TIDMSTX
RNS Number : 2248B
Shield Therapeutics PLC
19 September 2018
Shield Therapeutics plc
("Shield" or the "Company" or the "Group")
Interim Report for the Six Months Ended 30 June 2018
London, UK, 19 September 2018. Shield Therapeutics plc
(LSE:STX), a specialty pharmaceutical company focused on secondary
care, today announces its unaudited interim results for the six
months ended 30 June 2018.
Highlights (including post period end)
Operational
Feraccru(R) highlights
-- Exclusive licence agreement announced with Norgine BV
-- Marketing authorisation in Europe extended to cover iron
deficiency (ID) in adults with or without anaemia
-- Phase III AEGIS-CKD achieved statistically significant response against primary endpoint
-- US NDA submission remains on course to be filed in 2018
-- AEGIS-H2H recruitment completed
-- Revenues maintained despite reductions in manpower and promotional activity
Financial
-- Revenues of GBP495k (H1 2017: GBP142k)
-- Net loss of GBP8.0m (H1 2017: GBP9.6m)
-- Adjusted net loss (excluding exceptional items) of GBP6.8m (H1 2017: GBP8.4m)
-- Net cash of GBP3.5m (31 December 2017: GBP13.3m)
-- GBP11m upfront from Norgine licence agreement extends cash runway significantly
Board changes
Dr Andrew Heath resigned as Chairman and from the Board in June
2018 in order to focus on other business interests. Rolf Hoffman
and Hans-Peter Hasler joined the Board as non-executive directors
in April and July 2018 respectively.
Commenting on the interim results, Carl Sterritt, CEO of Shield
Therapeutics plc, said: "I am pleased to be able to report that the
business has continued to develop positively. Full analysis of the
AEGIS-CKD data showed a statistically significant response against
the primary endpoint, we gained a much broader approval for
Feraccru(R) in Europe, and we are on track to file a US NDA
submission in 2018. The licence agreement with Norgine announced
today is an important step forward for the Group which will
accelerate the commercialisation of Feraccru(R) and extend our cash
runway. Although we have had to adapt during the first half of the
year, I remain confident that we will be able to build a valuable
business and bring benefits to many patients worldwide who suffer
today from iron deficiency."
Conference call for analysts
A conference call for analysts will be held at 11.30am BST on 19
September 2018
Dial in details:
Participant local dial-in: +44 (0) 2071 928000
Participant free phone dial-in: 08003767922
Participant code: 8426797
To access the presentation, please visit Shield's investor
relations page
https://www.shieldtherapeutics.com/investors/presentations/
An audio replay file will be made available shortly afterwards
via the Company website: www.shieldtherapeutics.com
For further information please contact:
Shield Therapeutics plc
+44 (0)207 186 8500
Carl Sterritt, Chief Executive Officer
Tim Watts, Interim Chief Financial Officer
Nominated Advisor and Joint Broker +44 (0)203 100 2222
Liberum Capital Limited
Christopher Britton/Steve Pearce
Joint Broker
+44 (0)207 418 8900
Peel Hunt LLP
James Steel/Christopher Golden
Financial PR Advisor
+44 (0)203 709 5700
Consilium Strategic Communications
Mary-Jane Elliott/Matthew Neal
About Shield Therapeutics plc
Shield Therapeutics is a commercial stage pharmaceutical
company, delivering innovative specialty pharmaceuticals to address
patients' unmet medical needs. Our clear purpose is to help our
patients become people again, by enabling them to enjoy the things
that make the difference in their everyday lives. The Group has a
marketed product, Feraccru(R), for the treatment of adults with
iron deficiency with or without anaemia which has exclusive IP
rights until the mid-2030's. For more information please visit
www.shieldtherapeutics.com.
Note
This announcement is released by Shield Therapeutics plc and
contains inside information for the purposes of the Market Abuse
Regulation (EU) 596/2014 ("MAR") and is disclosed in accordance
with the Company's obligations under Article 17 of MAR. The person
who arranged for the release of this announcement on behalf of
Shield Therapeutics plc was Carl Sterritt, Chief Executive
Officer.
