Preliminary Results

28th May 2009 07:00



For Immediate Release

28 May 2009

MINSTER PHARMACEUTICALS PLC

("Minster" or "the Company")

Preliminary Announcement of Audited Results for the year ended 31 March 2009

Minster Pharmaceuticals plc (AIM: MPM), the drug development company specialising in neurological and psychiatric disorders, is pleased to announce its results for the year ended 31 March 2009.

Highlights

Continued clinical progress during the year including positive Phase II results of tonabersat in the treatment of migraine with aura but disappointing results of Phase IIb results of tonabersat in the prevention of migraine

On-going mechanistic work on tonabersat's novel mode of action provides confidence that tonabersat has significant therapeutic potential in a range of indications

 

Clinical development pathway of sabcomeline moving closer to definition as an adjunct therapy to existing atypical neuroleptic drugs

Respected healthcare analyst Karl Keegan joined Minster as Chief Financial Officer in April 2009

Cash and cash equivalents of £6.34 million at 31 March 2009 (2008: £11.8 million) and post-tax loss of £6.31 million (2008: £4.58 million)

John Russell, Minster Pharmaceuticals' Chairman, said: "The Board intends to evaluate all opportunities to build shareholder value through our existing pipeline assets, our revitalised management team and our willingness to consider all options to deliver our ultimate goal of building a profitable business. We are currently refining our strategy in order to achieve this goal and look forward to updating shareholders in due course."

For further information:

Minster Pharmaceuticals plc	Tel: +44 (0) 1799 506623
John Russell, Chairman and interim CEO
Karl Keegan, Chief Financial Officer
Buchanan Communications	Tel: +44 (0) 20 7466 5000
Mark Court / Rebecca Skye Dietrich / Catherine Breen
Nomura Code Securities Limited	Tel: +44 (0) 20 7776 1200
Chris Collins / Richard Potts

Notes for editors:

About Minster Pharmaceuticals plc

Minster Pharmaceuticals is a drug development company focussed on neurological and psychiatric disorders. Its principal pipeline assets are tonabersat and sabcomeline. Worldwide rights to both compounds were acquired from GlaxoSmithKline and the compounds benefit from comprehensive safety tolerance data as a result of investment by GSK.

Tonabersat is the leading compound in an exciting new class of selective drugs designated as neuronal gap junction blockers. Sabcomeline, a muscarinic partial agonist, has potential in the treatment of chronic schizophrenia and the strategy for its further clinical development is currently under consideration.

Minster joined the AIM market in February 2005 and trades under the symbol MPM. For further information please visit www.minsterpharma.com. 

  

Chairman's Statement

 

Minster enters the current year with a determination to build shareholder value from its assets, which include our pipeline products (tonabersat and sabcomeline), cash on our balance sheet of £6.34 million and our management team.

We recently strengthened our management team with the appointment, in April 2009, of Karl Keegan, the highly respected healthcare analyst, as our new CFO. Dr Keegan has an impressive track record, gained both in industry and the City, where he achieved the top ranking in investor surveys of biotechnology analysts. His experience of capital markets and the healthcare sector will be of great value in Minster's future development.

Our focus in the year to 31 March 2009 was on the completion of our Phase IIb TEMPUS study of tonabersat in the prevention of migraine. It was both a surprise and a disappointment when, as announced in February 2009, we found that the trial had not met its primary endpoint of a reduction in the number of migraine attacks suffered by patients during the last eight weeks of a 20 week treatment. However, we were pleased to note that the drug was extremely well tolerated by patients.

Whilst the outcome of the TEMPUS study of tonabersat in migraine prevention was disappointing, tonabersat's novel mode of action suggests that it has the potential to be clinically effective in treating a range of neurological conditions. There remains every possibility that tonabersat will become an approved product in the future, once the most appropriate indications are identified.

Minster has rights to tonabersat in epilepsy, neuropathic pain and in other neurological indications where current treatments are inadequate, and we remain confident that the compound has significant therapeutic potential.

This potential is underlined by our positive Phase II results, announced in October 2008, of the study of tonabersat in the treatment of migraine with aura. The result of the aura study, which was jointly funded by Minster and the University of Copenhagen, is both clinically and statistically highly significant: the median number of aura attacks was reduced by 68% (p=0.01) in patients receiving tonabersat, when compared with placebo.

