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RNS Number : 6104Y
GW Pharmaceuticals PLC
02 December 2014
GW Pharmaceuticals plc Reports 2014 Q4 and Full Year Financial
Results
-Conference Call Today at 8:00 a.m. ET, 1:00 p.m. GMT-
London, UK, 2 December 2014: GW Pharmaceuticals plc (NASDAQ:
GWPH, AIM: GWP, GW, the Company or the Group), a biopharmaceutical
company focused on discovering, developing and commercializing
novel therapeutics from its proprietary cannabinoid product
platform, announces financial results for the fourth quarter and
year ended 30 September 2014.
"GW's business has transformed over the last year principally as
a result of the rapid advance of our Epidiolex program to treat
orphan syndromes in the field of childhood epilepsy. During 2014,
we have raised significant capital from U.S. investors, commenced
treatment of approximately 200 children, obtained encouraging
clinical data, and commenced formal clinical development in the
U.S.," stated Justin Gover, GW's Chief Executive Officer. "In 2015,
we expect to complete much of the Epidiolex development program as
well as start to build a U.S. commercial presence in anticipation
of future launch. Beyond Epidiolex, we expect to report Phase 3
data from the Sativex cancer pain trials in early 2015 which, if
positive, would enable the filing of NDA in the U.S. during next
year. We also look forward to progressing multiple clinical trials
for our cannabinoid product pipeline."
2014 HIGHLIGHTS:
-- Epidiolex(R) (cannabidiol or CBD) childhood epilepsy program
o Company sponsored development programs in Dravet syndrome and
Lennox-Gastaut syndrome (LGS)
-- Phase 2/3 Dravet syndrome trial commenced in October 2014.
Part A on track to complete recruitment in December, with Part B
expected to commence in Q1 2015
-- Additional Phase 3 Dravet syndrome trial and two LGS Phase 3
trials on track to commence in Q1 2015
-- Orphan Drug Designation granted by the U.S. Food and Drug
Administration (FDA) for both Dravet syndrome and LGS, Fast Track
Designation for Dravet syndrome
-- Orphan Drug Designation granted by the European Medicines
Agency for Dravet syndrome
o FDA authorized physician-led expanded access program
-- Clinical effect data on 58 treatment-resistant children and
young adults released in October 2014 showing promising signals of
efficacy and safety
-- Approximately 410 children and young adults now authorized
for treatment with Epidiolex by FDA under 20 expanded access
Investigational New Drug Applications (INDs)
-- Approximately 200 children now receiving Epidiolex treatment
under expanded access INDs at 11 clinical sites in the U.S.
-- 6 patients being treated with Epidiolex under emergency
INDs
o State programs
-- State-based collaborations for Epidiolex clinical trials in
epilepsy with the States of Georgia and New York.
-- Sativex(R)
-- First Phase 3 cancer pain trial recruitment complete and last
patient due to exit study in December. Initial top-line data
available in early 2015. Second Phase 3 trial recruitment due to
complete Q1 2015 with data expected in Q2. Data intended to lead to
a New Drug Application (NDA) filing with the FDA in H2 2015
-- Fast Track designation awarded by FDA for treatment of cancer
pain
-- Special Protocol Assessment (SPA) ongoing with FDA for
proposed Sativex Phase 3 trial in the treatment of spasticity due
to Multiple Sclerosis
-- Agreement signed with Ipsen as exclusive distributor for
Sativex in Latin America (excluding Mexico)
-- Sativex approved in 27 countries and available for use in 15
countries. In-market sales volumes sold by GW's commercial partners
for the 2014 fiscal year increased by 50% over 2013
-- Cannabinoid pipeline product candidates
-- Additional epilepsy pipeline candidate GWP42006
(Cannabidivarin or CBDV), Phase 1 trial completed. Phase 2a trial
due to commence H1 2015
-- Phase 1b/2a trial of GWP42002:GWP42003 in the treatment of
glioma advancing to second phase. Safety data on initial cohort
from first phase assessed by independent safety monitoring board
with agreement to proceed into placebo-controlled phase; recent
publication by St. Georges University London researchers suggesting
a synergistic effect when combining cannabinoids with
radiotherapy
-- Top line data from Phase 2a trial of GWP42003 extract for the
treatment of ulcerative colitis show promising signals of efficacy
in patients who completed course of treatment
-- Phase 2a trial of GWP42003 for the treatment of schizophrenia
commenced in March 2014 with expected completion in H2 2015
-- Phase 2b trial of GWP42004 in type-2 diabetes commenced in
March 2014 with expected completion in 2016
Financial Highlights
-- Total revenue for the year ended 30 September 2014 of
GBP30.0m ($48.7m) compared to GBP27.3m ($44.3m) for the year ended
30 September 2013.
-- Net loss after tax for 2014 of GBP14.7m ($23.8m) compared to
GBP4.5m ($7.4m) in 2013, which primarily reflects the impact of
increased investment in R&D in 2014.
-- Two follow-on offerings of American Depositary Shares
("ADSs") on the NASDAQ Global Market raising total net proceeds
after expenses of approximately $212 million (GBP126.3 million)
-- Cash and cash equivalents at 30 September 2014 of GBP164.5m
($266.8m) compared to GBP38.1m ($61.7m) as at 30 September
2013.
Conference Call and Webcast Information
The Company will host a conference call and webcast to discuss
the 2014 fourth quarter and year-end financial results today at
8:00 a.m. ET / 1:00 p.m. GMT. To participate in the conference
call, please dial 877-407-8133 (toll free from the U.S. and
Canada), or 0800-756-3429 (toll free from the UK) or 201-689-8040
(international). Investors may also access a live audio webcast of
the call via the investor relations section of the Company's
website at http://www.gwpharm.com. A replay of the call will also
be available through the GW website shortly after the call and will
remain available for 30 days. Replay Numbers: (toll
free):1-877-660-6853, (international):1-201-612-7415. For both
dial-in numbers please use conference ID # 13595968.
About GW Pharmaceuticals plc
Founded in 1998, GW is a biopharmaceutical company focused on
discovering, developing and commercializing novel therapeutics from
its proprietary cannabinoid product platform in a broad range of
disease areas. GW commercialized the world's first plant-derived
cannabinoid prescription drug, Sativex(R) , which is approved for
the treatment of spasticity due to multiple sclerosis in 27
countries outside the United States. Sativex is also in Phase 3
clinical development as a potential treatment of pain associated
with advanced cancer. This Phase 3 program is intended to support
the submission of a New Drug Application for Sativex in cancer pain
with the U.S. Food and Drug Administration and in other markets
around the world. GW is also advancing an orphan drug program in
the field of childhood epilepsy with a focus on Epidiolex(R) ,
which is in Phase 2/3 clinical development for the treatment of
Dravet syndrome and which is also expected to enter Phase 3
clinical trials in the treatment of Lennox-Gastaut syndrome. GW has
a deep pipeline of additional cannabinoid product candidates which
includes compounds in Phase 1 and 2 clinical development for
glioma, ulcerative colitis, type 2 diabetes, and schizophrenia. For
further information, please visit www.gwpharm.com.
Forward-looking statements
This news release contains forward-looking statements that
reflect GW's current expectations regarding future events,
including statements regarding financial performance, the timing of
clinical trials, the relevance of GW products commercially
available and in development, the clinical benefits of Sativex(R)
and Epidiolex(R) and the safety profile and commercial potential of
Sativex and Epidiolex. Forward-looking statements involve risks and
uncertainties. Actual events could differ materially from those
projected herein and depend on a number of factors, including
(inter alia), the success of GW's research strategies, the
applicability of the discoveries made therein, the successful and
timely completion of uncertainties related to the regulatory
process, and the acceptance of Sativex, Epidiolex and other
products by consumer and medical professionals. A further list and
description of risks and uncertainties associated with an
investment in GW can be found in GW's filings with the U.S.
Securities and Exchange Commission. Existing and prospective
investors are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
GW undertakes no obligation to update or revise the information
contained in this press release, whether as a result of new
information, future events or circumstances or otherwise.
Note Regarding Expanded Access Studies
Expanded access studies are uncontrolled, carried out by
individual investigators, and not typically conducted in strict
compliance with Good Clinical Practices, all of which can lead to a
treatment effect which may differ from that in placebo-controlled
trials. Data from these studies provide only anecdotal evidence of
efficacy for regulatory review, contain no control or comparator
group for reference and are not designed to be aggregated or
reported as study results. Moreover, data from such small numbers
of patients may be highly variable. Such information may not
reliably predict data collected via systematic evaluation of the
efficacy in company-sponsored clinical trials. Reliance on such
information may lead to Phase 2 and 3 clinical trials that are not
adequately designed to demonstrate efficacy and could delay or
prevent GW's ability to seek approval of Epidiolex. Expanded access
programs may provide supportive safety information for regulatory
review. Physicians conducting these studies may use Epidiolex in a
manner inconsistent with the protocol, including in children with
conditions different from those being studied in GW-sponsored
trials. Any adverse events or reactions experienced by
subjects in the expanded access program may be attributed to
Epidiolex and may limit GW's ability to obtain regulatory approval
with labeling that GW considers desirable, or at all.
Enquiries:
GW Pharmaceuticals plc (Today) +44 20 3727 1000
Justin Gover, Chief Executive Officer (Thereafter) + 44 1980
557000
Stephen Schultz, VP Investor Relations 917 280 2424 / 401 500
(U.S.) 6570
FTI Consulting (Media Enquiries)
Ben Atwell / Simon Conway / John Dineen
(UK) + 44 20 3727 1000
Robert Stanislaro (U.S.) 212 850 5657
Trout Group, LLC (U.S. investor relations)
Todd James / Chad Rubin 646 378 2900
Peel Hunt LLP (UK NOMAD) + 44 20 7418 8900
James Steel / Clare Terlouw
GW Pharmaceuticals plc
("GW" or "the Company" or "the Group")
Preliminary Results for the Fourth Quarter and Year Ended 30
September 2014
OPERATIONAL OVERVIEW
GW Overview
GW is a biopharmaceutical company focused on discovering,
developing and commercializing novel therapeutics from its
proprietary cannabinoid product platform in a broad range of
disease areas. In 16 years of operations, GW has established a
world leading position in the development of plant-derived
cannabinoid therapeutics through its proven drug discovery and
development platform, a robust intellectual property portfolio and
its regulatory and manufacturing expertise.
