RNS Number:6462J
Lipoxen PLC
28 September 2006
LIPOXEN PLC
INTERIM REPORT
FOR THE SIX MONTHS ENDED
30TH JUNE 2006
CHAIRMAN'S STATEMENT
Dear Shareholder,
I am pleased to report upon the unaudited results for the six months ended 30th
June 2006.
Financial Results
The unaudited consolidated financial results, prepared under United Kingdom
generally accepted accounting principles, for the 6 months to 30th June 2006 are
summarised as follows:
30th June 2006 30th June 2005
Pre-tax loss (#) (#1,019,570) (#14,497)
Shareholders' funds (#) #11,397,198 #1,500
Net cash (#) #2,006,815 #1,312
Earnings per share (EPS) (basic - loss in pence per ordinary share) (1.05p) (0.44p)
EPS (fully diluted - loss in pence per ordinary share) (0.97p) (0.44p)
Net assets per share (basic - pence per ordinary share) 10.94p 0.05p
Net assets per share (fully diluted - pence per ordinary share) 10.06p 0.05p
History and Technology
The present Lipoxen plc group was established in January 2006 following the
successful reverse takeover of Lipoxen Technologies Limited, a UK-based
biopharmaceutical company, by Greenchip Investments plc. The shares of Lipoxen
plc ("the Company") were admitted to trading on AIM (LSE:LPX) on 16th January
2006 following a Placing of 28 million new ordinary shares at 13.5 pence,
raising a net #3.062 million.
The Company's value proposition is based on novel drug and vaccine delivery
technologies, which have the potential to greatly improve the performance of
high value differentiated biologicals, vaccines and oncology drugs by optimising
their performance and extending patent-life. The Company's technologies are as
follows:
* PolyXen(R) protein drug delivery technology links therapeutic
proteins or peptides to the naturally occurring polymer polysialic acid
("PSA") to prolong their stability, biological half-life, solubility and
immunologic characteristics while maintaining their biological activity and
minimising toxicity. The Company believes PolyXen(R) offers many advantages
over PEGylation, which is currently widely used in the pharmaceutical and
biotechnology industries.
* ImuXen(R) is based on the administration of vaccines via liposomes.
Vaccine materials are protected by the liposomal vehicle enhancing their
delivery to the immune system. This leads to protective immune responses
which are much stronger and more rapid than those observed with vaccine
materials delivered by conventional means. Moreover, liposomal formulation
is well known to minimize the side effects of vaccination as a result of
entrapment and also slow release of the active materials.
* A related liposomal technology is being developed for the
formulation of cytotoxic oncology drugs and a number of anti-cancer agents,
such as paclitaxel.
Operations
To capture the potential that the Company's technologies offer, a two-pronged
strategy is being adopted. The Company is developing its own product portfolio
based on its proprietary PolyXen(R), ImuXen(R) and related liposomal
technologies. In addition, the Company is working with a range of partners in
order to assist them both in developing new products as well as optimising the
performance and extending the patent-life of their current drugs.
The Company's current R&D portfolio includes 12 programmes across a range of
therapeutics and vaccines, the majority of which are being co-developed with the
Serum Institute of India Limited.
In addition, the Company's technologies are being evaluated for the enhanced
delivery of new and second-generation biotherapeutics by five of the world's
leading biopharmaceutical companies, Baxter, Genentech, Amgen, Genzyme and Teva.
CHAIRMAN'S STATEMENT (continued)
Relationship with Serum Institute of India Limited ("SIIL")
A strong relationship has been built with SIIL, India's largest biotechnology
company and one of the world's largest vaccine companies. To date, this
collaboration covers the development of some 10 product candidates, including
three protein drugs, four vaccines and three liposomal formulations of oncology
drug candidates. SIIL has exclusive rights to these candidates in the developing
world and, together with the Company, jointly owns rights to certain candidates
in the developed world.
In August 2006, SIIL's commitment to its strategic collaboration with the
Company was further enhanced when it subscribed for 10 million new ordinary
shares in the Company at 26 pence per share for a total of #2.6 million, thereby
increasing its holding to 15.28%. Concomitant with this placing, the Company
entered into a warrant agreement with SIIL pursuant to which SIIL is entitled to
subscribe for a further 2.7 million ordinary shares in the Company at a price of
35 pence per ordinary share, which would, if fully exercised, increase its
holding to approximately 17%.
