Gunsynd Regulatory News (GUN)

19 Apr 2007 07:01

Syntopix Group plc19 April 2007 For immediate release 19 April 2007 SYNTOPIX GROUP PLC ("Syntopix" or "the Group") Interim results for the six months ended 31 January 2007 Syntopix Group plc, the company focused on the discovery and development ofdrugs for the topical treatment of dermatological diseases, today announces itsinterim results for the six months ended 31 January 2007. Operational highlights Good progress with lead candidate development programme: • MHRA approval to conduct first Phase I clinical trial; • Clinical Research Organisation appointed; and • Formulations of other compounds initiated for further human use studies. Continued development of the pipeline: • Compound library now contains over 1,000 compounds for screening; and • Growing patent portfolio which is continually being evaluated. Financial highlights • Cash balance at 31 January 2007 of £2.5m (31 January 2006 - £323,000); • Tight overhead cost control; and • Development programme costs in line with budget. Commenting on today's announcement, Dr Rod Adams, Chairman, said: "I amdelighted to report that significant progress in the first half in thedevelopment of our pipeline has produced real momentum in our business in thecurrent half. We have successfully made the transition from a preclinical to aclinical stage company and look forward to reporting on further progress withour pipeline in due course." ENDS For further information please contact: Syntopix Group plc 0845 125 9204Stephen Jones, Chief Executive OfficerDarren Bamforth, Group Finance Director KBC Peel Hunt Ltd 020 7418 8900Megan MacIntyre Buchanan Communications 020 7466 5000Mark Court/Mary-Jane Johnson/Catherine Breen Joint statement from the Chairman and Chief Executive Officer We are pleased to report the interim result for the six months to 31 January2007. Since our last annual report, we have refined our licensing strategy and nowbelieve that Phase I clinical data, not Phase II, should provide sufficientinterest to our potential licensing partners. This approach has been validatedin discussions with two large multinational dermatological companies. Ourmodified strategy has several benefits, most notably that we can screen morecompounds faster in human use studies, to the extent that we are now six monthsahead of our original schedule. Therefore, we plan to enter potential licensingdiscussions earlier than originally planned. Lead candidate development programme In January 2007 we announced that the Group had entered into an agreement with aClinical Research Organisation in preparation for the start of the Group's firstPhase I clinical trial. We received approval in February 2007 from anindependent Ethics Committee to conduct our first Phase I clinical study whichis due to start imminently. We have developed formulations which will be used in the trials to determine theability of SYN 0017 (an antioxidant present in foods and cosmetics), SYN 0401(an antifungal present in personal healthcare products), and a combination ofSYN 0017 and SYN 0016 (an oxidising agent present in pharmaceuticalpreparations) to inhibit Propionibacterium acnes (P. acnes) when applied tohealthy volunteers. In addition to the Phase I clinical trial, we are also intending to conduct asecond human use study. Formulations of SYN 0126 (a compound currently used in awide variety of cosmetic preparations), and a combination of SYN 0126 with SYN0091(a bacteriostatic agent used in soap and cosmetics) are being prepared forthis study to start in the third quarter of 2007, with results in the fourthquarter. Another human use study this year will start in the fourth quarter of 2007, andis likely to be a Phase I clinical study. The compounds to be tested will dependin some part on the results of the first study, but it is intended to test atleast one new compound in this study. By the end of 2007 the Group will have completed several human use studies, andit is our intention to seek licensing partners for any compound(s) which show apositive outcome in a human use study. Over the past six months we havegenerated significant interest in these studies, and we believe a licensingagreement will follow a successful outcome. Pipeline The Group continues its research activities to generate further