8th Dec 2005 07:02
Protherics PLC08 December 2005 8 December 2005 PROTHERICS PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2005 Protherics PLC, ("Protherics" or the "Company") the biopharmaceutical companyfocused on critical care and oncology, today announces its interim results forthe six months to 30 September 2005. Operating Highlights Excellent progress in clinical pipeline: • CytoFabTM (for sepsis from severe infections) - Major licensing deal* with AstraZeneca worth up to £195 million (approximately $340 million) in upfront and milestone payments (see separate press release issued today) - Protherics will receive a 20% royalty on net sales - AstraZeneca will make an upfront payment of £16.3 million* and a £7.5 million equity investment in Protherics at 68.24 pence per share* • VoraxazeTM (for the control of high dose methotrexate therapy in cancer) - Marketing Authorisation Application (MAA) submitted in Europe - FDA confirmation that a Biological License Application (BLA) application can be filed following further analysis of patient samples • ProlarixTM (selective therapy for liver cancer and other solid tumours) - Activation of prodrug in all patients receiving combination therapy - Extension of on-going phase 1 study to assess efficacy at maximum tolerated dose • Angiotensin Vaccine (for high blood pressure) - Novel adjuvant to be used in new formulation has proven safe in preclinical testing to date *subject to Hart-Scott-Rodino regulatory clearance in the US Financial Highlights • Revenues £10.7 million on lower dollar translation (2004: £10.8 million) • Sales of CroFabTM, DigiFabTM and ViperaTAbTM up 9% in US dollar terms to $18.1 million (2004: $16.6 million) • Operating loss £3.6 million; £2.2 million before exceptional costs (2004: operating profit before and after exceptional costs £0.8 million) • Loss before tax £3.7 million (2004: £0.6 million profit) following programmed shutdown and planned increases in expenditure • Cash at end of period of £6.3 million (2004: £11.0 million) • NASDAQ listing completed in US Commenting on the results Stuart Wallis, Chairman, said: "We are very pleased to announce today our collaboration with AstraZeneca forthe global development and commercialisation of CytoFab for the treatment ofsepsis, which we believe is one of the largest product licensing deals inanti-infectives in the last 10 years. With the signing of this agreement andthe continuing good progress with the US and European regulators for themarketing approval of Voraxaze, Protherics is emerging as a leadingbiopharmaceutical company, with both a high value, late stage pipeline, and agrowing revenue stream which helps to fund the business. We look forward withconfidence to 2006." For further information contact: Protherics PLC +44 (0) 20 7246 9950 +44 (0) 7919 480510Andrew Heath, CEOBarry Riley, Finance DirectorNick Staples, Corporate Affairs Protherics Inc +1 615 327 1027Saul Komisar, President Financial DynamicsLondon: David Yates/Ben Atwell +44 (0) 20 7831 3113New York: Jonathan Birt/John Capodanno +1 212 850 5600 Notes for Editors: There will be a joint conference call for analysts and investors at 1pm GMT/8amEST with AstraZeneca to discuss the CytoFabTM licensing agreement. Please callMo Noonan on +44 20 7269 7116 for details. To access the live audio broadcastor a replay of the broadcast log onto http://www.protherics.com. Please connectto the website several minutes prior to the start of the live broadcast. This will be followed by a presentation to analysts on the interim results at3pm GMT/10am EST at the offices of Financial Dynamics, Holborn Gate, 26Southampton Buildings, London WC2A 1PB. Webcast details can be found on theCompany website: http://www.protherics.com or please call Mo Noonan for furtherdetails on +44 20 7269 7116. About Protherics Protherics (LSE: PTI, NASDAQ: PTIL) is an integrated biopharmaceutical companyfocused on the development and marketing of products for critical care andoncology. With headquarters in London, the Company has approximately 190employees across its operations in the UK, US and Australia. The Company'slead programmes are VoraxazeTM, for the control of high dose methotrexatetherapy in cancer, where discussions are on-going with the US and EU regulatorsregarding marketing approvals, and CytoFabTM, for severe sepsis, which has beenlicensed to AstraZeneca and is being prepared for a pivotal phase 3 trial. Protherics' strategy is to use the revenues generated from its marketed productsto help fund the advancement of the Company's development pipeline. With aproven track record in drug development, biopharmaceutical manufacturing andregulatory affairs, Protherics' goal is to attract and develop additionaloncology and critical care products for its sales and marketing teams todistribute in the US and Europe. Protherics has revenues from five products including two FDA approved productsand is in the process of building a specialist sales and marketing capability inboth the US and Europe. The majority of the Company's revenues are derived fromtwo critical care products, CroFabTM (pit viper antivenom) and DigiFabTM(digoxin antidote) developed in-house and sold in the US through Fougera Inc, adivision