TIDMTRX
RNS Number : 9370Y
Tissue Regenix Group PLC
23 May 2016
Tissue Regenix Group plc
Preliminary results for year ended 31 January 2016
Leeds, 23 May 2016 - Tissue Regenix Group (AIM:TRX) ("Tissue
Regenix" or "The Group") the regenerative medical devices company,
today announces its unaudited preliminary results for the year
ended 31 January 2016.
Operational Highlights
During the year, the Group:
-- Entered a key joint venture agreement establishing new entity GBM-V
- Granted the first licence to the dCELL(R) heart valves
- Granted the first licence to DermaPure(R) in continental Europe
-- Secured reimbursement for c.65% of Medicare beneficiaries for
the use of DermaPure(R), increased to 74% post year end
-- Surpassed $1m sales in the US for DermaPure(R)
- Growing clinical support for the use of DermaPure(R) in peer
reviewed clinical posters
-- Completed enrolment for the OrthoPure(TM) XM clinical trial
-- Commenced enrolment for the OrthoPure(TM) XT clinical trial
-- Relocated UK operations to a new ISO 13485 certified
manufacturing facility, allowing in-house production of xenograft
products for Europe and the rest of the world.
-- Appointed a new Non- Executive Director, Jonathan Glenn,
reflecting the increased commercial focus of the Group.
Financial Highlights
-- Significant revenue growth to GBP0.8m (2015: GBP0.1m)
-- GBP19.0m, net of expenses, raised via equity placing
-- Strong year-end cash balance of GBP19.9m (2015: GBP10.3m)
-- Loss after tax for year of GBP9.5m (2015: GBP7.6m) as
expected, reflecting the progression of EU clinical trials, and
growing commercial infrastructure in the US.
Antony Odell, Tissue Regenix's Chief Executive Officer,
commented:
"During the year to 31 January 2016 Tissue Regenix made
significant progress both in the commercialisation and regulatory
pathways across all of our key focus areas.
The performance of DermaPure(R) in its first commercialised year
exceeded our expectations and gives us confidence as we move
forward with a number of line extensions in different clinical
applications. This progress was also mirrored in our porcine
orthopaedic products OrthoPure(TM) XM & OrthoPure(TM) XT both
of which entered regulatory clinical trials for CE marks.
The establishment of our joint venture in Germany, GBM-V, is an
important milestone in our progress as a maturing commercial
company, and allows us to bring our dCELL(R) human tissue
applications to a wider European market. Also, allowing us to grant
for the first time the dCELL(R) heart valve licence and to begin
commercialising DermaPure(R) outside the US.
Our momentum has accelerated since year end, with further
Medicare coverage for DermaPure(R), and 510(k) market clearance
from the FDA for medical device SurgiPure(TM) XD, the first
approval for a dCELL(R) application under this regulatory body.
With Tissue Regenix celebrating its 10(th) anniversary this year
I feel that the Group is now beginning to truly show the enormous
potential of our dCELL(R) technology platform. Changing patient
treatment, recovery and quality of life, across multiple clinical
areas, and with the scope for future applications within the
development pipeline. I look to the coming year with confidence
that we will continue to deliver in line with our
expectations."
Enquiries
Tissue Regenix Group
plc +44 (0)330 430 3073
========================= =========================
Caitlin Pearson Corporate Communications
Officer
========================= =========================
Jefferies International
Ltd. +44 (0)20 7029 8000
========================= =========================
Simon Hardy
Harry Nicholas
========================= =========================
About Tissue Regenix
Tissue Regenix is a leading medical devices company in the field
of regenerative medicine. The company's patented decellularisation
('dCELL(R)') technology removes DNA and other cellular material
from animal and human tissue leaving an acellular tissue scaffold
which is not rejected by the patient's body and can then be used to
repair diseased or worn out body parts. The potential applications
of this process are diverse and address many diverse critical
clinical needs of which vascular disease, heart valve replacement
and knee repair are only the first.
Tissue Regenix was formed in 2006 when it was spun-out from the
University of Leeds. The company commercialises academic research
conducted by our partners around the World.
In November 2012 Tissue Regenix Group plc set up a subsidiary
company in the United States- 'Tissue Regenix Wound Care Inc.', as
part of its commercialisation strategy for its dCELL(R) technology
platform.
Chairman's statement
"Tissue Regenix has delivered another promising year of
continued progress, both in terms of commercialisation, and
development from its pipeline of innovative regenerative
solutions."
John Samuel
Chairman
Overview
The twelve months to 31 January 2016 represented another
progressive year for Tissue Regenix in its development as a
maturing and commercially focussed company, vindicating the belief
demonstrated when it was established ten years ago.
Surpassing the $1m sales mark with DermaPure(R) validates the
commercial viability of our technology and our approach to a hybrid
distribution model; utilising third party distributors and
strengthening our own salesforce is reaping benefits, a model in
which we invested after the fundraise in February 2015.
FDA market clearance for medical device SurgiPure(TM) XD, the
first for the Group, further strengthens our commercial position
within the US and marks a significant step in the acceptance of our
dCELL(R) technology.
We entered our first Joint Venture Agreement forming a
partnership with the GTM-V tissue bank in Rostock, Germany,
allowing us to grant for the first time, a dCELL(R) human heart
valve licence.
