuant to an agreement with Elan after the
period end these loans were converted to shares and are no longer
liabilities on the balance sheet (see note 9).
4. Profit per share
The basic and diluted profit per share is based on profits of £0.9m
(June 2002: loss of £2.1m) and the weighted average number of shares
in issue during the half year of 174,412,968 shares (June 2002:
170,286,912).
5. Accounting for joint venture arrangement
In June 2003 CeNeS announced the termination of its joint venture
(CeNeS Bermuda Limited) with Elan. Under the terms of the agreement,
CeNeS and Elan agreed that joint development programmes be terminated
and that respective rights to M6G and certain drug delivery
technologies be returned to CeNeS and Elan. It was also agreed that
no further funding would be available under the convertible loan
stock arrangements entered into in June 2001. The minority
shareholding held by Elan in CeNeS Bermuda Limited has been
transferred to CeNeS for a nominal consideration.
During the period goodwill of £413,000 arose as a result of the
acquisition of the minority shareholding in CeNeS Bermuda Limited
from Elan. This goodwill was written off in the period. The directors
are of the opinion that the calculation of this goodwill in
accordance with the Companies Act would not give a true and fair
view. As a result the directors have adopted a true and fair override
and calculated the goodwill in accordance with FRS2. The effect of
this decision has been to decrease the amount of goodwill arising on
the acquisition of the minority shareholding by £10.3m.
CeNeS (Bermuda) Limited has been accounted for as a subsidiary as a
result of the acquisition of Elan's minority shareholding and the
termination of the joint venture arrangements. Other income of
£422,000 reflects the profit made by CeNeS (Bermuda) Limited after
writing off creditor balances with Elan upon termination of the joint
venture arrangement.
6. Profit on disposal of pharmaceutical products
+-----------------------------------------------+
| | £'000 | £'000 |
|-------------------------------+-------+-------|
| Net book value of disposals: | | |
|-------------------------------+-------+-------|
| Pharmaceutical products | | 5,126 |
|-------------------------------+-------+-------|
| Fixed assets | | 19 |
|-------------------------------+-------+-------|
| Stock | | 843 |
|-------------------------------+-------+-------|
| | | 5,988 |
|-------------------------------+-------+-------|
| Consideration | | |
|-------------------------------+-------+-------|
| - Cash received | 8,939 | |
|-------------------------------+-------+-------|
| - Debtors due within one year | 220 | 9,159 |
|-------------------------------+-------+-------|
| Profit on disposal | | 3,171 |
+-----------------------------------------------+
Notes to the Interim Financial Statements
For the six months to 30 June 2003
7. Reconciliation of operating loss to net cash outflow from
operating activities
+-------------------------------------------------------------------+
| | Six months | Six months | Year |
| | ended 30 | ended 30 | ended |
| | June 2003 | June 2002 | |
| | | | 31 |
| | | | December |
| | | | 2002 |
|---------------------------+-------------+-------------+-----------|
| | | (Unaudited) | (Unaudited) | (Audited) |
|-----------------------+---+-------------+-------------+-----------|
| | | £'000 | £'000 | £'000 |
|-----------------------+---+-------------+-------------+-----------|
| Operating loss | | (2,232) | (1,856) | (6,451) |
|-----------------------+---+-------------+-------------+-----------|
| Depreciation | | 13 | 159 | 184 |
|-----------------------+---+-------------+-------------+-----------|
| Amortisation of grant | | - | (96) | (96) |
|-----------------------+---+-------------+-------------+-----------|
| Amortisation of | | 996 | 1,410 | 3,819 |
| intangible assets | | | | |
|-----------------------+---+-------------+-------------+-----------|
| Loss/(profit) on sale | | 3 | (32) | (207) |
| of tangible fixed | | | | |
| assets | | | | |
|-----------------------+---+-------------+-------------+-----------|
| Impairment of | | 413 | - | 1,731 |
| goodwill | | | | |
|-----------------------+---+-------------+-------------+-----------|
| Benefits and options | | - | 9 | - |
| settled by shares | | | | |
|-----------------------+---+-------------+-------------+-----------|
| Decrease/(increase) | | 44 | (189) | (460) |
| in stocks | | | | |
|-----------------------+---+-------------+-------------+-----------|
| Decrease/(increase) | | 690 | (665) | (1,559) |
| in debtors | | | | |
|-----------------------+---+-------------+-------------+-----------|
| Decrease in creditors | | (1,146) | (1,866) | (1,966) |
|-----------------------+---+-------------+-------------+-----------|
| Net cash outflow from | | (1,219) | (3,126) | (5,005) |
| operating activities | | | | |
+-------------------------------------------------------------------+
8. Analysis and reconciliation of net debt
+-------------------------------------------------------------------+
| | 1 | Cash | Exchange | Non-cash | 30 June |
|---------------| January | flow | adjustment | items | 2003 |
| | 2003 | | | | |
|---------------+---------+-------+------------+----------+---------|
| | £'000 | £'000 | £'000 | £'000 | £'000 |
|---------------+---------+-------+------------+----------+---------|
| | | | | | |
|---------------+---------+-------+------------+----------+---------|
| Cash at bank | 480 | 197 | - | - | 677 |
| and in hand | | | | | |
|---------------+---------+-------+------------+----------+---------|
| Debt due | (9,910) | 30 | 245 | (260) | (9,895) |
| after one | | | | | |
| year | | | | | |
|---------------+---------+-------+------------+----------+---------|
| Debt due | (65) | - | - | - | (65) |
| within one | | | | | |
| year | | | | | |
|---------------+---------+-------+------------+----------+---------|
| Finance | (8) | 8 | - | - | - |
| leases | | | | | |
|---------------+---------+-------+------------+----------+---------|
| Short term | - | 7,500 | - | - | 7,500 |
| deposits | | | | | |
|---------------+---------+-------+------------+----------+---------|
| Net debt | (9,503) | 7,735 | 245 | (260) | (1,783) |
+-------------------------------------------------------------------+
9. Elan loan stock settlement and placing of Elan's 9.9% shareholding
On 8 August 2003, Elan agreed to sell its holding of 16.9m shares in
CeNeS to a group of institutional investors at 3.875 pence per share.