GW commercialized the world's first plant-derived cannabinoid
prescription drug, Sativex(R) , which is approved for the treatment
of spasticity due to multiple sclerosis (MS) in 27 countries
outside the United States (U.S.). GW is also evaluating Sativex in
a Phase 3 program for the treatment of cancer pain intended to
support the submission of a New Drug Application (NDA) for Sativex
in cancer pain with the U.S. Food and Drug Administration (FDA) and
in other markets around the world.
Beyond Sativex, GW is advancing an orphan drug program in the
field of childhood epilepsy with a particular focus on Epidiolex(R)
, a liquid formulation of pure plant-derived cannabidiol (CBD).
Epidiolex has received Orphan Drug Designation from the FDA for
Epidiolex for the treatment of both Dravet syndrome and
Lennox-Gastaut syndrome (LGS), each of which are severe
infantile-onset, genetic, drug-resistant epilepsy syndromes. GW has
commenced a Phase 2/3 placebo-controlled clinical trial in patients
with Dravet syndrome and expects to commence an additional Phase 3
trial in Dravet syndrome and two Phase 3 trials in LGS in the first
quarter of 2015.
In addition, GW's cannabinoid platform offers a deep pipeline of
additional product candidates including distinct clinical-stage
candidates targeting epilepsy (CBDV), glioma, ulcerative colitis,
schizophrenia and type-2 diabetes.
U.S. Follow-on Offerings
In 2014, GW successfully completed two follow-on offerings on
the NASDAQ Global Market. In January, GW issued a total of
2,807,275 American Depositary Shares ("ADSs") at a price of $36.00
per ADS. In June, the Company issued a total of 1,455,000 ADSs at a
price of $86.83 per ADS. Total net proceeds for these two offerings
after expenses were approximately $212 million (GBP126.3 million).
The funds raised in these offerings are primarily intended to
advance the clinical development of Epidiolex, to support
pre-launch commercial activities for Epidiolex in the U.S., the
expansion of Epidiolex growing and manufacturing capability and
build-up of inventory in preparation for launch of Epidiolex, if
approved. GW also expects to use the funds toward the advancement
of other early stage pipeline opportunities, with a particular
focus on orphan diseases.
Epilepsy Drug Development Programs
GW is currently focused on two epilepsy development programs
that represent important product candidates within GW's epilepsy
franchise and have the potential to yield a variety of individual
orphan indications providing GW with significant new market
opportunities. These programs are for Epidiolex, a liquid
formulation of pure plant-derived CBD, and GWP42006, which features
cannabidivarin (CBDV). These development programs are funded
completely by GW and GW retains all rights to commercialize any and
all products that evolve from these programs.
Epidiolex(R)
GW has conducted extensive pre-clinical research with CBD in
epilepsy and has reported significant anti-epileptiform and
anticonvulsant activity using a variety of in vitro and in vivo
models. This research has shown the ability of CBD to treat
seizures in acute animal models of epilepsy with significantly
fewer side effects than existing anti-epileptic drugs.
GW is now undertaking a formal development program for
Epidiolexin the field of severe, drug-resistant childhood epilepsy.
The Company has received Orphan Drug Designation from the FDA for
Epidiolex for the treatment of both Dravet syndrome and LGS.
Additionally, GW has received Fast Track Designation from the FDA
and Orphan Designation from the European Medicines Agency (EMA) for
Epidiolex for the treatment of Dravet syndrome.
In October 2014, GW commenced a placebo-controlled Phase 2/3
clinical trial in Dravet syndrome. This Phase 2/3 trial is a
two-part, randomized double-blind, placebo-controlled parallel
group, safety, tolerability, pharmacokinetic and efficacy trial of
single and multiple doses of Epidiolex to treat Dravet syndrome in
children who are being treated with other anti-epileptic drugs.
Part one comprises the pharmacokinetic and dose-finding elements of
the trial. Part two is the Phase 3 element of the trial which will
compare the effect of Epidiolex with that of placebo. In addition
to this Phase 2/3 trial, GW expects to commence an additional Phase
3 trial in Dravet syndrome and two Phase 3 trials in LGS in the
first quarter of 2015.
In parallel with the Company's formal clinical trial program,
the FDA has granted 20 expanded access INDs and 7 individual
emergency INDs to independent investigators in the U.S. to treat a
total of approximately 410 children and young adults suffering from
intractable epilepsy with Epidiolex. To date, approximately 200
children and young adults are now receiving treatment with
Epidiolex in the U.S. at 11 clinical sites. Enrolment in this
program has accelerated in recent months and GW expects this rate
of enrolment to continue into the first half of 2015. Patients
being treated in the expanded access program suffer from a range of
treatment-resistant epilepsies. In the emergency cases, GW has
responded to, and the FDA has approved, emergency treatment
requests from physicians for children hospitalized as a result of
severe and potentially life-threatening seizures. So far as GW is
aware, 6 of the 7 children treated under emergency INDs remain on
Epidiolex treatment.
Trials conducted under these INDs contain no control or
comparator group for reference and these patient data are not
designed to be aggregated or reported as study results. Moreover,
data from such small numbers of patients may be highly variable.
Information obtained from these INDs may not reliably predict data
collected via systematic evaluation of efficacy in our sponsored
clinical trials. Such studies are carried out by individual
investigators and not conducted in strict compliance with Good
Clinical Practice.
In October 2014, GW reported clinical effect data on 58 patients
who had reached 12 weeks of treatment as well as safety data on 151
patients (58 patients with 12 weeks treatment plus an additional 93
patients who had yet to reach 12 weeks treatment). These data were
made available to GW from the independent physicians conducting
these studies.
Highlights from these data include:
-- Data on 58 patients with a wide range of drug-resistant
epilepsies treated with Epidiolex show a median overall reduction
in total seizure frequency of 40% after 12 weeks treatment. 43% of
patients obtained a greater than 50% reduction in total seizure
frequency.
-- 12 patients with Dravet syndrome reported a median overall
reduction in convulsive seizure frequency of 51% after 12 weeks
treatment. 58% of patients with Dravet syndrome obtained a greater
than 50% reduction in convulsive seizure frequency.
-- Approximately 95% of patients who have commenced treatment with Epidiolex remain on therapy.
-- The most common adverse events were somnolence and fatigue - 19% and 11% respectively.
Commenting on the data, Dr. Elizabeth Thiele, Director of the
Pediatric Epilepsy Program at Massachusetts General Hospital and
Harvard Professor of Neurology, said, "I am very encouraged with
the preliminary results from our open-label study of Epidiolex. I
think they show very promising signals of safety and efficacy in
patients, which include some of the most difficult epilepsy cases
we follow in our program. Based on my experience thus far, I
believe that Epidiolex has the potential to be an important advance
in treatment for these treatment-resistant children and will likely
have a significant role as a future therapy. I believe these data
fully support advancing into formal clinical development, and we
are very excited to participate with GW in the upcoming
placebo-controlled trials in Dravet and Lennox-Gastaut
syndromes."
GWP42006 - CBDV (cannabidivarin)
Separately, GW is developing GWP42006, which features the
non-psychoactive cannabinoid CBDV extracted from the cannabis
plant. CBDV is similar in chemical structure to CBD and has also
shown anti-epileptic properties across a range of in vitro and in
vivo models of epilepsy. GW has completed a Phase 1 clinical trial
of GWP42006. In this Phase 1 trial of 66 healthy subjects, GWP42006
demonstrated no safety or toxicity signals. CBDV was well tolerated
even at the highest tested dose and no significant side effects
were observed. There were no serious or severe adverse events, nor
any withdrawals due to adverse events. GW expects to commence a
Phase 2 study of GWP42006 in patients with epilepsy in the first
half of 2015.
GW has rights to a portfolio of intellectual property covering
CBD and CBDV in epilepsy. This portfolio, as at 1 November 2014,
includes fourteen patent families containing one or more pending
and/or issued patents with claims related to the use of CBD and/or
CBDV in the treatment of epilepsy as well as compositions,
extraction techniques, CBD and CBDV extracts and pure plant-derived
CBD.
Sativex in Cancer Pain
Sativex is an oromucosal spray consisting of a formulated
extract of the cannabis sativa plant that contains the principal
cannabinoids delta-9-tetrahydrocannabinol ("THC"), and CBD. GW is
currently evaluating Sativex in a Phase 3 clinical program to treat
persistent pain in people with advanced cancer who experience
inadequate pain relief from optimized chronic opioid therapy, the
current standard of care.
Pain is uncontrolled with opioid treatments in approximately 20%
of patients with advanced cancer, or 420,000 people in the U.S.
There are currently no approved non-opioid treatments for patients
who do not respond to, or experience negative side effects with,
opioid medications. GW believes that Sativex has the potential to
address a significant unmet need in this large market by treating
patients with a product that employs a differentiated non-opioid
mechanism of action, and offers the prospect of pain relief without
increasing opioid-related adverse side effects.
Sativex trials in the U.S. are being conducted under an IND
consisting of three Phase 3 clinical trials, the first two of which
are expected to enrol 760 patients in total (380 patients per
trial) and are intended to support the submission of an NDA with
the FDA for Sativex and in other markets around the world. Patient
recruitment in the first Phase 3 trial has completed and
recruitment in the second Phase 3 trial is expected to complete in
the first quarter of 2015. GW anticipates top-line results from the
first pivotal Phase 3 trial will be available in early 2015.
Top-line results from the second pivotal Phase 3 trial are expected
in the second quarter of 2015.
The results of the third Phase 3 trial are not intended to be
included in the initial regulatory filings if the results of the
first two pivotal Phase 3 trials provide a sufficient basis to
demonstrate the safety and efficacy of Sativex in the target
indication. In the event that either of the initial two Phase 3
trials do not provide sufficient evidence of efficacy, it is GW's
intention that this third Phase 3 trial be included in the Sativex
NDA filing assuming the data is supportive. The third Phase 3 trial
differs in design from the first two trials, employing a two--part
"enriched trial design" akin to that which was successfully
employed in the European MS spasticity trials program. The trial
involves exposing 540 patients to Sativex in a two--week
single--blind phase, or Phase A, following which responders will be
randomized either to stay on Sativex or switch to placebo in a
double-- blind phase for a five--week treatment period, or Phase B.
The primary efficacy analysis will be the mean change from baseline
in Phase B as measured using a 0 to 10 numeric rating scale (NRS).
The trial is designed to enrol 216 patients in Phase B.
