28th Sep 2006 07:02
Syntopix Group plc28 September 2006 For immediate release 28 September 2006 SYNTOPIX GROUP PLC ("Syntopix" or "the Group") PRELIMINARY RESULTS FOR THE 12 MONTHS ENDED 31 JULY 2006 Syntopix Group plc (AIM: SYN), the drug discovery and development group focusedon dermatological diseases, is pleased to announce its preliminary results forthe 12 month period ended 31 July 2006. Highlights • Successful flotation on AIM in March 2006, via a Placing raising £4 million gross • Significant progress in delivery of Group's strategy using reduced risk and reduced cost business model • Three lead candidates selected for pre-clinical and formulation studies • Board and Scientific Advisory Panel strengthened • Cash at 31 July 2006 of £3,247,430 (2005: £645,423) Commenting on the results, Gwyn Humphreys, Syntopix' Chairman, said: "The lasttwelve months have been exciting for Syntopix: The Group has proved that itsscreening methodology identifies strong candidate products; has consolidated itslaboratory capability and moved its operations to Bradford; has a strong patentportfolio; and is now progressing its lead candidates into pre-clinicaldevelopment. "Syntopix has a strong capability to develop a pipeline of innovativedermatological products. The funding is now in place to drive its productcandidates through the clinic and into commercial relationships with theobjective of realising significant value for shareholders." ENDS For further information please contact: Syntopix Group plc 0845 125 9204 Gwyn Humphreys, ChairmanRod Adams, Chief Executive Officer KBC Peel Hunt Ltd 020 7418 8900 Megan MacIntyre Buchanan Communications 020 7466 5000 Mark Court, Tim Anderson, Mary-Jane Johnson Notes to editors About Syntopix Group plc Syntopix, a group focused on the discovery and development of drugs for thetopical treatment of dermatological diseases, was founded in 2003 as a spin-outfrom the University of Leeds by Dr Jon Cove and Dr Anne Eady, two of the leadingexperts in skin microbiology, with initial funding from The Wellcome Trust. Syntopix' strategy is to seek to reduce the risks and costs of drug discoveryand development by discovering novel uses for known compounds; by concentratingon compounds and combinations of compounds that have a history of safe use; andworking with compounds that have known properties, for example antimicrobialsand anti-inflammatories. The Group currently has seven pending UK patentapplications. Syntopix is currently concentrating on acne and Staphylococcus aureus infectionsand has identified a pipeline of lead drug candidates that it intends to takethrough pre-clinical and, as appropriate, clinical trials. The Group intends toout-license products to commercial partners on obtaining proof of principle andto seek co-development partnerships. The Group is based at the Institute of Pharmaceutical Innovation in Bradford,giving access to the expertise in skin biology, formulation and toxicology atthe universities of Bradford and Leeds. Syntopix' shareholders include Techtran Group Limited (a subsidiary of IP Groupplc), The Wellcome Trust Limited, University of Leeds Limited, White RoseTechnology Limited and Ridings Early Growth Investment Company Limited.Syntopix joined the AIM market of the London Stock Exchange in March 2006. For further information please visit www.syntopix.com. Copies of the annual report and accounts Copies of the annual report and accounts will be sent to shareholders duringOctober 2006 and will be available at the Registered Office of the Company,Institute of Pharmaceutical Innovation, University of Bradford, Bradford, BD71LD and on the Company's website, www.syntopix.com for one month free of chargefrom late October 2006. CHAIRMAN'S STATEMENT Introduction We are pleased to report our maiden preliminary results following Syntopix Groupplc's successful listing on the AIM market of London Stock Exchange plc in March2006. These results cover the 12 month period from 1 August 2005 to 31 July2006. During the period under review, and post the period end, Syntopix has madeexcellent progress in its drug discovery and development activities and in thecorporate development of the Group. Our Business Syntopix' objective is to develop products to address dermatology diseases, inparticular acne and superficial staphylococcal infections, including those dueto MRSA. Our strategy is to identify individual antimicrobial compounds andsynergistic combinations of compounds that already have a history of safe use inman, possibly in other indications. This strategy is likely to reduce the highrisks and costs of early drug discovery, and reduce the time to market whencompared with conventional drug development. Central to the delivery of the Group's strategy is a novel screening processthat combines validated antimicrobial and pharmacological tests, allowing earlyidentification of active compounds and combinations of compounds enabling themost promising compounds to be fast-tracked as lead candidates for furtherstudies. Syntopix has already identified three lead candidates for development, and isnow progressing these into preliminary clinical studies and formulation, withclinical studies expected to commence in 2007. The Group has patent