TIDMGDR
RNS Number : 1705M
Genedrive PLC
11 October 2016
RNS
For release: 11 October 2016
Genedrive plc ("genedrive" or the "Company")
Preliminary Results for the year ended 30 June 2016
(unaudited)
Genedrive plc (LSE: GDR), the near patient molecular diagnostics
company which recently changed its name from Epistem Holdings Plc,
is pleased to announce today its unaudited preliminary results for
the year ended 30 June 2016.
In 2015/16, the Company achieved significant growth in revenue
driven by development income related to Genedrive(R), its novel
near patient PCR molecular platform, alongside the continued
re-focussing of the Company on the attractive market opportunities
which Genedrive(R) offers. The period saw the launch of the
Genedrive(R) tuberculosis (TB) and associated antibiotic resistance
test in India. David Budd has been appointed as CEO bringing strong
diagnostics management experience to the Company. Shortly after the
year end, in July 2016, the Company completed an oversubscribed
GBP6.0m (net) Placing, following which, on 25 July, the Company
changed its name to genedrive plc.
Financial Highlights
-- Growth in turnover of 12% to GBP5.0m (2015: GBP4.5m) at the top end of previous guidance.
-- Strong growth in Genedrive(R) development income of GBP1.9m
(2015: GBP0.9m) principally driven by the US Department of Defense
handheld biohazard identification programme.
-- No distributor sales to India in the year (2015: GBP0.2m.)
Our distributor continues to operate from their initial distributor
stocking order of GBP0.2m.
-- Reduced Service income of GBP3.1m (2015: GBP3.6m).
Preclinical Service income of GBP2.0m (2015: GBP2.3m).
Pharmacogenomics Service income of GBP1.1m (2015: GBP1.3m).
-- Operating loss of GBP5.4m (2015: GBP4.0m) following increased
Development and Administrative costs to support the re-focussing of
the Company.
-- GBP6.5m (GBP6.0m net) fundraising announced on 23 June 2016
with proceeds received by the Company after the year end.
-- Cash reserves at 30 June 2016 of GBP1.1m (30 June 2015:
GBP4.9m). Cash reserves at 30 June 2016 plus net proceeds of
placing amounted to GBP7.1m.
-- As part of the fundraising, the terms of $8m GHIF Convertible
Bond were amended with the bond's maturity date extended to 2021
from 2019, allowing for deferral and rolling up of interest due in
the periods to July 2019.
Operational Highlights
-- The Indian launch of the Genedrive(R) MTB/RIF test commenced
in April 2016. Whilst end user sales are yet to engage, early
interest is in line with expectations. Work is ongoing to refine
the sample preparation process as well as the training and
commercialisation activities, based on in-market experience. We are
pleased to report that positive post-market surveillance studies
confirm that the Genedrive(R) MTB test is performing in line with
its product performance claims.
-- Development of the next Genedrive(R) test for Hepatitis C
(HCV) remains on track. The Company undertook successful initial
validation studies of the HCV test at Institut Pasteur in February
2016, paving the way for clinical testing of the assay. Initial
CE-IVD approval of the HCV test is scheduled for March/April
2017.
-- Successful clinical trial results of Genedrive(R) IL28B
human-genotyping test in conjunction with Institut Pasteur at
Hospital Cochin, Paris announced in May 2016. Announcement of
adoption of the Genedrive(R) IL28B test in clinical trials being
conducted by STOP-HCV campaign.
-- Successful progress in the US Department of Defense Programme
to Develop Genedrive(R) biohazard identification tests triggers
commencement of next $2.9m phase.
-- Successful field validation of aquaculture test for detection
of White spot disease in shrimps in collaboration with the Centre
for Environment, Fisheries and Aquaculture Science (CEFAS).
-- Detailed strategic review of the Company's Preclinical &
Pharmacogenomics Services operations commenced against a background
of robust contract wins.
-- David Budd joined as CEO in March 2016 bringing 20 years of
international commercial and operational experience in the
diagnostics and medical devices field.