The study was conducted by Professor Jes Olesen at the University of Copenhagen's Danish Headache Centre. Prof Olesen believes that the compound has significant potential in this indication and we are grateful for his support. 

We continue to evaluate the most appropriate way to pursue the development of tonabersat in migraine with aura. It is characterised by symptoms such as visual disturbances and abnormalities of speech and hearing. These symptoms are generally recognised as being difficult to treat with existing medications.

Initial research also suggests that the compound could be clinically effective in epilepsy. The National Institutes of Health in the US is currently conducting preclinical research into the compound's potential in neuropathic pain. We anticipate that the results of this research will be available later this year.

Further research into the compound's novel mode of action - its ability to modulate cellular communication via the gap junctions between nerve cells and glial cells - is also providing the basis for a clearer insight into the most appropriate indications to pursue. In June last year, Dr Paul L Durham, an Associate Professor at Missouri State University, presented a scientific paper at the American Headache Society's 50th Scientific Meeting in Boston, Massachusetts, focusing on tonabersat's mode of action based on his pre-clinical mechanistic research, which remains ongoing.

  

Sabcomeline, a muscarinic partial agonist, has potential in the treatment of chronic schizophrenia and the strategy for its further clinical development is currently under consideration. We recently held a clinical advisory board meeting with leading US psychiatrists to aid our development planning process. The advisers were very supportive of conducting a Proof of Principle study with sabcomeline as adjunct therapy to existing atypical neuroleptic drugs and provided the Company with highly valuable insights into optimising the clinical development path of this drug.

The Group reported a post-tax loss of £6.31 million, compared with a post-tax loss of £4.58 million in the previous year. Research and development expenditure increased to £6.20 million (2008: £4.33 million), reflecting the continuation of the major Phase IIb trial on tonabersat.

At 31 March 2009 the Group had cash and cash equivalents of £6.34 million (2008: £11.84 million), which the Directors consider to be sufficient to finance the Group's current development plans for at least the next two financial years.

Karl Keegan joined Minster as CFO in April 2009, succeeding Robert Aubrey who remains at the Company as an Executive Director. Also in April 2009, Paul Sharpe stepped down from the role of CEO to become a Non-executive Director. I have taken on the role of interim CEO until such time in the Company's future development that it is appropriate to appoint a new CEO. We have recently opened a small, serviced office in central London.

I would like to express thanks to the Company's dedicated staff and also to its network of scientific, clinical and professional advisers. I would also like to thank shareholders for their support.

The Board intends to evaluate all opportunities to build shareholder value through our existing pipeline assets, our revitalised management team and our willingness to consider all options to deliver our ultimate goal of building a profitable business.

John Russell

Chairman and interim CEO

28 May 2009

  Consolidated Income Statement

year ending 31 March 2009 

		2009	2008
	Note	£	£
Revenue
Research and development expenses	3	(6,195,211)	(4,330,800)
Administrative expenses		(2,109,744)	(1,381,353)
Gains on foreign exchange		1,368,790	83,671
		(740,954)	(1,297,682)
Operating loss	3	(6,936,165)	(5,628,482)
Investment income	7	297,193	758,923
Loss on ordinary activities before taxation		(6,638,978)	(4,869,559)
Taxation credit on the results for the year	8	326,641	285,899
Loss on ordinary activities after taxation	16	(6,312,331)	(4,583,660)
Loss per share	19
Basic per 5p share		£0.107	£0.078
Fully diluted per 5p share		£0.088	£0.056
All the activities of the Group are classed as continuing.

