TIDMLPX
RNS Number : 7336R
Lipoxen PLC
06 May 2009
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| For Immediate Release | 6 May 2009 |
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Lipoxen PLC
("Lipoxen" or "the Company")
Final Results for the year ended 31 December 2008
London, UK, 6 May 2009 - Lipoxen PLC (AIM:LPX), a bio-pharmaceutical company
specialising in the development of high value differentiated biologicals,
vaccines and siRNA delivery, is pleased to announce its final results for the
year ended 31 December, 2008.
Key Operational Highlights:
* Positive Phase I results for ErepoXen, Lipoxen's long-acting erythropoietin
candidate
* Successful Phase I results for Sulixen, Lipoxen's long-acting insulin for the
treatment of diabetes
* Positive pre-clinical studies supporting ImuXen, Lipoxen's vaccine delivery
technology
* Collaboration with Cambridge Biostability Limited to develop Lipoxen's novel
vaccine delivery technology
* Strengthened IP position with the granting of two key patents in the US relating
to Lipoxen's innovative DNA vaccine delivery technology
* Received a grant from IAVI - the leading International AIDS Vaccine Initiative
to develop an HIV-AIDS vaccine
* Dr Peter Laing promoted to Chief Operating Officer in September
* Appointment of Mr Igor Nikolaev as a Non-Executive Director in October
Key Financial Highlights:
* Turnover of GBP1.1m (2007: GBP905k)
* Pre-tax loss of GBP3.8m (2007: GBP3.3m)
* Non-cash component of total pre-tax loss GBP2.1m (2007: GBP1.5m)
* Net cash at period end of GBP602k (2007: GBP2.4m)
* Net asset value at 31st December GBP3m (2007: 2007: GBP6.3m)
* Loss per share basic and fully diluted of 2.89p (2007: 2.78p)
* Net asset value per share - basic 2.48p (2007: 5.30p)
* Net asset value per share - fully diluted 2.38p (2007: 5.01p)
Post Period End Highlights:
* Positive Final Phase I data for ErepoXen, Lipoxen's long-acting erythropoietin
candidate (see separate announcement released today).
* Collaboration with Glide Pharma for the delivery of Lipoxen's long-acting
SuliXen (insulin) product using Glide's Solid Dose Injector technology
* Collaboration with Cambridge Biostability and positive pre-clinical data on
novel and enhanced influenza vaccine based on the combination of Lipoxen's novel
vaccine delivery system 'ImuXen' and CBL's proprietary VitRIS stabilisation
platform
Commenting on the results, M. Scott Maguire, CEO of Lipoxen, said:
"We are extremely pleased with Lipoxen's performance during 2008 and the first
quarter of 2009. We have made good progress across all our technology platforms,
signing several collaborations with key industry players, and Lipoxen's current
R&D portfolio now comprises five clinical and pre-clinical programmes across a
range of biotherapeutics and vaccines.
"In addition to strengthening our IP position and receiving a grant from IAVI, a
prestigious organisation and a fantastic endorsement of our technology, we look
forward to announcing a further grant in the area of malaria in the near
future. The Board believes Lipoxen is now in an exciting position to capitalise
on future growth."
For further information:
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| Lipoxen PLC | +44 (0)20 7691 3583 |
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| M. Scott Maguire, Chief Executive Officer | |
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| | |
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| Singer Capital Markets (nominated adviser) | +44 (0)20 3205 7500 |
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| Jeff Keating / Claes Spång | |
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| | |
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| Noble & Co | +44 (0)20 7763 2200 |
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| John Llewellyn-Lloyd / Sam Reynolds | |
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| | |
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| Buchanan Communications | +44 (0)20 7466 5000 |
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| Mary-Jane Elliott, Lisa Baderoon, Rebecca Skye | |
| Dietrich, Catherine Breen | |
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Notes to Editors
About Lipoxen
Lipoxen plc is a biopharmaceutical company focused on the development of new and
improved biologic drugs and vaccines. Lipoxen has three proprietary patented
technology platforms:
1. PolyXen - for extending the efficacy and half life of biologic drugs
2. ImuXen - for creating new vaccines and improving existing vaccines
3. SiRNAblate - for the delivery of siRNA
Lipoxen's technology is designed to improve the efficacy, safety, stability,
biological half-life and immunologic characteristics of its products.
Lipoxen has multiple drug and vaccine programmes in development. Two products
are in clinical development, SuliXen, a long acting insulin and ErepoXen, a
long-acting erythropoietin (EPO). Lipoxen's preclinical pipeline includes Factor
XIII and vaccines against HIV and influenza.
The Company has a low-risk business model and outlicenses its proprietary
technologies to biopharmaceutical companies that have strong manufacturing and
marketing capabilities. Lipoxen currently has commercial agreements with some of
the world's leading biotechnology and pharmaceutical companies including Baxter,
Schering-Plough, Sanofi-Aventis, the Serum Institute of India Limited,
Genentech, Amgen and Genzyme.
Lipoxen, which was formed as a spin-out from The School of Pharmacy at the
University of London. The Company trades on the AIM Market of the London Stock
Exchange under the ticker symbol LPX. More information can be found at the
Company's website: www.lipoxen.com.
CHAIRMAN'S STATEMENT
Lipoxen is an innovator in biologics, vaccines and siRNA and it is becoming
increasingly clear that our proprietary delivery platforms could have
significant potential to improve existing and create new drugs and vaccines.
With three important platform technologies at Lipoxen there is growing evidence
to suggest that the Company has a potentially significant capability to "make a
difference" by providing key unmet needs in the global healthcare system.
Notwithstanding that this Chairman's Statement accompanies our audited financial
statements for the 12 months ended 31st December 2008, I believe that it is
appropriate to report to you on the considerable progress made by the Company,
not just in the past 12 months, but over the 3 years since its Admission to AIM
in January 2006. In this period, your Company has matured from a novel IP
company to one which can now point to success with clinical trials on both of
our current lead proprietary biotherapeutic products and to remarkable progress
and pre-clinical achievements on our vaccine and siRNA platforms which show
great promise to revolutionise the way in which new vaccine and therapies will
be developed. Lipoxen has now signed several key collaborations with major
industry partners who now use the Company's various technology platforms. These
partnerships endorse the Company's technology and de-risk Lipoxen's development
pipeline.
Our Platform Technologies
Each platform addresses many of the drug and vaccine development problems
confronted by large pharmaceutical and biotech companies. Our platforms are
used in development projects by some of the largest firms in the industry
including Baxter, Serum Institute of India, Schering-Plough, International AIDS
Vaccine Initiative, IAVI, Amgen, Genentech as well as other non-disclosed
partners.
Each of our patent-protected technology platforms is based on the use of
materials found naturally in the human body. They each improve the performance
of approved biologic drugs, create novel vaccines for the prevention of major
diseases and overcome the foremost problem of drug delivery in siRNA
applications. They are described in greater detail below:
1. PolyXen
PolyXen is a versatile polymer technology, used to facilitate the creation of
"biosuperior" drugs with improved patient safety and convenience, using less of
the "active" drug material but with enhanced performance, reduced injections,
and a reduction of adverse side effects. The PolyXen platform is being applied
to the Company's two current proprietary product candidates, insulin (SuliXen -
for the treatment of both Type 1 and Type 2 diabetes) and for EPO (ErepoXen for
the treatment of anaemia in cancer patients and those on renal dialysis).
PolyXen is also offered on a "paid for research" basis to major pharmaceutical
companies for the development of new drug therapies and for "life cycle
management" projects where extant patents are nearing the end of their validity,
but may have the opportunity to be extended by reformulating the existing drug
on the PolyXen platform. In either case, Lipoxen will seek to out-
licence its technology to individual pharmaceutical companies each for their
specific therapeutic area and/or sales territory. In this regard we are
currently working with three of the world's six largest biotechnology companies.
As PolyXen is broadly applicable to 150 known, approved and marketed biologic
drug actives (and around 350 in the clinic and 1,000 in development) the Company
will seek to enter into multiple license transactions, a strategy which has the
potential to yield significant cash via upfront, milestone and royalty payments.
PolyXen is based on the use of one of the body's natural materials (polysialic
acid - a substance that coats most of the cells in the body) to prolong the life
of the active drug in the circulation; it is non-toxic, facilitates reduced
frequency and amount of dosage, improves the stability of the formulation,
preserves the biological activity of the active protein drug, reduces adverse
immunes responses and is biodegradable - unlike PEG (pegylated ethylene glycol)
the currently leading drug delivery system. PEG is used in a number of
billion-dollar marketed drugs but has a number of intractable characteristics
that make it unsuitable for many of the new generation of drugs coming to the
market; the PolyXen platform can now be offered as an alternative - and one with
broader applicability.
PolyXen is also expected to allow Lipoxen to play a pivotal role in the emerging
market for "biosuperiors", being therapies using approved "actives" but which,
by virtue of an enhanced delivery system such as PolyXen, offer a superior
performance compared to the original product and can be offered to the market on
more cost effective - but nevertheless patent-protected terms. Many of the
world's largest pharmaceutical companies are actively pursuing the biosuperior
route. The ability to bring to market differentiated biotherapeutics with
superior performance characteristics will likely be crucial in ensuring their
commercial success, in, not only the developed world, but also in the developing
world. As their patent-protected position in the developed world is eroded
through patent expiry and new governmental and regulatory frameworks, "Big
Pharma" and "Big Bio" are increasingly turning their attention to the developing
world in order to build new long-term markets.
The Company expects that its two current products will first enter the Russian
market in early 2011 leading to the foundation of long-term sustainable revenue
streams and enabling the further roll-out of these products across the
developing world with India representing the next key market opportunity. These
two programs are being externally funded through their entire Russian and Indian
approval processes.