-- Review and redirection of Group management organisation
focussing the Company on the Genedrive(R) molecular diagnostic
product range.
-- The Group was renamed genedrive plc on 22 July 2016. The
Company's Services operations will continue to trade under the
Epistem brand.
-- Post-period end, Matthew Fowler appointed as Chief Financial Officer.
David Budd, CEO of genedrive plc, commented: "The year has seen
us take further significant strides towards realising the potential
of the Genedrive(R) platform to bring the strength of
hospital-based, central laboratory diagnostics close to the point
of need and near patient setting. We have begun the launch of our
MTB/RIF assay in India, our first commercial market, and, whilst
this has been challenging, I am confident that we will make
progress in securing support for the roll out of our TB and HCV
tests during the current financial year. We also intend to make
progress in the development of partnerships to bring assays to the
Genedrive(R) platform which will see effective capital deployment
in the extension of the Genedrive(R) range of tests."
This announcement includes inside information.
- Ends -
For further details please contact:
genedrive plc
David Budd: CEO +44 (0)161 989 0245
John Rylands: Finance Director
Peel Hunt LLP
James Steel +44 (0)207 418 8900
Oliver Jackson
Consilium Strategic Communications
Chris Gardner +44 (0)203 709 5700
Matthew Neal
Laura Thornton
genedrive@consilium-comms.com
Chairman's Statement
I am very pleased to report on the progress which the Company
has made since my last report.
Our key priorities during the period have been to continue the
process of re-focussing the Company on the highly attractive
opportunities which the Genedrive(R) diagnostics platform offers in
the market for decentralised, near patient diagnostic tests, and
ensuring the success of its commercial launch and continued
development.
We have begun the launch of our MTB/RIF assay in India, our
first commercial market. While we have encountered challenges not
uncommon in the launch of new diagnostics products, early interest
in the market has been encouraging and our post-market surveillance
studies have confirmed that the Genedrive(R) test offers an
acceptable, low cost and accessible alternative for MTB/RIF
testing.
We remain confident in the potential of the Genedrive(R) MTB/RIF
assay in what are significant market opportunities, and are working
to develop further commercialisation efforts and improve certain
technical aspects of the product based on our in-market
experience.
We also report on the continued broader validation of the
Genedrive(R) platform, with the development of our HCV test on
track for CE Marking around March/April 2017 and significant
progress seen in our US Department of Defense project for the
development of Genedrive(R) as a handheld test for biohazard
identification.
Last year, we announced the conclusion of our collaboration with
University of Maryland Baltimore (UMB) in Radiation Biodefence and
this has impacted our Services income. However, significant
progress towards replacing this income has been achieved. Also, as
previously announced, we have appointed advisors to undertake a
review of our Services operations and will update on the progress
of the review in the coming months.
The period has seen the appointment of David Budd as CEO,
bringing over 20 years of international commercial and operational
experience in the diagnostics and molecular devices field to the
Company and strengthening our ability to exploit fully the
opportunity which our Genedrive(R) platform represents. David's
experience and focus is already having a significant impact across
the Company.
Furthermore, the GBP6.5m (GBP6.0m net) fundraising approved in
July 2016 has significantly strengthened our financial
position.
On behalf of the Board, I would like to thank our staff,
investors and customers for their commitment and support over the
past year and we look forward to updating investors on our progress
over the coming year.
Dr Ian Gilham
Chairman
11 October 2016
Chief Executive's Review
In my first Chief Executive's review, I am able to report on the
considerable advances the Company has made over the period towards
becoming a commercial stage molecular diagnostics business. That
step change in focus has been reflected in our change of name to
genedrive plc which shareholders approved in July 2016.
The Genedrive(R) Platform (Diagnostics)
Tuberculosis
The period under review included the Indian launch of the
Genedrive(R) MTB/RIF assay in April 2016 under an import licence
from the Drug Controller General of India (DCGI). This licence was
obtained on the basis of external clinical studies approved by the
DCGI.