In August 2006, SIIL and the Company entered into a Development and
Manufacturing Agreement under which SIIL has agreed to provide the Company with
a unique source of PSA in accordance with Good Manufacturing Practice standards.
PSA is a key component of the Company's PolyXen(R) protein drug delivery
technology. This agreement represents a substantial milestone in the Company's
development as it will facilitate the Company's ongoing development programmes
and provide a continuous supply of PSA to the Company's current and future
collaborative partners.
Bio-Entrepreneur of the Year Award
In July 2006, the Company was honoured with a Bio-Entrepreneur of the Year award
from UK Trade & Investment in recognition of its development efforts in India
with SIIL.
Outlook
The Board is satisfied with the progress made in the period under review and
believes that the Company is well positioned to deliver significant progress in
the upcoming months. Continuing positive results from pre-clinical trials will
enable the Company to initiate clinical trials using our innovative drug and
vaccine delivery technologies for a number of candidates currently under
development. The continuing commitment of our strategic partner, SIIL, will
enhance the development of additional vaccine, biotherapeutic and oncology drugs
in order to develop a balanced and sustainable clinical pipeline for the future.
Finally, I wish to thank the Company's management and staff whose efforts
continue to sustain the Company's progress towards achieving its short and
longer term commercial objectives.
Brian Richards, CBE
Non-Executive Chairman
London: 28th September 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS TO 30TH JUNE 2006
Unaudited Interim Results for the six months to 30th June 2006
Six months Six months Year to
to 30/06/06 to 30/06/05 31/12/05
Unaudited Unaudited Audited
# # #
Acquired
Operations
TURNOVER 298,880 - -
____________ ____________ ____________
Research and development 546,346 - -
Administrative expenses 408,063 14,547 114,201
____________ ____________ ____________
954,409 14,547 114,201
____________ ____________ ____________
Non-cash items:
Equity-settled share options 230,806 - -
Amortisation of goodwill 164,141 - -
____________ ____________ ____________
394,947 - -
____________ ___________ ____________
Total operating expenses 1,349,356 14,547 114,201
____________ ___________ ____________
OPERATING LOSS (1,050,476) (14,547) (114,201)
Interest receivable 40,274 50 2,258
Interest payable (9,368) - -
____________ ___________ ____________
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION (1,019,570) (14,497) (111,943)
Taxation credit 20,000 - -
____________ ___________ ____________
LOSS ON ORDINARY ACTIVITIES
AFTER TAXATION (999,570) (14,497) (111,943)
============ =========== ============
Loss per ordinary share - basic (1.05)p (0.44)p (2.06)p
============ =========== ============
fully diluted (0.97)p (0.44)p (2.06)p
=========== =========== ============
The group has no recognised gains or losses other than the results for each
period as set out above.
CONSOLIDATED BALANCE SHEET AS AT 30TH JUNE 2006
Unaudited Interim Results for the six months to 30th June 2006
As at As at As at
30/06/06 30/06/05 31/12/05
Unaudited Unaudited Audited
# # #
FIXED ASSETS
Intangible - Goodwill 6,401,511 - -
- Development costs 3,032,719 - -
____________ ____________ ___________
9,434,230 - -
Tangible 115,484 - -
____________ _____________ ___________
9,549,714 - -
____________ _____________ ___________
CURRENT ASSETS
Debtors 186,599 9,686 82,936
Cash at bank and in hand 2,006,815 1,312 142,613
____________ _____________ ___________
2,193,414 10,998 225,549
CREDITORS: Amounts falling
due within one year (345,930) (9,498) (121,495)
____________ _____________ ___________
NET CURRENT ASSETS 1,847,484 1,500 104,054
____________ _____________ ___________
TOTAL ASSETS LESS CURRENT
LIABILITIES 11,397,198 1,500 104,054
============= ============= ===========
CAPITAL AND RESERVES
Called up share capital 2,154,233 1,650,000 1,675,000
Share premium account 18,893,840 7,136,165 7,311,165
Profit and loss account (9,650,875) (8,784,665) (8,882,111)
______________ ____________ ____________
SHAREHOLDERS' FUNDS 11,397,198 1,500 104,054
============== ============ ============
Net assets per share - basic 10.94p 0.05p 1.25p
====== ===== =====
- fully diluted 10.06p 0.05p 1.25p
====== ===== =====
CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS TO 30TH JUNE 2006
Unaudited Interim Results for the six months to 30th June 2006
Six months Six months Year to
to 30/06/06 to 30/06/05 31/12/05
Unaudited Unaudited Audited
# # #
Net cash outflow from
operating activities (1,156,578) (14,541) (75,448)
__________ __________ _________
Returns on investments and
servicing of finance
Bank interest received 40,274 50 2,258
Bank interest paid (9,368) - -
__________ __________ _________
Net cash inflow from returns on
investments and servicing
of finance 30,906 50 2,258
__________ __________ _________
Taxation received 47,029 - -
__________ __________ _________
Capital expenditure
Purchase of tangible fixed assets (106,955) - -
