Interim Results

20th May 2010 07:00



GW Pharmaceuticals plc

("GW" or "the Group")

 

Interim Results

 

Porton Down, UK, 20 May 2010: GW Pharmaceuticals plc (AIM: GWP), the speciality pharmaceutical company focused on cannabinoid science, announces its interim results for the six months ended 31 March 2010.

 

OPERATIONAL HIGHLIGHTS

Sativex® regulatory process in UK and Spain for MS Spasticity enters final national phase. All major and minor outstanding issues resolved. UK approval expected by end of Q2

 

FINANCIAL HIGHLIGHTS

 

Dr Geoffrey Guy, GW's Chairman, said, "GW is transitioning from a late stage development company to a commercial pharmaceutical business with excellent growth prospects. The first six months of this year have proven the most important in GW's history in which we have made material progress towards Sativex's launch in Europe and generated positive cancer pain data in the US. We believe that these recent successes validate GW's cannabinoid technology platform and enable us to progress the development of our pipeline across a range of therapeutic areas with increased confidence."

 

An analyst presentation of the interim results is being held today at 11.00am at Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2A 1PB. Please contact Juliet Edwards at Financial Dynamics on +44 20 7269 7125 for details. An audio webcast of the presentation will be available on GW's website at www.gwpharm.com later this afternoon.

 

 

 

Enquiries:

 

GW Pharmaceuticals plc	(20/05/10) + 44 20 7831 3113
Dr Geoffrey Guy, Executive Chairman	(Thereafter) + 44 1980 557000
Justin Gover, Managing Director
Financial Dynamics	+ 44 20 7831 3113
Ben Atwell / John Dineen
Piper Jaffray Ltd	+44 (0)20 3142 8700
Neil Mackison / Rupert Winckler

 

 

 

GW Pharmaceuticals plc

("GW" or "the Group")

 

Interim Results For The Six Months Ended 31 March 2010

Interim Management Report

 

INTRODUCTION

 

The first six months of the year has seen GW make significant progress with Sativex®. The regulatory process in the UK and Spain in the Multiple Sclerosis (MS) Spasticity indication is now in its final stage with all major and minor issues now resolved. We expect approval and launch in the UK before the end of Q2 2010 and in Spain shortly thereafter. Separately, the development of Sativex as a treatment for cancer pain made a significant advance with the reporting of positive data from a 360 patient Phase IIb trial in this indication. This data, together with positive results from a previously reported Phase IIa trial, support advancing this indication into Phase III development and preparations for this are now well underway.

 

We believe that the recent successes with Sativex provide validation of GW's cannabinoid technology platform. With a world leading position in cannabinoid science, a promising pipeline, partnership track record, and a prudent financial model focused on revenue growth and partner funded R&D, we believe that GW has the assets and capability to create further valuable product opportunities. GW therefore intends to continue to pursue a strategy which focuses on maximizing the commercial potential of Sativex, in terms of expanded geography and indication, as well as leveraging the company's cannabinoid platform to expand, advance and partner the pipeline.

 

SATIVEX REGULATORY STRATEGY

 

The primary regulatory strategy for Sativex in Europe is to obtain marketing authorisation for the indication of MS spasticity. Following initial approval in the UK and Spain, marketing authorisation for this indication will be sought in the rest of Europe and certain other territories around the world. In the United States, cancer pain has been selected as the initial target indication. GW expects to expand the licensed indication of Sativex in Europe and other territories to cancer pain in the future based on the data being generated from the US studies. Longer term, the commercial opportunity for Sativex may be expanded into other indications for which positive Phase II/III data has already been generated.

 

In Canada, MS neuropathic pain was the first approved indication, and this has been successfully followed by the approval in cancer pain. These approvals were obtained with earlier data under the Notice of Compliance with conditions (NOC/c) policy.

 

MS SPASTICITY

 

In 2009, GW filed a regulatory submission for Sativex in the treatment of the symptoms of spasticity due to MS. The submission was filed in the UK and Spain under the European Decentralised Procedure, with the UK acting as the Reference Member State.