of Altana AG. Additional products in the development pipeline include ProlarixTM (selectivechemotherapy), currently in phase 1; and an Angiotensin Vaccine (treatment ofhypertension), where encouraging phase 2a results have led to an improvedformulation entering development. A copy of Protherics' latest Annual Report on Form 20-F can be found atwww.protherics.com. This document contains forward-looking statements that involve risks anduncertainties including with respect to the approval of Protherics' products formarketing and distribution in the US. Although we believe that the expectationsreflected in such forward-looking statements are reasonable at this time, we cangive no assurance that such expectations will prove to be correct. Given theseuncertainties, readers are cautioned not to place undue reliance on suchforward-looking statements. Actual results could differ materially from thoseanticipated in these forward-looking statements due to many important factors,including the factors discussed in Protherics' Annual Report on Form 20-F andother reports filed from time to time with the U.S. Securities and ExchangeCommission. We do not undertake to update any oral or written forward-lookingstatements that may be made by or on behalf of Protherics. INTERIM STATEMENT R & D pipeline update CytoFabTM - for sepsis from severe infections Protherics started an out-licensing initiative for CytoFabTM in 2004 following apositive end of phase 2 meeting with the US Food and Drug Administration (FDA).We have today announced a global development and commercialisation agreementwith AstraZeneca for our anti-sepsis product CytoFabTM. CytoFabTM is currentlybeing prepared for a single phase 3 registration study in severe sepsis in linewith guidance received at an end of phase 2 meeting. AstraZeneca will be responsible for developing CytoFabTM, an anti-TNF-alphapolyclonal antibody fragment (Fab) product, as a treatment for TNF-alphamediated diseases in man, with an initial target indication of severe sepsis.Sepsis is a life-threatening condition resulting from uncontrolled severeinfections which affects an estimated three million people a year worldwide.Under the terms of the agreement, AstraZeneca will undertake all clinicaldevelopment work for CytoFabTM and Protherics will be primarily responsible forbulk drug manufacturing, including the supply of clinical trial material. Theagreement will become effective upon the expiration of the Hart-Scott-Rodinowaiting period in the US, which is anticipated early in 2006. The agreement has a potential total deal value, excluding royalties, ofapproximately £195 million ($340 million) to Protherics, including an initialpayment of £16.3 million. In addition, AstraZeneca will make a £7.5 millionequity investment in Protherics to be paid in cash, at 68.24 pence per share,being a 30 percent premium to the average middle market closing price ofProtherics shares over the three months prior to the date of the agreement.AstraZeneca will own approximately 4.3 percent of Protherics' enlarged sharecapital. Protherics will receive additional payments worth up to £171 million payableupon the achievement of milestones. A significant proportion of these paymentsare contingent on pre-approval milestones being achieved. There are nomilestone payments related to sales performance. Protherics will also receiveroyalties on global product sales of 20 percent of net sales which reflect thelate stage development status and market potential of CytoFabTM. Prothericswill also receive additional payments in return for the commercial supply of theproduct and will invest to expand its manufacturing capacity accordingly. AstraZeneca plans to start the pivotal phase 3 study for CytoFabTM in the US andEU in 2007 following completion of improvements to the current manufacturingprocess. Protherics has previously demonstrated in a phase 2b study thatCytoFabTM caused a marked reduction in TNF-alpha in the blood and lung tissuesof patients with severe sepsis, and that patients required on average five days'less mechanical ventilation than when treated with placebo. In addition,CytoFabTM showed an encouraging trend suggesting a survival benefit compared toplacebo and a favourable side-effect profile. Approximately one third of patients with severe sepsis die from major organfailure. Patients typically require mechanical ventilation and intensive care.There is only one product currently available for the treatment of severe sepsisand there remains a considerable unmet need for treatment of thislife-threatening condition. VoraxazeTM - for the control of methotrexate therapy We submitted our Marketing Authorisation Application (MAA) in Europe in Julythis year. Initial feedback from the rapporteur and co-rapporteur authoritiessuggests that additional in vivo data will be required to support theapplication. Protherics believes that this work could be completed in the firsthalf of 2006, facilitating a potential approval in late 2006. Protherics has also been in discussions with the FDA throughout the course ofthe year regarding a Biological License Application (BLA) in the US. We havesubmitted additional non-clinical data requested by FDA, the clinical studyreports