AOR.L Regulatory News (AOR)

6 Dec 2006 07:01

Aortech International PLC06 December 2006 6 December 2006 Interim Results for the six months ended 30 September 2006 AorTech International plc (AIM: AOR) ("AorTech" or the "Company"), the medicaldevice development and biomaterials intellectual property and licensing company,today announces its interim results for the six months to 30 September 2006. Highlights • Turnover up 87% to £119k (H1 2005: £64k); • Loss before tax increased to £1.0m (H1 2005: Loss £0.9m); • Net cash position of £2.3m (H1 2005: £3.1m), reflecting investment in development projects and new facility; • Further partnership evaluations underway for heart valve. Post period end: • New facility in Melbourne opened on 30 October to scale-up manufacturing capability; • Non-exclusive licence and material supply agreement signed with Allium Medical, Inc. on 25 October for the use of Elast-Eon(TM)in non-vascular stents; • Exclusive material licensing and supply agreement signed with Avalon Laboratories of Rancho Dominguez, CA, on 5 December, in the field of cardiopulmonary vascular support cannulae; • Exclusive material licensing and supply agreement signed with Harland Medical Systems LLC, on 6 December, for the use of Elast-Eon(TM)in guide wire and catheter coatings. Commenting on the results, Jon Pither, Chairman of AorTech, said: "Over the past six months we have been able to build on 2006's key milestone,the first human use of our core product Elast-Eon(TM)in cardiac pacing leads.The result has been that there has been considerable acceleration from existingcustomers in material evaluations for our product and, in addition, there hasbeen strong growth in the number of new customer programmes across a remarkablybroad range of applications."Our strategy remains to build a profitable, cash positive, polymer licensingand supply business and to leverage that base with selected device developmentprojects with high potential returns, such as heart valve and breast implant,with which the directors expect to enhance shareholder value." -Ends- Enquiries: AorTech International plc Tel: : + 1 801 581 0854Frank Maguire, CEO Hogarth Partnership Limited Tel: +44 (0)20 7357 9477Andrew Jaques / Sarah Richardson Notes to editors: About AorTech International plc Listed on AIM in London, AorTech International plc wholly owns AorTechBiomaterials Pty Ltd based in Melbourne, Australia. AorTech Biomaterials wasformed in July 1997 to commercialise a range of medical grade polyurethanes formedical implants developed by the Commonwealth Scientific and IndustrialResearch Organisation (CSIRO). AorTech's Elast-Eon(TM)technology is the product of a decade of fundamentalresearch into biologically stable materials. ElastEon(TM)materials are patented,high silicone content, polyurethane copolymers which exhibit unparalleledbiological and mechanical performance. AorTech is firmly focused on the development and refinement of this material forthe medical community, with the aim of providing a wide range of highperformance Elast-Eon(TM)materials in a variety of application specificformulations and densities, for use in medical devices. Chairman's Statement In my last Chairman's Statement I was able to confirm that Elast-EonTM, our coreproduct, had been applied by St Jude Medical for human use in the sheathing ofpacemaker leads. Over the past six months, we have been able to build on thisextremely important milestone with the result that there has been considerableacceleration from existing customers in material evaluations for our productand, in addition, there has been strong growth in the number of new customerprogrammes across a broad range of applications. Our strategy remains to build a profitable, cash positive, polymer licensing andsupply business and to leverage that base with selected device developmentprojects with high potential returns, such as heart valve and breast implant,with which the directors expect to enhance shareholder value. Results Group turnover for the six months to 30 September 2006 was £119,078 (2005:£63,517); net operating expenses were £1,127,807 (2005: £1,045,861) and the lossbefore taxation for the period was £1,034,166 (2005: £929,566). Whilst turnoverincreased by 87% compared with the corresponding period in the previous year,the net operating costs were 8% higher, and the pre-tax loss increased by 11%.The net results are in line with those projected by the management for theperiod, and include costs related to the relocation of the Australian operationto