Dr. Jim Phillips, Chief Executive Officer and Nick
Robbins-Cherry, Finance Director, will host a conference call for
analysts at 14.00 BST today. Dial-in details are: UK: +44 1452 555
566, US: +1 866 966 9439, ID: 63728744.
Midatech Pharma PLC ("Midatech" or the
"Company")
Interim results for the six months ended 30
June 2016
ABINGDON, United Kingdom and OXFORDSHIRE, United Kingdom, Sept.
2, 2016 (GLOBE NEWSWIRE) -- Midatech Pharma (AIM: MTPH;
Nasdaq: MTP), the international specialty pharmaceutical company
focused on commercialising and developing products in oncology,
immunology and other therapeutic areas, today announces its interim
results for the six months ended 30 June 2016.
Operational Highlights
- Successful integration and good sales performance from newly
acquired US commercial business, Midatech Pharma US Inc. (formerly
DARA BioSciences, Inc.)
- US launch of anti-nausea product Zuplenz® in April 2016, with
encouraging early uptake helping drive the increasing revenues
- Gelclair® continues to consolidate its brand and market
leadership in the US for oral mucositis
- Positive progress has continued for lead Q-Octreotide product
for the treatment of Acromegaly and Carcinoid Syndrome. Plans for
human bio-equivalence studies in H1 2017 are on track, which, in
the case of positive results, could lead to the potential filing
for first marketing authorisations by end 2017/beginning of
2018
- Investment for scale up of manufacturing for the launch of
Q-Octreotide and collaboration with Ophthotech has commenced and is
on time and budget
- Product candidate testing and selection in vivo for
glioblastoma and hepatocellular carcinoma on track for completion
by the end of 2016
- Dosing due to commence in Q3 2016 in first immunotherapy
(MTX102) Phase I study using Midatech's gold nanoparticle ("GNP")
technology in type 1 diabetes
- Further positive progress seen in the period in the Company's
OpsiSporin and MTX110/111 (DIPG) programmes
Financial Highlights
- Total revenue grew from £0.32 million in H1 2015 to £3.80
million (up 1,088%)
- Research and development costs of £2.05 million, a 13% increase
from £1.82 million in H1 2015
- Administrative expenses increased from £3.77 million in H1 2015
to £6.82 million (up 81%), primarily due to the Company's enlarged
commercial infrastructure from the acquisition of Midatech Pharma
US
- Net cash outflow used in operations (after changes in working
capital) was £8.25 million, up 55% from £5.31 million in H1 2015.
The cash balance at 30 June 2016 was £7.23 million
- Loss per share increased by 39% to 25p (H1 2015: 18p)
Commenting on the interim results Dr. Jim Philips, CEO of
Midatech Pharma, said: "Midatech has made good performance in
the first half of 2016 and our commercial business is well placed
to deliver continued revenue growth in the second half of 2016. We
continue to carefully invest in our platform technologies and
candidate pipeline and the remainder of 2016 with 2017 are set to
deliver results from a variety of our exciting R&D programmes.
Notwithstanding the challenging recent market conditions globally,
we continue to look at opportunities to build value for
shareholders and look to the future with optimism."
Conference call Dr. Jim Phillips, Chief
Executive Officer and Nick Robbins-Cherry, Finance Director, will
host a conference call for analysts at 14.00 BST today.
UK:
+44 1452 555 566 USA: +1 866 966 9439
Conference ID: 63728744
A replay of the call will be available for 30
days after the event, and can be accessed through the numbers
below.
UK:
+44 1452 550 000 USA: +1 866 247 4222
Conference ID: 63728744
The results presentation will be made available
on the Investors section of the Midatech website shortly before the
call.
- ENDS -
For more information, please contact:
Midatech Pharma PLC Jim Phillips, CEO
Tel: +44 (0)1235 888300 www.midatechpharma.com
Panmure Gordon (UK) Limited (Nominated
Adviser and Broker) Corporate Finance Freddy Crossley /
Atholl Tweedie / Duncan Monteith Corporate Broking Tom
Salvesen Tel: +44 (0)20 7886 2500
RBC Europe Limited (Joint Broker) Paul
Tomasic / Rupert Walford / Thomas Stockman / Laura White Tel: +44
(0)207 653 4000
Consilium Strategic Communications (Financial
PR) Mary-Jane Elliott / Ivar Milligan / Matthew Neal / Hendrik
Thys Tel: +44 (0)20 3709 5700 Email:
midatech@consilium-comms.com
Westwicke Partners (US Investor
Relations) Chris Brinzey Tel: +1 339 970 2843 Email:
chris.brinzey@westwicke.com
Notes for Editors
About Midatech Pharma PLC Midatech is an international
specialty pharmaceutical company focused on oncology and other
therapeutic areas with a commercial platform and four marketed
products in the US. Midatech's strategy is to develop products
in-house in oncology and with partners in other indications, and to
accelerate growth organically and through strategic acquisitions.
The Company's R&D activities are supported by two breakthrough
drug delivery technologies. The Group, listed on AIM: MTPH and
Nasdaq: MTP, employs c.100 staff in four countries. For further
company information see: www.midatechpharma.com
Forward-Looking Statement Certain statements in this
press release may constitute "forward-looking statements" within
the meaning of legislation in the United Kingdom and/or United
States. Such forward-looking statements include, but are not
limited to, statements regarding the ability of Midatech to
successfully test, manufacture, produce or commercialize products
for conditions using the nanoparticle and sustained release drug
delivery platforms, and the ability for products in development to
achieve positive clinical results, and the ability to meet or
achieve timelines associated with pre-clinical studies, clinical
trials or regulatory submissions. Any forward-looking statements
are based on currently available competitive, financial and
economic data together with management's views and assumptions
regarding future events and business performance as of the time the
statements are made and are subject to risks and uncertainties. We
wish to caution you that there are some known and unknown factors
that could cause actual results to differ materially from any
future results, performance or achievements expressed or implied by
such forward-looking statements.
Reference should be made to those documents that Midatech shall
file from time to time or announcements that may be made by
Midatech in accordance with the London Stock Exchange AIM Rules for
Companies ("AIM Rules"), the Disclosure and Transparency Rules
("DTRs") and the rules and regulations promulgated by the US
Securities and Exchange Commission, which contains and identifies
other important factors that could cause actual results to differ
materially from those contained in any projections or
forward-looking statements. These forward-looking statements speak
only as of the date of this announcement. All subsequent written
and oral forward-looking statements by or concerning Midatech are
expressly qualified in their entirety by the cautionary statements
above. Except as may be required under the AIM Rules or the DTRs or
by relevant law in the United Kingdom or the United States,
Midatech does not undertake any obligation to publicly update or
revise any forward-looking statements because of new information,
future events or otherwise arising.
