30th Jan 2009 07:00
30 JANUARY 2009
HENDERSON MORLEY PLC
(AIM: HML)
INTERIM RESULTS FOR THE SIX MONTHS TO 31 OCTOBER 2008
The Board of Henderson Morley plc ("Henderson Morley" or "the Company"), the AIM quoted biotechnology company, announces its interim results for the six months to 31 October 2008.
HIGHLIGHTS
Work is continuing with the Australian Centre for Vaccine Development, and;
The Systems Biology Laboratory studies demonstrated, for the first time, that dendritic cells developed a strong response to Preps and L-particles, which is a good indicator for future studies.
POST PERIOD HIGHLIGHTS
The Company is in discussions with major animal health companies to seek development agreements or an out-licence of the companion cancer applications of PREPS and L-particles;
Collaborative agreement in the United States in respect of dog cancer immunotherapies;
The initial phase of the KHV Vaccine field studies had been completed and the next phase of the studies has commenced, and;
Discussions are still ongoing with potential partners with a view to considering an early licence before completion of the Feline Herpes Vaccine trial;
Executive Chairman Andrew Knight said: "We continue to be excited about the prospects for the future of the Company. We have a strong patent portfolio with a great number of our technologies under development and we are continuing to keep a strong control on costs, reducing these wherever possible."
---ENDS---
ENQUIRIES:
HENDERSON MORLEY PLC 0121 442 4600
Andrew Knight, Chairman
BISHOPSGATE COMMUNICATIONS LTD 0207 562 3350
(Public Relations)
Maxine Barnes
Nick Rome
BREWIN DOLPHIN INVESTMENT BANKING 0113 241 0126
(Nominated Adviser)
Neil Baldwin
HYBRIDAN LLP 0203 159 5085
(Broker)
Claire Noyce/Stephen Austin
Notes to Editors:
Henderson Morley was founded in 1996 with the objective of developing its anti viral application (Ionic Contra Viral Therapy (ICVT). ICVT is the Lead Platform and has been developed in-house and HML wholly owns the patent IPR.
Further information on Henderson Morley plc can be accessed through the Company's website at www.henderson-morley.com
CHAIRMAN'S STATEMENT
Financial Summary
Turnover for the period under review was £41,128 (2007:£686) which, after expenses and R&D costs, showed a pre tax loss of £547,984 (2007: £592,494). Cash at Bank as at 31 October 2008 was £203,786 (2007: £875,120). The total number of shares in issue is now. 575,261,963
Overview
The six months under review has been another very busy period and includes an important collaborative agreement in the United States in respect of dog cancer immunotherapies.
More generally, we continue to have meaningful discussions with potential partners which may or may not lead to the sale of certain parts of the business or out licenses for our various technologies.
Animal Health Division
Aqua Health
Koi Herpes Virus ("KHV")
In December, post period end, we announced that the initial phase of the KHV Vaccine field studies had been completed.
The vaccine candidates under examination were formulated to give a wide range of doses, using proprietary adjuvants (compounds that help boost and increase the duration of immune responses). The results from the study have demonstrated that the vaccine candidates were safe and well tolerated, with adverse effects no greater than unvaccinated controls. The next phase of studies have commenced
Fish Vaccine Adjuvants
Studies continue apace on the development of new vaccine adjuvants - important additions to vaccines that help boost and prolong immune responses, and reduce the number of doses needed.
Several new adjuvants are being tested in the next phase of KHV vaccine studies; if these prove successful they could rapidly be applied to existing licensed vaccines. Many of these vaccines are prone to the development of adverse effects due to inclusion of mineral oil. Although effective, this component of existing fish adjuvants is recognised as carrying a high burden of unwanted effects such as scarring, growth retardation and affecting the quality of the fish meat.
Cancer Immunotherapy - Canine
Earlier this month, post period end, we announced a Collaborative Research Programme. We can now confirm that this is being carried out by the Colorado State University, a US based centre of excellence for companion animal cancers. The centre is the largest research unit for animal cancers in the US, and the collaboration is to develop treatments for two different forms of dog cancer. They will undertake all of the animal studies, data analysis, and reporting as well as pathological analysis and patient follow up.