and clinical section from the European MAA, for FDA review. We have nowreceived confirmation from the FDA that a marketing application can be filedonce we have supplied additional data from a recent pharmacodynamic studyundertaken through the National Cancer Institute (NCI) and we expect to file aBLA in mid 2006. We continue to implement our VoraxazeTM commercialisation plan having recentlysigned distributor agreements in Italy and South Africa and appointed McKessonCanada as our named patient sales distributor in Canada. We also now haveVoraxazeTM stocked in centres both in Scandinavia and Australia for namedpatient use. Protherics is preparing to start several pilot studies to evaluate the planneduse of VoraxazeTM with repeated cycles of methotrexate treatment. These studieswill investigate the benefits and safety of repeated use, with a view topreparing for a subsequent registration study to allow Protherics to promoteVoraxazeTM for repeated planned use. ProlarixTM - a selective therapy for liver cancer and certain other solid celltumours ProlarixTM is a promising cancer therapy in which a prodrug (tretazicar) and aco-substrate (caricotamide) are given in combination. In the phase 1 study beingconducted by Cancer Research UK (CRUK), activation of the prodrug tretazicar hasbeen observed in all patients treated with the combination of tretazicar andcaricotamide where pharmacokinetic data has been determined. As a result, wehave fixed the dose of caricotamide and have started to escalate the dose oftretazicar. The combination has been well tolerated to date and one patientwith stable disease has now received four cycles of the combination. CRUK has received approval from the UK Medicines and Healthcare productRegulatory Agency (MHRA) to extend the study to allow a final cohort of sixpatients to be given repeated cycles of combination therapy at the maximumtolerated dose. This will allow tumour responses to be investigated as asecondary endpoint. Further patient recruitment into the study is pending theintroduction of a new formulation of caricotamide in early 2006. We expect that several more escalations of tretazicar will be required toestablish the maximum tolerated dose, and that the trial will report in H2 2006.Concomitantly, we intend to start a phase 2 trial in liver cancer (hepatoma)before the end of 2006. Protherics is also investigating other potentialapplications of this promising prodrug technology in other solid cell tumours,including ovarian cancer where high NQO2 activity has been found. Angiotensin Vaccine - for high blood pressure Protherics previously reported that it had selected an adjuvant for use with theAngiotensin Vaccine which produced ten times higher antibody titres in apreclinical model compared to the formulation which produced encouragingpharmacodynamic data in a phase 2a study. Preclinical testing of the newformulation is currently underway, with no safety concerns raised to date. Weare planning to start a phase 2a proof of concept study in the second half of2006 to determine whether higher antibody levels against angiotensin areproduced in man and result in a drop in blood pressure. Marketed Products CroFabTM - rattlesnake antivenom CroFabTM sales were £8.5 million against £7.4 million in the previous half year,showing continued strong underlying volume growth offset by a lower dollartranslation rate. In US dollar terms, the corresponding figures were $15.2million against $12.1 million, a 26% increase. Work on CroFabTM process improvements has been deferred over the last six monthsas our internal manufacturing resources have supported the CytoFabTM licensinginitiative. However, Protherics is now fast tracking the CroFabTM processchanges to provide the capacity required in our facility to manufacture CytoFabTM, in addition to reducing the cost of manufacturing for CroFabTM. These changes require FDA approval, which is now anticipated in late 2007 or early 2008. DigiFabTM - treatment for digoxin overdose DigiFabTM sales declined to £1.5 million in the half year, from £2.6 million($2.7 million against $4.3 million). Sales by our distributor, Altana, weresimilar in volume terms to the prior period, although, as indicated in our lastAnnual Report, Altana is reducing its average inventory levels, thus reducingour shipments and revenues. We continue to support our application for EU market approval of DigiFabTM andhave recently met with the MHRA to discuss the data package. Clinical data froma small number of patients who have already been treated with DigiFabTM in theUS will be required in order to support the application. Protherics currentlyanticipates receiving approval in the UK in the second half of 2006, withsubsequent approvals in Europe over the following six to twelve months. Webelieve the European market can provide a further opportunity to grow DigiFabTMsales. Altana has exercised its nil-cost option, as expected, to extend itsdistribution rights for CroFabTM and DigiFabTM for a further five years. At theend of this period, the distribution rights will revert back to Protherics, andthis represents a potential value driver in the future. Other revenues Named patient sales of VoraxazeTM were £0.3 million in the half