 

The UK and Spain regulatory authorities have reached consensus that all "major" and "minor" issues related to the Sativex application have been resolved. The decentralised procedure has now closed with the recommendation that Sativex should be approved and the regulatory process is entering its final phase. This final phase, known as the national phase, takes place separately in the UK and Spain and its purpose is to finalise local wording on product packaging and related documents. The duration of the national phase is determined separately by the UK and Spanish authorities.

 

GW expects regulatory approval in the UK before the end of Q2 2010, and in Spain shortly thereafter.

 

Following UK approval, submissions for approval will be made in additional European countries in H2 2010 under the mutual recognition procedure.

 

Beyond Europe, we have filed for a Notice of Compliance (NOC) approval in this indication in Canada and have also filed a "Section 23" submission in New Zealand. We intend to file in other selected territories around the world in the second half of 2010 in parallel with pursuing discussions with distribution partners for these other markets.

 

EUROPEAN LAUNCH PREPARATION

 

Sativex will be marketed in the UK by Bayer Schering Pharma and in the rest of the European Union by Almirall S.A. Upon UK regulatory approval, GW expects to receive a £10m milestone payment from Bayer. A further £2.5m milestone payment is payable by Almirall following both regulatory and pricing approval in Spain. Both marketing partners are now well advanced in preparation for the Sativex launch.

 

The Sativex marketing and medical team at Bayer Schering is derived from that company's current MS team. Bayer already has a leading position in the field of MS disease modifying treatments, established through its Betaferon® product, and is therefore able to take advantage of its close relationships with key opinion leaders and patient organisations in the MS field. Bayer has in place eight MS specialist sales persons for Betaferon targeting the 85 MS centres in the UK and these individuals will be responsible for the Sativex sales effort. A further team of healthcare development professionals have been employed by Bayer to inform NHS budget-holders around the UK about the forthcoming launch of Sativex and the potential budget impact of the product. All activities at Bayer are closely supported by GW and a cross functional team is working to ensure a successful product launch.

 

Sativex has been available as an unlicensed medicine in the UK since 2006 and this provides valuable clinical experience for commercial launch. Over 2,500 UK patients have received Sativex on prescription to date (including 400 ex-clinical trial patients), and over 2,000 UK physicians have prescribed the medicine. 95 per cent of UK Primary Care Trusts (PCTs) have reimbursed Sativex on prescription.

 

The Sativex launch team at Almirall benefits from Almirall's position as Spain's largest domestic pharmaceutical company. Almirall's last reported annual sales in Spain exceeded €500m, of which €168m related to neurology products. Almirall has a dedicated central European brand and marketing team for Sativex as well as a local team for each individual country, including Spain. As with Bayer, GW has a close working relationship with all relevant functions within Almirall as we work together towards launch in Spain and thereafter in the rest of Europe.

 

GW's in-house facility is the manufacturing site for the commercial launch of Sativex. In 2009, this facility passed a Good Manufacturing Practice (GMP) inspection by the UK regulatory authority, following which GW was awarded a GMP Certificate and Manufacturer's/Importer's Licence. UK launch stocks have been manufactured and will be available for distribution immediately upon UK approval.

 

Sativex has now been exported to 28 countries either on named patient prescription or in clinical trials. We believe that this demonstrates a growing awareness and appreciation of Sativex amongst the medical community and gives reason to be confident about eventual regulatory approvals abroad.

 

CANCER PAIN

 

Sativex is also being developed to treat pain in people with advanced cancer, who experience inadequate analgesia despite optimised chronic opioid therapy.

 

GW's cancer pain clinical programme is being wholly funded by Otsuka Pharmaceutical Co. Ltd, which has licensed the US commercialisation rights to this product. The cancer pain trials are designed to obtain approval in this indication from the Food & Drug Administration (FDA) in the US, but these data will also be used by GW for future regulatory applications in this indication in Europe and around the world.