The studies will explore the use of PREPS and L-particles as a treatment for cancer. The study will treat dogs that already have cancer, and where existing treatments have either failed or are likely to prove ineffective. The data generated in these studies will also be extremely useful in support of the on-going licensing efforts for the use of PREPS and L-particles as treatments for human cancer.
The Company is already in discussions with major animal health companies to seek development agreements or an out-licence of the companion cancer applications of PREPS and L-particles.
Feline Herpes Treatment
At our AGM we announced that we had received significant interest in our Feline Herpes Virus treatment and that we were in discussions with potential partners with a view to the Company considering an early licence before completion of the trial and these discussions are still ongoing.
Human Health Division
Collaborative Agreement with Australian Government-backed Research team
Work is continuing with the Australian Centre for Vaccine Development, and candidates have been prepared in our Birmingham laboratory. These candidates will be assessed to examine immune responses to the target antigens from Cytomegalovirus and Epstein Barr Virus - both important pathogens for which there is no licensed vaccine available, and both of which are recognised as disease areas of significant unmet medical need.
Cytomegalovirus is associated with a significant disease burden as it is responsible for infection of unborn children causing serious brain abnormalities. The virus is also a significant cause of death in patients who are immunosuppressed as a consequence of organ transplantation.
Epstein Barr virus infection is a significant contributory factor to the development of nasopharyngeal cancer (in a similar way to the human papilloma virus causing cancer of the cervix in women). This cancer is very common in South East Asia. It is also known to cause several forms of malignant disease including some forms of Hodgkin's disease and cancer affecting the mouth and pharynx.
Systems Biology Laboratory UK Ltd ("SBL")
The Company announced a collaborative research agreement with SBL. The team based in Abingdon has considerable expertise in the study of dendritic cells - important immune cells that help co-ordinate an immune response in many diseases including many cancers. These studies demonstrated for the first time that dendritic cells developed a strong response to PREPS and L-particles, which is a good indicator for vaccine development. They also confirmed the lack of toxicity of these particles, as the studies demonstrated high cellular loading without effects on cell viability. These studies are now completed and the data will now be presented to potential partners and licensees for PREPS and L-particles.
Outlook
We continue to be excited about the prospects for the future of the Company and we have a strong patent portfolio and a great number of our technologies under development. We are continuing to keep a strong control on costs and have reduced these wherever possible.
We look forward to updating shareholders on our further progress.
ANDREW KNIGHT
Executive Chairman
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HENDERSON MORLEY PLC
UNAUDITED CONSOLIDATED INCOME STATEMENT SIX MONTHS ENDED 31 OCTOBER 2008
|
||||
|
|
Note |
6 months ended 31 October 2008 |
6 months ended 31 October 2007 |
12 months ended 30 April 2008 |
|
|
|
Unaudited £ |
Unaudited £ |
Audited £ |
|
|
|
|
|
|
|
Continuing operations |
|
|
|
|
|
Revenue |
|
41,128 |
686 |
16,468 |
|
|
|
|
|
|
|
Cost of sales |
|
(775) |
(408) |
(503) |
|
Gross profit |
|
40,353 |
278 |
15,965 |
|
Research and development |
|
(247,941) |
(270,444) |
(528,118) |
|
Other administrative expenses |
|
(344,779) |
(349,052) |
(833,851) |
|
Amortisation of intangible assets |
|
(2,656) |
(2,656) |
(5,312) |
|
Results from operating activities |
|
(555,023) |
(621,874) |
(1,351,316) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income |
|
8,185 |
31,363 |
47,405 |
|
Finance costs |
|
(1,146) |
(1,983) |
(617) |
|
Net finance income |
|
7,039 |
29,380 |
46,788 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before taxation |
|
(547,984) |
(592,494) |
(1,304,528) |
|
|
|
|
|
|
|
Research and development tax credit |
|
57,842 |
44,601 |
98,857 |
|
Loss from continuing operations |
|
(490,142) |
(547,893) |
1,205,671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per ordinary share |
4 |
(0.09p) |
(0.11p) |
(0.24p) |
|
|
|
|
|
|
All amounts relate to continuing activities.