__________ __________ __________
Net cash outflow from capital
expenditure (106,955) - -
__________ __________ __________
Acquisitions and disposals
Purchase of subsidiary (45,560) - -
Less: cash balance acquired
with subsidiary 33,452 - -
__________ __________ _________
Net cash outflow for acquisitions
and disposals (12,108) - -
__________ __________ _________
Net cash flow before financing (1,197,706) (14,491) (73,190)
Financing
Issue of equity shares 3,061,908 14,872 214,872
____________ ____________ __________
Increase in cash in the period 1,864,202 381 141,682
=========== =========== ==========
NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS TO 30TH JUNE 2006
1. The interim financial statements for the six months ended 30th June 2006
are unaudited and were approved by the directors of the Company on 28th
September 2006. The financial information set out above does not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
The information given as comparative figures for the year ended 31st December
2005 was extracted from the Company's audited statutory accounts for that
financial year.
2. ACCOUNTING POLICIES
The principal accounting policies of the Company have remained unchanged from
those set out in the Company's 2005 accounts, except that the following
additional accounting policies have been adopted following the acquisition of
Lipoxen Technologies Limited.
Basis of consolidation
The group financial statements incorporate the financial statements of the
parent company and all of its subsidiary undertakings. The results of subsidiary
undertakings acquired or disposed of during the year are included in the group
financial statements from, or up to, the date of acquisition or disposal.
Turnover
The turnover shown in the profit and loss account represents the value of
services provided during the year, exclusive of Value Added Tax. For contracts
in progress at the balance sheet date, turnover is recognised based on the
degree of completion of the project and the agreed fee for the total project.
Intangible fixed assets
Intangible fixed assets acquired are capitalised at cost. Intangible assets
(excluding development costs) created within the business are not capitalised
and such expenditure is charged in the profit and loss account in the year in
which it is incurred.
Goodwill
Goodwill, being the difference between the consideration and the attributable
fair values of the net assets of the undertaking acquired, is amortised over its
useful economic life, which is presently estimated to be 20 years. Provision is
made for any impairment.
Tangible fixed assets and depreciation
Depreciation is provided to write off the cost less the estimated residual value
of tangible fixed assets on a straight line basis over their estimated useful
economic lives as follows:
Laboratory equipment - 4 years
Plant and machinery - 4 years
Computer equipment - 4 years
Operating lease agreements
Operating lease rentals are charged in the profit and loss account on a straight
line basis over the lease term.
Research and development costs
Research and development costs are written off to the profit and loss account as
incurred, except that development expenditure incurred on an individual project
is carried forward when its future recoverability can be reasonably regarded as
assured. Any expenditure carried forward is amortised in line with the expected
future sales from the related project.
NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS TO 30TH JUNE 2006
(continued)
2. ACCOUNTING POLICIES (continued)
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the
rate ruling at the balance sheet date. Transactions in foreign currencies are
translated into sterling at the rate of exchange ruling at the date of the
transaction. Exchange differences are taken into account in arriving at the
operating profit.
Pension costs
Company contributions to personal pension schemes are written off to the profit
and loss account as incurred.
Share based payments
The Company has adopted FRS 20 'Share based payments' in respect of share
options granted to employees and also certain supplier contracts under which
services are provided as consideration for the issue of equity instruments.
Share options granted to employees since 7th November 2002 are valued at the
date of grant using an appropriate option pricing model and are charged to
operating profit over the vesting period of the option. This has given rise to a
charge to profits of #230,806 in the current period but has had no impact on
prior periods.
In October 2005, Lipoxen Technologies Limited entered into an agreement with FDS
Pharma under which 15,000,000 shares in Lipoxen Technologies Limited were
allotted in consideration for the provision by FDS Pharma of manufacturing and
clinical development services. The services to be provided by FDS Pharma have
now been valued at the fair value of the equity instruments issued of
#3,032,719. This amount has been included within intangible fixed assets as
development costs. No amortisation has been provided in the period as FDS Pharma
have not completed the development of the technology.