Operational Review
Feraccru(R)
In February 2018 the Company announced preliminary topline data
from the Feraccru(R) AEGIS-CKD clinical study which suggested that
the study had not met its primary endpoint. Subsequent detailed
analysis, which was announced in March 2018, showed that the study
had, in fact, achieved a statistically significant response
(p=0.0149) against the primary endpoint of haemoglobin levels after
16 weeks of treatment. However, the adverse market reaction to the
initial announcement led the Company to adapt its strategy so as to
out-license Feraccru(R) in Europe and to reduce the organisation
and cost base substantially.
Since March 2018 there has been good progress on several fronts,
as shown below.
Broad label in Europe
In March the European Commission (EC) approved a much broader
indication for Feraccru(R), which can now be used across Europe to
treat iron deficiency (ID) with or without anaemia in adults. This
decision was a very significant event for Feraccru(R) as it
provides a significantly broader commercial opportunity in Europe,
where 40 million people are estimated to be iron deficient as
compared to less than half a million with iron deficiency anaemia
(IDA) associated with inflammatory bowel disease (IBD).
Licence agreement with Norgine B.V.
The Company has announced today that it has entered into an
exclusive licence agreement with Norgine for the commercialisation
of Feraccru(R) in Europe, Australia and New Zealand. Under the
terms of the agreement, Shield will receive an immediate GBP11
million upfront payment, is eligible to receive up to EUR4.5
million in development milestones and up to EUR50 million in sales
milestones upon the achievement of specified targets. Shield will
also receive tiered royalties ranging from 25% to 40% of net sales
of Feraccru(R). This agreement is the result of an extensive
process involving several potential partners.
US New Drug Application (NDA) submission
Following the Company's detailed analysis of the positive data
from the placebo-controlled period of the AEGIS-CKD study, in March
a pre-planned pre-NDA submission meeting with the FDA took place.
This gave the Company an opportunity to present and discuss the
positive AEGIS-CKD study results together with a broader discussion
regarding the Company's intention to file an NDA for Feraccru(R).
The feedback received from the FDA has meant we have continued
preparations for the NDA submission, which remains on course to
occur in the second half of 2018 and could lead to an approval
decision being made by the FDA during Q4 2019.
Development progress
AEGIS-CKD study: In March, following a detailed review of all
enrolled subjects who completed the initial 16-week pivotal period
of the Phase III AEGIS-CKD study, we announced Feraccru(R) had
achieved a statistically significant response (p=0.0149) in
haemoglobin levels after 16 weeks of treatment compared to placebo.
Statistically significant results were also achieved across a range
of secondary iron parameters (TSAT, Ferritin levels, serum iron
levels). Following announcement of these positive pivotal results
our focus has been on finalising the Clinical Study Report such
that the study results can be incorporated into the NDA submission.
At the same time, we have been continuing to progress the long term
36-week open-label phase of the study, which will complete active
patient involvement by the end of the year.
AEGIS-H2H study: As announced on 13 September 2108, recruitment
into this study has been completed. The Feraccru AEGIS-H2H study is
a Phase 3b trial comparing the change in haemoglobin (Hb) from
baseline at 12 weeks after oral Feraccru 30mg twice daily for 12
weeks versus IV ferric carboxymaltose dosed in line with its
commercially approved dosing regimen. The primary endpoint is
non-inferiority of Hb response at 12 weeks with preliminary results
anticipated in Q1 2019.
Paediatric PK Study: In June we reported positive data from our
first paediatric study of Feraccru(R), the AEGIS-Paeds PK study.
This pharmacokinetics (PK) study of Feraccru(R) was conducted in 36
subjects aged 12-17 years and saw Feraccru(R) achieve all the
pre-defined goals of the protocol, including demonstrating positive
effects on serum iron parameters over the duration of the study and
showing good tolerance at all dosing levels. Completion of this
study signified delivery of the first major milestone in Feraccru's
paediatric development plan as agreed with the EMA and allows for
selection of an optimal dosing schedule for the Phase III pivotal
study in children that will follow in due course.
Real World Data: The first half of 2018 also saw two
independently published reports of the efficacy and
cost-effectiveness of Feraccru(R) in real world settings. The FRESH
(Feraccru(R) Real World Effectiveness Study in Hospital Practice)
study presented at the 2018 meeting of the British Society of
Gastroenterology and a health economics analysis reported at the
2018 European Haematology Society meeting by physicians from the
London North West University Healthcare NHS Trust have both
provided independent data supporting the clinical and cost
effectiveness of Feraccru(R), all of which adds to the growing body
of evidence supporting its use. We anticipate that as prescriber
experience of Feraccru(R) grows, further positive real world data
will be reported at scientific congresses.
