19th Jan 2006 07:01
GW Pharmaceuticals PLC19 January 2006 Embargoed until 0700 19 January 2006 GW Pharmaceuticals plc ("GW" or "the Group") Preliminary Results for the Year Ended 30 September 2005 GW Pharmaceuticals plc, the company which develops and manufactures a range ofnew medicines based on cannabis and other controlled drugs, announces itspreliminary results for the year ended 30 September 2005. Highlights • Sativex approved and launched in Canada. In-market sales in first six months of C$1.1m (£540,000), in line with expectations• European (ex-UK) marketing agreement for Sativex signed with Almirall, including £12m signature fee• US FDA accepts IND for Sativex, allowing direct entry into pivotal Phase III trials in cancer pain• Contract to supply Sativex to 600 patients in Spain under compassionate access programme - first patient now enrolled• UK Home Office permits import of Sativex from Canada to UK as an unlicensed medicine. Hundreds of enquiries received to date• Medicines Commission confirms further efficacy data required prior to UK regulatory approval. No quality or safety issues to prevent grant of a product licence• Pivotal MS spasticity Phase III trial completed patient recruitment and due to report results in the second quarter of 2006• Two pivotal neuropathic pain Phase III trials ongoing and due to report results by the end of 2006• Phase III trial shows that Sativex improves symptoms of bladder dysfunction in Multiple Sclerosis• Progress in earlier stage research programmes, notably rheumatoid arthritis and the study of THCV• Net loss for the year of £7.5m (2004: £13.7m), in line with budget • Cash and short term deposits at 30 Sept 2005 of £13.0m (2004: £17.8m)• Balance sheet significantly strengthened since the year end following the £12m signature fee from Almirall and £8.1m US share placing Dr Geoffrey Guy, Executive Chairman, commented: "During the last twelve months,GW has made significant advances, including its first product approval andlaunch, first sales revenues, completion of its most sizeable commercialagreement to date, and, latterly, the grant of a Phase III IND in the UnitedStates, the world's largest pharmaceutical market. As a result, we start 2006 ina strong position from a commercial, financial, and scientific perspective. "We are encouraged by the initial performance of Sativex since its launch inCanada at the end of June. We are pleased that the product is now alsogenerating revenues on a named patient basis in Europe. The smooth commercialintroduction of Sativex bodes well for the long term potential of the Sativexfranchise. "With the Canadian launch, Phase III IND in the US, and a comprehensive latestage clinical programme in Europe, GW now has a truly international strategicoutlook. Whilst UK regulatory progress has been slower than hoped, the ongoingPhase III trials programme now provides a number of independent routes toEuropean regulatory approvals for Sativex. In the indication of MultipleSclerosis spasticity, the pivotal Phase III trial will report results in thesecond quarter of 2006. In the indication of peripheral neuropathic pain, twopivotal Phase III trials are on track to conclude towards the end of the year. "In building upon the achievements of 2005, the Company can look forward withconfidence to 2006, a year in which we expect to see revenue growth, resultsfrom three pivotal clinical trials, a regulatory submission in Europe, the startof pivotal Phase III trials in the US, and a renewed focus on earlier stageresearch." A presentation for analysts is taking place today at 09.30 at Weber ShandwickSquare Mile, Fox Court, 14 Gray's Inn Road, London WC1. An audio webcast of thepresentation will be available on GW's website at www.gwpharm.com from 15.00today. Enquiries: GW Pharmaceuticals plc (19/01/06) 020 7067 0700Dr Geoffrey Guy, Chairman (Thereafter) 01980 557000Justin Gover, Managing Director Weber Shandwick Square Mile 020 7067 0700Kevin Smith / Yvonne Alexander Embargoed until 0700 19 January 2006 GW Pharmaceuticals plc ("GW" or "the Group") Preliminary Results for the Year Ended 30 September 2005 Managing Director's Review This year marked GW's first regulatory approval and product launch, major milestones in the history of any biopharmaceutical company. Product salesrevenues are now growing from the Canadian launch of Sativex as well as fromsales of Sativex on an unlicensed basis in Europe. We also signed a majorlicensing agreement in Europe with Almirall Prodesfarma S.A.. Most recently, wesuccessfully achieved Phase III IND status for Sativex in the United States, theworld's largest pharmaceutical market. These achievements contrast withregulatory setbacks in the UK. Nevertheless, GW has a clear and advancedstrategy in place, supported by several clinical trials, to resolve this issue.With both the £12m Almirall signature fee as well as a share placing of $15m(£8.1m net) to a US institutional investor in January, GW has commenced 2006with