5th Sep 2005 07:00
Futura Medical PLC05 September 2005 Press Release 5 September 2005 Futura Medical plc Interim Results for the six months ended 30 June 2005 Futura Medical plc ("Futura" or "the Company"), the AIM-quoted pharmaceuticaland medical device group that develops innovative products for the sexualhealthcare market, announces its interim results for the six months ended 30June 2005. Highlights - Excellent progress with three lead development products: • CSD500: submission of dossier for EU marketing authorisation on track for November 2005 • FLD500: global distribution rights licensed to SSL International and all clinical work successfully completed • MED2002: exclusive co-development programme with major pharmaceutical group on schedule, with pilot results expected in November - Loss of £856,027 (First half 2004: £578,702) reflecting increased R&D spend of £686,116 (First half 2004: £360,391) in line with expected acceleration of development programmes - Other administration costs of £380,378 broadly in line with comparative period in 2004, demonstrating tight cost management - £2.7million cash in bank as at 30 June 2005 - Chairman Dr Bill Potter to commit more time to the Company as lead products move closer to market Commenting on the results, James Barder, Chief Executive, said: "The past six months have been the most productive and busiest in the history ofFutura and we fully expect the momentum to increase over the next six months.The submission of the EU dossier for marketing authorisation of CSD500 and thecompletion of further MED2002 pilot work to conclude global distributionarrangements for the first OTC pharmaceutical treatment for Erectile Dysfunctionare just two of the key milestones we expect to achieve over the coming months. "We are also delighted that our Chairman, Dr Bill Potter, will be committingmore time to Futura having become increasingly involved in the productdevelopment programmes this year. " For further information:Futura Medical plcJames Barder, Chief Executive Tel: +44 (0) 1483 685 670mail to: [email protected] www.futuramedical.co.uk Media enquiries:AbchurchPeter Curtain / Samantha Robbins Tel: +44 (0) 20 7398 7700mailto: [email protected] www.abchurch-group.com CHAIRMAN & CHIEF EXECUTIVE INTERIM STATEMENT The past six months have been the most productive and busiest in the history ofFutura and we fully expect the momentum to continue increasing over the next sixmonths. The submission of the EU dossier for marketing authorisation for CSD500and completion of further MED2002 pilot work to conclude global commercialdistribution arrangements for the first over-the-counter ("OTC") pharmaceuticaltreatment for Erectile Dysfunction are two of the key milestones we expect toachieve over the coming months. CSD500 - ZanifilTMCondom safety device In April we announced that following satisfactory pilot stability results, SSLInternational plc ("SSL") was commencing initial manufacturing trials. SinceApril, a series of manufacturing trials have been successfully completed.Stability studies in compliance with the relevant regulatory requirements are inprogress and if the results continue to be satisfactory, the submission for EUmarketing authorisation will be made in November 2005. We have been advised that dossier review by EU regulators and subsequentapproval is likely to take six months from submission. During this period wewill be working closely with SSL as preparations commence for the marketingresearch being conducted by SSL and subsequent launch of CSD500. FLD500Female lubrication device We have made significant progress with the development of FLD500. In July, weannounced that SSL had exercised its option for global distribution rights.Recently, we also announced that following a review of all the clinical data andsupported by preliminary feedback from an EU Competent Authority, we were notseeking to conduct further clinical studies thereby saving both time and moneyin the development programme. CSD500 is a gel localised within the teat of a condom whilst FLD500 is a thinelastomer film coating the exterior of a condom. Although there is considerableoverlap in the technical aspects of the development programme with CSD500, theelastomer film does present some different technical manufacturing challenges.These technical challenges are currently being evaluated and we hope to make anannouncement shortly relating to the expected timetable for the completion ofthe EU dossier for marketing authorisation. MED2002 - EroxonTMTreatment for Erectile Dysfunction ("ED") In our most recent year-end statement we announced that we had entered intoconfidential and exclusive discussions with a major global pharmaceutical group("MGPG") on a proposed agreement for the worldwide development and marketing ofMED2002. The commitment of both parties to an exclusivity period has enabled Futura andMGPG to allocate resources to the joint development of MED2002. In our view,the commercial benefits such a major development and distribution partner couldbring to MED2002 increases the potential for the product to become the first OTCpharmaceutical treatment for Erectile Dysfunction. Since March, considerable work has been conducted by MGPG to confirm the optimumregulatory strategy for MED2002 in the key consumer markets and evaluate themarket opportunity for MED2002. This work, as agreed under the planned scheduleof joint development between Futura and MGPG, will complete this autumn. As we reported during July 2004, in vitro tests of our revised formulation,MED2002, showed dramatically improved dermal absorption rates. In recent invivo trials in healthy men