TIDMREDX
RNS Number : 5979P
Redx Pharma plc
30 May 2018
REDX PHARMA PLC
("Redx" or "the Group")
Interim results for the six months ended 31 March 2018
Delivering on strategic objectives
Alderley Park, May 30 2018 Redx (AIM: REDX), the drug discovery
and development Group focused on cancer and fibrosis, today
announces unaudited results for the six months ended 31 March
2018.
Iain Ross, Executive Chairman of Redx Pharma commented:
"I am pleased with the progress that Redx has made in the past
six months. We have continued to advance our R&D programmes and
achieved substantial cost savings across the business. Based upon
the outcome of discussions with the regulators our plans are to
re-introduce RXC004 into the clinic and we continue to expect to
enrol additional patients into the amended phase I/IIa clinical
trial early next year
"We are all delighted to have Lisa Anson on board as our new
Chief Executive Officer. Her experience and knowledge will prove
invaluable to the Group and I look forward to her taking over the
reins on 1 June 2018. Her appointment, along with Dr. Andrew
Saunders as our Chief Medical Officer, strengthens the Redx team as
we continue to execute on our strategy.
"On 1 June I will re-assume my role as Non-Executive Chairman of
the Group and would like to take this opportunity to reiterate my
thanks to all at Redx for their commitment during my time as
Executive Chairman."
Operational Highlights
-- Exited Administration on 2 November 2017 with a cash balance
of GBP13.9 million and shares resumed trading on AIM on 6 November
2017
-- Announced strategic update and refocused R&D pipeline,
consisting of two development programmes and five research
programmes
-- Strengthened management team and Board of Directors
o Iain Ross appointed Executive Chairman with the former CEO
stepping down as a Director of the Group
o Dominic Jackson appointed Chief Financial Officer and
Executive Director
o Peter Presland appointed Non-Executive Director and Chair of
Audit Committee
o Dr. Andrew Saunders appointed Chief Medical Officer
-- RXC004 Phase 1a/2a trial initiated and temporally suspended
due to occurrence of a high level of on-target adverse events
o Good drug exposure observed, no-off target side-effects, and
expected on-target, Wnt pathway-mediated effects observed
o Indication that the compound is hitting the target pathway
o Pharmacokinetic evaluation suggests that, with the support of
the regulators, there is a clear pathway for re-introduction of
compound back into the clinic at lower dose
-- Poster presentation at American Association for Cancer Research
o Demonstrated that RXC004 enhances immune response in
pre-clinical models of cancer
-- Option and licence agreement signed with Deinove for Novel
Bacterial Topoisomerase Inhibitor (NBTI) programme.
Post Period Highlights
-- Lisa Anson, currently President of AstraZeneca UK, appointed
as Chief Executive Officer, effective 1 June 2018
-- Iain Ross to revert to role of Non-Executive Chairman.
Financial Highlights
-- Cash balance at 31 March 2018 of GBP10.3m (H1 2017:
GBP5.1m/at exit from Administration on 2 November 2017:
GBP13.9m)
-- Annualised reduction in costs of GBP7m
-- Loss for the period GBP4.6m (H1 2017:GBP10.7m loss )
-Ends-
For further information, please contact:
Redx Pharma Plc T: +44 1625 469
918
Iain Ross, Executive Chairman
Cantor Fitzgerald Europe (Nominated Advisor & T: +44 20 7894
Broker) 7000
Phil Davies
WG Partners LLP (Joint Broker) T: +44 20 3705
9330
Claes Spång/ Chris Lee/ David Wilson
FTI Consulting T: +44 20 3727
1000
Simon Conway/Stephanie Cuthbert
About Redx Pharma Plc
Redx is a UK biotechnology Group whose shares are traded on AIM
(AIM:REDX). Redx is focused on creating and developing first, or
potentially best in class drugs, in specific areas of cancer and
fibrosis that address significant unmet medical need. Redx has an
in-house discovery team with proven world-class chemistry
capabilities.