 

In March 2010, GW announced preliminary results of a 360 patient Phase IIb cancer pain trial, performed in conjunction with Otsuka. The study met its key objectives of providing data to support entry into Phase III, showing statistically significant differences from placebo in pain scores, according to both the FDA-recommended continuous response analysis and the change from baseline analysis in NRS average pain score.

 

The results of the Phase IIb dose ranging study are consistent with a Phase IIa study in which Sativex also showed statistically significant improvements versus placebo in the continuous response analysis, as well as the mean change from baseline in NRS pain score. This study was recently published in the Journal of Pain and Symptom Management.

 

As a result of this positive Phase II data, GW and Otsuka are now planning an End of Phase II meeting with the FDA to gain endorsement of the proposed Phase III programme. This meeting is due to take place in H2 2010. The current US development programme anticipates two further Phase III trials prior to a subsequent submission of a New Drug Application to the FDA. The first patients are expected to enter the Phase III programme in H2 2010.

 

OTHER SATIVEX INDICATIONS

 

Following the approval for Sativex in Europe in MS spasticity, GW intends to broaden the commercial opportunity for the product through a clinical development programme in selected additional indications. In recent years, GW has generated positive results from clinical trials in a range of indications, including various types of pain, as well as other symptoms of MS. GW will evaluate these opportunities in conjunction with its marketing partners before selecting the first new target indication for development.

 

CANNABINOID PIPELINE

 

GW occupies a world leading position in cannabinoid science. The company has developed a proprietary and validated cannabinoid technology platform and formed constructive collaborations with leading international scientists in the field. GW's extensive research into the pharmacology of cannabinoids continues to yield highly promising data and new intellectual property across a range of therapeutic areas and provides GW with the potential to develop and licence several new cannabinoid drug candidates in the coming years. GW expects to step up the pace of this research in the coming years to maximise the potential of its in-house pipeline.

 

CANCER

 

We have shown in pre-clinical studies the ability of certain cannabinoids to inhibit the growth of various cancers, notably prostate, breast and colon cancer. We have also produced promising data showing a potential synergistic action of cannabinoids with existing anti-cancer agents in reducing the proliferation of glioma cells in cancer models. The mechanisms of action that cause these effects are becoming better understood and extend far beyond actions at the cannabinoid receptors. Several new patent filings have been submitted to protect these data. As a result of the promising progress to date in this area, GW expects an increased focus on its cancer research programme in the next 12 months.

 

GW's cancer research is carried out as part of the GW-Otsuka research collaboration agreement. Under this agreement, Otsuka fund all research in this area.

 

NEUROSCIENCE

 

Research into nervous system disorders is currently focused primarily on epilepsy and psychiatric illness. This research programme is also funded as part of the GW-Otsuka research collaboration agreement.

 

A number of GW phytocannabinoids have already shown a marked anti-epileptic effect in several pre-clinical models of epilepsy. This research is centred at the University of Reading and data are now being published.

 

In the field of schizophrenia, GW cannabinoids have shown notable anti-psychotic effects in accepted pre-clinical models of schizophrenia and importantly have also demonstrated the ability to reduce the characteristic movement disorders induced by currently available anti-psychotic agents.

 

GW expects to advance its research effort in both the above therapeutic areas and is confident that the data generated will support advancing new cannabinoid drug candidates into clinical trials.

 

DIABETES / METABOLIC DISEASE

 

GW has carried out pre-clinical research on its cannabinoids in several models of diabetes looking at several metabolic parameters, and is now preparing to embark on a Phase II clinical programme. The Group's metabolic research effort is centred on a strategic alliance with Professor Mike Cawthorne, the scientist who led the team that invented rosiglitazone (Avandia®), and the Clore Laboratory, University of Buckingham. A dedicated section of the Clore Laboratory has been named the "GW Metabolic Research Laboratory".

 

GW is planning a programme of small scale Phase IIa trials in this therapeutic area focusing on lipid metabolism and distribution in subjects with metabolic syndrome. The first clinical trial, a Phase IIa multiple dose study of a novel cannabinoid medicine in the treatment of dyslipidaemia and fatty liver in Type II diabetic patients, is expected to commence in Q3 2010. We also expect an additional Phase IIa trial to start in H2 2010.

