26th Mar 2007 07:01
Sinclair Pharma PLC26 March 2007 Sinclair Pharma plc Interim Results - Highlights Godalming, UK, 26 March 2007: Sinclair Pharma plc (SPH:L) ("Sinclair" or the "Company"), the rapidly growing international specialty pharmaceutical company,today announces its interim results for the six months ended 31 December 2006and a summary of post-period activity. Highlights Financial Highlights for the first half • Turnover up 145% to £9.1m from the same period last year (H1 FY06: £3.7m)• Revenue increase driven by contributions from acquired sales and marketing operations in France and the UK (CS Dermatologie ("CSD") and Ashbourne Pharmaceuticals Ltd. ("Ashbourne") respectively)• AtopiclairTM revenues increased 130% to £1.3m (H1 FY06: £0.6m)• Operating loss of £2.6m (H1 FY06: £1.7m loss)• Loss per share of 3.1p (H1 FY06: 3.0p loss per share)• Sinclair started the second half of the year with the Company's strongest ever order book• Seeking to migrate from AIM to the Official List in London in the near future, together with a secondary listing on Euronext Paris. This will be through an introduction of existing shares with no new shares being issued Operating Highlights for the first half and post-period Own sales and marketing operations • Sinclair acquired the UK sales and marketing company Ashbourne in September 2006• Sinclair Srl (Italy) refocused its portfolio on core prescription products through divestment of non-prescription products and acquisition of three prescription products• Ashbourne launched the vertigo product Arlevert(R), through a marketing agreement with Hennig Arzneimittel GmbH, in January 2007• CSD launched Sinclair's atopic dermatitis product Atopiclair in France in February 2007 Sales through marketing partners • Sinclair's marketing partner network expanded. During the half year there were new agreements with seven marketing partners for six products, covering 16 countries• Sinclair now has a marketing partner network that spans 67 countries including the main EU and Latin American territories, the US, China and Russia.• These included an agreement with Bayer's specialist dermatology division, Intendis, to sell Atopiclair in eight major territories. In some countries a co-marketing agreement means that Intendis will market the product alongside Sinclair's own sales and marketing teams.• US Atopiclair salesforce significantly increased Pipeline and clinical update • Positive study results from two paediatric trials for Atopiclair announced• SebclairTM received US Food and Drug Administration (FDA) marketing approval for seborrheic dermatitis• Decapinol Toothpaste with fluoride and Toothpaste Gel with fluoride approved in the EU, consolidating the Decapinol product range• Exclusive rights to develop and commercialise the peptide p1025, for use in the dental setting, acquired from King's College London Steve Harris, Chairman of Sinclair Pharma plc, commented: "We have invested significantly in the business, putting infrastructure inplace, expanding sales and marketing distribution in Europe and expanding ourproduct portfolio. This is reflected in the 145% first-half increase inrevenues and our strongest ever order book at the start of the second half.Atopiclair is performing particularly well. First half revenue growth was driven largely by Atopiclair sales and thecontribution of our acquired operations in France and the UK. Looking forwardto the second half, we are working towards events that should not onlyillustrate the development of Sinclair since IPO, but also provide a platformfor future revenues. These include the US launch of Decapinol by OraPharma,Inc. and the launch of Atopiclair across several key EU territories. Weanticipate that second half revenues will be significantly higher than the firsthalf, and are optimistic about full year revenues. END For further information please contact: Sinclair Pharma plc Tel: +44 (0) 1483 410 600Dr Michael Flynn, CEOJerry Randall, CFOZoe McDougall, Director of Communications Capital MS&L Tel +44 (0)20 7307 5340Mary Clark, Halina Kukula Notes to Editors: Sinclair Pharma plc Sinclair Pharma plc is an international specialty pharmaceutical company. Ithas a growing sales and marketing operation that is already present in France,Italy, UK, Spain and Portugal, and a complementary marketing partner networkthat spans more than 65 