CHAIRMAN AND CHIEF EXECUTIVE'S REVIEW
We are pleased to report that during the first
half of 2016 Midatech has continued to make good progress on a
number of fronts.
Commercial
In December 2015, we completed the acquisition of the US-based
oncology supportive care business, DARA BioSciences, Inc., which
has since been renamed Midatech Pharma US, Inc. ("MTPUS"). This was
rapidly followed with the acquisition of the anti-nausea product
Zuplenz®. MTPUS brought with it three cancer supportive care
products, Gelclair®, Oravig® and Soltamox® as well as an
established oncology focussed, sales and marketing capability in
the United States.
Midatech's commitment to build on its product portfolio within
the chosen therapeutic areas was demonstrated with the MTPUS
acquisition which has provided an excellent opportunity for the
Group by providing a knowledgeable and established commercial
infrastructure in its primary target area of oncology. Following
the Zuplenz addition to the MTPUS portfolio our US salesforce has a
comprehensive range of cancer supporting care products with which
to target the US market. The market share for these products
currently remains modest so we believe there is significant
opportunity for expansion.
Performance from our MTPUS commercial business for the first six
months of 2016 has been good: overall, total Group revenue was
£3.80 million (H1 2015: £0.32 million) with £3.19 million coming
from product sales in the US (H1 2015: nil). Prior to its
acquisition, DARA Biosciences, Inc. had revenue from product sales
of $2.24m in the comparable six months to 30 June 2015. This
represents an encouraging growth rate on the equivalent period last
year. Gelclair continues to grow, Oravig is in its early growth
phase having been added in October 2015 and Zuplenz was launched in
the US in April where performance has, so far, been
encouraging.
We are pleased to report that the integration of the US business
was completed quickly, successfully and according to plan.
We continue to invest in the Group's infrastructure, and are in
the process of expanding our manufacturing capability in Bilbao to
include the Group's lead development product, Q-Octreotide, and the
products coming from our collaboration with Ophthotech. By
investing in the scale up of our sustained release technology this
will enable us to manufacture most of our own products to
commercial scale in-house in the future. This work is on-going and
is expected to be completed in late 2016.
R&D
In May, we received data from the joint venture insulin legacy
programme (MTD101, MidaformTM) following its Phase IIa study. The
study failed to demonstrate the release profile seen in prior
studies and we are moving to close this programme down. Importantly
for the Company, the oral delivery system used for this trial was a
novel and unique application of Midatech's GNP technology and it is
not used in any of the Group's other GNP programmes; all other GNP
programmes are delivered via injection or infusion, which we
believe is the optimal delivery system for our GNP programmes.
All of our other programmes continue to move forward with
encouraging data coming in, in particular from our lead
Q-Octreotide programme (MTD201) for the treatment of acromegaly and
carcinoid syndrome. Midatech plans to submit an IND application to
the FDA for Q-Octreotide and begin bio-equivalence or therapeutic
equivalence studies by late 2016/early 2017, with a potential US
launch in 2018 or 2019 (depending on clinical trial outcomes). The
market each year for chronic treatment of acromegaly and metastatic
carcinoid syndrome is estimated by the Directors to amount to
approximately $2 billion p.a.
Furthermore, we are obtaining encouraging early results on
cancer targeting using our nanotechnology and the Group's oncology
development portfolio is progressing positively. Our DIPG programme
(MTX110) has been used to treat patients on a compassionate basis
and the clinical development of this and other DIPG product
candidates is on-going.
Additionally, in product research and development, the Group
has: in oncology, further GNP cancer therapies (as outlined above)
in pre-clinical phases for Liver Hepatocellular Carcinoma (MTR104),
which is currently in candidate selection, and for Squamous Cell
Carcinoma (MTR105), which is currently in feasibility testing ahead
of in vivo studies; a sustained release treatment named OpsiSporin
(MTD202) for the treatment of non-infective uveitis, and two
early-stage research programmes in cancer immunotherapy.
The Group's platform technologies have continued to deliver
interest in new product partnerships and collaborations. Midatech
has various current and historic collaborations with a number of
specialty and major pharmaceutical companies and universities to
develop the Group's platform technologies into a broad number of
products in order to achieve a range of potential revenue
opportunities within priority therapeutic areas. This includes
products currently in development with Ophthotech Corporation
(Nasdaq: OPHT), an ocular speciality biopharmaceutical company. The
objective of this collaboration is to explore the feasibility of
using Midatech's sustained release formulations with certain
Ophthotech products. The Group is also working on the development
of an innovative vaccine against type 1 diabetes using the Group's
GNP technology, which has shown in vivo to substantially enhance
tolerogenic response. This is being undertaken with funding support
from an EU Consortium grant, for which dosing in Phase I
first-in-human trials study is commencing in H2 2016, with results
expected in 2017.
Outlook
We believe that our commercial business is well placed to build
on the good performance in the first half of 2016 with continued
revenue growth in the second half of 2016. Furthermore, a number of
our R&D programmes have reached exciting stages of development
and we anticipate positive progress over the remainder of 2016 and
beyond as we continue to carefully invest in our platform
technologies and candidate pipeline.
We continue to look at opportunities to build value for
shareholders going forward despite the difficult market
conditions.
Rolf
Stahel
Dr Jim Phillips
Chairman
Chief Executive Officer
FINANCIAL REVIEW
We are pleased to report a positive set of results for the six
months to 30 June 2016 as Midatech Pharma plc reports its first
interim financial information following the acquisition in December
2015 of DARA BioSciences, Inc., since renamed Midatech Pharma US,
Inc. ("MTPUS").
Key performance indicators
|
H1
2016 |
H1
2015 |
Change |
|
|
|
|
Total
revenue |
£3.80m |
£0.32m |
1,088% |
R&D
costs |
£2.05m |
£1.82m |
12% |
R&D as
% of operating costs (before, amortisation of intangible assets and
exceptional items) |
20% |
37% |
n/a |
Loss from
operations |
£10.34m |
£5.27m |
96% |
Net cash
outflow for the period |
£8.80m |
£5.98m |
47% |
Average
headcount |
79 |
55 |
44% |
Loss from operations before amortisation of intangibles and
exceptional items is also regarded as a significant KPI. In the six
months to 30 June 2016 the Group incurred significant costs arising
from the requirement to commence amortisation of the intangible
assets acquired with MTPUS and Zuplenz® product marketing rights
and the settlement of the contracts of certain of its employees,
the impact of which was as follows:
|
H1
2016 £'000 |
H1 2015
£'000 |
|
|
|
Loss
from operations |
(10,335) |
(5,266) |
|
|
|
Contract
settlement costs |
(1,138) |
- |
Amortisation of intangible assets |
(1,709) |
- |
Listing and
acquisition expenses |
- |
(674) |
|
|
|
Loss
from operations before amortisation of intangible assets and
exceptional items |
_______
(7,488) ___ ___ |
_______
(4,592) __ ____ |
Midatech's KPIs continue to be focused on the key areas of cash
management and available cash, R&D spend and operating results
and, with the addition of the US commercial operation, revenue is
now a very significant KPI. Additional, non-financial KPIs,
including further KPIs in respect of the research and development
programmes, will be added as the business continues to develop.
