GWP.L Regulatory News (GWP)

19 Jun 2007 07:00

GW Pharmaceuticals PLC19 June 2007 GW Pharmaceuticals plc ("GW" or "the Group") Interim Results For The Six Months Ended 31 March 2007 Porton Down, UK, 19 June 2007: GW Pharmaceuticals plc (AIM: GWP), the developerand manufacturer of a range of new cannabinoid medicines, including Sativex(R),announces its interim results for the six months ended 31 March 2007. OPERATIONAL HIGHLIGHTS • Qualifying Notice for approval of Sativex in the relief of cancer pain received from Health Canada (announced separately today) • Sativex US licence agreement signed with Otsuka, including $18m signature fee, additional milestone payments up to $255m as well as a significant long term commercial supply price and royalty • Discussions at an advanced stage with Otsuka to enter into global cannabinoid research collaboration in the field of CNS and cancer treatment • Positive discussions with FDA on US development programme - first large scale US clinical trial in cancer pain due to start during summer 2007 • European regulatory application process ongoing for Sativex in the relief of MS Spasticity • THCV, a potential treatment for obesity and metabolic disorders, enters Phase I clinical trials FINANCIAL HIGHLIGHTS • Net loss for the period of £6.7m (2006: £6.9m), in line with expectations • Cash and short term deposits at 31 March 2007 of £21.9m • Net cash inflow for period of £2.0m Dr Geoffrey Guy, GW's Chairman, said: "The first half of the year has been oneof considerable progress, notably in respect of our activities in North America.The Sativex US licence agreement with Otsuka is a significant achievement andserves to validate further the potential of this important new medicine. InCanada, we are pleased to have announced today further regulatory success withreceipt of the Qualifying Notice for the approval of Sativex for the relief ofcancer pain. Today's news is important not only for Canada, but also for ourprospects in the US, where cancer pain represents the lead target indication. "In the second half of the year, we look forward to the start of our first largescale US clinical trial, to be fully funded by Otsuka, and the approval andlaunch of the cancer pain indication in Canada. In addition, the Europeanregulatory submission for Sativex in MS spasticity is expected to conclude. Wealso expect to sign a global cannabinoid research collaboration with Otsuka andto see progress of early stage programmes under this arrangement, as well asprogress with the early clinical development of THCV as a potential treatmentfor obesity and related metabolic disorders." An analyst presentation of the interim results is being held today at 09.30 atFinancial Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2A 1PB.Please contact Gemma Cross Brown at Financial Dynamics on +44 20 7269 7125 fordetails. An audio webcast of the presentation will be available on GW's websiteat www.gwpharm.com later this afternoon. Enquiries: GW Pharmaceuticals plc (19/06/07) + 44 20 7831 3113Dr Geoffrey Guy, Executive Chairman (Thereafter) + 44 1980 557000Justin Gover, Managing Director Financial Dynamics + 44 20 7831 3113David Yates / Ben Atwell GW Pharmaceuticals plc ("GW" or "the Group") Interim Results For The Six Months Ended 31 March 2007 During the first half of the year, GW entered into its most significantagreement to date with the signing of a major long term strategic cannabinoidalliance with Otsuka Pharmaceutical Co., Ltd, one of Japan's largestpharmaceutical companies and a world leader in Central Nervous System (CNS)research. This relationship has commenced with the licensing to Otsuka ofSativex for development and commercialisation in the United States. We expect toextend the collaboration further in the near future by entering into a globalcannabinoid research agreement. Having completed the US licence for Sativex, GWnow has successfully partnered this important product across Europe (Bayer inUK, Almirall in continental Europe) and North America (Bayer in Canada, Otsukain the US). Taken together, the licensing terms for this product total $51m ofsignature fees, $376m of milestone payments as well as substantial long-termsupply price and royalty provisions. The clinical and regulatory programme for Sativex continues to progress asplanned. We are delighted to have announced separately today that Health Canadahas issued a Qualifying Notice for Sativex to be approved in the relief ofcancer pain. Cancer pain is an important indication for Sativex, particularly inNorth America, since it also represents the lead clinical programme in theUnited States. We expect Sativex to be available for prescription to patientswith cancer pain in Canada in the autumn. In Europe, the regulatory process forapproval of Sativex in MS spasticity