Organisational changes
As a result of the adverse consequences following the
preliminary results of the AEGIS-CKD study, the Group has reduced
the number of permanent employees from 50 at 31 December 2017 to 20
at 30 June 2018 (and 15 at the end of August 2018). This includes
the closure of the sales and marketing teams in the UK and
Germany.
Outlook
Shield Therapeutics has made considerable progress during the
first half of 2018, despite the setback in February caused by the
preliminary data from the AEGIS-CKD study. With the broad label for
Feraccru(R) now approved in Europe, the licence agreement with
Norgine, the completion of the head-to-head study and the impending
filing of the US NDA, the Group intends to build on this momentum
in the coming months. The paediatric Phase III study will be
started and focus will turn to the commercialisation of Feraccru(R)
in other parts of the world, in particular the USA. Shield is now
funded for at least 12 months and therefore well placed to deliver
value to shareholders.
Financial Review
Revenue
Revenue of GBP495k was recorded during the period (H1 2017 :
GBP142k), of which GBP107k related to sales in the UK and GBP388k
to sales in Europe. European sales revenue includes a milestone
payment of GBP61k from a commercial partner. Despite the closure of
the UK and German sales and marketing teams during H1 2018, revenue
in the period was unchanged from the GBP495k generated in H2
2017.
Selling, general and administrative expenses
Selling costs reduced from GBP3.9m in H1 2017 (and GBP5.3m in H2
2017) to GBP2.6m in the period, largely as a consequence of
decisions taken following February 2018 to rationalise the Group's
commercial structure and extend its cash runway.
Other costs remained broadly steady, with general and
administrative expenses at GBP2.6m compared to GBP2.7m in H1 2017
(and GBP2.4m in H2 2017) and depreciation and amortisation of
GBP1.2m in both H1 2018 and H1 2017.
Research and development expenditure
Research and development costs of GBP2.1m in the statement of
profit and loss included expenditure on the Group's AEGIS-CKD
study, and other continuing clinical and regulatory activities.
In addition, GBP2.7m of costs were capitalised as intangible
assets, including GBP2.5m spent on the Head to Head and paediatric
studies and GBP0.2m on improved patent protection.
Exceptional items
Exceptional items, which are set out in Note 6, are non-cash
charges included in expenditure (IP amortisation and share-based
payment charges) which the Directors consider should be disclosed
separately in order to give a fuller understanding of the
performance of the Group. The H1 2018 charge of GBP1.3m is broadly
comparable with GBP1.2m in H1 2017.
Operating loss
The operating loss after exceptional items of GBP8.1m is a
reduction from the GBP9.6m loss in H1 2017 and GBP11.3m loss in H2
2017. The reduction in the loss in the most recent period is due
mainly to the reduction in selling costs.
Balance sheet
Net assets at 30 June 2018 were GBP33.5m (31 December 2017 :
GBP41.2m), including intangible assets of GBP31.5m (31 December
2017 : GBP30.0m) and cash of GBP3.5m (31 December 2017 :
GBP13.3m).
GBP22.4m of the intangible assets balance relates to the
intellectual property acquired with Phosphate Therapeutics Limited
in 2016. A further GBP9.1m of intangible assets relate to
Feraccru(R), including GBP1.3m strengthening the Group's patent
protection and GBP7.8m of development cost expenditure in relation
to the Group's Head to Head and paediatric studies, together with
initial Marketing Authorisation costs.
Cash
The Group's cash at 30 June 2018 was GBP3.5m (31 December 2017 :
GBP13.3m). Cash burn (net cash outflow from operating and investing
activities) was GBP9.8m (H1 2017 : GBP11.0m), primarily in relation
to key research and development activities and
commercialisation.
Financial Outlook
As discussed above the Group has substantially rationalised its
cost base and headcount such that selling and administration costs
are significantly reduced. With the receipt of the GBP11 million
upfront from the Norgine licence upfront payment, funding the
business for at least 12 months, and with the prospects of future
development milestones and the start of royalty payments, the Group
is now financially well placed to undertake the paediatric Phase
III study and to pursue the approval of Feraccru(R) in the USA.