Consolidated Statement of Changes in Equity

		2009	2008
		£	£
At April 2008		24,407,992	28,773,504
Share capital subscribed, including premium, net of expenses of issue		-	90,000
Net loss for the year		(6,312,331)	(4,583,660)
Equity settled share-based payments		142,838	128,148
At 31 March 2009		18,238,499	24,407,992

  Consolidated Balance Sheet

at 31 March 2009

		2009	2008
	Note	£	£
Non-current assets
Intangible assets	9	12,397,754	12,397,754
Property, plant and equipment	10	6,999	8,470
Total non-current assets		12,404,753	12,406,224
Current assets
Trade and other receivables	12	114,989	163,418
Current tax		326,641	443,382
Cash and cash equivalents		6,341,650	11,844,722
Total current assets		6,783,280	12,451,522
Total assets		19,188,033	24,857,746
Current liabilities
Trade and other payables	13	(949,534)	(449,261)
Provisions for liabilities	14	-	(493)
Total liabilities		(949,534)	(449,754)
Net assets		18,238,499	24,407,992
Shareholders' equity
Share capital	15	2,945,066	2,945,066
Share premium	16	26,071,249	26,071,249
Capital reserve	16	4,837,500	4,837,500
Retained earnings	16	(15,615,316)	(9,445,823)
Total shareholders' equity	17	18,238,499	24,407,992

  Company Balance Sheet

at 31 March 2009

		2009	2008
	Note	£	£
Non-current assets
Investment in subsidiary	11	12,097,500	12,097,500
Current assets
Trade and other receivables	12	5,966,384	18,685,595
Total assets		18,063,884	30,783,095
Current liabilities
Trade and other payables	13	(125,640)	(54,435)
Provisions for liabilities	14	-	(493)
Total liabilities		(125,640)	(54,928)
Net assets		17,938,244	30,728,167
Shareholders' equity
Share capital	15	2,945,066	2,945,066
Share premium	16	26,071,249	26,071,249
Capital reserve	16	4,837,500	4,837,500
Retained earnings	16	(15,915,571)	(3,125,648)
Total shareholders' equity	17	17,938,244	30,728,167

 

  Consolidated Cash Flow Statement

year ending 31 March 2009 

		2009	2008
	Note	£	£
Cash flows from operating activities
Operating loss		(6,936,165)	(5,628,482)
Depreciation charges		3,300	2,582
Loss on disposal of non-current assets		70	-
Decrease in provisions		(493)	(15,361)
Equity settled share options		142,838	128,148
Change in receivables		48,429	26,577
Change in payables		500,273	89,029
Cash outflow from operating activities		(6,241,748)	(5,397,507)
Cash flow statement
Cash flows from operating activities
Cash outflow from operating activities		(6,241,748)	(5,397,507)
Taxation received		443,382	-
Net cash outflow from operating activities		(5,798,366)	(5,397,507)
Cash flows from investing activities
Interest received		297,193	758,923
Purchase of plant and equipment	10	(1,899)	(8,716)
Cash flows from investing activities		295,294	750,207
Net increase/(decrease) in cash and cash equivalents		(5,503,072)	(4,647,300)
Cash and cash equivalents at beginning of year		11,844,722	16,492,022
Cash and cash equivalents at end of year		6,341,650	11,844,722

  Notes to the Financial Statements

year ending 31 March 2009 

1. Basis of Preparation

These consolidated financial statements are for the financial year ended 31 March 2009 and have been prepared under the historical cost convention and in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

At the date of authorisation of these financial statements, the following new and revised Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective:

IFRS 1	- First-time Adoption of International Financial Reporting Standards
IFRS 2	- Share-based Payment
IFRS 3	- Business Combinations
IFRS 7	- Financial Instruments: Disclosure
IAS 1	- Presentation of Financial Statements
IAS 23	- Borrowing Costs
IAS 27	- Consolidated and Separate Financial Statements
IAS 28	- Investments in Associates
IAS 31	- Interests in Joint Ventures
IAS 32	- Financial Instruments: Presentation
IAS 39	- Financial Instruments: Recognition and Measurement
IFRIC 13	- Customer Loyalty Programmes
IFRIC 16	- Hedges of a Net Investment in a Foreign Operation
IFRIC 17	- Distributions of Non-cash Assets to Owners
IFRIC 18	- Transfers of Assets from Customers

The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no impact on the financial statements of the Group.

In addition, 'Annual Improvements to IFRS' were issued in May 2008 and in April 2009 with numerous amendments to IFRS which are considered by the IASB as non urgent but necessary. No changes to the Group accounting policies are expected as a result of these amendments.

