Aura Renew Acq Regulatory News (ARA)

29 Jun 2005 07:00

Ardana PLC29 June 2005 Ardana: Preliminary Announcement for the year ended 31 March 2005 Ardana plc (LSE: ARA) today announces its Preliminary Results for the year ended31 March 2005. Ardana is an emerging pharmaceutical company focused on the discovery,development and marketing of innovative products to improve human reproductivehealth, and to address areas of considerable unmet need in this $23.8 billionmarket. Ardana's listing on the Official List of the London Stock Exchange on 9 March2005 comprised a total of 16,400,000 shares at 128 pence per share,corresponding to gross proceeds for the Company of £21 million (£18.5 millionnet of expenses). Highlights Financial - Successful listing on the Official List of the London Stock Exchange in March 2005, raising £18.5 million (net of expenses) - Series B £9 million fund raising completed May 2004 - Loss before tax for the year ended 31 March 2005 of £8.4 million (2004: £15.2 million) - Cash and liquid resources at 31 March 2005 of £29.2 million (2004: £11.2 million) Product - Invicorp(TM) licensed-in for Europe (June 2004) - Striant(TM) SR launched in the UK (June 2004) - European mutual recognition process for Striant(TM) SR completed (October 2004) Pipeline - Positive results in Phase II trial of Teverelix in Prostate cancer (SC) (February 2005) Corporate - MRC collaboration agreement extended to July 2008 (December 2004) - Mr Simon Best appointed Chairman (April 2004) - Dr Maureen Lindsay appointed Chief Executive Officer (April 2004) - Mr Graham Lee appointed Chief Financial Officer (May 2004) - Dr John Brown appointed as Non Executive Director (May 2004) Post Balance Sheet events - Positive results in Phase I trial of Oral Growth Hormone Secretagogue (April 2005) - Positive results in Phase II trial of Teverelix in Prostate Cancer (IM) (May 2005) - Positive results in Phase II trial of Teverelix in BPH (May 2005) - Agreement with Cytochemia AG, German marketing partner for Striant(TM) SR (June 2005) - Ms Carol Ferguson appointed as Non Executive Director (June 2005) Dr Maureen Lindsay, CEO, commented "2004 has been a milestone year for Ardana interms of making significant progress towards our objective of building asuccessful pharmaceutical business in the field of reproductive health. Our UK sales and marketing team is in place and our first product, Striant(TM) SR has been launched. A second product, Invicorp(TM), is undergoing European Mutual Recognition to enable marketing to commence, and our development programmes are all progressing well. We are confident that we will be able to build on this successful beginning as a public company and continue to deliver good news on a number of fronts during the coming year." Enquiries For more information contact: Maureen Lindsay + 44 (0) 131 226 8550Ardana Julia Phillips/Davina Langdale +44 (0)20 7831 3113Financial Dynamics(corporate and financial media relations): Nicki Brimicombe + 44 (0)1883 732353NB Public Relations(trade and technical media relations): Notes for Editors Ardana plc is an emerging pharmaceutical company focused on the development andmarketing of innovative products to improve human reproductive health, a $23.8billion market*. Ardana's strategy is to manage risk by maintaining a broad and balanced productpipeline through its network of leading research institutions and through theacquisition of products and intellectual property rights. The Company's fourlead products reflect this strategy: Striant(TM) SR, a testosterone replacementtherapy that has already been by launched by Ardana through its own specialistsales force in the UK as a treatment for men with primary or secondaryhypogonadism; Teverelix LA, in development for three initial indications(prostate cancer, benign prostatic hyperplasia (BPH) and endometriosis); TestoBi-gel, a dermal testosterone delivery system to treat male hypogonadism, whichwill shortly enter Phase II trials; and Invicorp, a combination drug treatmentfor male erectile dysfunction, for which the Company has marketing andmanufacturing rights in Europe. In addition, Ardana has a strong portfolio offollow-on products in development. Prior to flotation, Ardana raised in excess of £43 million in four fundingrounds from investors including DVC Deutsche Venture Capital, Albany VentureManagers Limited and 3i Bioscience Investment Trust, Merlin Biosciences Limited,MVM Limited (MVM), Techno Venture Management (TVM), ABN-AMRO Participates, 3iGroup plc, ISIS Equity Partners plc, Scottish Widows Investment Partnership Ltd,Saffron Hill Ventures, Mitsubishi Corporation and Green Highlander, LLC. For further information please