 

INFLAMMATION

 

Several GW cannabinoids have shown anti-inflammatory properties in a number of models of inflammation, and have the capacity to inhibit the production in tissues of chemical mediators of inflammation. We are currently working to select candidate cannabinoids with a view to constructing proof of concept studies in inflammatory conditions.

 

SUMMARY AND OUTLOOK

 

GW is transitioning from a late stage development company to a commercial pharmaceutical business with excellent growth prospects. The first six months of this year have proven the most important in GW's history in which we have made material progress towards Sativex's launch in Europe and generated positive cancer pain data in the US. We believe that these recent successes validate GW's cannabinoid technology platform and enable us to progress the development of our pipeline across a range of therapeutic areas with increased confidence.

 

With the first major approvals and launches for Sativex now imminent, the US cancer pain Phase III trial preparation well underway, partners for Sativex secured in key markets, a highly promising earlier stage pipeline and a strong financial position, we remain confident in the future prospects for GW.

 

FINANCIAL REVIEW

 

In the six months to 31 March 2010, GW recorded a loss before tax of £2.7m. This compares to a profit of £4.0m in the prior period which included £8.0m of milestone income. No milestones were received in the current period. The reported loss of £2.7m therefore compares to the underlying loss of £4.0m, before milestone income, recorded in H1 2009.

 

Total revenue decreased to £11.4m from the £16.1m recorded in H1 2009. This decrease is due to the prior period having included £8.0m of milestone income.

 

Research and development fees increased to £9.5m (H1 2009: £6.2m). These fees represent charges to Otsuka for research conducted under both the Sativex US licence agreement and the research collaboration agreement.

 

Named patient sales of Sativex increased by 29% to £0.7m (H1 2009: £0.5m). The majority of named patient prescriptions occur in the UK. Outside the UK, the largest named patient prescription use is currently in Spain and Italy. Commercial sales of Sativex to Bayer Canada reduced from £0.4m in 2009 to £0.2m in 2010 due to timing of deliveries, with just one batch being delivered in the current period compared to two batches in the prior period. Total Sativex sales of £0.93m were therefore marginally lower than the £0.97m recorded for the prior period.

 

The remaining £0.95m (H1 2009:£0.95m) of revenue relates to the recognition of deferred signature fees arising under the Almirall and Otsuka licence agreements.

 

Total research and development expenditure increased to £12.1m (H1 2009: £9.9m). Consistent with the trend established over the last three years, the proportion of expenditure funded by GW decreased further to £2.6m (H1 2009: £3.7m), representing 21% (H1 2009: 38%) of total R&D spend. The amount funded by our partner, Otsuka, increased by 54% to £9.5m (H1 2009: £6.2m).

 

Management and administrative expenses decreased to £1.4m from £1.7m in H1 2009. Capital expenditure was £0.2m (H1 2009: £0.6m).

 

In previous years GW has surrendered tax losses in order to claim a research and development tax credit cash payment. Despite having recorded a loss for the first six months of the year, our expectation is that we will not be seeking to claim such a repayment at year end so no tax credit has been recorded at this interim stage (H1 2009: £Nil).

 

At 31 March 2010, GW had £20.4m of cash (31 March 2009: £11.8m). The net cash outflow for the six months of just £0.2m compares favourably to the outflow of £2.2m in the comparable period last year. The improved cashflow results from growing revenues and reducing GW-funded expenditure, but also reflects the timing of receipt of advance funding from Otsuka. This funding is to cover costs expected to be incurred in H2 as we progress the set-up of planned Phase III cancer pain trials, the costs of which are entirely funded by Otsuka.