Revenue
Total revenue for the six months to 30 June 2016 was £3.80m
compared to £0.32m in the first six months of 2015, an increase of
1,088%. US product sales made up the largest part of this with
£3.19m (H1 2015: nil) however a further £0.26m (H1 2015: £0.12m)
came from collaboration revenue and sales made by the UK business.
The balance of revenue of £0.35m (H1 2015: £0.20m) came from grant
income received under the Group's two substantial European grant
funded programmes.
Research and development costs
Expenditure on research and development increased 12% from
£1.82m in the six months to 30 June 2015 to £2.05m in the first six
months of 2016. The increase reflects developments on a number of
fronts including external clinical research focussed on product
development and a number of internal programmes dealing with the
characterisation of Midatech's gold nanoparticle constructs.
Significant progress has been made with both of Midatech's
technology platforms, including:
- Positive pharmacokinetic data with our sustained release
Q-Octreotide programme (MTD201) for the treatment of acromegaly and
carcinoid syndrome.
- Positive data from our OpsiSporin programme (MTD202), a
sustained release treatment with Q-Cyclosporin for the treatment of
non-infective uveitis.
- Progress towards dosing in a first-in-human clinical trial for
its collaborative innovative immunotherapy vaccine against type 1
diabetes, MTX102 utilising Midatech's gold nanoparticle technology.
This trial is expected to commence in the second half of 2016.
- Progress towards therapeutic candidate selection for the
treatment of glioblastoma (brain) and liver cancers and
investigational new drug application (IND) enabling programmes are
scheduled to commence at the end of 2016.
Distribution costs, sales and
marketing
Distribution, sales and marketing costs for the six-month period
to 30 June 2016 were £4.24m (H1 2015: nil) and relate exclusively
to the US commercial business. This includes £1.71m of amortisation
charges relating to the acquired intangibles in the books of
Midatech Pharma plc.
Administrative costs
Administrative expenses in the six-month period to 30 June 2016
were £6.82m compared to £3.77m for H1 2015. The most significant
element of the increase relates to the administrative costs of the
newly acquired MTPUS, with £2.89m incurred directly by the US
business. These US costs included £1.14m of non-recurring cost in
relation to settlements with certain former employees of DARA
BioSciences, Inc.
Cash flows
Cash outflows used in operations (after changes in working
capital) in H1 2016 were £8.25m compared to £5.31m in H1 2015,
reflecting the addition of the MTPUS business to the Group as well
as the incremental ongoing costs associated with the NASDAQ
listing. These cash movements resulted in a cash balance of £7.23m
as at 30 June 2016 compared to £16.18m at 31 December 2015 and
£24.34m at 30 June 2015. In addition to these cash reserves, the
Board of Directors of Midatech Pharma plc is evaluating various
near-term funding options available to the Group. The Company
continues to maintain its usual stringent controls over costs.
Whilst the first half of 2016 included £1.14m of employee
contract settlement costs that we do not anticipate will recur, the
likely cash burn in the second half of the year implies a limited
headroom afforded by existing funding. The Board is evaluating
various near-term funding options available to the Group, and,
based on on-going discussions, the Directors are confident that
additional working capital will become available before the end of
the year. We are therefore satisfied that it is appropriate to
prepare these accounts on a going concern basis.
Capital expenditure
Capital expenditure for H1 2016 was £0.75m, which was in line
with H1 2015. Expenditure was broadly split between adding further
analytical capability to the Head Office GNP and Cardiff sustained
release research facilities as well as significant enhancements to
the Group's manufacturing facility in Bilbao, Spain where we are in
the process of adding a sustained release manufacturing line. Only
limited further investment in the UK is planned and the Spanish
construction work is expected to be completed in Q4 2016.
So far in 2016, we have continued to build on the solid
foundations laid down since our AIM IPO and to deliver on our
stated strategy of:
- Expansion of our commercial operations;
- In-house development of our own product portfolio in rare
cancers and with partners in other indications; and
- Acceleration of growth through strategic acquisition of
complementary products and technologies.
Whilst it is too early to assess the long-term impact of the
UK's decision to leave the European Union, there has been no
immediate impact on the Company's day-to-day operations. We have
considered the potential implications on the EU funded grants
received by the Group and at this time do not anticipate any
problems.
The fall in the value of Sterling against both the Euro and US
Dollar immediately following the "Brexit" decision has meant that
costs incurred in those currencies have resulted in higher Sterling
charges to the consolidated financial statements however this is
partly offset by US Dollar denominated revenues.