year, up from£0.1 million in the corresponding half year, as product awareness continues tobuild in Europe. ViperaTAbTM sales were similar to the corresponding period, at£0.1 million. Prion recognition (TSE testing) licensing revenues from Enfer were £0.2 million,compared to the £0.4 million in the corresponding period last year, due toincreasing competition. Enfer has launched an updated test kit, incorporatingour intellectual property which may help to sustain this no-cost royalty streamto Protherics. Operations The first half of the year saw a major programmed shutdown to bring on streamthe expansions in our Welsh plant which have been constructed over the past 2years. Production re-started in September and the necessary documentation tore-qualify the facility has been submitted to the FDA. Approval is expected bythe end of the current financial year. With some further planned investments,this expansion now gives us the capability to produce CytoFabTM at expectedcommercial volumes. Protherics increased its manufacturing investments in CytoFabTM as licensingdiscussions progressed over the last year. With a licensing agreement nowsigned with AstraZeneca, Protherics will continue to invest in its manufacturingoperations in preparation for the commercial supply of CytoFabTM. Protherics isplanning to fund these investments from the various milestone payments expectedfrom AstraZeneca. Financial Review This is the first period in which we report under International FinancialReporting Standards (IFRS). The interim figures for the six months to 30September 2004 and the year to 31 March 2005 have been restated as set out innotes 1 and 2 to the Interim Statement, and in the Group's IFRS transitiondocument, which is available on our website, www.protherics.com. Revenues were £10.7 million compared to £10.8 million in the corresponding halfyear. Over 90% of this turnover arises in US dollars from the sales of CroFabTM, DigiFabTM and ViperaTAbTM. The actual US dollar sales for these productswere $18.1 million compared to $16.6 million, a 9% increase, which demonstratesthe underlying growth in this part of the business. The effective translationrate in the half year was $1.79 to the pound, against $1.64 per pound in thecorresponding period. Cost of sales for the period has been impacted by several factors. The plannedshutdown referred to above incurred exceptional costs of £1.4 million, largelyin overheads incurred in the shutdown period. In addition, there were highershipments of CroFabTM and lower shipments of DigiFabTM compared to thecorresponding six month period. DigiFabTM is a significantly higher marginproduct. The combination of these factors and the adverse US dollar translationrates reduced gross margins (excluding exceptional costs) to 41% from 59% in thecorresponding six month period. We expect these margins to improve as weimplement our CroFabTM manufacturing changes over the next 18 months. Research and Development increased to £2.4 million compared to £2.0 million inthe corresponding period. Although we have not pressed ahead as rapidly asplanned with the new CroFabTM process development, we have invested in theCytoFabTM process, and on additional studies on VoraxazeTM, which are requiredby the regulatory authorities in Europe and the US. General and Administrationexpenses increased to £4.2 million (2004: £3.6 million). Included in this amountwere costs of £0.4 million relating to the adoption of IAS 39 from 1 April 2005.As indicated in the last Annual Report, under IFRS our foreign exchangecontracts do not qualify for hedge accounting. Instead, the contracts arerecorded at fair value at the balance sheet date. This has the effect ofadvancing the gain or loss on these contracts, compared to the previoustreatment. The remaining increase in expenditure was due to our continuingbuild-up of pre-marketing efforts, ahead of the planned launch of VoraxazeTM. The resulting operating loss of £3.6 million (£2.2 million before exceptionalcosts) compares to a £0.8 million operating profit before and after exceptionalcosts in the corresponding six month period. Finance costs have declined to £0.1 million from £0.3 million, largely as aresult of conversions of the 6% unsecured loan notes, coupled with interestincome from higher average cash balances. The tax credit, at £0.1 million was similar to the corresponding period,resulting in a loss after tax of £3.6 million in the half year against a profitof £0.7 million in the corresponding period. Balance Sheet Inventories reduced to £9.6 million compared to £11.8 million at 30 September2004, and £12.8 million at 31 March 2005. Significant inventories were built inanticipation of the shutdown described above. These can be expected to increaseas we manufacture ahead of the next "biting season" commencing in spring 2006. Trade and other receivables have increased following the heavy shipments ofCroFabTM through the summer months. The 6% convertible loan notes havedecreased to £2.9 million from £3.8 million at 31 March 2005 due to furtherconversions. Cash Flow Cash used in operating activities (£0.3 million) was similar to thecorresponding six month period to 30 September 2004. Purchases of capitalequipment decreased