In support of commercialisation, we have undertaken further
post-market surveillance studies in India. These studies have
confirmed the Genedrive(R) MTB/RIF test is performing in line with
our product performance claims and offers an acceptable, low cost
and accessible alternative for MTB/RIF testing.
Early interest from Indian laboratories post-launch is in line
with our assessment of the market but the sales cycle is proving
longer than we had anticipated and user sales have yet to engage.
We have identified the need to establish the right user training
and address some variable performance in the sample preparation
process. While we expected a gradual ramp up in sales in the early
months post launch, we booked no new sales to our distributor,
Xcelris Laboratories Ltd, following the GBP0.2m stocking order in
2015.
We are working closely with Xcelris to address the commercial
challenges. The product launch phase initiated a programme of
product based training for Xcelris' sales team, followed up with a
programme of customer site demonstrations to establish initial
reference sites. In response to slower than anticipated sales, we
are taking steps to further align MTB specific product training for
the distributer and customers aligned to their level of experience.
We now directly employ four in-country trainers (all Indian
nationals) to support demonstration and post-sale processes.
We are also evaluating additional distribution arrangements,
should we consider alternatives are necessary in order to drive
sales of the Genedrive(R) platform in India.
Alongside these near-term actions in support of
commercialisation, we have commenced a non-capital intensive
development programme to address certain product characteristics
related to MTB sputum sample preparation to ensure the full
expected market is ultimately available.
Our initial focus continues to be on small and medium-sized
decentralised laboratories. These are predominantly in the private
sector, which is presently the largest market by revenue and is
where we believe our cost will be a competitive advantage. In
connection with the sample refinements above, we are also exploring
appropriate expanded public markets for which we will engage
further Key Opinion Leaders (KOLs) and subsequently deploy
commercial teams. We remain confident in the potential of the
Genedrive(R) MTB/RIF test in the Indian market.
Hepatitis C (HCV)
Following continued positive progress, the Company's research
and development team is working to achieve CE Marking for the HCV
assay in anticipation of phase 1 launch in the EU in 2017. With
this approval, we will begin KOL engagement and apply for
regulatory approval for product launch in resource limited
settings, where access to laboratory equipment is less available.
In February, we announced successful external assessment of the
Genedrive(R) HCV test at the Institut Pasteur, Paris, which allowed
for the start of performance trials required to achieve CE
Marking.
A programme of independent validation trials in Scotland,
England, France and Spain is planned for the test which we
anticipate will yield results around which we can conclude
agreements for the distribution of the test. The Company is
currently in discussion with both international and country
specific partners for distribution opportunities.
The Product development team is progressing new low-cost
technology to develop a disposable plasma separation unit that
would deliver plasma from a minimally invasive finger stick
collection of blood without the need for centrifuge and the more
invasive vial of blood which centrifuge requires. The successful
development of this technology will remove a major barrier to tests
that require plasma at the point-of-care or point-of-need used
outside of a laboratory. We are pleased with progress being made
with the development of this minimally invasive disposable unit and
are targeting to make this available to support phase 2 of the
commercial launch.
Pathogen Detection
The Company can report excellent progress in our US Department
of Defense funded collaboration to develop biohazard tests for
Genedrive(R). We have booked revenues in the financial year of
$2.2m for the first phase of the project and announced, in March
2016, the outline approval for the next $2.9m phase which, subject
to continued technical progress, we expected to be largely
undertaken during the current financial year. The project
represents significant external validation for our development
capability and processes as well as extensive enhancement of our
development know-how and supply chain. The terms of reference for
the programme have been set by US Department of Defence but do not
indicate the level of future sales which may arise from continued
successful development.
The Company is also collaborating with the Centre for
Environment, Fisheries and Aquaculture Science (CEFAS) in a funded
programme for the development of a diagnostic aquaculture test for
White spot, a disease which is causing significant disruption of
shrimp farms in Asia, in particular. The Genedrive(R) test
successfully passed its initial field trial conducted by CEFAS in
August this year. We will now seek within the CEFAS collaboration
to undertake on-site trials to gather data designed to establish
the possible commercial potential for the test.