a strong balance sheet to advance its pivotal European and US regulatoryprogrammes as well as enhance its earlier stage research efforts. Canada In April 2005, Sativex was approved by Health Canada as an adjunctive treatmentfor symptomatic relief of Neuropathic Pain in adults with Multiple Sclerosis("MS"). Sativex contains delta-9-tetrahydrocannabinol (THC) and cannabidiol(CBD) as its principal cannabinoid components. The medicine is administered bymeans of a spray into the mouth and is a pharmaceutical product standardised incomposition, formulation and dose. The product was launched at the end of June by our marketing partner, BayerHealthCare. In-market sales in the first six months total C$1.1 million(£540,000), in line with GW/Bayer expectations. GW was fully responsible for the regulatory process in Canada and succeeded ingaining approval in less than twelve months. The product was approved underHealth Canada's Notice of Compliance with Conditions (NOC/c) policy. Initial physician and patient feedback from market experience in Canada ispositive with consistent patterns of safety and efficacy as experienced duringthe clinical trials. Expected commercial challenges at launch include the lackof any previous clinical trials of Sativex in Canada and, as with all productsapproved under the NOC/c policy, the lack of reimbursement by the public healthsystem. This situation should change once the "condition" element of the NOC/capproval is lifted, which will follow completion of the planned MS pain trial in2007. The Canadian approval has already yielded positive benefits elsewhere, includingthe use of Sativex as an unlicensed medicine in Spain and the UK (see below). GW is currently exploring opportunities to expand the regulatory approval inCanada to other indications. Almirall In December 2005, GW and Almirall entered into an exclusive agreement forAlmirall to market Sativex in Europe (excluding the UK). Under the terms of the agreement, GW has maintained a significant share of longterm product revenues whilst benefiting from a £12 million signature fee. Inaddition, milestone payments are payable on the successful completion of each ofthe ongoing pivotal Phase III trials, as well as on regulatory approvals and inrelation to achievement of sales targets. Including the signature fee,milestones payable under the contract may total up to £46 million. Almirall is Spain's largest pharmaceutical company and one of Europe's leadingprivate pharmaceutical companies, with 2005 sales approaching 1 billion Euros.The company has a significant presence in Spain, where it is number two bymarket share, and subsidiary operations in other major European markets,including France, Germany, Italy, Portugal and Belgium. Under the agreement GW is responsible for completing the development of Sativexin the three initial target indications of MS symptoms (neuropathic pain andspasticity), neuropathic pain (peripheral and general) and cancer pain. Inaddition, Almirall and GW expect to collaborate on the development of Sativex inother indications. The parties will be discussing potential new indications overthe coming months. It is anticipated that Almirall will contribute to the costof development of new indications. The licensed territory includes the members of the European Union (excluding theUK), EU accession countries, as well as Switzerland, Norway and Turkey. Incountries where Almirall has no direct presence at the time of product launch,the companies shall jointly agree the appointment of distribution partners. Insuch countries, GW may elect to distribute the product itself. In the UK,Sativex will be exclusively marketed by Bayer HealthCare. United States It has, for some time, been GW's strategy to generate extensive data on Sativexin Europe before embarking on discussions with the Food & Drug Administration(FDA) regarding possible development in the US. One year ago, GW announced thatit would embark on plans to open discussions with the FDA. Although thisrepresented a new regulatory development for GW, the company had in fact forseveral years been preparing for this strategic move by building an extensivesupport base in the US. This strategy has now provided the optimum outcome and on 4 January 2006, wewere delighted to announce that the FDA had accepted GW's Investigational NewDrug (IND) Application for Sativex for the treatment of pain in patients withadvanced cancer that has not been adequately relieved by opioid medications. Aspart of this IND, the FDA agreed that GW may proceed directly into pivotal PhaseIII clinical trials in the US. We have thus managed to compress the overallpotential timelines to filing a US regulatory submission as compared to a USdevelopment programme commencing in Phase II. This IND followed a pre-IND/end of Phase II meeting held with the FDA in summer2005. In addition, the FDA provided written guidance on the US Phase III trialprotocol. GW expects to carry out two pivotal Phase III trials, each