 

Inventory of £0.6m (31 March 2009: £0.6m) consists of finished goods, consumable items and work in progress. Carrying value of inventory continues to be based upon expected net realisable value, calculated by applying historic growth rates to current named patient sales and commercial sales in Canada. In accordance with our inventory accounting policy, upon achievement of territorial regulatory approvals, we will revise our sales projections to reflect expected sales by commercial partners and will revise the carrying value accordingly.

 

Total deferred income of £18.8m (H1 2009: £18.1m) represents the unrecognised balances of the non-refundable signature fees of £14.5m (H1 2009: £16.3m) and £4.3m (H1 2009: £1.8m) of advance payments received from Otsuka. These amounts will be recognised as revenue in future periods.

 

The average headcount for the period to 31 March 2010 was 120 compared to 110 as at 30 September 2009 and 107 at 31 March 2009.

 

For the 2010 financial year, we expect GW-funded R&D expenditure to be in line with 2009 but would expect spend to increase in H2 compared to the low levels seen in H1. Following regulatory approval in the UK, expected to be achieved in calendar Q2 2010 (financial H2 10), GW expects to receive a £10m milestone payment from Bayer and to start to generate commercial sales revenues. This would result in GW reporting a profit for the 2010 financial year. A £2.5m milestone payment from Almirall is payable upon pricing approval in Spain, which is likely to occur after the 2010 financial year end.

 

RISKS AND UNCERTAINTIES

 

GW continues to face a number of potential risks and uncertainties which could have a material impact on the Group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The directors do not consider that the principal risks and uncertainties have changed since the publication of the annual report for the year ended 30 September 2009. A detailed explanation of the risks summarised below can be found on pages 11 and 12 of the annual report which is available to download at www.gwpharm.com.

 

The directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the financial information for the half year ended 31 March 2010.

 

The principal risks can be summarised as follows:

 

Clinical Risk

Clinical trials may encounter delays or fail to achieve their endpoints.

 

Manufacturing Risk

GW may encounter problems in its manufacturing process which may delay product development programmes or restrict the commercial quantities of product that can be made.

 

Funding Risk

The Group may require access to additional funding in future. If it fails to secure such funding the Group may need to delay or scale back some of its R&D programmes or the commercialisation of some of its products.

 

Commercialisation Risk

Following regulatory approval, GW's products may not achieve commercial success or may be subject to competition.

 

Financial Risks

The Group is subject to exchange rate risk, interest rate risk, credit risk, counterparty risk, market price and liquidity risks.

 

Regulatory Risk

Regulatory bodies around the world have different requirements for approval of therapeutic products. Submissions to regulatory authorities may result in restriction of indication, denial of approval or demands for additional data.

 

In the next six months, the key risk facing the Group relates to the submission of marketing authorisation applications for Sativex to various European regulators under the Mutual Recognition Procedure.

 

Related Party transactions

 

The Group did not enter into any related party transactions during the period.

 

Responsibility Statement

 

The directors confirm that this condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of the principal risks and uncertainties for the remaining six months of the year) and DTR 4.2.8R (disclosure of related party transactions and changes therein).

 

The directors of GW Pharmaceuticals plc are listed in the GW Pharmaceuticals plc Annual Report for the year ended 30th September 2009 and there has been no change in the interim period.

 

By Order of the Board

Dr Geoffrey Guy Chairman

Justin Gover Managing Director

 

 

 

GW Pharmaceuticals plc

Condensed consolidated income statement

Six months ended 31 March 2010

 

 

		Six months ended	Six months ended	Year ended
		31 March	31 March	30 September
	Notes	2010	2009	2009
		(Unaudited)	(Unaudited)	(Audited)
		£000's	£000's	£000's
Revenue	3	11,409	16,086	24,121
Cost of sales		(243)	(269)	(433)
		__________	__________	__________
Gross profit		11,166	15,817	23,688
Research and development expenditure	4	(12,100)	(9,904)	(19,337)
Management and administrative expenses		(1,433)	(1,686)	(2,693)
Share-based payment		(334)	(298)	(634)
		__________	__________	__________
Operating (loss)/profit		(2,701)	3,929	1,024
Interest payable		(4)	-	(8)
Interest receivable		39	99	136
		__________	__________	__________
Loss/(profit) on ordinary activities before taxation		(2,666)	4,028	1,152
Tax credit on loss on ordinary activities	5	-	-	353
		__________	__________	__________
Loss/(profit) on ordinary activities after taxation		(2,666)	4,028	1,505
		__________	__________	__________
(Loss)/earnings per share - basic and fully diluted	6	(2.1)p	3.3p	1.2p

 

 

All amounts relate to continuing operations.