Consolidated statement of profit and loss and other
comprehensive income
for the six months ended 30 June 2018
Six months Year
Six months
ended ended ended
30 June 30 June 31 December
2018 2017 2017
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
----------------------------------- ----- -------------- -------------- -------------
Revenue 4 495 142 637
Cost of sales (131) (38) (155)
----------------------------------- ----- -------------- -------------- -------------
Gross profit 364 104 482
Operating costs - selling,
general and administrative
expenses 5 (6,301) (7,787) (16,722)
Operating loss before research
and development expenditure (5,937) (7,683) (16,240)
Research and development
expenditure (2,146) (1,941) (4,711)
Operating loss (8,083) (9,624) (20,951)
----------------------------------- ----- -------------- -------------- -------------
Analysed as:
Operating loss before exceptional
items (6,806) (8,434) (18,380)
Exceptional items 6 (1,277) (1,190) (2,571)
----------------------------------- ----- -------------- -------------- -------------
Operating loss (8,083) (9,624) (20,951)
----------------------------------- ----- -------------- -------------- -------------
Financial income 58 10 15
Financial expense (12) (14) (58)
----------------------------------- ----- -------------- -------------- -------------
Loss before tax (8,037) (9,628) (20,994)
Taxation (8) - 1,406
----------------------------------- ----- -------------- -------------- -------------
Loss for the period (8,045) (9,628) (19,588)
----------------------------------- ----- -------------- -------------- -------------
Attributable to:
Equity holders of the parent (8,045) (9,628) (19,588)
Other comprehensive income
Items that are or may be
reclassified subsequently
to profit or loss:
Foreign currency translation
differences - foreign operations 1 (23) (41)
----------------------------------- ----- -------------- -------------- -------------
Total comprehensive expenditure
for the period (8,044) (9,651) (19,629)
----------------------------------- ----- -------------- -------------- -------------
Attributable to:
Equity holders of the parent (8,044) (9,651) (19,629)
Total comprehensive expenditure
for the period (8,044) (9,651) (19,629)
----------------------------------- ----- -------------- -------------- -------------
Earnings per share
Basic and diluted loss per GBP(0.07)
share 7 GBP(0.09) GBP(0.17)
----------------------------------- ----- -------------- -------------- -------------
Non-GAAP measure
Adjusted loss per share 7 GBP(0.06) GBP(0.08) GBP(0.15)
----------------------------------- ----- -------------- -------------- -------------
Group balance sheet
at 30 June 2018
30 June 30 June 31 December
2018 2017 2017
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
------------------------------- ----- -------------- --------------- -------------
Non-current assets
Intangible assets 8 31,511 29,870 29,961
Property, plant and equipment 10 16 13
------------------------------- ----- -------------- --------------- -------------
31,521 29,886 29,974
------------------------------- ----- -------------- --------------- -------------
Current assets
Inventories 151 138 125
Trade and other receivables 1,256 2,104 1,572
Cash and cash equivalents 3,508 21,521 13,299
------------------------------- ----- -------------- --------------- -------------
4,915 23,763 14,996
------------------------------- ----- -------------- --------------- -------------
Total assets 36,436 53,649 44,970
------------------------------- ----- -------------- --------------- -------------
Current liabilities
Trade and other payables (2,720) (2,634) (3,501)
Other liabilities (194) (197) (262)
------------------------------- ----- -------------- --------------- -------------
(2,914) (2,831) (3,763)
------------------------------- ----- -------------- --------------- -------------
Total liabilities (2,914) (2,831) (3,763)
------------------------------- ----- -------------- --------------- -------------
Net assets 33,522 50,818 41,207
------------------------------- ----- -------------- --------------- -------------
Equity
Share capital 9 1,746 1,746 1,746
Share premium 88,338 88,338 88,338
Merger reserve 28,358 28,358 28,358
Currency translation reserve 33 50 32
Retained earnings (84,953) (67,674) (77,267)
------------------------------- ----- -------------- --------------- -------------
Total equity 33,522 50,818 41,207
------------------------------- ----- -------------- --------------- -------------
Group statement of changes in equity
for the six months ended 30 June 2018
Currency
Share Share Warrants Merger translation Retained