is ongoing and expected to conclude laterthis year. In addition, a Phase III trial in MS neuropathic pain is recruitingas planned and due to report results in early 2008. We continue to publishpositive clinical study results in peer-reviewed journals, including thejournals Multiple Sclerosis and The European Journal of Neurology. Beyond Sativex, we continue to invest in early stage cannabinoid research toselect and develop our next product candidates. We have recently started a Phase1 clinical study of THCV, a potential treatment for obesity, diabetes and othermetabolic disorders. Our early stage research activities are expected to expandsignificantly as soon as we have concluded the proposed cannabinoid researchcollaboration agreement with Otsuka. OTSUKA Sativex US Licence In February 2007, GW granted Otsuka an exclusive licence to develop and marketSativex, GW's lead product, in the US. GW will be responsible for themanufacture and supply of Sativex to Otsuka. The financial terms of this agreement include a $18m signature fee, which hasbeen received, further milestone payments to GW of up to $255m as well as a longterm commercial supply price and royalty. In addition, Otsuka will bear thecosts of all US development activities for Sativex in the treatment of cancerpain, additional indications and future formulations. Cannabinoid Research Collaboration GW and Otsuka are currently in detailed discussions to enter into a globalcannabinoid research collaboration in the field of CNS and cancer treatment.Under this collaboration, Otsuka would fund the evaluation of a range ofcannabinoids as drug candidates within the research field, with a view toselecting the most promising candidates for full clinical development,regulatory approval and global commercialisation. Products selected forcommercialisation would be the subject of a licence from GW. Under the terms ofthis licence, Otsuka would fund the global development of selected products andGW would receive commercially reasonable financial terms. SATIVEX REGULATORY STRATEGY The clinical and regulatory strategy for Sativex is focused on four specifictherapeutic indications, each of which represents a distinct regulatoryopportunity and each of which requires a distinct set of clinical efficacy data.These indications are as follows: • MS Spasticity • MS Neuropathic Pain • Cancer Pain • Peripheral Neuropathic Pain Each of these target indications is supported by existing positive Phase IIIdata and will continue to be supplemented by further late stage trials over thenext few years in order to supplement globally approvable regulatory packagesand provide more data to support the marketing of the product post approval. The lead indication for Sativex differs across different regions of the world.In the United States, Cancer Pain is the chosen initial target. In Canada, MSNeuropathic Pain is the first approved indication, which is being followed byCancer Pain. In Europe, the entry point for Sativex is MS, with MS Spasticityinitially targeted, followed closely by MS Neuropathic Pain. This clinical and regulatory programme is designed to provide multipleopportunities over the next few years to obtain approvals for Sativex acrossvarious indications in a number of territories. GEOGRAPHIC REVIEW United States In 2006, the Food & Drug Administration (FDA) permitted Sativex to enterdirectly into late stage development in the US for the treatment of pain inpatients with advanced cancer that has not been adequately relieved by opioidmedications. Since the signature of the Otsuka licence agreement, GW and Otsukahave held positive discussions with FDA with regard to the US development plan,including with respect to the first US pivotal efficacy clinical trial, which isto be a Phase II/III Cancer Pain dose ranging study. Under the terms of the Otsuka agreement, all US clinical trials are to be fundedby Otsuka. GW and Otsuka are jointly overseeing all US clinical development andregulatory activities. For the first Cancer Pain indication, GW has retainedresponsibility for carrying out such activities, at Otsuka's cost. GW will alsocontinue to be the holder of the IND until the filing of a New Drug Application,which will be in Otsuka's name. Preparations are at an advanced stage for the first US study, which is expectedto commence during summer 2007. GW has worked successfully with the DrugEnforcement Agency (DEA) to ensure that investigative sites are appropriatelylicensed and that the necessary import licences for supply of product have beenreceived. Institutional Review Board (IRB) approvals have also already beenobtained at a number of investigative sites. This Phase II/III trial aims to recruit over 300 patients, principally at sitesin the US. It is expected that results from the study will be available