If you would like to sign up to regular alerts from Redx Pharma,
please follow this link
https://www.redxpharma.com/investors/email-alerts/.
CHAIRMAN'S STATEMENT
In December 2017, when I announced the financial results for the
year ended 30(th) September 2017, I stated that our mantra for this
business going forward would be Focus, Realism and Results. It is
therefore with pleasure that I present the financial results for
Redx Pharma Plc for the six-month period ended 31(st) March 2018,
which demonstrate a clear commitment to that mantra.
We have made significant progress with our R&D programmes
and I believe the recent setback with our RXC004 clinical programme
was dealt with transparently and we have identified a way back into
the clinic. Concurrently, we have disposed of non-core assets,
completed re-structuring and rationalisation initiatives, and
achieved substantial cost savings across the business.
Realism and professionalism remain key to forming validating
partnerships, and I am pleased to report significant progress has
been made in discussions with third parties across all programmes
during the period, and that our interim financial results
demonstrate a tight and prudent control of costs and cash flow.
Finally, during the period we appointed Dr. Andrew Saunders as
our CMO and more recently, post period and after the completion of
an extensive search, we announced the appointment of our new CEO,
Lisa Anson. Lisa brings invaluable, relevant experience and
contacts to the business and will, as of 1(st) June 2018, lead us
through the Group's next stage of development. From that date I
will revert to my previous position as Non-Executive Chairman.
Research & Development
Last November we set some near-term milestones, most of which I
am pleased to report we have achieved.
The suspension of patient recruitment in our Phase I/IIa RXC004
oncology programme, in late March, was disappointing with the first
patient dosed removed from the study to allow recovery from
clinically significant side effects that emerged. Importantly, good
drug exposure was observed, and only expected on-target Wnt pathway
mediated side-effects were noted with no-off target side-effects
recorded. This indicates that the compound is hitting the target
and the pharmacokinetic evaluation shows a clear pathway forward,
and following discussions with the MHRA, we plan to introduce the
compound back into the clinic at lower doses, where we would
predict target engagement with limited on-target side-effects.
Simultaneously, publications and presentations at the recent
American Association for Cancer Research (AACR) Meeting held in
Chicago highlighted the role that the Wnt pathway plays in
immuno-oncology resistance. We presented a poster at the meeting,
which demonstrated that RXC004 enhances immune response in
pre-clinical models of cancer.
It has also been specifically reported that Novartis' WNT974
competitor programme has demonstrated immuno-oncology,
pharmacodynamic effects as a monotherapy in patients at a
well-tolerated dose of 10mg, which augurs well for RXC004, which
has a longer half-life and we would predict would have similar
effects at a lower dose.
In addition, during the period, we made substantial progress in
our fibrosis initiatives. In our porcupine fibrosis project, we
have demonstrated robust anti-fibrotic effects in a range of
industry standard models. Both our lead clinical porcupine
inhibitor, RXC004, and a back-up, REDX06109 (from a distinct
chemical class in comparison to RX004 and therefore protected by a
different patent family), showed inhibition of fibrosis end points
in disease models of kidney, liver and lung (IPF) fibrosis. In our
Pan-ROCK programme we have now confirmed the good anti-fibrotic
effects of our lead compound, REDX08397, in an adoptive T cell
model of intestinal fibrosis.
In line with our previously announced strategy to close down our
anti-infective research unit and look to partner our assets, we
announced in March that we have signed an option and licence
agreement with Deinove for our Novel Bacterial Topoisomerase
Inhibitor (NBTI) programme, which is primarily focused on treating
multi-drug resistant Gram negative bacteria.
On the IP front, we have had the Pan-ROCK inhibitor US patent
granted and the RXC004 US patent notice of allowance issued.
Finance
The interim results to March 2018 are the first set of financial
results to be largely free of one-off costs and adjustments of the
Administration. However, I draw your attention to the cash flow,
where a significant unwind relating to the payment of exceptional
liabilities exists; these were accrued during the Administration
and as such are legacy in nature.