to £0.3 million from £0.6 million, as the major expansionundertaken in Wales was completed. Overall, cash at the end of the period was£6.3 million, in line with expectations, and down from £7.3 million at 31 March2005. Outlook A licensing deal with AstraZeneca on CytoFabTM is a transforming event forProtherics. It not only provides a valuable revenue stream in terms of upfrontpayments and potential milestones and royalties, but also highlights the valuein both the CytoFabTM programme and our ovine polyclonal antibody fragmenttechnology platform. We are now preparing to make further investments in ourmanufacturing operations, and will explore other potential applications for ourpolyclonal Fab technology. Meanwhile, we are working to maximize our returns onCroFabTM and DigiFabTM and focusing on growing our oncology franchise,anticipating the launch of VoraxazeTM in our financial year ending March 2006 inthe US and Europe. In addition, we will begin studies early next year toevaluate the potential of repeated planned use of VoraxazeTM. CONSOLIDATED INCOME STATEMENT (UNAUDITED)for the six months ended 30 September 2005 Six months Six months Year ended 30 ended 30 ended 31 September September March 2005 2004 2005 Notes £'000 £'000 £'000 Revenue 3 10,686 10,814 18,839Cost of sales Cost of sales excluding exceptional closedown costs (6,299) (4,463) (8,744) Exceptional closedown costs (1,362) - -Total cost of sales (7,661) (4,463) (8,744) _____ _____ _____Gross profit 3,025 6,351 10,095 Administrative expenses Research and development (2,374) (1,953) (4,575) General & administrative (4,241) (3,563) (7,178) _____ _____ _____Total administrative expenses (6,615) (5,516) (11,753) _____ _____ _____ Operating (loss) / profit before exceptional closedown costs (2,228) 835 (1,658) Exceptional closedown costs (1,362) - -Operating (loss) / profit 3 (3,590) 835 (1,658) Finance costs (127) (269) (419) _____ _____ _____(Loss) / profit before tax (3,717) 566 (2,077)Tax 6 148 129 296 _____ _____ _____(Loss) / profit for the period, attributable to equity (3,569) 695 (1,781)shareholders _____ _____ _____ Pence Pence Pence(Loss) / earnings per share Basic and diluted 5 (1.5) 0.3 (0.8) All revenue and results arose from continuing operations. CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE (UNAUDITED)for the six months ended 30 September 2005 Six months Six months Year ended 30 ended 30 ended 31 September September March 2005 2004 2005 £'000 £'000 £'000 Exchange differences on translation of foreign operations (29) (145) (33) _____ _____ _____ Net expense recognised directly in equity (29) (145) (33) (Loss) / profit for the period (3,569) 695 (1,781) _____ _____ _____ Total recognised (expense) / income for the period (3,598) 550 (1,814) _____ _____ _____ All recognised income and expense is attributable to equity shareholders. CONSOLIDATED BALANCE SHEET (UNAUDITED)at 30 September 2005 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000 Non-current assetsGoodwill 9,199 9,199 9,199Other intangible assets 1,102 594 1,081Property, plant and equipment 6,933 6,914 6,999Deferred tax assets 461 438 432 _____ _____ _____ 17,695 17,145 17,711 _____ _____ _____Current assetsInventories 9,641 11,774 12,752Financial assets - 361 75Tax receivables 491 500 344Trade and other receivables 3,793 2,729 3,200Cash and cash equivalents 6,255 11,036 7,270 _____ _____ _____ 20,180 26,400 23,641 _____ _____ _____ Total assets 37,875 43,545 41,352 Current liabilitiesTrade and other payables 7,896 8,359 8,551Current tax liabilitiesFinancial liabilities 217 193 209 Obligations under finance leases 586 478 534 Bank overdrafts, loans and other borrowings 32 406 193 Derivative instruments 363 - - _____ _____ _____ 9,094 9,436 9,487 _____ _____ _____ Non-current liabilitiesFinancial liabilities Borrowings 252 108 250 Convertible loan notes 2,943 7,062 3,762 Obligations under finance leases 1,258 1,285 1,246Other non-current liabilities 595 630 638 _____ _____ _____ 5,048 9,085 5,896 _____ _____ _____ Total liabilities 14,142 18,521 15,383 _____ _____ _____ Net assets 23,733 25,024 25,969 _____ _____ _____ EquityShare capital 4,898 4,570 4,844Share premium account 78,528 74,949 77,868Merger reserve 51,163 51,163 51,163Equity reserve 317 - -Cumulative translation reserve (62) (145) (33)Other reserve 398 162 278Retained earnings (111,509) (105,675) (108,151) _____ _____ _____Total equity 23,733 25,024 25,969 _____ _____ _____ CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) Share Share Merger Equity capital premium reserve reserve £'000 £'000 £'000 £'000 Balance at 1 April 2004 4,155 66,027 51,163 - Currency translation adjustments - - - - _____ _____ _____ _____Net (expense) recognised directly in equity - - - -Profit for the period - - - - _____ _____ _____ _____Total recognised (expense) / income for the period - - - - _____ _____ _____ _____ New share capital subscribed 415 9,556 - -Expenses of issue of equity shares - (634) - -Employee share option scheme:- value of services provided - - - - _____ _____ _____ _____Balance at 30 September 2004 4,570 74,949 51,163 - _____ _____ _____ _____ Cumulative Other Retained Total Translation reserve earnings reserve £'000 £'000 £'000 £'000 Balance