see www.ardana.co.uk *Source: IMS Retail Drug Monitor October 2004: key drug purchases in the 12months to October 2004 for the Genito-Urinary and Hormone classes Statements contained within this press release may contain forward-lookingcomments which involve risks and uncertainties that may cause actual results tovary from those contained in the forward-looking statements. In some cases, youcan identify such forward-looking statements by terminology such as 'may', 'will', 'could', 'forecasts', 'expects', 'plans', 'anticipates', 'believes', 'estimates', 'predicts', 'potential', or 'continue'. Predictions andforward-looking references in this press release are subject to the satisfactoryprogress of research which is, by nature, unpredictable. Forward projectionsreflect management's best estimates based on information available at the timeof issue. CHAIRMAN'S STATEMENT Ardana's development has been rapid since its inception in 2000. We have nowraised over £60 million in a series of fund raisings and have entered anexciting new phase as a publicly-listed Company. Since its inception Ardana has focused on the key therapy areas of reproductivehealth, specifically encompassing reproductive endocrinology, urology, sexualdysfunction, gynaecology and obstetrics. Ardana's success to date has been achieved by maintaining this strategic focus,developing a cost effective operating model and ensuring that it delivers on itspromises. This financial year proved to be another busy year in the building anddevelopment of the Company and the business. The Chief Executive's Statementdetails the development of the business achievements in the year, of which thefollowing have been key: 1. Launch of Striant(TM) SR 2. In-license of Invicorp(TM) 3. Acquisition of Bi-Gel technology patents 4. Clinical development of Teverelix LA The Group's strategy includes continued investment in its research capabilitiesand I am pleased to say that we concluded a new three year agreement with the UKMedical Research Council (MRC) in December 2004 which gives Ardana exclusiverights to commercialise selected research areas in the MRC Human ReproductiveSciences Unit (HRSU) in Edinburgh, Scotland. This contract is a refinement ofthe five-year agreement that Ardana secured on its inception in 2000. Thepartnership will also afford the HRSU additional funding for selected projectsand help it to meet the objective of translating basic research on humanreproduction into tangible health benefits. The HRSU, which employs over 100 staff, is recognised by the World HealthOrganisation as one of the leading academic centres of excellence inreproductive biology in the world and it has been at the forefront of this areaof research for the last 30 years. The HRSU has already contributed a series ofexciting and innovative early stage projects to the Ardana pipeline, the mostadvanced of which is a novel prostate cancer therapy which has promise but isstill in pre-clinical evaluation. This deal ensures that we will continue tobenefit from the HRSU's unique expertise in those areas of strategic importanceto Ardana. The Board continues to evolve with the Company. I would like to thank DavidBrister and Hubert Birner, our outgoing Non-Executive Directors, for thesupport, advice and encouragement they have given the Company over the last fewyears. We are now in the process of increasing the number of Non-ExecutiveDirectors and I am pleased to welcome Carol Ferguson to the Board. Following our successful listing in March 2005 Ardana has entered an excitingnew phase. I believe we are well positioned to meet the challenges that faceus. The Board of Directors and I look forward to delivering our key strategicaims and generating value for our shareholders. CHIEF EXECUTIVE'S STATEMENT Since Ardana's foundation in 2000, we have pursued a four-part strategy tocreate value within the business by: • Maintaining a broad and balanced portfolio to manage risk, focusing on the therapeutic area of human reproductive health; • Actively pursuing an in-licensing and acquisition programme for products and technologies to maintain a robust pipeline, including near-term commercial products and potential high value development candidates; • Retaining value within the Ardana Group by building a sales and marketing capability in leading European markets, through both our own infrastructure and partnerships; and • Maintaining a lean organisation by selective outsourcing in order to achieve flexibility. During the last year we have successfully achieved our goals towards thedelivery of this strategy. Our clinical trials have progressed well for all ourcompounds in development. In June we acquired a