RNS Number:9489X
Osmetech PLC
29 January 2001
29 January 2001
Osmetech plc
Interim Results for the Six Months Ended 31 October 2000
Osmetech plc, the developer of electronic-nose (e-nose) technology for
healthcare applications, today announces its interim results for the six
months ended 31 October 2000.
Operating Highlights
* Successful completion of clinical trials for Urinary Tract Infection
(UTI) detection in support of application for US Food and Drug
Administration (FDA) approval.
* Technical collaboration agreement signed with leading industrial
e-nose company, Cyrano Sciences Inc.
* Results of a large bacterial vaginosis (BV) study match performance
of the existing 'gold standard' diagnosis test
* Establishment of three BV trial sites at internationally renowned
hospitals in the US and UK to support forthcoming second FDA
application.
* Losses for the half-year of #2.1million, in line with expectations.
* Cash balances at 31 October 2000 of #7.2 million
Gordon Hall, Chairman, Osmetech plc, said:
"The successful performance results from the UTI clinical trials are a
landmark achievement for an e-nose company. These trial results will support
the Company's application for an FDA approval which will be a major milestone
in the commercialisation process of the Company's versatile and exciting
sensor technology. The Company is now focussed on ensuring that the supporting
information for the FDA submission is up to the same high standard as the
clinical trial results. We expect to achieve FDA approval for our first
diagnostic test by Autumn 2001, a major endorsement of Osmetech's core
technology."
Enquiries:
Osmetech plc
James White, Chief Executive
01270 216444
Bell Pottinger Financial
Rebecca Fox
020 7353 9203
Osmetech plc
Interim Results for the Six Months Ended 31 October 2000
Chairman's Statement
Introduction
Osmetech has successfully completed its clinical trials for the detection of
urinary tract infections ("UTI's"). These performance results are a landmark
achievement in the electronic nose ("e-nose") industry and the Company expects
its subsequent US Food and Drug Administration ("FDA") approval by Autumn
2001. This approval will be a major milestone in the commercialisation process
of Osmetech's technology.
UTI Project
The clinical trials in support of the FDA submission were successfully
completed at Guys and St. Thomas's Hospital, London and at premier teaching
hospitals in Boston and Baltimore in the US. The results were in line with an
earlier study that confirmed that the Osmetech Microbial AnalyserTM can
reliably detect the six most common pathogens present in UTI's. The Company is
now focussed on ensuring that the supporting information for the FDA
submission is up to the same high standard as the clinical trial results.
We anticipate publication of the earlier proof of concept study in a peer
reviewed medical journal within the next six months. Together with FDA
approval this should enable negotiations with commercial partners to be
conducted from a position of strength.
BV Project
In October the Company announced that the results of a 1038 patient study
conducted by Dr Philip Hay, one of the world's leading BV physicians, at St
George's Hospital, London had demonstrated that Osmetech's device matches the
diagnostic performance of the existing 'gold standard' diagnostic test for the
disease. The Osmetech test does have a considerable speed advantage that
should enable the physician to make a cost effective diagnosis within ten
minutes. The test results are further evidence of Osmetech's leading
technological capability in the healthcare field.
Following on from the experience gained through the Company's first FDA
submission for UTI, we anticipate that clinical trials will commence for BV
during the next few months and an FDA submission will be filed soon
thereafter. The Company has prepared three leading UK and US trial sites for
this process.
Other Projects
The Company's resources have been focussed on the FDA approval process.
Consequently, limited emphasis has been placed on longer-term projects,
including pneumonia in intensive care unit patients, pharyngitis and wound
care during the period. This will change as these longer-term projects enter a
new phase of development.
The Company will also start to investigate other disease states. Initially
this work will be performed internally using the Company's new microbiology
facility and will concentrate upon areas of unmet market need, balancing the
size of the commercial opportunity with the desire to bring products quickly
to market.
Collaboration Agreement
In November the Company announced that it had entered into a healthcare
technical collaboration agreement with leading industrial e-nose company,
Cyrano Sciences Inc. of the US. This agreement provides for a jointly funded
trial of Osmetech's sensors incorporated into Cyrano's recently launched
hand-held sensing instrument. If successful, this could accelerate the
commercialisation of healthcare opportunities and, in particular, point of
care applications towards which the global healthcare market is progressing
and also enable Osmetech to extract maximum value from its healthcare
platform.
Financial Review
Losses for the half-year of #2,129,000 (1999 - #1,736,000) were in line with
expectations. Cash outflow before financing at #1,955,000 was below the level
of expenditure experienced in the last six months of the prior year.
Expenditure in the second half of the year is expected to increase to reflect
the cost of FDA trial projects together with other costs associated with
obtaining regulatory approval.
Cash balances at 31 October 2000 of #7,211,000 were enhanced by the 5% issue
of share capital in September to Merrill Lynch Investment Managers, raising #
2,689,000 net of expenses.
Outlook
We have made significant strides in developing our technology during this
six-month period. We expect to achieve the landmark of FDA approval for our
first diagnostic test by Autumn 2001, a major endorsement of Osmetech's core
technology.
Our versatile and exciting sensor technology gives us a strong platform to
develop other healthcare applications and enter into commercial partnerships,
creating revenue and value for our shareholders.