In the Annual Report released last year, the Group cited GBP4m
of targeted full-year fixed cost savings. I am pleased to report
that we delivered a GBP7m annualised reduction in costs, all of
which had been in place by March 2018.
Over the period, the Board has further adopted a robust set of
financial controls, including a project-based operating model and
associated rolling short-term cash flow forecasts to assist in
better prioritisation of resources to projects, resulting in
greater transparency and project accountability.
The cash position at the end of March 2018 was GBP10.3m compared
with GBP13.9m on exit from Administration five months previously.
We continue to focus on our cash balance and run-rate. However, it
is worth noting that because of the delay in the RCX004 programme,
the near-term cash spend on that project will now be much lower
with significant costs deferred until patient accrual into the
trial recommences.
The successful partnering of one of our Anti-Infective
programmes with Deinove, increased our focus on the core areas of
oncology and fibrosis and has created liquidity for the Group
whilst retaining the potential for further upside value
creation.
The Group has further demonstrated its ability to flex the cost
base in line with the liquidity demands presented by the R&D
programmes. One example of this is a sub-let agreement signed
during the period with Cancer Research UK, which significantly
reduces the operating leverage previously created by the 10-year
lease and associated rates for our buildings and facilities at
Alderley Park.
Outlook
In late May 2017 Redx Pharma plc and its subsidiary Redx
Oncology Limited went into Administration and, as a result, we had
to execute an accelerated sale of a valuable world-class
development asset to meet the immediate demands of all outstanding
bona fide creditors. This included Liverpool City Council, along
with creditors then falling due as a result of the Administration,
including the Regional Growth Funds.
This was an uncomfortable period for all involved and, as a
result, your new Board has restructured the business model, as well
as insisting upon transparency, realism and a change in culture in
the overall management of the business.
Our science remains of the highest quality, but the management
of our assets is now more rigorous and akin to that of a small, but
thriving, biotech company. I believe we are now fit for purpose and
I look forward to working with Lisa, our new CEO, and her team to
build sustainable long-term value for shareholders.
Iain Ross
Chairman
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Half Year Half Year Year to
to 31 March to 31 30 September
2018 March 2017 2017
Note GBP000 GBP000 GBP000
Revenue 2 129 - 30,474
Operating expenses (5,172) (10,154) (15,768)
RGF clawback 3 - - (6,086)
Costs of Administration
Write-off of derivative instrument 4 - - (3,560)
Other Administration costs 5 (177) - (2,930)
Reorganisation costs 6 (215) (320) (791)
Derecognition of non-current
asset 7 - - (641)
Share based compensation 8 (162) (3) (13)
Other operating income 637 642 1,291
------------- ------------ --------------
(Loss)/profit from operations (4,960) (9,835) 1,976
Finance costs 9 - (1,170) (368)
Finance income 9 16 19 38
------------- ------------ --------------
(Loss)/profit before taxation (4,944) (10,986) 1,646
Income tax 10 341 293 (118)
------------- ------------ --------------
Total comprehensive (loss)/profit
for period attributable to
owners of Redx Pharma plc (4,603) (10,693) 1,528
============= ============ ==============
pence Pence pence
(Loss)/earnings per share
- basic 11 (3.6) (10.7) 1.4
- diluted 11 (3.6) (10.7) 1.4
Consolidated Statement of Financial Position
Unaudited Unaudited Audited
31 March 31 March 30 September
2018 2017 2017
Note GBP000 GBP000 GBP000
Assets
Property, plant and equipment 238 386 222
Intangible assets 427 426 430
Derivative financial instrument - 894 -
Other receivables 7 - 623 -
Total non-current assets 665 2,329 652
---------- ---------- -------------
Trade and other receivables 2,207 1,481 2,588
Derivative financial instrument - 1,788 -
Cash and cash equivalents 10,318 5,106 23,806
Current tax 653 930 643
Total current assets 13,178 9,305 27,037
---------- ---------- -------------
Total assets 13,843 11,634 27,689
---------- ---------- -------------
Liabilities
Trade and other payables 3,957 7,434 13,362
Borrowings - 2,000 -
Total liabilities 3,957 9,434 13,362
---------- ---------- -------------
Net assets 9,886 2,200 14,327
========== ========== =============