Human Genotyping assay (IL28B)
The division has completed successful trials of the IL28B
genotyping test and the test has been adopted by the STOP-HCV
programme for inclusion in its clinical trials
(http://www.stop-hcv.ox.ac.uk/stop-hcv-1-trial). The results from
this field trial will allow us to market test our genotyping
platform and to assess the extent to which it will complement our
infectious disease product range. Genedrive is contributing 20
Genedrive(R) units and 400 tests for use in the STOP-HCV
programme.
Business Development
In addition to addressing our Genedrive(R) proprietary pipeline,
I am finalising a review of our commercial priorities. We will
address opportunities with external parties to bring existing
laboratory based tests onto the Genedrive(R) system to exploit its
unique characteristics and potential in near patient applications.
Such development would more rapidly expand the range of tests
available on the Genedrive(R) platform and build validation in a
capital efficient manner. We also see significant scope to pursue
new client funded opportunities to develop new assays, along the
model of our biohazard programmes.
Services Operations
As previously stated, while the Services business has been a
very valuable component of the Company's development since
incorporation, it is clear that our resources do not allow the
level of investment required to ensure the division's continued
long-term progress and growth. In June 2016, we announced that we
had appointed advisers to undertake a strategic review of our
Services operations. We will keep shareholders updated with
progress on this review over the coming months.
Preclinical Research Services
Preclinical Research Services delivers specialised testing
services to biotechnology and international drug development
companies. Last year, we reported that the US Government agencies,
NIH/NIAID, would not be continuing their funding to University of
Maryland, Baltimore (UMB) beyond September 2016. Running at GBP1m
pa, our participation as a sub-contractor to UMB had historically
generated a significant share of the division's income.
The division has responded to the challenge with an in-depth
programme of client presentations and has made great progress in
replacing the capacity recently utilised by UMB. Sales of GBP2.0m
were booked in the period (2015: GBP2.3m) with continuing
improvement expected in the coming year.
Pharmacogenomics Services
The Pharmacogenomics Services team engages in the application of
molecular expertise towards collaborative projects for
pharmaceutical and biotechnology organisations engaged in drug
development and the discovery and validation of new drug and
biomarker targets.
The current period saw a slight weakening of Service income to
GBP1.1m (2015: GBP1.3m). This was accounted for by a change in
activity by international pharma client moving from a committed
Full-Time Equivalent (FTE) programme towards a service model for
which we have been awarded Preferred Supplier Status. We are
pleased that our FTE programme delivered first class quality
results for our client and we anticipate a growth in income for the
current year.
Financial Review
On June 23 we announced a proposed placing to raise GBP6.5m
(GBP6.0 net) by means of conditional placing with new and existing
investors of 8,125,000 shares. Calculus Capital acted as
cornerstone investor, subscribing for 3,125,000 shares. The placing
was approved by shareholders on 11 July 2016.
In addition to completing the Placing process, the Company has
worked with the Global Health Investment Fund (the GHIF) to agree
the amended terms of the Collaboration and Convertible $8m Bond
agreement entered into in July 2014. These amendments, which came
into effect on 25 July 2016 and will be detailed in the 2016 Annual
Report, allow for a two year extension of the maturity date for the
bonds as well as a deferral of interest payments otherwise due up
to July 2019. The amendments also adjust to GBP1.50 per share (from
GBP4.89) the fixed conversion price in respect of $2m out of the
$8m bonds.
Overall we report revenue and other income for the year of
GBP5.0m (2015: GBP4.5m).
Operating loss was GBP5.4m (2015: GBP4.0m) following increased
investment in Genedrive(R) development and administrative costs to
support the refocussing of the Company's activities which is
highlighted in this report.
The reported loss per share was 56.2p (2015: 30.2p)
Cash reserves at 30 June 2016 were GBP1.1m (2015: GBP4.9m),
prior to receiving GBP6.0m (net) from the Placing of shares
approved on 25 July 2016.