 

The Group has no recognised gains or losses other than the losses above and therefore no separate statement of recognised income and expense has been presented.

 

 

 

 

GW Pharmaceuticals plc

Condensed consolidated statement of changes in equity

Six months ended 31 March 2010

Unaudited

 

 

		Called-up	Share
		share	premium	Other	Retained
		capital	account	reserves	earnings	Total
		£000's	£000's	£000's	£000's	£000's
At 1 October 2008		121	58,375	19,262	(79,485)	(1,727)
Exercise of share options		-	-	-	-	-
Share-based payment		-	-	-	298	298
Retained loss for the period		-	-	-	4,028	4,028
		__________	__________	_________	__________	_________
Balance at 31 March 2009		121	58,375	19,262	(75,159)	2,599
Exercise of share options		-	15	-	-	15
Issue of new share capital		8	6,599	-	-	6,607
Expenses of share placing		-	(312)	-	-	(312)
Share-based payment		-	-	-	336	336
Retained loss for the period		-	-	-	(2,523)	(2,523)
		__________	__________	_________	__________	_________
Balance at 30 September 2009		129	64,677	19,262	(77,346)	6,722
Exercise of share options		1	297	-	-	298
Share-based payment		-	-	-	334	334
Retained profit for the period		-	-	-	(2,666)	(2,666)
		__________	__________	_________	__________	_________
Balance at 31 March 2010		130	64,974	19,262	(79,678)	4,688
		_________	__________	_________	__________	_________

 

 

 

GW Pharmaceuticals plc

Condensed consolidated balance sheet

As at 31 March 2010

 

 

		31 March	31 March	30 September
	Notes	2010	2009	2009
		(Unaudited)	(Unaudited)	(Audited)
Non-current assets		£000's	£000's	£000's
Intangible assets - goodwill		5,210	5,210	5,210
Property, plant & equipment		1,815	1,500	1,858
		__________	__________	__________
		7,025	6,710	7,068
		__________	__________	__________
Current assets
Inventories	7	566	599	551
Taxation recoverable		360	-	360
Trade and other receivables	8	560	9,010	811
Cash and cash equivalents		20,371	11,828	20,601
		__________	__________	__________
		21,857	21,437	22,323
		__________	__________	__________
Total assets		28,882	28,147	29,391
		__________	__________	__________
Current liabilities
Trade and other payables	9	(5,356)	(7,396)	(4,496)
Obligations under finance leases		(42)	-	(35)
Deferred revenue	10	(6,225)	(3,703)	(4,594)
		__________	__________	__________
		(11,623)	(11,099)	(9,125)
Non-current liabilities
Obligations under finance leases		(22)	-	(45)
Deferred revenue	10	(12,549)	(14,449)	(13,499)
		__________	__________	__________
Total liabilities		(24,194)	(25,548)	(22,669)
		__________	__________	__________
Net assets		4,688	2,599	6,722
		__________	__________	__________
Equity
Share capital		130	121	129
Share premium account		64,974	58,375	64,677
Other reserves		19,262	19,262	19,262
Retained earnings		(79,678)	(75,159)	(77,346)
		__________	__________	__________
Shareholders' funds		4,688	2,599	6,722
		__________	__________	__________

 

These interim results were approved by the board of Directors on 19 May 2010.