The potential addressable market for protein and peptide drugs for which PolyXen
is widely applicable has been growing at an estimated 10% CAGR since 2002 and is
expected to reach US$70 billion next year.
2. ImuXen
Imuxen is a vaccine liposomal nano-technology which has achieved pre-clinical
success both in its ability to significantly improve a vaccine's performance
together with the potential to deliver single-shot protective immunity - a
hugely important feature for the distribution of many modern vaccines for
preventable diseases such as influenza, and HIV.
Your Company is building a strong reputation in the field of novel vaccine
development and each of these projects demonstrates Lipoxen's desire and
commitment to help solve some of the gravest problems afflicting humanity.
The ImuXen platform is the foundation for the creation of new vaccines for the
treatment and prevention of major diseases and for reformulating existing
vaccines with the potential to deliver protective immunity in a single dose.
Further pivotal benefits are that they offer:
* reduced dosing regimes;
* reduced side-effects (as the antigens are released slowly into the immune
system);
* the ability to make combination vaccines (for, say, our combined Hepatitis B-E
vaccine);
* the opportunity to make vaccines containing numerous antigens to combat
infections such as influenza where protection against multiple strains of the
virus has to be achieved;
* relative ease of manufacture.
Our vaccine technology addresses a currently fast-growing (at around 26% CAGR)
market expected to reach circa.$25bn per annum by 2011 and we are currently
working with two of the world's largest vaccine companies and on several large
humanitarian initiatives, with proof of concept preclinical studies being
carried out in externally funded research programs for HIV and influenza:
* HIV - A proprietary product candidate being funded by the International AIDS
Vaccine Initiative (IAVI))
* Influenza - A proprietary product candidate being developed in collaboration and
funded by the UK government.
There is an important "crossover" aspect to the above-named programs, in that,
although they are stand-alone product candidates in their own right, the work
done using the Company's ImuXen technology variously on these candidates
indicates that ImuXen could have a potentially major impact on the world of
vaccine storage and distribution by avoiding any need for refrigeration.
In 2007, 2.1 million deaths were attributed to HIV infection. This equates to 4
deaths per minute. The Company is working alongside the International AIDS
Vaccine Initiative (IAVI) on the improved delivery of HIV vaccines; IAVI is the
world's leading AIDS vaccine organization, and the development of an HIV vaccine
highlights the growing interest in Lipoxen's ground-breaking vaccine technology.
The recent current global swine flu epidemic is another example of how Lipoxen's
technology could be of significant health benefit in a world crisis. Our
influenza vaccine candidate, currently in the development pipeline uniquely
addresses the need for speed of production, distribution and stockpiling of the
vaccine.
3. Gene silencing siRNA technology
Lipoxen's gene silencing siRNA technology can overcome the single greatest issue
in siRNA drug applications being the critical need to deliver the payload intact
and directly to the targeted cells by protecting the "active" such that the body
does not excrete it before it can play its role. "siRNA" is a Nobel
prize-winning technology which, by means of "silencing" unwanted genetic
activity (by stopping the production of the proteins that are responsible for
the disease), has the potential to more effectively treat or cure a significant
number of important therapeutic challenges. In principle, it works by directly
targeting the therapeutic agent to a specifically identified genetic sequence,
something made possible only by the completion in 2003 of the mapping of the
human genome. However, to be effective, the interfering RNAi needs to be
delivered intact to the appropriate cells in the body - a crucial feature that
has proved hitherto to be something of an intractable problem for the drug
developers.
In 2008, Lipoxen generated compelling data on applying its liposomal entrapment
technology platform to this delivery problem. In a widely accepted pre-clinical
model, our work showed that we are able to eliminate from the circulation the
bad cholesterol gene. To date, no technical approach has been able to achieve
this "holy grail" of delivery but our work suggests that Lipoxen may well have
achieved this very important goal. Lipoxen's technology may, therefore, be able
to solve what may be the biggest hurdle to realising the full therapeutic
potential of this Nobel prize winning technology, which, if delivered properly,
offers a new paradigm in the treatment of a broad range of diseases.
Our key therapeutic areas and the pipeline
1. Biotherapeutics:
Lipoxen's first two proprietary product candidates in the field of
biotherapeutics are:
a) ErepoXen (long acting EPO)
In early 2008 Lipoxen's business made a major breakthrough when we announced
very exciting positive Phase I results with our partner, Serum Institute of
India, India's biggest biotech company (and a circa 28% shareholder in the
Company), for ErepoXen, our long-acting erythropoietin candidate. ErepoXen is
targeting the $9bn market for EPO therapeutics which are used to treat anaemia
in renal dialysis and cancer patients.
The trial results, which showed ErepoXen to be safe and well tolerated, long
acting and with no adverse clinical events in the trial, have been independently
assessed by one of the UK's leading nephrologists who confirms the potential for
this product candidate to have a once-per-month dosing regime, compared to the
world's leading US$9B per year EPO product which has a one to three times per
week dosing profile.
The final analysis of the entire 64 subject Phase I Indian trial is planned to
be published in May 2009. A Phase II Indian trial is expected to start in
Q3-2009 contemporaneous with a Russian Phase II/III trial. The Company hopes
that our EPO candidate will come to market in Russia in 2011 with India
following some time later when the more extensive Indian clinical trial stages
have been completed.
b) SuliXen (long-acting insulin)
In the course of FY2008, we announced that in a Phase I study, SuliXen , a
long-acting novel insulin candidate for Types 1 and 2 diabetes, had shown the
candidate to be safe and well-tolerated. The trial data also demonstrated that
we are progressing towards the goal of having a superior formulation to Sanofi
Aventis's Lantus, the world's most-prescribed insulin which generated sales of
over US$3.2 billion in 2008. (EUR2.45B). We expect to further advance this
candidate into Phase II clinical studies during the course of 2009. With the
World Health Organization expecting over 300m Type 1 diabetes sufferers
worldwide by 2025, there is a clear market need for alternative insulin
formulations such as SuliXen.
This is undoubtedly an exciting commercial opportunity for Lipoxen and we plan
to begin Phase II clinical studies with SuliXen later this year. SuliXen is
targeting a novel insulin market that is currently worth US$13 billion.
2. Vaccines:
In 2008 we made significant progress with our second delivery platform, ImuXen,
with pre-clinical studies supporting the proposition of our technology being a
key factor in the generation of novel vaccines and superior products in the
rapidly-growing vaccine market. The progress that we have made is attracting
considerable interest from some of the world's leading vaccine companies and
research institutions:
* We strengthened our IP position with the granting of two key patents in the US
relating to our innovative DNA vaccine delivery technology. This ground-breaking
technology is designed to produce not only novel vaccines for major diseases but
ones which can generate a more effective immune response with the potential for
single-shot protective immunity with reduced side effects.
* We received a grant from the International Aids Vaccine Initiative (IAVI), the
world's leading HIV-AIDS vaccine organization based in New York, for the
research and development of an HIV-AIDS vaccine. Lipoxen is one of only a select
few institutions to have received such a grant from IAVI reflecting the
potential of our technology platform to help cure or prevent a disease that
kills a person every 15 seconds.
* We also have a novel influenza vaccine in development and recently announced
very encouraging data regarding this program. The data is timely given the
outbreak of swine flu that has garnered global attention. We will continue with
the clinical development of this program either through grants or with a
commercial partner.
These projects demonstrate Lipoxen's commitment to humanitarian projects that
could provide significant healthcare benefits to people in the developing world.
3. siRNA Delivery:
In 2008, Lipoxen generated its very exciting first data on applying its
liposomal entrapment technology platform to the delivery of siRNA, thereby
demonstrating an important new step towards solving what is generally recognised
as being the biggest problem in this new and massively "hot button" field of
drug therapies based on the ability of our technology to deliver intact the drug
"payload" direct to the targeted cells.
Progress with Collaborations
Establishing collaborations continues to be a key element of Lipoxen's growth
strategy as we aim to achieve the broad adoption of our drug and vaccine
delivery technologies. These collaborations are also important in helping build
the Company's revenue base. We have signed a number of new collaborations with
some of the world's largest pharmaceutical and biotech companies and we continue
to believe that we are very well positioned to leverage our technology further
through additional agreements in the pharmaceutical sector. A brief review on
these collaborations is set out below.
* With a view to nominating a "lead product" candidate, our next milestone, in
2010, (probably in Q2), the Company continues to work extensively with Baxter
Healthcare (Lipoxen's "lead" Licensee for our PolyXen technology) on the
development of a new Factor VIII product for the treatment of, primarily,
haemophilia - a US$1.3 billion per annum market for Baxter.
* In October 2008 we joined forces with Cambridge Biostability Limited, the
University of Cambridge and the UK Government's Health Protection Agency to
develop vaccines that do not require refrigerated distribution. Such vaccines
could greatly reduce the number of deaths from preventable infections in the
developing world through achieving both improved vaccine efficacy and by
eliminating the need for 'cold-chain' distribution. The requirement to keep
vaccines at low temperatures from the point of manufacture to the point of
administration is the major reason that many people in the developing world do
not receive available appropriate protection against a number of infectious
diseases. Fundamental to achieving this goal is the development of new vaccine
formulations able to circumvent the refrigeration requirement, something that
may now be achieved using Lipoxen's proprietary ImuXen technology. We will be
reporting data on this project later this year.