license to market Invicorp(TM) in Europe and acquired the EU patent for BiGel. We set up the UK sales team andlaunched our first product Striant(TM) SR in June. On the research side, inDecember we agreed an extension to the collaboration deal with the MRC foranother three years, our work with the University of Montreal progresses welland we have initiated support for the University of Manchester. On thefinancial front we completed our last private funding round in May 2004 which wefollowed up with the successful launch onto the London Stock Exchange's mainmarket in March 2005. Our achievements and financing have allowed us to expand our management team. Inaddition to setting up the sales team we have filled other key positions withinthe organisation in support of our clinical development, manufacturing andmarketing activities. Ardana's strategy is to manage risk by continuing to maintain a broad andbalanced pipeline of products and product candidates through relationships withleading research institutions and the acquisition of products and intellectualproperty rights. We have already established a targeted sales force in the UKand it is our intention to establish a specialist sales and marketinginfrastructure in the five largest European markets to support the future launchof additional products, as and when commercially appropriate. It is intendedthat this infrastructure will be in place to support the launch of Teverelix LAin Europe. We believe that having our own sales and marketing capability willallow us to keep more value in the Company for the benefit of our shareholders.In the interim, commercialisation will be by a combination of our own salesteams and strategic partnerships. Currently, Ardana's key customers areendocrinologists and urologists and, as the portfolio expands, the customerprofile will include other reproductive health specialists such as obstetriciansand gynaecologists. These groups of clinicians are a small, well circumscribedgroup, easily addressed by a small team of sales representatives. Ardana's portfolio of products continue to progress well at each stage of theirdevelopment. Striant(TM) SR An effective, unique and innovative controlled-release buccal tablet containing30 mg of testosterone indicated for testosterone replacement therapy in men withhypogonadism, the most common hormone deficiency in men. The Striant(TM) SR tablet is applied to the gum above the front incisor tooth, providing a novel method of delivery compared with existing testosterone replacement products. In April 2004, marketing authorisation was granted for this product in the UK, where Ardana commenced commercial sales in June 2004. Striant(TM) SR has received a positive opinion under the Mutual Recognition Procedure in several other European countries. Ardana intends to roll-out the sale and distribution of Striant(TM) SR across European-licensed territories on a country-by-country basis through local partners, starting with Germany in 2005. Ardana announced in June 2005 the appointment of Cytochemia AG to market and distribute Striant(TM) SR in Germany under licence. Teverelix LA A long-acting formulation of a GnRH antagonist that binds with a receptor in thepituitary gland, to provide dose-dependent control of the release of sexhormones such as testosterone in men and oestrogen in women. GnRH is consideredto be the master switch by which the body controls the production of sexhormones. The benefit of Teverelix LA is that its mode of action means that itcan be used both as an ''on/off'' and ''dimmer'' switch for hormone release.This is important in those diseases where the progression of the disease relieson a supply of the sex hormones. Thus for the malignant diseases Teverelix LAcan switch off and stop the production of either testosterone or oestrogen andfor the benign diseases it can reduce (or "dim") the levels of the sex hormonesin a dose dependent manner thus alleviating the effects of the disease withoutcausing the side-effects of castration. Ardana is developing Teverelix LAinitially to treat three major indications: • prostate cancer • benign prostatic hyperplasia (BPH) • endometriosis. In trials conducted to date, Teverelix LA has shown to be well tolerated anddemonstrates a dose-dependent reduction of testosterone in men and oestradiol inwomen. Teverelix LA - Prostate Cancer In February and May 2005 we announced successful results from two Phase IIstudies of Teverelix LA in patients with advanced prostate cancer. Theprogression of prostate cancer is driven by male sex hormones (androgens) suchas testosterone. It is widely accepted that reducing levels of these hormonesin advanced disease can help slow