Outlook
Our report last year highlighted the Company's achievements in
developing the Genedrive(R) platform on very modest resources by
comparison with peer developments. In this subsequent period, we
have continued the process of re-focusing on the significant and
fast-growing global molecular diagnostics opportunity we see as
available to us. The period of scrutiny which has accompanied the
management changes has increased our confidence in the technical
quality of the underlying Genedrive(R) platform. We have
strengthened our investment in delivering reliable and accurate
tests for the MTB/RIF and HCV infectious disease markets. With
regard to the roll out of our MTB/RIF test in India, we are early
in our launch phase and cannot yet be clear about the timescale
within which user acceptance in India will be demonstrated and when
growth in sales will commence. However, we remain confident in the
potential of the Genedrive(R) MTB/RIF assay in what are significant
market opportunities.
With the increased funding now available to the Company, we are
confident that we will deliver momentum across our programmes
during the coming financial year. We see positive performance in
Genedrive(R) in a wide range of applications and targets which
gives us confidence that we can make progress in winning
partnerships to develop assays for the Genedrive(R) platform and
win new and extended development programmes to fund new
Genedrive(R) tests. We believe that these activities will generate
income for the Group in the year ahead and demonstrate the position
which the Genedrive(R) platform can secure in the increasingly
attractive near patient, decentralised molecular diagnostics
market.
David Budd
CEO
11 October 2016
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE
INCOME
For the year ended 30 June 2016
Unaudited
2016 2015
GBP'000 GBP'000
Revenue 3,094 3,703
Other Income - development grant funding 1,969 814
------- ----------------------
Revenue and other income 5,063 4,517
Contract costs (3,285) (3,933)
Research and development costs (4,836) (2,942)
Administrative costs (2,368) (1,682)
------- ----------------------
Operating loss (5,426) (4,040)
Finance (costs)/income (1,071) 616
Loss on ordinary activities before taxation (6,497) (3,424)
Taxation on ordinary activities 582 399
------- ----------------------
Loss on for the financial year (5,915) (3.025)
Other Comprehensive Income for the year - -
Total Comprehensive expense for the financial year (5,915) (3,025)
------- ----------------------
(Loss) per share (pence)
Basic (56.2)p (30.2)p
Diluted (56.2)p (30.2)p
CONSOLIDATED BALANCE SHEET
As at 30 June 2016
Unaudited
2016 2015
GBP'000 GBP'000
Assets
Non-current assets
Plant and equipment 713 805
Intangible assets 6,273 7,191
Deferred tax assets - 30
-------- -------
6,986 8,026
Current assets
Inventories 202 163
Trade and other receivables 2,797 2,191
Current tax assets 757 685
Cash and cash equivalents 1,114 4,928
-------- -------
4,870 7,967
Liabilities
Current liabilities
Deferred revenue 88 50
Trade and other payables 1,774 1,123
Deferred consideration payable in shares - 1,250
--------
1,862 2,423
Net current assets 3,008 5,544
-------- -------
Total assets less current liabilities 9,994 13,570
-------- -------
Non-current liabilities
Deferred consideration payable in shares 1,250 -
Convertible Bond 4,991 4,025
-------- -------
6,241 4,025
-------- -------
Net Assets 3,753 9,545
-------- -------
Capital and reserves
Called-up equity share capital 158 158
Share premium account 20,088 20,088
Employee share incentive plan reserve (240) (196)
Share options reserve 1,281 1,197
Reverse acquisition reserve (2,484) (2,484)
Retained earnings (15,050) (9,218)
--------
Total shareholders' equity 3,753 9,545
-------- -------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2016
Employee Share Reverse
Share Premium incentive plan Share options acquisition Retained
Share Capital Account reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
July 2014 150 18,616 (228) 1,032 (2,484) (6,222) 10,864
------------- ------------- -------------- -------------- -------------- -------------- -------
Allotment of
ordinary
shares 7 1,393 - - - - 1,400
Purchase of own