* Our collaboration with the Barbara Davis Centre for Childhood Diabetes will
explore whether SuliXen, our long-acting insulin formulation, has the potential
to treat or prevent the underlying causes of Type I diabetes. This collaboration
is particularly exciting as, not only is the Barbara Davis Center for Childhood
Diabetes one of the world's largest diabetes programmes specialising in Type-I
diabetes research and care (for both children and adults), but the agreement is
also in line with our strategy of maximising the benefits that we could bring to
the overall diabetes population. Insulin is a US$13 billion global market. We
will be reporting data on this project later this year.
* In May 2008 we successfully concluded a grant application with the world's
leading AIDs vaccine organization (IAVI) which underpins our research into the
development of a novel HIV/AIDS vaccine using our ImuXen technology. We will be
reporting data on this project later this year.
* In September 2008 the Company entered into a Materials Transfer Agreement (MTA)
with Angel Biotechnology to investigate the potential for Angel's GCSF to be
incorporated into our proprietary PolyXen technology for the development of a
long-acting GCSF (Granulyte Colony Stimulating Factor). GCSF stimulates the bone
marrow to produce more white blood cells. One of the main side effects of
chemotherapy drugs is a reduction in the number of white blood cells. GCSF can
be given to people in this situation to stimulate the bone marrow to produce new
white cells more quickly which can shorten the period during which they are at
risk of developing a serious infection. The intention is to develop a polysialic
GCSF formulation that will offer patients and treating physicians a formulation
with a superior performance to the current GCSF biosimilar products which are
already marketed worldwide as treatments for neutropenia and have a market value
of US$3.9 billion.
* In October 2008 we joined with Nottingham University to work on the improved
delivery of antiviral drugs for the treatment of liver disease caused by
Hepatitis C. Once we have developed this new formulation we believe we can
significantly extend its commercial potential through 2009 and beyond in the of
field drug delivery to the liver by taking advantage of the opportunity to
resurrect several 'near-miss' new drug candidates from major pharma companies
that were being developed for the treatment of HCV infection. We expect to be in
a position to report data on this project end of this year.
* In March 2009 we announced a collaboration with Glide Pharmaceutical
Technologies Limited for the delivery of Lipoxen's long-acting SuliXen (insulin)
product using the Glide's Solid Dose Injector (SDI) technology. We expect to be
in a position to report data on this project Q3 this year.
* In April 2009, through Lipoxen's collaboration with Cambridge Biostability,
Lipoxen announced positive preclinical results for the delivery of a novel and
enhanced influenza vaccine based on the combination of Lipoxen's novel vaccine
delivery system 'ImuXen' and CBL's proprietary VitRIS stabilisation platform.
ImuXen was shown to increase the effectiveness of influenza vaccines by
approximately 30-fold and the VitRIS formulation enhances the efficacy of the
vaccine by a further 4-fold. The study highlights the potential to radically
increase output of vaccine doses from existing manufacturing facilities -
projected 10-fold advantage in vaccine production rates and perhaps most
importantly there is no requirement for 'cold-chain' of refrigerated trucks,
warehouses and fridges.
Summary of the pipeline
The positive data that has been generated by our scientists and collaborators
has allowed Lipoxen to make significant progress in implementing its strategy of
leveraging the Company's patent-protected delivery technologies and proprietary
products while also focusing on building a broad pipeline of research
collaborations that could lead to material revenue-generating licence
agreements. This progress is reflected in that fact that we now have:
* 2 proprietary candidates in the clinic (Sulixen and ErepoXen) addressing current
markets valued at US$13B and US$9B per annum respectively for Insulin and EPO,
each with identified paths to market in Russia and India - both candidates being
in programs funded by existing major shareholders;
* A pre-clinical vaccine candidate relating to HIV, which, against continuing
success in the clinic, will be fully funded externally;
* A pre-clinical Influenza candidate funded by a UK government program; in early
trials this product candidate has demonstrated that our "ImuXen" technology
generates compelling data. The recent current global swine flu epidemic is
another example of how Lipoxen's technology could be of significant health
benefit in a world crisis. Our influenza vaccine candidate uniquely addresses
the need for speed of production, distribution and stockpiling of the vaccine;
* A considerable pipeline of research collaborations with many of the world's
largest pharmaceutical and biotech companies on our three technologies.
Intellectual Property
In 2008 Lipoxen continued to strengthen its IP portfolio following the allowance
of two key patents in the US relating to DNA vaccine delivery. Realising that a
strong intellectual property position is key to our future success, the
allowance of these patents further strengthened the Company's position as a
leader in the development of DNA vaccine delivery technology and helped ensure
that Lipoxen's advanced ImuXen technology continues to be at the forefront of
novel vaccine development. The attractiveness of this technology is already
evident from the increasing number of vaccine companies who are approaching us
to evaluate the potential of ImuXen delivery.
Board Changes and Management Appointments
In October 2008 we announced the appointment of Mr Igor Nikolaev to the
Company's Board, as a Non-executive Director. Mr Nikolaev was formerly Deputy
Director of the Russian branch of the international law firm Clyde and Company.
Prior to this, he was at Rothman's International in St. Petersburg where he was
an in-house lawyer and advised on the merger with British American Tobacco. Mr
Nikolaev has also worked at Herbert Smith in London. His practice areas are
corporate and commercial law, litigation and privatisation.
In August 2008 Dr Peter Laing was promoted from Director of Business Development
to the position of Chief Operating Officer. Dr Laing joined Lipoxen in March
2002 and has played a leading role in developing the Company's R&D and Business
Development operations and in the establishment of collaborative and licensing
deals with the some of the World's top biotech companies.
Dr Ajay K. Agrawal was appointed Head of Business Development in August 2008. Dr
Agrawal has extensive experience in the biotech and pharma industries worldwide.
He was a founder of the drug delivery company, polyMASC Pharmaceuticals plc,
London in 1995. PolyMASC Pharmaceuticals was the first UK biotech company
spun-out from a university (Royal Free Hospital, School of Medicine) that was
directly listed on AIM, and subsequently merged with a NASDAQ-listed company,
Valentis Inc (USA) in 1999 to become one of the biggest companies in the
delivery of biologics at that time.
Summary and Outlook
We have an attractive drug pipeline including two high-value differentiated
biotherapeutics, ErepoXen and SuliXen, both of which have shown in the clinic
that they have potential advantages over existing billion-dollar products in
these high value market opportunities. We also have three novel vaccine
candidates funded by external parties targeting HIV, and influenza diseases
which each cause millions of deaths per year.
The quality and progress that we have made with our two technology platforms,
PolyXen and ImuXen - which are the basis of our own drug pipeline - means that
these technologies are now attracting a much higher level of interest from the
world's leading pharmaceutical and biotech companies. I am confident that we
will be able to capitalise on this interest by signing a number of
revenue-generating license deals for Lipoxen in the coming years. I would also
hope that over the next year that we will be able to sign our first major
licence deal based on our siRNA delivery platform
In 2009 we will be striving to produce further positive clinical results on both
ErepoXen and SuliXen as well as driving our vaccine development programmes
towards the clinic. We will also be looking to announce some exciting results
from the collaborations we entered into in 2008 as well as looking to enter into
more revenue-generating license deals which will take advantage of our
proprietary technologies.
2009 is expected to see both SuliXen and ErepoXen move to Phase II clinical
trials while our ImuXen (vaccine) and siRNA technologies will be applied to
pre-clinical studies across a broad range of therapeutic areas; a Phase I EPO
Western trial is also planned to commence in Q3 this year. I am confident that
new collaborations based on our PolyXen technology for protein drug applications
will be initiated both as to potential proprietary candidate development and for
new "Big Pharma" licensing opportunities
In the first quarter of 2009, I am pleased to report that Company has operated
on a "cash flat" basis ending Q1-09 with the same level of cash as at the end of
FY2008. Of course, in order to further expand our level of effort on the
development and optimisation of our technology platforms your Board expects to
address the capital markets in the current period as opportunistically as
possible in consideration both of the massive progress that Lipoxen can
demonstrate it has made since coming to market in January 2006 (being the last
date at which institutional (rather than strategic) investors were "tapped" for
new capital), as well as in full recognition of the continuing fragile state of
the global equity capital markets. Your Company has worked hard to prudently use
its limited capital resources and I am confident that, at such time as new
funding is sought, the Lipoxen investment case will be well received.
The Directors and I would like to thank all of the management and staff for
their substantial contribution to our successes in the last year and I look
forward to their continuing commitment in the future.
Brian Richards, CBE
Non-Executive Chairman
London: 5th May 2009
The financial results for the Group in the period under review were:
+--------------------------------------------------+-----------+-----------+
| | 2008 | 2007 |
+--------------------------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+--------------------------------------------------+-----------+-----------+
| Turnover | 1,160 | 905 |
+--------------------------------------------------+-----------+-----------+
| Total pre-tax losses for period | 3,791 | 3,291 |
+--------------------------------------------------+-----------+-----------+
| Non-cash component of total pre-tax loss | 2,142 | 1,455 |
+--------------------------------------------------+-----------+-----------+
| Net cash at 31st December | 602 | 2,446 |
+--------------------------------------------------+-----------+-----------+
| Net asset value as 31st December | 2,973 | 6,336 |
+--------------------------------------------------+-----------+-----------+
| | | |
+--------------------------------------------------+-----------+-----------+
| | P | P |
+--------------------------------------------------+-----------+-----------+
| Loss per share - basic and fully diluted | 2.89 | 2.78 |
+--------------------------------------------------+-----------+-----------+
| | | |
+--------------------------------------------------+-----------+-----------+
| Net asset value per share - basic | 2.48 | 5.30 |
+--------------------------------------------------+-----------+-----------+
| Net asset value per share - fully diluted | 2.38 | 5.01 |
+--------------------------------------------------+-----------+-----------+
Analysis of the total administrative expenses included within the income
statement reveals that the majority of the cash-settled expenses (69.5%) went
into research and development activities. This reflects the Board's continuing
commitment to running an efficient company and focus the resources on R&D which
proved again to have been well-placed as reflected in the excellent clinical
results achieved in the period under review. The year-on-year reduction in core
administrative costs of the business of circa 17% also reflects continuing tight
cost controls on all "non science" costs. In circumstances where cash is an
absolute resource, the Group has maintained its aggregate cash spend to an
amount fractionally less than in 2008 as shown in the following table.