Throughout the year we undertook a staged move to a new facility
in Leeds and we anticipate that the consolidation of our managerial
and manufacturing functions will bring further improvement to our
corporate efficiency.
The Regenerative Advantage
Regenerative solutions continue to lead the way in
revolutionising medical treatments. With an ageing population
suffering multiple ailments and injuries, with increasing
participation in active sports, and with current treatment
modalities having significant disadvantages in terms of side
effects, treatment cost and intercurrent morbidity, the potential
benefits of the regenerative approach are becoming increasingly
clear. In a market that is expected to reach a value of $11.5bn by
2022, Tissue Regenix is actively involved in three clinical areas
at present, with considerable potential for further expansion.
Wound Care
We have taken significant steps in the commercialisation of our
flagship product DermaPure(R) in the US, and given the potential
size of the wound care market worldwide, we are confident that this
success can be replicated in other markets. We are also well on the
way to establishing additional applications for wound care, and
expect to launch SurgiPure(TM) XD into the US market in H216 after
receiving FDA market clearance in March.
Orthopaedics
Our Orthopaedic clinical trials are currently ongoing, for both
the OrthoPure(TM) XM and XT (porcine products), and we anticipate
that we will have CE mark approval by early 2017. We have also
strengthened our senior management team by appointing a VP of
Orthopedics for North America, who will be key to guiding our entry
into this market over the coming years with both our porcine
products and human tissue applications.
Cardiac
Our relationship with Professor Francisco da Costa and research
partner Pontifical Catholic University of Paraná, Curitiba, Brazil,
has been ongoing for the last ten years and we are proud to now be
in a position to present the ten year clinical follow-up data at
prestigious conferences around the world. We hope to be able to
bring dCELL(R) heart valves to European patients in the near future
through our Joint Venture. We anticipate that this will be the
first of an expanding network of agreements with international
partners who share our ethical and commercial values.
Human Resources
We continue to invest in the development and retention of our
staff and have strengthened our senior management with the
appointment of a VP for Orthopedics in the US. Alongside this we
have expanded our senior sales team for DermaPure(R) and developed
our production and manufacturing teams within the UK.
Finance
With the Group now generating revenue the decision has been made
to move our year end date to 31 December, to a more conventional
commercial company reporting timeframe. We have also implemented,
for the first time, segmental reporting for each of our operational
divisions, in order to provide even greater transparency of the
business as each of the operating divisions grow.
The Board
In January we announced the appointment of Jonathan Glenn, CEO
of Consort Medical plc, as a Non-Executive Director. With the
expected rapid commercialisation of products over the coming years,
the addition of Jonathan strengthens our commercial, and
specifically, medical device industry expertise, to help guide
Tissue Regenix through the next stages of its business plan.
Outlook
An exciting and busy year lies ahead for Tissue Regenix and we
are confident that we will continue to see notable progress across
all three operating divisions in the coming months. dCELL(R)
technology applications are well advanced in terms of clinical
development and regulatory processes, and we anticipate that within
the coming year we will be in a position to bring them to the
European market, and begin our entry pathway in the US with our
orthopaedic portfolio.
John Samuel
Chairman
23 May 2016
CEO STATEMENT
"During the year to 31 January 2016 Tissue Regenix made
significant progress in both the commercial and development
businesses of the Group. We continue to carefully monitor our
commitments to ensure that we can deliver in line with
expectations, and bring our products to the market in the safest
and most time efficient manner over the coming year."
Antony Odell
chief executive officer
Our Highlights
In the year since our last report, Tissue Regenix has taken
great strides in realising its true potential, gaining commercial
traction with our wound care products, surpassing $1m revenue with
DermaPure(R) in its first full year of commercialisation, and
receiving our first 510k whilst also undertaking the groundwork to
allow for a successful launch of our orthopaedic products during
2017.
We have entered our first Joint Venture Agreement, highlighting
the corporate maturity of the Group as we embark on a new business
model, enabling us to roll out our dCELL(R) human tissue products
in Europe.
The move to our new manufacturing facilities' consolidating our
UK operations' was completed on time and on budget, ensuring that
we are in a position to meet our production demands in the coming
years, as well as ensuring that we can meet the requirements of the
FDA for products such as SurgiPure(TM) XD.
Finance
During the year we invested in our sales and distribution
infrastructure for DermaPure(R) in the US, and our porcine
orthopaedic applications within the EU. Following the GBP19m
fundraise undertaken in February 2015, we maintain a strong
financial position.
Strategy
As a company operating in a rapidly developing industry sector,
we have remained committed to our core strategic focuses of wound
care, orthopaedics and cardiac, with a specific geographic focus on
the EU and the US, and a dual tissue strategy utilising both human
and animal (xeno) tissues.
However, we also pride ourselves in having the flexibility and
commercial confidence to pursue new opportunities as they arise, as
was demonstrated in January 2016 when we entered our first Joint
Venture Agreement with GTM-V in Rostock, Germany, establishing
tissue bank GBM-V. This new business model will allow us to deploy
our human tissue products throughout Germany, and the wider EU.
Regulatory Pathways
We have an experienced in-house regulatory and quality team
which is successfully leading our regulatory applications and entry
into global markets. In March 2016 we received our first 510(k)
market clearance from the FDA for SurgiPure(TM) XD, a decellurised
porcine dermis for soft tissue defects. This represents an
important step since it is the FDA's first in-depth review of a
dCELL(R) process, as part of the approval which encourages us in
planning for future regulatory submissions in the US.