countries. Sinclair has proven expertise in acquiring or developing commercially attractiveand undervalued products, registering these products and bringing them to marketwithin a short time frame. The company focuses on niche therapeutic areas andits current portfolio includes products for dermatological conditions and oralhealth. Other languages For versions of this press release in French, German or Japanese please [email protected] "Safe Harbor" Statement under the US Private Securities Litigation Reform Act of1995: Some or all of the statements in this document that relate to futureplans, expectations, events, performances and the like are forward-lookingstatements, as defined in the US Private Securities Litigation Reform Act of1995. Actual results of events could differ materially from those described inthe forward- looking statements due to a variety of factors. Sinclair Pharma plc Interim Results for the six months to 31 December 2006 CHIEF EXECUTIVE'S REVIEW Revenues increased by 145% compared to the same period in FY06, reflecting therapid progress being made by the Company. Sinclair has delivered consistentrevenue growth since IPO in 2003, which has been driven both by sales of ourproducts through marketing partners, and contributions from our acquired salesand marketing companies. We entered the second half of the financial year with the highest ever orderbook and second-half revenues are expected to be substantially higher than inthe first half. We look forward to an active second half and are focused ondelivering strong results for the full year. Operations: Own sales and marketing operations UK acquisition: Ashbourne Pharmaceuticals In September 2006, Sinclair established its own sales and marketing presence inits home market, the UK, by acquiring Ashbourne Pharmaceuticals Ltd. Thisbrings us closer towards our goal of building a salesforce across the mainEuropean territories. Ashbourne is regarded as a leading company in the UK dispensing doctor sector,which accounts for 18% of the UK GP market. In January 2007 Ashbourne launchedthe vertigo product Arlevert. They also announced the UK Product Fosteringconcept, where Ashbourne can launch other companies' products into thedispensing doctor sector. This offers a niche market in which to gather salesfeedback and to generate sales, and a potential launch pad into the UK orEurope. Integration of Ashbourne into the group has proceeded well, and weannounce today that having achieved reimbursement, Ashbourne plans to launchAtopiclair in the UK. France: CS Dermatologie Sinclair's French sales and marketing operation, CS Dermatologie ("CSD"),launched five new line extensions of its existing dermatology products, and isseeking to further expand sales of its dermo-cosmetic range through a newlyestablished export function. Post-period, CSD launched Sinclair's flagship product Atopiclair to Frenchdermatologists and paediatricians. Italy: Sinclair Srl Sinclair Srl has revised its portfolio to focus on its core prescriptiondermatology products. Some non-prescription products were divested and threeon-market prescription products were acquired that represent a good fit withSinclair Srl's sales target profile. Operations: Marketing partner network Sinclair now has a marketing partner network that spans 67 countries includingthe main EU territories, the US, China and Russia and Latin American. Sinclairproducts have been launched in 29 of these countries. In the remainingterritories, our partners are in the registration process or preparing tolaunch; providing the foundation for additional revenue growth. Our commercial partners now include Orapharma Inc., Bayer's Intendis, 3M ESPEand Graceway Pharmaceuticals. Graceway Pharmaceuticals has expanded as a resultof the recent merger with Chester Valley Pharmaceuticals, and the acquisition of3M's pharmaceutical business in North and Latin America. As a result thein-house salesforce for Atopiclair in the US has increased from 40 to 160. Our partnership with the leading dermatology company Intendis will result inwide market exposure for Atopiclair, in a co-marketing arrangement alongsideSinclair's own sales and marketing teams. Intendis has now launched the productin Spain and Italy, where more than 90 representatives are selling it asZarzenda. Launches are forthcoming in France, Germany, Brazil, Russia and othermarkets. In