In preparing the financial statements the Directors are required to make judgements and estimates in their application of the Group's accounting policies. These judgements and estimates are based on the Directors' knowledge of current relevant facts, past history and anticipated future trends. Any change in such estimates is recognised in the accounting period in which such estimates are revised.

Critical judgements and estimates applicable to these financial statements are as follows:

Valuation of Intangible Assets

The Group's intangible asset comprises intellectual property rights and licenses in respect of the drug compounds being developed by the Group. In preparing these financial statements, the Directors are required to review the carrying value of this asset to assess whether any impairment provision might be required. This assessment is dependent upon the Directors' assessment of the potential future commercial value of the compounds which is in turn dependent upon the successful conclusion of the development and testing programme. At the balance sheet date the Directors are of the opinion that no provision is required in this respect.

Research and Development

The Directors are required to judge whether the Group's development programme has reached the stage where the conditions for capitalisation of research and development costs as set out in IAS 38 have been met. In the Directors' opinion the future commercial success of the drug development programme has yet to be firmly established and consequently it would be imprudent to capitalise such costs which accordingly continue to be written off to revenue as incurred.

  

Deferred Taxation

The Directors are required to judge whether the potential future value of corporation tax losses existing at the balance sheet date should be recognised as an asset in the financial statements. Under IAS 12 this would be appropriate if the Directors considered it probable that sufficient future taxable profits would accrue to the group to enable the tax losses to be utilised. In the Directors' opinion, the future success of the Group's drug development programme is insufficiently certain for it to be appropriate to recognise a deferred tax asset in respect of existing tax losses.

2. Accounting Policies

Basis of Consolidation

The financial statements consolidate the financial statements of the parent company, Minster Pharmaceuticals plc, and its subsidiary, Minster Research Limited. Subsidiaries are undertakings controlled by the Group and control is deemed to exist where the Company has the power to govern the financial and operating policies of the undertaking so as to benefit from its activities. Where necessary, adjustments are made to the financial statements of subsidiary companies to bring their accounting policies in to line with those of the Group and all inter-group transactions, balances and income and expenditure are eliminated on consolidation.

Property, Plant and Equipment

Property, plant and equipment is included at cost, net of depreciation and any provision for impairment. Depreciation has been provided on the straight-line basis on all property, plant and equipment in order to write off the assets over their estimated useful lives, which are:

Computer equipment 3 years

Other office equipment 4 years

Intangible Assets

Intangible assets are identified and capitalised where they are separable and arise from contractual and other legal rights acquired from third parties. Purchased intellectual property rights, patents and licences are included at fair value and amortised over their useful economic lives once each asset is brought into use to generate income for the Group. Up to that point in time, the carrying value of each asset is reviewed annually for impairment.

Non-current Investments

Investments in subsidiaries are stated at cost, less provision for permanent impairment.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash.

Taxation

The tax credit or charge in the income statement comprises both current and deferred taxation.

Current taxation comprises amounts currently payable or repayable based on the profit or loss for the year as adjusted for income and costs which are deferred to later periods or are never taxable or deductible. Deferred taxation is the tax expected to be payable or repayable based on differences between the carrying amount of assets and liabilities in the financial statements and their corresponding value for taxation purposes and is calculated on the liability method.

Deferred taxation is calculated at the rates of tax that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax assets are recognised to the extent that it is probable that they will be recovered.

  

Research and Development

Research costs are charged to the income statement in the year in which they are incurred.

Development costs are capitalised as intangible assets when all the following conditions are met:

	Completion of the development is technically feasible
	The Group intends to complete the development
	The Group has the ability to use or sell the developed product
	The development will generate probable future economic benefits
	There are adequate technical and financial resources to complete the development
	Expenditure attributable to the development can be reliably identified and measured

Where these conditions are not met, development costs are charged to the income statement in the year in which they are incurred.

Foreign Currencies

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. Profits and losses arising from exchange differences are included in the income statement for the year.

Pensions

Pension contributions to a group stakeholder pension plan in respect of certain Directors and employees are charged to the income statement as incurred. 

Operating Leases

Rentals applicable to operating leases, where substantially all the benefits and risks of ownership remain with the lessor, are charged to the income statement as incurred.