the growth of the cancer and prolong survival.The production of testosterone can be reduced either surgically, with theremoval of the testicles, or through medicines that affect production oftestosterone. These studies confirmed that Teverelix LA can attain and maintainsuppression of testosterone to castration levels in patients with advancedprostate cancer, is generally well tolerated and was also shown to rapidlyreduce and normalise PSA (Prostate Specific Antigen) levels, a biological markerthat is elevated in most patients with prostate cancer. These studies give Ardana further insight into how Teverelix LA should be usedto achieve the optimal clinical effect in the treatment of prostate cancer,which is widely acknowledged to be a multi-billion dollar market. We believethat this compound has considerable potential in the treatment of the disease,and will now enter a longer term Phase II clinical trial with a potentialproduct launch by the end of 2009. Teverelix LA - Benign Prostatic Hyperplasia (BPH) In May 2005 we announced successful results from a Phase II study of TeverelixLA in patients with Benign Prostatic Hyperplasia (BPH). Teverelix LAdemonstrated statistically significant symptomatic improvements, increasing overthe time of the study. In addition, statistically significant improvements wereseen in maximum urine flow rates, prostate size and patient's quality of life. BPH is a common benign disease occurring in men over the age of 50, andincreases in prevalence with age. BPH is characterised by an enlargement of theprostate gland, which results in urinary flow problems such as hesitancy, weakor interrupted stream, urgency and more frequent urination, especially at night. The growth of prostatic tissue is driven by male sex hormones (known asandrogens), primarily testosterone and its more potent metabolitedihydrotestosterone (DHT). Reducing levels of these hormones can reduce thesize and growth of the prostate. In previous clinical studies, Teverelix LA has been shown to decreasetestosterone and subsequently DHT in a dose-dependent manner. Therefore,Teverelix LA can reduce testosterone levels to the low end of the normal range,avoiding a chemical castration and its related symptoms. We are very encouraged by this study which provides proof of concept ofTeverelix LA as a potential treatment for BPH. This trial demonstrated thatTeverelix LA was well tolerated, without any signs of allergic reactions, andcaused a rapid and prolonged improvement of the symptoms of BPH. These findingssuggest that Teverelix LA, administered by subcutaneous injection two to threetimes per year, could be used not only for the improvement of BPH symptoms butalso to delay the progression of BPH. We believe that this compound hasconsiderable potential in the treatment of BPH which currently has a substantialpharmaceutical market worth €3.9 billion per annum. A second and longer term Phase II clinical trial for BPH is expected to commencein H2 2005. Teverelix LA - Endometriosis Endometriosis is a hormone responsive condition arising in women in which thetissue lining the uterus (the endometrium) is deposited outside the uterus.This can potentially develop into cysts, which are usually benign but can causepain and is associated with heavy menstruation and infertility. Reducing levels of female sex hormones (ie oestrogen) can cause endometrialgrowths to shrink. Our first Phase I trial completed this year showed thatTeverelix LA can decrease oestrogen in a dose-dependent manner. The first PhaseII trial to demonstrate clinical proof-of-concept in patients is expected tocommence in H1 2006. Testo Bi-gel Testo Bi-gel is a trans-dermal testosterone delivery system being developed forthe treatment of male hypogonadism. Testo Bi-gel is formulated as a creamconsisting of both oil-based and water-based gel substances together with theactive ingredient, testosterone. We believe this product offers importantadvantages over existing gel-based testosterone products and that clinical proofof concept has been established through a successful feasibility study completedthis year. Although used to treat the same condition, we believe Testo Bi-gel addresses adifferent market segment than Striant(TM) SR as it offers a dermal rather thanoral application. Phase II clinical trials of Testo Bi-gel are expected tocommence during H2 2005. Invicorp(TM) We acquired Invicorp(TM) in June 2004 from Senetek plc for the European market.It is an injectable treatment for erectile dysfunction. Marketing authorisationfor Invicorp(TM) has been granted in Denmark and we intend to initiate Europeanmutual recognition proceedings in 2005. Oral GHS We have been conducting