Equity
Share capital 1,265 1,265 1,265
Share premium 33,263 33,367 33,263
Share-based compensation 1,042 870 880
Capital redemption reserve 1 1 1
Retained deficit (25,685) (33,303) (21,082)
Equity attributable to
shareholders 9,886 2,200 14,327
========== ========== =============
Consolidated Statement of Changes in Equity
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Share Share Share-based Capital Retained Total
capital premium payment redemp'n deficit equity
reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Movements by half
year
As at 30 September
2016 936 22,526 867 1 (22,610) 1,720
---------- ---------- ------------ ---------- ---------- ----------
Share options exercised 1 69 - - - 70
Share issue 328 11,966 - - - 12,294
Share issue costs - (1,194) - - - (1,194)
Transactions with
owners in their capacity
as owners 329 10,841 - - - 11,170
Loss and total comprehensive
income for the period - - - - (10,693) (10,693)
Share-based compensation - - 3 - - 3
---------- ---------- ------------ ---------- ---------- ----------
As at 31 March 2017 1,265 33,367 870 1 (33,303) 2,200
---------- ---------- ------------ ---------- ---------- ----------
Share issue costs - (104) - - - (104)
---------- ---------- ------------ ---------- ---------- ----------
Transactions with
owners in their capacity
as owners - (104) - - - (104)
Profit and total comprehensive
income for the period - - - - 12,221 12,221
Share-based compensation - - 10 - - 10
As at 30 September
2017 1,265 33,263 880 1 (21,082) 14,327
---------- ---------- ------------ ---------- ---------- ----------
Transactions with - - - - - -
owners in their capacity
as owners
Loss and total comprehensive
income for the period - - - - (4,603) (4,603)
Share-based compensation - - 162 - - 162
As at 31 March 2018 1,265 33,263 1,042 1 (25,685) 9,886
========== ========== ============ ========== ========== ==========
Consolidated Statement of Cash Flows
Unaudited Unaudited Audited
Half Year Half Year Year to
to 31 March to 31 30 September
2018 March 2017 2017
GBP000 GBP000 GBP000
Net cash flow from operating activities
(Loss)/profit for the period (4,603) (10,693) 1,528
Adjustments for:
Income tax (341) (293) 118
Finance costs (net) (16) 1,151 330
Depreciation and amortisation 88 178 327
Share based compensation 162 3 13
Derecognition of non-current asset - - 641
Write-off of derivative asset - - 3,560
Profit on disposal of assets (3) - (107)
Movements in working capital
Decrease/(increase) in trade and
other receivables 266 71 (1,185)
(Decrease)/increase in trade and
other payables (9,269) 1,573 8,871
Cash (used in)/generated by operations (13,716) (8,010) 14,096
Tax credit received 358 - -
Interest received 16 2 2
------------- ------------ --------------
Net cash (used in)/generated by
operations (13,342) (8,008) 14,098
------------- ------------ --------------
Cash flows from investing activities
Purchase of intangible assets - (117) (121)
Sale of property plant and equipment 8 - 124
Purchase of property, plant and
equipment (106) (31) (33)
Net cash used in investing activities (98) (148) (30)
------------- ------------ --------------
Cash flows from financing activities
Proceeds from share issues - 12,364 12,364
Share issue costs - (1,194) (1,298)
Derivative financial instrument - (3,666) (3,666)
Receipt from derivative financial
instrument - - 106
Interest paid (48) - (1,551)
Loan repaid - - 25
LCC loan repaid - - (2,000)
Net cash from financing activities (48) 7,504 3,980
------------- ------------ --------------
Net (decrease)/increase in cash
and equivalents (13,488) (652) 18,048
Cash and cash equivalents brought
forward 23,806 5,758 5,758
Cash and cash equivalents carried
forward 10,318 5,106 23,806
============= ============ ==============
Reconciliation of liabilities arising from financing
activities
Unaudited Unaudited Audited
Half Year Half Year Year to
to 31 March to 31 30 September
2018 March 2017
2017
LCC loan GBP'000 GBP'000 GBP'000
Balance B/fwd - 2,000 2,000
Cash flows - - (2,000)
-------------- ---------- --------------
Balance C/fwd - 2,000 -
============== ========== ==============
Notes to the Financial Statements
1. Basis of preparation and accounting policies
1.01 Description of Group and approval of the consolidated interim financial statements
Redx Pharma plc ("Redx" or "the Company") is a limited liability
company incorporated and domiciled in the UK. Its shares are quoted
on AIM, a market operated by The London Stock Exchange. The
principal activity of the Group is drug discovery, pre-clinical
development and licensing.