Share-based Incentives

Incentives in the form of share options are provided to certain Directors and employees and are measured at fair value at the date of grant. The fair value of the services is charged as an expense on a straight-line basis over the period during which the services are provided after making allowance for the proportion of options expected to be exercised. The fair value of the options granted is computed using the Black-Scholes model taking into account the particular circumstances of the Group.

Impairment of Property, Plant and Equipment and Intangible Assets

At the year end date, the Directors review the carrying value of property, plant and equipment and intangible assets to assess whether those assets have suffered an impairment in value. Where any such impairment is identified the recoverable amount of the asset is estimated to determine the extent of any impairment provision required.

The recoverable amount is the higher of its fair value less costs to sell and its value in use. The value in use is assessed by estimating future cash flows to be derived from the asset, discounted to reflect the time value of money and risks specific to the asset to the extent not already reflected in the estimated future cash flows.

  

Where any such impairment is identified the carrying value of the asset is written down to its estimated recoverable amount.

3. Operating Loss

		2009	2008
		£	£
The operating loss is stated after charging:
Depreciation of plant and equipment		3,300	2,582
Research and development expenses		6,195,211	4,330,800
Auditors' remuneration - audit of Group		15,000	14,000
Auditors' remuneration - subsidiary		7,000	6,000
Auditors' remuneration - other services		10,982	18,800
Directors' remuneration		607,682	592,321
Operating lease rentals		16,067	13,334
And crediting foreign exchange		(1,368,790)	(83,671)

The accounts do not include the individual income statement for the Company. The Company made a loss before and after taxation of £12,789,923, including a provision of £11,573,594 as set out in note 12 (2008: loss of £546,057).

4. Directors Remuneration and Share Options

The Directors were paid salaries and benefits through the subsidiary. Minster Research Limited, as follows: 

		2009	2008
		£	£
Salaries		492,000	483,525
Pension contributions paid in respect of one Director		20,000	20,000
Share-based payments		95,682	88,796
		607,682	592,321

 

The highest paid Director received a salary of £200,000 (2008: £200,000), share-based payments of £nil (2008: £nil) and pension contributions of £20,000 (2008: £20,000). Further details of Directors' remuneration are shown in the full accounts. 

Directors' share options: 

During the year, the following options were granted to Directors: 

			Pence per
		Number	share
Dr Argeris Karabelas		75,000	35.00
John Russell		100,000	35.00
Robert Stubbs		75,000	35.00
Dr Peter Blower		100,000	35.00

5. Personnel Expenses

 

Staff numbers and costs for the year, including Directors, were as follows

		2009	2008
Average number		10	10

		2009	2008
		£	£
Salaries		682,417	647,883
Social security costs		78,613	74,762
Pensions		32,050	28,092
Equity settled share-based payments (note 6)		142,838	128,148
		935,918	878,885

The Group operates a stakeholder pension plan for certain Directors and employees. The assets of the plan are held separately from those of the Group. The pension cost charged in the income statement represents payments made in the year and amounted to £32,050 (2008: £28,092).

6. Share-based Payments

The Company granted share options to certain Directors and key employees in February and May 2005, in March and September 2007 and in June 2008. Where certain conditions are met, these options have been granted under the terms of an HM Revenue & Customs approved Enterprise Management Incentives share option scheme. Where conditions are not met, the options are granted as unapproved options.

The share options granted in February 2005 are exercisable immediately on grant and lapse if not exercised by the tenth anniversary of grant. The share options granted in May 2005 are subject to a two year vesting period and lapse if not exercised by the tenth anniversary of the date of grant. The share options granted in March and September 2007 and June 2008 are subject to a two year vesting period and lapse if not exercised by the fifth anniversary of the date of grant.

Details of the share options outstanding during the year are as follows:

			Share options
Outstanding at 1 April 2008			3,028,750
Granted			550,000
Expired/cancelled			(64,500)
Exercised			-
Outstanding at 31 March 2009			3,514,250
Exercisable at 31 March 2009			2,302,000
At 31 March 2009
Weighted average exercise price			£0.72
Range of exercise prices for options outstanding			£0.35 - 1.75
Weighted average remaining contractual life, years			3.80

  The estimated fair values of share options are calculated by applying the Black-Scholes model. The assumptions used in the model are as follows: 

Share price			£0.255 - 0.70
Exercise price			£0.35 - 1.75
Expected volatility			30%
Expected option life, years			1.60 - 4.90
Expected dividend yield			0%
Risk free interest rate			4.38 - 5.31%

The expected life used in the model has been based on exercise restrictions. The risk free rate is based on a five Year UK Gilt Rate. 