total Atopiclair is now sold by 340 representatives worldwide andthis number will increase in coming months. We are expanding the presence of our brands in the developing markets. Thelargest regional Latin American company, Roemmers Pharma, will sell AloclairTMin 15 markets and we have also signed an agreement with Auroren Pharmaceuticalsto sell Aloclair in China. A list of all Sinclair's marketing partners can be found at the Sinclair websiteat http://www.sinclairpharma.com/business_development.php. Products and pipeline SebclairTM In November 2006, Sinclair obtained US Food and Drug Administration (FDA)marketing approval for SebclairTM, for seborrheic dermatitis (SD). Sebclair isthe first topical non-steroidal product cleared for marketing in the US through510k registration that can also specifically claim reduction of erythema(redness) as a symptom of seborrheic dermatitis (SD). This is significantbecause we believe the unappealing appearance of SD is a key driver for sales.The market for SD in the five core pharmaceutical territories is believed to beworth at least $400m. Decapinol(R) As part of Sinclair's strategy to address the whole gum care market, a portfolioof products is being developed that include the Decapinol technology. DecapinolSpray offers a convenient alternative to the oral rinse presentation, and hasbeen approved in the EU as a Medical Device Class IIa. Decapinol Toothpaste withfluoride and Decapinol Toothpaste gel with fluoride were approved in the EU. These add to other products in the Decapinol range that have already beenapproved in the EU: Decapinol toothpaste, and Decapinol(R) Gel. The lattercombines Decapinol with Sinclair's other barrier technology, present inAloclair, in a product designed for site specific gingivitis and pain reliefafter dental visits. With approximately 80 per cent of the adult populationestimated to have some degree of gum inflammation, Decapinol oral rinseaddresses a large market, estimated at more than $1.5bn, while the toothpasteaddresses an even larger market. P1025 In November 2006, Sinclair announced an agreement with King's College London toacquire the exclusive rights to develop and commercialise the peptide p1025, foruse in the dental setting. p1025 interferes with the mechanism that allows thebacterium Streptococcus mutans to attach to tooth surfaces and has been shown tomaintain this action for 120 days. Streptococcus mutans is a major contributorto dental caries and its removal is critical to preventing caries. Clinical Update Atopiclair - Positive Study in Children and Adolescents Two paediatric studies for Atopiclair were completed and reported; one largemulticentre, US study and one smaller European study. Both studies demonstratedsignificant benefits of Atopiclair versus an emollient cream, both in the reliefof itch and improvement in appearance of the skin, in speed of action.Significantly fewer patients using Atopiclair needed steroid treatment duringboth studies. These results support Sinclair's concept of providing analternative to topical corticosteroids, particularly for use in children witheczema. With approximately one third of eczema prescriptions being in paediatrics, thesedata are expected to provide strong marketing leverage to Sinclair sales peopleand our Atopiclair marketing partners. Financial Review Revenues of £9.1m were recorded in the first half of FY07 (H1 FY06: £3.7m).Rapidly increasing sales of Atopiclair contributed to revenue growth, and alarge part of the growth came from contributions from the acquisitions of ourFrench operation CSD and our UK operation Ashbourne. Sinclair enters the second half of the year with its strongest ever order book -a significant number of orders that were scheduled for delivery in December havefallen into the first quarter of 2007. We anticipate that the historic tradingpattern of the Group will be seen again in the second half with revenuesexpected to be significantly higher than in the first half. Revenues of Atopiclair through our licensing partners have grown to £1.3m (2005:£0.6m), an increase of over 130%, but this has been mitigated by lower revenuesfrom Salinum, SST and Xclair, which were launched in the US in our previousfinancial year and had generated large stocking orders in FY06. In Sinclair Srl there has been a rationalisation of the product portfolio inorder to