Nick Robbins-Cherry Chief Financial
Officer
Condensed consolidated unaudited statement of comprehensive
income for the six month period ended 30 June 2016 |
|
|
Note |
|
Six
months ended 30 June 2016 unaudited |
Six
months ended 30 June 2015 unaudited |
|
|
|
£'000 |
£'000 |
|
|
|
|
|
Revenue |
4 |
|
3,456 |
121 |
Grant
revenue |
|
|
347 |
203 |
|
|
|
_______ |
_______ |
Total
revenue |
|
|
3,803 |
324 |
|
|
|
|
|
Cost of
sales |
|
|
(1,032) |
- |
|
|
|
_______ |
_______ |
Gross
profit |
|
|
2,771 |
324 |
Research
and development costs |
4 |
|
(2,048) |
(1,822) |
Distribution costs, sales and marketing |
4 |
|
(4,237) |
- |
Administrative costs |
4 |
|
(6,821) |
(3,768) |
|
|
|
_______ |
_______ |
Loss
from operations |
|
|
(10,335) |
(5,266) |
|
|
|
|
|
Finance
income |
|
|
765 |
28 |
Finance
expense |
|
|
- |
(12) |
|
|
|
_______ |
________ |
|
|
|
|
|
Loss
before tax |
|
|
(9,570) |
(5,250) |
|
|
|
|
|
Taxation |
3 |
|
1,365 |
356 |
|
|
|
_______ |
________ |
|
|
|
|
|
Loss
after tax attributable to the owners of the parent |
|
|
(8,205) |
(4,894) |
|
|
|
________ |
________ |
|
|
|
|
|
Other
comprehensive income: |
|
|
|
|
|
|
|
|
|
Items that
will or may be reclassified subsequently to profit or loss when
specific conditions are met: |
|
|
|
|
Exchange
gains/(losses) arising on translation of foreign operations |
|
|
1,974 |
(60) |
|
|
|
_______ |
________ |
|
|
|
|
|
Total
other comprehensive income, net of tax |
|
|
1,974 |
(60) |
|
|
|
_______ |
________ |
|
|
|
|
|
Total
comprehensive loss attributable to the owners of the
parent |
|
|
(6,231) |
(4,954) |
|
|
|
___
____ |
___
____ |
|
|
|
|
|
Loss per
share |
|
|
|
|
Basic and
diluted loss per ordinary share - pence |
5 |
|
(25p) |
(18p) |
|
|
|
________ |
________ |
Condensed consolidated unaudited statement of financial
position at 30 June 2016 |
|
|
Note |
|
As at
30 June 2016 unaudited |
As at 31
December 2015 |
Assets |
|
|
£'000 |
£'000 |
Non-current assets |
|
|
|
|
Property,
plant and equipment |
6 |
|
2,469 |
1,984 |
Intangible
assets |
7 |
|
42,510 |
41,339 |
Other
receivables due in greater than one year |
|
|
387 |
387 |
|
|
|
_______ |
_______ |
|
|
|
45,366 |
43,710 |
|
|
|
_______ |
_______ |
Current
assets |
|
|
|
|
Inventories |
|
|
787 |
459 |
Trade and
other receivables |
|
|
1,503 |
2,496 |
Income tax
receivable |
|
|
1,723 |
1,201 |
Cash and
cash equivalents |
|
|
7,226 |
16,175 |
|
|
|
_______ |
_______ |
|
|
|
11,239 |
20,331 |
|
|
|
_______ |
_______ |
|
|
|
|
|
Total
assets |
|
|
56,605 |
64,041 |
Liabilities |
|
|
_______ |
_______ |
Non-current liabilities |
|
|
|
|
Borrowings |
|
|
1,440 |
1,508 |
Deferred
tax liability |
8 |
|
6,520 |
6,547 |
|
|
|
_______ |
_______ |
|
|
|
|
|
|
|
|
7,960 |
8,055 |
|
|
|
_______ |
_______ |
Current
liabilities |
|
|
|
|
Trade and
other payables |
|
|
5,790 |
7,084 |
Borrowings |
|
|
360 |
442 |
Derivative
financial liability-equity settled |
9 |
|
965 |
1,573 |
Provisions |
10 |
|
799 |
- |
|
|
|
_______ |
_______ |
|
|
|
7,914 |
9,099 |
|
|
|
_______ |
_______ |
|
|
|
|
|
Total
liabilities |
|
|
15,874 |
17,154 |
|
|
|
_______ |
_______ |
|
|
|
|
|
Issued
capital and reserves attributable to owners of the parent |
|
|
|
|
Share
capital |
11 |
|
1,002 |
1,002 |
Share
premium |
|
|
31,643 |
31,643 |
Merger
reserve |
|
|
53,003 |
52,803 |
Shares to
be issued |
|
|
- |
200 |
Foreign
exchange reserve |
|
|
2,364 |
390 |
Accumulated
deficit |
|
|
(47,281) |
(39,151) |
|
|
|
|
|
|
|
|
_______ |
_______ |
Total
equity |
|
|
40,731 |
46,887 |
|
|
|
_______ |
_______ |
|
|
|
|
|
Total
equity and liabilities |
|
|
56,605 |
64,041 |
|
|
|
_______ |
_______ |
Condensed consolidated unaudited statement of cash flows for
the six month period ended 30 June 2016 |
|
|
|
|
|
|
|
|
Six
months ended 30 June 2016 unaudited |
Six
months ended 30 June 2015 unaudited |
|
|
|
£'000 |
£'000 |
Cash
flows from operating activities |
|
|
|
|
Loss after
tax |
|
|
(8,205) |
(4,894) |
Adjustments
for: |
|
|
|
|
Depreciation of property, plant and equipment |
|
|
442 |
191 |
Amortisation of intangible fixed assets |
|
|
1,709 |
- |
Share based
payment expense |
|
|
75 |
92 |
Net finance
income |
|
|
(765) |
(16) |
Taxation |
|
|
(1,365) |
(356) |
|
|
|
_______ |
_______ |
Cash
flows from operating activities before changes in working
capital |
|
|
(8,109) |
(4,983) |
|
|
|
|
|
Increase in
inventories |
|
|
(328) |
- |
Decrease/
(increase) in trade and other receivables |
|
|
891 |
(777) |
(Decrease)/
increase in trade and other payables |
|
|
(702) |
453 |
|
|
|
_______ |
_______ |
Cash
used in operations |
|
|
(8,248) |
(5,307) |
|
|
|
|
|
Taxes
received |
|
|
204 |
- |
|
|
|
_______ |
_______ |
Net cash
used in operating activities |
|
|
(8,044) |
(5,307) |
|
|
|
_______ |
_______ |
Investing activities |
|
|
|
|
Purchases
of property, plant and equipment |
|
|
(752) |
(733) |
Interest
received |
|
|
157 |
- |
|
|
|
_______ |
_______ |
Net cash
used in investing activities |
|
|
(595) |
(733) |
Financing activities |
|
|
|
|
Payments
to finance lease creditors |
|
|
(15) |
(11) |
Repayment of borrowings |
|
|
(149) |
(34) |
Issue of
borrowings |
|
|
- |
102 |
Share
issues net of costs |
|
|
- |
1 |
|
|
|
_______ |
_______ |
Net cash
(used)/generated from financing activities |
|
|
(164) |
58 |
|
|
|
|
|
Net
decrease in cash and cash equivalents |
|
|
(8,803) |
(5,982) |
Cash and
cash equivalents at beginning of period |
|
|
16,175 |
30,325 |
Exchange
gains on cash and cash equivalents |
|
|
(146) |
- |
|
|
|
_______ |
_______ |
Cash and
cash equivalents at end of period |
|
|
7,226 |
24,343 |
|
|
|
_______ |
_______ |
Condensed consolidated unaudited statement of changes in
equity for the six month period ended 30 June 2016 |
|
|
|
|
|
|
|
|
|
Share capital |
Share premium |
Merger
reserve |
Shares
to be issued |
Foreign exchange reserve |
Accumulated deficit |
Total equity |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
At 1
January 2016 |
1,002 |
31,643 |
52,803 |
200 |
390 |
(39,151) |
46,887 |
|
|
|
|
|
|
|
|
Loss for
the period |
- |
- |
- |
- |
- |
(8,205) |
(8,205) |
Foreign
exchange translation |
- |
- |
- |
- |
1,974 |
- |
1,974 |
|
______ |
______ |
______ |
______ |
______ |
______ |
______ |
Total
comprehensive loss |
- |
- |
- |
- |
1,974 |
(8,205) |
(6,231) |
|
______ |
______ |
______ |
______ |
______ |
______ |
______ |
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of
shares |
- |
- |
200 |
(200) |
- |
- |
- |
Share based
payment |
- |
- |
- |
- |
- |
75 |
75 |
|
______ |
______ |
______ |
______ |
______ |
______ |
______ |
At 30