We have also undertaken a two part submission for CE marking,
which should reduce the time needed for final approval of the
OrthoPure(TM) products, by ensuring that once the required clinical
data has been collected we are in a position to submit the final
application for approval.
Our entry into the German market will be managed by our partners
from GTM-V who have extensive experience of the German regulatory
system, one of the toughest within Europe, thus setting a high
benchmark for the dCELL(R) products to meet, which allows us to
feel confident that further EU approvals will be more readily
secured.
Key performance indicators
Key Group performance indicators are set out below:
-- Monthly review of product development timelines and costs
-- Monthly review of revenue progress and forecasts
-- Monitoring of cash balance and associated working capital requirements
-- Monthly review of actual results against budget
Licensing and IP
Through GBM-V, our JV company, we granted for the first time a
licence to CardioPure(TM), the dCELL(R) human heart valve. We
expect to be in a position to roll out the first dCELL(R) human
heart valves in 2017, subject to approval from the necessary German
authorities. GBM- V has also been granted a licence to DermaPure(R)
, the first commercial licence for this product outside of the
US.
We continue to maintain our relationship with the NHSBT who were
granted an exclusive royalty-free licence for the use of
DermaPure(R) within the UK, and our research partner Pontifical
Catholic University of Paraná, who we continue to work with closely
in developing our cardiac applications.
Outside of the already granted licences we also have a portfolio
of products and line extensions that we are currently developing,
and will, if relevant, review licensing to a suitable partner, as
well as holding the IP to the dCELL(R) products that will be
manufactured in-house by Tissue Regenix. We continue to protect our
intellectual property by securing a number of global patents, and
ensuring we take the necessary precautionary steps and action
needed to secure these.
Operations
In April 2015 we commenced the move to our new manufacturing
facility outside of Leeds. Having undergone renovations to bring it
in line with our needs from both a regulatory and manufacturing
standpoint, we achieved ISO13485 certification for the whole of our
UK operations, which supports the future manufacture of products
for Europe and the rest of the world from this facility. We have
now consolidated our entire UK operation to this one site, which
has the capacity to meet our expanding manufacturing needs in the
coming years, for both our orthopaedic and wound care porcine
products. We believe that this strategic decision will create
further synergies in the manufacturing and development arms,
enhancing the corporate cohesion and global reach of the
Company.
We have expanded the number of top level managers within the US
to facilitate the growth of our wound care division, making senior
appointments to both our sales and marketing teams, thus driving
further market penetration and brand awareness. In March 2016 we
also made our first appointment to Tissue Regenix Orthopedic, Inc.
filling the post of VP Orthopedics for North America to lead our
entry into this marketplace over the coming years.
Current Trading and Outlook
We expect this progress to continue in the next year as we bring
to market SurgiPure(TM) XD, progress with CE mark application for
OrthoPure(TM), and begin our entry into the US market with our
human tissue orthopaedic applications.
DermaPure(R) now has an established foothold within the US, and
we hope to receive the remaining approvals and become available to
100% of medicare beneficiaries in the coming months. Alongside this
we will continue to penetrate the private payer market and
establish further revenue-generating opportunities.
Our Joint Venture Agreement in Germany allows us to pursue new
business opportunities and begin our entry into the European market
with our human tissue applications, and additionally allows us to
enter the cardiac field, something which we feel will underline the
unique efficacy of our dCELL(R) technology.
Conclusion
Tissue Regenix this year celebrates its tenth anniversary,
having fulfilled the promise of its early research and development
roots.
With accelerating sales, increasing market visibility in the US,
new partners, creating new opportunities, and potential licensing
and commercial breakthroughs in Europe, the Company continues to
expand and develop as originally envisaged, and we remain
optimistic that it will reach its fullest potential across our key
focus areas.
At the same time, as a British company, strategically allied
with British educational establishments, it remains a source of
pride that was granted a revenue-free license for human tissue
applications (only) of dCELL(R) to the NHS in partnership with the
National Blood Transfusion Service (NHSBT) who developed
DermaPure(R) , which Tissue Regenix is now commercialising globally
outside of the UK.
We are still at an early stage in exploring the potential
clinical applications of the dCELL(R) platform which is showing its
true potential to provide solutions in a wide variety of medical
arenas.
With the support of our strong blue chip investor base I am
confident that the benefits to clinicians and patients will
continue to expand over the coming years.
Antony Odell
Chief Executive Officer
23 May 2016
cfo statement
"Tissue Regenix Group plc ended FY16 in line with our
expectations. Taking our first product through it's first full year
we generated revenue of GBP816k, and maintained a strong cash
balance at the end of the period of GBP19,907k."
Ian Jefferson
Chief Financial Officer
For the year ended 31 January 2016 Tissue Regenix Group plc
delivered revenue of GBP816k (2015: GBP100k) and generated an
operating loss of GBP10,242k (2015: GBP8,369k). With finance income
of GBP213k (2015: GBP168k) and a research and development tax
credit of GBP527k (2015: GBP620k) the loss after tax was GBP9,502k
(2015: GBP7,581k) of which GBP9,410k (2015: GBP7,581k) was
attributable to the equity holders of the parent Company. Cash
balances at the end of the period were GBP19,907k (2015:
GBP10,257k). The results were in line with our expectations.