improve the efficiency of the sales operations. A number of smallernon-prescription dermatology products were sold during the half year at a profitof £1.3m. Some replacement on-market prescription products have been acquiredalthough the revenue impact of these will not be seen until the second half. We are very pleased with the profitable contribution of CSD in this half, andwith their integration of the business into the Sinclair Group, which isprogressing well. There was an operating loss of £2.6m during the period, compared to £1.7m forthe same period in FY06. This translates to a loss per share of 3.1p comparedto 3.0p for H1 FY06. No additional funds were raised during the period and theUK sales and marketing operation Ashbourne Pharmaceuticals Ltd was acquired forcash for a net cost of £0.5m (£1.25m including £0.7m cash). Cash and cash equivalents at 31 December 2006 were £2.5m (31 December 2005:£10.7m). Operating expenses were £8.7m (H1 FY06: £3.8m restated), reflectingthe Company's investment in sales and marketing infrastructure in our Europeanterritories. Within the next month, Sinclair intends to apply for admission of its ordinaryshares to the Official List of the UK Listing Authority ("Official List") and totrading on the London Stock Exchange's market for listed securities, and totrading on Eurolist by Euronext Paris, the regulated market of Euronext Paris SA("Euronext Paris"). This will be through an introduction of its existingordinary shares, with no new shares being issued. The Directors believe thatthe move to the Official List is appropriate to the growth and ambition of theCompany. The new listings are expected to increase liquidity in the ordinaryshares, and enhance the domestic and international profile of the Company. Inrecent years, the Company has expanded its international presence, and now hassignificant and expanding activities in continental Europe. A secondary listingon Euronext Paris will reflect the Company's growing commercial presence inthese territories. Management In July 2006 we announced that Alan Olby had been promoted to Finance Directorand Company Secretary, and in February 2007 Zoe McDougall was appointed Directorof Communications. Danilo Massari, VP of Corporate Development, will be leaving the company topursue other opportunities. Outlook Activities and results for the first half have contributed towards our goal ofbecoming a sustainably profitable specialty pharmaceutical company, with anintegrated European salesforce. Integration of our acquired companies isproceeding well; our French operation recently launched our flagship productAtopiclair, with the UK launch by Ashbourne to follow. We aim to establish apresence in the important German market, to consolidate our presence in the keyEU territories. Our business model is designed to extract maximum value from our brands by acombination of sales through our own sales and marketing operations and throughour respected marketing partners. Both of these sales routes show strongpromise for the future, especially when combined with our pipeline of newproducts and line extensions. The management and employees of Sinclair are focused on driving the Companytowards profitability and creating a climate for long term profitable growth forthe company. Dr. Michael Flynn Jerry Randall ACAChief Executive Officer Chief Financial Officer Unaudited consolidated income statementFor the six months ended 31 December 2006 Six months Six months Year ended ended ended 30 June 31 December 31 December 2006 2006 2005 £000 Notes £000 £000 (restated) Revenue 2 9,109 3,711 11,623Cost of sales (3,354) (1,588) (4,576)Gross profit 5,755 2,123 7,047 Selling, marketing and distribution (3,377) (1,493) (5,019)General and administrative expenses (5,321) (2,327) (5,001)Total operating expenses (8,698) (3,820) (10,020) Operating loss before exceptional items (2,943) (1,697) (2,973)Exceptional items 3 377 - -Operating loss (2,566) (1,697) (2,973) Interest receivable 68 113 276Interest payable and similar charges (46) (25) (54)Loss before taxation (2,544) (1,609) (2,751)Taxation (172) - (85) Loss for the period (2,716) (1,609) (2,836) Attributable to:Minority interest 3 - -Equity holders of the Company (2,719) (1,609) (2,836) (2,716) (1,609) (2,836) Loss per share (basic and diluted) 4 (3.1)p (3.0)p (4.5)p Restated - see note 1 Unaudited consolidated