of which include 250patients with cancer pain in the US, prior to filing a US regulatory submission.The US development plan also includes other smaller scale supporting studies. Following the recent US equity placing, US-related development activities willcommence in the next few months and the Phase III clinical programme is likelyto commence in late 2006. In parallel, GW shall seek a US licensing partner forSativex with a view to such partner taking responsibility for the principalcosts of US development. A US regulatory submission could reasonably be expectedto occur 24-36 months after the start of the Phase III programme. European Regulatory Strategy GW made an initial application for Sativex to the UK regulator, the Medicinesand Healthcare products Regulatory Agency (MHRA), in 2003. The applicationultimately focused on the use of Sativex for the treatment of Spasticity in MS.This process concluded in May 2005 at the Medicines Commission, the senioradvisory body to the MHRA. Disappointingly, the regulators determined that,although there were no quality or safety issues which would prevent an approval,the evidence of efficacy in MS Spasticity was promising but not yet sufficientlycompelling to permit the grant of a licence. The Medicines Commission hearing related solely to the indication of MSSpasticity. However, GW had in parallel put in place a well defined clinicalprogramme which is the subject of formal regulatory advice and which is designedto secure European regulatory approvals for Sativex in a range of indications.There are now a number of independent routes to European regulatory approvalsfor Sativex in the indications listed below: •MS SpasticityIn the indication of MS spasticity, GW has one completed positive pivotal trial.In order to meet regulatory requirements, a second pivotal study was initiatedin early 2005. This study has completed patient recruitment and includes a totalof 337 patients, comfortably in excess of recruitment targets. The study is dueto report results in the second quarter of 2006. GW believes that this study,together with the existing data, will be sufficient to obtain Europeanregulatory approvals in this indication. Subject to the results of this study,GW would be in a position to make a UK regulatory submission in this indicationby the end of the first half of 2006. •Peripheral Neuropathic PainGW has received formal guidance from European regulatory authorities that itscurrent clinical programme would be sufficient to support a regulatory filing inthe indication of peripheral neuropathic pain. GW has to date reported positivedata in four separate neuropathic pain trials, each of which provide strongsupportive evidence in this indication. In addition, GW is now conducting twofurther trials which conform to newly published European regulatory guidelines(which detail requirements for approval in this indication). These studies are a218 patient study in neuropathic pain in patients with diabetic neuropathy,which is due to report results in the third quarter of 2006, and a 218 patientstudy in neuropathic pain in patients with allodynia, which is due to completeat the end of the year. •Neuropathic Pain in MSAs discussed above, GW has obtained approval for Sativex in Canada in theindication of neuropathic pain in MS. As part of this approval, under the NOC/cpolicy, a further study was formally agreed with the regulator. This 218 patientstudy will commence in the next few months. In addition to Canada, this studywill be used to support a future European regulatory filing in this indication.The trial is expected to complete in summer 2007. •General Neuropathic PainThe MS pain study described above will provide data in a recognised model ofcentral neuropathic pain. GW has received regulatory advice that the twoperipheral neuropathic pain studies described above together with the MS painstudy will support an application to broaden a future peripheral neuropathicpain indication to a general neuropathic pain claim. •Cancer PainAs highlighted above, GW has received permission from the FDA to enter directlyinto Phase III trials in the US in the indication of cancer pain. Thisdevelopment follows a positive Phase III Cancer Pain trial reported at thebeginning of 2005. It is intended that Phase III trials from the US programmewill provide a European registration package for this indication also. In summary, GW has a focused ongoing clinical programme targeted at well definedregulatory indications and which has been, and continues to be, the subject ofwidespread formal regulatory consultation. Assuming the results of these trialsare consistent with previous positive results seen in similar trials alreadycompleted, this programme will provide robust registration packages for Sativexin Europe, as well as North America and elsewhere in the world across a range ofindications. GW expects to make its next regulatory submission in Europe duringcalendar 2006. Supply of Sativex As An