The total charge for the year relating to employee share-based payments was £142,838 (2008: £128,148) all of which related to equity settled share-based payment transactions. The aggregate of the estimated fair values of the existing options granted is £426,156.

7. Investment Income

		2009	2008
		£	£
Interest receivable:
On refund of corporation tax		190	-
On bank deposits		297,003	758,923
		297,193	758,923

 

8. Taxation

No UK Corporation Tax is payable on the results for the year due to losses. The taxation credit in the consolidated income statement comprises payable enhanced research and development tax credits claimed by the subsidiary company, Minster Research Limited.

In accordance with the Group's accounting policy on taxation, any potential deferred tax asset is calculated by the Directors and then reviewed for its likelihood of recoverability. As this recoverability is affected adversely by uncertainty regarding the timing of future profits, the Directors have not created a deferred tax asset in the Group balance sheet.

		2009	2008
		£	£
Taxation credit on the results for the year		326,641	285,899

  

Factors affecting the tax charge for the period

The difference between the tax assessed for the period and the standard rate of corporation tax is explained as follows: 

		2009	2008
		£	£
Loss on ordinary activities before tax		(6,638,972)	(4,869,559)
Standard rate of corporation tax in the UK		28%	30%
Loss on ordinary activities multiplied by the standard rate of corporation tax		(1,858,912)	(1,460,868)
Effects of:
Expenses not deductible for corporation tax purposes		42,041	39,696
Timing differences		(42)	(397)
Adjustment for research and development tax credit		(591,128)	(168,785)
Losses carried forward to future years		2,081,400	1,304,455
Taxation credit for the year		(326,641)	(285,899)

These are tax losses carried forward in the Group of approximately £14.30 million (2008: £7.47 million)

9. Intangible Assets

			Group 2009
			£
Cost 1 April 2007			12,397,754
Addition during the year			-
Cost 1 April 2008			12,397,754
Addition during the year			-
Cost 31 March 2009			12,397,754
Net book value 31 March 2009, 2008 and 2007			12,397,754

Intangible assets comprise intellectual property rights and licences held by the subsidiary company. Minster Research Limited. No amortisation was charged in either year.

  10. Property, Plant and Equipment

			Group 2009
			£
Cost 1 April 2007			5,637
Additions			8,716
Cost 1 April 2008			14,353
Additions			1,899
Disposals			(1,062)
Cost 31 March 2009			15,190
Depreciation 1 April 2007			3,301
Charge for the year			2,582
Depreciation 1 April 2008			5,883
Charge for the year			3,300
Disposals			(992)
Depreciation 31 March 2009			8,191
Net book value 31 March 2009			6,999
Net book value 31 March 2008			8,470
Net book value 31 March 2007			2,336

The property, plant and equipment is held by the subsidiary company, Minster Research Limited, and comprises computers and office equipment. 

11. Investments

		Company	Company
		2009	2008
		£	£
Investment in subsidiary undertaking
At 1 April 2008 and at 31 March 2009		12,097,500	12,097,500

The Company owns 100% of the issued Ordinary share capital of shares of 10p each in Minster Research Limited, which is incorporated in England and Wales. 

Its principal activity consists of the development of pharmaceutical compounds under licence from the patent holders. 

In the opinion of the Directors, the value of the Company's investment in its subsidiary undertaking is supported by the value of that company's interest in the intellectual property of the Group.

12. Receivables

	Group	Company	Group	Company
	2008	2008	2008	2008
	£	£	£	£
Amounts owed by Group undertaking	-	5,957,148	-	18,677,534
Prepayments and other receivables	104,675	9,236	129,994	8,061
VAT	10,314	-	33,424	-
	114,989	5,966,384	163,418	18,685,595

  Amounts due after more than one year included in: 

	Group	Company	Group	Company
	2008	2008	2008	2008
	£	£	£	£
Prepayments and other receivables	50,588	-	71,888	-

The amount owed by the Group undertaking is net of a provision of £11,573,594, calculated to reduce the amount owed to equal the net non-Group asset value as set out in that company's financial statements at 31 March 2009.