applicationsprogressing covering the compounds being taken into development. The Group believes the dermatology market, with estimated global sales of morethan $10 billion, is particularly attractive, in part because majorpharmaceutical companies have chosen in general to focus their activities onother, larger therapeutic areas. As a result there has been a lack of innovationin dermatology along with clear evidence of unmet medical need, creatingsignificant opportunities for the Group. Syntopix also carries out some consultancy and contract research services forcompanies in the dermatology area. These services are valuable in nurturingrelationships with potential commercial/licensing partners. They maintainSyntopix' visibility with such companies but the revenues from these servicesare not planned to be significant. The commercialisation strategy at Syntopix is to out-license its products tosignificant players in dermatology for sales and marketing followingproof-of-concept clinical studies that will be carried out by the Group or phaseII clinical studies as appropriate. The Board In early January 2006 Dr Helen Shaw joined the Board of Syntopix Ltd as aNon-Executive Director. Helen has many years of experience as Medical Directorat Boots Healthcare International, and brings valuable clinical anddrug-development experience to Syntopix. In July 2006, we also recruited DrStephen Jones to the Group as Chief Operating Officer. Stephen, who was alsoappointed to the Board, is a highly experienced pharmaceutical executive with atrack record in both branded medicine and consumer healthcare and a successfulhistory of new product development. He was most recently at GlaxoSmithKlinewhere he held the position of Vice President and Director of Consumer HealthcareResearch and Development. Financials In March 2006 the Group raised £3.3 million of new capital, net of expenses, andwas admitted to the AIM market of the London Stock Exchange. This capital willallow the Group to progress its candidate drug products through pre-clinicalstudies and into clinical trials for out-licensing to partners. The spendprofile of the Group is as expected, with modest growth of in-house researchexpenditure. In October 2005 the Group moved its operations to the Institute forPharmaceutical Innovation at the University of Bradford, which offers excellentlaboratory facilities sufficient for the foreseeable future needs of the Group.This move was very cost-effective, as the Group's rent is lower, and it alsoqualifies Syntopix for both European and regional grant support. Outlook The last twelve months have been exciting for Syntopix: the Group has provedthat its screening methodology identifies strong candidate products; hasconsolidated its laboratory capability and moved its operations to Bradford; hasa strong patent portfolio; and is now progressing its lead candidates intopreliminary clinical development. Syntopix has a strong capability to develop a pipeline of innovativedermatological products. The funding is now in place to drive its productcandidates through the clinic and into commercial relationships with theobjective of realising significant value for shareholders. Gwyn Humphreys Chairman 28 September 2006 CHIEF EXECUTIVE'S REVIEW OF OPERATIONS Introduction Over the last twelve months Syntopix has made significant progress in thediscovery and development of innovative drug candidates for the treatment ofacne and staphylococcal skin infections, our principal areas of focus in thedermatology market. Syntopix, which was founded in 2003, has dedicated itsresources to the discovery and development of therapeutic products against theseindications and we believe the Group is well positioned to create new and muchneeded therapies. The global market for our products is reasonably large with acne accounting forsome 22% of skin disease, or approximately $3.3bn in value. Acne has beenlargely regarded as a teenage condition but increasingly recognised problems oflate-onset and persistent acne are expanding the potential market size.Superficial staphylococcus aureus infections account for some 5% of the market,with a value of approximately $0.75bn. During the period under review we have continued to successfully screencombinations of compounds from our library of approximately 1000 compounds andnow have a pipeline of candidates that have shown synergistic actions againstPropionibacterium.acnes and/or S. aureus. To date, management of superficial staphylococcus aureus infections andprophylaxis of nasal carriage continues to rely heavily upon antibiotics withassociated concerns about rising resistance rates. Our approach, which usessynergistic combinations of antimicrobial compounds, has the potential tomitigate the problem of drug resistance. The Group has carried out consultancy and contract work for other pharmaceuticalcompanies throughout the year. Although the revenue has been modest at £31,914(2005: £61,156) the relationships formed with the companies for which we havecarried out this work could be the basis for future partnerships orcollaborations. Discussions have also taken place with several potentialpartners in other pharmaceutical companies who have interests in thedermatological area. Discovery and