Segmental Analysis
A split of the Group's results by operational division, as
extracted from the operating segment analysis (see note 3), is
shown below along with a further breakdown of administrative
costs:
Wound Care Orthopaedics Cardiac Central Total
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Total segment 884 72 - - 76 - 8 28 968 100
Inter-segment (76) - (76) - - - (152) -
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Revenue 808 72 - - - - 8 28 816 100
Cost of sales (154) (32) - - - - - - (154) (32)
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Gross Profit 654 40 - - - - 8 28 662 68
Administrative
costs (4,938) (2,843) (2,382) (2,054) (352) (250) (3,232) (3,290) (10,904) (8,437)
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Operating loss (4,284) (2,803) (2,382) (2,054) (352) (250) (3,224) (3,262) (10,242) (8,369)
Finance income - - - - - - 213 168 213 168
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Loss before taxation (4,284) (2,803) (2,382) (2,054) (352) (250) (3,011) (3,094) (10,029) (8,201)
Taxation 169 50 324 510 16 60 18 - 527 620
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Loss for the
year (4,115) (2,753) (2,058) (1,544) (336) (190) (2,993) (3,094) (9,502) (7,581)
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Wound Care Orthopaedics Cardiac Central Total
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Development (1,108) (1,029) (2,279) (2,032) (289) (235) - - (3,676) (3,296)
Sales and marketing (3,672) (1,766) - - - - - - (3,672) (1,766)
Operations * (158) (48) (103) (22) (63) (15) (3,232) (3,290) (3,556) (3,375)
-------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Admin costs (4,938) (2,843) (2,382) (2,054) (352) (250) (3,232) (3,290) (10,904) (8,437)
-------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
* Central costs include plc, the Board, operations, finance and
facilities.
Sales and marketing for Wound Care includes the entire costs for
our US entity. Included within these costs is GBP303k (2015:
GBP21k) commission on sales.
The Group is organised into Cardiac, Wound Care and Orthopaedics
divisions for internal management, reporting and decision-making,
based on the nature of the products of the Group's businesses.
Central overheads, which primarily relate to operations of the
Group function, are generally not allocated to the business
units.
Wound Care
Group revenue for the year was generated almost entirely from
the Wound Care division with revenue of GBP808k (2015:
GBP72k).Launched in the second half of the prior year, FY16
represents the first full year of sales for DermaPure(R) .
Delivering GBP808k ($1.2m) of revenue from our first product
launched in the USA, demonstrates the successful transition from
development to commercialisation, a significant achievement. Moving
forward we anticipate continued acceleration of DermaPure(R)
revenue. The exact timing of distributor appointments and contract
approvals is highly variable, therefore our revenue expectation for
the next 12 months is between $2.5-$4.5m. However, as described
overleaf our next accounting period will be shortened to 31
December 2016, a period of 11 months. The expected reported revenue
in the current period will therefore be proportionally smaller. As
announced earlier in the year, SurgiPure(TM) XD has been granted
510k approval in the USA and it is anticipated that the product
will be launched in H2 CY16. We therefore do not expect a material
impact on revenue from this product in the current period.
Gross margin for the year for the Wound Care division was 81%
(2015: 56%). The margin in both years was impacted by the provision
of free of charge evaluation units to potential new customers. This
was naturally higher in the initial months after product launch and
therefore affected 2015 more significantly than 2016. As recurring
business has been established the number of evaluation units has
reduced as a proportion of total units shipped resulting in an
increase in the margin achieved. The underlying margin on product
sales, excluding the evaluation units, was 86% (2015: 82%), the
variance in the underlying margin being the result of product size
mix.
Development costs at GBP1,108k (2015: GBP1,029k) resulted from
the associated expense of the on going randomised clinical trial of
DermaPure(R) , to collect clinical evidence for use supporting the
sales and marketing functions, and the 510k process costs for
SurgiPure(TM) XD. We expect these costs to be slightly lower in the
current period as the DermaPure(R) trial is coming to an end and
SurgiPure(TM) XD is in the final qualification stages before
product launch. Sales and marketing expenditure of GBP3,672k (2015:
GBP1,766k) represents the costs of our US entity. The increase
during the year resulted from the planned recruitment of additional
direct sales heads, marketing costs to support the roll out of
DermaPure(R) and commission costs on sales. The commission costs
were GBP303k (2015: GBP21k), which as a percentage of sales was
therefore 37.5% (2015: 29.2%). The commission percentages paid vary
between salaried reps, external distributors and commission- only
reps. The overall percentage paid will therefore vary depending on
the sales mix but is anticipated to move towards 35%. For the
current period the total sales and marketing costs will increase
due to a combination of commission ramping in line with revenue
growth, the full year effect of hires in FY16 and several new
appointments being made to support the distribution side of our
hybrid sales model.
With the working capital and start-up costs of the US operation
the Group has a net outflow of US dollars. The recent strength of
the US dollar rate means that this outflow is proportionally more
expensive when translated into sterling, the Group's functional
currency. However, this situation will reverse when the US
operation becomes profitable and cash generative.