potentialsynergistic combinations. We are screening combinations of compounds, and nowhave over 1,000 in our library. Approximately 30% of these show sufficientantimicrobial activity against P. acnes and/or Staphylococcus aureus to indicatesuitability for topical use. Our intellectual property portfolio continues to grow: Syntopix has a patentportfolio that currently comprises nine patent applications. Each applicationis continually re-evaluated for commercial relevance, and in the last twelvemonths we have filed a new application every six to eight weeks. Financial summary During the six months to 31 January 2007 the Group's focus has been thecontinuation of our lead candidate development programme through pre-clinicaldevelopment and into clinical trials, with the intention of achieving futurerevenue streams through milestone payments and licensing deals with thirdparties. The development programme is proceeding in line with our expectations and theexpenditure of £491,000 on Research and Development activity for the six monthsended 31 January 2007 is within our budget. During the period the Groupreceived European grant income of £20,000 which has mitigated some of the costsof maintaining our patent portfolio, and we anticipate further grant receiptsduring the forthcoming months. Additionally the Group has benefited from thereceipt of R&D tax credits which has reduced the overall expenditure on ourprogramme. Administrative overheads are running at a comparable rate to those incurred inthe year ended 31 July 2006 and are closely controlled. The Group benefits fromits association with the University of Bradford and the purpose builtmicrobiology laboratory facilities at the University's Institute ofPharmaceutical Innovation are provided to Syntopix at significantly reducedrates. Cash balances at 31 January 2007 were £2,501,993 (31 January 2006 : £323,396).The Group's financial strategy continues to be to monitor costs carefully duringthe period until licensing deals can be achieved and revenues can begin to begenerated. The Group periodically conducts small research consultancy projects,and whilst not significant in the period ended 31 January 2007, a number ofrevenue generating projects are currently in progress. This is the first period in which we are required to comply with FRS 20 - "ShareBased Payments". Under this accounting standard we are required to calculatethe fair value of share options issued. This means that the loss for the sixmonths to 31 January 2007 has been increased by £52,546 (six months to 31January 2006: loss increased by £410) and the loss for the year ended 31 July2006 has been increased by £16,832. Outlook We are very pleased with progress to date. Preparatory work undertaken sincethe flotation and during the first half of the year has delivered real momentumin the business and we look forward to the future with confidence. Dr Rod Adams Dr Stephen JonesChairman Chief Executive Officer18 April 2007 18 April 2007 Consolidated profit and loss accountfor the six months ended 31 January 2007 Six months Six months Year ended ended ended 31 January 31 January 31 July 2007 2006 2006 Restated Restated £ £ £TURNOVER 2,500 16,800 31,914 Research and development costs (490,763) (169,078) (493,645)Administrative expenses (356,355) (130,331) (608,982)Other operating income 20,000 2,949 2,949 OPERATING LOSS (824,618) (279,660) (1,067,764)Interest receivable 55,123 6,796 53,993Interest payable (937) (17) (76) LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (770,432) (272,881) (1,013,847)Taxation 92,207 35,352 86,169 LOSS FOR THE FINANCIAL PERIOD (678,225) (237,529) (927,678) LOSS PER SHAREBasic and diluted (11.9p) (8.8p) (22.0p) All Group activities relate to continuing operations. Statement of total recognised gains and losses £ £ £ Loss for the period (678,225) (237,529) (927,678) Total recognised gains and losses relating to the period (678,225) (237,529) (927,678) Prior year adjustment (see note 2) (16,832) - - Total recognised gains and losses since the last annualreport (695,057) (237,529) (927,678) Consolidated balance sheetas at 31 January 2007 31 January 31 January 31 July 2007 2006 2006 Restated Restated £ £ £FIXED ASSETSTangible assets 117,470 102,702 121,041 CURRENT ASSETSDebtors 179,368 73,668 123,976Cash at bank and