The Group's consolidated interim financial statements are
presented in pounds sterling, which is the Group's presentational
currency, and all values are rounded to the nearest thousand
(GBP000) except where indicated otherwise.
The consolidated interim financial statements were approved by
the Board of Directors on 29 May 2018.
1.02 Basis of preparation
The Group's consolidated interim financial statements, which are
unaudited, consolidate the results of Redx Pharma plc and its
subsidiary undertakings made up to 31 March 2018. The Group's
accounting reference date is 30 September.
These interim financial statements have not been audited and do
not comprise statutory accounts within the meaning of section 434
of the Companies Act 2006.
The information for the period ended 30 September 2017 has been
extracted from the statutory accounts for the year ended 30
September 2017, prepared in accordance with International Financial
Reporting Standards as adopted by the European Union (IFRS). The
statutory accounts were approved by the Board on 20 December 2017
and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain a statement under
section 498(2) or section 498(3) of the Companies Act 2006. The
results for the six months ended 31 March 2017 are unaudited.
1.03 Significant accounting policies
The accounting policies used in the preparation of the financial
information for the six months ended 31 March 2018 are in
accordance with the recognition and measurement criteria of
International Financial Reporting Standards ('IFRS') as adopted by
the European Union and are consistent with those adopted in the
annual statutory financial statements for the year ended 30
September 2017 and those which will be adopted in the annual
statutory financial statements for the year ending 30 September
2018.
While the financial information included has been prepared in
accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRS), as adopted by
the European Union (EU), the interim financial statements do not
contain sufficient information to comply with IFRS's.
1.04 Segmental information
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The Board of Directors and the Chief Financial Officer are together
considered the chief operating decision-maker and as such are
responsible for allocating resources and assessing performance of
operating segments.
The Directors consider that there are no identifiable business
segments that are subject to risks and returns different to the
core business. The information reported to the Directors, for the
purposes of resource allocation and assessment of performance is
based wholly on the overall activities of the Group.
The Group has therefore determined that it has only one
reportable segment.
1.05 Revenue
Revenue is measured at the fair value of the consideration
received or receivable.
Revenues from the sale of intellectual property, where there are
no obligations subsequent to delivery, are recognised when
significant risks and rewards have transferred which is considered
to be the point at which all patents and other information in
accordance with the substance of the agreement are handed over.
Revenues from the grant of an option over a license agreement,
where there are no obligations subsequent to the granting of the
option, are recognised as soon as all information in accordance
with the substance of the agreement is handed over.
1.06 Going concern
As part of their going concern review the Directors have
followed the guidelines published by the Financial Reporting
Council entitled "Guidance on Risk Management and Internal Control
and Related Financial and Business Reporting".
The Group made a net loss of GBP4.6m during the period,
following the entering into an option for a license agreement of
one of its Anti-infectives programmes, and after taking into
account the final costs associated with two Group companies, Redx
Pharma Plc and Redx Oncology Limited, entering Administration in
May 2017. The Directors are satisfied, based on detailed cash flow
projections and after the consideration of reasonable
sensitivities, that sufficient liquidity is available to meet the
Group's needs as they fall due for the foreseeable future and at
least 12 months from the date of signing the interim financial
statements.