 

 

GW Pharmaceuticals plc

Condensed consolidated cash flow statement

For the six months ended 31 March 2010

 

	Six months ended		Six months ended	Year ended
	31 March		31 March	30 September
	2010		2009	2009
	(Unaudited)		(Unaudited)	(Audited)
	£000's		£000's	£000's
Operating (loss)/profit	(2,701)		3,929	1,024
Adjustments for:
Depreciation of property, plant & equipment	286		233	456
Share-based payment charge	334		298	634
	__________		__________	__________
Operating cash flow before movements in working capital	(2,081)		4,460	2,114
(Increase)/decrease in inventories	(15)		(96)	(48)
(Increase)/decrease in receivables	415		(8,229)	(38)
Increase/(decrease) in payables	1,401		375	(2,599)
	__________		__________	__________
Cash used by operations	(280)		(3,490)	(571)
Income tax credits received	-		1,792	1,791
	__________		__________	__________
Net cash in/(out)flow from operating activities	(280)		(1,698)	1,220
Investing activities
Interest received	34		99	135
Interest paid	(4)		-	(8)
Purchases of property, plant and equipment	(243)		(627)	(1,061)
	__________		__________	__________
Net cash from investing activities	(213)		(528)	(934)
Financing activities
Proceeds on issue of shares	298		-	6,622
Expenses of share issue	(18)		-	(294)
Capital element of finance leases	(17)		-	(67)
	__________		__________	__________
Net cash from financing activities	263		-	6,261
Net increases/(decrease) in cash and cash equivalents		(230)	(2,226)	6,547
Cash and cash equivalents at beginning of year	20,601		14,054	14,054
	__________		__________	__________
Cash and cash equivalents at end of the period	20,371		11,828	20,601
	__________		__________	__________

 

 

 

 

1. General information and basis of preparation

 

These interim financial statements are condensed financial statements that have been prepared in accordance with IAS 34 - "Interim Financial Reporting" and were approved by the Board on 19 May 2010.

 

The information for the year ended 30 September 2009 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The statutory accounts for the year ended 30 September 2009 have been filed with the Registrar of Companies. The auditors' report on those financial statements was not qualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006.

 

At 31 March 2010 the Group had cash resources of £20.4 million. The Group is also generating revenues from Sativex sales, from research and development activity that it carries out on behalf of Otsuka Pharmaceutical Ltd and has several opportunities to earn milestones from these partners in the next year. The directors have reviewed the working capital and research and development funding requirements of the Group for the next twelve months and consider that the cash in hand, recurring revenues together with the strong development partner relationships that are in place mean that the Group is well placed to manage its business risks successfully despite the current economic outlook.

 

The directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the financial information for the half year ended 31 March 2010.

 

Results for the six month periods ended 31 March 2010 and 31 March 2009 have not been audited. 

 

 

2. Significant Accounting policies

 

The significant accounting policies and methods of computation adopted in the preparation of these interim condensed financial statements are consistent with those used in the preparation of the Group's financial statements for the year ended 30th September 2009.

 

 

3. Business and Geographical segments

 

 

All turnover and losses before taxation originated in the UK. All assets and liabilities are held in the UK.

 

The Directors do not consider the business to be seasonal or cyclical.

 

 

Revenue:	Six months ended	Six months ended	Year ended
	31 March	31 March	30 September
	2010	2009	2009
	£000's	£000's	£000's
Product sales	932	974	1,689
Research and development fees	9,527	6,162	12,532
Licensing fees:
- signature fees	950	950	1,900
- development and approval fees	-	8,000	8,000
	__________	__________	__________
	11,409	16,086	24,121
	__________	__________	__________

 

Geographical analysis of turnover: - by destination of customer

 

	Six months ended	Six months ended	Year ended
	31 March	31 March	30 September
	2010	2009	2009
	£000's	£000's	£000s
UK	540	444	915
Europe (excluding UK)	571	8,508	9,152
North America	8,152	5,660	10,689
Asia	2,146	1,474	3,365
	__________	__________	__________
	11,409	16,086	24,121
	__________	__________	__________

 

 