absorption rates were even higher than predicted fromthe in vitro data, demonstrating the significant improvements that have beenmade to the formulation. These initial results support the potential for thisproduct to offer an effective, rapid-onset, locally active dose with a lowsystemic uptake which will help to reduce unwanted side effects. Further in vivo trials, financed by Futura, are ongoing with the objective ofdetermining the optimum dose and formulation to maximise local effects in thepenis whilst minimising systemic uptake throughout the body. It is intendedthat this will reduce the potential for adverse interaction with other centrallyacting drugs that may also be taken concomitantly by the patient, especiallyPDE5 inhibitors such as Viagra(R), Cialis(R) or Levitra(R). Greater dermalabsorption rates will also deliver the active ingredient more rapidly to thepenis, which should be reflected in an improved time to onset of an erection. We remain optimistic of the positive outcome of these trials and expect to beable to report to our shareholders on the results of the studies in November andconclude our negotiations with MGPG thereafter as planned. Business analysis Our overall loss for the six months ended 30 June 2005 was £856,027. Researchand development costs of £686,116 are 90% higher compared with last year'sinterim results. This reflects the increased activity as we seek toaggressively push through our development programme. Other administrative costsof £380,378 are broadly in line with the comparative six month period, risingonly 4%, as overheads stabilise having absorbed the charges associated withbecoming an AiM quoted company. We continue to maintain a tight control onexpenditure. Cash at the end of June 2005 was £2.7 million. An eye on the future The revised carrier formulation for MED2002 has delivered significantly improvedabsorption profiles with rates of up to 1,000% greater than those of previousversions of MED2002. Moreover, this new topical delivery platform has enabledus to apply for further intellectual property rights. In recent months we havecommissioned an investigation into other topically applied medications thatcould benefit from such a vastly improved absorption profile. Critical to thisanalysis was identifying existing topical medications where a significantincrease in efficacy would have consequences greater than just a reduction indosage. We have identified two products that fit these criteria. This development is aby-product of the MED2002 programme and we have been careful to ensure this hashad limited cost and resource consequences for Futura. Moreover, as we shall beseeking to improve existing pharmaceutical products rather than develop newones, the regulatory challenges are considerably reduced. We expect to reportfurther on this over the next few months. We continue to evaluate other external opportunities. Nevertheless our priorityremains the completion of the development of our three lead products and ourresources and energies are focused on this. Once more this leads us to thank all the Futura team for their continuingcommitment and work which continues to build value for our shareholders. Dr W D Potter, Chairman J H Barder, Chief Executive Board changes Over the past few months Dr Bill Potter has become increasingly involved in theproduct development programme of Futura. We expect that this role will continueto increase as the exciting developments at Futura gain momentum and with thisin mind Bill has agreed to commit more time to us. The rest of the Board aredelighted that Futura will be able to further leverage the undisputed talentsand expertise of Bill. However, in light of Bill adopting a more executiverole, the Board has decided that Bill should step down from the Audit Committeeand he has agreed to this. The Board has appointed Andrew Slater to the AuditCommittee in his place. J H Barder, Chief Executive CONSOLIDATED PROFIT AND LOSS ACCOUNT Notes Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £ £ £ Turnover - 4,646 129,863 Research and development costs (686,116) (360,391) (960,141)Other administrative costs (380,378) (364,297) (745,806) Administrative expenses (1,066,494) (724,688) (1,705,947) Operating loss (1,066,494) (720,042) (1,576,084) Other interest receivable and 77,937 76,159 177,047similar income Loss on ordinary activities before (988,557) (643,883) (1,399,037)taxationTax on loss on ordinary activities 2 132,530 65,181 170,086 Loss on ordinary activities after 3 (856,027) (578,702) (1,228,951)taxation and retained loss for theperiod Basic and diluted loss per share 4 (1.8) (1.2) (2.6)(pence) All amounts relate to continuing activities. Statement of Total Recognised Gains and Losses There were no recognised gains and losses in the period, or in the priorperiods, other than those passing through the profit and loss account above andtherefore no separate statement of total recognised gains and losses has beenpresented. CONSOLIDATED BALANCE SHEET Notes Unaudited Unaudited Audited 30 June 30 June 31 December 2005 2004 2004 £ £ £ Fixed AssetsTangible assets 27,914 24,567 28,120 _________ _________ _________ 27,914 24,567 28,120 _________ _________ _________Current AssetsStock 5,320 16,045 14,812Debtors 398,445 260,187 258,211Cash at bank and in hand 2,661,562 4,299,913 3,672,647 _________ _________ _________ 3,065,327 4,576,145 3,945,670 Creditors: amounts falling due within (200,753) (242,498) (225,275)one year _________ _________ _________Net current assets 2,864,574 4,333,647 3,720,395 _________ _________ _________ Total net assets 2,892,488 4,358,214 3,748,515 _________ _________ _________ Capital