+-------------------------------+-+-+-----------+-----------+-------------+-----------+
| | | | 2008 | 2008 | 2007 | 2007 |
+-------------------------------+-+-+-----------+-----------+-------------+-----------+
| Cash settled expenses | | | GBP'000 | % | GBP'000 | % |
+-------------------------------+-+-+-----------+-----------+-------------+-----------+
| R&D expense - cash settled | | | 2,004 | 69.5 | 1,836 | 63.4 |
+-------------------------------+-+-+-----------+-----------+-------------+-----------+
| Other expenses - cash settled | | 879 | 30.5 | 1,058 | 36.6 |
+---------------------------------+-+-----------+-----------+-------------+-----------+
| | | --------- | --------- | --------- | -------- |
+---------------------------------+-+-----------+-----------+-------------+-----------+
| Total expenses - cash settled | | 2,883 | 100.0 | 2,894 | 100.0 |
+---------------------------------+-+-----------+-----------+-------------+-----------+
| | | | --------- | ======= | --------- | ======= |
+-------------------------------+-+-+-----------+-----------+-------------+-----------+
| Non cash items | | | | | | |
+-------------------------------+-+-+-----------+-----------+-------------+-----------+
| Equity settled share option | | | 94 | | 672 | |
| expense | | | | | | |
+-------------------------------+-+-+-----------+-----------+-------------+-----------+
| Equity settled R&D expenses | | | 1,773 | | 520 | |
+-------------------------------+-+-+-----------+-----------+-------------+-----------+
| Depreciation | | | 275 | | 263 | |
+-------------------------------+-+-+-----------+-----------+-------------+-----------+
| | | | --------- | | ----------- | |
+-------------------------------+-+-+-----------+-----------+-------------+-----------+
| | | 2,142 | | 1,455 | |
+---------------------------------+-+-----------+-----------+-------------+-----------+
| | --------- | | ---------- | |
+-----------------------------------+-----------+-----------+-------------+-----------+
| TOTAL ADMINISTRATIVE COSTS | 5,025 | | 4,349 | |
+-----------------------------------+-----------+-----------+-------------+-----------+
| | ======= | | ======= | |
+-------------------------------+-+-+-----------+-----------+-------------+-----------+
Net operating cash outflow in the period - as reported in the consolidated cash
flow statement (post) - was GBP1,772k compared to GBP1,157k in 2007. It is
notable that this net figure was much influenced by the increase in receivables
(GBP636k) at the end of 2008 compared to end-2007 offset somewhat by a GBP181k
increase in current payables. Nevertheless, a modified (as the Group holds no
inventories) Quick Assets valuation at the noted period end dates is shown
below:
+------------------------------------------+-----------+-----------+-----------+
| | 2008 | 30 Jun 08 | 2007 |
+------------------------------------------+-----------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+-----------+-----------+-----------+
| Trade and other receivables (excluding | 772 | 322 | 143 |
| prepayments) | | | |
+------------------------------------------+-----------+-----------+-----------+
| Cash | 602 | 1,213 | 2,446 |
+------------------------------------------+-----------+-----------+-----------+
| Current liabilities (including accruals) | (475) | (212) | (294) |
+------------------------------------------+-----------+-----------+-----------+
| | --------- | --------- | --------- |
+------------------------------------------+-----------+-----------+-----------+
| Net "quick assets" | 899 | 1,323 | 2,295 |
+------------------------------------------+-----------+-----------+-----------+
| | --------- | --------- | --------- |
+------------------------------------------+-----------+-----------+-----------+
The above table is intended to demonstrate that, the Group's net "cash burn" in
the second half year reduced to circa GBP71k pcm compared to the first half when
the net "burn" was closer to circa GBP162k pcm; this reflects inter alia the
increased revenue generated by the Group on paid-for development projects , a
feature that has maintained into the current financial year. As a consequence,
while it will be necessary to seek additional capital in the new financial year,
a continuing lower rate of "burn" better positions the Group to be flexible as
to exactly when the capital markets are approached.
The successful scientific developments achieved in the period under review have
been the genesis of significant new collaborations with the world's leading
pharmaceutical and biotech companies. These collaborations are the basis for
generating license deals that could lead to material upfront, milestone and
royalty payments. The imperative to establish (and maintain) such business
development initiatives will remain at the core of our activities in 2009.
Colin Hill
Chief Financial Officer
London: 5th May 2009
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31st DECEMBER 2008
+--------------------------------------------------+------+------------------+------------------+
| | | 2008 | 2007 |
+--------------------------------------------------+------+------------------+------------------+
| | Note | GBP | GBP |
+--------------------------------------------------+------+------------------+------------------+
| | | | |
+--------------------------------------------------+------+------------------+------------------+
| | | | |
+--------------------------------------------------+------+------------------+------------------+
| | | | |
+--------------------------------------------------+------+------------------+------------------+
| REVENUE | 3 | 1,160,324 | 905,273 |
+--------------------------------------------------+------+------------------+------------------+
| | | ---------------- | ---------------- |
+--------------------------------------------------+------+------------------+------------------+
| ADMINISTRATIVE EXPENSES | | |
+---------------------------------------------------------+------------------+------------------+
| Research and development expenditure | 3,776,636 | 2,355,616 |
+---------------------------------------------------------+------------------+------------------+
| Administrative expenses | 1,247,817 | 1,993,140 |
+---------------------------------------------------------+------------------+------------------+
| | | ---------------- | ---------------- |
+--------------------------------------------------+------+------------------+------------------+
| Total | | 5,024,453 | 4,348,756 |
+--------------------------------------------------+------+------------------+------------------+
| | | ---------------- | ---------------- |
+--------------------------------------------------+------+------------------+------------------+
| OPERATING LOSS | 4 | (3,864,129) | (3,443,483) |
+--------------------------------------------------+------+------------------+------------------+
| | | |
+---------------------------------------------------------+------------------+------------------+
| Finance income | 72,926 | 152,751 |
+---------------------------------------------------------+------------------+------------------+
| | ---------------- | ---------------- |
+---------------------------------------------------------+------------------+------------------+
| LOSS BEFORE TAXATION | (3,791,203) | (3,290,732) |
+---------------------------------------------------------+------------------+------------------+
| | | |
+---------------------------------------------------------+------------------+------------------+
| Income tax credit | 7 | 332,916 | - |
+--------------------------------------------------+------+------------------+------------------+
| | | ---------------- | ---------------- |
+--------------------------------------------------+------+------------------+------------------+
| LOSS FOR THE YEAR ATTRIBUTABLE TO EQUITY HOLDERS | | (3,458,287) | (3,290,732) |
| OF THE PARENT | | | |
+--------------------------------------------------+------+------------------+------------------+
| | | ========== | ========== |
+--------------------------------------------------+------+------------------+------------------+
| | | |
+---------------------------------------------------------+------------------+------------------+
| Loss per share (pence) - basic and fully diluted | 9 | (2.89)p | (2.78)p |
+--------------------------------------------------+------+------------------+------------------+
| | | =========== | =========== |
+--------------------------------------------------+------+------------------+------------------+
All of the activities of the Group are classed as continuing.
The Company has elected to take the exemption under section 230 of the Companies
Act 1985 to not present the parent company income statement.