balance sheetAt 31 December 2006 31 December 30 June 31 December 2006 2006 2005 Notes £000 £000 £000Non-current assets Goodwill 43,165 43,692 18,070Intangible assets 8,882 9,336 1,141Property, plant and equipment 2,052 1,558 361Non-current tax assets 1,898 1,796 -Other non-current assets 64 55 - 56,061 56,437 19,572Current assetsInventories 3,007 2,609 722Trade and other receivables 5 6,199 8,072 3,472Current tax receivables - - 57Cash and cash equivalents 2,545 5,036 10,671 11,751 15,717 14,922Total Assets 67,812 72,154 34,494 Current liabilitiesFinancial liabilities - borrowings (441) (806) (727)Trade and other payables 6 (6,210) (6,155) (3,022)Current tax liabilities - (348) - (6,651) (7,309) (3,749)Non-current liabilitiesFinancial liabilities - borrowings (419) (295) (168)Non-current tax liabilities (1,154) (1,211) -Other non-current liabilities (529) (529) -Provisions (116) (140) - (2,218) (2,175) (168)Total liabilities (8,869) (9,484) (3,917)Net Assets 58,943 62,670 30,577 EquityShare capital 934 933 652Share premium account 21,433 21,386 23,247Merger reserve 50,404 50,404 15,684Other reserves (deficit) (418) 749 643Profit & loss reserve (deficit) (13,418) (10,807) (9,645) 58,935 62,665 30,581Minority equity interests 8 5 (4)Total equity 58,943 62,670 30,577 Consolidated statement of changes in shareholders' equity (Unaudited) Profit & Attributable loss to equity Other reserve holders of reserves (deficit) the parent Share Share Merger Minority TOTAL capital premium reserve (deficit) interest EQUITY £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000Balance at 1 July 2005 592 16,171 15,684 700 (8,101) 25,046 (4) 25,042Exchange differences - - - (57) - (57) - (57)arising on translation ofoverseas subsidiariesLoss for the period - - - - (1,609) (1,609) - (1,609)Total recognised expense - - - (57) (1,609) (1,666) - (1,666)for the periodShare based payments - - - - - 65 65 - 65value of employeeservices *Options and warrants 1 16 - - - 17 - 17exercisedIssue of share capital 59 7,343 - - - 7,402 - 7,402Share issue expenses - (283) - - - (283) - (283)Balance at 31 December 652 23,247 15,684 643 (9,645) 30,581 (4) 30,5772005Exchange differences - - - 106 - 106 - 106arising on translation ofoverseas subsidiariesLoss for the period - - - - (1,227) (1,227) - (1,227)Total recognised - - - 106 (1,227) (1,121) - (1,121)(expense)/ income for theperiodShare based payments - - - - - 65 65 - 65value of employeeservices *Options and warrants 1 98 - - - 99 - 99exercisedShares issued on 280 - 34,720 - - 35,000 9 35,009acquisition of Groupe CSDermatologie SASShare issue expenses - (1,959) - - - (1,959) - (1,959)Balance at 30 June 2006 933 21,386 50,404 749 (10,807) 62,665 5 62,670Exchange differences - - - (1,167) - (1,167) - (1,167)arising on translation ofoverseas subsidiariesLoss for the period - - - (2,719) (2,719) 3 (2,716)Total recognised expense - - - (1,167) (2,719) (3,886) 3 (3,883)for the periodShare based payments - - - - - 108 108 - 108value of employeeservicesOptions and warrants 1 47 - - - 48 - 48exercisedBalance at 31 December 934 21,433 50,404 (418) (13,418) 58,935 8 58,9432006 * Restated - see note 1 Unaudited consolidated cash flow statementFor the six months ended 31 December 2006 Six months Six months Year ended ended ended 31 December 31 December 30 June 2006 2005 2006 £'000 £'000 £'000Cash flows from operating activitiesLoss before tax (2,544) (1,609) (2,751) Interest receivable (68) (113) (276) Interest payable 46 25 54Share based payment - value of employee services 108 65 130Depreciation 203 51 157Amortisation of intangible assets 384 42 307Loss on disposal of property, plant & equipment 1 - -(Profit) on sale of product rights (1,295) - -Exchange (gain)/loss (152) (43) 30 (3,317) (1,582) (2,349)Changes in working capital (excluding effects ofacquisitions)Increase in inventories (370) (121) (33)Decrease/(increase) in receivables 1,657 1,429 (195)Decrease in payables (315) (1,321) (379)(Decrease)/increase in provisions (21) - 19Net cash outflow from operations (2,366) (1,595) (2,937)Interest paid (40) (25) (43)Interest paid on finance lease (6) - (11)Taxation paid (107) (74) (172)Net cash used in operating activities (2,519) (1,694) (3,163)Investing activitiesInterest received 88 113 268Purchases of property, plant and equipment (292) (37) (126)Proceeds from sale of property, plant and