13. Current Liabilities: Trade and Other Payables

	Group	Company	Group	Company
	2008	2008	2008	2008
	£	£	£	£
Trade payables	335,687	91,442	310,062	-
Taxes and social security costs	1,478	1,478	27,598	1,478
Accruals	612,369	32,720	111,601	52,957
	949,534	125,640	449,261	54,435

14. Non-current Liabilities: Provision for Liabilities

		2009	2008
		£	£
National insurance provision on options
At 1 April 2008		493	15,854
Credited in year		(493)	(15,361)
At 31 March 2009		-	493

The provision comprises national insurance that potentially arises on exercise of certain of the options granted over shares in the Company. 

15. Called up Share Capital

		2009	2008
Authorised:	Number	100,000,000	100,000,000
Ordinary shares of 5p each	Value	£5,000,000	£5,000,000
		2009	2008
Allotted, called up and fully paid: Ordinary shares of 5p each	Number	58,901,312	58,901,312
	Value	£2,945,066	£2,945,066

Date of Grant	At 31 March 2008	Granted During the year	Lapsed During the year	Exercised During the year	At 31 March 2009	Option price	Exercisable from	To
25/02/2005	600,000	-	-	-	600,000	175p	25/02/2005	24/02/2015
25/02/2005	400,000	-	-	-	400,00	37.5p	25/02/2005	24/02/2015
11/05/2005	102,000	-	-	-	102,000	70p	11/05/2007	10/05/2075
26/03/2007	880,000	-	-	-	880,000	65p	26/03/2007	25/03/2012
03/04/2007	320,000	-	-	-	320,000	73.75p	26/03/2009	25/03/2012
28/09/2007	726,750	-	64,500	-	662,250	46.75p	28/09/2009	27/09/2012
24/06/2008	-	450,000	-	-	450,000	35p	24/06/2010	23/06/2013
24/06/2008	-	100,000	-	-	100,000	50p	24/06/2010	23/06/2013

16. Share Premium and Reserves

The Group	Share
	premium	Capital	Retained
	account	reserve	earnings
	£	£	£
At 1 April 2007	26,007,337	4,837,500	(4,990,311)
Retained loss for the year	-	-	(4,583,660)
Equity settled share-based payments (see note 6)	-	-	128,148
On shares issued during the year	63,912	-	-
At 31 March 2008	26,071,249	4,837,500	(9,445,823)
At 1 April 2008	26,071,249	4,837,500	(9,445,823)
Retained loss for the year	-	-	(6,312,331)
Equity settled share-based payments (see note 6)	-	-	142,838
At 31 March 2009	26,071,249	4,837,500	(15,315,316)

The Company	Share
	premium	Capital	Retained
	account	reserve	earnings
	£	£	£
At 1 April 2007	26,007,337	4,837,500	(2,579,591)
Retained loss for the year	-	-	(546,057)
On shares issued during the year	63,912	-	-
At 31 March 2008	26,071,249	4,837,500	(3,125,648)
At 1 April 2008	26,071,249	4,837,500	(3,125,648)
Retained loss for the year	-	-	(12,789,923)
At 31 March 2009	26,071,249	4,837,500	(15,915,571)

The capital reserve arose from the value of the secondary consideration referred to in note 15(i) and represents the potential issue of 12,900,000 shares. 

17.  Statement of Changes in Equity

Group		2009	2008
		£	£
At 1 April 2008		24,407,992	28,773,504
Share capital subscribed, including premium, net of expenses of issue		-	90,000
Net loss for the year		(6,312,331)	(4,583,660)
Equity settled share-based payments		142,838	128,148
At 31 March 2009		18,238,499	24,407,992

Company		2009	2008
		£	£
At 1 April 2008		30,728,167	31,184,224
Share capital subscribed, including premium, net of expenses of issue		-	90,000
Net loss for the year		(12,789,923)	(546,057)
At 31 March 2009		17,938,244	30,728,167

18.   Financial Instruments

The Group's financial instruments comprise cash and borrowings in the form of unsecured convertible zero coupon loan notes together with trade payables that derive directly from its operations. There were no trade receivables.