capital premium reserve reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------ --------- --------- ----------- --------- ------------- ---------- ---------
Balance at 1 January 2017
(audited) 1,622 77,963 2,760 28,358 73 (62,380) 48,396
Loss for the year - - - - - (19,588) (19,588)
Other comprehensive income:
Foreign currency translation
differences - - - - (41) - (41)
------------------------------ --------- --------- ----------- --------- ------------- ---------- ---------
Total comprehensive expense
for the year - - - - (41) (19,588) (19,629)
Transactions with owners,
recorded directly in equity
Share issue - exercise of
Warrants 108 10,235 (2,760) - - 2,760 10,343
Share issue - placing 15 - - - - 1,381 1,396
Share issue - subscription 1 140 - - - - 141
Equity-settled share-based
payment transactions - - - - - 560 560
------------------------------ --------- --------- ----------- --------- ------------- ---------- ---------
Balance at 31 December 2017
(audited) 1,746 88,338 - 28,358 32 (77,267) 41,207
------------------------------ --------- --------- ----------- --------- ------------- ---------- ---------
Loss for the period - - - - - (8,045) (8,045)
Other comprehensive income:
Foreign currency translation
differences - - - - 1 - 1
------------------------------ --------- --------- ----------- --------- ------------- ---------- ---------
Total comprehensive expense
for the period - - - - 1 (8,045) (8,044)
Transactions with owners,
recorded directly in equity
Equity-settled share-based
payment transactions - - - - - 359 359
------------------------------ --------- --------- ----------- --------- ------------- ---------- ---------
Balance at 30 June 2018
(unaudited) 1,746 88,338 - 28,358 33 (84,953) 33,522
------------------------------ --------- --------- ----------- --------- ------------- ---------- ---------
Group statement of cash flows
for the six months ended 30 June 2018
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2018 2017 2017
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
---------------------------------------------------- -------------- -------------- --------------
Cash flows from operating activities
Loss for the period (8,045) (9,628) (19,588)
Adjustments for:
Depreciation and amortisation 1,161 1,186 2,437
Equity-settled share-based payment expenses 421 193 560
Financial income (4) (10) (15)
Financial expense 12 10 17
Unrealised foreign exchange losses 1 49 39
Income tax 8 - (1,406)
---------------------------------------------------- -------------- -------------- --------------
(6,446) (8,200) (17,956)
(Increase)/decrease in inventories (26) 280 293
Decrease/(increase) in trade and other receivables 320 (221) (171)
Decrease in trade and other payables (786) (1,409) (409)
(Decrease)/increase in other liabilities (130) 36 101
Financial income 4 10 15
Financial expense (12) (10) (17)
Income tax received (8) 587 1,993
---------------------------------------------------- -------------- -------------- --------------
Net cash flows from operating activities (7,084) (8,927) (16,151)
---------------------------------------------------- -------------- -------------- --------------
Cash flows from investing activities
Acquisitions of intangible assets (118) (175) (235)
Capitalised development expenditure (2,589) (1,894) (3,173)
Net cash flows from investing activities (2,707) (2,069) (3,408)
---------------------------------------------------- -------------- -------------- --------------
Cash flows from financing activities
Proceeds of warrants exercise - 10,306 10,792
Proceeds of placing - 1,500 1,500
Proceeds of subscription - 145 144
Share issue costs - (413) (556)
Net cash flows from financing activities - 11,538 11,880
---------------------------------------------------- -------------- -------------- --------------
Net (reduction)/increase in cash (9,791) 542 (7,679)
Cash and cash equivalents at beginning period 13,299 20,978 20,978
Effects of currency translation on cash and - 1 -
cash equivalents
---------------------------------------------------- -------------- -------------- --------------
Cash and cash equivalents at period end 3,508 21,521 13,299
---------------------------------------------------- -------------- -------------- --------------
Notes
for the six months ended 30 June 2018
1. General information
Shield Therapeutics plc (the "Company") is incorporated in
England and Wales as a public limited company. The Company trades
on the London Stock Exchange's AIM market.
The Company is domiciled in England and the registered office of
the Company is at Northern Design Centre, Baltic Business Quarter,
Gateshead Quays NE8 3DF.