Unlicensed Medicine GW remains committed to achieving regulatory approvals for Sativex around theglobe. As we make progress towards this goal, GW is also responding to requestsfor the supply of Sativex as an unlicensed medicine. In recent months, therehave been specific developments of this kind in Spain and the UK. In November 2005, GW reached agreement with the Health Department of TheRegional Government of Catalonia in Spain to supply Sativex to 600 patientssuffering from MS and a number of other conditions under a compassionate accessprogramme. The programme has been approved by the Spanish Ministry of Health andthe Catalan Health Department has approved a specific budget to pay for GW tosupply the medicine. The first patient entered the programme in January 2006. The rationale for this programme was explained by Dr. Rafael Manzanera, GeneralDirector of Health Resources of the Catalan Health Department, who said, "Thisis a direct response to the wishes of patients with a significant unmet medicalneed. The Catalan administration believes that a non-smoked prescriptioncannabis derived medicine, such as Sativex, represents the optimum solution forthese patients, without in any way promoting the use of herbal cannabis." In the UK, GW was informed by the Home Office in November 2005 that Sativex maybe imported from Canada to satisfy its prescription to individual patients inthe UK as an unlicensed medicine. This development is in response to enquiriesfrom a number of UK doctors and individual patients who have been in contactwith the Home Office to request access to Sativex. Under relevant UKlegislation, the basis on which Sativex may be imported is the clinicaljudgement of doctors in relation to specific nominated patients. Sativex will remain a Schedule 1 controlled drug in the UK in line with statedgovernment policy. This means that the prescribing of Sativex can only bepermitted under Home Office licence. GW has received hundreds of enquiries fromboth physicians and patients and is now processing such enquiries. Publications GW's clinical data has to date been the subject of eight peer-reviewedpublications. Highlights this year include publication in the journal,Neurology, of a Phase III study showing that Sativex is effective in reducingcentral neuropathic pain and sleep disturbance in people with Multiple Sclerosis(MS)(i). In addition, the journal Rheumatology, published a Phase II study inpatients with Rheumatoid Arthritis showing that Sativex "has a significanteffect on easing pain and on suppressing the disease"(ii). Presentations of GW data have been made this year by key opinion leaders atmeetings of the American Academy of Neurology, the American Pain Society, theBritish Pain Society, the Association of British Neurologists, the ECTRIMS/ACTRIMS Multiple Sclerosis meeting and the International Association for theStudy of Pain. Trial Results GW also reports today preliminary results in two non-pivotal Phase III trials.The trials commenced prior to implementation of the current regulatory strategyand hence do not have pivotal regulatory utility. The first study incorporated 135 patients with advanced MS who were experiencingbladder dysfunction ("Detrusor Overactivity") that was not responding adequatelyto currently available treatment. In the trial, Sativex achieved statisticallysignificant improvements in a range of bladder symptoms, including nocturia (p=0.01), daytime frequency (p=0.044), frequency per 24 hours (p=0.001), bladdersymptom severity (p=0.001). A significant effect was also seen in the patient'sglobal impression of change (p=0.005). There was also a strong trend in favourof Sativex in urgency (p=0.07). There was no significant effect on incontinence,the primary endpoint of the study. The adverse event data showed the medicine tobe generally well tolerated. Professor Clare Fowler, Professor of Uro-Neurology at the Institute ofNeurology, UCL and Consultant in Uro-Neurology, National Hospital for Neurology& Neurosurgery, said, "This study demonstrates that in patients with MS who haveexhausted other pharmacological treatments, Sativex improved some of their mosttroublesome symptoms of bladder dysfunction. The impact that Sativex had,particularly on frequency and nocturia in these patients was of significantbenefit for them and was maintained in long-term use. The results suggest thatSativex will have a useful place in the management of these distressingproblems." The results offer promise that bladder dysfunction may provide a further newindication for Sativex in due course. The second study is a non-pivotal study in 117 patients with pain due to spinalcord injury. This study was designed in 2002 and does not meet recentlypublished new regulatory guidelines for neuropathic pain studies. In this study,Sativex achieved a statistically significant effect on the Brief Pain Inventory(p=0.032) as well as the patient's global impression of change (p=0.001).However, there was no significant