Development During the year we have made significant scientific advances, culminating in theselection of three lead candidates from our portfolio to enter formulation andpre-clinical trials. It is intended that these will commence clinical trials inearly 2007. Our first candidate, SYN-24-0017, is an anti-oxidant present in a wide varietyof foods and cosmetics. It will enter pre-clinical development as a remedy forthe prevention and treatment of S. aureus infections. Our second candidate is a synergistic combination of SYN-24-0017 with a metalsalt that will be developed as a topical treatment for acne vulgaris. The third candidate, which will also be developed as a treatment for acne, willbe a synergistic combination of SYN-24-0401 and SYN-24-0016 or SYN-24-0017(previously SYN-24-0403) (or its salt). SYN-24-0401 is an anti-fungal ingredientin personal healthcare products. SYN-24-0016 is an oxidising agent present in anumber of pharmaceutical preparations. The Board has decided to substituteSYN-24-0016 or SYN-24-0017 for SYN-24-0403 due to stronger IP protection overthe combination of SYN-24-0401 and SYN-24-0403. Intellectual Property We have continued throughout the year to file for patents based on the growingpipeline of new synergistic combinations of compounds. At the year-end we had 7submitted patents. Financials The balance sheet was strengthened considerably in March 2006 with the flotationon AIM. The Placing at the time of the flotation raised £3.3 million net ofexpenses through the issue of 2,259,887 ordinary shares at a Placing Price of177p. Turnover in the period was £31,914 (2005: £61,156) and the net loss was £910,846(2005: net loss £99,660), equating to a loss per share of 21.6p (2005: loss pershare of 3.7p). Net cash as at 31 July 2006 was £3,247,430 (2005: £645,423). Staff levels have been increased during the financial year, with the addition ofan administrator, a part-time technician and a Chief Operating Officer, andsubsequent to the year end we appointed an additional research scientist.Overhead costs however remain as forecast, due in part to the move from ourprevious high cost premises at Leeds University to low cost purpose builtoffices and laboratories at the Institute of Pharmaceutical Innovation atBradford University. The Group qualifies for repayable R&D tax credits amounting to £86,000 for theyear in respect of its research activity. Conclusion We have continued to invest in the research and development of our drugcandidates and this will increase as we enter the formulation and clinicalstages of our product development. The current financial year will be a pivotalyear for Syntopix and we look forward with confidence to the opportunities aheadboth in terms of the development of our product portfolio and of our commercialrelationships Rod Adams Chief Executive Officer 28 September 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 July 2006 Year ended Year ended 31 July 31 July 2006 2005 Notes £ £ TURNOVER 31,914 61,156Research and development costs (493,645) (171,075)Administrative expenses (592,150) (105,563)Other operating income 2,949 111,565 OPERATING LOSS (1,050,932) (103,917)Interest receivable 53,993 4,257Interest payable (76) - LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (997,015) (99,660)Taxation 86,169 - LOSS FOR THE FINANCIAL PERIOD (910,846) (99,660) LOSS PER SHAREBasic and diluted 2 (21.6p) (3.7p) No separate statement of Total Recognised Gains and Losses has been presented asall such gains and losses have been dealt with in the profit and loss account. As explained in the accounting policies (basis of consolidation) the profit andloss account has been prepared using merger accounting principles and ispresented as if the Group had been in existence throughout the current and priorperiods. All Group activities relate to continuing operations. CONSOLIDATED BALANCE SHEET as at 31 July 2006 At At 31 July 31 July 2006 2005 Notes £ £ FIXED ASSETSTangible assets 121,041 - CURRENT ASSETSDebtors 123,976 7,150Cash at bank and in hand 3,247,430 645,423 3,371,406 652,573 CREDITORS: Amounts falling due within one year (230,493) (47,599) NET CURRENT ASSETS 3,140,913 604,974 TOTAL ASSETS LESS CURRENT LIABILITIES 3,261,954 604,974CREDITORS: Amounts falling due after more than oneyear - (62,101)PROVISION FOR LIABILITIES AND CHARGES - - NET ASSETS 3,261,954 542,873 CAPITAL AND RESERVESCalled up share capital 568,398 264,788Share premium account 3,379,046 -Merger reserve 337,935 390,664Profit and loss account (1,023,425) (112,579) EQUITY SHAREHOLDERS' FUNDS 3 3,261,954 542,873 CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 July 2006 Year ended Year ended 31 July 31 July 2006 2005 Notes £ £ Cash outflow from operating activities 4 (878,390) (77,580)Returns on investments and servicing of finance 5 53,917 4,257Capital expenditure and financial investment 5 (141,346) - CASH OUTFLOW BEFORE FINANCING (965,819) (73,323)Financing 5 3,567,826 704,633 INCREASE IN CASH IN THE PERIOD 2,602,007 631,310 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Year ended Year ended 31 July 31 July 2006 2005 Notes £ £ Increase in cash in the period 2,602,007 631,310Cash outflow/(inflow) from decrease/(increase) indebt financing 62,101 (62,101)Other