This interim report, which is not audited, has been prepared in
accordance with the measurement and recognition criteria of EU
Adopted International Financial Reporting Standards. It does not
include all the information required for full annual financial
statements and should be read in conjunction with the financial
statements of the Company and its subsidiaries (the "Group") as at
and for the year ended 31 December 2017. This financial information
does not constitute statutory financial statements as defined in
Section 435 of the Companies Act 2006. The comparative figures for
the year ended 31 December 2017 are not the Company's statutory
accounts for that financial year. Those accounts have been reported
on by the Company's auditor and delivered to the Registrar of
Companies. The report of the auditors was unqualified. The auditor
has reported on those accounts; their report was unqualified and
did not contain a statement under Section 498 (2) or (3) of the
Companies Act 2006; though it did include a reference to a matter
to which the auditor drew attention by way of emphasis without
qualifying their report in relation to going concern. It does not
comply with IAS 34 Interim financial reporting, as is permissible
under the rules of AIM.
The interim report was approved by the board of directors on 18
September 2018.
2. Accounting policies
The accounting policies applied in these interim financial
statements are consistent with those of the annual financial
statements for the year ended 31 December 2017, as described in
those annual financial statements, except as explained in
Accounting Developments below.
Accounting developments
The Directors have considered all new standards, amendments to
standards and interpretations which are mandatory for the first
time for the financial year beginning 1 January 2018. From 1
January 2018 the Company adopted IFRS 15 Revenue from contracts
with customers. The Company has also adopted IFRS 9 Financial
Instruments. No adjustments have been required as a consequence of
these standards' adoption, as the impact is immaterial. There are
no other new or amended standards which impact the Group in the
period.
The Group is continuing to assess the impact of IFRS 16 Leases
and does not expect its introduction to have a material impact
based on an initial assessment.
3. Critical accounting judgments and key sources of estimation
uncertainty
In the application of the Group's accounting policies,
management is required to make judgments, estimates and assumptions
about the carrying amounts of assets and liabilities that are not
readily apparent from other sources.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
The significant judgments and estimates which may lead to material
adjustment in the next accounting period are:
Going concern
Following the receipt of the GBP11 million upfront on signing
the licence agreement with Norgine, the Directors are of the
opinion that the Group has sufficient working capital for its
present requirements, that is for at least 12 months from the date
of this announcement. The Directors therefore consider it
appropriate to adopt the going concern basis of accounting in
preparing the interim financial information.
Notes (continued)
for the six months ended 30 June 2018
Valuation of intellectual property acquired with Phosphate
Therapeutics Limited - GBP22.4m
The valuation of intellectual property acquired with Phosphate
Therapeutics Limited is based on cash flow forecasts for the
underlying business and an assumed appropriate cost of capital and
other inputs in order to arrive at a fair value for the asset. The
realisation of its value is ultimately dependent on regulatory
approval and successful commercialisation of the asset. Work on the
development of a suitable commercial formulation of the drug
product is ongoing and a strategic commercial/co-development
partner for the asset is being sought in order to provide the
funding required to successfully commercialise the asset. In the
event that commercial returns are lower than current expectations
or partner or alternative funding is not available this may lead to
an impairment. No impairment has been recognised to date.
Valuation of intellectual property associated with Feraccru(R) -
GBP9.1m
The valuation of intellectual property associated with
Feraccru(R) (including patents, development costs and the Company's
investment in Shield TX (Switzerland) AG) is based on cash flow
forecasts for the underlying business and an assumed appropriate
cost of capital and other inputs in order to arrive at a fair value
for the asset. The realisation of its value is ultimately dependent
on the successful commercialisation of the asset. A strategic
commercial partner for the asset is currently being sought in
Europe in order to provide the funding required to successfully
commercialise the asset. In the event that commercial returns are
lower than current expectations or partner or alternative funding
is not available this may lead to an impairment. No impairment has
been recognised to date.
Deferred tax assets
No deferred tax asset has been recognised as at 30 June 2018 as
there has been no certainty of future profitability.
4. Segmental reporting
The following analysis by segment is presented in accordance
with IFRS 8 on the basis of those segments whose operating results
are regularly reviewed by the Chief Operating Decision Maker
(considered to be the Board of Directors) to assess performance and
make strategic decisions about the allocation of resources.
Segmental results are calculated on an IFRS basis.
A brief description of the segments of the business is as
follows:
-- Feraccru(R) - development and supply of the Group's lead Feraccru(R) product
-- PT20 - development of the Group's secondary asset
Operating results which cannot be allocated to an individual
segment are recorded as central and unallocated.