equipment 36 - -Purchase of intangible assets (15) - (57)Proceeds from sale of product rights 1,383 - -Acquisition of subsidiary undertaking, net of cash (612) - (2,181)acquiredNet cash from/(used in) investing activities 588 76 (2,096)Financing activitiesRepayments of obligations under finance leases (44) (7) (33)Proceeds from issue of new loans 54 - 42Proceeds from issue of share capital 47 7,420 7,518Share issue costs - (283) (2,242)Net cash from financing activities 57 7,130 5,285 Net (decrease)/increase in cash and cash equivalents (1,874) 5,512 26 Cash and cash equivalents at 1 July 4,470 4,444 4,444Effect of foreign exchange rate changes (51) 6 -Cash and cash equivalents at end of period/year 2,545 9,962 4,470Cash and cash equivalents includes:Cash and cash equivalents 2,545 10,671 5,036Bank overdrafts - (709) (566)Cash and cash equivalents 2,545 9,962 4,470 Notes to the financial information 1. Basis of preparation This financial information comprises the consolidated interim balance sheets asat 31 December 2006, 30 June 2006 and 31 December 2005 and related consolidatedinterim statements of income and cash flows for the six months then ended ofSinclair Pharma plc (herein after referred to as 'financial information'). In preparing this financial information management has used the principalaccounting policies as set out in the Group's annual report for the year ended30 June 2006. The Group has chosen not to adopt IAS 34 'Interim Financial Statements' inpreparing its 2006 interim statement, and therefore, this financial informationis not in compliance with IFRS. The interim financial information has not been audited and does not constitutestatutory accounts within the meaning of Section 240 of the Companies Act 1985but has been reviewed by the auditors in accordance with Bulletin 1999/4 issuedby the Auditing Practices Board. The Company's statutory accounts for the yearended 30 June 2006 have been delivered to the Registrar of Companies; the reportof the auditors on these accounts was unqualified and did not contain astatement under Section 237 (2) or (3) of the Companies Act 1985. The unaudited comparative figures in the income statement for the period to 31December 2005 have been restated to reflect a lower IFRS2 charge in respect ofshare options and warrants. The original charge of £385k included options whichhad already vested prior to the date of conversion to IFRS and which should nothave been reflected in the charge for the period to 31 December 2005. Therestated charge is £65k, a reduction of £320k. This announcement was approved by the Board of Sinclair Pharma plc on 23 March2007. 2. Revenue An analysis of revenue type is given below: Six months Six months Year ended ended ended 31 December 31 December 30 June 2006 2005 2006 £000 £000 £000 Product revenue 8,292 3,278 10,376Royalties 376 216 719Licence fees and milestones 441 217 528 9,109 3,711 11,623 An analysis of revenue by geographical destination is given below: Six months Six months Year ended ended ended 31 December 31 December 30 June 2006 2005 2006 £000 £000 £000 United Kingdom 848 348 496Rest of Europe 7,154 2,131 7,978United States of America 659 1,155 2,755Rest of World 448 77 394 9,109 3,711 11,623 3. Exceptional Items Exceptional items represent significant items of income and expense which due totheir nature or the expected infrequency of the events giving rise to them, arepresented separately on the face of the income statement to give a betterunderstanding to shareholders of the elements of financial performance in theyear, so as to facilitate comparison with prior periods and to better assestrends in financial performance. Six months Six months Year ended ended ended 31 December 31 December 30 June 2006 2005 2006 £000 £000 £000 Goodwill adjustment (147) - -Provision for doubtful debt (771) - -Income from sale of product rights 1,295 - - 377 - - Provision has been made during the period for a doubtful debt due from adistributor. The Directors' expect to recover the full amount of the debt, butas it is significantly beyond its normal payment terms a provision has beenmade. 