Sativex has received Fast Track designation by the FDA. The
FDA's Fast Track program is designed to facilitate the development
of drugs that have demonstrated potential to treat diseases that
are serious, life threatening, and for which there is an unmet
medical need. The costs of the Phase 3 cancer pain program are
fully funded by Otsuka Pharmaceutical Co. Ltd, who hold exclusive
rights to commercialize Sativex in the U.S.
Sativex in MS Spasticity
MS affects 1.3 million people worldwide, of which up to 80%
suffer from spasticity, a symptom of MS characterized by muscle
stiffness and uncontrollable spasms. There is no cure for
spasticity and it is widely recognized that pre-Sativex available
oral treatments afford only partial relief and have unpleasant side
effects. Sativex offers the prospect of treating patients who have
failed existing oral therapies and who might otherwise require
invasive and costly alternative treatment options.
Sativex is currently approved as a treatment for MS spasticity
in 27 countries outside of the U.S. and is currently available on
prescription in 15 countries. In 2014, GW expanded its Sativex
commercial partnerships with an exclusive agreement for Ipsen to
promote and distribute Sativex in Latin America (excluding Mexico
and the Islands of the Caribbean).
GW believes that MS spasticity represents an attractive
indication for Sativex in the U.S. and has submitted to the FDA a
request for Special Protocol Assessment, or SPA, of a single Phase
3 study protocol, for which the Company has not yet reached
agreement. Subject to reaching agreement with the FDA, GW expects
to commence the trial in 2015. If the trial is conducted and is
successful, GW intends to submit the results, along with the
ex-U.S. clinical data collected in our clinical development program
for MS spasticity to date, in an NDA for MS spasticity.
As with the U.S. Phase 3 cancer pain development program, GW
expects the costs of the Phase 3 MS program to be fully funded by
Otsuka.
Other Cannabinoid Platform Pipeline Programs
Orphan Program in Glioma
GW is testing its product candidate GWP42002:GWP42003 in the
treatment of recurrent glioblastoma multiforme, or GBM, a
particularly aggressive brain tumor which is considered a rare
disease by the FDA and the European Medicines Agency. Glioblastoma
is particularly difficult to treat and claims the lives of about
5,200 people each year. It also has a particularly poor prognosis
as the rate of survival after five years of patients' diagnosis is
around 10%.
In pre-clinical models, GW has shown these two cannabinoids when
administered together to be orally active in the treatment of
gliomas and have shown tumor response to be positively associated
with tissue levels of cannabinoids.
In 2014, GW commenced a Phase 1b/2a clinical trial in 20
patients with recurrent GBM. The first phase of this trial was an
open-label safety evaluation of GWP42002:GWP42003 in combination
with temozolomide. This phase, comprising two cohorts of three
patients each completing two cycles (months) of treatment is now
complete. Safety data from these initial patient cohorts has been
assessed by the independent safety monitoring board and their
approval has been given to proceed into a placebo-controlled phase
which has recently commenced randomization.
A recent study carried out in collaboration with GW by
specialists at St George's, University of London, was the first to
show a dramatic effect on brain tumours when combining cannabinoids
with irradiation. This research, published in Molecular Cancer
Therapeutics, showed that tumour growth in mouse brain was
significantly slowed when a combination of THC and CBD was used
with irradiation and tumour inhibition was higher than observed
with irradiation alone.
Ulcerative Colitis
Ulcerative colitis, or UC, is a chronic, relapsing inflammatory
disease affecting the colon which can cause pain, urgent diarrhea,
severe tiredness and loss of weight. In addition, patients with
chronic intestinal inflammation have an increased risk of
developing bowel cancers. According to the Crohn's & Colitis
Foundation of America, UC may affect as many as 700,000 Americans.
The four major classes of medication used today to treat ulcerative
colitis are aminosalicylates (5-ASA), steroids, immune modifiers
and antibiotics.
In October 2014, GW reported preliminary top line results from a
10-week randomized, double-blind, placebo controlled Phase 2a study
of GWP42003 extract, which features CBD as the primary cannabinoid
and which also contains other cannabinoid and non-cannabinoid
components, in the treatment of UC in patients who had not been
able to gain remission from the condition despite first line
treatment with salicylates, and in some cases immunosuppressive
therapy. This study follows pre-clinical research that has shown
GWP42003 to have anti-inflammatory properties in a number of
accepted animal models of inflammation, notably of the gut and the
joints.
The primary endpoint of this study was the percentage of
participants achieving remission quantified by the MAYO score and
the study also included a range of secondary endpoints in
particular focusing on benefits for subjects on symptom control, as
well as other related secondary measures. While the study did not
meet the primary endpoint, data from this 60 patient study showed
promising signals of efficacy across a range of secondary endpoints
in patients who completed the course of treatment. Thirteen
patients withdrew from the study due to adverse events on drug
(most of these withdrawals were due to minor THC-related adverse
events such as dizziness), compared with seven on placebo.
GW believes that, in patients who were able to take GWP42003 for
a prolonged treatment period, these results provide good evidence
for a therapeutic effect in the treatment of UC in patients who had
previously failed to respond to first line therapy. In addition, GW
believes that the results support further investigation of GWP42003
albeit with a modified dosage form.
Schizophrenia
Schizophrenia is a chronic disease that manifests through
disturbances of perception, thought, cognition, emotion, motivation
and motor activity. Over a lifetime, about 1% of the population
will develop schizophrenia. GWP42003 has shown notable
anti--psychotic effects in accepted pre--clinical models of
schizophrenia and importantly has also demonstrated the ability to
reduce the characteristic movement disorders induced by currently
available anti--psychotic agents. The mechanism of GWP42003 does
not appear to rely on the dopamine D2 receptor augmentation of
standard antipsychotics and therefore has the potential to offer a
novel treatment option in this therapeutic area.
In March 2014, GW commenced a Phase 2a trial of GWP42003 in the
treatment for schizophrenia. This study is expected to enrol
approximately 80 patients with an estimated completion date of the
second half of 2015.
Type-2 Diabetes
In March 2014, GW commenced a 12-week randomized, double blind,
placebo controlled Phase 2b study of GWP42004 to treat type-2
diabetes. GWP42004 is an orally administered product which features
plant-derived tetrahydrocannabivarin (THCV) as its active
ingredient. THCV is distinct from THC and does not share its
intoxicating psychoactive effects. The primary objective of this
study is to compare the change in glycemic control in participants
with type-2 diabetes when treated with one of three doses of
GWP42004 or placebo, as add-on therapy to metformin with the
primary endpoint being change from baseline to the end of treatment
in mean glycosylated haemoglobin A1c (HbA1c) level. The safety and
tolerability of GWP42004 compared with placebo will also be
assessed. This study is expected to enrol approximately 200
patients with an estimated completion date in 2016.
This study follows positive findings reported in November 2012
from a Phase 2a exploratory study, showing evidence of
anti-diabetic effects and supporting advancement of GWP42004 into
further clinical development. These findings were consistent with
pre-clinical data demonstrating that GWP42004 protects the
insulin-producing cells of the pancreatic islets, a highly
desirable feature of a new anti-diabetic medicine, increases
insulin sensitivity, and reduces fasting plasma glucose levels.
GW believes that if the Phase 2b study confirms the Phase 2a
findings, GWP42004 would have the potential to offer a novel
orally-administered treatment option in this large potential
market.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in
conjunction with the unaudited consolidated financial information
contained herein. GW presents its consolidated financial
information in pounds sterling and using the recognition and
measurement principles of International Financial Reporting
Standards, or IFRS, as endorsed by the European Union and as issued
by the International Accounting Standards Board, or IASB.
Solely for the convenience of the reader, unless otherwise
indicated, all pound sterling amounts stated in the Condensed
Consolidated Balance Sheet as at 30 September 2014 and in the
Condensed Consolidated Income Statement, Condensed Consolidated
Statement of Comprehensive Income, Condensed Consolidated Statement
of Changes in Equity and Condensed Consolidated Cash Flow Statement
for the 3 months and for the year ended 30 September 2014 have been
translated into U.S. dollars at the rate on 30 September 2014 of
$1.6219 to GBP1.00. These translations should not be considered
representations that any such amounts have been, could have been or
could be converted into U.S. dollars at that or any other exchange
rate as at that or any other date.
Results of Operations:
Comparison of three month periods ended 30 September 2014 and 30
September 2013:
Revenue
Total revenue for the three months ended 30 September 2014 was
GBP7.4 million, an increase of GBP0.3 million compared to the
GBP7.1 million for three months ended 30 September 2013.
This reflects an increase of GBP0.3 million in research and
development fees to GBP6.1 million for the three months ended 30
September 2014 from GBP5.8 million for the three months ended 30
September 2013 relating to increased activities associated with
Otsuka-funded Phase 3 cancer pain trials.
GW's Sativex product sales revenue of GBP1.0 million for the
three months ended 30 September 2014 was in line with the three
months ended 30 September 2013. However, in-market sales volumes
sold by GW's commercial partners for the three months ended 30
September 2014 were 50% higher than in the three months ended 30
September 2013, primarily driven by increasing demand in Italy and
Germany.
Cost of sales
Cost of sales for the three months ended 30 September 2014 was
GBP0.4 million, consistent with the three months ended 30 September
2013.
Research and development expenditure
Total research and development expenditure for the three months
ended 30 September 2014 was GBP12.3 million, an increase of GBP3.1
million compared to the GBP9.2 million for the three months ended
30 September 2013. The GBP3.1 million increase resulted from a
GBP0.3 million increase in partner-funded research and development,
linked to the Otsuka-funded Phase 3 cancer pain clinical program,
and a GBP2.8 million increase to GW-funded R&D. The increase in
GW-funded R&D was principally linked to:
-- GBP1.0 million increase in staff, employment-related expenses
and overheads driven by increased headcount as GW has expanded its
team in the UK and U.S. to execute the epilepsy development
program.
-- GBP0.8 million increase in epilepsy clinical trials spend and
other GW-funded clinical program costs - reflecting the costs
associated with the set-up phase of GW's Dravet and Lennox Gastaut
syndrome Epidiolex trials and the costs of completing the
ulcerative colitis trial, plus costs of providing regulatory
support and Epidiolex under the increasing number of FDA-authorized
expanded access INDs.
-- GBP0.3 million increase in costs of growing an increased
volume of high CBD plant materials for the Epidiolex development
program.
-- GBP0.3 million increase in R&D consumables associated with GW's CBD research.