Six months Year
ended ended
30 June 31
2018 December
(unaudited) 2017
(audited)
Central Central
Feraccru(R) PT20 and Total Feraccru(R) PT20 and Total
GBP000 GBP000 unallocated GBP000 GBP000 GBP000 unallocated GBP000
GBP000 GBP000
----------- ------------- ------------- ------------- -------- ------------- ----------- ------------- ---------
Revenue 495 - - 495 637 - - 637
----------- ------------- ------------- ------------- -------- ------------- ----------- ------------- ---------
Operating
loss (6,207) (919) (957) (8,083) (16,718) (2,047) (2,186) (20,951)
----------- ------------- ------------- ------------- -------- ------------- ----------- ------------- ---------
Net
foreign
exchange
losses 54 (41)
Financial
income 4 15
Financial
expense (12) (17)
Tax (8) 1,406
Loss for
the
period (8,045) (19,588)
----------- ------------- ------------- ------------- -------- ------------- ----------- ------------- ---------
Notes (continued)
for the six months ended 30 June 2018
4. Segmental reporting (continued)
The revenue analysis in the table below is based on the country
of registration of the fee paying party. GBP61,000 (2017 - GBPNil)
of revenue is derived from a milestone payment from a commercial
partner. The remainder of revenue is derived from the sale of
goods.
Year
Six months Six months ended
ended ended 31 December
30 June 30 June 2017
2018 2017 Restated
(unaudited) (unaudited) (unaudited)
GBP000 GBP000 GBP000
-------- -------------- -------------- -------------
UK 107 - 70
Europe 388 142 567
495 142 637
-------- -------------- -------------- -------------
Segment assets and liabilities
Central
Six months ended 30 June 2018 (unaudited) Feraccru(R) PT20 and unallocated Total
GBP000 GBP000 GBP000 GBP000
--------------------------------------------- -------------- --------- ------------------ ---------
Segment assets 11,030 22,532 2,873 36,436
Segment liabilities (2,700) (6) (208) (2,914)
--------------------------------------------- -------------- --------- ------------------ ---------
Total net assets 8,330 22,526 2,664 33,522
--------------------------------------------- -------------- --------- ------------------ ---------
Depreciation, amortisation and impairment 243 918 - 1,161
--------------------------------------------- -------------- --------- ------------------ ---------
Capital expenditure - - - -
--------------------------------------------- -------------- --------- ------------------ ---------
Capitalised development costs 2,589 - - 2,589
--------------------------------------------- -------------- --------- ------------------ ---------
Central
Feraccru(R) PT20 and unallocated Total
Year ended 31 December 2017 (audited) GBP000 GBP000 GBP000 GBP000
------------------------------------------- -------------- --------- ------------------ ---------
Segment assets 9,623 23,451 11,896 44,970
Segment liabilities (3,570) (16) (177) (3,763)
------------------------------------------- -------------- --------- ------------------ ---------
Total net assets 6,053 23,435 11,719 41,207
------------------------------------------- -------------- --------- ------------------ ---------
Depreciation, amortisation and impairment 421 2,016 - 2,437
------------------------------------------- -------------- --------- ------------------ ---------
Capital expenditure - - - -
------------------------------------------- -------------- --------- ------------------ ---------
Capitalised development costs 3,173 - - 3,173
------------------------------------------- -------------- --------- ------------------ ---------
All material segmental non-current assets are located in the
UK.
Notes (continued)
for the six months ended 30 June 2018
5. Operating costs - selling, general and administrative
expenses
Operating costs are comprised of:
Six months Six Year
ended months ended
30 June ended 31 December
2018 30 June 2017
2017
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
------------------------------------- -------------- -------------- --------------
Selling costs 2,575 3,859 9,133
General and administrative expenses 2,565 2,742 5,152
Depreciation and amortisation 1,161 1,186 2,437
6,301 7,787 16,722
------------------------------------- -------------- -------------- --------------
6. Exceptional items
Exceptional items are separately disclosed on the basis that the
Directors believe this is necessary to enable a fuller
understanding of the performance of the Group. The Directors define
exceptional items as:
-- Material items that are unusual by size or incidence; or
-- Non-cash charges which, whilst recurring in nature, at this
stage in the Group's development, are of a disproportionate size
relative to the Group's other expenditure - this includes the
amortisation of the Phosphate Therapeutics licences and share-based
payment charges.