CONSOLIDATED BALANCE SHEET
AS AT 31st DECEMBER 2008
+---------------------------------------+------+--------------+--------------------+--------------------+
| | | 2008 | 2007 |
+---------------------------------------+------+-----------------------------------+--------------------+
| | Note | GBP | GBP | GBP |
+---------------------------------------+------+--------------+--------------------+--------------------+
| | | | | |
+---------------------------------------+------+--------------+--------------------+--------------------+
| NON-CURRENT ASSETS | | | | |
+---------------------------------------+------+--------------+--------------------+--------------------+
| Property, plant and equipment | 10 | | 665,972 | 866,552 |
+---------------------------------------+------+--------------+--------------------+--------------------+
| Goodwill | 11 | | 1,061,476 | 1,061,476 |
+---------------------------------------+------+--------------+--------------------+--------------------+
| Other receivables | 13 | | - | 500,000 |
+---------------------------------------+------+--------------+--------------------+--------------------+
| | | ------------------ | ------------------ |
+----------------------------------------------+--------------+--------------------+--------------------+
| | | 1,727,448 | 2,428,028 |
+----------------------------------------------+--------------+--------------------+--------------------+
| | | | ------------------ |
+----------------------------------------------+--------------+--------------------+--------------------+
| CURRENT ASSETS | | | | |
+---------------------------------------+------+--------------+--------------------+--------------------+
| Trade and other receivables | 13 | 1,118,559 | | 1,755,640 |
+---------------------------------------+------+--------------+--------------------+--------------------+
| Cash and cash equivalents | 602,065 | | 2,445,936 |
+----------------------------------------------+--------------+--------------------+--------------------+
| | ------------ | | ------------------ |
+----------------------------------------------+--------------+--------------------+--------------------+
| | 1,720,624 | | 4,201,576 |
+----------------------------------------------+--------------+--------------------+--------------------+
| CURRENT LIABILITIES | | | | |
+---------------------------------------+------+--------------+--------------------+--------------------+
| Trade and other payables | 14 | 474,849 | | 293,733 |
+---------------------------------------+------+--------------+--------------------+--------------------+
| | | ------------ | | ------------------ |
+---------------------------------------+------+--------------+--------------------+--------------------+
| NET CURRENT ASSETS | | 1,245,775 | 3,907,843 |
+----------------------------------------------+--------------+--------------------+--------------------+
| | ------------------ | ------------------ |
+-------------------------------------------------------------+--------------------+--------------------+
| NET ASSETS | 2,973,223 | 6,335,871 |
+-------------------------------------------------------------+--------------------+--------------------+
| | | | ============ | =========== |
+---------------------------------------+------+--------------+--------------------+--------------------+
| | | | | |
+---------------------------------------+------+--------------+--------------------+--------------------+
| | | | | |
+---------------------------------------+------+--------------+--------------------+--------------------+
| EQUITY ATTRIBUTABLE TO EQUITY HOLDERS | | | | |
| OF THE PARENT | | | | |
+---------------------------------------+------+--------------+--------------------+--------------------+
| Share capital | 15 | | 2,232,790 | 2,231,468 |
+---------------------------------------+------+--------------+--------------------+--------------------+
| Share premium account | | | 22,508,793 | 22,508,165 |
+---------------------------------------+------+--------------+--------------------+--------------------+
| Reverse acquisition reserve | | | (8,252,127) | (8,252,127) |
+---------------------------------------+------+--------------+--------------------+--------------------+
| Retained earnings | | | (13,516,233) | (10,151,635) |
+---------------------------------------+------+--------------+--------------------+--------------------+
| | | | ------------------ | ------------------ |
+---------------------------------------+------+--------------+--------------------+--------------------+
| TOTAL EQUITY | | | 2,973,223 | 6,335,871 |
+---------------------------------------+------+--------------+--------------------+--------------------+
| | | | ============ | ============ |
+---------------------------------------+------+--------------+--------------------+--------------------+
The financial statements were approved and authorised for issue by the directors
on 5th May 2009 and were signed on their behalf by:
SCOTT MAGUIRE - Director COLIN HILL - Director
COMPANY BALANCE SHEET
AS AT 31st DECEMBER 2008
+----------------------------------------+------+-----------+------------------+------------------+
| | | 2008 | 2007 |
+----------------------------------------+------+------------------------------+------------------+
| | Note | GBP | GBP | GBP |
+----------------------------------------+------+-----------+------------------+------------------+
| | | | | |
+----------------------------------------+------+-----------+------------------+------------------+
| NON-CURRENT ASSETS | | | | |
+----------------------------------------+------+-----------+------------------+------------------+
| Property, plant and equipment | 10 | | 480,000 | 640,000 |
+----------------------------------------+------+-----------+------------------+------------------+
| Investments | 12 | | 9,045,030 | 9,045,030 |
+----------------------------------------+------+-----------+------------------+------------------+
| Other receivables | 13 | | 4,862,481 | 3,158,356 |
+----------------------------------------+------+-----------+------------------+------------------+
| | | ---------------- | ---------------- |
+-----------------------------------------------+-----------+------------------+------------------+
| | | 14,387,511 | 12,843,386 |
+-----------------------------------------------+-----------+------------------+------------------+
| | | | ---------------- |
+-----------------------------------------------+-----------+------------------+------------------+
| CURRENT ASSETS | | | | |
+----------------------------------------+------+-----------+------------------+------------------+
| Trade and other receivables | 13 | 12,823 | | 9,852 |
+----------------------------------------+------+-----------+------------------+------------------+
| Cash and cash equivalents | 564,739 | | 2,368,608 |
+-----------------------------------------------+-----------+------------------+------------------+
| | --------- | | ---------------- |
+-----------------------------------------------+-----------+------------------+------------------+
| | 577,562 | | 2,378,460 |
+-----------------------------------------------+-----------+------------------+------------------+
| CURRENT LIABILITIES | | | | |
+----------------------------------------+------+-----------+------------------+------------------+
| Trade and other payables | 14 | 180,793 | | 81,799 |
+----------------------------------------+------+-----------+------------------+------------------+
| | | --------- | | ---------------- |
+----------------------------------------+------+-----------+------------------+------------------+
| NET CURRENT ASSETS | | 396,769 | 2,296,661 |
+-----------------------------------------------+-----------+------------------+------------------+
| | ---------------- | ---------------- |
+-----------------------------------------------------------+------------------+------------------+
| NET ASSETS | 14,784,280 | 15,140,047 |
+-----------------------------------------------------------+------------------+------------------+
| | =========== | =========== |
+-----------------------------------------------------------+------------------+------------------+
| | | | | |
+----------------------------------------+------+-----------+------------------+------------------+
| | | | | |
+----------------------------------------+------+-----------+------------------+------------------+
| EQUITY ATTRIBUTABLE TO EQUITY HOLDERS | | | | |
| OF THE COMPANY | | | | |
+----------------------------------------+------+-----------+------------------+------------------+
| Share capital | 15 | | 2,232,790 | 2,231,468 |
+----------------------------------------+------+-----------+------------------+------------------+
| Share premium account | | | 22,508,793 | 22,508,165 |
+----------------------------------------+------+-----------+------------------+------------------+
| Retained earnings | | | (9,957,303) | (9,599,586) |
+----------------------------------------+------+-----------+------------------+------------------+
| | | | ---------------- | ---------------- |
+----------------------------------------+------+-----------+------------------+------------------+
| TOTAL EQUITY | | | 14,784,280 | 15,140,047 |
+----------------------------------------+------+-----------+------------------+------------------+
| | | | =========== | =========== |
+----------------------------------------+------+-----------+------------------+------------------+
The financial statements were approved and authorised for issue by the directors
on 5th May 2009 and were signed on their behalf by:
SCOTT MAGUIRE - Director COLIN HILL - Director
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31st DECEMBER 2008
+-------------+--------+--------+----------------------+----------------------+
| | | | 2008 | 2007 |
+-------------+--------+--------+----------------------+----------------------+
| | Note | | GBP | GBP |
+-------------+--------+--------+----------------------+----------------------+
| | | | | |
+-------------+--------+--------+----------------------+----------------------+
| Cash | 17 | | (2,177,421) | (1,309,836) |
| flows | | | | |
| from | | | | |
| operating | | | | |
| activities | | | | |
+-------------+--------+--------+----------------------+----------------------+
| Interest | | | 72,926 | 152,751 |
| received | | | | |
+-------------+--------+--------+----------------------+----------------------+
| Taxation | | | 332,916 | - |
| received | | | | |
+-------------+--------+--------+----------------------+----------------------+
| | | | -------------------- | -------------------- |
+-------------+--------+--------+----------------------+----------------------+
| Net | | | (1,771,579) | (1,157,085) |
| cash | | | | |
| outflow | | | | |
| from | | | | |
| operating | | | | |
| activities | | | | |
+-------------+--------+--------+----------------------+----------------------+
| | | | -------------------- | -------------------- |
+-------------+--------+--------+----------------------+----------------------+
| Cash | | | | |
| flows | | | | |
| from | | | | |
| investing | | | | |
| activities | | | | |
+-------------+--------+--------+----------------------+----------------------+
| Purchase | | | (74,242) | (159,201) |
| of | | | | |
| property, | | | | |
| plant and | | | | |
| equipment | | | | |
+-------------+--------+--------+----------------------+----------------------+
| | | | -------------------- | -------------------- |
+-------------+--------+--------+----------------------+----------------------+
| Net | | | (74,242) | (159,201) |
| cash | | | | |
| used | | | | |
| in | | | | |
| investing | | | | |
| activities | | | | |
+-------------+--------+--------+----------------------+----------------------+
| | | | -------------------- | -------------------- |
+-------------+--------+--------+----------------------+----------------------+
| Cash | | | | |
| flows | | | | |
| from | | | | |
| financing | | | | |
| activities | | | | |
+-------------+--------+--------+----------------------+----------------------+
| Issue | | | 1,950 | 1,072,000 |
| of | | | | |
| equity | | | | |
| share | | | | |
| capital | | | | |
+-------------+--------+--------+----------------------+----------------------+
| | | | -------------------- | -------------------- |
+-------------+--------+--------+----------------------+----------------------+
| | | | | |
+-------------+--------+--------+----------------------+----------------------+
| Net | | | (1,843,871) | (244,286) |
| decrease | | | | |
| in cash | | | | |
| and cash | | | | |
| equivalents | | | | |
+-------------+--------+--------+----------------------+----------------------+
| | | | | |
+-------------+--------+--------+----------------------+----------------------+
| Cash | | | 2,445,936 | 2,690,222 |
| and | | | | |
| cash | | | | |
| equivalents | | | | |
| at | | | | |