towardsthe end of 2008. The current US development program anticipates two further Phase III trials tobe conducted during 2009, prior to a subsequent submission of a New DrugApplication to FDA. All data generated in the US will also be available to GWfor submission to regulatory authorities in Europe and elsewhere. Canada Sativex is approved and marketed in Canada as adjunctive treatment for thesymptomatic relief of neuropathic pain in Multiple Sclerosis ("MS") in adults.The product is exclusively marketed in Canada by Bayer. In October 2006, GW filed an application with Health Canada to extend theCanadian approval to include the use of Sativex in the relief of Cancer Pain. GWhas announced separately today that Health Canada, the Canadian regulatoryagency, has issued a Qualifying Notice for this approval. Following agreement ofrequired documentation in the next few months, we expect to receive thisregulatory approval in the late summer. The approved Cancer Pain indication will be "adjunctive analgesic treatment inadult patients with advanced cancer who experience moderate to severe painduring the highest tolerated dose of strong opioid therapy for persistentbackground pain." Europe In September 2006, GW announced it had filed a regulatory submission in fourselected European countries for Sativex for the symptomatic relief of spasticityin people with MS. The filing has been made under the "decentralised procedure"in the UK, Spain, Denmark and the Netherlands. Under this procedure, the UK isacting as Reference Member State and consults with the three other countries.If successful, this procedure would lead to the simultaneous approval of Sativexin these countries for the MS Spasticity indication. The regulatory process isongoing and expected to conclude in the second half of 2007. Sativex is licensed exclusively to Almirall, Spain's largest pharmaceuticalcompany, in Europe (ex-UK). In the UK, Sativex is exclusively licensed to BayerHealthCare. The first opportunity to expand the approval in Europe into other indications isexpected to be for MS Neuropathic Pain. Spain Since January 2006, Sativex has been supplied to selected patients in Cataloniain Spain under an agreement with the Health Department of The RegionalGovernment of Catalonia. At present, a few hundred patients are participatingand new patients continue to be enrolled. The Catalan Health Department havestated publicly that they are very pleased with the response to this programmeby opinion leaders and patients. UK Sativex is being supplied as an unlicensed medicine to patients in the UK whoare in receipt of a prescription. This includes patients who have previouslybeen on clinical trials, as well as other patients who have been recommended totake Sativex by their physician. Licences issued by the Home Office mean thatSativex may be supplied directly from the UK manufacturing site and dispensed bylocal pharmacies. GW charges for provision of the medicine under thesecircumstances. To date, Sativex has been prescribed in the UK to over 1,000 patients. Themajority of prescriptions are being funded by the National Health Service. SATIVEX CLINICAL TRIALS PROGRAMME MS Spasticity The body of clinical evidence supporting the efficacy of Sativex in MSSpasticity includes two pivotal Phase III trials, a pooled analysis, as well assupportive data. This evidence has formed the basis of the current regulatorysubmission in selected European countries. In February, a leading neurology journal, The European Journal of Neurology,published results of one of GW Phase III trials, which forms part of the currentregulatory submission, showing that Sativex significantly reduces intractablespasticity (spasms and stiffness) in people with MS (1). GW's strategy across all target indications is to continue to supplement itsdata with further late stage trials over the next few years. For this reason, GWplans to continue to generate data in this indication by commencing a further MSSpasticity trial later this year. MS Neuropathic Pain GW has obtained approval for Sativex in Canada in the indication of NeuropathicPain in MS. This approval was obtained under the Canadian NOC/c policy on thebasis of a single positive Phase III trial which was published in the journal,Neurology (2). GW is currently conducting a second Phase III study in this indication, which isexpected to complete in early 2008. This 300 patient study is recruitingpatients in Canada, UK, Spain, France and the Czech Republic. Following completion of this second Phase III trial, GW expects to havesufficient data for a regulatory submission in Europe in this indication. Cancer Pain GW's Cancer Pain programme is being initiated in the US with a view to obtainingapproval from the FDA. These US trials will also form the basis of a Europeanregulatory