early stage clinical development on an oral formulationof a Growth Hormone Secretagogue, EP01572, which is potentially useful as atreatment for growth hormone deficiency disorders and metabolic complicationsassociated with critical illness. The results of the Phase I trial announced in April 2005 showed that EP01572stimulates growth hormone release in a selective manner and was well tolerated.We shall now be progressing the compound into Phase II clinical trials. Thegrowth hormone market is worth about €2 billion per annum worldwide and as themajority of products are injectables we believe that EP01572 will offer anattractive alternative for patients. Terbutaline Vaginal Gel We are currently conducting Phase II trials on a form of Terbutaline formulatedas a bio-adhesive vaginal gel for use as treatment for infertility linked toendometriosis. We expect the results from this trial to be available during H12006. Other products Our business development team, alongside expanding our portfolio in the field ofreproductive medicine, continues to look to create value by out-licensing othercompounds that we own which are not core to our strategy. Operationally we continue to maximise value and manage risk in the businessthrough our flexible and low cost business model. We are strategically buildingour sales and marketing capability across Europe with our lead commercialproduct Striant(TM) SR, to be followed by Invicorp(TM) and Testo BiGel, so that we can build a solid relationship with our customers, understand the market anddemonstrate Ardana's commitment to the area in advance of the launch ofTeverelix in the larger indications. We are rapidly expanding our partnershipsin research, regulatory and manufacturing, all of whom are directed by our inhouse team of experienced managers. Our intention is to ensure that Teverelix, Testo BiGel and GHS are optimallydeveloped and marketed worldwide. To this end we are looking for partners tocommercialise the products outside Europe and it is our intention to have acollaboration deal for Teverelix LA in the first half of 2006. We are very pleased to have successfully completed our launch onto the LondonStock Exchange and by the response we have received from investors and potentialinvestors to the Ardana story. With £18.5 million raised in the IPO, we are inexcellent shape to continue our investment in progressing our productdevelopment programmes, as well as commercialising our first products as theycome to market in key European territories. We have achieved a great deal in the relatively short period of time sinceArdana was founded in 2000, and we look forward to meeting the challenges thatwill face us as we further develop and expand the business. Anticipated news flow H2 2005 FDA meeting on Teverelix LA in prostate cancer and BPH.H2 2005 Results from Phase II trial of Testo BiGelH2 2005 Announcement of further European partners for Striant(TM) SRH1 2006 Results from Phase II trial of TerbutalineH1 2006 Teverelix LA collaboration Unaudited consolidated profit and loss accountFor the year ended 31 March 2005 Notes Unaudited Unaudited Year ended Year ended 31 March 2005 31 March 2004* £ £ TURNOVER 84,013 88,959Cost of Sales (10,746) - ______ ______ GROSS PROFIT 73,267 88,959 Research and development costs (4,010,545) (12,439,031)Other operating costs (5,094,842) (3,272,594) ______ ______Total operating costs (9,105,387) (15,711,625) Other operating income 78,560 -Exchange gain 5,348 132,080 ______ ______Operating loss (8,948,212) (15,490,586) Net interest receivable 523,359 273,559 ______ ______ LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (8,424,853) (15,217,027)Tax on loss on ordinary activities 478,556 466,112 ______ ______LOSS FOR THE YEAR (7,946,297) (14,750,915) ______ ______Loss per share (basic and diluted) 5 (20.5p) (49.2p) * Refer to Basis of Preparation in Note 1. The results for the year shown above are derived entirely from continuingactivities. Unaudited consolidated balance sheetAs at 31 March 2005 Notes Unaudited Unaudited 31 March 2005 31 March 2004* £ £FIXED ASSETSTangible assets 32,394 34,149 ______ ______ CURRENT ASSETSStocks 107,271 -Debtors 2 1,307,882 1,029,396Cash at bank and in hand (including liquid 29,181,946 11,153,607resources) ______ ______ 30,597,099 12,183,003 Creditors: Amounts falling due within one year 3 (3,840,737) (3,302,307) ______ ______ NET CURRENT ASSETS 26,756,362 8,880,696 ______ ______ TOTAL ASSETS LESS CURRENT LIABILITIES 26,788,756 8,914,845 Creditors: Amounts falling due after more than one 4 (1,373,249) (3,006,213)year ______ ______ NET ASSETS 25,415,507 5,908,632 ______ ______ CAPITAL & RESERVESCalled-up share capital 