-- GBP0.2 million increase in provision for payroll taxes on
unrealized staff share option gains and share-based payment
charges.
-- GBP0.2 million increase in pre-clinical research activities
associated with GW's Epidiolex program.
Management and administrative expenses
Management and administrative expenses for the three months
ended 30 September 2014 was GBP1.8 million, an increase of GBP1.0
million compared to the GBP0.8 million recorded for the three
months ended 30 September 2013. The increase was principally linked
to:
-- GBP0.5 million in respect of employment-related expenses.
-- GBP0.2 million in respect of increased accountancy, audit and
investor relation costs arising from GW's U.S. listing and
Sarbanes-Oxley compliance.
-- GBP0.2 million in respect of property costs and increased
travel costs, primarily to the U.S. by staff involved in the
establishment of its U.S. based operations.
Net foreign exchange gains / losses
Net foreign exchange was a gain of GBP5.4 million in the three
months ended 30 September 2014, an increase of GBP5.7 million
compared to the GBP0.3 million loss recorded for the three months
ended 30 September 2013. This reflected a foreign exchange gain
predominantly arising from the retranslation of the Group's U.S.
dollar denominated cash balance at the closing U.S. dollar to GBP
sterling exchange rate of 1.6219 as at 30 September 2014. Dollar
denominated cash deposits totaled $169 million (GBP104.0 million
equivalent) at 30 September 2014 and averaged $180 million in the
three month period.
Tax
The tax credit for the three months ended 30 September 2014 was
GBP1.9 million, an increase of GBP1.2 million from GBP0.7 million
in the three months ended 30 September 2013. The current period
reflects a GBP2.2 million increase in the research and development
tax credit claim that the Group expects to submit in the near
future in respect of research and development expenditure incurred
in 2014, offset by the recording of GBP0.3 million of deferred tax
expense associated with profits earned in the period by GW Pharma
Limited, the Group's principle commercial subsidiary, due to the
utilization of previously recognized loss attributes.
Comparison of full years ended 30 September 2014 and 2013:
Revenue
Total revenue for the year to 30 September 2014 was GBP30.0
million, compared to GBP27.3 million for the year ended 30
September 2013. This GBP2.7 million increase reflects:
- GBP2.2 million increase in Sativex product sales revenues to
GBP4.4 million for the year ended 30 September 2014 compared to
GBP2.2 million for the year ended 30 September 2013.
- GBP0.7 million increase in research and development fees to
GBP24.3 million for the year ended 30 September 2014 from GBP23.6
million for the year ended 30 September 2013.
- GBP0.3 million decrease in milestone income, reflecting the
fact that the year to 30 September 2013 included a GBP0.3 million
Italian commercial pricing approval milestone from Almirall.
- GBP0.1 million increase in license, collaboration and
technical access fees to GBP1.4 million for the year ended 30
September 2014 from GBP1.3 million for the year ended 30 September
2013, reflecting the Ipsen distribution agreement signed in January
2014.
The increase in GW's Sativex product sales revenue for the year
ended 30 September 2014 compared to the year ended 30 September
2013 was driven by a combination of the 65% increase in volume of
Sativex inventory shipped to GW's commercial partners and the fact
that the GBP1.1 million adverse impact of the German pricing
decision (explained further below) in 2013 was not repeated in
2014. The Sativex volume increase was driven by significant
increases in the number of vials shipped to Germany and Italy
following strong in-market sales growth in these countries by GW's
partner Almirall during 2014.
Sativex in-market sales volumes sold by GW's commercial partners
for the year ended 30 September 2014 were 50% higher than in the
year ended 30 September 2013.
Sativex product sales revenue in the year ended 30 September
2013 was negatively impacted by the German National Association of
Statutory Health Insurance Funds decision to impose a price
reduction on Sativex sales in Germany effective for sales from 1
July 2012. Consequently, a GBP1.1 million rebate provision, for the
revenue rebate due to Almirall from GW was recognized in the year
ended 30 September 2013.
Research and development fees charged to Otsuka for the year to
30 September 2014 were GBP24.3 million, compared to GBP23.6 million
for the year ended 30 September 2013. This GBP0.7 million increase
reflects additional research and development expenditure associated
with the Sativex U.S. development program. Further details are
given in the expenditure section below.
Cost of sales
Cost of sales for the year ended 30 September 2014 was GBP2.1
million, an increase of GBP0.8 million compared to GBP1.3 million
for the year end ended 30 September 2013. The GBP0.8 million
increase reflects the 65% increase in the volume of Sativex
inventory shipped to partners in the year ended 30 September
2014.
Research and development expenditure
Total research and development expenditure for the year ended 30
September 2014 was GBP43.5 million, an increase of GBP10.8 million
compared to GBP32.7 million for the year ended 30 September 2013.
The increase resulted from a GBP0.7 million increase in
partner-funded research and development, linked to the
Otsuka-funded Phase 3 cancer pain clinical program, and a GBP10.1
million increase to GW-funded R&D. The increase in GW-funded
R&D is linked primarily to development of Epidiolex and CBDV
epilepsy product candidates, and other pipeline product development
activities. The increase was driven by:
-- GBP3.3 million increase in staff and employment-related
expenses linked to increased headcount as the Company expand its
team to enable execution of the epilepsy development program.
-- GBP2.7 million increase in epilepsy and other GW-funded
clinical program costs - reflecting the costs associated with the
set-up phase for GW's Dravet and Lennox-Gastaut Epidiolex studies,
cost of completion of the ulcerative colitis trial and costs of
providing regulatory support and Epidiolex under the increasing
number of FDA-authorized expanded access INDs.
-- GBP1.5 million increase in the provision held for future
payroll taxes on unrealized staff share option gains, driven by the
increase in the GW share price during the year.
-- GBP1.0 million increase in growing costs associated with
increased volume of high CBD plant material for the Epidiolex
development program.
-- GBP0.9 million increase in pre-clinical activities associated
primarily with GW's Epidiolex program.
-- GBP0.4 million increase in share-based payment charges.
-- GBP0.3 million increase in depreciation on R&D assets.
Segmental results
In Note 3, a segmental analysis of the Company's business is
provided showing the income statement split into the three business
segments of the Group: Commercial, Sativex R&D and Pipeline
R&D.
The Commercial business generated a segmental result of GBP4.5
million (2013: GBP3.0 million) from product sales, milestones and
licence fee revenues received from commercial partners. The GBP1.5
million increase was largely due to growth in the gross margin
earned from increased Sativex sales volumes.
Investment in Sativex R&D was GBP26.4 million (2013: GBP23.7
million), of which GBP23.6 million (2013: GBP19.3 million) was
Otsuka funded Phase 3 cancer pain expenditure. The remaining GBP2.8
million (2013: GBP4.4 million) was funded by GW.
Investment in Pipeline R&D was GBP17.1 million (2013: GBP9.2
million), of which Otsuka funded GBP0.7 million (2013: GBP4.3
million). The remaining GBP16.4 million (2013: GBP4.9 million) was
funded by GW.
Management and administrative expenses
Management and administrative expenses for the year ended 30
September 2014 was GBP7.3 million, an increase of GBP3.7 million
from the GBP3.6 million incurred in the year ended 30 September
2013. This includes:
-- A GBP3.0 million increase in respect of employee-related
expenses, comprising a GBP1.2 million increase in the charge in
respect of the provision for payroll taxes on unrealized staff
share option gains, a GBP1.4 million increase in payroll and
share-based payment costs and a GBP0.4 million increase in payroll
taxes on realized staff share option gains.
-- A GBP0.5 million increase in respect of increased
accountancy, audit and investor relation costs arising from GW's
U.S. listing and Sarbanes-Oxley compliance.
-- A GBP0.2 million increase in respect of property and
increased travel costs associated with travel to the U.S. by GW
staff involved with establishment of the Company's U.S.
operations.
Net foreign exchange gains / (losses)
Net foreign exchange gains/losses for the year ended 30
September 2014 was a gain of GBP3.2 million, an increase of GBP3.4
million from the GBP0.2 million loss incurred for the year ended 30
September 2013. This increase resulted from unrealized gains from
translating our $169 million dollar denominated cash deposits to
pounds sterling at the closing balance sheet exchange rate of
1.6219 (GBP104.0 million equivalent at 30 September 2014). GW
expects to continue to hold a substantial proportion of its cash
deposits in U.S. dollars to match future research and development
expenditure in the U.S. and, as a result can expect to experience
continued exchange rate related volatility in exchange related
gains and losses.
Taxation
Our tax credit was GBP4.9 million for the year ended 30
September 2014, which represents a decrease of GBP0.9 million
compared to a GBP5.8 million credit recorded in the year ended 30
September 2013.
In the year ended 30 September 2014, GW recorded a tax credit of
GBP4.9 million made up of: (i) the recognition of an accrued GBP5.3
million research and development tax credit to be claimable by GW
Research Limited in respect of the research and development
expenditure incurred in the year ended 30 September 2014; (ii) the
recognition of an additional GBP0.3 million of research and
development tax credits in respect of the year ended 30 September
2013 in its principal research subsidiary, GW Research Limited,
following the submission of tax returns for that period; (iii) the
recognition of an additional GBP0.8 million deferred tax asset in
respect of cumulative trading losses which GW intends to utilize to
offset future trading profits by GW Pharma Limited, the Group's
principal commercial trading subsidiary and (iv) recording of
GBP1.5 million of deferred tax expense due to the fact that
previously recognized loss attributes have been utilized to offset
profits earned in the year by GW Pharma Limited.
In the year ended 30 September 2013, GW reached an agreement
with the UK tax authority, HMRC, regarding the tax computations GW
submitted for the year ended 30 September 2012. The total tax
credit for the prior year of GBP5.8 million was made up of: (i) the
recognition of a GBP2.0 million research and development tax credit
by GW Research Limited in respect of 2013 research and development
expenditure; (ii) the recognition of an additional GBP2.9 million
of research and development tax credits in respect of the year
ended 30 September 2012 by GW Research Limited and (iii) the
recognition of a net GBP0.9 million deferred tax asset in respect
of cumulative trading losses of GW Pharma Limited.
Profitability
Loss before tax for the year ended 30 September 2014 was GBP19.6
million (2013: GBP10.4 million).
This loss was decreased by the tax credit, resulting in a
post-tax loss for the year of GBP14.7 million (2013: GBP4.5
million).