HENDERSON MORLEY PLC
UNAUDITED CONSOLIDATED BALANCE SHEET AT 31 OCTOBER 2008
|
|
At 31 October 2008 Unaudited |
At 31 October 2007 Unaudited |
At 30 April 2008 Audited |
|
|
£ |
£ |
£ |
|
Non current assets |
|
|
|
|
Property, plant and equipment |
140,276 |
113,038 |
166,133 |
|
Goodwill |
58,964 |
58,964 |
58,964 |
|
Intangible assets |
29,216 |
34,528 |
31,872 |
|
Total non current assets |
228,456 |
206,530 |
256,969 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Inventories |
200 |
400 |
200 |
|
Trade and other receivables |
53,913 |
68,852 |
99,293 |
|
Tax receivable |
156,699 |
104,887 |
98,857 |
|
Cash and cash equivalents |
203,786 |
875,120 |
701,269 |
|
Total current assets |
414,598 |
1,049,259 |
899,619 |
|
|
|
|
|
|
Total assets |
643,054 |
1,255,789 |
1,156,588 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Bank loans and overdrafts |
- |
- |
1,483 |
|
Trade and other payables |
177,705 |
113,557 |
199,614 |
|
Total current liabilities |
177,705 |
113,557 |
201,097 |
|
|
|
|
|
|
Net assets |
465,349 |
1,142,232 |
955,491 |
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
Called up share capital |
719,078 |
614,911 |
719,078 |
|
Share premium account |
6,307,511 |
5,940,641 |
6,307,511 |
|
Profit and loss account |
(6,561,240) |
(5,413,320) |
(6,071,098) |
|
Shareholders' funds |
465,349 |
1,142,232 |
955,491 |
|
|
|
|
|
|
|
|
|
|
HENDERSON MORLEY PLC
STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 OCTOBER 2008
|
|
Called up share capital |
Share premium account |
Profit and loss account |
Total equity |
|
|
£ |
£ |
£ |
£ |
|
At start of period |
719,078 |
6,307,511 |
(6,071,098) |
955,491 |
|
Loss for the period |
- |
- |
(490,142) |
(490,142) |
|
|
|
|
|
|
|
At end of period |
719,078 |
6,307,511 |
(6,561,240) |
465,359 |
For the 12 months ended 30 April 2008
|
|
Called up share capital |
Share premium account |
Profit and loss account |
Total equity |
|
|
£ |
£ |
£ |
£ |
|
At start of period |
614,911 |
5,940,641 |
(4,865,427) |
1,690,125 |
|
Issue of shares (net of issue costs) |
104,167 |
366,870 |
- |
471,037 |
|
Loss for the year |
- |
- |
(1,205,671) |
(1,205,671) |
|
|
|
|
|
|
|
At end of period |
719,078 |
6,307,511 |
(6,071,098) |
955,491 |
For the six months ended 31 October 2007
|
|
Called up share capital |
Share premium account |
Profit and loss account |
Total equity
|
|
|
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
At start of period |
614,911 |
5,940,641 |
(4,865,427) |
1,690,125 |
|
Loss for the period |
- |
- |
(547,893) |
(547,893) |
|
|
________ |
____________ |
___________ |
_________ |
|
At end of period |
614,911 |
5,940,641 |
(5,413,320) |
1,142,232 |
HENDERSON MORLEY PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTH PERIOD TO 31 OCTOBER 2008
|
|
Note |
6 months ended 31 October 2008 Unaudited |
6 months ended 31 October 2007 Unaudited |
12 months ended 30 April 2008 Audited |
|
|
|
|
|
|
|
|
|
£ |
£ |
£ |
|
Cash flow from operating activities |
|
|
|
|
|
Cash generated from operations |
5 |
(501,298) |
(603,852) |
(1,227,185) |
|
|
|
|
|
|
|
Interest paid |
|
(1,146) |
(1,983) |
(617) |
|
Research and development tax credit received |
|
- |
17,394 |
77,679 |
|
|
|
|
|
|
|
Net cashflow from operating activities |
|
(502,444) |
(588,441) |
(1,150,123) |
|
|
|
|
|
|
|
Cashflow from investing activities |
|
|
|
|
|
Purchases of property, plant and equipment |
|
(6,100) |
(56,770) |
(161,508) |
|
Sale of tangible fixed assets |
|
3,328 |
- |
1,400 |
|
Interest received |
|
8,185 |
31,363 |
47,405 |
|
|
|
|
|
|
|
Net cash inflow/outflow from investing activities |
|
5,413 |
(25,407) |
(112,703) |
|
|
|
|
|
|
|
Cash flow from financing activities |
|
|
|
|
|
Proceeds from issue of new shares net of expenses |
|
- |
- |
471,037 |
|
Amount introduced by Directors |
|
1,031 |
18,819 |
21,426 |
|
|
|
|
|
|
|
Net cash inflow from financing activities |
|
1,031 |
18,819 |
492,463 |
|
|
|
|
|
|
|
(Decrease) in cash and cash equivalents |
|
(496,000) |
(595,029) |
(770,363) |
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
699,786 |
1,470,149 |