3. MOVEMENT IN SHAREHOLDERS' FUNDS
Six months Six months Year to
to 30/06/06 to 30/06/05 31/12/05
Unaudited Unaudited Audited
# # #
Opening shareholders' funds 104,054 9,938 9,938
Loss for period (999,570) (14,497) (111,943)
Issue of ordinary share capital 12,061,908 14,872 214,872
Decrease in shares to be issued - (8,813) (8,813)
Share based payments 230,806 - -
______________ ___________ ___________
11,397,198 1,500 104,054
============= =========== ===========
NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS TO 30TH JUNE 2006
(continued)
4. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
Six months Six months Year to
to 30/06/06 to 30/06/05 31/12/05
Unaudited Unaudited Audited
# # #
Operating loss (1,050,476) (14,547) (114,201)
Amortisation of goodwill 164,141 - -
Depreciation 16,667 - -
Equity-settled share options 230,806 - -
Decrease/(increase) in debtors 113,498 314 (72,936)
(Decrease)/increase in creditors (631,214) (308) 111,689
____________ ___________ ___________
Net cash outflow from operating
activities (1,156,578) (14,541) (75,448)
=========== =========== ===========
5. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Six months Six months Year to
to 30/06/06 to 30/06/05 31/12/05
Unaudited Unaudited Audited
# # #
Opening net funds 142,613 931 931
Increase in cash in period 1,864,202 381 141,682
_____________ ___________ ___________
Closing net funds 2,006,815 1,312 142,613
============= =========== ===========
NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS TO 30TH JUNE 2006
(continued)
6. ACQUISITION OF SUBSIDIARY
On 16th January 2006, the Company acquired Lipoxen Technologies Limited
for a consideration principally satisfied by the issue of 66,666,665 new
ordinary shares of 0.5 pence each to the vendors valued at the placing price of
13.5 pence per share.
Net assets acquired:
#
Goodwill 6,565,652
Development expenditure 3,032,719
Tangible fixed assets 25,196
Debtors 244,190
Bank and cash 33,452
Creditors (855,649)
____________
9,045,560
============
Satisfied by:
Equity shares issued 9,000,000
Costs of acquisition 45,560
____________
9,045,560
============
7. EARNINGS PER SHARE
Six months Six months Year to
to 30/06/06 to 30/06/05 31/12/05
Unaudited Unaudited Audited
# # #
Weighted average number of
ordinary shares in issue 95,211,159 3,277,323 5,440,743
______________ ____________ ____________
Dilutive effect of the weighted
average number of share options
in the period 7,588,417 - -
______________ ____________ ____________
Loss after taxation (999,570) (14,497) 111,943)
______________ ____________ ____________
Basic loss per share - pence (1.05)p (0.44)p (2.06)p
====== ====== ======
Fully diluted loss per share - pence (0.97)p (0.44)p (2.06)p
====== ====== ======
NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS TO 30TH JUNE 2006
(continued)
8. NET ASSET VALUE PER SHARE
The "basic" net asset value per share figures are calculated on the
basis of the net assets attributable to equity shareholders divided by the
number of ordinary shares in issue at the relevant dates.
The "fully diluted" net assets per share figures are calculated by
adjusting the number of ordinary shares on the assumption of the exercise in
full of all options and warrant instruments extant as at the relevant dates
where the exercise price of any such instrument is less than the "basic" net
asset value per share.
9. EVENTS AFTER THE BALANCE SHEET DATE
In August 2006, the Company raised #2,600,000 by placing 10,000,000 new
ordinary shares in the Company at a subscription price of 26p per share, and
entered into a warrant agreement under which the warrant holder has the right to
subscribe for up to 2,700,000 ordinary shares in the Company for a period of two
years from 3rd August 2006 at a subscription price of 35 pence per share.
10. Copies of the interim report are available to the public free of charge
from the Company at London Bioscience Innovation Centre, 2 Royal College Street,
London, NW1 0NH during normal office hours, Saturdays and Sundays excepted, for
14 days from today.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BXGDCLUDGGLI
Lipoxen (LSE:LPX)
Historical Stock Chart
From Jun 2024 to Jul 2024
Lipoxen (LSE:LPX)
Historical Stock Chart
From Jul 2023 to Jul 2024