June 2016 |
1,002 |
31,643 |
53,003 |
- |
2,364 |
(47,281) |
40,731 |
|
______ |
______ |
______ |
______ |
______ |
______ |
______ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1
January 2015 |
1,001 |
31,643 |
37,776 |
800 |
(9) |
(29,222) |
41,989 |
|
|
|
|
|
|
|
|
Loss for
the year |
- |
- |
- |
- |
- |
(4,894) |
(4,894) |
Foreign
exchange translation |
- |
- |
- |
- |
(60) |
- |
(60) |
|
______ |
______ |
______ |
______ |
______ |
______ |
______ |
Total
comprehensive loss |
- |
- |
- |
- |
(60) |
(4,894) |
(4,954) |
|
______ |
______ |
______ |
______ |
______ |
______ |
______ |
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of
shares |
1 |
- |
- |
- |
- |
- |
1 |
Share based
payment |
- |
- |
- |
- |
- |
92 |
92 |
|
______ |
______ |
______ |
______ |
______ |
______ |
______ |
At 30
June 2015 |
1,002 |
31,643 |
37,776 |
800 |
(69) |
(34,024) |
(37,128) |
|
______ |
______ |
______ |
______ |
______ |
______ |
______ |
Notes forming part of the condensed consolidated unaudited
interim financial information for the six month period ended 30
June 2016 |
|
1 |
Basis
of preparation |
The unaudited interim consolidated financial
information for the six months ended 30 June 2016 has been prepared
following the recognition and measurement principles of the
International Financial Reporting Standards, International
Accounting Standards and Interpretations (collectively IFRS) issued
by the International Accounting Standards Board (IASB), and as
adopted by the EU and in accordance with International Accounting
Standard 34 Interim Financial Reporting ('IAS34'). The interim
consolidated financial information does not include all the
information and disclosures required in the annual financial
information, and should be read in conjunction with the audited
financial statements for the year ended 31 December 2015.
The condensed interim financial information
contained in this interim statement does not constitute statutory
financial statements as defined by section 434(3) of the Companies
Act 2006. The condensed interim financial information has not been
audited. The financial information for the year ended 31 December
2015 is derived from the audited statutory financial statements for
the year ended 31 December 2015. The independent auditor's report
was unqualified and did not contain any statement under section
498(2) or 498(3) of the Companies Act 2006.
There are no new standards or interpretations
applicable to the Group for the accounting period commencing 1
January 2016 for adoption.
Going concern
The Group is subject to a number of risks
similar to those of other development and early-commercial stage
pharmaceutical companies. These risks include, amongst others,
generation of revenues from the existing product portfolio and in
due course the development portfolio and risks associated with
research, development, testing and obtaining related regulatory
approvals of its pipeline products. Ultimately, the attainment of
profitable operations is dependent on future uncertain events which
include obtaining adequate financing to fulfil the Group's
commercial and development activities and generating a level of
revenue adequate to support the Group's cost structure.
The Group has experienced net losses and
significant cash outflows from cash used in operating activities
over the past years as it develops its portfolio. As at 30 June
2016 the Group had total equity of £40.73m, it incurred a net loss
after tax for the six months to 30 June 2016 of £8.21m and used
cash in operating activities of £8.25m for the same period. As at
30 June 2016, the Group had cash and cash equivalents of
£7.23m.
The future viability of the Group is dependent
on its ability to generate cash from operating activities, to raise
additional capital to finance its operations or to successfully
obtain regulatory approval to allow marketing of the Group's
development products. The Group's failure to raise capital as and
when needed could have a negative impact on its financial condition
and ability to pursue its business strategies.
The Directors have prepared cash flow forecasts
and considered the cash flow requirement for the Group for a period
including twelve months from the date of approval of this interim
financial information. These forecasts show that further financing
will be required during the course of the next 12 months. This
requirement for additional financing in the short term represents a
material uncertainty that may cast significant doubt upon the
Group's ability to continue as a going concern.
In addition to utilising the existing cash
reserves, the Directors are evaluating a number of near-term
funding options available to the Group and are confident that
additional working capital will become available in the timeframe
required and on terms acceptable to the Board and shareholders.
Therefore, after considering the uncertainties the Directors
consider it is appropriate to continue to adopt the going concern
basis in preparing the interim financial information.
The condensed financial information for the
six-month period were approved by the board on 1 September
2016.
The accounting policies adopted are consistent
with those followed in the preparation of the audited statutory
financial statements for the year ended 31 December 2015.
None of the newly applicable IFRS standards and
amendments had an impact on the Group's interim consolidated
financial information.
Some of the significant accounting policies
require management to make difficult, subjective or complex
judgments or estimates. The policies which management consider
critical because of the level of complexity, judgment or estimation
involved in their application and their impact on the financial
Information are:
- Business combinations
- Impairment of goodwill and intangible assets not yet ready for
use
- Share-based payments
- Income Taxes
- Intangible asset recognition
- Fair value through profit and loss derivative liabilities
Income tax is
recognised or provided at amounts expected to be recovered or to be
paid using the tax rates and tax laws that have been enacted or
substantively enacted at the Group Statement of Financial Position
date. Research and development tax credits are recognised on an
accruals basis and are included as an income tax credit under
current assets. The research and development tax credit recognised
is based on management's best estimate of the expected tax claim
for the period and is recorded within taxation as under the Small
and Medium-sized Enterprise Scheme.