Liquidity
Cash Flow
Net cash used by operations for the year ended 30 September 2014
of GBP15.8 million was GBP5.5 million higher than the GBP10.3
million used by operations recorded in the year ended 30 September
2013, principally reflecting the increase in investment in
Epidiolex and other GW-funded research and development
activities.
GBP3.2 million of research and development tax credits were
received in the year ended 30 September 2014 compared to the GBP2.8
million received during the year ended 30 September 2013. Further
details of research and development tax credit claims are given in
the taxation section above.
Capital expenditure recorded for the year ended 30 September
2014 of GBP7.3 million, consisting primarily of upgrades to Sativex
and Epidiolex manufacturing facilities, was GBP5.1 million higher
than the GBP2.2 million recorded for the year ended 30 September
2013.
Net cash inflow from financing activities increased by GBP126.0
million to GBP144.3 million in the year ended 30 September 2014
compared to GBP18.3 million recorded for the year ended 30
September 2013. This increase reflects the net proceeds of GBP69.5
million received from the follow-on offering in June 2014, GBP56.8
million received from the follow-on offering in January 2014,
GBP7.8 million fit out funding from the Group's landlord to fund
the expansion and upgrades to manufacturing facilities, GBP5.3
million of proceeds from the exercise of warrants and GBP5.0
million from proceeds on exercise of share options.
The above cash flows resulted in net cash inflow for the year
ended 30 September 2014 of GBP126.4 million compared to a net cash
inflow of GBP8.7 million for the year ended 30 September 2013.
Financial Position
The Group's cash position comprises cash balances together with
amounts held on short term deposit. As at 30 September 2014, total
cash was GBP164.5 million (2013: GBP38.1 million).
Property, plant and equipment
Property, plant and equipment at 30 September 2014 increased by
GBP6.1 million to GBP11.6 million from GBP5.5 million at 30
September 2013. This increase primarily reflects the upgrade and
expansion of new manufacturing and growing facilities for Sativex
and Epidiolex.
Inventories
Inventories at 30 September 2014 increased by GBP0.1 million to
GBP4.8 million from GBP4.7 million at 30 September 2013.
Inventories consist of finished goods, consumable items and work in
progress and are stated net of a GBP0.4 million realisable value
provision (30 September 2013: GBP1.6 million). During the year
ended 30 September 2014, the provision for inventories reduced by
(i) GBP1.0 million as a result of having utilised some of the
Group's surplus inventory to manufacture Sativex in the period and
(ii) GBP0.8 million due to the write off of previously provided for
inventories, offset by an additional provision of GBP0.6 million to
transfer work-in-progress materials to R&D programs.
Trade receivables and other receivables
Trade and other receivables at 30 September 2014 increased by
GBP0.2 million to GBP1.9 million from GBP1.7 million at 30
September 2013. This increase primarily reflects recoverable VAT on
R&D expenditure.
Trade and other payables
Current trade and other payables at 30 September 2014 increased
by GBP3.0 million to GBP12.4 million from GBP9.4 million at 30
September 2013. This increase reflects a GBP2.2 million increase in
the provision for payroll taxes on unrealized staff share option
gains, a GBP0.4 million increase in payroll taxes payable due to
HMRC, a GBP0.2 million increase in rebates and GBP0.2 million
arising from the current portion on expected repayments of the fit
out funding provided by the Group's landlord to fund the expansion
and upgrades to manufacturing facilities.
Non-current trade and other payables at 30 September 2014
increased by GBP7.9 million from GBPnil at 30 September 2013. This
increase reflects recognition of the liability to repay the advance
funding received from the Group's landlord to fund the expansion
and upgrades to manufacturing facilities. This balance of GBP7.9
million reflects the non-current portion of the repayments,
expected to be repaid in the form of lease rentals commencing upon
the completion of construction, expected in Q3 2015, over a 15 year
term.
Headcount
Average headcount of the Group for the year was 223 (2013: 188).
The increase in staff numbers reflects the expansion of operations
necessary to support GW's development and scale up activities for
Epidiolex, preparation for the Sativex U.S. NDA and increased
research activities associated with the Company's pipeline of
promising early-stage product candidates.
2015 Guidance:
GW expects continued in-market sales volume growth by commercial
partners to result in steady growth in Sativex sales revenues in
2015.
Consistent with the use of proceeds commitments made at the time
of our 2014 equity offerings, GW expects cash expenditure to
increase significantly in 2015. There are a number of drivers for
this:
- The Company expects to complete recruitment into the Epidiolex
Phase 3 clinical trials in Dravet and Lennox Gastuat syndromes by
the end of 2015.
- The Company expects to increase the scale of growing and
manufacturing activities in preparation for the future anticipated
launch of Epidiolex.
- The Company expects to increase spend on U.S. commercial
operations in preparation for future commercialization of
Epidiolex.
As a result, GW expects net cash outflow from operating
activities to increase to approximately GBP50 million. Capital
expenditure is expected to increase to approximately GBP22 million
in order to complete construction of the Sativex manufacturing
facility in preparation for anticipated U.S. launch, as well as to
expand Epidiolex growing and manufacturing facilities. Total cash
outflow for the 2015 financial year is therefore expected to be
approximately GBP72 million. It should be noted that, in the event
that the four Epidiolex clinical trials recruit as anticipated in
2015, Epidiolex-related clinical trial expenditure would be
expected to decrease in 2016.
GW Pharmaceuticals plc
Consolidated income statement
For the three months and year ended 30 September 2014
Year ended Year ended Year ended
30 September 30 September 30 September
Notes 2014 2014 2013
$000's GBP000's GBP000's
Revenue 3 48,730 30,045 27,295
Cost of sales (3,341) (2,060) (1,276)
Research and development expenditure 4 (70,512) (43,475) (32,697)
Management and administrative
expenses (11,899) (7,337) (3,555)
Net foreign exchange gain/(loss) 5,170 3,188 (237)
Operating loss (31,852) (19,639) (10,470)
Interest expense (99) (61) (64)
Interest income 210 130 178
------------------------------------- ----- ------------ ------------ ------------
Loss before tax (31,741) (19,570) (10,356)
Tax benefit 6 7,965 4,911 5,807
------------------------------------- ----- ------------ ------------ ------------
Loss for the year (23,776) (14,659) (4,549)
------------------------------------- ----- ------------ ------------ ------------
Loss per share
- basic 7 (11.3)c (7.0)p (3.0)p
------------------------------------- ----- ------------ ------------ ------------
- diluted 7 (11.3)c (7.0)p (3.0)p
------------------------------------- ----- ------------ ------------ ------------
Three months Three months Three months
ended ended ended
30 September 30 September 30 September
2014 2014 2013
$000's GBP000's GBP000's
Revenue 12,032 7,419 7,121
Cost of sales (680) (419) (351)
Research and development expenditure (19,898) (12,269) (9,165)
Management and administrative
expenses (2,991) (1,844) (763)
Net foreign exchange gain/(loss) 8,777 5,411 (278)
Operating loss (2,760) (1,702) (3,436)
Interest payable (4) (2) (19)
Interest income 81 50 67
-------------------------------------- ------------ ------------ ------------
Loss on ordinary activities before
taxation (2,683) (1,654) (3,388)
Tax benefit 3,140 1,936 736
-------------------------------------- ------------ ------------ ------------
Profit/(loss) on ordinary activities
after taxation 457 282 (2,652)
-------------------------------------- ------------ ------------ ------------
Earnings/(loss) per share
- basic 0.2c 0.1p (1.5)p
-------------------------------------- ------------ ------------ ------------
- diluted 0.2c 0.1p (1.5)p
-------------------------------------- ------------ ------------ ------------
GW Pharmaceuticals plc
Consolidated balance sheet
As at 30 September 2014
30 September 30 September 30 September
Notes 2014 2014 2013
$000's GBP000's GBP000's
Non-current assets
Intangible assets -
goodwill 8,450 5,210 5,210
Property, plant & equipment 18,877 11,639 5,476
Deferred tax asset(1) 449 277 895
27,776 17,126 11,581
---------------------------- ----- ------------ ------------ ------------
Current assets
Inventories 8 7,748 4,777 4,661
Taxation recoverable 8,517 5,251 2,900
Trade and other receivables 9 3,012 1,857 1,733
Cash and cash equivalents 266,788 164,491 38,069
---------------------------- ----- ------------ ------------ ------------
286,065 176,376 47,363
---------------------------- ----- ------------ ------------ ------------
Total assets 313,841 193,502 58,944
---------------------------- ----- ------------ ------------ ------------
Current liabilities
Trade and other payables 10 (20,073) (12,376) (9,440)
Obligations under finance
leases 12 (204) (126) (100)
Deferred revenue 11 (7,829) (4,827) (3,181)
---------------------------- ----- ------------ ------------ ------------
(28,106) (17,329) (12,721)
Non-current liabilities
Trade and other payables 10 (12,857) (7,927) -
Obligations under finance
leases 12 (2,889) (1,781) (1,905)
Deferred revenue 11 (12,782) (7,881) (8,916)
---------------------------- ----- ------------ ------------ ------------
Total liabilities (56,634) (34,918) (23,542)
---------------------------- ----- ------------ ------------ ------------
Net assets 257,207 158,584 35,402
---------------------------- ----- ------------ ------------ ------------
Equity
Share capital 13 384 237 178
Share premium account 357,712 220,551 84,005
Other reserves 31,238 19,260 20,184
Retained earnings (132,127) (81,464) (68,965)
---------------------------- ----- ------------ ------------ ------------
Shareholders' funds 257,207 158,584 35,402
---------------------------- ----- ------------ ------------ ------------
(1) Deferred tax asset as at 30 September 2013 has been
reclassified from current assets to non-current assets.
This announcement was approved by the Board of Directors on 2
December 2014.