| beginning | | | | |
| of year | | | | |
+-------------+--------+--------+----------------------+----------------------+
| | | | -------------------- | -------------------- |
+-------------+--------+--------+----------------------+----------------------+
| Cash | | | 602,065 | 2,445,936 |
| and | | | | |
| cash | | | | |
| equivalents | | | | |
| at end of | | | | |
| year | | | | |
+-------------+--------+--------+----------------------+----------------------+
| | | | =============== | =============== |
+-------------+--------+--------+----------------------+----------------------+
| | | | | |
+-------------+--------+--------+----------------------+----------------------+
COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 31st DECEMBER 2008
+-------------+--------+--------+---------------------+---------------------+
| | | | 2008 | 2007 |
+-------------+--------+--------+---------------------+---------------------+
| | Note | | GBP | GBP |
+-------------+--------+--------+---------------------+---------------------+
| | | | | |
+-------------+--------+--------+---------------------+---------------------+
| Cash | 17 | | (173,394) | (364,018) |
| flows | | | | |
| from | | | | |
| operating | | | | |
| activities | | | | |
+-------------+--------+--------+---------------------+---------------------+
| Interest | | | 71,700 | 147,216 |
| received | | | | |
+-------------+--------+--------+---------------------+---------------------+
| | | | ------------------- | ------------------- |
+-------------+--------+--------+---------------------+---------------------+
| Net | | | (101,694) | (216,802) |
| cash | | | | |
| outflow | | | | |
| from | | | | |
| operating | | | | |
| activities | | | | |
+-------------+--------+--------+---------------------+---------------------+
| | | | ------------------- | ------------------- |
+-------------+--------+--------+---------------------+---------------------+
| Cash | | | | |
| flows | | | | |
| from | | | | |
| investing | | | | |
| activities | | | | |
+-------------+--------+--------+---------------------+---------------------+
| Loan | | | (1,704,125) | (1,114,425) |
| to | | | | |
| subsidiary | | | | |
+-------------+--------+--------+---------------------+---------------------+
| | | | ------------------- | ------------------- |
+-------------+--------+--------+---------------------+---------------------+
| Net | | | (1,704,125) | (1,114,425) |
| cash | | | | |
| used | | | | |
| in | | | | |
| investing | | | | |
| activities | | | | |
+-------------+--------+--------+---------------------+---------------------+
| | | | ------------------- | ------------------- |
+-------------+--------+--------+---------------------+---------------------+
| Cash | | | | |
| flows | | | | |
| from | | | | |
| financing | | | | |
| activities | | | | |
+-------------+--------+--------+---------------------+---------------------+
| Issue | | | 1,950 | 1,072,000 |
| of | | | | |
| equity | | | | |
| share | | | | |
| capital | | | | |
+-------------+--------+--------+---------------------+---------------------+
| | | | ------------------- | ------------------- |
+-------------+--------+--------+---------------------+---------------------+
| | | | | |
+-------------+--------+--------+---------------------+---------------------+
| Net | | | (1,803,869) | (259,227) |
| decrease | | | | |
| in cash | | | | |
| and cash | | | | |
| equivalents | | | | |
+-------------+--------+--------+---------------------+---------------------+
| | | | | |
+-------------+--------+--------+---------------------+---------------------+
| Cash | | | 2,368,608 | 2,627,835 |
| and | | | | |
| cash | | | | |
| equivalents | | | | |
| at | | | | |
| beginning | | | | |
| of year | | | | |
+-------------+--------+--------+---------------------+---------------------+
| | | | ------------------- | ------------------- |
+-------------+--------+--------+---------------------+---------------------+
| Cash | | | 564,739 | 2,368,608 |
| and | | | | |
| cash | | | | |
| equivalents | | | | |
| at end of | | | | |
| year | | | | |
+-------------+--------+--------+---------------------+---------------------+
| | | | ============== | ============== |
+-------------+--------+--------+---------------------+---------------------+
| | | | | |
+-------------+--------+--------+---------------------+---------------------+
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31st DECEMBER 2008
3.SEGMENTAL ANALYSIS
The revenue and loss before tax are attributable to the one principal
activity of the group. The net assets of the Group at 31st December 2008 and
31st December 2007 are wholly attributable to the principal activity. The Group
comprises one primary business segment for reporting purposes. There is no
secondary reporting segment.
An analysis of turnover (by location of customer) is given below:
+--------------------------------------------------+------------------+------------------+
| | 2008 | 2007 |
+--------------------------------------------------+------------------+------------------+
| | GBP | GBP |
+--------------------------------------------------+------------------+------------------+
| United States | 1,060,636 | 745,165 |
+--------------------------------------------------+------------------+------------------+
| Europe | 99,688 | 160,108 |
+--------------------------------------------------+------------------+------------------+
| | ---------------- | ---------------- |
+--------------------------------------------------+------------------+------------------+
| | 1,160,324 | 905,273 |
+--------------------------------------------------+------------------+------------------+
| | =========== | =========== |
+--------------------------------------------------+------------------+------------------+
An analysis of the Group's total assets by location is given below:
+--------------------------------------------------+------------------+------------------+
| | 2008 | 2007 |
+--------------------------------------------------+------------------+------------------+
| | GBP | GBP |
+--------------------------------------------------+------------------+------------------+
| United Kingdom | 2,493,223 | 5,695,871 |
+--------------------------------------------------+------------------+------------------+
| India | 480,000 | 640,000 |
+--------------------------------------------------+------------------+------------------+
| | ---------------- | ---------------- |
+--------------------------------------------------+------------------+------------------+
| | 2,973,223 | 6,335,871 |
+--------------------------------------------------+------------------+------------------+
| | =========== | =========== |
+--------------------------------------------------+------------------+------------------+
4.OPERATING LOSS
Operating loss is stated after charging/(crediting):
+--------------------------------------------------+-------------+------------+
| | 2008 | 2007 |
+--------------------------------------------------+-------------+------------+
| | GBP | GBP |
+--------------------------------------------------+-------------+------------+
| | | |
+--------------------------------------------------+-------------+------------+
| Depreciation of owned property, plant and | 274,822 | 263,314 |
| equipment | | |
+--------------------------------------------------+-------------+------------+
| Operating lease costs: | | |
+--------------------------------------------------+-------------+------------+
| - land and buildings | - | 1,517 |
+--------------------------------------------------+-------------+------------+
| Net (profit)/loss on foreign currency | (87,903) | 13,765 |
| translation | | |
+--------------------------------------------------+-------------+------------+
| Research and development costs - cash settled | 2,003,510 | 1,835,579 |
+--------------------------------------------------+-------------+------------+
| Research and development costs - equity settled | 1,773,126 | 520,037 |
+--------------------------------------------------+-------------+------------+
| Share option expense - equity settled | 93,689 | 671,776 |
+--------------------------------------------------+-------------+------------+
| | =========== | ========== |
+--------------------------------------------------+-------------+------------+
7. INCOME TAX CREDIT
(a) Analysis of charge in the period
+-----------------------------+-----------------------------+------------------+------------------+
| | 2008 | 2007 |
+-----------------------------------------------------------+------------------+------------------+
| | GBP | GBP |
+-----------------------------------------------------------+------------------+------------------+
| Current tax: | | |
+-----------------------------------------------------------+------------------+------------------+
| UK corporation tax based on the results for the year at | (332,916) | - |
| 28.5% (2007 - 30%) | | |
+-----------------------------------------------------------+------------------+------------------+
| Adjustment in respect of prior periods | - | - |
+-----------------------------------------------------------+------------------+------------------+
| | ---------------- | ---------------- |
+-----------------------------------------------------------+------------------+------------------+
| Total current tax | (332,916) | - |
+-----------------------------------------------------------+------------------+------------------+
| | =========== | =========== |
+-----------------------------+-----------------------------+------------------+------------------+
(b) Factors affecting the tax charge for the year
The tax assessed for the year does not reflect a credit equivalent to the loss
on ordinary activities multiplied by the standard rate of corporation tax of
28.5% (2007 - 30%).
+----------------------------------------+-----------+------------------+------------------+
| | 2008 | 2007 |
+----------------------------------------------------+------------------+------------------+
| | GBP | GBP |
+----------------------------------------------------+------------------+------------------+
| | | | |
+----------------------------------------+-----------+------------------+------------------+
| Loss on ordinary activities before tax | | (3,791,203) | (3,290,732) |
+----------------------------------------+-----------+------------------+------------------+
| | | ========== | =========== |
+----------------------------------------+-----------+------------------+------------------+
| | | | |
+----------------------------------------+-----------+------------------+------------------+
| Loss on ordinary activities multiplied | | (1,080,493) | (987,220) |
| by the standard rate of corporation | | | |
| tax | | | |
+----------------------------------------+-----------+------------------+------------------+
| Effects of: | | | |
+----------------------------------------+-----------+------------------+------------------+
| Expenses not deductible for tax | | 497 | 1,816 |
| purposes | | | |
+----------------------------------------+-----------+------------------+------------------+
| Fixed asset timing differences | | 50,208 | 44,087 |
+----------------------------------------+-----------+------------------+------------------+
| Share options timing differences | | 20,361 | 91,283 |
+----------------------------------------+-----------+------------------+------------------+
| Unrelieved tax losses arising in the | | 1,009,427 | 850,034 |
| year | | | |
+----------------------------------------+-----------+------------------+------------------+
| Surrender of qualifying research and | | (332,916) | - |
| development costs for tax rebates | | | |
+----------------------------------------+-----------+------------------+------------------+
| | | ---------------- | ---------------- |
+----------------------------------------+-----------+------------------+------------------+
| Current tax for the period | | (332,916) | - |
+----------------------------------------+-----------+------------------+------------------+
| | | =========== | =========== |
+----------------------------------------+-----------+------------------+------------------+
The Group has corporation tax losses available for offset against future profits
of the same trade of GBP12,500,000 (2007 - GBP11,280,000). The deferred taxation
asset not provided for in the accounts due to the uncertainty that future
taxable profits will be available to allow recovery of the asset is
approximately GBP3,500,000 (2007 - GBP3,000,000).
9. EARNINGS PER SHARE
The calculation of loss per share is based on the loss of GBP3,458,287 (2007 -
GBP3,290,732) and on the number of shares in issue, being the weighted average
number of shares in issue during the period of 119,668,535 ordinary 0.5p shares
(2007 - 118,370,247 ordinary 0.5p shares). There is no dilutive effect of share
options on the basic loss per share.