at 1 April 2004 - 41 (106,370) 15,016 Currency translation adjustments (145) - - (145) _____ _____ _____ _____Net (expense) recognised directly in equity (145) - - (145)Profit for the period - - 695 695 _____ _____ _____ _____Total recognised (expense) / income for the period (145) - 695 550 _____ _____ _____ _____ New share capital subscribed - - - 9,971Expenses of issue of equity shares - - - (634)Employee share option scheme:- value of services provided - 121 - 121 _____ _____ _____ _____Balance at 30 September 2004 (145) 162 (105,675) 25,024 _____ _____ _____ _____ Share Share Merger Equity capital premium reserve reserveBalance at 1 October 2004 4,570 74,949 51,163 - Currency translation adjustments - - - - _____ _____ _____ _____Net income recognised directly in equity - - - -Loss for the period - - - - _____ _____ _____ _____Total recognised income / (loss) for the period - - - - _____ _____ _____ _____ New share capital subscribed 274 3,186 - -Expenses of issue of equity shares - (267) - -Employee share option scheme:- value of services provided - - - - _____ _____ _____ _____Balance at 31 March 2005 4,844 77,868 51,163 -Adoption of IAS 32 and IAS 39 - 13 - 378Balance at 1 April 2005 4,844 77,881 51,163 378 _____ _____ _____ _____ Cumulative Other Retained Total Translation reserve earnings reserveBalance at 1 October 2004 (145) 162 (105,675) 25,024 Currency translation adjustments 112 - - 112 _____ _____ _____ _____Net income recognised directly in equity 112 - - 112Loss for the period - - (2,476) (2,476) _____ _____ _____ _____Total recognised income / (loss) for the period 112 - (2,476) (2,364) _____ _____ _____ _____ New share capital subscribed - - - 3,460Expenses of issue of equity shares - - - (267)Employee share option scheme:- value of services provided - 116 - 116 _____ _____ _____ _____Balance at 31 March 2005 (33) 278 (108,151) 25,969Adoption of IAS 32 and IAS 39 - - 211 602Balance at 1 April 2005 (33) 278 (107,940) 26,571 _____ _____ _____ _____ Share Share Merger Equity capital premium reserve reserveBalance at 1 April 2005 4,844 77,881 51,163 378 Currency translation adjustments - - - - _____ _____ _____ _____Net (expense) recognised directly in equity - - - -Loss for the period - - - - _____ _____ _____ _____Total recognised (loss) for the period - - - - _____ _____ _____ _____ New share capital subscribed 54 586 - -Recognition of equity component of convertible loan - 61 - (61)notes _____ _____ _____ _____Employee share option scheme:- value of services provided - - - - _____ _____ _____ _____Balance at 30 September 2005 4,898 78,528 51,163 317 _____ _____ _____ _____ Cumulative Other Retained Total Translation reserve earnings reserveBalance at 1 April 2005 (33) 278 (107,940) 26,571 Currency translation adjustments (29) - - (29) _____ _____ _____ _____Net (expense) recognised directly in equity (29) - - (29)Loss for the period - - (3,569) (3,569) _____ _____ _____ _____Total recognised (loss) for the period (29) - (3,569) (3,598) _____ _____ _____ _____ New share capital subscribed - - - 640Recognition of equity component of convertible loan - - - -notes _____ _____ _____ _____Employee share option scheme:- value of services provided - 120 - 120 _____ _____ _____ _____Balance at 30 September 2005 (62) 398 (111,509) 23,733 _____ _____ _____ _____ CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)for the six months ended 30 September 2005 Six months to 30 September 2005 £'000 £'000 Cash flows from operating activitiesCash generated from operations (248)Income tax paid (10)Income tax received - _____Net cash (used in) operating activities (258) _____ Investing activitiesInterest received 103Proceeds on disposal of property, plant and equipment -Purchases of property, plant and equipment (279)Purchases of other intangible non-current assets -Capital grants received - _____Net cash (used in) investing activities (176) _____ Financing activitiesInterest paid (134)Interest paid on finance leases (73)Repayment of borrowings (270)Repayments of finance leases (155)New bank loans raisedIssue of shares 70(Decrease) / increase in bank overdrafts (28) _____Net cash (used in) / from financing activities (590) _____ Net (decrease) / increase in cash and cash equivalents (1,024) Cash and cash equivalents at the beginning of period 7,270 Effect of foreign exchange rate changes 9 _____Cash and cash equivalents at the end of period 6,255 _____ Six months to 30 September 2004 £'000 £'000 Cash flows from operating activitiesCash generated from operations (218)Income tax paid (77)Income tax received - _____Net cash (used in) operating activities (295) _____ Investing activitiesInterest received 58Proceeds on disposal of property, plant and equipment -Purchases of property, plant and equipment (603)Purchases of other intangible non-current assets -Capital grants received - _____Net cash (used in) investing activities (545) _____ Financing activitiesInterest paid (259)Interest paid on finance leases (56)Repayment of borrowings (257)Repayments of finance leases (252)New bank loans raised 106Issue of shares 9,337(Decrease) / increase in bank overdrafts - _____Net cash (used in) / from financing activities 8,619 _____ Net (decrease) / increase