The purpose of these instruments is to provide finance for the Group's operations.

Foreign Currencies

The Company held deposits in euros and US dollars at 31 March 2009 as detailed below. These deposits were created by exchanging sterling deposits into the relevant currencies, and these exchanges were carried out in order to cover the estimated financial values of research programmes contracted during the year in those currencies and thus limit the financial risk on those future liabilities caused by possible future fluctuations in exchange rates.

Interest Rate

The Group finances its operations principally through the cash reserves held, which have arisen as a result of shares being issued. Surplus funds are held on banker's treasury deposits. The unsecured convertible zero coupon loan notes carried no interest charge prior to their conversion into ordinary shares.

Liquidity Risk

The Group manages its liquidity risk through effective working capital management. 

Book Value of Financial Instruments 

In the opinion of the Directors, the book value of the financial instruments is not materially different from their fair values.

Financial assets and liabilities

The financial assets are as follows:

Company		2009	2008
		£	£
Cash at bank and in hand - in sterling		91,014	95,468
Cash at bank and in hand - in euros		2,006	8,023
Cash at bank and in hand - in US dollars		269,652	28,322
Bank treasury deposits - in sterling		4,028,727	6,470,003
Bank treasury deposits - euros		-	509,453
Bank treasury deposits - in US dollars		1,950,251	4,733,453
		6,341,650	11,844,722

19.  Loss per Share

The calculation of loss per share is based on the following information:

Company		2009	2008
		£	£
Loss attributable to shareholders		£6,312,331	£4,583,660
Weighted average number of shares of 5p (basic)		58,901,312	58,887,971
Weighted average number of shares of 5p (diluted)		71,801,312	81,513,891

The calculation of the basic and fully diluted loss per share as set out in the consolidated income statement is based on the loss after taxation and basic and diluted weighted average number of shares set out above.

The weighted average number of shares of 5p (diluted) is calculated to assume conversion of all the shares to be issued as secondary consideration and those options and warrants where the exercise price is below the mid-market price of the ordinary hares at 31 March 2009. Details of shares to be issued as secondary consideration and all options and warrants are set out in note 15 to the accounts.

If all warrants and options were to be converted, regardless of exercise price, the weighted average number of shares of 5p diluted) would be 82,354,019 and the fully diluted loss per share would be £0.077.

20. Transactions with Directors

On 1 October 2006 the Company entered into a contract with Thirty Five Limited, a company with which John Russell is associated. The contract provides for the consultancy services of John Russell to be made available on an arm's length basis.

During the year the amount charged to the income statement under this contract was £32,000 (2008: £26,000) and the balance outstanding at 31 March 2009 was £nil (2008: £nil). The agreement was terminated on 31 December 2008.

On 1 August 2007 the Company engaged Robert Stubbs to provide consultancy services to the Company on an arm's length basis. During the year the amount charged to the income statement under this contract was £6,750 (2008: £7,500) and the balance outstanding at 31 March 2009 was £nil (2008: £nil).

21.  Commitments

At 31 March 2009 the Group had an operating lease commitment in respect of land and buildings of £1,235 (2008: £1,235), representing one month's rental of its offices.

The Directors have signed licensing agreements whereby payments become due on the initiation of a first Phase III clinical trial and on the first commercial sale of product in a major market. As no liability arises unless and until these events occur, the Directors believe that it is inappropriate to make a provision. If these events do occur, the Directors are confident that they will be able to secure sufficient funds to make the payments.

22.  Financial information and posting of accounts

The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 March 2008 or 2009, but is derived from those accounts. The auditors have reported on those accounts; their reports were unqualified and did not contain any explanatory statements.

Copies of the Report and Accounts will be available from the Company's registered office at Audley End Business Centre, The Old Forge, London Road, Wendens Ambo, Saffron Walden CB11 4JL and on the Company's web-site (www.minsterpharma.com).

The preliminary results were approved by the Board on 27 May 2009.

ENDFR PUUQGAUPBGQM

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Related Shares:

MPM.L