|
Six
months ended 30 June 2016 unaudited |
Six
months ended 30 June 2015 unaudited |
|
£'000 |
£'000 |
Income
tax credit |
|
|
Income tax
credited to the income statement |
725 |
356 |
|
_______ |
_______ |
|
|
|
|
725 |
356 |
Deferred
tax credit |
|
|
Reversal of
temporary differences (note 8) |
640 |
- |
|
_______ |
_______ |
|
|
|
Total
tax credit |
1,365 |
356 |
|
_______ |
_______ |
Revenue
Geographical analysis of revenue by destination
of customer
|
|
Six
months ended 30 June 2016 unaudited |
Six
months ended 30 June 2015 unaudited |
|
|
£'000 |
£'000 |
|
|
|
|
United
Kingdom |
|
42 |
- |
Austria |
|
34 |
25 |
United
States |
|
3,380 |
96 |
|
|
_______ |
_______ |
|
|
|
|
|
|
3,456 |
121 |
|
|
_______ |
_______ |
One customer in respect of pipeline R&D
accounts for 5% of revenue in 2016. In the six months ending 30
June 2015, i.e. prior to acquisition of Midatech Pharma US, there
was only one reportable segment, being pipeline R&D. Modest
sales in the six months ended 30 June 2015 meant that no meaningful
analysis could be drawn from the customer profile of the revenues
achieved during that period.
Following the acquisition of Midatech Pharma US,
Inc., in December 2015, the Group now contains two reportable
operating segments as follows:
- Pipeline Research and Development: The Pipeline Research and
Development ("Pipeline R&D") segment seeks to develop products
using the Group's nanomedicine and sustained release technology
platforms.
- Commercial: The Commercial segment distributes and sells the
Group's commercial products. Midatech Pharma US promotes the
Group's commercial, cancer supportive care products in the US
market, in which the Group has exclusive licenses to Soltamox,
Oravig and Zuplenz, an exclusive license to distribute, promote and
market Gelclair, and a marketing agreement to co-promote two other
products: Ferralet 90 and Aquoral. As and when new products are
introduced the Commercial segment will include revenues from the
marketing of these commercial products.
The accounting policies of the reportable
segments are consistent with the Group's accounting policies
described in note 2. Segment result represents the result of each
segment without the allocation of interest expense, interest income
and tax.
No measures of segment assets and segment
liabilities are reported to the Group's Board of Directors in order
to assess performance and allocate resources. There is no
intersegment activity and all revenue is generated from external
customers.
The UK and Spanish entities meet the aggregation criteria and
have therefore been presented as a single reportable segment under
Pipeline R&D. The research and development activities involve
the discovery and development of pharmaceutical products in the
field of nanomedicine and sustained release technology. The US
operating company is engaged in the sale and marketing of cancer
supportive care products and is reported under the Commercial
segment.
Segmented results for the 6 month ended 30
June 2016
|
Pipeline R&D |
Commercial |
Consolidated |
|
unaudited £'000 |
unaudited £'000 |
unaudited £'000 |
|
|
|
|
Revenue |
266 |
3,190 |
3,456 |
Grant
revenue |
347 |
- |
347 |
|
_______ |
_______ |
_______ |
|
|
|
|
Total
revenue |
613 |
3,190 |
3,803 |
|
|
|
|
Cost of
sales |
- |
(1,032) |
(1,032) |
Depreciation |
(437) |
(5) |
(442) |
Amortisation |
(3) |
(1,706) |
(1,709) |
Contract
settlement costs |
- |
(1,138) |
(1,138) |
Other
research and development costs |
(2,048) |
- |
(2,048) |
Other
distribution costs, sales and marketing |
(21) |
(2,507) |
(2,528) |
Other
administrative costs |
(3,493) |
(1,748) |
(5,241) |
|
_______ |
_______ |
_______ |
|
|
|
|
Segmental result/operating loss |
(5,389) |
(4,946) |
(10,335) |
|
_______ |
_______ |
|
|
|
|
|
Finance
income |
|
|
765 |
|
|
|
_______ |
|
|
|
|
Loss
before tax |
|
|
(9,570) |
|
|
|
|
|
|
|
|
Taxation |
|
|
1,365 |
|
|
|
_______ |
|
|
|
|
Loss
after tax |
|
|
(8,205) |
|
|
|
_______ |
|
|
|
|
For the 6 months ending 30 June 2015 there was
only one reportable segment being Pipeline R&D. The segment
result is the operating loss for the period which is before
interest expense, interest income and tax.
Non-current assets by location of assets
|
|
30
June 2016 |
31
December 2015 |
|
|
unaudited £'000 |
£'000 |
|
|
|
|
Spain |
|
1,720 |
1,433 |
United
Kingdom |
|
14,209 |
14,019 |
United
States |
|
29,437 |
28,258 |
|
|
_______ |
_______ |
|
|
|
|
|
|
45,366 |
43,710 |
|
|
_______ |
_______ |
Basic loss per share amounts are calculated by dividing the net
loss for the period attributable to ordinary equity holders of the
parent company by the weighted average number of ordinary shares
outstanding during the period. As the Group made a loss for the
period the diluted earnings per share is equal to the basic
earnings per share.