10.PROPERTY, PLANT AND EQUIPMENT
+--------------------------------+------------------+------------------+------------------+----------------+
| Group | Plant | Laboratory | Computer | Total |
| | | equipment | equipment | |
+--------------------------------+------------------+------------------+------------------+----------------+
| | GBP | GBP | GBP | GBP |
+--------------------------------+------------------+------------------+------------------+----------------+
| COST | | | | |
+--------------------------------+------------------+------------------+------------------+----------------+
| At 1st January 2007 | 800,000 | 289,763 | 30,200 | 1,119,963 |
+--------------------------------+------------------+------------------+------------------+----------------+
| Additions | - | 145,072 | 14,129 | 159,201 |
+--------------------------------+------------------+------------------+------------------+----------------+
| | | ---------------- | ---------------- | -------------- |
| | --------------- | | | |
+--------------------------------+------------------+------------------+------------------+----------------+
| At 1st January 2008 | 800,000 | 434,835 | 44,329 | 1,279,164 |
+--------------------------------+------------------+------------------+------------------+----------------+
| Additions | - | 72,741 | 1,501 | 74,242 |
+--------------------------------+------------------+------------------+------------------+----------------+
| | | ---------------- | ---------------- | -------------- |
| | ---------------- | | | |
+--------------------------------+------------------+------------------+------------------+----------------+
| At 31st December 2008 | 800,000 | 507,576 | 45,830 | 1,353,406 |
+--------------------------------+------------------+------------------+------------------+----------------+
| | | =========== | =========== | ========== |
| | =========== | | | |
+--------------------------------+------------------+------------------+------------------+----------------+
| | | | | |
+--------------------------------+------------------+------------------+------------------+----------------+
| DEPRECIATION | | | | |
+--------------------------------+------------------+------------------+------------------+----------------+
| At 1st January 2007 | - | 131,707 | 17,591 | 149,298 |
+--------------------------------+------------------+------------------+------------------+----------------+
| Charge for the year | 160,000 | 95,275 | 8,039 | 263,314 |
+--------------------------------+------------------+------------------+------------------+----------------+
| | | ---------------- | -------------- | -------------- |
| | --------------- | | | |
+--------------------------------+------------------+------------------+------------------+----------------+
| At 1st January 2008 | 160,000 | 226,982 | 25,630 | 412,612 |
+--------------------------------+------------------+------------------+------------------+----------------+
| Charge for the year | 160,000 | 106,700 | 8,122 | 274,822 |
+--------------------------------+------------------+------------------+------------------+----------------+
| | | ---------------- | --------------- | -------------- |
| | --------------- | | | |
+--------------------------------+------------------+------------------+------------------+----------------+
| At 31st December 2008 | 320,000 | 333,682 | 33,752 | 687,434 |
+--------------------------------+------------------+------------------+------------------+----------------+
| | =========== | =========== | =========== | ========== |
+--------------------------------+------------------+------------------+------------------+----------------+
| | | | | |
+--------------------------------+------------------+------------------+------------------+----------------+
| NET BOOK VALUE | | | | |
+--------------------------------+------------------+------------------+------------------+----------------+
| At 31st December 2008 | 480,000 | 173,894 | 12,078 | 665,972 |
+--------------------------------+------------------+------------------+------------------+----------------+
| | | =========== | =========== | ========== |
| | =========== | | | |
+--------------------------------+------------------+------------------+------------------+----------------+
| At 31st December 2007 | 640,000 | 207,853 | 18,699 | 866,552 |
+--------------------------------+------------------+------------------+------------------+----------------+
| | | =========== | =========== | ========== |
| | =========== | | | |
+--------------------------------+------------------+------------------+------------------+----------------+
10.PROPERTY, PLANT AND EQUIPMENT (continued)
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| Company | Plant | Laboratory | Computer | Total |
| | | equipment | equipment | |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | GBP | GBP | GBP | GBP |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| COST | | | | |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| At 1st January 2007 | 800,000 | - | - | 800,000 |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| Additions | - | - | - | - |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | -------------- | -------------- | --------------- | -------------- |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| At 1st January 2008 | 800,000 | - | - | 800,000 |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| Additions | - | - | - | - |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | -------------- | --------------- | --------------- | -------------- |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| At 31st December 2008 | 800,000 | - | - | 800,000 |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | =========== | =========== | =========== | =========== |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | | | | |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | | | | |
| DEPRECIATION | | | | |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| At 1st January 2007 | - | - | - | - |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| Charge for the year | 160,000 | - | - | 160,000 |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | -------------- | --------------- | --------------- | -------------- |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| At 1st January 2008 | 160,000 | - | - | 160,000 |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| Charge for the year | 160,000 | - | - | 160,000 |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | -------------- | --------------- | --------------- | --------------- |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| At 31st December 2008 | 320,000 | - | - | 320,000 |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | =========== | =========== | =========== | ============ |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| NET BOOK VALUE | | | | |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| At 31st December 2008 | 480,000 | - | - | 480,000 |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | =========== | =========== | =========== | ============ |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| At 31st December 2007 | 640,000 | - | - | 640,000 |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | =========== | =========== | =========== | ============ |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | | | | |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | | | | |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | | | | |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
| | | | | |
+--------------------------------------------+----------------+-----------------+-----------------+-----------------+
11.GOODWILL
+------------------------------------------------+-+------------+-------------+
| Group | | | |
+------------------------------------------------+-+------------+-------------+
| | | | GBP |
+------------------------------------------------+-+------------+-------------+
| COST | | | |
+------------------------------------------------+-+------------+-------------+
| At 1st January 2007, 1st January 2008 and 31st | | | 1,061,476 |
| December 2008 | | | |
+------------------------------------------------+-+------------+-------------+
| | | | =========== |
+------------------------------------------------+-+------------+-------------+
Goodwill arising on consolidation represents the excess of the cost of the
reverse acquisition over the net assets of Lipoxen Plc at the date of the
business combination.
The reverse acquisition of Lipoxen Plc provided Lipoxen Tehnologies Limited with
access to the AIM market to enable it to raise funds to finance the ongoing
development of its technology. This access to capital markets does not satisfy
the criteria for separate recognition as an intangible asset as set out in IAS
38: Intangible assets, and is therefore treated as goodwill in these financial
statements.
The Group tests annually for impairment or more frequently if there are
indications that goodwill might be impaired. The impairment review has been
carried out on the Group as a whole.
As primarily a research and development Group, the use of discounted cash flow
or similar tools is not appropriate given the inherent risks and uncertainties
in the sector and the long timespans involved. Instead the Board look at longer
term indicators of impairment.
Since the date of the previous impairment review the Group has demonstrated
strong technical success in the development of its PSA technologies and its
preclinical liposomal entrapment, both in vivo and in vitro. The revenue
generating capacity of the Group has been enhanced through this progress.
Consequently, it is the view of the Board that no impairment of the carrying
value of the Group's goodwill or other assets has occurred during the year.
13.TRADE AND OTHER RECEIVABLES
+-----------------------------+------------------+------------------+--------------------+------------------+
| | Group | Company |
+-----------------------------+-------------------------------------+---------------------------------------+
| | 2008 | 2007 | 2008 | 2007 |
+-----------------------------+------------------+------------------+--------------------+------------------+
| | GBP | GBP | GBP | GBP |
+-----------------------------+------------------+------------------+--------------------+------------------+
| Due in more than one year: | | | | |
+-----------------------------+------------------+------------------+--------------------+------------------+
| Prepayments | - | 500,000 | - | - |
+-----------------------------+------------------+------------------+--------------------+------------------+
| Receivables from | - | - | 4,862,481 | 3,158,356 |
| subsidiaries | | | | |
+-----------------------------+------------------+------------------+--------------------+------------------+
| | __________ | _________ | ___________ | __________ |
+-----------------------------+------------------+------------------+--------------------+------------------+
| | | | | |
+-----------------------------+------------------+------------------+--------------------+------------------+
| | - | 500,000 | 4,862,481 | 3,158,356 |
+-----------------------------+------------------+------------------+--------------------+------------------+
| | =========== | =========== | ========= | =========== |
+-----------------------------+------------------+------------------+--------------------+------------------+
| Due within one year: | | | | |
+-----------------------------+------------------+------------------+--------------------+------------------+
| Trade receivables | 704,738 | 111,523 | - | - |
+-----------------------------+------------------+------------------+--------------------+------------------+
| Provision for impairment | - | (11,902) | - | - |
+-----------------------------+------------------+------------------+--------------------+------------------+
| | ________ | ________ | ________ | __________ |
+-----------------------------+------------------+------------------+--------------------+------------------+
| | | | | |
+-----------------------------+------------------+------------------+--------------------+------------------+
| | 704,738 | 99,621 | - | - |
+-----------------------------+------------------+------------------+--------------------+------------------+
| Other receivables | 66,763 | 43,788 | - | 2,468 |
+-----------------------------+------------------+------------------+--------------------+------------------+
| Prepayments | 347,058 | 1,612,231 | 12,823 | 7,384 |
+-----------------------------+------------------+------------------+--------------------+------------------+
| | ---------------- | ---------------- | ------------------ | ---------------- |
+-----------------------------+------------------+------------------+--------------------+------------------+
| | 1,118,559 | 1,755,640 | 12,823 | 9,852 |
+-----------------------------+------------------+------------------+--------------------+------------------+
| | =========== | =========== | ============ | =========== |
+-----------------------------+------------------+------------------+--------------------+------------------+
In October 2005, Lipoxen Technologies Limited entered into an agreement with its
then major shareholder, FDS Pharma Ass, under which 15,000,000 ordinary shares
were allotted in consideration for the provision by FDS of manufacturing and
clinical development services. As per a Novation Agreement between FDS Pharma
Ass, Lipoxen Technologies Limited and the Company dated 16th January 2006, the
agreement provides for the allotment of up to 10,174,340 ordinary shares in
Lipoxen Plc upon achievement of certain future milestones to the financial value
of US$2,670,764 as approved by shareholders at the Extraordinary General Meeting
of the Company held on 16th January 2006. An amount of GBP1,773,126 (2007
-GBP520,037) has been written off
to the income statement in the year in respect of services provided in the year
by FDS. An amount of GBP311,725 (2007 - GBP2,084,851) is included in the balance
sheet under prepayments in respect of services still to be provided under the
agreement, of which GBPNil (2007 - GBP500,000) is expected to be provided in
more than one year from the balance sheet date.