GW Pharmaceuticals plc
Consolidated statement of changes in equity
For the year ended 30 September 2014
Share
Share Premium Other Accumulated
Capital Account Reserves Deficit Total
GBP000's GBP000's GBP000's GBP000's GBP000's
------------------------------------ --------- --------- --------- ----------- ---------
At 1 October 2012 133 65,947 20,184 (65,032) 21,232
Issue of share capital 45 19,725 - - 19,770
Expenses associated with new equity
issue - (1,670) - - (1,670)
Exercise of share options - 3 - - 3
Share-based payment transactions - - - 616 616
Loss for the year - - - (4,549) (4,549)
------------------------------------ --------- --------- --------- ----------- ---------
Balance at 30 September 2013 178 84,005 20,184 (68,965) 35,402
Issue of share capital 51 127,315 - - 127,366
Expenses associated with new equity
issue - (1,067) - - (1,067)
Exercise of share options 4 5,014 - - 5,018
Exercise of warrants 4 5,284 (922) 922 5,288
Share-based payment transactions - - - 1,238 1,238
Loss for the year - - - (14,659) (14,659)
Other comprehensive expense - - (2) - (2)
------------------------------------ --------- --------- --------- ----------- ---------
Balance at 30 September 2014 237 220,551 19,260 (81,464) 158,584
------------------------------------ --------- --------- --------- ----------- ---------
Consolidated statement of comprehensive income
For the year ended 30 September 2014
Year ended Year ended
30 September 30 September
2014 2013
GBP000's GBP000's
------------------------------------------------- ------------- -------------
Loss for the year (14,659) (4,549)
Items that may be reclassified subsequently to
profit or loss
Exchange differences on retranslation of foreign
operations (2) -
Other comprehensive expense for the year (2) -
------------------------------------------------- ------------- -------------
Total comprehensive expense for the year (14,661) (4,549)
------------------------------------------------- ------------- -------------
GW Pharmaceuticals plc
Consolidated cash flow statement
For the year ended 30 September 2014
Year ended Year ended Year ended
30 September 30 September 30 September
2014 2014 2013
$000's GBP000's GBP000's
------------------------------------------------------------------------ ------------- ------------- -------------
(Loss)/profit for the year (23,775) (14,659) (4,549)
Adjustments for:
Interest payable 99 61 64
Interest income (211) (130) (178)
Tax (7,965) (4,911) (5,807)
Depreciation of property, plant and equipment 2,267 1,398 989
Net foreign exchange gains (3,043) (1,876) (25)
(Decrease)/increase in allowance for doubtful debts - - (26)
Decrease in provision for inventories (662) (408) (530)
Share-based payment charge 2,008 1,238 616
Losses on disposal of property, plant and equipment 3 2 -
------------------------------------------------------------------------ ------------- ------------- -------------
(31,279) (19,285) (9,446)
Decrease/(increase) in inventories 473 292 (594)
(Increase) / decrease in trade receivables and other assets (230) (142) (108)
Increase / (decrease) in trade and other payables and deferred revenue 5,398 3,328 (152)
------------------------------------------------------------------------ ------------- ------------- -------------
Cash (used in)/generated by operations (25,638) (15,807) (10,300)
Research and development tax credits received 5,159 3,181 2,832
------------------------------------------------------------------------ ------------- ------------- -------------
Net cash (outflow)/inflow from operating activities (20,479) (12,626) (7,468)
Investment activities
Interest received 235 145 167
Purchases of property, plant and equipment (11,765) (7,254) (2,243)
Proceeds from sale or property, plant and equipment 23 14 -
------------------------------------------------------------------------ ------------- ------------- -------------
Net cash outflow from investing activities (11,507) (7,095) (2,076)
Financing activities
Proceeds on exercise of share options 8,139 5,018 3
Proceeds of new equity issue 206,577 127,367 19,770
Expenses of new equity issue (1,731) (1,067) (1,670)
Proceeds of warrant exercise 8,577 5,288 -
Interest paid (99) (61) (64)
Proceeds from fit out funding 12,687 7,822 -
Proceeds from finance leases - - 225
Capital element of finance leases (162) (100) (11)
------------------------------------------------------------------------ ------------- ------------- -------------
Net cash from financing activities 233,988 144,267 18,253
Effect of foreign exchange rate changes 3,043 1,876 25
------------------------------------------------------------------------ ------------- ------------- -------------
Net increase in cash and cash equivalents 205,045 126,422 8,734
Cash and cash equivalents at beginning of year 61,743 38,069 29,335
------------------------------------------------------------------------ ------------- ------------- -------------
Cash and cash equivalents at end of year 266,788 164,491 38,069
------------------------------------------------------------------------ ------------- ------------- -------------
1. General information
The financial information set out in this preliminary
announcement does not constitute statutory financial statements for
the years ended 30 September 2014 or 2013, for the purpose of the
Companies Act 2006, but is derived from those financial statements.
Statutory financial statements for 2014, on which the Group's
auditors have given an unqualified report which does not contain
statements under s. 498(2) or (3) of the Companies Act 2006, will
be filed with the Registrar of Companies by 31 March 2015.
Statutory financial statements for 2013 have been filed with the
Registrar of Companies. The Group's auditors have reported on those
accounts; their reports were unqualified and did not contain
statements under s. 498(2) or (3) of the Companies Act 2006.
Whilst the financial information included in this press release
has been prepared in accordance with International Financial
Reporting Standards ("IFRS") as adopted for use in the European
Union and as issued by the International Accounting Standards
Board, this announcement does not itself contain sufficient
information to comply with IFRS. The accounting policies applied in
preparing this financial information are consistent with the
Group's financial statements for the year ended 30 September
2014.
The financial information for the three-month periods ended 30
September 2014 and 2013 is unaudited.
Solely for the convenience of the reader, unless otherwise
indicated, all pound sterling amounts stated in the Consolidated
Balance Sheet as at 30 September 2014 and in the Consolidated
Income Statement, Consolidated Statement of Changes in Equity,
Consolidated Statement of Comprehensive Income and Consolidated
Cash Flow Statement for the year and 3 months ended 30 September
2014 have been translated into U.S. dollars at the rate on 30
September 2014 of $1.6219 to GBP1.00. These translations should not
be considered representations that any such amounts have been,
could have been or could be converted into U.S. dollars at that or
any other exchange rate as at that or any other date.
The Board of Directors of the Company approved this statement on
2 December 2014.
2. Selected accounting policies
Selected Group accounting policies are summarised below.
Basis of Accounting
The historical consolidated financial data as at September 30,
2013 and for the year and three months then ended, has been derived
after a reclassification to report foreign exchange gains and
losses, primarily from balance sheet revaluation, previously
reported within "Management and administrative expenses" reported
in a new income statement line item, 'Net foreign exchange
gains/(losses)'. Such reclassification had no impact on operating
profit, profit before tax or profit for the year.
Going Concern
The Directors have considered the financial position of the
Group, its cash position and forecast cash flows for the 12-month
period from the date of signing these financial statements when
considering going concern. They have also considered the Group's
business activities, the key policies for managing financial risks
and the key factors affecting the likely development of the
business in 2015. In the light of this review, the Directors have a
reasonable expectation that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern basis
in preparing these financial statements.
Basis of Consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 30 September each year. Subsidiaries
are all entities over which the Group has the power to govern the
financial and operating policies of the entity concerned, generally
accompanying a shareholding of more than one half of the voting
rights.
Intangible Assets - Goodwill
Goodwill arising in a business combination is recognised as an
asset at the date that control is acquired. Goodwill is measured as
the excess of the sum of consideration transferred, the amount of
any non-controlling interest in the acquiree and the fair value of
the acquirer's previously held equity interest (if any) in the
entity over the net of the acquisition date amounts of the
identifiable assets and liabilities assumed.
Goodwill is not amortised but is tested for impairment at least
annually.
Revenue
Revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable for goods
and services provided in the normal course of business net of value
added tax and other sales-related taxes. The Group recognises
revenue when the amount can be reliably measured; when it is
probable that future economic benefits will flow to the Group; and
when specific criteria have been met for each of the Group's
activities, as described below.
The Group's revenue arises from product sales, licensing fees,
collaboration fees, technical access fees, development and approval
milestone fees, research and development fees and royalties.
Agreements with commercial partners generally include
non-refundable up-front license and collaboration fees, milestone
payments, the receipt of which is dependent upon the achievement of
certain clinical, regulatory or commercial milestones, as well as
royalties on product sales of licensed products, if and when such
product sales occur, and revenue from the supply of products. For
these agreements, total arrangement consideration is attributed to
separately identifiable components on a reliable basis that
reasonably reflects the selling prices that might be expected to be
achieved in stand-alone transactions. The then allocated
consideration is recognised as revenue in accordance with the
principles described below.
The percentage of completion method is used for a number of
revenue streams of the Group. For each of the three years ended 30
September 2014, there were no discrete events or adjustments which
caused the Group to revise its previous estimates of completion
associated with those revenue arrangements accounted for under the
percentage of completion method.
Product Sales
Revenue from the sale of products is recognised when the Group
has transferred to the buyer the significant risks and rewards of
ownership of the goods, the Group no longer has effective control
over the goods sold, the amount of revenue and costs associated
with the transaction can be measured reliably, and it is probable
that the Group will receive future economic benefits associated
with the transaction. Product sales have no rights of return other
than where products are damaged or defective.
The Group maintains a rebate provision for expected
reimbursements to our commercial partners in circumstances in which
actual net revenue per vial differs from expected net revenue per
vial as a consequence of, as an example, ongoing pricing
negotiations with local health authorities. The amount of our
rebate provision is based on, amongst other things, monthly unit
sales and in-market sales data received from commercial partners
and represents management's best estimate of the rebate expected to
be required to settle the present obligation at the end of the
reporting period. Provisions for rebates are established in the
same period that the related sales are recorded.
Licensing Fees
Licensing fees received in connection with product out-licensing
agreements, even where such fees are non-refundable, are deferred
and recognised over the period of the license term.
Collaboration Fees
Collaboration fees are deferred and recognised as services are
rendered based on the percentage of completion method.
Technical Access Fees
Technical access fees represent amounts charged to licensing
partners to provide access to, and to commercially exploit data
that the Group possesses or which can be expected to result from
Group research programs that are in progress. Non-refundable
technical access fees that involve the delivery of data that the
Group possesses and that permit the licensing partner to use the
data freely and where the Group has no remaining obligations to
perform are recognised as revenue upon delivery of the data.
Non-refundable technical access fees relating to data where the
research program is ongoing are recognised based on the percentage
of completion method.
Development and Approval Milestone Fees
Development and approval milestone fees are recognised as
revenue based on the percentage of completion method on the
assumption that all stages will be completed successfully, but with
cumulative revenue recognised limited to non-refundable amounts
already received or reasonably certain to be received.
Research and Development Fees
Revenue from partner-funded contract research and development
agreements is recognised as research and development services are
rendered. Where services are in-progress at period end, the Group
recognises revenues proportionately, in line with the percentage of
completion of the service. Where such in-progress services include
the conduct of clinical trials, the Group recognises revenue in
line with the stage of completion of each trial so that revenues
are recognised in line with the expenditures.
