Tepnel Life Sciences - Final Results
September 16 1998 - 3:30AM
UK Regulatory
RNS No 0290t
TEPNEL LIFE SCIENCES PLC
16th September 1998
Contacts:
Dr Simon Douglas, CEO Nicola How
Jeremy Lee, Finance Director Spencer Yates
Tepnel Life Sciences PLC HCC.De Facto
Tel: 0161 927 3400 Tel: 0171 496 3300
Tepnel Life Sciences PLC preliminary announcement
of results for the year to 30 June 1998.
Cheshire, England, 16 September 1998 - Tepnel Life Sciences announces its
preliminary results for the year to 30 June 1998. The Company is a developer
of proprietary DNA diagnostic systems encompassing the key areas of
purification, amplification and detection.
Highlights:
- Appointment of highly experienced executive Board to focus Tepnel's
commercial development
- Strong cash levels, combined with tight financial controls will enable the
Company to address its current business objectives for at least the next
two years
- DARAS patent given Notice of Allowance by US Patent Office
- Patent filed in the area of DNA purification giving Tepnel a new commercial
opportunity, building on the automated DARAS platform
- Two European distributors signed up for DARAS
- Increased R & D spend by 38% to #1.9M (1997: #1.4M)
- Losses increased from #1.53M in 1997 to #2.59M in 1998, in line with
expectations
Peter Raymond, Chairman of Tepnel, commented:
"Following the appointment of the new executive team of directors real
progress has been made in moving the Company forward from a technology driven
research and development operation to a commercially focused company based on
DNA systems.
It is our aim to deliver financial success from licences, strategic
partnerships and collaborative agreements.
We are encouraged that the launch of DARAS has identified several potential
partners for collaboration. With a portfolio of novel technologies, a focused
business strategy, adequate cash resources and a dedicated management team,
Tepnel is in a strong position to succeed.
I am confident that the business expertise now in place will deliver the
potential of Tepnel's portfolio of patented products and technologies and
yield a profitable future to our shareholders''.
CHAIRMAN'S STATEMENT
The last financial year has seen many positive developments and some
significant challenges for Tepnel.
The loss for the year to 30 June 1998 was #2.587 million (1996/7: #1.525
million) representing a loss per share of 5.31 pence (1996/7: 3.14 pence).
The trading loss is close to forecast despite the disappointing level of top
line income, thanks primarily to tight cost controls. However we have
continued to invest in the future and increased Research and Development
expenditure from #1.4 million to #1.9 million. Sales and marketing costs
increased from #228K to #598K, whilst administration costs remained almost
constant. Tepnel has a strong cash position sufficient for over two years at
the current burn rates.
We experienced considerable challenges during the first half of the financial
year, which resulted in major changes at Board level. The recent appointment
of three highly experienced executive directors to complement the leadership
of the newly promoted Chief Executive, Dr Simon Douglas, has brought our plans
for commercial development into sharp focus. Following these appointments
there was a comprehensive review of the Company's business strategy.
I am pleased to be able to report that the progress being made on all fronts
is laying a firm foundation for our future success.
Board Appointments
We are pleased to welcome Mike Billingham from Amersham International plc as
Commercial Director. Mike spent 13 years in various senior commercial roles
at Amersham and was most recently Head of Marketing Development. Our new
Technical Director, Dr Peter Highfield, brings a wealth of product development
experience from Wellcome Research Laboratories and, latterly, Murex
Diagnostics and Virotest, where he was Director of Research & Development.
Finally, our new Finance Director, Jeremy Lee joined Tepnel from Thermo
Instrument Systems Inc., where he was Chief Financial Officer for the
BioSystems Group of the Life Sciences International business.
These new appointments have been further strengthened by the appointment of Dr
John Hurrell, as US Strategic Advisor. He is a senior industry figure with
experience in world-wide biotechnology and diagnostics businesses including
Genzyme Corporation and Boehringer Mannheim Corporation.
This new team emphasises the emergence of Tepnel from a technology-driven
research company to a product development company with an extensive knowledge
and experience of the marketplace. I am confident that the business expertise
now in place will deliver the potential of Tepnel's portfolio of patented
products and technologies and yield a profitable future.
Commercial Strategy
I am pleased to report that the launch of the DARAS instrumentation has been
well received, although it has not resulted in early sales. Initially
impressed by the instrument, we have found potential customers require further
supporting validation data. Measures have now been put in place to achieve
the required validation and 22 DARAS systems have been placed with end users
to generate the appropriate data. This early market feedback contributed to
the review of our commercial strategy. The results of this review have
enabled us to focus on the right customers, and to implement a programme of
targeted marketing. As a start of this process we have appointed two European
distributors.
Our commercial strategic review has also identified additional opportunities
to utilise the DARAS platform as a template for other companies' technologies.