new and larger premises in Melbourne. The cash position of £2,335,526 on 30 September 2006 compares with £2,715,804 atthe start of the period, and with £3,060,660 as at 30 September 2005. Heart Valve The robust condition of our polymer licensing and supply business has providedthe basis for the Company to be selective in its choice of partners for thepolymer valve platform. In the opinion of the Board, the market environment forthis technology continues to improve and there are viable options forpartnering. The technology continues to perform well in its evaluations by potentialcustomers and, as reported in my statement in the Annual Report, we continue tomake progress towards a partnership for this project. Breast Implant As advised in my previous Chairman's Statement, we have been anticipating the USre-approval of the silicone gel-filled implant which we believe will bringforward the level of investment in new technology in this field. This FDAapproval has been recently granted and we believe that this market environmentwill consequently become increasingly receptive to a next generation breastimplant product. Current trading I am pleased to report that since the interim period end our new Melbournefacility has been opened, which gives us substantially greater productioncapacity. This facility will underpin AorTech's future commercial developmentand economic prosperity by providing room for growth as well as enabling AorTechto provide its customers with leading edge synthesis and manufacturingcapabilities, meeting the increasing orders for polymer expected through thecoming year. As announced on 25 October 2006, we have signed a non-exclusivelicence and material supply agreement with Allium Medical Inc., a Delaware basedcompany, for the purchase and use of AorTech's Elast-Eon(TM)bio-material in thefield of non-vascular stents. We also announced the signing of an exclusivematerial licensing and supply agreement with Avalon Laboratories of RanchoDominguez, CA, on 5 December 2006, in the field of cardiopulmonary vascularsupport cannulae including those cannulae used with ventricular assist andextracorporeal heart/lung support devices. In addition we today announced anexclusive material licensing and supply agreement with Harland Medical SystemsLLC, for various short-term guide wire and catheter coating applications. Outlook During the second half of the current financial year, the Board expects revenuesto begin to increase meaningfully and anticipates that this trend will continueinto the next financial year. Current trading remains in line with the Board'sexpectations. Jon PitherChairman CONSOLIDATED PROFIT AND LOSS ACCOUNT (unaudited) (unaudited) (audited) six months six months year ended ended 30 ended 30 31 March September 2006 September 2005 2006 Note £ £ £Turnover 119,078 63,517 1,424,944 Cost of sales (78,771) (28,675) (222,751) Gross profit 40,307 34,842 1,202,193 Net operatingexpenses (1,127,807) (1,045,861) (1,867,740)Net operating expensesinclude:Developmentexpenditure (371,353) (396,986) (634,292)Amortisationof intangiblefixed assets (47,855) (49,697) (99,491) Loss onordinaryactivitiesbeforeinterest (1,087,500) (1,011,019) (665,547)Interestreceivable 53,334 81,453 142,199 Loss onordinaryactivitiesbeforetaxation (1,034,166) (929,566) (523,348)Taxation - - - Loss for thefinancialperiod (1,034,166) (929,566) (523,348) Loss perordinary share 3 (27.14p) (24.40p) (13.74p) All of the turnover and operating losses are derived fromcontinuing operations CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Loss for thefinancialperiod (1,034,166) (929,566) (523,348) Currencytranslationdifferencesarising onconsolidation (87,605) 105,538 (22,981) Totalrecognisedlosses (1,121,771) (824,028) (546,329) CONSOLIDATED BALANCE SHEET (unaudited) (unaudited) (audited) 30 September 30 September 31 March 2006 2006 2005 £ £ £Fixed assetsIntangible assets 1,269,267 1,480,441 1,360,209Tangible assets 537,466 205,631 239,775 1,806,733 1,686,072 1,599,984 Current assetsStocks 91,144 115,791 139,637Debtors 315,406 289,311 1,304,424Cash at bank 2,335,526 3,060,660 2,715,804 2,742,076 3,465,762 4,159,865 Creditors: amountsfalling due within oneyear (284,349) (322,352) (508,371) Net current assets 2,457,727 3,143,410 3,651,494 Total assets lesscurrent liabilities 4,264,460 4,829,482 5,251,478 Creditors: amountsfalling due after morethan one year (279,050) - (144,297) Net assets 3,985,410 4,829,482 5,107,181 Capital and reservesCalled up sharecapital 9,525,695 9,525,695 9,525,695Other