|
|
|
Six
months ended 30 June 2016 unaudited |
Six
months ended 30 June 2015 unaudited |
|
Numerator |
|
£'000 |
£'000 |
|
|
|
_______ |
_______ |
|
|
|
|
|
|
Loss used
in basic EPS and diluted EPS |
|
(8,205) |
(4,894) |
|
|
|
_______ |
_______ |
|
|
|
|
|
|
|
|
|
|
|
Denominator |
|
|
|
|
|
|
|
|
|
Weighted
average number of ordinary shares used in basic EPS |
|
33,469,150 |
27,800,459 |
|
|
|
|
|
|
|
|
_______ |
_______ |
|
|
|
|
|
|
Basic and
diluted loss per share - pence |
|
(25p) |
(18p) |
|
|
|
_______ |
_______ |
6 |
Property, plant and equipment |
|
|
Fixtures and fittings |
Leasehold improve-ments |
Computer equipment |
Laboratory equipment |
Total |
|
|
unaudited |
unaudited |
unaudited |
unaudited |
unaudited |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1
January 2016 |
1,319 |
1,112 |
354 |
983 |
3,768 |
|
Additions |
105 |
284 |
18 |
345 |
752 |
|
Exchange
differences |
163 |
111 |
21 |
5 |
300 |
|
Disposals |
- |
- |
(54) |
- |
(54) |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
At 30
June 2016 |
1,587 |
1,507 |
339 |
1,333 |
4,766 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
Accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1
January 2016 |
458 |
733 |
180 |
413 |
1,784 |
|
Charge for
the period |
271 |
27 |
23 |
121 |
442 |
|
Exchange
differences |
56 |
89 |
19 |
5 |
169 |
|
Disposals |
- |
(40) |
(58) |
- |
(98) |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
At 30
June 2016 |
785 |
809 |
164 |
539 |
2,297 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
Net book
value |
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30
June 2016 |
802 |
698 |
175 |
794 |
2,469 |
|
At 1
January 2016 |
861 |
379 |
174 |
570 |
1,984 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
At 1
January 2015 |
1,202 |
880 |
195 |
583 |
2,860 |
|
Additions |
183 |
283 |
173 |
385 |
1,024 |
|
Acquired
through acquisition of subsidiary |
- |
- |
- |
16 |
16 |
|
Exchange
differences |
(66) |
(51) |
(14) |
(1) |
(132) |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
At 31
December 2015 |
1,319 |
1,112 |
354 |
983 |
3,768 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
At 1
January 2015 |
479 |
479 |
140 |
246 |
1,344 |
|
Charge for
the year |
3 |
282 |
48 |
168 |
501 |
|
Exchange
differences |
(24) |
(28) |
(8) |
(1) |
(61) |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
At 31
December 2015 |
458 |
733 |
180 |
413 |
1,784 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
Net book
value |
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31
December 2015 |
861 |
379 |
174 |
570 |
1,984 |
|
At 31
December 2014 |
723 |
401 |
55 |
337 |
1,516 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
7 |
Intangible assets |
|
|
|
|
|
|
|
|
In-process research and development |
Product
and marketing |
Goodwill |
IT/Website costs |
Total |
|
|
|
unaudited |
unaudited |
unaudited |
unaudited |
unaudited |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
At 1
January 2016 |
12,600 |
18,321 |
12,456 |
15 |
43,392 |
|
|
Additions |
- |
- |
- |
12 |
12 |
|
|
Exchange
differences |
- |
1,932 |
1,072 |
(3) |
3,001 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
At 30
June 2016 |
12,600 |
20,253 |
13,528 |
24 |
46,405 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation and impairment |
|
|
|
|
|
|
|
At 1
January 2016 |
1,800 |
243 |
- |
10 |
2,053 |
|
|
Amortisation charge for the period |
- |
1,706 |
- |
3 |
1,709 |
|
|
Exchange
differences |
- |
133 |
- |
- |
133 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
At 30
June 2016 |
1,800 |
2,082 |
- |
13 |
3,895 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
Net book
value |
|
|
|
|
|
|
|
At 30
June 2016 |
10,800 |
18,171 |
13,528 |
11 |
42,510 |
|
|
At 1
January 2016 |
10,800 |
18,078 |
12,456 |
5 |
41,339 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Cost |
|
|
|
|
|
|
|
At 1
January 2015 |
12,600 |
- |
2,291 |
12 |
14,903 |
|
|
Acquired in
business combinations |
- |
17,989 |
9,952 |
- |
27,941 |
|
|
Additions |
- |
- |
- |
3 |
3 |
|
|
Exchange
differences |
- |
332 |
213 |
- |
545 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
At 31
December 2015 |
12,600 |
18,321 |
12,456 |
15 |
43,392 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
Accumulated amortisation and impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1
January 2015 |
1,800 |
- |
- |
9 |
1,809 |
|
|
Amortisation charge for the year |
- |
235 |
- |
1 |
236 |
|
|
Exchange
differences |
- |
8 |
- |
- |
8 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
At 31
December 2015 |
1,800 |
243 |
- |
10 |
2,053 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
|
|
Net book
value |
|
|
|
|
|
|
|
At 31
December 2015 |
10,800 |
18,078 |
12,456 |
5 |
41,339 |
|
|
At 31
December 2014 |
10,800 |
- |
2,291 |
3 |
13,094 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
|
Deferred tax is calculated in full on temporary
differences under the liability method using tax rates applicable
in the tax jurisdictions where the tax asset or liability would
arise.
The movement on the deferred tax account is as
shown below:
|
|
30 June
2016 |
31
December 2015 |
|
|
unaudited £'000 |
£'000 |
|
|
_______ |
_______ |
|
|
|
|
Liability |
|
(6,520) |
(6,547) |
|
|
_______ |
_______ |
|
|
six
months ending 30 June 2016 |
Year
ended 31 December 2015 |
|
|
unaudited £'000 |
£'000 |
|
|
|
|
Liability at 1 January |
6,547 |
354 |
Arising on business combination |
- |
6,191 |
Credited to income statement |
(640) |
(131) |
Foreign exchange gain/(loss) |
613 |
133 |
|
|
_______ |
_______ |
Liability at period end |
|
6,520 |
6,547 |
|
|
_______ |
_______ |
A £6.2m
deferred tax liability arose during 2015 following the acquisition
of DARA BioSciences, Inc.
9 |
Derivative financial liability |
|
|
Six
months ending 30 June 2016 |
Year
ended 31 December 2015 |
|
|
unaudited £'000 |
£'000 |
|
|
|
|
|
|
|
|
Equity
settled derivative financial liability - fair value through profit
and loss |
|
965 |
1,573 |
|
|
_______ |
_______ |
|
|
|
|
Liability
at 1 January |
|
1,573 |
- |
On
acquisition - 5 December 2015 |
|
- |
3,211 |
Gain
recognised in finance income within the consolidated statement of
comprehensive income |
|
(608) |
(1,638) |
|
|
______ |
______ |
Liability
at period end |
|
965 |
1,573 |
|
|
_______ |
_______ |
Equity settled derivative financial liability is not a liability
that is to be settled for cash. The Group assumed fully vested
warrants and share options on the acquisition of DARA Biosciences,
Inc. which are to be settled in shares of Midatech Pharma plc. The
number of ordinary shares to be issued when exercised is fixed,
however the exercise prices are denominated in US Dollars being
different to the functional currency of the parent company.
Therefore, the warrants and share options are classified as equity
settled derivative financial liabilities through the profit and
loss account. The financial liabilities were valued using the
Black-Scholes option pricing model based on assumptions described
below. Financial liabilities at FVTPL are stated at fair value,
with any gains or losses arising on re-measurement recognised in
profit or loss. The net gain or loss recognised in profit or loss
incorporated any interest paid on the financial liability and is
included in the 'other gains and losses' line item in the income
statement. A key input in the valuation of the instrument is the
company share price. The share price of the company reduced from
£2.65 at the date of acquisition of DARA Biosciences, Inc. to £1.74
at 31 December 2015, resulting in a gain of £1.638m on
re-measurement which was credited to finance income. The share
price further reduced to £1.35 on the 30 June 2016 resulting in a
gain of £608k on re-measurement, also credited to finance
income.