Tepnel's core competencies in instrumentation, software, reagents and
disposables offer the potential for integrated system development across a
wide range of diagnostic applications. It is our intention to utilise these
competences to generate early revenues from the DARAS platform, through
licensing and supply agreements incorporating royalty payments. We are very
encouraged that early discussions resulting from the launch of DARAS have led
to the identification of several potential partners and we are confident that
this will lead to a number of strategic partnerships, licensing and
development agreements.
Technology and Product Development
The DNA-based diagnostics market urgently needs novel technologies to develop
cost-effective products. Tepnel is now developing a range of technologies to
encompass the 'sample to result' diagnostic process. These are broken down
into the three key areas of Purification, Amplification and Detection.
The modular core platform of the DARAS technology is evolving into new robust
systems for potential partnerships. The DARAS patent has been given Notice of
Allowance by the US Patent Office. During the past twelve months, our New
Technologies Group has invented a novel approach to purification, resulting in
a recent patent application, for a specific disposable device used for
purification. Progress in our amplification technology continues and patent
applications have also recently been filed in this area.
The Future
The Board is confident that the changes implemented will secure the
commercialisation of Tepnel's broad platform of patented technologies.
Financial success will come from licences, strategic partnerships and
collaborative development agreements. Without minimising the difficulty of
the challenge ahead, I am pleased with the progress made by the new team since
May this year. With a portfolio of novel technologies, a robust intellectual
property position, a focused business strategy, adequate cash reserves and a
committed and experienced management team, Tepnel is in a strong position to
succeed.
I would like to thank all our staff for their continuing commitment and
contributions. In order to ensure their continuing motivation and to share in
the Company's long-term future and success, we intend to introduce a share
option scheme
Finally, I would like to take this opportunity to thank our shareholders for
their continuing faith and support during what has been a challenging year.
Both my Board and I are committed to fulfilling that confidence and investment
in our Company through the successful realisation of the commercial potential
at Tepnel.
Consolidated Profit and Loss Account
Year to 30 June 1998 Year to 30 June 1997
#'000 #'000 #'000 #'000
Turnover 135 265
Cost of Sales (71) (108)
_______ _______
Gross Profit 64 157
Research and Development (1,936) (1,401)
Sales and Marketing ( 598) ( 228)
Administrative Expenses ( 576) ( 566)
_______ _______
(3,110) (2,195)
_______ _______
Operating Loss (3,046) (2,038)
Interest Receivable 459 513
_______ _______
Loss both before and after
taxation for the year (2,587) (1,525)
Loss per Share 5.31p 3.14p
The Group's activities for the year relate to continuing operations and all
recognised gains and losses are included above.
Consolidated Balance Sheet
As at 30 June 1998 As at 30 June 1997
#'000 #'000 #'000 #'000
Fixed Assets
Intangible assets 542 542
Tangible assets 349 201
_______ _______
891 743
Current Assets
Stocks 405 14
Debtors and prepayments 250 223
Investments 61 0
Cash at bank and in hand 5,083 8,049
_______ _______
5,799 8,286
Creditors : amounts falling
due within one year 595 356
Net current assets 5,204 7,930
_______ _______
Total assets less current
liabilities 6,095 8,673
_______ _______
Capital and reserves
Called up share capital 487 486
Share premium account 15,981 15,973
Profit and loss account (10,373) (7,786)
_______ _______
Shareholders funds 6,095 8,673
_______ _______
All items under capital and reserves are equity
On 3 July 1997 90,000 Ordinary shares of 1p each were issued to Sir David
Trippier at 10p pursuant to the options granted on 24 September 1992.
Consolidated Cash Flow Statement
Year to 30 Year to 30
June 1998 June 1997
#'000 #'000
Reconciliation of operating loss to net cash flow
from operating activities
Operating Loss (3,046) (2,038)
Depreciation 137 66
(Increase)/decrease in stocks (391) 9
Increase in debtors (27) (59)
Increase in creditors 239 237
Loss on disposal of fixed assets 25 -
Release on provision for diminution in value of assets (113) -
_______ _______
Net cash outflow from operating activities (3,176) (1,785)
_______ _______
Net cash outflow from operating activities (3,176) (1,785)
Returns on investments 459 513
Capital expenditure (258) (196)
Management of liquid resources 2,849 1,626
Financing 9 15
_______ _______
(Decrease)/increase in cash (117) 173
_______ _______
Notes:
1. The Directors do not recommend the payment of a dividend.
2. Nature of Preliminary Announcement
The abridged comparative figures for the year to 30 June 1997 are derived from
the statutory accounts of the Company for the year ended 30 June 1997. These
accounts have been reported on by the Company's auditors and delivered to the
Registrar of Companies. The report of the auditors was unqualified and did not
contain a statement under section 237(2) or (3) of the Companies Act 1985.
The foregoing financial information which has been prepared on the basis of
the accounting policies set out in the Company's accounts for the year to 30
June 1997, does not amount to statutory accounts within the meaning of Section
240 of the Companies Act 1985. The auditors have not yet reported on the
accounts for the year ended 30 June 1998. The statutory accounts for this year
will be delivered to the Registrar of Companies following the Company's Annual
General Meeting.
END
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