Orthopaedics
Significant progress was made during the period with both
OrthoPure(TM) XM and OrthoPure(TM) XT. The development costs
incurred of GBP2,279k (2015: GBP2,032k) consisted primarily of the
pre-clinical and clinical trial costs of both these products as
they moved into the human trial phase. We would anticipate these
costs increasing in the current period as the implanted patient
numbers grow and we move towards CE marking. Product launch for
orthopaedic products is expected in the first half of CY17.
Cardiac
There are no material results for year for this division.
However, a significant step forward was made with the creation of a
Joint Venture tissue bank in Germany in January 2016, an important
first step in the process of commercialising our human heart valve
technology in Europe. Details on the Joint Venture are included in
the Strategic Review on pages 20-21.
Central
Operation costs are mainly incurred centrally and are in general
not allocated to individual operating divisions. Costs have been
kept under control and remained flat over the period at GBP3,232k
(2015: GBP3,290).
Finance Income
Finance income increased to GBP213k (2015: GBP168k) and
represents interest earned on cash deposits. The increased interest
reflects the additional cash held on deposit subsequent to the
equity fund-raise
in February 2015.
The Group follows a risk-averse policy of treasury management.
Cash deposits are held across a number of counterparties and are
held only with institutions of prime financial standing. The
Group's primary objective is to minimise exposure to potential
capital losses whilst at the same time securing prevailing market
rates.
Taxation
The Group continues to submit enhanced research and development
tax claims and elects to exchange tax losses for a cash refund. The
expected refund for the year to 31 January 2016 is GBP492k (2015:
GBP620k). Tax losses carried forward by the Group at the end of
January 2016 were GBP23,772k (2015: GBP16,121k). The Group
therefore does not expect to pay corporation tax for a number of
years. Once profitable, the Group also expects to fall within the
Patent Box regime and benefit from the reduced corporation tax rate
within it.
Cash Balances
As at 31 January 2016 the Group had cash resources of GBP19,907k
(2015: GBP10,257k) and was debt free. The increase in cash balances
resulted from an equity placing in February 2015 which raised
GBP18,947k after expenses. Adjusting for the fund-raise the outflow
of cash from other activities was GBP9,297k (2015: GBP8,226k). The
bulk of this outflow, GBP9,116k (2015: GBP8,038k), related to the
"cash" operating loss (operating loss excluding non-cash
items).
Accounting Reference Date Change
Historically, the Group had a 31 July year end, consistent with
its origins as a University spin-out. On reversal onto AIM in 2010
the Group adopted the accounting reference date of 31 January in
line with the vehicle into which it reversed. However, now that the
Group is entering its commercial phase the Board has decided to
change the accounting reference date to 31 December, primarily to
bring it in line with a more conventional commercial company
reporting timeframe and to provide ease of reference for investors,
customers, managers and employees.
The effect of the change to the accounting reference date is to
shorten the next accounting period to 31 December 2016, a period of
11 months. The Group will therefore have the following reporting
dates:
-- Unaudited results for the 6 months to 31 July 2016
-- Audited results for the 11 months to 31 December 2016
The Group will subsequently publish its half-yearly reports to
30 June and annual report and accounts to 31 December in accordance
with the AIM Rules for Companies.
Ian Jefferson
Chief Financial Officer
23 May 2016
Consolidated Statement of Comprehensive Income
for the year ended 31 January 2016
2016 2015
Notes GBP000 GBP000
----------------------------------------- ----- -------- -------
REVENUE 3 816 100
Cost of sales (154) (32)
----------------------------------------- ----- -------- -------
GROSS PROFIT 662 68
Administrative expenses 3 (10,904) (8,437)
----------------------------------------- ----- -------- -------
OPERATING LOSS (10,242) (8,369)
Finance income 213 168
----------------------------------------- ----- -------- -------
LOSS BEFORE TAXATION (10,029) (8,201)
Taxation 4 527 620
----------------------------------------- ----- -------- -------
LOSS FOR YEAR (9,502) (7,581)
----------------------------------------- ----- -------- -------
ATTRIBUTABLE TO:
Equity holders of the parent (9,410) (7,581)
Non-controlling interests (92) -
----------------------------------------- ----- -------- -------
(9,502) (7,581)
----------------------------------------- ----- -------- -------
OTHER COMPREHENSIVE INCOME:
Foreign currency translation differences
- foreign operations (1) (4)
----------------------------------------- ----- -------- -------
TOTAL COMPREHENSIVE EXPENSE FOR
THE YEAR (9,503) (7,585)
----------------------------------------- ----- -------- -------
ATTRIBUTABLE TO:
Equity holders of the parent (9,411) (7,585)
Non-controlling interests (92) -
----------------------------------------- ----- -------- -------
(9,503) (7,585)
----------------------------------------- ----- -------- -------
LOSS PER SHARE
Basic and diluted on loss attributable
to equity holders of the parent 5 (1.27)p (1.19)p
The loss for the year arises from the Group's continuing the
operations.
The accompanying notes form an integral part of the financial
statements.