application in this indication. Peripheral Neuropathic Pain GW has generated a body of clinical data to support the efficacy of Sativex inperipheral Neuropathic Pain. In early 2007, two further Phase III studiesreported preliminary results. One of the studies, in 246 patients withNeuropathic Pain characterised by allodynia (3), showed a positive result forthe responder analysis of the primary endpoint (the proportion of patientsobtaining a clinically meaningful improvement in pain relief), as well as two ofthe key pain-related secondary efficacy endpoints. The results of the study in297 patients with painful diabetic neuropathy were more difficult to interpretdue to an abnormally large placebo response. These data contribute to a future regulatory filing in the use of Sativex as atreatment for Neuropathic Pain and GW intends to continue to add to thisevidence base by conducting additional confirmatory trials in due course. THCV CLINICAL PROGRAMME In June 2007, GW commenced the clinical development programme of its novelcannabinoid product, delta-9-tetrahydrocannabivarin (THCV). THCV has shownpromise in pre-clinical studies as a potential treatment for obesity, diabetesand related metabolic disorders. The first Phase I study, which is ongoing, is a randomised, double blind,placebo controlled, dose escalation, safety and tolerability study of singledoses of THCV in twelve healthy volunteer subjects. The formulation is anextract from a unique cannabis plant variety bred by GW scientists whichexhibits THCV as the principal cannabinoid component. The product is beingadministered as an oral solution. If this Phase I trial is successful, GW intends to progress the programme byembarking on studies in obese subjects. EARLY STAGE CANNABINOID RESEARCH GW works closely with a network of world leading cannabinoid scientists inexploring the potential of a range of cannabinoid molecules. This programme willbe expanded further upon signature of the anticipated research collaborationwith Otsuka with a view to generating a number of new product candidates fordevelopment and commercialisation over the next few years. FINANCIAL REVIEW Turnover of £823,000 includes £423,000 relating to commercial sales of Sativexin Canada and the UK. The remaining £400,000 relates to revenue recognised fromthe £12m Almirall licence agreement signature fee, which is being recognisedover a 15 year period. In February, the Sativex US licence agreement was signed with Otsuka, whichresulted in the receipt of a $18m (£9.2m) signature fee at the end of March. Thesignature fee will be recognised as revenue over the life of the agreement witheffect from 1 April 2007, hence no revenue arising from this transaction hasbeen recognised in the current period. Research and development expenditure decreased, in line with budget, to £6.2m(2006: H1 £6.5m; H2 £6.6m). Management and administrative expenses (including amortisation of goodwill)increased to £2.0m (2006: H1 £1.7m; H2 £1.8m). The adoption of FRS 20 (share-based payments) has resulted in a charge of£666,000 in the six month period, compared to a prior period restatement of£713,000 in the comparative period last year and £1,338,000 for the full year to30 September 2006. All share options have been valued using the Black-Scholesoption-pricing model. Operating losses of £8.1m (2006: £8.2m) were offset by interest income of £0.39mand an R&D tax credit of £1.01m, resulting in a net loss after tax of £6.7mcompared to a restated £6.9m in the same period last year. Net cash inflow, before management of liquid resources and financing, was £2.0mcompared to £4.2m in the comparable period last year. As at 31 March 2007 GW had cash and short-term deposits totalling £21.9m.Debtors at 31 March were £4.9m, which includes R&D tax credits receivable of£3.0m (of which £2.0m was received in May 2007) and £1.2m of Spanish withholdingtax. Total deferred income of £20.1m represents the unrecognised balances of thenon-refundable £12m Almirall and $18m (£9.2m) Otsuka signature fees. These willbe recognised as revenue in future periods. The headcount as at 31 March 2007 was 123 compared to 120 as at 30 September2006. As indicated at the beginning of the year we expect overall R&D expenditure forthe year to be in line with that incurred in 2006. Following a review by the Board, GW will be adopting International FinancialReporting Standards ('IFRS') for the year ended 30 September 2008. Havingadopted FRS20 (share-based payments) in the current year, preliminary analysisindicates that the overall impact of IFRS adoption will be minimal. Board of Directors GW previously announced that the Board has been carrying out a corporategovernance review process with regard to the proportion of independentnon-executive directors. During the first few months of 