shares (SIP) - - 32 - - - 32
Exercise of
share options 1 79 - (29) - 29 80
Forfeit of
share options - - - (11) - - (11)
Recognition of
equity-settled
share-based
payments - - - 205 - - 205
Total
comprehensive
expense for
the year - - - - - (3,025) (3,025)
------------- ------------- -------------- -------------- -------------- -------------- -------
At 30 June 2015 158 20,088 (196) 1,197 (2,484) (9,218) 9,545
------------- ------------- -------------- -------------- -------------- -------------- -------
At 1 July 2015 158 20,088 (196) 1,197 (2,484) (9,218) 9,545
------------- ------------- -------------- -------------- -------------- -------------- -------
Purchase of own
shares (SIP) - - (44) - - - (44)
Lapsed share
options - - - (83) - 83 -
Forfeit of
share options - - - (6) - - (6)
Recognition of
equity-settled
share-based
payments
share-based
payments - - - 173 - - 173
Total
comprehensive
expense for the
year
for the year - - - - - (5,915) (5,915)
------------- ------------- -------------- -------------- -------------- -------------- -------
Balance at 30
June 2016 158 20,088 (240) 1,281 (2,484) (15,050) 3,753
(unaudited)
------------- ------------- -------------- -------------- -------------- -------------- -------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2016
Unaudited
2016 2015
GBP'000 GBP'000
Cash flows from operating
activities
Operating loss for the
year (5,426) (4,040)
Depreciation, amortisation
and impairment 1,174 387
ATL Research Credits (151) (202)
Share based payment expense 167 194
---------- --------
Operating (loss) before
changes in working capital
and provisions (4,236) (3,661)
(Increase) in inventories (39) (163)
(Increase) in trade and
other receivables (606) (1,066)
Increase/(decrease) in
deferred revenue 38 (36)
Increase in trade and
other payables 651 107
---------- --------
Net cash (outflow) from
operations (4,192) (4,819)
Tax received 691 1,513
Net cash (outflow) from
operating activities (3,501) (3,306)
Cash flows from investing
activities
Finance income 7 16
Acquisition of plant and
equipment & intangible
assets (164) (178)
Net cash (outflow)
from investing activities (157) (742)
---------- --------
Cash flows from financing
activities
Proceeds from issue of
convertible bond - 4,700
Cost of issue of convertible
bond - (100)
Finance cost- interest
paid (304) (212)
Exercise of share options - 80
Share Investment Plan
- purchase of own shares (44) (22)
---------- --------
Net cash (outflow)/inflow
from financing activities (348) 4,446
---------- --------
Net (decrease)/increase
in cash equivalents (4,006) 398
Effects of exchange rate
changes on cash equivalents 192 292
Cash and cash equivalents
at beginning of year 4,928 4,238
---------- --------
Cash and cash equivalents
at end of year 1,114 4,928
---------- --------
Analysis of net funds
Cash at bank and in hand 1,114 4,928
---------- --------
Net funds 1,114 4,928
---------- --------
NOTES TO THE UNAUDITED PRELIMINARY RESULTS TO 30 JUNE 2016
1. General Information
Genedrive Plc (the "Company" or Group") is a publicly traded
company incorporated and domiciled in the UK. The address of its
registered office is 48 Grafton Street, Manchester M13 9XX.
The Annual Report and Financial Statements for the year ended 30
June 2015 have been delivered to the Registrar of Companies and are
available on the Company's website www.genedrive.com . The Auditors
have reported on the accounts for the year ended 30 June 2015;
their report was unqualified, did not include a reference to any
matters to which the Auditors drew attention by way of emphasis
without qualifying their report and did not contain a statement
under section 498(2) or (3) of the Companies Act 2006.The Annual
Report and Financial Statements for the year ended 30 June 2016
will be posted to shareholders and made available on the Company's
website in October 2016.
2. Basis of Preparation
This announcement was approved by the Board of Directors on 10
October 2016. The financial information in this announcement does
not constitute the Group's statutory accounts for the years ended
30 June 2015 or 30 June 2016 but is derived from those accounts,
which for the year ended 30 June 2016 are unaudited.