555,628 155,543Share Premium 26,948,599 -Merger reserve 34,451,498 34,451,498Own shares (100,788) (135,276)Profit and loss account (36,439,430) (28,563,133) ______ ______TOTAL EQUITY SHAREHOLDERS FUNDS 25,415,507 5,908,632 ______ ______ * Refer to Basis of Preparation in Note 1. Unaudited consolidated cash flow statementYear ended 31 March 2005 Unaudited Unaudited Year ended Year ended 31 March 31 March 2004* 2005 £ £ Net cash outflow from operating activities (10,304,601) (9,672,320) ______ ______ Returns on investments and servicing of financeInterest received 523,450 273,748Interest paid (91) (189) ______ ______ Net cash inflow from returns on investments and 523,359 273,559servicing of finance Net cash inflow from taxation 383,774 123,405 ______ ______ Capital expenditurePurchase of tangible fixed assets (35,824) (36,984)Sale of tangible assets 8,459 37,857Net sale of investments 104,488 47,224 ______ ______ Net cash inflow from capital expenditure 77,123 48,097 ______ ______ Net cash inflow from management of liquid resourcesIncrease on amounts placed on short term deposit (17,958,923) (6,733,517) FinancingOrdinary share capital issued 27,348,684 15,999,995 ______ ______ Increase in cash in year 69,416 39,219 ______ ______ * Refer to Basis of Preparation in Note 1. Notes to the Financial Information 1. The financial information disclosed in the announcement does notconstitute the Company's statutory accounts for the year ended 31 March 2005,which will be finalised on the basis of the financial information set out by thedirectors in this preliminary announcement and delivered to the Registrar ofCompanies after the Company's Annual General Meeting in September 2005. Thefinancial information for the year ended 31 March 2004 is derived from thestatutory accounts of Ardana Bioscience Limited for that year and which havebeen delivered to the Registrar of Companies. The auditors reported on theaccounts of Ardana Bioscience Limited for the year ended 31 March 2004; theirreport was unqualified and did not contain a statement under S237(2) or (3) ofCompanies Act 1985. On 5 May 2004, Ardana Limited acquired the entire issued share capital of ArdanaBioscience Limited in exchange for the issue of shares to shareholders on aone-for-one basis. The restructuring represented a change in identity of this Company, being theholding company, rather than an acquisition of the business. The restructuringhas been accounted for using merger accounting and so the financial informationis presented as if the Company and its subsidiaries had always been part of thesame group. The results and cash flows of the entities are combined from thebeginning of the year in which the merger occurred and their assets andliabilities are combined at the amounts at which they were previously recorded.The comparatives are presented as if the companies in the Ardana plc Group hadbeen owned and controlled by the Company throughout the year ended 31 March2004. 2. Debtors 31 March 31 March 2005 2004 (unaudited) (unaudited) £ £ Trade debtors 33,619 19,039Other debtors 140,113 82,350Tax credit recoverable 944,668 849,886Prepayments and accrued income 189,482 78,121 _____ _____ 1,307,882 1,029,396 _____ _____ 3. Creditors: Amounts falling due within one year 31 March 31 March 2005 2004 (unaudited) (unaudited) £ £ Trade creditors 1,089,046 866,696Deferred consideration 1,716,561 1,670,118Other taxes and social security 160,143 39,074Other creditors and accruals 874,987 726,419 ______ ______ 3,840,737 3,302,307 ______ ______ 4. Creditors: Amounts falling due after more than one year 31 March 31 March 2005 2004 (unaudited) (unaudited) £ £ Deferred consideration 1,373,249 3,006,213 ______ ______ 5. Loss per share is based on the loss on ordinary activities aftertaxation as shown in the consolidated profit and loss account and on theweighted average number of ordinary shares in issue of 38,717,240 (2004:29,998,974). The weighted average number of shares in issue in 2004 has beenre-stated to take account of the rebasing in February 2005. 6. Reconciliation of movements in shareholders' funds 31 March 31 March 2005 2004 (unaudited) (unaudited) £ £ (Loss)/profit for the financial year (7,946,297) (14,750,915) New shares issued 27,348,684 19,999,995Net movement in own shares 34,488 47,224Gain on sale of EBT shares 70,000 - _____ _____Net increase in shareholders' funds 19,506,875 5,296,304 Opening shareholders' funds 5,908,632 612,328 _____ _____Closing shareholders' funds 25,415,507 5,908,632 _____ _____ 7. The directors do not propose a dividend for the period (2004: £Nil). This information is provided by RNS The company news service from the London Stock Exchange