Gordon J Hall
Chairman
29 January 2001
Independent Review Report to Osmetech plc
Introduction
We have been instructed by the company to review the financial information set
out on pages 4 to 6 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing
Rules of the Financial Services Authority require that the accounting policies
and presentation applied to the interim figures should be consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999
/4 issued by the Auditing Practices Board. A review consists principally of
making enquiries of management and applying analytical procedures to the
financial information and underlying financial data and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions. It is substantially less in scope than an audit performed in
accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit. Accordingly we do not express an audit opinion on the
financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 October 2000.
BDO Stoy Hayward
Chartered Accountants
Manchester
29 January 2001
Group Profit and Loss Account
For the six months ended 31st October 2000
Six Six Year
months to months to ended
31 October 31 October 30 April
2000 1999 2000
#'000 #'000 #'000
Turnover 26 301 480
========= ========= =========
Operating loss (2,325) (1,632) (4,338)
Net interest receivable/(payable
and similar charges) 196 (104) (133)
--------- --------- ---------
Loss on ordinary activities before
tax (2,129) (1,736) (4,471)
Tax on loss on ordinary activities - - -
--------- --------- ---------
Loss before and after taxation
attributable to shareholders (2,129) (1,736) (4,471)
========= ========= =========
Loss per share - basic (0.98p) (1.03p) (2.42p)
========= ========= =========
Group Statement of Total Recognised Gains and Losses
For the six months ended 31st October 2000
Six Six Year
months to months to ended
31 October 31 October 30 April
2000 1999 2000
#'000 #'000 #'000
Loss for the period after taxation (2,129) (1,736) (4,471)
Exchange gain/(loss) on
consolidation 4 (3) 7
--------- --------- ---------
Total recognised losses for the
period (2,125) (1,739) (4,464)
========= ========= =========
Group Balance Sheet
As at 31 October 2000
31 October 31 October 30 April
2000 1999 2000
#'000 #'000 #'000
Fixed assets
Intangible assets 838 1,050 813
Tangible assets 357 612 321
--------- --------- ---------
1,195 1,662 1,134
--------- --------- ---------
Current assets
Stocks 127 370 153
Debtors 337 209 234
Cash at bank and in hand 7,211 1,684 6,426
--------- --------- ---------
7,675 2,263 6,813
Less:
Creditors: amounts falling due
within one year
Other creditors 751 692 449
Deferred income - 65 -
--------- --------- ---------
751 757 449
--------- --------- ---------
Net current assets 6,924 1,506 6,364
--------- --------- ---------
Total assets less current
liabilities 8,119 3,168 7,498
Creditors: amounts falling due
after more than one year
Debenture stock - 1,457 -
Other creditors 8 - -
--------- --------- ---------
8,111 1,711 7,498
========= ========= =========
Capital and reserves
Called up share capital 2,268 1,723 2,136
Share premium account 24,109 13,404 21,503
Profit and loss account (18,266) (13,416) (16,141)
--------- --------- ---------
8,111 1,711 7,498
========= ========= =========
Reconciliation of movement in
shareholders' funds
Opening shareholders' funds 7,498 2,515 2,515
Loss for the period (2,129) (1,736) (4,471)
New share capital subscribed
(including premium) 2,773 935 9,924
Issue expenses (35) - (477)
Exchange differences 4 (3) 7
--------- --------- ---------
8,111 1,711 7,498
========= ========= =========
Group Cash Flow Statement
For the six months ended 31 October 2000
Six Six Year
months to months to ended
31 October 31 October 30 April
2000 1999 2000
#'000 #'000 #'000
Net cash outflow from operating
activities (1,906) (1,305) (3,473)
--------- --------- ---------
Returns on investment and servicing
of finance
Interest received 87 49 115
Interest paid - (5) (6)
--------- --------- ---------
Net cash outflow from returns on
investments and servicing of
finance 87 44 109
--------- --------- ---------
Capital expenditure and financial
investment
Payments to acquire intangible
assets (36) (61) (94)
Payments to acquire tangible assets (100) (219) (190)
--------- --------- ---------
Net cash outflow from investing
activities (136) (280) (284)
--------- --------- ---------
Net cash outflow before financing (1,955) (1,541) (3,648)
Financing
Shares issued by parent company 2,773 4 7,302
Convertible debentures issued by
parent company - 2,500 2,500
Issue expenses (35) (313) (764)
Capital element of hire purchase
payments - (2) (2)
--------- --------- ---------
Net cash inflow from financing 2,738 2,189 9,036
--------- --------- ---------
Increase in cash 783 648 5,388
========= ========= =========
Reconciliation of operating loss to
operating cash flow
Operating loss (2,325) (1,632) (4,338)
Depreciation and amortisation of
fixed assets 88 214 431
(Increase)/decrease in stocks (3) 80 203
Decrease in debtors 8 61 102
Increase/(decrease) in creditors 309 (35) (295)
Loss on disposal of fixed assets 17 7 424
--------- --------- ---------
(1,906) (1,305) (3,473)
========= ========= =========
Notes
1. The Interim Statement, which is unaudited, has been prepared on the
basis of the accounting policies set out in the statutory accounts to
30 April 2000. The directors do not recommend the payment of an
interim dividend. The balance sheet as at 30 April 2000 and the
results for the year there ended have been abridged from the statutory
accounts which have been filed with the Registrar of Companies. The
auditors' opinion on those accounts was unqualified.
2. The calculation of loss per share for the six months to 31st October
2000 is based upon a loss of #2,128,539 (31 October 1999: loss of
#1,736,330; 30th April 2000: loss of #4,470,527) and on the weighted
average number of shares in issue for the period, 217,234,503 (31st
October 1999: 168,261,326 and 30 April 2000: 184,627,231).
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