Royalties
Royalty revenue is recognised on an accrual basis in accordance
with the substance of the relevant agreement, provided that it is
probable that the economic benefits will flow to the Group and the
amount of revenue can be measured reliably.
Research and Development
Expenditure on research and development activities is recognised
as an expense in the period in which it is incurred prior to
achieving regulatory approval.
An internally generated intangible asset arising from the
Group's development activities is recognised only if the following
conditions are met:
-- an asset is created that can be identified;
-- it is probable that the asset created will generate future economic benefits; and
-- the development cost of the asset can be measured reliably.
The Group has determined that regulatory approval is the
earliest point at which the probable threshold can be achieved. All
research and development expenditure incurred prior to achieving
regulatory approval is therefore expensed as incurred.
Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost is calculated using the weighted average cost method.
Cost includes materials, direct labour, depreciation of
manufacturing assets and an attributable proportion of
manufacturing overheads based on normal levels of activity. Net
realisable value is the estimated selling price, less all estimated
costs of completion and costs to be incurred in marketing, selling
and distribution.
If net realisable value is lower than the carrying amount, a
write down provision is recognised for the amount by which the
carrying amount exceeds its net realisable value.
Inventories manufactured prior to regulatory approval are
capitalised as an asset but provided for until there is a high
probability of regulatory approval of the product. At the point
when a high probability of regulatory approval is obtained, the
provision is adjusted appropriately to increase the carrying value
to expected net realisable value, which may not exceed original
cost.
Adjustments to the provision for inventories manufactured prior
to regulatory approval are recorded as a component of research and
development expenditure. Adjustments to the provision against
commercial product related inventories manufactured following
achievement of regulatory approval are recorded as a component of
cost of goods.
Taxation
The tax expense represents the sum of the tax currently payable
or recoverable and deferred tax.
The tax payable or recoverable is based on taxable profit for
the year. Taxable profit differs from profit before tax as reported
in the consolidated income statement because it excludes items of
income or expense that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates and
laws that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax is the tax expected to be payable or recoverable on
differences between carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised only to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of assets and
liabilities in a transaction that affects neither the taxable
profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient future taxable profits will be available
to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised based on tax laws and rates that have been enacted at the
balance sheet date. Deferred tax is charged or credited in the
consolidated income statement, except when it relates to items
charged or credited in other comprehensive income, in which case
the deferred tax is also dealt with in other comprehensive
income.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
(Loss)/Earnings per Share
Basic earnings or loss per share represents the profit or loss
for the year, divided by the weighted average number of ordinary
shares in issue during the year, excluding the weighted average
number of ordinary shares held in the GW Pharmaceuticals All
Employee Share Scheme (the "ESOP") during the year to satisfy
employee share awards.
Diluted earnings or loss per share represents the profit or loss
for the year, divided by the weighted average number of ordinary
shares in issue during the year, excluding the weighted average
number of shares held in the ESOP during the year to satisfy
employee share awards, plus the weighted average number of dilutive
shares resulting from share options or warrants where the inclusion
of these would not be antidilutive.
Foreign Currency
The individual financial statements of each Group company are
presented in the currency of the primary economic environment in
which it operates (its functional currency). For the purpose of the
consolidated financial statements, the results and financial
position of each Group company are expressed in Pounds
Sterling.
In preparing the financial statements of the individual
companies, transactions in currencies other than the entity's
functional currency (foreign currencies) are recorded at the rate
of exchange at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet
date are retranslated at the rates of exchange prevailing at that
date. Non-monetary items carried at fair value that are denominated
in foreign currencies are translated at the rates prevailing at the
date when the fair value was determined. Non-monetary items that
are measured in terms of historical cost in a foreign currency are
not retranslated.
For the purpose of presenting consolidated financial statements,
the assets and liabilities of the Group's foreign operations are
translated at exchange rates prevailing on the balance sheet date.
Income and expense items are translated at the average exchange
rate for the period, unless exchange rates fluctuate significantly
during the period, in which case the exchange rates at the date of
transactions are used. Exchange differences arising, if any, are
recognised in other comprehensive income and accumulated in
equity.
Property, Plant and Equipment
Property, plant and equipment are stated at cost, net of
accumulated depreciation and any recognised impairment loss.
Depreciation is provided so as to write off the cost of assets,
less their estimated residual values, over their useful lives using
the straight-line method, as follows:
Plant, machinery and lab equipment 3-10 years
Office and IT equipment 3-4 years
Leasehold improvements 4-15 years or term of the lease
if shorter
Assets under finance leases are depreciated over their expected
useful lives on the same basis as owned assets or, where shorter,
over the term of the relevant lease.
No depreciation is provided on assets under the course of
construction. Cost includes professional fees and, for qualifying
assets, borrowing costs capitalised in accordance with the Group's
accounting policy. Depreciation on these assets commences when the
assets are available for use.
The gain or loss arising on disposal or scrappage of an asset is
determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in operating
profit.
Share-based Payments
The Group operates a number of equity-settled share-based
compensation plans under which the Company receives services from
employees as consideration for equity instruments (options) of the
Company. The fair value of the employee services received in
exchange for the grant of the awards is recognised as an expense.
The total amount to be expensed is determined by reference to the
fair value of the options granted (excluding the effect of any
non-market-based performance and service vesting conditions) at the
date of grant.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of
shares that will eventually vest. At each balance sheet date, the
Group revises its estimate of the number of equity instruments
expected to vest as a result of the effect of non-market-based
performance and service vesting conditions. The impact of the
revision of the original estimates, if any, is recognised in profit
or loss such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to equity reserves.
Equity-settled share-based payment transactions with parties
other than employees are measured at the fair value of the goods or
services received, except where that fair value cannot be estimated
reliably, in which case they are measured at the fair value of the
equity instruments granted, measured at the date of grant.
3. Segmental Information
Information reported to the Company's Board of Directors, the
chief operating decision maker for the Group, for the purposes of
resource allocation and assessment of segment performance is
focused on the stage of product development. The Group's reportable
segments are as follows:
-- Commercial: The Commercial segment (formerly Sativex
Commercial) promotes Sativex through strategic collaborations with
major pharmaceutical companies for the currently approved
indication of spasticity due to MS. The Group has licensing
agreements for the commercialization of Sativex with Almirall S.A.
in Europe (excluding the United Kingdom) and Mexico, Otsuka
Pharmaceutical Co. Ltd. ("Otsuka") in the U.S., Novartis Pharma AG
in Australia, New Zealand, Asia (excluding Japan, China and Hong
Kong), the Middle East and Africa, Bayer HealthCare AG in the
United Kingdom and Canada, Neopharm Group in Israel and Ipsen
Biopharm Ltd. in Latin America (excluding Mexico and the Islands of
the Caribbean). Commercial segment revenues include product sales,
royalties, license, collaboration, and technical access fees, and
development and approval milestone fees.
-- Sativex Research and Development: The Sativex Research and
Development ("Sativex R&D") segment seeks to maximize the
potential of Sativex through the development of new indications.
The current focus for this segment is the Phase 3 clinical
development program of Sativex for use in the treatment of cancer
pain. The Group also believe that MS spasticity represents an
attractive indication for the U.S. and GW intends to pursue an
additional clinical development program for this significant market
opportunity. In addition, Sativex has shown promising efficacy in
Phase 2 trials in other indications such as neuropathic pain, but
these areas are not currently the subject of full development
programs. Sativex Research and Development segment revenues consist
of research and development fees charged to Sativex licensees.
-- Pipeline Research and Development: The Pipeline Research and
Development ("Pipeline R&D") segment seeks to develop
cannabinoid medications other than Sativex across a range of
therapeutic areas using the Company's proprietary cannabinoid
technology platform. The Group's product pipeline includes
Epidiolex(R) , a treatment for Dravet syndrome and Lennox-Gastaut
syndrome, a second epilepsy product candidate as well as other
product candidates in Phase 1 and 2 clinical development for
glioma, ulcerative colitis, type-2 diabetes and schizophrenia.
Pipeline Research and Development segment revenues consist of
research and development fees charged to Otsuka under the terms of
GW's pipeline research collaboration agreement.
The accounting policies of the reportable segments are
consistent with the Group's accounting policies described in note
2. Segment result represents the result of each segment without
allocation of share-based payment expenses, and before management
and administrative expenses, interest expense, interest income and
tax.
No measures of segment assets and segment liabilities are
reported to the Company's Board of Directors in order to assess
performance and allocate resources. There is no intersegment
activity and all revenue is generated from external customers.