The detailed cash flow assumptions are based on the Group's
projections, prepared and approved by the Board, which reflects a
number of key assumptions in respect of project costs, overheads
and discretionary spend, underpinned by the current pipeline.
No revenue has been assumed in the forecasts, save for that
generated from subletting unused space. The Group is already in
discussions with third-parties in respect of partnerships and the
licensing of non-core assets in addition to the Deinove option
already granted. As highlighted in the Chairman's statement, delays
to the RXC004 trial has meant that near term expenditure on that
project will be lower & some expenditure deferred. The
forecasts indicate that the Group has a cash runway through to mid
calendar year 2019 and its ability to continue to develop its
programmes thereafter is dependent on entering a partnership
agreement or an additional fund raise. The Group is already in
discussions with third-parties in respect of partnerships and the
licensing of non-core assets and furthermore, the Group continues
to have the ability to seek to raise additional funds on capital
markets.
In the absence of such opportunities in relation to partnerships
and the licensing of non-core assets coming to fruition, or of the
ability to raise additional funds on capital markets before
mid-calendar year 2019 or in the unlikely event of the Group
becoming liable to pay tax on the disposal of the BTK Program,
management has identified further discretionary spending areas
which can be reduced to allow the Group to extend its cash runway
further into 2019. These can be made without impinging on the
ability of key programmes to reach value inflexion points.
On the basis of the above review, the Directors are confident
that the Group has sufficient liquidity to honour all of its
obligations to creditors as and when they fall due. Accordingly,
the Directors continue to adopt the going concern basis in
preparing the Financial Statements.
2. Revenue
In August 2017, the Group sold its BTK inhibitor drug
development programme and related IP to Loxo Oncology Inc. for
$40m. The sale included certain patents, intellectual property,
contracts for product manufacture, and physical materials relating
to that program.
In March 2018, the Group granted an option for a license
agreement with Deinove.
Unaudited Unaudited Audited
Half year Half year Year to 30
to 31 March to 31 March September
2018 2017 2017
GBP'000 GBP'000 GBP'000
Revenue 129 - 30,474
============= ============= ============
3. Clawback of Regional Growth Fund grant funding
The Group has, in past years, received Regional Growth Funds
(RGF) grants administered by the Department of Business, Energy and
Industrial Strategy of the UK Government. Under the terms of the
grant awards, clawback amounts became repayable on Redx Pharma plc
entering Administration. During the course of the Administration, a
full and final settlement was reached. It was repaid as part of the
exit from Administration.
Unaudited Unaudited Audited
Half year Half year Year to 30
to 31 March to 31 March September
2018 2017 2017
GBP'000 GBP'000 GBP'000
RGF clawback - - 6,086
============== ============== ============
4. Write off of Derivative financial instrument
On 1 March 2017 the Company issued 11,500,000 new ordinary
shares of 0.1p each ("Ordinary Shares") at a price of 37.5p per
share to Lanstead Capital for GBP4,312,500. The Company
simultaneously entered into an equity swap with Lanstead for 85 per
cent of these shares with a reference price of 50p per share (the
"Reference Price"). The equity swap was for an 18-month period
ending in October 2018. All 11,500,000 Ordinary Shares were
allotted with full rights on the date of the transaction.
Of the subscription proceeds of GBP4,312,500 received from
Lanstead, GBP3,665,625 (85 per cent) was invested by the Company in
the equity swap.
Investment in the equity swap was a condition of the placing
with Lanstead.
In the period to 24 May 2017, which was the date of Redx Pharma
plc entering Administration, GBP106,000 had been received by the
Group under the terms of the swap.
As a consequence of entering Administration, the terms of the
equity swap were such that it terminated with no further benefit to
the Company. The remaining balance of GBP3.56m was therefore
written off.