2007, this process wascompleted with the appointment of two new independent non-executive directors,James Noble and Richard Forrest, in place of David Mace and David Morrison, bothof whom have stood down from the Board. James Noble has also been appointed tothe newly created position of Deputy Chairman and is the nominated seniorindependent director. Summary and Prospects The first half of the year has been one of considerable progress, notably inrespect of our activities in North America. The Sativex US licence agreementwith Otsuka is a significant achievement and serves to validate further thepotential of this important new medicine. In Canada, we are pleased to haveachieved further regulatory success through obtaining the Qualifying Notice forapproval of the cancer pain indication. In the second half of the year, we look forward to the start of our first largescale US clinical trial, to be fully funded by Otsuka, and the approval andlaunch of the cancer pain indication in Canada. In addition, the Europeanregulatory submission for Sativex in MS spasticity is expected to conclude. Wealso expect to sign the global cannabinoid research collaboration with Otsukaand to see progress of early stage programmes under this arrangement, as well asprogress with the early clinical development of THCV as a potential treatmentfor obesity and related metabolic disorders. Enquiries: GW Pharmaceuticals plc (19/06/07) + 44 20 7831 3113Dr Geoffrey Guy, Executive Chairman (Thereafter) + 44 1980 557000Justin Gover, Managing Director Financial Dynamics + 44 20 7831 3113David Yates / Ben Atwell This news release may contain forward-looking statements that reflect theGroup's current expectations regarding future events, including the clinicaldevelopment and regulatory clearance of the Group's products. Forward-lookingstatements involve risks and uncertainties. Actual events could differmaterially from those projected herein and depend on a number of factors,including (inter alia), the success of the Group's research strategies, theapplicability of the discoveries made therein, the successful and timelycompletion of clinical studies, including with respect to Sativex and theGroup's other products, the uncertainties related to the regulatory process, andthe acceptance of Sativex and other products by consumers and medicalprofessionals Footnotes: (1) Collin C, Davies P, Mutiboko IK, Ratcliffe S, for the Sativex Spasticity in MS Study Group. Randomised controlled trial of cannabis based medicine in spasticity caused by Multiple Sclerosis. European Journal of Neurology (2007) 14 (3), 290-296 (2) D.J.Rog, T.J.Nurmikko, T.Friede, and C.A Young. Randomized, controlled trial of cannabis-based medicine in central pain in multiple sclerosis. Neurology 2005;65:812 (3) Allodynia is the occurrence of pain in response to a normally non-painful stimulus (e.g. clothes touching against the skin). It is often intense and can occur in patients suffering from a range of conditions that damage the peripheral nerves (e.g. nerve lesions, post-herpetic neuralgia). GW Pharmaceuticals plcConsolidated profit and loss accountFor the six months ended 31 March 2007 - Unaudited Six months ended Six months ended Year ended 31 March 31 March 30 September Notes 2007 2006 2006 Restated Restated Unaudited Unaudited Audited £000's £000's £000'sTurnover 2 823 733 1,981Cost of sales (85) (92) (277) __________ __________ __________Gross Profit 738 641 1,704Research and development costs (6,246) (6,461) (13,102)Management and administrative expenses (1,962) (1,703) (3,468) Share-based payment (666) (713) (1,338) __________ __________ __________Operating loss (8,136) (8,236) (16,204)Interest receivable 393 426 929 __________ __________ __________Loss on ordinary activities before taxation (7,743) (7,810) (15,275)Tax credit on loss on ordinary activities 3 1,012 901 2,022 __________ __________ __________Loss on ordinary activities after taxationbeing retained loss for the period (6,731) (6,909) (13,253) __________ __________ __________ Loss per share - basic and diluted 4 (5.6p) (5.9p) (11.2p) All activities relate to continuing operations. The Group has no recognised gains and losses other than the losses above andtherefore no separate statement of total recognised gains and losses has beenpresented. Results for the periods ended 31 March 2006 and 30 September 2006 have beenrestated to reflect the impact of the adoption of FRS 20. See note 9 fordetails. GW Pharmaceuticals plcConsolidated balance sheetAs at 31 March 2007 - Unaudited 31 March 31 March 30 September Notes 2007 2006 2006 Unaudited Unaudited Audited £000's £000's £000'sFixed assetsIntangible assets - goodwill 5,031 5,388 5,210Tangible assets 1,044 681 952 __________ __________ __________ 6,075 6,069 6,162 __________ __________ __________Current assetsStock 665 617 695Debtors: amounts falling due within one year 5 3,928 3,549 4,335Debtors: amounts due after more than one year 5 1,012 901 -Cash held on deposit as short term investment 8,101 18,092 14,437Cash at bank and in hand 13,813 7,271 5,438 __________ __________ __________ 27,519 30,430 24,905Creditors: Amounts falling due within one year 6 (6,286) (4,872) (5,403) __________ __________ __________Net current assets 21,233 25,558 19,502 __________ __________ __________Total assets less current liabilities 27,308 31,627 25,664Creditors: Amounts falling due after one year 6 (18,249) (10,967) (10,567)Provisions for liabilities and charges (54) (32) (40) __________ __________ __________Net assets 9,005 20,628 15,057 __________ __________ __________ Capital and reservesCalled-up share capital 8 120 120 120Share premium account 8 58,223 58,209 58,210Other reserves 8 19,262 19,262 19,262Profit and loss account 8 (68,600) (56,963) (62,535) __________ __________ __________Equity shareholders' funds 8 9,005 20,628 15,057 __________ __________ __________ GW Pharmaceuticals plcConsolidated cash flow statementFor the six months ended 31 March 2007 - Unaudited Six months ended Six months ended Year ended 31 March 31 March 30 September 2007 2006 2006 Unaudited Unaudited Audited £000's £000's £000'sNet cash flow from operating activities 1,950 4,037 (3,275)Returns on investment and servicing of finance 357 306 919Taxation - - 1,678Capital expenditure (281) (125) (593) __________ __________ __________Cash flow before management of liquid resources and 2,026 4,218 (1,271)financingManagement of liquid resources 6,336 (7,972) (4,317)Financing 13 8,112 8,113 __________ __________ __________Increase in cash during the period 8,375 4,358 2,525 __________ __________ __________ Reconciliation of operating loss to net cash flow from operating activities Six months ended Six months ended Year ended 31 March 31 March 30 September 2007 2006 2006 Restated Restated Unaudited Unaudited Audited £000's £000's £000'sOperating loss (8,136) (8,236) (16,204)Depreciation charge 189 167 364Amortisation of goodwill 178 178 356Decrease / (increase) in stocks 30 39 (39)Decrease / (increase) in debtors 444 (1,294) (1,846)Increase in creditors 8,579 12,470 12,609All employee share scheme charge - - 147Share-based payment charge 666 713 1,338 __________ __________ __________Net cash flow from operating activities 1,950 4,037 (3,275) __________ __________ __________ GW Pharmaceuticals plc Notes 1 Basis of preparation These interim statements have been prepared on a consistent basis with the financial statements for the year ended 30 September 2006 except for the adoption of FRS 20 (Share-based payment). The Group has applied the requirements of FRS 20 (Share-based payment), in accordance with the transitional provisions to all equity instruments granted after 7 November 2002 and unvested at 1 October 2006 (see note 9). These interim statements do not constitute statutory financial statements within the meaning of Section 240 of the Companies Act 1985. Results for the six month periods ended 31 March 2007 and 31 March 2006 have not been audited. The results for the year ended 30 September 2006 have been extracted from the statutory financial statements that have been filed with the Registrar of Companies subject to the prior year adjustment described in note 9. The auditors' report on those financial statements was unqualified. 2 Segmental Information Turnover: Six months ended Six months ended Year ended 31 March 31 March 30 September 2007 2006 2006 Unaudited Unaudited Audited £000's £000's £000'sProduct sales 423 501 1,348Licensing fees 400 232 633 __________ __________ __________ 823 733 1,981 __________ __________ __________ Geographical analysis of turnover: Six months ended Six months ended Year ended 31 March 31 March 30 September 2007 2006 2006 Unaudited Unaudited Audited £000's £000's £000sUK 268 112 338Europe (excluding UK) 400 544 1,426North America 155 77 217 __________ __________ __________ 823 733 1,981 __________ __________ __________ 3 Tax credit on loss on ordinary activities Six months ended Six months ended Year ended 31 March 31 March 30 September 2007 2006 2006 Unaudited Unaudited Audited £000's £000's £000'sUK Corporation tax - R&D tax credit:Current period (1,012) (901) (2,022) __________ __________ __________ The UK Corporation tax credits relate to research and development expenditureclaimed under the Finance Act 2000. The amounts are subject to the agreement of HM Revenue and Customs. 