Six months Six months Year
ended 30 ended ended
June 2018 30 June
2017
(unaudited) (unaudited) 31 December
2017
GBP000 GBP000 (audited)
GBP000
------------------------------------------ ------------------ ------------------ --------------
Phosphate Therapeutics Ltd. intellectual
property amortisation 918 997 2,011
Share-based payments charge 359 193 560
------------------------------------------ ------------------ ------------------ --------------
1,277 1,190 2,571
------------------------------------------ ------------------ ------------------ --------------
7. Loss per share
The basic loss per share of GBP0.07 (H1 2017: GBP0.09) has been
calculated by dividing the loss for the period by the weighted
average number of shares of 116,426,000 in issue during the six
months ended 30 June 2018 (six months ended 30 June 2017:
108,223,000).
The basic adjusted loss per share of GBP0.06 (H1 2017: GBP0.08)
has been calculated by dividing the adjusted loss for the period of
GBP6,768,000 (H1 2017: GBP8,438,000), after adding back the
exceptional items in Note 6, by the weighted average number of
shares of 116,426,000 in issue during the six months ended 30 June
2018 (six months ended 30 June 2017: 108,223,000).
Although there are potentially-dilutive ordinary shares these
would not serve to increase or reduce the loss per ordinary share,
as the Group is loss-making. There is therefore no difference
between the loss per ordinary share and the diluted loss per
ordinary share.
Notes (continued)
for the six months ended 30 June 2018
8. Intangible assets
Phosphate
Patents Development Therapeutics
Group and trademarks costs licences Total
GBP000 GBP000 GBP000 GBP000
--------------------------------------- ----------------- -------------- --------------- ---------
Cost
Balance at 1 January 2017 (audited) 1,440 2,639 27,047 31,126
Additions - externally purchased 235 - - 235
Additions - internally developed - 3,173 - 3,173
Balance at 31 December 2017 (audited) 1,675 5,812 27,047 34,534
--------------------------------------- ----------------- -------------- --------------- ---------
Additions - externally purchased 118 - - 118
Additions - internally developed - 2,589 - 2,589
Balance at 30 June 2018 (unaudited) 1,793 8,401 27,047 37,241
--------------------------------------- ----------------- -------------- --------------- ---------
Accumulated amortisation
Balance at 1 January 2017 (audited) 325 115 1,702 2,142
Charge for the period 92 327 2,012 2,431
--------------------------------------- ----------------- -------------- --------------- ---------
Balance at 31 December 2017 (audited) 417 442 3,714 4,573
Charge for the period 32 207 918 1,157
Balance at 30 June 2018 (unaudited) 449 649 4,632 5,730
--------------------------------------- ----------------- -------------- --------------- ---------
Net book values
30 June 2018 (unaudited) 1,344 7,752 22,415 31,511
--------------------------------------- ----------------- -------------- --------------- ---------
31 December 2017 (audited) 1,258 5,370 23,333 29,961
--------------------------------------- ----------------- -------------- --------------- ---------
9. Share capital
Six months Six months Year Year
ended ended ended ended
30 June 30 June 31 December 31 December
2018 2018 2017 2017
Number Number
000 GBP000 000 GBP000
--------------------------------------------- ------------- ------------- -------------- --------------
At beginning of period 116,426 1,746 108,135 1,622
Exercise of Warrants - - 7,194 108
Issuance of shares pursuant to placing - - 1,000 15
Issuance of shares pursuant to subscription - - 97 1
--------------------------------------------- ------------- ------------- -------------- --------------
At end of period 116,426 1,746 116,426 1,746
--------------------------------------------- ------------- ------------- -------------- --------------
On 28 June 2017 the Company issued an additional 1,000,000
Ordinary Shares to participants in a placing, raising gross
proceeds of GBP1.5m. The placing was undertaken by means of a cash
box structure. Consequently, relief was available under s612 of the
Companies Act 2006 from recording share premium and the difference
between net proceeds and the nominal value of shares issued was
transferred to retained earnings. As part of the 2016 listing
process 11,666,658 of Warrants were issued to participants in the
placing. During June 2017 7,193,766 Warrants were exercised at a
strike price of GBP1.50, raising gross proceeds of GBP10.8m. The
remaining 4,472,892 Warrants lapsed at 30 June 2017. On 28 June
2017 the Company's directors and senior management subscribed to an
issue of 96,669 Ordinary Shares, raising gross proceeds of
GBP145,000. Expenses of GBP0.5m were incurred in the course of the
exercise of Warrants, placing and subscription.
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
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