Segmental Results for the Year Ended 30 September 2014
Total
Commercial reportable Unallocated
year ended Sativex Pipeline segments Costs Consolidated
2014 R&D R&D year year year
GBP'000 year year ended ended ended
ended ended 2014 2014 2014
2014 2014 GBP'000 GBP'000 GBP'000
GBP'000 GBP'000
-------------------------- ------------- ---------- ----------- ------------- -------------- ---------------
Revenue:
Product sales 4,382 - - 4,382 - 4,382
Research and development
fees - 23,618 667 24,285 - 24,285
Licence, collaboration
and technical access
fees 1,378 - - 1,378 - 1,378
Total revenue 5,760 23,618 667 30,045 - 30,045
Cost of sales (2,060) - - (2,060) - (2,060)
Research and development
credit/(expenditure) 847 (26,444) (17,103) (42,700) (775) (43,475)
-------------------------- ------------- ---------- ----------- ------------- -------------- ---------------
Segmental result 4,547 (2,826) (16,436) (14,715) (775) (15,490)
-------------------------- ------------- ---------- ----------- ------------- -------------- ---------------
Management and administrative expenses (7,337)
Net foreign exchange gain/(loss) 3,188
Operating loss (19,639)
Interest expense (61)
Interest income 130
------------------------------------------------------------------ ------------- -------------- ---------------
Loss before tax (19,570)
Tax benefit 4,911
------------------------------------------------------------------ ------------- -------------- ---------------
Loss for the year (14,659)
================================================================== ============= ============== ===============
Segmental Results for the Year Ended 30 September 2013
Total
Commercial reportable Unallocated
year ended Sativex R&D Pipeline R&D segments Costs Consolidated
2013 year ended year ended year ended year ended year ended
GBP'000 2013 2013 2013 2013 2013
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ------------- -------------- --------------- ------------- -------------- ---------------
Revenue:
Product sales 2,157 - - 2,157 - 2,157
Research and
development fees - 19,333 4,261 23,594 - 23,594
Licence,
collaboration and
technical access
fees 1,294 - - 1,294 - 1,294
Development and
approval milestone
fees 250 - - 250 - 250
---------------------- ------------- -------------- --------------- ------------- -------------- ---------------
Total revenue 3,701 19,333 4,261 27,295 - 27,295
Cost of sales (1,276) - - (1,276) - (1,276)
Research and
development
credit/(expenditure) 597 (23,737) (9,240) (32,380) (317) (32,697)
---------------------- ------------- -------------- --------------- ------------- -------------- ---------------
Segmental result 3,022 (4,404) (4,979) (6,361) (317) (6,678)
---------------------- ------------- -------------- --------------- ------------- -------------- ---------------
Management and administrative expenses (3,555)
(237)
Operating loss (10,470)
Interest expense (64)
Interest income 178
---------------------------------------------------------------------- ------------- -------------- ---------------
Loss before tax (10,356)
Tax benefit 5,807
---------------------------------------------------------------------- ------------- -------------- ---------------
Loss for the year (4,549)
====================================================================== ============= ============== ===============
Geographical analysis of revenue:
Year ended Year ended
30 September 30 September
2014 2013
GBP000's GBP000's
UK 1,099 577
Europe (excluding UK) 3,864 2,290
North America 23,904 19,508
Canada 518 587
Asia 660 4,333
---------------------- ------------ ------------
30,045 27,295
---------------------- ------------ ------------
4. Research and Development Expenditure
Year ended Year ended
30 September 30 September
2014 2013
GBP000's GBP000's
GW-funded research and development 19,190 9,103
Development partner-funded research and development 24,285 23,594
---------------------------------------------------- ------------ ------------
Total 43,475 32,697
---------------------------------------------------- ------------ ------------
5. Share-based Payment
Charges for share-based payment have been allocated to the
research and development and management and administrative expenses
lines of the consolidated income statement as follows:
Year ended Year ended
30 September 30 September
2014 2013
GBP000's GBP000's
Research and development expenditure 774 317
Management and administrative expenses 464 299
--------------------------------------- ------------ ------------
Total charge for the year 1,238 616
--------------------------------------- ------------ ------------
6. Tax
Year ended Year ended
30 September 30 September
2014 2013
GBP000's GBP000's
Current year research and development tax
credit (5,251) (2,900)
Adjustment in respect of prior year tax credit (278) (2,012)
Recognition of previously unrecognized deferred
tax asset (829) (2,872)
Current year utilization of deferred tax
assets 1,447 1,977
------------------------------------------------ ------------ ------------
Total credit (4,911) (5,807)
------------------------------------------------ ------------ ------------
The UK Corporation tax credit relates to research and
development expenditure claimed under the Finance Act 2000.
At 30 September 2014 the Group had tax losses available for
carry forward of approximately GBP34.3 million (2013: GBP33.6
million). The Group has recognized a deferred tax asset in respect
of GBP1.4 million (2013: GBP4.1 million) of such losses. The Group
has not recognized deferred tax assets relating to the remaining
carried forward losses, of approximately GBP32.9 million (2013:
GBP29.5 million). In addition, the Group has not recognized
deferred tax assets relating to other temporary differences of
GBP11.6 million (2013: GBP1.7 million). These deferred tax assets
have not been recognized as the Group's management considers that
there is insufficient future taxable income, taxable temporary
differences and feasible tax-planning strategies to utilize all of
the cumulative losses and therefore it is probable that the
deferred tax assets will not be realized in full. If future income
differs from current projections, this could significantly impact
the tax charge or benefit in future periods.
7. Earnings per Share
The calculations of earnings per share are based on the
following data:
2014 2013
GBP000's GBP000's
------------------------------------------------------ ----------- -----------------
(Loss)/profit for the year - basic and diluted (14,659) (4,549)
------------------------------------------------------- ----------- -----------------
Number of shares
-----------------
2014 2013
m m
------------------------------------------------------ ----------- -----------------
Weighted average number of ordinary shares 210.4 151.5
Less ESOP trust ordinary shares(1) - -
Weighted average number of ordinary shares
for purposes of basic earnings per shares 210.4 151.5
Effect of potentially dilutive shares arising from
share options(2) - -
------------------------------------------------------ ----------- -----------------
Weighted average number of diluted ordinary shares
for purposes of diluted earnings per share 210.4 151.5
------------------------------------------------------- ----------- -----------------
(Loss)/earnings per share - basic (7.0)p (3.0)p
------------------------------------------------------- ----------- -----------------
(Loss)/earnings per share - diluted (7.0)p (3.0)p
------------------------------------------------------- ----------- -----------------
(1) As at 30 September 2014 and 2013, 34,706 ordinary shares
were held in the ESOP trust. The financial effect is less than
0.1m, and consequently these have not been presented above.
(2) The Group incurred a loss each of the financial years above.
As a result, the inclusion of potentially dilutive share options
and warrants in the diluted loss per share calculation would have
an antidilutive effect on the loss per share for the period. The
impact of 9.5 million share options and warrants have therefore
been excluded from the diluted loss per share calculation for the
year ended 30 September 2014 (30 September 2013: 6.7 million).
8. Inventory
30 September 30 September
2014 2013
GBP000's GBP000's
Raw materials 210 180
Work in progress 3,885 4,101
Finished goods 682 380
----------------- ------------ ------------
4,777 4,661
----------------- ------------ ------------
Inventory is stated net of a provision for inventories,
calculated in accordance with the accounting policy set out in Note
2. The movement in the provision for inventories is as follows:
30 September 30 September
2014 2013
GBP000's GBP000's
Opening balance at 1 October 1,601 2,131
Write down of inventories 625 -
Write off of inventories included in the
provision (842) -
Reversal of write down of inventories (1,033) (530)
351 1,601
----------------------------------------- ------------ ------------
Inventory with a carrying value of GBP3.2 million is considered
to be recoverable after more than one year (2013: GBP3.5 million).
The reversal of write down is as a result of an increased level of
production, reducing the level of work in progress expected to
expire before use.
9. Trade and other receivables
30 September 30 September
2014 2013
GBP000's GBP000's
Amounts falling due within one year
Trade receivables 612 621
612 621
Other receivables 436 763
Prepayments and accrued income 809 349
------------------------------------ ------------ ------------
1,857 1,733
------------------------------------ ------------ ------------
10. Trade and other payables
30 September 30 September
2014 2013
GBP000's GBP000's
Amounts falling due within one year
Trade payables 2,342 3,393
Fit out funding 218 -
Other taxation and social security 702 745
Other creditors and accruals 9,114 5,302
Amounts falling due after one year
Fit out funding 7,927 -
20,303 9,440
------------------------------------ ------------ ------------
Included within the above is a balance of GBP8.1 million owed to
the Group's landlord reflecting the recognition of the liability to
repay the fit out funding received to fund the expansion and
upgrades to manufacturing facilities and associated interest of
GBP0.3 million. This is expected to be repaid in the form of lease
rentals commencing upon the completion of construction, currently
expected to be during the third quarter of the year ending 30
September 2015, over a 15-year term. The Group has estimated that
GBP0.2 million will be due within one year and the remaining GBP7.9
million is due after one year from the balance sheet date.
11. Deferred Revenue
30 September 30 September
2014 2013
Amounts falling due within one year GBP000's GBP000's
Deferred licence, collaboration and technical
access fee income 1,366 1,294
Advance payments received 3,461 1,887
---------------------------------------------- ------------ ------------
4,827 3,181
---------------------------------------------- ------------ ------------
Amounts falling due after one year
---------------------------------------------- ------------ ------------
Deferred licence, collaboration and technical
access fee income 7,881 8,916
---------------------------------------------- ------------ ------------
Deferred revenues primarily relate to up-front licence fees
received in 2005 of GBP12.0 million from Almirall S.A. (deferred
revenue balance as at 30 September 2013 - GBP5.9 million and 30
September 2012 - GBP6.6 million) and collaboration and technical
access fees from other Sativex licensees. Amounts deferred under
each agreement will be recognized in revenue as disclosed in note
2.
Advance payments received represent payments for research and
development activities to be carried out in the next year on behalf
of Otsuka. These amounts will be recognized as revenue in future
periods as the services are rendered.
12. Obligations under Finance Leases
Minimum lease payments
2014 2013
GBP000's GBP000's
---------------------------------------- ------------ -----------
Amounts payable under finance leases:
Within one year 200 177
In the second to fifth years inclusive 838 861
After five years 1,382 1,559
2,420 2,597
---------------------------------------- ------------ -----------
Less: future finance charges 513 592
----------------------------------------- ------------ -----------
Present value of lease obligations 1,907 2,005
----------------------------------------- ------------ -----------
Present value
of lease payments
2014 2013
GBP000's GBP000's
------------------------------- ---------- ---------
Amounts payable under finance
leases:
Amounts due for settlement
within 12 months 126 100
Amounts due for settlement
after 12 months 1,781 1,905
1,907 2,005
------------------------------- ---------- ---------
All lease obligations are denominated in Sterling. The fair
value of the Group's lease obligations is approximately equal to
their carrying amount.
The Group's obligations under finance leases are generally
secured by the lessors' rights over the leased assets.
13. Share Capital
As at 30 September 2014 the share capital of the Company
allotted, called-up and fully paid amounts was as follows:
2014 2013
GBP000's GBP000's
----------------------------------------- -------- --------
Allotted, called-up and fully paid
236,646,895 (2013: 177,521,287) ordinary
shares of 0.1p each 237 178
----------------------------------------- -------- --------
Changes to the number of ordinary shares in issue have been as
follows:
Total Nominal Total Share
Number of Value Premium Total Consideration
Shares GBP000's GBP000's GBP000's
-------------------------- ----------- ------------- ----------- -------------------
As at 1 October 2013 177,521,287 178 84,005 84,183
Issue of new shares 51,147,300 51 126,248 126,299
Exercise of share options 4,201,348 4 5,014 5,018
Exercise of warrants 3,776,960 4 5,284 5,288
-------------------------- ----------- ------------- ----------- -------------------
As at 30 September 2014 236,646,895 237 220,551 220,788
-------------------------- ----------- ------------- ----------- -------------------
14. Availability of Information
A copy of this statement is available from the company website
at www.gwpharm.com or from the Company Secretary at Porton Down
Science Park, Salisbury, Wiltshire, SP4 0JQ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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