Consolidated Statement of Changes in Equity
for the year ended 31 January 2016
Attributable to equity holders of
the parent
Reserve Share
Reverse for based Retained Non-
Share Share Merger acquisition own payment earnings controlling Total
capital premium reserve reserve shares reserve deficit Total interests equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- ------- ------- ------- ----------- ------- ------- --------- --------- ----------- ---------
At 31 January
2014 3,267 31,971 10,884 (7,148) (831) 630 (19,795) 18,978 - 18,978
---------------- ------- ------- ------- ----------- ------- ------- --------- --------- ----------- ---------
Loss for
the year - - - - - - (7,581) (7,581) - (7,581)
Other
comprehensive
expense - - - - - - (4) (4) - (4)
---------------- ------- ------- ------- ----------- ------- ------- --------- --------- ----------- ---------
Loss and
total
comprehensive
expense
for the
year - - - - - - (7,585) (7,585) - (7,585)
Exercise
of share
options 4 1 - - - - - 5 - 5
Share based
payment
expense - - - - - 180 - 180 - 180
---------------- ------- ------- ------- ----------- ------- ------- --------- --------- ----------- ---------
At 31 January
2015 3,271 31,972 10,884 (7,148) (831) 810 (27,380) 11,578 11,578
---------------- ------- ------- ------- ----------- ------- ------- --------- --------- ----------- ---------
Loss for
the year - - - - - - (9,410) (9,410) (92) (9,502)
Other
comprehensive
expense - - - - - - (1) (1) - (1)
---------------- ------- ------- ------- ----------- ------- ------- --------- --------- ----------- ---------
Loss and
total
comprehensive
expense
for the
year - - - - - - (9,411) (9,411) (92) (9,503)
Non-controlling
interest
arising
on creation
of a joint
venture - - - - - - - - 9 9
Issue of
shares 526 18,421 - - - - - 18,947 - 18,947
Exercise
of share
options 4 68 - - - - - 72 - 72
Share based
payment
expense - - - - - 136 - 136 - 136
---------------- ------- ------- ------- ----------- ------- ------- --------- --------- ----------- ---------
At 31 January
2016 3,801 50,461 10,884 (7,148) (831) 946 (36,791) 21,322 (83) 21,239
---------------- ------- ------- ------- ----------- ------- ------- --------- --------- ----------- ---------
Consolidated Statement of Financial Position
as at 31 January 2016
2016 2015
Notes GBP000 GBP000
-------------------------------------- ----- -------- --------
ASSETS
Non-current assets
Property, plant and equipment 901 435
-------------------------------------- ----- -------- --------
TOTAL NON-CURRENT ASSETS 901 435
-------------------------------------- ----- -------- --------
Current assets
Inventory 64 34
Trade and other receivables 2,325 1,947
Cash and cash equivalents 19,907 10,257
-------------------------------------- ----- -------- --------
TOTAL CURRENT ASSETS 22,296 12,238
-------------------------------------- ----- -------- --------
TOTAL ASSETS 23,197 12,673
-------------------------------------- ----- -------- --------
LIABILITIES
Current liabilities
Trade and other payables (1,958) (1,095)
-------------------------------------- ----- -------- --------
TOTAL LIABILITIES (1,958) (1,095)
-------------------------------------- ----- -------- --------
NET ASSETS 21,239 11,578
-------------------------------------- ----- -------- --------
EQUITY
Share capital 6 3,801 3,271
Share premium 6 50,461 31,972
Merger reserve 6 10,884 10,884
Reverse acquisition reserve 6 (7,148) (7,148)
Reserve for own shares (831) (831)
Share based payment reserve 946 810
Retained earnings deficit 7 (36,791) (27,380)
-------------------------------------- ----- -------- --------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
OF PARENT 21,322 11,578
Non-controlling interests (83) -
-------------------------------------- ----- -------- --------
TOTAL EQUITY 21,239 11,578
-------------------------------------- ----- -------- --------
Approved by the Board of Directors and authorised for issue on
23 May 2016.
Company number: 5969271
John Samuel
Chairman
Ian Jefferson
Chief Financial Officer
Consolidated Statement of Cash Flows
for the year ended 31 January 2016
2016 2015
Notes GBP000 GBP000
---------------------------------------- ----- -------- -------
Operating activities
Operating loss (10,242) (8,369)
Adjustment for non-cash items:
Depreciation of property, plant
and equipment 245 151
Share based payment 136 180
R&D tax credit 745 -
---------------------------------------- ----- -------- -------
Operating cash outflow (9,116) (8,038)
---------------------------------------- ----- -------- -------
Increase in inventory (30) (34)
Increase in trade and other receivables (596) (200)
Increase/(decrease) in trade and
other payables 862 (13)
---------------------------------------- ----- -------- -------
Net cash outflow from operations (8,880) (8,285)
---------------------------------------- ----- -------- -------
INVESTING ACTIVITIES
Interest received 213 168
Net cash acquired on creation of
joint venture 9 -
Purchases of property, plant and
equipment (711) (114)
---------------------------------------- ----- -------- -------
Net cash (outflow)/inflow from
investing activities (489) 54
---------------------------------------- ----- -------- -------
FINANCING ACTIVITIES
Proceeds from issue of share capital 6 19,019 5
---------------------------------------- ----- -------- -------
Net cash inflow from financing
activities 19,019 5
---------------------------------------- ----- -------- -------
Increase/(decrease) in cash and
cash equivalents 9,650 (8,226)
Cash and cash equivalents at start
of year 10,257 18,483
---------------------------------------- ----- -------- -------
CASH AND CASH EQUIVALENTS AT
OF YEAR 19,907 10,257
---------------------------------------- ----- -------- -------
The Company's annual report and accounts for the year ended 31
January 2016 have been published today and will be posted to
shareholders shortly. The annual report and accounts are also
available in electronic form for download on the Company's website,
www.tissueregenix.com.
