10th Jun 2005 07:00
Provalis PLC10 June 2005 10 June 2005 Provalis plc Trading Update Provalis plc (LSE: PRO; NASDAQ: PVLS), the international medical diagnostics andpharmaceuticals group, is today providing a year-end trading review and anupdate on the roll out of its new in2it(TM) diagnostics product. Diagnostics The supply of analysers and commissioning of automated cartridge manufacturingfor the Group's flagship product, in2it(TM), has gone well. However, as iscommon with new product development in such complex technologies, the Group hasencountered several "teething problems" with both the analyser and the A1c testcartridge. These have necessitated a number of enhancements to improvesignificantly the performance and robustness of the product which will alsoenhance its competitive position. The Board decided to implement and validate all of the enhancements beforelarger quantities of the cartridges are shipped to the US. Production of theupgraded analyser has now resumed and the improved cartridge will followshortly, targeting a full US roll-out of in2it during the early Summer. Theinterest in the product and demand for the A1c cartridge remain strong. Pharmaceuticals The impact on Diclomax(R) sales from generic competition and turbulence in theCOX II / non-steroidal anti-inflammatory market, which the Group highlighted atthe Interim Results on 1 March 2005, has been somewhat worse than originallyanticipated. However, the situation for the last two months has stabilised withmore predictable prescribing and ordering patterns emerging. Erdotin(R), a muco-modulatory drug used to treat respiratory disease, isadvancing through the regulatory process, with approval now expected in late2005. Respiratory diseases cost the NHS more than any other disease area andErdotin(R) has generated great interest with respiratory physicians. Discussions continue in relation to two other extremely promising pharmaceuticalproducts. If these discussions are successfully concluded, the first of theproducts could be launched before the end of this calendar year. Year end review As a result of the issues raised above, the Board now expects Group sales forthe financial year to 30 June 2005 to be circa £10.3m. The Board has already taken action to address the resultant reduction inprofitability, in particular by reducing expenditure and actively managing thecost base. The Group is likely to report an operating loss slightly increasedcompared to that previously forecast but will start the new financial year witha reduced cost base. The Board expects the Group to have borrowings of some £1m at the end of thefinancial year; it has a banking facility of up to £5m. Outlook With in2it(TM) already launched in the US market, the Board believes that theGroup has the platform for significant growth in 2006 and thereafter for thefollowing reasons: • The already large market for diabetic diagnostics continues to grow with 17 million Americans diagnosed with the disease; the demand for a cost-effective and easy-to-use glycated haemoglobin testing product for disease management in this market is very apparent; • Market demand for in2it(TM) from the US remains strong; • Recent evaluation of in2it(TM) by distributors and key customers has gone well, reinforcing the order base for the product; • The introduction of the UK based automated cartridge manufacturing facility for in2it(TM) test cartridges, delivering a several fold increase in capacity, remains on track for completion during the Summer; • The development of the high sensitivity CRP test, the second for the in2it(TM) platform, is accelerating; • Positive discussions continue with a number of potential in2it(TM) distributors for Europe and Japan; and • The pharmaceuticals business will be extended by one or more significant portfolio additions in 2006. ------------- For further information:- Provalis plcDr Phil Gould, Chief Executive Officer 01244 833463Mr Peter Bream, Finance Director 01244 833552 College HillAdrian Duffield/Corinna Dorward, 020 7457 2815/2803 Notes to Editors Provalis plc (LSE: PRO; NASDAQ: PVLS) is an international healthcare group withtwo operating businesses:- • Medical Diagnostics - develops medical diagnostic products for chronic disease management for sale to world markets. The business' principal products are in2it(TM) A1c and Glycosal(R), both diabetes diagnostic tests. • Pharmaceuticals - sells and markets its own, and third party, branded, prescription medicines in the UK and Ireland to GPs and hospitals through its regionally managed sales force. The business' principal product is Diclomax(R), a medicine for use in the treatment of musculo-skeletal disorders, and it also sells products in the areas of osteoporosis, migraine and dermatology. Visit Provalis' Revised Website at http://www.provalis.com "Safe Harbor" Statement under the US Private Securities Litigation Reform Act of1995: Statements in this announcement that relate to future plans, expectations,events, performances and the like are forward-looking statements as defined inthe US Private Securities Litigation Reform Act of 1995. Actual results ofevents could differ materially from those described in the forward-lookingstatements due to a variety of factors. Such factors include, among others: theviability of the Group's products, which are at various stages of development;the generation of sufficient operating cash flow by the Group's pharmaceuticaland medical diagnostic businesses to finance the ongoing development of thesebusinesses as well as the Group's research and development activities; thesuccess of the Group's research and development strategy and activities;uncertainties related to future clinical trial results and the associatedregulatory process; the execution and success of collaborative agreements withthird parties; availability and level of reimbursement for the Group's productsfrom government health administration authorities or other third-party payors;the rate of net cash utilisation within the Group and, hence, the Group'spossible need for additional capital in the short, medium and/or long term; theGroup's intellectual property position and the success of patent applicationsfor its products and technologies; the Group's dependence on key personnel;general business and economic conditions; the impact of future laws, regulationsand policies; stock market trends in the Group's sector; and other factorsbeyond the Group's control that may cause the Group's available capitalresources to be used more quickly than expected. These and other factors thatcould affect the Company's future results are more fully described in itsfilings with the US Securities and Exchange Commission, in particular the latest20-F filing, copies of which are available from the Company Secretary at theCompany's registered address. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Proservice Bldg