in cash and cash equivalents 7,779 Cash and cash equivalents at the beginning of period 3,253 Effect of foreign exchange rate changes 4 _____Cash and cash equivalents at the end of period 11,036 _____ Year ended 31 March 2005 £'000 £'000 Cash flows from operating activitiesCash generated from operations (3,054)Income tax paid (79)Income tax received 332 _____Net cash (used in) operating activities (2,801) _____ Investing activitiesInterest received 236Proceeds on disposal of property, plant and equipment 35Purchases of property, plant and equipment (1,001)Purchases of other intangible non-current assets (191)Capital grants received 10 _____Net cash (used in) investing activities (911) _____ Financing activitiesInterest paid (494)Interest paid on finance leases (131)Repayment of borrowings (336)Repayments of finance leases (490)New bank loans raised -Issue of shares 9,161(Decrease) / increase in bank overdrafts 28 _____Net cash (used in) / from financing activities 7,738 _____ Net (decrease) / increase in cash and cash equivalents 4,026 Cash and cash equivalents at the beginning of period 3,253 Effect of foreign exchange rate changes (9) _____Cash and cash equivalents at the end of period 7,270 _____ NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)for the six months ended 30 September 2005 Reconciliation of operating (loss) / profit to net cash outflow from operatingactivities Six months Six months Year ended 30 ended 30 ended 31 September September March 2005 2004 2005 £'000 £'000 £'000 Operating (loss) / profit (3,590) 835 (1,658) Adjustments for: Change in fair value of derivatives 439 (38) 248 Deferred grant income (71) (21) (48) Non cash expenses / (revenues) 75 (110) (110) Share-based payment costs 120 121 213 Depreciation of property, plant and equipment 710 815 1,464 Amortisation of intangible fixed assets 55 56 111 Loss on disposal of property, plant and equipment 61 161 162 _____ _____ _____Operating cash flows before movements in working capital (2,201) 1,819 382 Decrease / (increase) in inventories 3,288 (2,081) (3,032)(Increase) / decrease in receivables (168) 502 68(Decrease) in payables (1,167) (458) (472) _____ _____ _____Net cash flows from operating activities (248) (218) (3,054) _____ _____ _____ Analysis of net debt 1 April 2005 Cash flow Exchange Other 30 September movement non-cash 2005 changes £'000 £'000 £'000 £'000 £'000 Cash at bank and in hand 7,270 (1,024) 9 - 6,255Overdraft (28) 28 - - - _____ _____ _____ _____ _____Cash and cash equivalents 7,242 (996) 9 - 6,255Loans - amounts falling due in less than (165) 140 (7) - (32)one yearLoans - amounts falling due in more than (3,730) 15 (17) 537 (3,195)one yearObligations under finance lease and hire (1,780) 270 (7) (327) (1,844)purchase obligations _____ _____ _____ _____ _____ 1,567 (571) (22) 210 1,184 _____ _____ _____ _____ _____ NOTES TO THE INTERIM STATEMENT 1. General information The interim financial statements, which have been approved by the Directors on 7December 2005, are unaudited and do not constitute full financial information asdefined in Section 240 of the Companies Act 1985 (as amended). The financial information in respect of the year ended 31 March 2005 has beenproduced using extracts from the statutory accounts under UK GAAP for thisperiod and amended by adjustments arising from the implementation ofInternational Financial Reporting Standards (IFRS). The statutory accounts forthis period have been filed with the Registrar of Companies. The auditors'report on these accounts was unqualified and did not contain a statement undersection 237 (2) or (3) of the Companies Act 1985 which deal respectively withthe maintaining of proper accounting books and records and the availability ofinformation to the auditors. The financial information presented on pages 9 to 16 has been prepared based onthe adoption of IFRS, including International Accounting Standards (IAS) andinterpretations issued by the International Accounting Standards Board (IASB)and its committees, as interpreted by any regulatory bodies relevant to theGroup. These are subject to ongoing amendment by the IASB and subsequentendorsement by the European Commission. Additionally, IFRS is currently beingapplied in the United Kingdom and in a large number of countries simultaneouslyfor the first time and due to a number of new and revised Standards includedwithin the body of the standards that comprise IFRS, there is yet to be asignificant body of established practices on which to draw in forming optionsregarding interpretation and application. Accordingly, practice is continuing toevolve. As a result the accounting policies used to prepare the interim financial reportwill need to be updated for any subsequent amendment to IFRS required for firsttime adoption, or any new standard that the Group may elect to adopt early.Consequently, the revised accounting policies which are detailed in theProtherics PLC IFRS transition document, available on its website,www.protherics.com, are provisional and subject to change. These accountingpolicies have been consistently applied to all periods presented in the interimfinancial statements with the exception of IAS 32, Financial Instruments:Disclosure and Presentation and IAS 39, Financial Instruments: Recognition andMeasurement. In accordance with IFRS 1, First Time Adoption of InternationalFinancial Reporting Standards, the Directors have elected not to restatecomparative information for the impact of IAS 32 and IAS 39, but have onlyadopted these standards to apply for 1 April 2005. 