4 Loss per share The calculations of loss per share are based on the following losses and numbers of shares. Six months ended Six months ended Year ended 31 March 31 March 30 September 2007 2006 2006 Restated Restated Unaudited Unaudited Audited £000's £000's £000'sLoss for the financial period (6,731) (6,909) (13,253) ___________ ___________ ___________ Number of shares Number of shares Number of sharesWeighted average number of shares 120,085,006 116,802,886 118,443,944 ___________ ___________ ___________ Since the Group reported a net loss, diluted loss per share is equal to basicloss per share. 5 Debtors 31 March 31 March 30 September 2007 2006 2006 Unaudited Unaudited Audited £000's £000's £000'sAmounts falling due within one yearTrade debtors 67 67 579Taxation recoverable - UK Corporation tax 2,022 1,678 2,022Taxation recoverable - foreign withholding tax 1,200 1,200 1,200Other debtors 449 351 285Prepayments an accrued income 190 253 249 __________ __________ __________ 3,928 3,549 4,335 __________ __________ __________ Amounts falling due after one yearTaxation recoverable - UK Corporation tax 1,012 901 - __________ __________ __________ Foreign Withholding tax relates to a 10% Spanish withholding tax on the £12mAlmirall signature fee. 6 Creditors 31 March 31 March 30 September 2007 2006 2006 Unaudited Unaudited Audited £000's £000's £000'sAmounts falling due within one yearTrade creditors 2,225 1,967 2,527Other taxation and social security 169 151 155Accruals 1,930 1,894 1,834Deferred income 1,900 800 800Defined contribution pension scheme accruals 62 60 37Other creditors - - 50 __________ __________ __________ 6,286 4,872 5,403 __________ __________ __________ Amounts falling due after one yearDeferred income 18,249 10,967 10,567 __________ __________ __________ Deferred income represents the balance of the non-refundable signature feesreceived from Almirall and Otsuka. These amounts will be recognised as revenuein future periods. For Almirall the £12m signature fee is being recognised at the rate of £0.8m peryear over 15 years from December 2005. In the case of Otsuka, where the Group'sobligations under the agreement are weighted towards the earlier years, the $18m(£9.2m) signature fee will be recognised from 1 April 2007 to 30 September 2011at the rate of £1.1m per year and at £0.28m per year for the following 15 years. 7 Analysis of changes in net funds As at As at 30 September 2006 Cashflow 31 March 2007 Audited Unaudited Unaudited £000's £000's £000'sCash held on deposit as short term investment 14,437 (6,336) 8,101Cash at bank and in hand 5,438 8,375 13,813 __________ __________ __________ 19,875 2,039 21,914 __________ __________ __________ 8 Movement in Share Capital & Reserves Called-up Called-up Share share share premium capital capital account Unaudited Unaudited UnauditedGroup No. of shares £000's £000'sAt 1 October 2006 120,076,035 120 58,210Exercise of share options 20,300 - 13Share-based payment - - -Retained loss for the period - - - ___________ __________ __________At 31 March 2007 120,096,335 120 58,223 ___________ _________ __________ Movement in Share Capital & Reserves (continued from table above) Other Profit and reserves loss account Total Unaudited Unaudited UnauditedGroup £000's £000's £000'sAt 1 October 2006 19,262 (62,535) 15,057Exercise of share options - - 13Share-based payment - 666 666Retained loss for the period - (6,731) (6,731) _________ __________ _________At 31 March 2007 19,262 (68,600) 9,005 _________ __________ _________ 9 FRS 20 (Share-based payment) The Group adopted FRS 20 (Share-based payment) in the period. The Group provides benefits to employees (including Directors) in the form of share-based payment transactions, whereby employees render services in exchange for rights over shares ('equity-settled transactions'). The fair value of the employee services rendered is determined by reference to the fair value of the options granted. All share options are valued using an option-pricing model (Black-Scholes). This fair value is charged to the profit and loss account over the vesting period of the share-based payment scheme. The value of the charge is adjusted in the profit and loss account over the remainder of the vesting period to reflect expected and actual levels of options vesting. The adoption of FRS 20 has resulted in a change in accounting policy for share-based payments. A prior year adjustment has been made to the financial information set out for the period to 31 March 2006 and 30 September 2006 to apply charges to the profit and loss account for share options granted. The Group has recognised a total expense of £666,000 relating to equity settled share option scheme transactions in the six month period to 31 March 2007 (£713,000 in the six month period to 31 March 2006; £1,338,000 in the year to 30 September 2006). 10 Availability of Information A copy of this statement is available from the registered office of the Company. This information is provided by RNS The company news service from the London Stock Exchange