effect on pain as measured on a numeric ratingscale, the primary endpoint of the study. The apparent internal contradiction inresults requires further consideration. Some explanation may lie in the recentneuropharmacological observation that intact spinal nerve pathways are requiredfor effective cannabinoid analgesia. Tetrahydrocannabivarin (THCV) For several years, GW has been undertaking a botanical research programmetargeted at THCV, a naturally occurring variant of THC. This programme led tothe exciting pharmacological finding last year by Professor Roger Pertwee, GW'sDirector of Pharmacology, that THCV acts as an antagonist at both the CB1 andCB2 receptor, with a potency similar to that of rimonabant, the potentialblockbuster drug developed by Sanofi-Aventis. This GW-led discovery hasreverberated through the world of cannabinoid research and has kick-started anew GW research programme aimed at fully elaborating the pharmacology of THCV.Further work over the next year will add to the understanding of this naturallyoccurring cannabinoid, and GW also hopes to start human clinical trials. THCV isone of a wide range of cannabinoids which offer the potential for a significantexpansion of GW's clinical portfolio in the coming years. Advanced Dispensing System Progress has been slower than anticipated this year towards commencing aclinical trial with GW's second generation Advanced Dispensing System (ADS).Much of the required regulatory device approval testing has been successfullycompleted and final software modifications are ongoing prior to achieving allthat is required for commencing the clinical trial. This system has been specifically developed to allow for methadone to bedispensed safely and reliably in the treatment of drug addiction. The clinicaltrial will be carried out at the UK National Addiction Centre. Upon completion,GW will look to expand the adoption of the ADS system at drug treatment centresaround the UK. GW has commenced early stage preparations for ADS in the US market and isworking with officials at two US federal agencies, the National Institute forDrug Abuse (NIDA) and the Center for Substance Abuse Treatment (CSAT). As partof this arrangement, it has been agreed to conduct a pilot US trial which willfollow completion of the UK trial. NIDA have agreed in principle to fund thistrial, which is expected to take place at Johns Hopkins University. Prospects During the next twelve months, GW expects to benefit from revenue growth fromsales of Sativex, commence US Phase III development, complete three key pivotalPhase III trials and submit a new regulatory submission in Europe. Havingachieved approval in Canada, we remain committed to securing approval forSativex across Europe as well as in the United States and elsewhere, and haveput in place a clear clinical programme based on formal regulatory advice, whichis designed to ensure that this objective is met as rapidly as possible. We haveseen excellent clinical data from our trials to date and have good reason toexpect similar results from our future trials. In addition, we are now in aposition to focus additional resource on earlier stage research programmes. Justin GoverManaging Director Financial Review This year has seen GW obtain it first product approval and make its firstcommercial sales of Sativex. Since the year end GW has completed a Europeanlicensing deal, commenced sales of Sativex as an unlicensed medicine in Spain,and concluded a US share placing. As a result, we enter 2006 with asignificantly strengthened balance sheet and are well placed to capitalise onour commercial ambitions. Results of Operations The Group loss for the year ended 30 September 2005 was £7.5m (2004: £13.7m). Turnover of £3.11m in the year includes £2.8m of milestone income receivedfollowing regulatory approval for Sativex in Canada plus £0.31m of product salesrevenues representing GW's first commercial supplies to our marketing partner,Bayer, following the Canadian launch of Sativex in June 2005. Research and development expenditure, which is expensed as incurred, decreasedto £10.3m (2004: £13.9m). This expenditure was in line with the plannedreduction in our research activities as outlined in last year's Annual Report.Management and administrative expenses decreased to £2.6m (2004: £2.7m). The average headcount of the Group for the year was 101 (2004: 128) and we endedthe year with 105 employees (2004: 108). Capital expenditure was £0.1m (2004: £0.8m) as no major capital expenditureprojects were undertaken in the year. The Group benefited from net interest income of £0.7m (2004: £1.0m). Stock Following the approval of Sativex in Canada, stock was recognised for the firsttime in our interim accounts to 31 March 2005. The stock represents the value ofraw materials, work in progress and finished goods ready to satisfy theanticipated demand for Sativex from the Canadian market and from our recentlysigned contract with the Catalonian Department of Health. The