1,470,149 |
|
Cash and cash equivalents at end of period |
|
203,786 |
875,120 |
699,786 |
HENDERSON MORLEY PLC
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (IFRS) For the six months ended 31 October 2008
1. BASIS OF PREPARATION OF INTERIM REPORT
The information for the period ended 31 October 2008 is not audited and does not constitute statutory accounts. The statutory accounts for the year ended 30 April 2008 were given an unqualified audit report. A copy of the statutory accounts for that year has been delivered to the Register of Companies. The interim accounts for the six month period to 31 October 2007 were also unaudited.
2. ACCOUNTING POLICIES
Basis of Accounting
The financial report has been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS)
The report has been prepared on a going concern basis in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") at 31 October 2008 as well as all interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") at 31 October 2008. The Group has not availed itself of early adoption options in such standards and interpretations.
The validity of the going concern basis will depend on the ability of the directors to arrange further funding to support the activities of the subsidiary undertaking, Henderson Morley Research and Development Limited or to adopt alternative strategies to preserve its intellectual property so that its products under development can achieve commercial success. The Directors are confident that the Group will be able to raise appropriate funding and accordingly have prepared these accounts on a going concern basis.
The financial statements have been prepared under the historical cost basis. The principal accounting policies adopted are set out below:
New standards and Interpretations of existing standards that are not yet effective and have not been early adopted by the Group.
The Group does not anticipate that the adoption of these standards and interpretations will have a material impact on the Group's financial statements on adoption.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 October and 30 April each year. Control is achieved where the Company has the power to govern the financial and operating policies so as to obtain benefits from its activities.
The Group does not disclose transactions or balances between Group entities that are wholly eliminated on consolidations
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.
Research and Development
The Group considers that the regulatory, technical and market uncertainties inherent in the development of new products mean that internal development costs should not be capitalised as intangible non-current assets until commercial viability of a project is demonstratable and appropriate resource is in place to launch the products. Except in those circumstances, research and development expenditure is expensed as incurred.
Taxation
The tax charge or credit represents the sum of the current and deferred tax. Current tax is provided as amounts expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that is no longer probable that sufficient taxable profits will be available to allow all, or part, of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets are not capitalised until commercial viability of a project is demonstrable and appropriate resource is in place to launch the product. Except in those circumstances expenditure is charged against profit in the year in which the expenditure is incurred. Intangible assets with a future useful life are amortised over their useful economic lives. The intangible assets residual values, useful lives and methods of valuation are reviewed and adjusted, if appropriate, at each financial period end.
For intangible assets with finite useful lives, amortisation is calculated so as to write off the cost of an asset less its estimated residual value over its useful economic life as follows: Know how, patents and licences - over 10 years.
Goodwill
Goodwill arising on consolidation represents the excess cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition.