2. Reconciliation of the transition from UK GAAP to IFRS The effect of transition from UK GAAP to IFRS on the Group's profit / (loss) forthe period and net assets is set out below. Full details of the restatement andreconciliations with the previously published UK GAAP financial information forthe six months ended 30 September 2004 and for the year ended 31 March 2005,together with the accounting policies adopted following transition to IFRS canbe obtained from the Group's IFRS transition document which is available on itswebsite, www.protherics.com. Six months Twelve ended 30 Months September ended 31 2004 March 2005 £'000 £'000 £'000 £'000Profit / (loss) for the period As previously reported under UK GAAP 301 (2,587) Reversal of goodwill amortisation cost 499 998 Share option cost (132) (232) Alignment of capitalised interest 23 47 Other 4 (7) _____ _____ 394 806 _____ _____ As restated under IFRS 695 (1,781) _____ _____ 30 September 2004 31 March 2005 £'000 £'000 £'000 £'000Net Assets As previously reported under UK GAAP 24,785 25,228 Reversal of goodwill amortisation cost 499 998 Share option cost (97) (105) Alignment of capitalised interest (58) (35) Other (105) (117) _____ _____ 239 741 _____ _____ As restated under IFRS 25,024 25,969 _____ _____ 3. Segment information As at 30 September 2005, the Group is organised into two operating segments, thesale, manufacture and development of pharmaceutical products and out-licensedtechnology. Six months ended 30 September 2005 Sale, manufacture and Outlicensed Consolidated development of technology pharmaceutical products £'000 £'000 £'000RevenueExternal sales 10,462 224 10,686Inter-segment sales - - - _____ _____ _____Total revenue 10,462 224 10,686 _____ _____ _____ Operating (loss) / profit (3,812) 222 (3,590) Finance costs (127) _____ _____ _____(Loss) before tax (3,717)Tax 148 _____(Loss) for the period, attributable to (3,569)equity shareholders _____ Six months ended 30 September 2004 RevenueExternal sales 10,402 412 10,814Inter-segment sales - - - _____ _____ _____Total revenue 10,402 412 10,814 _____ _____ _____ Operating profit 428 407 835 Finance costs (269) _____ _____ _____Profit before tax 566Tax 129 _____Profit for the period, attributable to 695equity shareholders _____ Year ended 31 March 2005 RevenueExternal sales 18,127 712 18,839Inter-segment sales - - - _____ _____ _____Total revenue 18,127 712 18,839 _____ _____ _____ Operating (loss) / profit (2,365) 707 (1,658) Finance costs (419) _____ _____ _____(Loss) before tax (2,077)Tax 296 _____(Loss) for the period, attributable to (1,781)equity shareholders _____ Interim measurement A significant proportion of the Group's expected revenues arise from itsCroFabTM pit viper antivenom treatment and is subject to seasonal fluctuations,with peak demand in the first six months of the Group's financial year caused bythe hibernation patterns of such snakes. In the year ended 31 March 2005, 64.7%of CroFabTM revenues arose in the six months ended 30 September 2004. 4. Cost of sales During the six months ended 30 September 2005, the Group completed a majorfacility upgrade and expansion of its manufacturing facility in Wales. Duringthis phase of the work, the facility was shutdown for a substantial part of thefinancial period therefore incurring £1,362,000 of expenditure which, undernormal circumstances would have been absorbed into stock manufactured during theperiod. These costs had no effect on the tax credit for the period. 5. (Loss) / earnings per share The calculation of the basic and diluted (loss) / earnings per share is based onthe following data: Six months Six months Year ended 30 ended 30 ended 31 September 2005 September 2004 March 2005 £'000 £'000 £'000(Loss) / earnings(Loss) / earnings for the purposes of basic (loss) / earnings (3,569) 695 (1,781)per share being net (loss)/ profit attributable to equityshareholders of the parentEffect of dilutive potential ordinary shares - - - _____ _____ _____Earnings for the purposes of diluted (loss) / earnings / per (3,569) 695 (1,781)share _____ _____ _____ Number of sharesWeighted average number of shares for the purposes of basic 242,960,097 213,519,516 224,145,177(loss) / earnings per shareEffect of dilutive potential ordinary shares:Share options - 2,346,236 - _____ _____ _____Weighted average number of ordinary shares for the purposes 242,960,097 215,865,752 224,145,177of diluted (loss) / earnings per share _____ _____ _____ 6. Taxation Tax credits of £150,000 arose in the period to 30 September 2005 as a result ofresearch and development expenditure claimed under the Finance Act 2000 (2004:£140,000). 7. Other Copies of this statement are being sent to all shareholders and will beavailable to the public at the Company's registered office at The Heath Businessand Technical Park, Runcorn, Cheshire, WA7 4QF. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Astrazeneca