inclusion of£0.66m of stock in the balance sheet has resulted in a corresponding credit tothe profit and loss account in the year. Share Issues In February 2005 the Company raised £2.5m via a placing of 2,034,894 shares at£1.235. In addition the Company has received £262,000 via the exercise of shareoptions. Subsequent to the year end, in January 2006, the Company raised £8.6m via aplacing to a US investor of 6,165,978 shares at £1.3961. This financing willpermit GW to start the US development of Sativex whilst the company seeks a USlicensing partner. Research and Development Tax Credit The Group has claimed a research and development tax credit of £1.7m (2004:£2.1m) which is shown as a credit to the profit and loss account and is subjectto agreement with HM Revenue and Customs. Liquidity and Cash Resources The Group's net funds comprise cash balances together with amounts held on shortterm deposit. Cash and short term deposits at 30 September 2005 totalled £13.0m(2004: £17.8m). The net cash outflow during the year (before financing andmanagement of liquid resources) was £7.5m (2004: £14.3m). 2006 Financial Year In the first few months of the 2006 financial year, GW has significantlyincreased its cash position with the £12m signature fee from the marketingagreement with Almirall combined with the US placing which netted an additional£8.1m after costs. In 2006, principally as a result of the European Phase III trials, initial USdevelopment activity and increased earlier stage research, we expect R&Dexpenditure to increase by about 30% over 2005. This will bring R&D expenditureback to around 2004 levels. Setting aside the recently completed US equityplacing, GW expects 2006 to be approximately cash neutral. David KirkFinance Director - Ends - Enquiries: GW Pharmaceuticals plc (19/01/06) 020 7067 0700Dr Geoffrey Guy, Chairman (Thereafter) 01980 557000Justin Gover, Managing Director Weber Shandwick Square Mile 020 7067 0700Kevin Smith / Yvonne Alexander This news release may contain forward-looking statements that reflect theCompany's current expectations regarding future events, including the clinicaldevelopment and regulatory clearance of the Company's products. Forward-lookingstatements involve risks and uncertainties. Actual events could differmaterially from those projected herein and depend on a number of factors,including (inter alia), the success of the Company's research strategies, theapplicability of the discoveries made therein, the successful and timelycompletion of clinical studies, including with respect to Sativex and theCompany's other products, the uncertainties related to the regulatory process,and the acceptance of Sativex and other products by consumers and medicalprofessionals. --------------------------(i) D.J.Rog, T.J.Nurmikko, T.Friede, and C.A Young. Randomized, controlled trialof cannabis-based medicine in central pain in multiple sclerosis. Neurology2005;65:812(ii) D. R. Blake, P. Robson, M. Ho, R. W. Jubb, and C. S. McCabe. Preliminaryassessment of the efficacy, tolerability and safety of a cannabis-based medicine(Sativex) in the treatment of pain caused by rheumatoid arthritis. Rheumatology,January 2006; 45: 50 - 52. GW Pharmaceuticals plcPreliminary Results for the Year Ended 30 September 2005Consolidated Profit and Loss Account Notes 2005 2004 £000's £000'sTurnover 3,110 -Cost of sales (82) - __________ __________Gross Profit 3,028 -Research and development costs (10,276) (13,937)Management and administrative expenses (2,628) (2,752) __________ __________Operating loss (9,876) (16,689)Interest receivable 682 961Interest payable - (3) __________ __________Loss on ordinary activities before taxation (9,194) (15,731)Tax credit on loss on ordinary activities 2 1,678 2,051 __________ __________Loss on ordinary activities after taxation being retained loss for the financial year (7,516) (13,680) ========== ==========Loss per share - basic and diluted 3 (6.7p) (12.4p) All activities relate to continuing operations. The Group has no recognised gains or losses other than the losses above andtherefore no separate statement of total recognised gains and losses has beenpresented. GW Pharmaceuticals plcPreliminary Results for the Year Ended 30 September 2005Consolidated Balance Sheet Notes At 30 Sept At 30 Sept 2005 2004 £000's £000'sFixed assetsIntangible assets - goodwill 5,566 5,922Tangible assets 723 1,026 __________ __________ 6,289 6,948 __________ __________Current assetsStocks 656 -Debtors 2,135 2,381Cash held on deposit as short term investments 10,120 13,152Cash at bank and in hand 2,913 4,655 __________ __________ 15,824 20,188Creditors: Amounts falling due within one year (3,379) (3,609) __________ __________Net current assets 12,445 16,579 __________ __________Total assets less current liabilities 18,734 23,527Provisions for liabilities and charges (22) (69) __________ __________Net assets 18,712 23,458 ========== ========== Capital and reservesCalled-up share capital 114 