As at the date of this announcement, the Auditors have not
reported on the Group Financial Statements for the year ended 30
June 2016 and therefore the financial information in respect of
that period is unaudited. The unaudited consolidated Financial
Statements from which these results are extracted have been
prepared under the historical cost convention in accordance with
IFRS (International Financial Reporting Standards) as adopted by
the EU, IFRS IC interpretations and those parts of the Companies
Act 2006 applicable to companies reporting under IFRS.
The unaudited Group Financial Statements have been prepared on a
going concern basis, as the Directors confirm that they have
reasonable expectation that the Group has adequate resources to
fund its operations for a period of at least 12 months from the
date that the Financial Statements were approved, given the cash
resources available to the Group and the future cash flow
forecasts.
3. Statement of Directors' Responsibilities
Each of the Directors conforms that to the best of their
knowledge:
-- The Financial Statement from which the financial information
within these Preliminary Results announcement has been extracted
have been prepared in accordance with IFRSs as adopted by the EU,
give a true and fair view of the assets, liabilities, financial
position and loss of the Group included in the consolidation taken
as a whole; and
-- The Chairman's Statement and the Chief Executive's Review
include a fair review of the development and performance of the
business and the position of the Group, taken together with their
description of the principal risks and uncertainties that it
faces.
4. Business segments
Preclinical Pharmaco Admin
Research genomics Diagnostics istrative
Services Services Segment Costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Twelve months ended 30 June 2016
Income 2,010 1,147 1,906 - 5,063
============ ========= ============ ========== ========
Segment trading result 49 (79) (1,918) (2,287) (4,235)
Add ATL Research Credits 83 68 - - 151
less depreciation and amortization (62) (141) (885) (85) (1,173)
less equity-settled share-based payments (19) (27) (77) (46) (169)
------------ --------- ------------ ---------- --------
Operating profit/(loss) 51 (179) (2,880) (2,418) (5,426)
------------ --------- ------------ ---------- --------
Twelve months ended 30 June 2015
Income 2,322 1,266 929 - 4,517
============ ========= ============ ========== ========
Segment trading result 135 62 (2,266) (1,593) (3,662)
Add Research Credits 111 91 - - 202
less depreciation and amortization (163) (71) (102) (50) (386)
less equity-settled share-based payments (15) (27) (113) (39) (194)
------------ --------- ------------ ---------- --------
Operating profit/(loss) 68 55 (2,481) (1,682) (4,040)
------------ --------- ------------ ---------- --------
5. Geographical segments
2016 2015
GBP'000 GBP'000
United Kingdom 1,035 912
Europe 365 1,061
United States of America 3,529 2,034
Asia 134 510
---------- --------
Revenue 5,063 4,517
---------- --------
6. Earnings per share
Basis of Calculation
The basic earnings per share is calculated by dividing the
earnings attributable to ordinary shareholders for the year by the
weighted average number of ordinary shares in issue during the year
less the weighted average number of Matching Shares held by the
Epistem Share Investment Plan which are not yet vested.
The diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares in relation to
share options and share warrants and also the weighted average
Matching Shares held by the Epistem SIP which are not yet vested.
The number of share options has been adjusted to take into account
the issue price and the fair value, consistent with IAS 33,
"Earnings per share".
The adjusted weighted average number of shares in issue during
the year was 10,531,615 (2015: 10,011,341)
The dilutive weighted average number of shares in issue during
the year was 10,544,541 (2015: 10,314,444)
Due to the company being loss making during the year, the
"dilutive weighted average number of shares" has not been used in
the dilutive EPS calculation.
7. Finance Income and Costs
2016 2015
GBP'000 GBP'000
Gain on issue of convertible bond - 1,004
Movement in fair value of derivative embedded in Convertible Bond 37 73
Finance cost of Convertible Bond (304) (212)
Accounting adjustment to Convertible Bond finance cost (272) (205)
Foreign exchange movement in Convertible Bond (731) (298)
Interest receivable 7 16
Foreign exchange gains 192 238
-------- --------
Finance (costs)/income (1,071) 616
-------- --------
8. Convertible Bond
The Convertible Bond relates to the Collaboration and
Convertible Bond Purchase Agreement entered into on 22 July 2014
with the Global Health Investment Fund 1 LLC ("GHIF" or the "bond
holder"). Under the terms of the Agreement, the Company issued to
GHIF a five-year Convertible Bond totalling $8.0m (GBP4.7m on
conversion to GBP.) Further, as part of the Agreement, GHIF and the
Company entered into a Global Access Commitment. An amendment to
the Agreement came into effect on 11 July 2016.