in hand 2,501,993 323,396 3,247,430 2,681,361 397,064 3,371,406 CREDITORS: Amounts falling due within one year (162,556) (172,669) (230,493) NET CURRENT ASSETS 2,518,805 224,395 3,140,913 NET ASSETS 2,636,275 327,097 3,261,954 CAPITAL AND RESERVESCalled up share capital 568,398 286,984 568,398Share premium account 3,379,046 - 3,379,046Merger reserve 337,935 389,811 337,935Profit and loss account (1,649,104) (349,696) (1,023,425) EQUITY SHAREHOLDERS' FUNDS 2,636,275 327,097 3,261,954 Consolidated cash flow statementfor the six months ended 31 January 2007 Six months Six months Year ended ended ended 31 January 31 January 31 July 2007 2006 2006 Restated Restated £ £ £Cash outflow from operating activities (873,431) (240,566) (878,390)Returns on investments and servicing of finance 54,186 6,779 53,917Taxation 86,168 - -Capital expenditure and financial investment (12,360) (109,583) (141,346) CASH OUTFLOW BEFORE FINANCING (745,437) (343,370) (965,819)Financing - 21,343 3,567,826 (DECREASE)/INCREASE IN CASH IN THE PERIOD (745,437) (322,027) 2,602,007 Reconciliation of net cash flow to movement in net fundsfor the six months ended 31 January 2007 Six months Six months Year ended ended ended 31 January 31 January 31 July 2007 2006 2006 Restated Restated £ £ £(Decrease)/increase in cash in the period (745,437) (322,027) 2,602,007Cash outflow from decrease in debt financing - - 62,101 MOVEMENT IN NET FUNDS IN THE PERIOD (745,437) (322,027) 2,664,108NET FUNDS AT THE BEGINNING OF THE PERIOD 3,247,430 583,322 583,322 NET FUNDS AT THE END OF THE PERIOD 2,501,993 261,295 3,247,430 Reconciliation of operating loss to operating cash flowsfor the six months ended 31 January 2007 Six months Six months Year ended ended ended 31 January 31 January 31 July 2007 2006 2006 Restated Restated £ £ £Operating loss (824,618) (279,660) (1,067,764)Depreciation 15,931 6,881 20,305Share option expense 52,546 410 16,832(Increase) in debtors (49,354) (31,166) (30,657)(Decrease)/increase in creditors (67,936) 62,969 182,894 Net cash outflow from operating activities (873,431) (240,566) (878,390) Notes to the consolidated interim financial statements 1 The interim financial statements have been prepared in accordance with UKGAAP, using accounting policies and practices consistent with those applied inthe 2006 annual reports and accounts with the exception of the application ofFRS 20 (see below). The interim statements have neither been reviewed noraudited by the Group's auditors. The financial information contained in this report does not constitute statutoryaccounts as defined by Section 240 of the Companies Act 1985. The figures for the year ended 31 July 2006 have been extracted from thestatutory accounts which have been filed with the Registrar of Companies buthave been restated for the impact of FRS 20. The auditors' report for the 2006accounts was unqualified and did not contain a statement under s237 (2) or (3)of the Companies Act 1985. 2 The adoption of FRS20 - Share Based Payments requires a prior periodadjustment to be made. This has reduced retained profits for the year ended 31July 2006 by £16,832 but has no effect on net assets at that date. FRS 20 is effective for accounting periods beginning on or after 1 January 2006and must be applied retrospectively to equity settled awards that were grantedafter 7 November 2002 and had not vested by 1 January 2006. 3 The interim results were approved by the Board of Directors on 18 April2007. 4 Copies of this interim report are available on the Group's website 'www.syntopix.com' and upon application to Syntopix Group plc, Institute ofPharmaceutical Innovation, University of Bradford, Bradford, BD7 1DP. 5 The calculation of basic and diluted loss per share is based upon the lossafter tax divided by the weighted average number of shares in issue during theperiod. Due to the losses incurred there is no dilutive effect from the issueof share options. Weighted (Loss) average number EPSBasic and diluted loss per share £ of shares (pence) Six months ended 31 January 2007 (678,225) 5,683,981 (11.9)Six months ended 31 January 2006 (237,529) 2,698,544 (8.8)12 months ended 31 July 2006 (927,678) 4,211,384 (22.0) J D BamforthSecretary18 April 2007 This information is provided by RNS The company news service from the London Stock Exchange