Unaudited Unaudited Audited
Half year Half year Year to 30
to 31 March to 31 March September
2018 2017 2017
GBP'000 GBP'000 GBP'000
Write-off of derivative financial
instrument - - 3,560
============== ============== ============
5. Administration
On 24 May 2017, two companies within the Group, Redx Pharma plc
and Redx Oncology Limited were placed into Administration as a
result of the default on repaying a loan from Liverpool City
Council. FRP Advisory LLP were appointed as Administrators. Dealing
in the shares of the Group on the AIM market was suspended on 24
May 2017. As at 30 September 2017 those companies remained in
Administration. They exited Administration on 2 November 2017, when
control was returned to the Directors. The costs directly
associated with the Administration (including a provision for costs
up to the end of the Administration), principally Administrators'
costs, legal costs and taxation costs, have been separately
disclosed on the face of the Consolidated Statement of
Comprehensive income.
Unaudited Unaudited Audited
Half year Half year Year to 30
to 31 March to 31 March September
2018 2017 2017
GBP'000 GBP'000 GBP'000
Costs of Administration 177 - 2,930
============= ============= ============
6. Reorganisation costs
In March 2017, the Board of directors agreed a proposal to
undertake a restructuring of the Group, leading to a significant
reduction in headcount across all areas of operation. The non-
recurring costs incurred in implementing this proposal were:
Unaudited Unaudited Audited
Half year Half year Year to 30
to 31 March to 31 March September
2018 2017 2017
GBP'000 GBP'000 GBP'000
Reorganisation costs 215 320 791
============= ============= ============
7. Derecognition of non-current assets
Unaudited Unaudited Audited
31 March 31 March 30 September
2018 2017 2017
GBP'000 GBP'000 GBP'000
Loan - 623 641
Derecognition - - (641)
----------- ---------- --------------
- 623 -
=========================== ========== ==============
The loan of GBP714k was granted to Redag Crop Protection Ltd as
part of the sale of the former subsidiary. It bears interest at 5%
repayable with the principal sum. The loan is unsecured, and is
only repayable on the sale, listing, or change of control of Redag
Crop Protection Ltd.
At 30 September 2017, the total amount outstanding (including
accrued interest), was GBP821k before a fair value adjustment was
made to reflect the non-current nature of the asset, amounting to
GBP180k. Following review, and as a result of the conditionality
attached to the repayment of the loan, the Directors have
derecognised it as an asset in accordance with International
Accounting Standards.
Whilst the loan has been de-recognised as an asset, the
Directors do not consider it to be extinguished and will continue
to seek full repayment under its terms.
8. Share-based compensation
Share options have been issued to certain directors and
staff during the period, and the charge arising is shown
below. The fair value of the options granted has been calculated
using a Black--Scholes model.
Unaudited Unaudited Audited
Half Year Half Year Year to
to 31 March to 31 March 30 September
2018 2017 2017
Number Number Number
Outstanding at the beginning
of the period 2,963,417 3,907,784 3,907,784
Options granted and vested in
period 3,760,000 - -
Options exercised in period - (145,319) (145,319)
Options Forfeited in period (113,854) (199,538) (799,048)
Options granted and vesting
in future periods - - -
------------- ------------- --------------
6,609,563 3,562,927 2,963,417
============= ============= ==============
GBP000 GBP000 GBP000
Charge to Statement of Comprehensive
Income in period 162 3 13
============= ============= ==============
Assumptions used were an option life of 5 years, a risk
free rate of 2% and no dividend yield. Other inputs were:
* Volatility 40%
* Share price at date of grant in a range between 22p
and 85p
* Weighted average exercise price in a range between
22p and 85p
* Weighted average fair value of each option in a range
between 3.2p and 47.2p
9. Finance expense and finance income
Unaudited Unaudited Audited
Half Year Half Year Year to
to 31 March to 31 March 30 September
2018 2017 2017
Finance expense
Loan interest - 186 319
Fair value adjustment - 984 -
Other interest and similar charges - - 49
- 1,170 368
============= ============= ==============
Finance income
Bank and other short term deposits 16 1 2
Loan interest - 18 36
16 19 38
============= ============= ==============
10. Income tax
Unaudited Unaudited Audited
31 March 31 March 30 September
2018 2017 2017
GBP'000 GBP'000 GBP'000
Current income tax
Corporation tax 27 - 124
Research and Development Expenditure (293) -
credit
Prior year adjustment (368) - (6)
---------- ---------- --------------
Income tax (credit) / charge
per the income statement (341) (293) 118
========== ========== ==============
11. (Loss) / earnings per Share
Basic (loss)/earnings per share is calculated by dividing
the net income for the period attributable to ordinary equity
holders by the weighted average number of ordinary shares
outstanding during the period.