At the same time CeNeS and Elan agreed to convert the outstanding
convertible loan notes of US$21.7m (approx £13.5m) into approximately
20m CeNeS ordinary shares at an average price of $1.10 (£0.68) per
ordinary share. CeNeS agreed that as part of the transaction the
outstanding loan notes for the purposes of the conversion would
include interest rolled up to the term for each of the loan notes.
These shares were also placed with the group of institutional
investors at 3.875 pence per share. Following completion Elan has no
shareholding in CeNeS. As previously announced on 18 June 2003, CeNeS
and Elan agreed to terminate the CeNeS/Elan joint venture, which was
established in June 2001 to develop M6G (morphine-6-glucuronide) for
the treatment of pain. CeNeS has agreed to pay Elan a low percentage
of all future revenues from M6G.
10. Share placing
Also on 8 August 2003 CeNeS raised approximately £675,000, before
expenses, through a placing with investors of 17,441,296 new ordinary
shares of 1p each at a price of 3.875 pence per share. This placing
was effected following the sub-division detailed in note 11.
11. Sub-division of ordinary shares
On 11 August 2003 the company sub-divided its existing 10p ordinary
shares into new ordinary shares with a nominal value of 1p and
deferred shares (with effectively no value). The new ordinary shares
effectively have the same rights as the existing ordinary shares.
Independent review report to CeNeS Pharmaceuticals plc
Introduction
We have been instructed by the company to review the financial
information which comprises the profit and loss account, balance
sheet, cash flow statement, statement of total recognised gains and
losses and related notes. We have read the other information
contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the
financial information.
Directors' responsibilities
The interim report, including the financial information contained
therein, is the responsibility of, and has been approved by the
directors. The Listing Rules of the Financial Services Authority
require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing
the preceding annual accounts except where any changes, and the
reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in
Bulletin 1999/4 issued by the Auditing Practices Board. A review
consists principally of making enquiries of group management and
applying analytical procedures to the financial information and
underlying financial data and, based thereon, assessing whether the
accounting policies and presentation have been consistently applied
unless otherwise disclosed. A review excludes audit procedures such
as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit
performed in accordance with Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the financial information. This
report has been prepared for and only for the Company for the purpose
of the Listing Rules of the Financial Services Authority and for no
other purpose. We do not, in producing this report, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or in to whose hands it may come save where
expressly agreed by our prior consent in writing.
Review conclusion
On the basis of our review we are not aware of any material
modifications that should be made to the financial information as
presented for the six months ended 30 June 2003.
PricewaterhouseCoopers LLP
Chartered Accountants
Cambridge
30 September 2003
Notes:
(a) The maintenance and integrity of the CeNeS Pharmaceuticals plc
website is the responsibility of the directors; the work carried out
by the auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that may have occurred to the interim report since it was initially
presented on the website.
(b) Legislation in the United Kingdom governing the preparation and
dissemination of financial information may differ from legislation in
other jurisdictions.
For more information please contact:
CeNeS Pharmaceuticals plc
Neil Clark
Tel: +44 (0)1223 266466
Fax: +44 (0)1223 266467
Evolution Beeson Gregory
Nick Rodgers
Tel: +44 (0)20 7488 4040
Noonan Russo
Julia Philips
Fay Weston
Tel: +44 (0)20 7726 4452
Fax: +44 (0)20 7726 4453
- ---END OF MESSAGE---
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