4. Loss per share The basic loss earnings per share has been calculated by dividing the loss forthe period/year, by the weighted average number of shares in existence for theperiod/year. Shares held by the Employee's Share Trust, including shares over which optionshave been granted to Directors and staff, have been excluded from the weightedaverage number of shares for the purposes of calculation of the loss per share. The loss and weighted average number of shares for the purpose of calculatingthe diluted loss per share are identical to those used for the loss per share at31 December 2006, 31 December 2005 and 30 June 2006, as the exercise of shareoptions would have the effect of reducing the loss per share and is thereforenot dilutive. Six months Six months Year ended ended ended 31 December 31 December 30 June 2006 2005 2006 (restated)Basic and diluted EPSNet loss before exceptional items (£000) (3,093) (1,609) (2,836)Exceptional items (£000) 377 - -Net loss (£000) (2,716) (1,609) (2,836)Weighted average number of shares 86,967,261 53,903,261 63,400,983 Loss per share before exceptional items (3.5)p (3.0)p (4.5)pExceptional items 0.4p - -Basic and diluted loss per share (3.1)p (3.0)p (4.5)p 5. Trade and other receivables 31 December 31 December 30 June 2006 2005 2006 £000 £000 £000 Trade receivables net of provisions 4,887 2,980 6,294Other receivables 440 218 1,214Prepayments and accrued income 872 274 564 6,119 3,472 8,072 6. Trade and other payables 31 December 31 December 30 June 2006 2005 2006 £000 £000 £000 Trade payables 3,306 1,588 3,687Other tax and social security 532 206 579Other payables 427 167 203Accruals and deferred income 1,945 1,061 1,686 6,210 3,022 6,155 7. Acquisition of Ashbourne Pharmaceuticals Limited On 26 September 2006, the Group completed the acquisition of 100% of theordinary share capital of Ashbourne Pharmaceuticals Limited for a cashconsideration of £1.25m plus costs of acquisition. The pre-acquisition carrying values and provisional fair values of the netassets acquired were: Fair value adjustments Book value Fair value £000 £000 £000 Property, plant and equipment 312 - 312Inventories 178 - 178Trade and other receivables 407 - 407Cash 712 - 712Trade and other payables (653) - (653) Net assets acquired 956 - 956Goodwill arising on consolidation 368 1,324 Consideration satisfied by:Cash 1,250Costs of acquisition 74 1,324 Independent review report to Sinclair Pharma plc Introduction We have been instructed by the company to review the financial information whichcomprises: consolidated income statement, consolidated statement of changes inshareholders' equity, consolidated balance sheet information as at 31 December2006, consolidated cash flow statement, comparative figures and associatednotes. We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the interim report in accordance with the AIM Ruleswhich require that the accounting policies and presentation applied to theinterim figures should be consistent with those applied in preparing thepreceding annual accounts except where any changes, and the reasons for them,are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of management and applying analyticalprocedures to the financial information and underlying financial data and, basedthereon, assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with United Kingdom auditing standards and therefore provides a lowerlevel of assurance than an audit. Accordingly we do not express an audit opinionon the financial information. This report has been prepared for and only for thecompany for the purpose of the AIM Rules and for no other purpose. We do not, inproducing this report, accept or assume responsibility for any other purpose orto any other person to whom this report is shown or into whose hands it may comesave where expressly agreed by our prior consent in writing. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 December 2006. PricewaterhouseCoopers LLPChartered AccountantsCambridge26 March 2007 Notes: (a) The maintenance and integrity of the Sinclair Pharma plc web site is theresponsibility of the directors; the work carried out by the auditors does notinvolve consideration of these matters and, accordingly, the auditors accept noresponsibility for any changes that may have occurred to the interim reportsince it was initially presented on the web site. (b) Legislation in the United Kingdom governing the preparation anddissemination of financial information may differ from legislation in otherjurisdictions. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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