Notes to the Financial Statements
for the year ended 31 January 2016
1. BASIS OF PREPARATION
The financial statements of Tissue Regenix Group plc are audited
consolidated financial statements for the year to 31 January 2016.
These include audited comparatives for the year to 31 January
2015.
The Financial Statements set out in this announcement do not
constitute statutory accounts for the year ended 31 January 2016.
The report of the auditors on the statutory accounts for the year
ended 31 January 2016 was unqualified and did not contain a
statement under Section 498 of the Companies Act 2006. The
Financial Statements for the year ended 31 January 2016 included in
this announcement were authorised for issue in accordance with a
resolution of the Board of Directors on 23 May 2016.
The Company is a limited liability company incorporated and
domiciled in England & Wales and whose shares are quoted on
AIM, a market operated by The London Stock Exchange.
The Group financial statements consolidate the financial
statements of Tissue Regenix Group plc and the entities it
controls, its subsidiaries.
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
In assessing control, the Group takes into consideration potential
voting rights that are currently exercisable. The acquisition date
is the date on which control is transferred to the acquirer. The
financial statements of subsidiaries are included in the
consolidated financial statements from the date that control
commences until the date that control ceases. Losses applicable to
the non-controlling interests in a subsidiary are allocated to the
non-controlling interests even if doing so causes the
non-controlling interests to have a deficit balance. Intra-group
balances and transactions, and any unrealised income and expenses
arising from intra-group transactions, are eliminated.
Going Concern
As at 31 January 2016, the Group had GBP19.9m of cash and cash
equivalents available to it. The Directors have considered their
obligation, in relation to the assessment of the going concern of
the Group and each statutory entity within it, and have reviewed
the current budget cash forecasts and assumptions as well as the
main risk factors facing the Group.
After due enquiry, the Directors consider that the Group has
adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going
concern basis in preparing the financial statements.
2. Significant accounting policies
The Group's financial statements have been prepared in
accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union as they apply to the
financial statements of the Group for the year ended 31 January
2016 and applied in accordance with the Companies Act 2006.
The accounting policies adopted are consistent with those
followed in the preparation of the audited financial statements of
Tissue Regenix Group Plc for the year ended 31 January 2016 and are
disclosed in those statements.
3. SEGMENTAL REPORTING
The following table provides disclosure of the Group's revenue
by geographical market based on location of the customer:
2016 2015
GBP000 GBP000
-------------- ------- -------
USA 808 72
Rest of world 8 28
-------------- ------- -------
816 100
-------------- ------- -------
Analysis of revenue by customer
During the year ending 31 January 2016 the Group had two
customers who individually exceeded 10% of revenue. These customers
generated 12% and 11% of revenue respectively. During the year
ending 31 January 2015 the Group had three customers who
individually exceeded 10% of revenue. These customers generated
28%, 25% and 18% of revenue respectively.
Operating segments
The Group is organised into Cardiac, Wound Care and Orthopaedics
divisions for internal management, reporting and decision-making,
based on the nature of the products of the Group's businesses.
Managers have been appointed within these divisions, who report to
the Board. These are the reportable operating segments in
accordance with IFRS 8 "Operating Segments". The Directors
recognise that the operations of the Group are dynamic and
therefore this position will be monitored as the Group
develops.
In accordance with IFRS 8, the Group has derived the information
for its operating segments using the information used by the Chief
Operating Decision Maker. The Group has identified the Board of
Directors as the Chief Operating Decision Maker as it is
responsible for the allocation of resources to the operating
segments and assessing their performance.
Central overheads, which primarily relate to operations of the
Group function, are not allocated to the business units.
Wound Care Orthopaedics Cardiac Central Total
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Total segment 884 72 - - 76 - 8 28 968 100
Inter-segment (76) - (76) - - - (152) -
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Revenue 808 72 - - - - 8 28 816 100
Cost of sales (154) (32) - - - - - - (154) (32)
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Gross Profit 654 40 - - - - 8 28 662 68
Administrative
costs (4,938) (2,843) (2,382) (2,054) (352) (250) (3,232) (3,290) (10,904) (8,437)
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Operating loss (4,284) (2,803) (2,382) (2,054) (352) (250) (3,224) (3,262) (10,242) (8,369)
Finance income - - - - - - 213 168 213 168
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Loss before taxation (4,284) (2,803) (2,382) (2,054) (352) (250) (3,011) (3,094) (10,029) (8,201)
Taxation 169 50 324 510 16 60 18 - 527 620
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Loss for the
year (4,115) (2,753) (2,058) (1,544) (336) (190) (2,993) (3,094) (9,502) (7,581)
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Administrative costs are broken down as follows:
Wound Care Orthopaedics Cardiac Central Total
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Development (1,108) (1,029) (2,279) (2,032) (289) (235) - - (3,676) (3,296)
Sales and marketing (3,672) (1,766) - - - - - - (3,672) (1,766)
Operations * (158) (48) (103) (22) (63) (15) (3,232) (3,290) (3,556) (3,375)
-------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
Admin costs (4,938) (2,843) (2,382) (2,054) (352) (250) (3,232) (3,290) (10,904) (8,437)
-------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------- -------
* Central costs include plc, the Board, operations, finance and
facilities.