Goodwill is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed. Goodwill arising on acquisition before the date of transition to IFRS has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date.
Impairment of tangible and intangible assets excluding goodwill
Intangible and tangible assets are reviewed for impairment both annually and when there is an indication that an asset may be impaired when events of changes in circumstances indicate that carrying value may not be recoverable. The recoverable amount of the asset is calculated, this being the higher of the assets fair value less costs to sell and its value in use. Where the carrying amount exceeds the recoverable amount, the intangible assets are considered impaired and written down to their recoverable amounts.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives on the following bases:
Plant and machinery equipment,
fixtures and fittings 25% per annum on reducing balance
Leasehold property Straight line over 10 years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.
Leases
Rentals under operating leases are charged against profit as incurred.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.
Share based payments
The only share based payments of the Group are equity settled Share options. Options have been granted over the ordinary shares of Henderson Morley to employees and advisors. All options granted had an exercise price of either market value or above at the date of grant. Taking into account all the terms and conditions upon which the options are granted the Directors believe that a fair value for such shares does not exceed the exercise price. As a consequence the amount recognised as an expense and as a share based payment reserve is £Nil.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials. Cost is calculated using the first in first out (FIFO) basis. Net realisable value represents the estimated selling price less all estimated costs to be incurred in marketing and selling.
Trade receivables
Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.
Trade payables
Trade payables are not interest-bearing and are stated at their nominal value.
Employee benefit costs
Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate.
Financial Liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual agreements entered in to. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recognised at the amounts of proceeds received net of costs directly attributable to the transaction. To the extent that those proceeds exceed the par value of the shares issued they are credited to share premium account.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.
Valuation of intangibles and impairment of goodwill and valuation of intangibles
Determining whether a carrying value of goodwill and the other intangibles is impaired requires an estimation of their values. Although there are uncertain cash flows, the directors consider that there is sufficient value in intellectual property and development to justify the carrying values. Therefore there was no impairment during the period.
In preparing the financial statements of the individual companies, transactions in currencies other than the entity's function currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date.
Research and development expenditure was recognised in the income statement during the year. Management made the judgement not to capitalise this expenditure as it did not meet the criteria of IAS 38 in that it related to costs incurred on the development of products which have not been approved from a regulatory point of view at that stage.
3. Dividends
The Company will not be declaring an interim dividend.
4. loss per share
The calculation is based on the loss attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue during the period as follows:
|
|
6 months ended 31 October 2008
|
6 months ended 31 October 2007
|
12 months ended 30 April 2008
|
|
|
£ |
£ |
£ |
|
|
|
|
|
|
Numerators; earnings attributable to equity |
(490,142) |
(547,893) |
(1,205,671) |
|
|
|
|
|
|
Denominators; weighted average number of equity shares |
|
|
|
|
Basic and Diluted |
575,261,963 |
491,928,631 |
495,809,999 |
|
|
|
|
|
5. CASH USED IN OPERATIONS
|
|
6 months ended 31 October 2008
|
6 months ended 31 October 2007
|
12 months ended 30 April 2008
|
|
|
£ |
£ |
£ |
|
|
|
|
|
|
Results from operating activities |
(555,023) |
(621,874)) |
(1,351,316) |
|
Depreciation of property, plant and equipment |
29,461 |
18,232 |
69,200 |
|
Amortisation of intangible assets |
2,656 |
2,656 |
5,312 |
|
Profit disposed of fixed assets |
(832) |
- |
(725) |
|
Decrease in inventories |
- |
- |
200 |
|
Decrease/(increase) in receivables |
45,380 |
(21,036) |
(51,476) |
|
Increase/(decrease) in payables |
(22,940) |
18,170 |
101,620 |
|
Cash flows generated from operations |
(501,298) |
(603,852) |
(1,227,185) |
6. This report is available on the company's website at www.henderson-morley.com. Copies are available upon request from the Company's registered office at Metropolitan House, 2 Salisbury Road, Moseley, Birmingham, West Midlands, B13 8JS.
Related Shares:
HML.L