111Share premium account 4 50,103 47,336Other reserves 4 19,262 19,262Profit and loss account 4 (50,767) (43,251) __________ __________Equity shareholders' funds 5 18,712 23,458 ========== ========== GW Pharmaceuticals plcPreliminary Results for the Year Ended 30 September 2005Consolidated Cash Flow Statement Notes 2005 2004 £000's £000'sNet cash outflow from operating activities 6 (10,026) (16,403)Returns on investments and servicing of finance 717 1,097Taxation 1,883 1,725Capital expenditure (112) (764) __________ __________Cash outflow before management of liquid resources and financing (7,538) (14,345)Management of liquid resources 3,032 15,893Financing 2,764 108 __________ _________(Decrease) / increase in cash during the year (1,742) 1,656 ========== ========= Notes: 1 Basis of presentation The preliminary statement covers the year ended 30 September 2005. It has beenprepared using the same accounting policies as those adopted in preparing thestatutory accounts for the year ended 30 September 2004. The Board of Directors of the Company approved the statement on 18 January 2006. The 2005 and 2004 accounts received unqualified reports from the Auditors anddid not contain any statements under S237(2) or (3) of the Companies Act 1985.The 2005 accounts will be filed with the Registrar of Companies following theAnnual General Meeting. The 2004 accounts have been filed. The statutoryaccounts will be issued to shareholders shortly, together with the notice forthe Annual General Meeting to be held at 11am on 21 March 2006 at Porton DownScience Park, Salisbury, Wiltshire. The information does not constitute the Company's statutory accounts undersection 240 of the Companies Act 1985 for the year ended 30 September 2005 butis derived from those accounts. 2 Tax credit on loss on ordinary activities The tax credit of £1,678,000 (2004: £2,051,000) has arisen as a result of theresearch and development expenditure claimed under the Finance Act 2000. At 30 September 2005 the Group had trading losses of approximately £33m (2004:£30m) available to carry forward against future tax liabilities. The tax credit and trading losses to be carried forward for the year are subjectto the agreement of HM Revenue and Customs. 3 Loss per share The calculations of loss per share are based on the following losses and numbersof shares. Basic Diluted -------------------------------------------------------- 2005 2004 2005 2004 £000's £000's £000's £000'sLoss for the financial year (7,516) (13,680) (7,516) (13,680) =========== =========== =========== =========== 2005 2004 Number Number of shares of sharesWeighted averagenumber of shares: 112,512,974 110,647,389 ============= ============= Since the Group reported a net loss, diluted loss per share is equal to basicloss per share. 4 Reserves Share premium Other Profit and account reserves loss account TotalGroup £000's £000's £000's £000'sAt 1 October 2004 47,336 19,262 (43,251) 23,347Exercise of share options 261 - - 261Equity share issue 2,511 - - 2,511Expense of equity share issue (5) - - (5)Retained loss for the year - - (7,516) (7,516) __________ __________ __________ ________At 30 September 2005 50,103 19,262 (50,767) 18,598 ========== ========== ========== ======== 5 Reconciliation of movements in Group shareholders' funds 2005 2004 £000's £000'sLoss for the financial year (7,516) (13,680)New ordinary shares issued net of expenses 2,770 172 __________ __________Net reduction addition to shareholders' funds (4,746) (13,508)Opening shareholders' funds 23,458 36,966 __________ __________Closing shareholders' funds 18,712 23,458 ========== ========== 6 Reconciliation of operating loss to net cash outflow from operating activities 2005 2004 £000's £000'sOperating loss (9,876) (16,689)Depreciation charge 414 526Amortisation of goodwill 356 357Loss on disposal of fixed assets - 14Increase in stocks (656) -Decrease / (increase) in debtors 7 (47)Decrease in creditors (271) (564) __________ __________Net cash outflow from operating activities (10,026) (16,403) ========== ========== 7 Subsequent events On 12 December 2005 the Company announced that it had signed a EuropeanDevelopment and Marketing Agreement for Sativex with Almirall Prodesfarma S.A.,which included a £12 million upfront signature fee. Almirall have deducted a 10%Spanish withholding tax from this payment. We are in discussions with ouradvisers regarding reclaiming this amount. On 4 January 2006 the Company announced that it had obtained a late stage USInvestigational New Drug (IND) Application for Sativex and raised $15 million(£8.6 million) by placing 6,165,978 new Ordinary shares of 0.1p each at £1.3961per share with a US based institutional investor. The placing which netted £8.1mafter costs was to provide the Company with additional working capital and inparticular to provide the Group with the resources to start making commitmentsto the US development of Sativex. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
GWP.L