non-cash movements - 12,916 MOVEMENT IN NET FUNDS IN THE PERIOD 6 2,664,108 582,125NET FUNDS AT THE BEGINNING OF THE PERIOD 6 583,322 1,197 NET FUNDS AT THE END OF THE PERIOD 6 3,247,430 583,322 NOTES 1 ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial information contained in this report has been prepared under thehistorical cost convention and in accordance with applicable accountingstandards in the United Kingdom. The financial information on the Group set out above does not constitute 'statutory accounts' within the meaning of section 240 of the Companies Act 1985. The financial information for the year ended 31 July 2006 has been extractedfrom the Group's audited consolidated statutory accounts. Those accounts, uponwhich the auditors, BDO Stoy Hayward LLP, issued an unqualified opinion, will bedelivered to the Registrar of Companies for England and Wales following theGroup's Annual General Meeting. BASIS OF CONSOLIDATION The Group's financial statements consolidate the financial statements ofSyntopix Group plc and all its subsidiaries made up to 31 July 2006. Noseparate profit and loss account is presented for Syntopix Group plc aspermitted by Section 230 of the Companies Act 1985. The Group loss for theperiod includes a loss after tax of £120,539 which is dealt with in thefinancial statements of the parent company. The Company was incorporated on 16 December 2005 as Pop Tart Limited and passeda special resolution to change its name to Syntopix Group Limited on 4 February2006. On 15 March 2006, Syntopix Group Limited entered into a share for shareexchange agreement with the shareholders of Syntopix Limited, whereby SyntopixGroup Limited acquired the entire issued share capital of Syntopix Limited andits subsidiaries, the consideration being satisfied by the allotment of ordinaryshares in Syntopix Group Limited to the shareholders of Syntopix Limited. On 16March 2006 the Company was re-registered as a public limited company under thename of Syntopix Group plc. This acquisition has therefore been accounted for as a merger as permitted byFinancial Reporting Standard 6 as if the Group (as currently constituted) hadbeen in place throughout the whole of the period covered by these financialstatements. As such, the results for the year ended 31 July 2006 have beenpresented as though Syntopix Limited and its subsidiaries had always been partof Syntopix Group plc, even though Syntopix Group plc itself was onlyincorporated on 16 December 2005. BASIS OF COMPARITIVE INFORMATION The comparative consolidated profit and loss account has been presented as ifthe merger took place on the first day of each financial period presented and asthough the Group had been in existence throughout these periods. The figures forthe year ended 31 July 2005 have been extracted from the audited SyntopixLimited accounts adjusted for the shares issued by the Company as considerationas if they had always been in issue. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies applied in these preliminary results areconsistent with those that have been applied in the financial statements for theyear ended 31 July 2006 and aside from the presentation of comparativeinformation as set out above, are consistent with those adopted in the financialstatements for the year ended 31 July 2005. 2 BASIC AND DILUTED EARNINGS PER SHARE 2006 2005 £ £ Loss for the financial period (910,846) (99,660) Weighted average number of shares No. of shares No. of shares For basic and diluted earnings per share 4,211,384 2,647,879 The comparative figures are proforma based on the number of shares that wouldhave been in issue had the capital structure of the new parent company alwaysbeen in place. 3 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS 2006 2005 £ £ GroupLoss for the period (910,846) (99,660)Proceeds from issue of shares 4,136,213 264,788Share issue expenses (453,557) (4)Merger reserve arising (52,729) 390,664 Net addition to shareholders' funds 2,719,081 555,788Opening shareholders' funds 542,873 (12,915) Closing shareholders' funds 3,261,954 542,873 4 RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATINGACTIVITIES 2006 2005 £ £ Operating loss (1,050,932) (103,917)Depreciation 20,305 -(Increase) in debtors (30,657) (7,146)Increase in creditors 182,894 33,483 NET CASH OUTFLOW FROM OPERATING ACTIVITIES (878,390) (77,580) 5 ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW 2006 2005 £ £ RETURNS ON INVESTMENTS AND SERVICING OF FINANCEInterest received 53,917 4,257 NET CASH INFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 53,917 4,257 CAPITAL EXPENDITURE AND FINANCIAL INVESTMENTPurchase of tangible fixed assets (141,346) - NET CASH OUTFLOW FOR CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT (141,346) - FINANCINGIssue of share capital (net of expenses) 3,629,927 642,532(Loans repaid)/loans received (62,101) 62,101 NET CASH INFLOW FROM FINANCING 3,567,826 704,633 6 ANALYSIS OF NET FUNDS At At 1 August 31 July 2005 Cash flow 2006 £ £ £ Cash at bank 645,423 2,602,007 3,247,430Debts : amounts falling due after more than one year (62,101) 62,101 - 583,322 2,664,108 3,247,430 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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