Sales and marketing for Wound Care includes the entire costs for
our US entity. Included within these costs is GBP303k (2015:
GBP21k) commission on sales.
Other segment information
The Group's non-current assets are predominantly held by UK
entities and consequently no geographical statement of financial
position disclosures are required.
4. TAXATION
Tax on loss on ordinary activities
2016 2015
GBP000 GBP000
------------------------------------------ ------- -------
Current tax:
UK corporation tax credit on losses
of period (527) (620)
------------------------------------------ ------- -------
(527) (620)
Deferred tax:
Origination and reversal of temporary
timing differences - -
------------------------------------------ ------- -------
Tax credit on loss on ordinary activities (527) (620)
------------------------------------------ ------- -------
The charge for the year can be reconciled to the loss before tax
per the statement of comprehensive income as follows:
Factors affecting the current tax charges
2016 2015
GBP000 GBP000
-------------------------------------------- -------- -------
The tax assessed for the year varies
from the small company rate of corporation
tax as explained below:
Loss on ordinary activities before tax (10,029) (8,201)
Tax at the standard rate of corporation
tax 20% (2,006) (1,640)
Effects of:
Expenses not deductible for tax purposes 27 36
Research and development tax credits
received (492) (620)
Surrender of research and development
relief for repayable tax credit 679 919
Research and development enhancement (377) (510)
Prior year adjustment (35) -
Unutilised tax losses 1,677 1,195
-------------------------------------------- -------- -------
Tax credit for the year (527) (620)
-------------------------------------------- -------- -------
Deferred tax
2016 2015
GBP000 GBP000
------------------------------------------ ------- -------
Tax losses
Losses available to carry forward against
future trading profits 23,772 16,121
Deferred tax asset - unrecognised* 4,279 3,224
------------------------------------------ ------- -------
* The Company has not recognised a deferred tax asset relating
to these losses as their recoverability is uncertain.
5. LOSS PER SHARE (BASIC AND DILUTED)
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the parent by the weighted
average number of ordinary shares in issue during the year
excluding own shares held jointly by the Tissue Regenix Employee
Share Trust and certain employees. Diluted loss per share is
calculated by adjusting the weighted average number of ordinary
shares in issue during the year to assume conversion of all
dilutive potential ordinary shares.
2016 2015
GBP000 GBP000
-------------------------------------- ------- -------
Total loss attributable to the equity
holders of the parent (9,410) (7,581)
-------------------------------------- ------- -------
No. No.
--------------------------------------- ----------- -----------
Weighted average number of ordinary
shares in issue during the year 743,183,878 636,890,061
--------------------------------------- ----------- -----------
Loss per share
Basic and diluted on loss for the year (1.27)p (1.19)p
--------------------------------------- ----------- -----------
The Company has issued employee options over 24,543,853 ordinary
shares and there are 16,940,386 jointly owned shares which are
potentially dilutive. There is, however, no dilutive effect of
these issued options as there is a loss for each of the years
concerned.
6. SHARE CAPITAL
Share Reverse acquisition
Number capital Share premium Merger reserve reserve Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------ ----------- -------- ------------- -------------- ------------------- -------
Total ordinary shares
of 0.5 p each as at 31
January 2014 653,487,357 3,267 31,971 10,884 (7,148) 38,974
Share options exercised 635,674 4 1 - - 5
------------------------ ----------- -------- ------------- -------------- ------------------- -------
Total ordinary shares
of 0.5p each as at 31
January 2015 654,123,031 3,271 31,972 10,884 (7,148) 38,979
Issue of shares 105,263,158 526 18,421 - - 18,947
Share options exercised 738,075 4 68 - - 72
------------------------ ----------- -------- ------------- -------------- ------------------- -------
Total ordinary shares
of 0.5p each as at 31
January 2016 760,124,264 3,801 50,461 10,884 (7,148) 57,998
------------------------ ----------- -------- ------------- -------------- ------------------- -------
As permitted by the provisions of the Companies Act 2006, the
Company does not have an upper limit to its authorised share
capital.
7. MOVEMENT IN RETAINED EARNINGS AND RESERVE FOR OWN SHARES
Retained Reserve
earnings for own
deficit shares
GBP000 GBP000
------------------- --------- --------
At 31 January 2014 (19,795) (831)
------------------- --------- --------
Loss for the year (7,581) -
Exchange movement (4) -
------------------- --------- --------
At 31 January 2015 (27,380) (831)
------------------- --------- --------
Loss for the year (9,410) -
Exchange movement (1) -
------------------- --------- --------
At 31 January 2016 (36,791) (831)
------------------- --------- --------
8. Annual report and accounts
The Company's annual report and accounts for the year ended 31
January 2016 have been published today and will be posted to
shareholders shortly. The annual report and accounts are also
available in electronic form for download on the Company's website,
www.tissueregenix.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AMMMTMBITTTF
(END) Dow Jones Newswires
May 23, 2016 02:00 ET (06:00 GMT)
Tissue Regenix (LSE:TRX)
Historical Stock Chart
From Aug 2024 to Sep 2024
Tissue Regenix (LSE:TRX)
Historical Stock Chart
From Sep 2023 to Sep 2024