The carrying amount of the trade receivables is denominated in currencies as
follows:
+--------------------------------------------------+-------------+-------------+
| | 2008 | 2007 |
+--------------------------------------------------+-------------+-------------+
| | GBP | GBP |
+--------------------------------------------------+-------------+-------------+
| Pounds sterling | 23,510 | 5,131 |
+--------------------------------------------------+-------------+-------------+
| US dollars | 681,228 | 94,490 |
+--------------------------------------------------+-------------+-------------+
| | __________ | _________ |
+--------------------------------------------------+-------------+-------------+
| | | |
+--------------------------------------------------+-------------+-------------+
| | 704,738 | 99,621 |
+--------------------------------------------------+-------------+-------------+
| | =========== | =========== |
+--------------------------------------------------+-------------+-------------+
Trade receivables are considered to be impaired if they are more than three
months overdue at the date of approval of the financial statements. At 31st
December 2008 trade receivables of GBPNil (2007 - GBP11,902) were impaired and
provided against. Movements on the provision for impairment of trade receivables
are as follows:
+--------------------------------------------------+-------------+-------------+
| | 2008 | 2007 |
+--------------------------------------------------+-------------+-------------+
| | GBP | GBP |
+--------------------------------------------------+-------------+-------------+
| At 1st January 2008 | 11,902 | 95,893 |
+--------------------------------------------------+-------------+-------------+
| Unused amount reversed | (11,902) | (83,991) |
+--------------------------------------------------+-------------+-------------+
| | __________ | _________ |
+--------------------------------------------------+-------------+-------------+
| | | |
+--------------------------------------------------+-------------+-------------+
| At 31st December 2008 | - | 11,902 |
+--------------------------------------------------+-------------+-------------+
| | =========== | =========== |
+--------------------------------------------------+-------------+-------------+
The maximum exposure to credit risk at the reporting date is the carrying value
of each class of receivable mentioned above. The Group does not hold any
collateral as security. The Directors consider that the carrying value of each
class of receivable approximates to its fair value.
14.TRADE AND OTHER PAYABLES
+-----------------------------+------------------+------------------+------------------+------------------+
| | Group | Company |
+-----------------------------+-------------------------------------+-------------------------------------+
| | 2008 | 2007 | 2008 | 2007 |
+-----------------------------+------------------+------------------+------------------+------------------+
| | GBP | GBP | GBP | GBP |
+-----------------------------+------------------+------------------+------------------+------------------+
| Trade payables | 129,672 | 117,020 | 72,530 | 5,934 |
+-----------------------------+------------------+------------------+------------------+------------------+
| Social security and other | 45,706 | 36,873 | 513 | - |
| taxes | | | | |
+-----------------------------+------------------+------------------+------------------+------------------+
| Other payables | 7,963 | 9,319 | - | - |
+-----------------------------+------------------+------------------+------------------+------------------+
| Accrued expenses | 216,024 | 130,521 | 107,750 | 75,865 |
+-----------------------------+------------------+------------------+------------------+------------------+
| Deferred income | 75,484 | - | - | - |
+-----------------------------+------------------+------------------+------------------+------------------+
| | ---------------- | ---------------- | ---------------- | ---------------- |
+-----------------------------+------------------+------------------+------------------+------------------+
| | 474,849 | 293,733 | 180,793 | 81,799 |
+-----------------------------+------------------+------------------+------------------+------------------+
| | =========== | =========== | =========== | =========== |
+-----------------------------+------------------+------------------+------------------+------------------+
15.SHARE CAPITAL
Authorised share capital:
+----------------------------+----------------+-------+----------------+-------+------------+----------------+
| | 2008 | 2007 |
+-----------------------------------------------------+------------------------+-----------------------------+
| | GBP | GBP |
+-----------------------------------------------------+------------------------+-----------------------------+
| 673,300,000 Ordinary shares of 0.5p each | 3,366,500 | 3,366,500 |
+-----------------------------------------------------+------------------------+-----------------------------+
| 16,335,000,000 Deferred shares of 0.01p each | 1,633,500 | 1,633,500 |
+-----------------------------------------------------+------------------------+-----------------------------+
| | ---------------------- | --------------------- |
+-----------------------------------------------------+------------------------+-----------------------------+
| | 5,000,000 | 5,000,000 |
+-----------------------------------------------------+------------------------+-----------------------------+
| | ============= | ============= |
+-----------------------------------------------------+------------------------+-----------------------------+
| Allotted, called up and fully paid: | |
+----------------------------------------------------------------------+-------------------------------------+
| | 2008 | 2007 |
+----------------------------+-----------------------------------------+-------------------------------------+
| | No | GBP | No | GBP |
+----------------------------+----------------+------------------------+--------------------+----------------+
| Ordinary shares of 0.5p | 119,858,085 | 599,290 | 119,593,552 | 597,968 |
| each | | | | |
+----------------------------+----------------+------------------------+--------------------+----------------+
| Deferred shares of 0.01p | 16,335,000,000 | 1,633,500 | 16,335,000,000 | 1,633,500 |
| each | | | | |
+----------------------------+----------------+------------------------+--------------------+----------------+
| | | ----------------- | | -------------- |
+----------------------------+----------------+------------------------+--------------------+----------------+
| | | 2,232,790 | | 2,231,468 |
+----------------------------+----------------+------------------------+--------------------+----------------+
| | | =========== | | ========== |
+----------------------------+----------------+-------+----------------+-------+------------+----------------+
Following the exercise of share options, 128,875 ordinary shares of 0.5p each
were issued on 19th August 2008 for cash of GBP949 and a further 135,658
ordinary shares of 0.5p each were issued on 17th October 2008 for cash of
GBP1,001.
The rights attached to the deferred shares are as follows:
(a) no entitlement to any dividend;
(b) on a winding-up, an entitlement to receive an amount equal to the nominal
value of each share, but only after an amount of GBP50,000,000 per share has
been paid to the holders of the issued and fully paid ordinary 0.5p shares;
(c) no right to attend or vote at a general meeting; and
(d) an obligation to permit the Company to transfer the shares to such person as
the Company may determine, without receiving any payment.
17.RECONCILIATION OF LOSS BEFORE TAXATION TO NET CASH OUTFLOW FROM OPERATING
ACTIVITIES
+--------------------------------------------------+------------------+------------------+
| Group | 2008 | 2007 |
+--------------------------------------------------+------------------+------------------+
| | GBP | GBP |
+--------------------------------------------------+------------------+------------------+
| Loss before taxation | (3,791,203) | (3,290,732) |
+--------------------------------------------------+------------------+------------------+
| Adjustments for: | | |
+--------------------------------------------------+------------------+------------------+
| Equity-settled share options | 93,689 | 671,776 |
+--------------------------------------------------+------------------+------------------+
| Equity-settled research and development | 1,773,126 | 520,037 |
+--------------------------------------------------+------------------+------------------+
| Depreciation | 274,822 | 263,314 |
+--------------------------------------------------+------------------+------------------+
| Investment income | (72,926) | (152,751) |
+--------------------------------------------------+------------------+------------------+
| | ---------------- | ---------------- |
+--------------------------------------------------+------------------+------------------+
| | (1,722,492) | (1,988,356) |
+--------------------------------------------------+------------------+------------------+
| (Increase)/decrease in receivables | (636,045) | 652,907 |
+--------------------------------------------------+------------------+------------------+
| Increase in payables | 181,116 | 25,613 |
+--------------------------------------------------+------------------+------------------+
| | ---------------- | ---------------- |
+--------------------------------------------------+------------------+------------------+
| Net cash outflow from operating activities | (2,177,421) | (1,309,836) |
+--------------------------------------------------+------------------+------------------+
| | =========== | =========== |
+--------------------------------------------------+------------------+------------------+
+--------------------------------------------------+------------------+------------------+
| Company | 2008 | 2007 |
+--------------------------------------------------+------------------+------------------+
| | GBP | GBP |
+--------------------------------------------------+------------------+------------------+
| Loss before taxation | (357,717) | (428,284) |
+--------------------------------------------------+------------------+------------------+
| Adjustments for: | | |
+--------------------------------------------------+------------------+------------------+
| Depreciation | 160,000 | 160,000 |
+--------------------------------------------------+------------------+------------------+
| Investment income | (71,700) | (147,216) |
+--------------------------------------------------+------------------+------------------+
| | ---------------- | ---------------- |
+--------------------------------------------------+------------------+------------------+
| | (269,417) | (415,500) |
+--------------------------------------------------+------------------+------------------+
| (Increase)/decrease in receivables | (2,971) | 9,664 |
+--------------------------------------------------+------------------+------------------+
| Increase in payables | 98,994 | 41,818 |
+--------------------------------------------------+------------------+------------------+
| | ---------------- | ---------------- |
+--------------------------------------------------+------------------+------------------+
| Net cash outflow from operating activities | (173,394) | (364,018) |
+--------------------------------------------------+------------------+------------------+
| | =========== | =========== |
+--------------------------------------------------+------------------+------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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