As at 30 June 2016 there were DARA options outstanding
over 721,000 Midatech ordinary shares with a weighted average
exercise price of $7.62 per share, within a range of $2.54 to
$770.59, and a weighted average remaining contractual life of 8.0
years. The risk free rate ranged from 0.63% to 1.81%, volatility
from 59% to 79% and the expected life from 1.4 - 8.1 years. The
exercise of all options would raise additional cash of $5.50m.
Also at the
period-end there were DARA warrants outstanding over 3,034,437
Midatech ordinary shares with a weighted average exercise price of
$9.67 per share, within a range of $3.06 to $164.71, and a weighted
average remaining contractual life of 2.6 years. The risk free rate
ranged from 0.44% to 1.63%, volatility from 59% to 79% and the
expected life from 0.6 - 6.5 years. The exercise of all warrants
would raise additional cash of $29.33m.
Fair value hierarchy
The Group uses the following hierarchy for
determining and disclosing the fair value of financial instruments
by valuation technique:
- Level 1: quoted (unadjusted) prices in active markets for
identical assets and liabilities;
- Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly; and
- Level 3: techniques which use inputs that have a significant
effect on the recorded fair value that are not based on observable
market data.
The fair value of the Group's financial
liability is measured at fair value on a recurring basis.
The following table gives information about how
the fair value of this financial liability is determined:
Financial liabilities |
Fair
value as at 30/06/2016 £'000 |
Fair
value as at 31/12/2015 £'000 |
Valuation technique(s) and key input(s) |
Significant unobservable input(s) level 3 |
Relationship of unobservable inputs to fair value |
|
|
|
|
|
|
Equity settled financial derivative liability |
965 |
1,573 |
Black Scholes option pricing model |
Volatility
rates between a range of 59% and 76% determined using historical
volatility of comparable companies. |
The higher
the volatility the higher the fair value. |
Expected
life between a range of 0.1 and 8.6 years determined using the
remaining life of the share options. |
The shorter
the expected life the lower the fair value. |
Risk-free
rate between a range of 0.44% and 1.81% determined using the
expected life assumptions. |
The higher
the risk-free rate the higher the fair value. |
If the above unobservable volatility input to
the valuation model were 10% higher while all other variables were
held constant, the carrying amount of shares would increase by
£194k (2015: £273k).
If the above unobservable expected life input to
the valuation model were 1 year shorter while all other variables
were held constant, the carrying amount of shares would decrease by
£74k (2015: £70k).
If the above unobservable risk free rate input
to the valuation model were 10% higher while all other variables
were held constant, the carrying amount of shares would increase by
£11k (2015: £5k).
The financial liability measured at fair value
on Level 3 fair value measurement represents consideration relating
to a business combination.
|
|
30 June
2016 |
|
|
unaudited £'000 |
|
|
|
Provisions at 1 January |
|
- |
Contract
settlements |
|
799 |
|
|
_______ |
|
|
|
Provisions
at period end |
|
799 |
|
|
_______ |
Contract settlements relate to provisions for
settlements with former employees of Midatech Pharma US, Inc.
|
As at
30 June 2016 |
As at
30 June 2016 |
As at
31 December 2015 |
As at
31 December 2015 |
Allotted
and fully paid - classified as equity |
Number |
£ |
Number |
£ |
|
|
|
|
|
At 1
January |
|
|
|
|
Ordinary
shares of 0.005p each |
33,542,412 |
1,677 |
33,467,504 |
1,673 |
Deferred
shares of £1 each |
1,000,001 |
1,000,001 |
1,000,001 |
1,000,001 |
C
preference shares of 0.01p each |
- |
- |
- |
- |
|
|
__________ |
|
__________ |
Total |
|
1,001,677 |
|
1,001,674 |
|
|
__________ |
|
__________ |
|
|
|
|
|
In accordance with the Articles of Association for
the Company adopted on 13 November 2014, the share capital of the
Company consists of an unlimited number of ordinary shares of
nominal value 0.005 pence each.
Date
of Issue |
Type
of Share Issue |
Ordinary Shares |
Deferred Shares |
Share Price |
Total consideration |
|
|
Number |
Number |
£ |
£'000 |
2016 |
|
|
|
|
|
As at 1
January 2016 |
|
33,467,507 |
1,000,001 |
|
46,840 |
|
|
|
|
|
|
27 June
2016 |
Deferred
consideration re: acquisition of Q Chip Limited |
74,905 |
- |
2.67 |
200 |
|
|
_________ |
_________ |
|
_________ |
|
|
|
|
|
|
As at 30
June 2016 |
|
33,542,412 |
1,000,001 |
|
47,040 |
|
|
_________ |
_________ |
|
_________ |
Date
of Issue |
Type
of Share Issue |
Ordinary Shares |
Deferred Shares |
Share Price |
Total consideration |
|
|
Number |
Number |
£ |
£'000 |
2015 |
|
|
|
|
|
As at 1
January 2015 |
|
27,794,261 |
1,000,001 |
|
32,000 |
|
|
|
|
|
|
24 April
2015 |
Exercise of
employee share options |
16,500 |
- |
0.00005 |
- |
25
September 2015 |
Exercise of
employee share options |
10,000 |
- |
0.00005 |
- |
4 December
2015 |
Share issue
on acquisition of DARA BioSciences, Inc. |
5,422,028 |
- |
2.63 |
14,240 |
23 December
2015 |
Deferred
consideration re: acquisition of Q Chip Limited |
224,718 |
- |
2.67 |
600 |
|
|
_________ |
_________ |
|
_________ |
|
|
|
|
|
|
As at 31
December 2015 |
|
33,467,507 |
1,000,001 |
|
46,840 |
|
|
_________ |
_________ |
|
_________ |
12 |
Related party transactions and ultimate controlling
party |
Transactions with Monosol RX, LLC
The Directors consider Monosol RX, LLC to be a
related party by virtue of the fact that Monosol RX, LLC is a
shareholder of the company and a collaborative partner in the
MidaSol Therapeutics joint operation. During the six months ended
30 June 2016 Midatech Limited recharged to Monosol RX, LLC £105k
(six months ended June 2015 £111k) for research services. There was
no period end receivable due from Monosol RX LLC (at 30 June 2015:
£92k).
The Directors do not consider that there is an
ultimate controlling party.
13 |
Contingent liabilities |
The Group had no material contingent liabilities
at 30 June 2016 or 31 December 2015.
14 |
Events after the reporting date |
There are no events to disclose after the
reporting date.
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