In the case of diluted amounts, the denominator also includes
ordinary shares that would be issued if any dilutive potential
ordinary shares were issued following conversion of loans
or exercise of share options.
The basic and diluted calculations are based on the following:
Unaudited Unaudited Audited
Half Year Half Year Year to
to 31 March to 31 March 30 September
2018 2017 2017
GBP000 GBP000 GBP000
(Loss)/profit for the period
attributable to the owners
of the Company (4,603) (10,693) 1,528
Number Number Number
Weighted average number of
shares
- basic 126,447,914 99,524,002 113,022,840
============= ============= ==============
Weighted average number of
shares
- diluted 126,447,914 99,524,002 113,046,401
============= ============= ==============
Pence Pence Pence
(Loss)/earnings per share -
basic (3.6) (10.7) 1.4
============= ============= ==============
(Loss)/earnings per share -
diluted (3.6) (10.7) 1.4
============= ============= ==============
The loss and the weighted average number of shares used for
calculating the diluted loss per share in 2018 and the half
year to 31 March 2017 are identical to those for the basic
loss per share. This is because the outstanding share options
would have the effect of reducing the loss per share and
would therefore not be dilutive under IAS 33 Earnings per
Share.
INDEPENT REVIEW REPORT TO REDX PHARMA PLC
Introduction
We have been engaged by the Company to review the consolidated
interim financial statements in the interim financial report for
the six months ended 31 March 2018 which comprises the Consolidated
Statement of Comprehensive Income, the Consolidated Statement of
Financial Position, the Consolidated Statement of Changes in
Equity, the Consolidated Statement of Cash Flows and the related
explanatory Notes. We have read the other information contained in
the interim financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"'Review of Interim Financial Information performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our review work has been undertaken so that we might state
to the Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
Directors' Responsibilities
The interim financial report, is the responsibility of, and has
been approved by the directors. The directors are responsible for
preparing and presenting the interim financial report in accordance
with the AIM Rules of the London Stock Exchange.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with International Financial
Reporting Standards and International Financial Reporting
Interpretations Committee pronouncements as adopted by the European
Union. The consolidated interim financial statements included in
this interim financial report have been prepared in accordance with
the presentation, recognition and measurement criteria of
International Financial Reporting Standards and International
Financial Reporting Interpretations Committee pronouncements, as
adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the consolidated interim financial statements in the interim
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the consolidated interim financial
statements in the interim financial report for the six months ended
31 March 2018 is not prepared, in all material respects, in
accordance with the presentation, recognition and measurement
criteria of International Financial Reporting Standards and
International Financial Reporting Interpretations Committee
pronouncements as adopted by the European Union, and the AIM Rules
of the London Stock Exchange.
RSM UK Audit LLP
Chartered Accountants
9th Floor,
3 Hardman Street,
Manchester,
M3 3HF
29 May 2018
FURTHER INFORMATION FOR SHAREHOLDERS
AIM: REDX
Company number: 07368089
Investor website: http://redxpharma.com/investors
Registered office: Block 33, Mereside, Alderley Park, Macclesfield,
SK10 4TG
Directors: Iain Ross (Executive Chairman)
Dominic Jackson (CFO)
Peter Presland (Non-Executive Director)
Bernhard Kirschbaum (Non-Executive Director)
Company Secretary: Andrew Booth
END
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR ALMRTMBATBRP
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