4. Research and development expenditure

	Six months ended	Six months ended	Year ended
	31 March	31 March	30 September
	2010	2009	2009
	£000's	£000's	£000s
GW-funded research	2,573	3,742	6,805
Development partner-funded research	9,527	6,162	12,532
	__________	__________	_________
Total	12,100	9,904	19,337
	__________	__________	__________

 

 

5. Tax credit

 

	Six months ended	Six months ended	Year ended
	31 March	31 March	30 September
	2010	2009	2009
	£000's	£000's	£000's
UK Corporation tax - R&D tax credit:
Prior year	-	-	7
Current period	-	-	(360)
	__________	__________	__________
Total credit for the period	-	-	(353)
	__________	__________	__________

 

The UK Corporation tax credits relate to research and development expenditure claimed under the Finance Act 2000.

 

The amounts are subject to the agreement of HM Revenue and Customs.

 

 

6. Earnings per share

 

The calculations of earnings/(loss) per share are based on the following losses and numbers of shares.

 

	Six months ended	Six months ended	Year ended
	31 March	31 March	30 September
	2010	2009	2009
	£000's	£000's	£000's
Profit/(loss) for the period - basic	(2,666)	4,028	1,505
Profit/(loss) for the period - fully diluted	(2,666)	4,030	1,511
	___________	___________	___________
	Number of shares	Number of shares	Number of shares
Weighted average number of shares - basic	129,644,229	120,785,335	122,534,208
Weighted average number of shares - fully diluted	129,644,229	123,248,756	128,125,821
	___________	___________	___________

 

In the current period, since the Group reported a net loss, diluted loss per share is equal to basic loss per share.

 

 

7. Inventories

 

	31 March	31 March	30 September
	2010	2009	2009
	£000's	£000's	£000's
Raw materials	79	159	93
Work in progress	359	365	286
Finished goods	128	75	172
	__________	__________	__________
	566	599	551
	__________	__________	__________

 

 

 

8. Trade and other receivables

 

	31 March	31 March	30 September
	2010	2009	2009
	£000's	£000's	£000's
Amounts falling due within one year
Trade receivables	222	8,138	129
Other receivables	84	169	75
Prepayments and accrued income	254	703	607
	__________	__________	__________
	560	9,010	811
	__________	__________	__________

 

 

9. Trade and other payables

 

	31 March	31 March	30 September
	2010	2009	2009
	£000's	£000's	£000's
Trade payables	996	2,478	2,463
Other taxation and social security	275	151	156
Accruals and other payables	4,042	4,725	1,834
Defined contribution pension scheme accruals	43	42	43
	__________	__________	__________
	5,356	7,396	4,496
	__________	__________	__________

 

 

10. Deferred Revenue

 

	31 March	31 March	30 September
	2010	2009	2009
Amounts falling due within one year	£000's	£000's	£000's
Deferred signature fee income	1,900	1,900	1,900
Advance payments received	4,325	1,803	2,694
	____ _____	__________	__________
	6,225	3,703	4,594
	__________	__________	__________
Amounts falling due after one year
Deferred signature fee income	12,549	14,449	13,499
	__________	__________	__________

 

Deferred signature fee income represents the balance of the non-refundable signature fees received from Almirall and Otsuka. These amounts will be recognised as revenue in future periods.

 

For Almirall the £12m signature fee is being recognised at the rate of £0.8m per year over 15 years from December 2005. In the case of Otsuka, where the Group's obligations under the agreement are weighted towards the earlier years, the $18m (£9.2m) signature is being recognised from 1 April 2007 to 30 September 2011 at the rate of £1.1m per year and at £0.28m per year for the following 15 years.

 

Advance payments received represents payments for research and development activities to be carried out on behalf of Otsuka. These amounts will be recognised as revenue in the next period.

 

 

11. Availability of information

 

A copy of this statement is available from the Company Secretary at Porton Down Science Park, Salisbury, Wiltshire, SP4 0JQ. Full details can also be found on the Company's website at www.gwpharm.com.

 

 

 

 

 

 

 

ENDIR SFLESUFSSEFI

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Related Shares:

GWP.L