and reservesCalled up share capital 97,357 97,167 97,357Share premium account 5 8,425,707 8,385,347 8,425,707Other reserves 1,152,165 1,152,165 1,152,165Profit and loss account (6,782,741) (5,276,465) (5,926,714) _________ _________ _________Equity shareholders' funds 6 2,892,488 4,358,214 3,748,515 _________ _________ _________ CONSOLIDATED CASH FLOW STATEMENT Notes Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £ £ £ Net cash outflow from operating 7 (1,064,305) (691,259) (1,559,590)activities _________ _________ _________Returns on investments and servicingof financeInterest received 64,154 69,056 175,141 _________ _________ _________Net cash inflow from returns on 64,154 69,056 175,141investments and servicing offinance _________ _________ _________Corporation TaxResearch and development tax credit - - 108,436received _________ _________ _________ - - 108,436 _________ _________ _________Capital expenditurePayments to acquire tangible assets (10,934) (10,357) (21,648)Proceeds on disposal of fixed - - 170assets _________ _________ _________Net cash outflow from capital (10,934) (10,357) (21,478)expenditure _________ _________ _________Net cash outflow before use of (1,011,085) (632,560) (1,297,491)liquidresources and financing _________ _________ _________Management of liquid resourcesDecrease/(Increase) in short term 8 986,301 (1,888,089) (1,160,993)deposits _________ _________ _________FinancingIssue of ordinary shares - 2,604,000 2,644,550Expenses paid in connection with - (76,120) (76,120)share issues _________ _________ _________Net cash inflow from financing - 2,527,880 2,568,430 _________ _________ _________(Decrease)/Increase in net cash 8 (24,784) 7,231 109,946 _________ _________ _________ 1. Basis of preparation The unaudited Interim Report was approved by the Board of Directors on 2September 2005. The financial information contained in this Interim Report has been prepared onthe basis of the accounting policies set out in the Group's Annual Report forthe year ended 31 December 2004. The financial information for the six months ended 30 June 2005 and for the sixmonths ended 30 June 2004 is unaudited. The financial information for the Group set out above does not constitute "statutory accounts" within the meaning of Section 240 of the Companies Act 1985.The information for the year ended 31 December 2004 has been extracted fromthe statutory accounts of Futura Medical plc for that period which received anunqualified audit report and have been delivered to the Registrar of Companies. 2. Taxation Taxation represents tax credits for certain research and development expenditurebased on the expenditure incurred in the relevant period or year. Deferred taxassets have not been recognised on the basis that their future economic benefitis not certain. 3. Dividends No dividends have been paid and none are proposed. 4. Loss per ordinary share The loss attributable to ordinary shareholders and weighted average number ofordinary shares for the purpose of calculating the diluted earnings per ordinaryshare are identical to those used for basic earnings per share. This is becausethe exercise of share options would have the effect of reducing the loss perordinary share and is therefore not dilutive under the terms of FinancialReporting Standard 14. The calculation of the loss per ordinary share is based on a loss of £856,027(six months to 30 June 2004: loss of £578,702; year to 31 December 2004: loss of£1,228,951) and on a weighted average of 48,678,601 shares in issue (six monthsto 30 June 2004: 47,471,613 shares; year to 31 December 2004: 48,069,839shares). 5. Share premium Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £ £ £ Opening share premium 8,425,707 5,864,117 5,864,117Premium on shares issued - 2,597,350 2,637,710Less: share issues costs - (76,120) (76,120) _________ _________ _________ Closing share premium 8,425,707 8,385,347 8,425,707 _________ _________ _________ 6. Reconciliation of movements in shareholders' funds Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £ £ £ Retained loss for the period (856,027) (578,702) (1,228,951)Net proceeds from issue of shares - 2,527,880 2,568,430 _________ _________ _________Net (decrease)/increase in (856,027) 1,949,178 1,339,479shareholders' fundsOpening shareholders' funds 3,748,515 2,409,036 2,409,036 _________ _________ _________Closing shareholders' funds 2,892,488 4,358,214 3,748,515 _________ _________ _________ 7. Reconciliation of operating profit to operating cash flows Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £ £ £ Operating loss (1,066,494) (720,042) (1,576,084)Depreciation 7,758 7,690 15,414Loss on sale of fixed assets - - 3,897Decrease in stocks 9,492 1,234 2,467Decrease/(increase) in debtors 6,079 (39,711) (46,463)(Decrease)/increase in creditors (21,140) 59,570 41,179 _________ _________ _________Net cash outflow from operating (1,064,305) (691,259) (1,559,590)activities _________ _________ _________ 8. Reconciliation of net cash flow to movement in net funds Unaudited Unaudited Audited 6 months 6 months year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £ £ £ (Decrease)/increase in cash in the (24,784) 7,231 109,946periodCash (outflow)/inflow from changes (986,301) 1,888,089 1,160,993in liquid resources _________ _________ _________Movement in net funds in the (1,011,085) 1,895,320 1,270,939periodNet funds at start of period 3,672,647 2,401,708 2,401,708 _________ _________ _________Net funds at end of period 2,661,562 4,297,028 3,672,647 _________ _________ _________ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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