reserve (2,003,143) (2,003,143) (2,003,143)Profit & Loss account (3,537,142) (2,693,070) (2,415,371) Equity shareholders'funds 3,985,410 4,829,482 5,107,181 CONSOLIDATED CASH FLOWSTATEMENT (unaudited) (unaudited) (audited) Note six months six months ended ended 30 September 30 September year ended 2006 2005 31 March 2006 £ £ £Net cash outflow fromoperating (86,628) (1,015,153) (1,188,804)activities Returns on investment andservicing of finance:Interest received 53,334 81,453 142,199 TaxationResearch and development taxcredits refunded - - (98,899) Capital expenditure andfinancial investmentPurchase of tangible fixedassets (351,122) (35,590) (119,759) --------- --------- ---------Cash outflow beforemanagementof liquid resources and financing (384,416) (969,290) (1,265,263) Management of liquidresourcesCash released from short termdeposit 527,936 938,938 1,658,461 Increase / (Decrease) in cashin the period 4 143,520 (30,352) 393,198---------------------------- ----- --------- --------- --------- NOTES TO THE INTERIM FINANCIAL STATEMENTS (unaudited) FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006 1. BASIS OF PREPARATION The interim financial statements have been prepared in accordance with the guidance published by theAccounting Standards Board and on the basis of the accounting policies set outin the Group's 2006 statutory accounts. The interim financial statements were approved by a duly appointed andauthorised committee of the Board of Directors on 5 December 2006 and areunaudited. The information shown for the year ended 31 March 2006 does not constitutestatutory accounts within the meaning of section 240 of the Companies Act 1985and has been extracted from the full accounts for the year ended 31 March 2006which have been filed with the Registrar of Companies. The report of theauditors on those accounts was unqualified and did not contain a statement undereither section 237(2) or section 237(3) of the Companies Act 1985. 2. SEGMENTAL ANALYSIS BY CLASS OF BUSINESS AND GEOGRAPHICAL AREA (a) class of The Group operates in one class of business, being the business development and exploitation of a range of innovative biomaterials. (b) geographical The analysis by geographical area of the Group's turnover, area loss before tax and net assets is set out below: six months six months year ended ended ended 30 September 30 September 31 March 2006 2006 2005 sales by sales by sales by destination sales by origin destination sales by origin destination sales by origin(i) turnover £ £ £ £ £ £GeographicalsegmentUnited Kingdom 43,967 - 23,073 - 35,870 -Rest of Europe - - 8,079 - - -Rest of World 75,111 119,078 32,365 63,517 1,389,074 1,424,944 ------- --------- ------- --------- ---------- --------- 119,078 119,078 63,517 63,517 1,424,944 1,424,944 ------- --------- ------- --------- ---------- --------- (ii) Loss before six months six months year ended taxation ended ended 30 September 30 September 31 March 2006 2005 2006 £ £ £GeographicalsegmentUnited Kingdom (318,533) (382,150) (689,206)Rest of (768,967) (628,869) 23,659World --------- ---------- ---------Loss beforeinterest (1,087,500) (1,011,019) (665,547)Net interestreceivable 53,334 81,453 142,199 --------- ---------- ---------Loss beforetaxation (1,034,166) (929,566) (523,348) --------- ---------- --------- 30 September 30 September 31 March 2006 2005 2006(iii) net £ £ £assetsGeographicalsegmentUnited Kingdom 1,681,447 2,856,656 2,127,732Rest of 2,303,963 1,972,826 2,979,449World --------- ---------- --------- 3,985,410 4,829,482 5,107,181 --------- ---------- --------- 3. LOSS PER ORDINARY SHARE The basic loss per ordinary share is calculated on the loss of the Group of£1,034,166 for the six months to 30 September 2006 (six months ended 30September 2005: loss of £929,566, year ended 31 March 2006: loss of £523,348)and on 3,810,278 (six months ended 30 September 2005: 3,810,278, year ended 31March 2006: 3,810,278) equity shares. exchange 30 September4. ANALYSIS OF NET FUNDS 1 April 2006 cash flow differences 2006 £ £ £Net cash:Cash at bankand in hand 2,715,804 (384,416) 4,138 2,335,526Depositstreated asliquidresources (2,051,010) 527,936 - (1,523,074) -------- --------- ---------- ---------- 664,794 143,520 4,138 812,452Liquid resources:Depositsincluded incash 2,051,010 (527,936) - 1,523,074 -------- --------- ---------- ----------Net funds 2,715,804 (384,416) 4,138 2,335,526 -------- --------- ---------- ---------- This information is provided by RNS The company news service from the London Stock Exchange