The purpose of the Agreement is to fund the Company's
development, production and commercialization of Genedrive(R) to
address Global Health Challenges and achieve Global Health
Objectives. An outline (only) of the terms of the Agreement is
detailed below:
Convertible Bond Agreement terms in place at 30 June 2016
Unless previously converted or redeemed, the Convertible Bond
will mature on 21 July 2019 and interest will be payable half
yearly at the rate of 5% per annum.
The Bond Holder has a Purchaser Optional Conversion Period which
runs from 15 January 2015 to 15 May 2019 (or earlier in the event
of a change of control of the Company). The bond holder has the
option to convert all (but not part only) of the Convertible Bond
at the Conversion Price, initially GBP4.89 per Ordinary Share at
the Fixed Rate of Exchange of $1.6913:GBP1. ("The Fixed Rate of
Exchange") (The Conversion Price may be adjusted to take account of
changes by the Company of its capital structure or payment of
dividends etc.).
The Company has an option conversion period running from 22
January 2015 to 08 July 2019, during which the Company may convert
all (but not part only) of the Convertible Bond into Ordinary
Shares at the Conversion Price of GBP4.89 per Ordinary Share at the
Fixed Rate of Exchange of $1.6913:GBP1 if the current market prices
equals or exceeds 1.2 times the Conversion Price. (The Conversion
Price may be adjusted to take account of changes by the Company of
its capital structure or payment of dividends etc.).
The Company may redeem the whole of the Convertible Bond on any
interest payment date from 22 July 2016. In this event, the bond
holder may elect to receive full payment in Ordinary Shares based
on a conversion ratio calculated around the market price at the
time of notice of Redemption. Without such an election, the bond
will be redeemed at par in US dollars.
Global Access Commitment
Under the Global Access Agreement, the Company will undertake
appropriate regulatory strategy and registrations to secure access
for Genedrive(R) in Developing Countries in tuberculosis, malaria
or other infectious diseases agreed between the parties.
The Company agrees to establish a tiered pricing framework that
is commercially reasonable and reflects the needs of poor patients
in Developing Countries. The Company agrees, taking into account
its profitability and other commercial interests, to allocate
sufficient resources.
Terms of Amendment to Convertible Bond Agreement which came into
effect on 11 July 2016
The maturity date of the GHIF Bond will be extended by two years
to 21 July 2021 and the GHIF Bond will be split into two tranches,
with the first tranche of US$2m having a Conversion Price of
GBP1.50 per Ordinary Share and the second tranche of US$6m having a
Conversion Price remaining at GBP4.89 per Ordinary Share.
In respect of the Company conversion option, the Company will
have the option to convert the first tranche of US$2m into new
Ordinary Shares in circumstances where the average closing price of
the Company's Ordinary Shares is greater than or equal to GBP2.50
per ordinary Share for a period of 20 consecutive days.
In addition, for interest periods ending on or before (but not
after) 21 January 2019, the Company may elect to pay none or a
portion of the 5% interest payable semi-annually on the accrued and
outstanding principal amount of the GHIF Bond and instead
capitalise and compound some or all of such outstanding interest
due until the earlier of the date on which the GHIF Bond is repaid
if converted into Ordinary Shares.
The amendment became effective on 11 July 2016 and, as a result
has no impact on the results and balances for the current financial
year. The effect of the changes on the financial statements for the
forthcoming year will be outlined in the 2016 Annual Report and
Accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AKKDBDBDBBKD
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October 11, 2016 02:00 ET (06:00 GMT)
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